Chiesi Hellas AEBE

1. Strategic, Analysis & Action

ADMINISTRATIVE PRACTICES

The need for an increasingly sustainable world to benefit the health of the planet and civilisation, is clearer than ever. At Chiesi, we are acutely aware of this need. The starting point for all our actions centres around one simple question: how can we provide outstanding therapeutic solutions and improve people’s quality of life worldwide while driving a sustainable and responsible business? Our commitment hinges on creating a positive impact through the care we provide for our patients and those who assist them. But it also goes further. We have made progress over the past year in continuing to be a good corporate citizen, equally strengthening our impact on society, our industry and the communities where we operate. Indeed, as the Covid-19 restrictions have eased, something feels different. Our new normal means placing an even greater focus on people’s needs to improve their lives and our planet. It has also enabled us to reflect upon our ways of working so that we can deliver on our ambitions for all stakeholders with whom we interact. Throughout 2021, we built on our foundations of people, sustainability and innovation to support continual growth in an ever-evolving world. It is not enough to simply develop products that safeguard our patients – we must also seek out ways to reduce our carbon footprint, simultaneously caring for environmental and social systems so as to meet the challenges of the future.

 
Our vision

By 2025 we aspire to be a reference point for patients living with chronic respiratory disorders, neonatal pathologies, rare diseases and other difficult-totreat health conditions. We commit to offering patients, and their caregivers, innovative solutions to help meet their needs, by exploring new frontiers in treatment and care and embracing state-of-the-art technologies. As a family owned company, we want to continue growing sustainably by focusing on key markets such as the U.S. and Europe, while expanding access to care in emerging countries like China. We aim to maintain a profitability level adequate to support our investments in innovation and development and our international expansion efforts.

As a Benefit Corporation, we want to act as a force for good, doing business in a way that generates a positive impact on society and nature and become an inspiration to our stakeholders in the biopharmaceutical industry. Achieving this demands teamwork and care for the well-being of the people we work with. By leveraging diversity and creativity, we seek to promote a working environment that welcomes everyone’s contribution and rewards personal accountability. The We Act sustainability manifesto guides our corporate efforts and is the core of all our actions.

SUSTAINABILITY MANIFESTO

We live in a time of great changes. The planet is exploited beyond its limits and its equilibriums are in continuous transformation. We are changing ourselves in the way we live and think about our society. The most fragile and vulnerable are paying the price: those who are often left behind in this rush forward. At Chiesi we have always believed that it is necessary to take care of our planet and the people who inhabit it, rediscovering the value of mutual solidarity, as we are aware that every individual, as well as every living organism, is unique and irreplaceable. This is why we want to make the assurance of high-quality medical researcha vailable for the most fragile individuals so that we can closely listen to and understand them as people rather than as patients.

We want to act as a force for good, promoting a conscious and different way of doing business which strives to achieve a positive impact on society and nature by handling resources in a circular way and creating a new harmony and sustainability. The well-being of all depends on this balance. For us, this is the only true form of progress. Our team of professionals is highly motivated and open-minded as our culture guides us, valuing the diversity of each individual.

The health of our planet and its inhabitants deserves our best efforts.

 
We ACT

“We ACT”, also known as “We Actively Care for Tomorrow” is an engagement programme which seeks to involve, educate and commit all employees across the company to our sustainability goals and strategy. It stems from a sustainability manifesto which expresses what our company stands for, and which aims to set the direction and tone for everything we do, building on Chiesi’s desire to take care of society and the environment through awareness-raising projects and by actively involving all of our people. Each year, all people of the Group convene at the We Act Day, a global event that engages all Chiesi people worldwide to spread the shared value mindset and implement the principles of the manifesto through specific initiatives and projects.

 
Our path towards B-Corp recertification

As the largest global B Corp-certified pharmaceutical company, Chiesi constantly monitors and improves the societal and environmental performances throughout its operations. Alongside our company mission of developing and delivering therapeutic solutions to improve patients’ health, we have integrated four common benefit goals into our bylaws which define our profile as a Benefit Corporation. These focus on operating in a sustainable, transparent and responsible way towards society and the environment, thus embedding the concept of creating shared value into how we put action into words. Under this overarching framework, the Chiesi community constantly focuses on improving areas of synergy, helping to drive even greater impact for all stakeholders and partners. This is facilitated by establishing yearly improvement plans directly related to impact areas.

• Common benefit purposes
• Improving people’s health, wellbeing and quality of life.
• Continuously innovating the sustainability of all company processes and practices in order to minimise negative impacts and to amplify positive impacts on people, the biosphere and the community, in pursuit of an economy with net-zero GHG emissions, in line with European objectives on climate neutrality and national objectives on ecological transition.*
• Promoting a conscious and sustainable way of doing business, by fostering a collaborative dialogue among stakeholders.
• Contributing to the development of the local communities in which the company operates.

Since becoming a Benefit Corporation under Italian and US law in 2018 and being certified as B Corp in 2019, Chiesi self-assesses its sustainability performance on a yearly basis, as part of our own corporate commitment to constantly measure our progress in key areas and implement further improvement actions. In order to maintain B Corp certification, companies must update their impact assessment every three years, to verify their status and update their score. In 2022 we are required to seek recertification as a B Corp for the first time since joining. After submitting all relevant material to B Lab in 2021, Chiesi is currently undergoing the audit phase of this process.

B Corp companies are required to publish an annual Sustainability Report. In the case of Chiesi, reports are published by both the parent company and the subsidiaries. In 2019, Chiesi Hellas chose to formulate and publish a three-year Sustainability Action plan. From 2022 onwards, these Action Plans are annual.

• About B Corporations

Certified B Corporations are for-profit companies that use the power of business to build a more inclusive and sustainable economy. They meet the highest verified standards of social and environmental performance, transparency, and accountability. To date, there are more than 5,000 B Corps in 155 industries and 80 countries around the world.

• About B Lab

B Lab® is a non-profit that serves a global movement of people using business as a force for good. Their initiatives include B Corp Certification, administration of the Impact Management programmes, and advocacy for governance structures like the Benefit Corporation. B Lab® envisions an inclusive and sustainable economy that creates shared prosperity for all.

Risk management

Chiesi is subject to risks and uncertainties inherent to our business and the complex, rapidly evolving environment in which we operate. To better understand and manage our exposure to these risks and to seize any related opportunities, specific processes and procedures are handled by dedicated business and staff functions. To further support and integrate these processes and in order to allow a transversal and holistic view of the overall risk profile, the Group continues the development of an Enterprise Risk Management system that is inspired by international best practices (CoSO ERM - Integrating with Strategy and Performance). The system allows us to identify and assess risks that may impact our business, including ESG risks. At the end of 2021, we integrated our risk assessment and strategic planning processes. We also set up an improved structure for the integration of ESG risks into our Risk Management framework, including those relevant in the medium to long-term (e.g. risks related to climate change, risks related to long-term sustainability objectives) or those which evolve quickly and continuously (e.g. risks related to the evolution of the regulatory framework). In addition, to better understand the climate risks to which we are potentially exposed and to foster more resilient supply chains and business activities, we are analysing such risks in accordance with the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD) promoted by the Financial Stability Board. The main risk factors to which the Group is potentially exposed and which are carefully monitored and managed on an ongoing basis are listed below.

Strategic Risks

• R&D
• Intellectual property

External Risks

• Market dynamics
• Evolution of legislation
• Country risk

Business model risks

• B-corp recertification
• Mergers & Acquisitions / Joint Ventures

Operational and business risks

• Industrial operations
• Procurement
• Business interruption
• Environmental sustainability
• Information technology
• Human resources
• Financial risks
• Legal and compliance

In Greece, Senior Management constantly assesses the state of the macroeconomic environment and its possible effects, in order to ensure that all necessary and possible measures and actions are taken in a timely manner to minimize any effects on the Company's activities.

The Organization has appointed an external security technician who is consulted on security issues of buildings, workers, environment, etc. In this context, an OCCUPATIONAL RISK ASSESSMENT is carried out from time to time. On the occasion of the Covid-19 pandemic, an emergency update of the Occupational Risk Assessment for the Organization was carried out in order to ensure the health safety and protection of employees and their families and their wider social environment.

Initiatives

• Sustainable Development Goals

Chiesi supports the United Nations Sustainable Development Goals (UN SDGs). While we firmly believe in the importance of all 17 goals for achieving a fairer and more prosperous world for all, there are nine goals in particular which we think are best positioned to support through our work:

#3 Good health and well-being,
#5 Gender equality,
#8 Decent work and economic growth,
#9 Industry, innovation and infrastructure,
#10 Reduced inequalities,
#11 Sustainable cities and communities,
#12 Responsible consumption and production,
#13 Climate action,
#17 Partnerships for the goals.

Since 2020, we use the SDG Action Manager Tool to assess, compare and improve our performance to deliver tangible progress on the SDGs. 2021 marked an improvement in our overall performance against the SDGs: while acknowledging that Chiesi’s activities pose no potential risks to the achievement of any of the SDGs, the analysis showed that Chiesi positively contributes to many of them, outperforming the average country and sector scores in many cases. We achieved a very high score on SDG #3: Good Health and Well-Being (the only SDG directly linked to Chiesi’s business model), which highlights how our business contributes to sustainable development by enabling healthy lives and promoting well-being for all, at all ages.

• World Economic Forum “Measuring Stakeholder Capitalism” metric

Finally, we are also preparing for the expectations of the future with regard to corporate reporting, ahead of the EU’s expected adoption of a new Corporate Sustainability Reporting Directive (CSRD) in 2022. We always seek to go above and beyond mere compliance in every aspect of our work, including measuring our progress. To that end, 2021 saw a new framework taken for consideration. The Measuring Stakeholder Capitalism framework, launched by WEF in September 2020, is intended to help companies to align their mainstream reporting on performance against environmental, social and governance (ESG) indicators and track their contributions towards the SDGs on a consistent basis. This new set of metrics brings together, but also goes beyond, existing standards such as GRI, with a view to enabling greater comparability and consistency of ESG disclosures and reporting. In 2021, Chiesi decided to include this new framework in the present report, in order to ensure the most comprehensive approach to our reporting, enlarging its scope as much as possible.

• The Group is engaged at an international level to follow the continuous evolution of the ESG frameworks and promote a stronger global harmonisation. We participate in ad hoc workstreams within EFPIA, IFPMA and innovative platforms such as the Biopharma Sustainability Roundtable
• When it comes to driving sustainable progress and shared value in the healthcare sector, actions speak louder than words. At Chiesi, we are committed to measuring our impact both within and beyond our organisation in a systematic way. Our methodology for impact measurement integrates different reporting frameworks:

• • B Impact Assessment from B Lab
  • The Benefit Corporation legal framework
  • Global Reporting Initiative (GRI) Standards
  • UN Sustainable Development Goals (SDGs)
  • World Economic Forum’s recommended metrics (from the Measuring Stakeholder Capitalism white paper) for non-financial reporting
  • Science Based Targets initiative (SBTi)

Our commitment and sustainability policy is published in our Articles of Association and our Annual Sustainability Report.

See more: Chiesi Annual & Sustainability Report 2021, p. 7-9, 12-13, 15-16, 23-24, 26-32.

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2. Materiality

ADMINISTRATIVE PRACTICES

As we emerge from the pandemic, many of last year’s challenges will undoubtedly stay with us. Global supply chain issues and the ongoing energy crisis have once again demonstrated how we are part of a fragile, interdependent system. I firmly believe that it is our responsibility to create value for the communities where our associates, affiliates and partners live and work. Only by collaborating closely with all stakeholders can we tackle the pressing humanitarian and environmental issues that society is facing. Our determination to make the world feel better and to create a healthier, more sustainable future is behind everything we do. As a Benefit Corporation and a B Corp-certified Group, we are guided by the concept of shared value – an approach that aims at generating economic value in a way which also benefits society by addressing its needs and challenges.

We reinforced our commitment to patient-centric innovation with the announcement, in December 2021, that we would be opening a new Biotech Centre of Excellence Plant next to our current manufacturing facilities in Parma, Italy. Expected to be operational from 2024, this new innovation hub will focus on the development and production of biological drugs which have the potential to transform lives, tapping into pharmaceutical talent, enhancing know-how from all over the globe and growing to become a state-of-the-art reference point for the entire sector. In the spirit of generating value for all stakeholders, with the aim to benefit people, communities, and the planet, 2021 also saw significant steps forward as regard to our environmental impact. In May 2021, we unveiled our plan to become carbon neutral by 2030 for direct greenhouse gas (GHG) emissions and indirect GHG emissions from purchased electricity and heat (scope 1 and 2). By 2035, we intend to become carbon neutral for our other indirect GHG emissions (scope 3) as well. These targets have been approved by the Science Based Target Initiative (SBTi) and are a manifestation of our #ActionOverWords campaign, emphasising the importance of the larger global corporate movement towards the ecological transition.

The health of our planet and its inhabitants deserves our best efforts, which is why Chiesi will continue promoting a regenerative business model capable of creating positive results today and for future generations.

The creation of an annual Sustainability Action Plan is preceded by a mapping of the external macroeconomic environment (e.g. pestel analysis), anticipation/recording of potential opportunities and threats and identification of the most pressing social and Environmental challenges.

Materiality analysis

The Impact Profile is aligned with the material topics identified in our latest Materiality Analysis, a key tool to help us understand which issues are most relevant to our core stakeholders and should receive special attention from our company’s management. This is a key process and requirement for adhering to GRI reporting standards, which define material issues as “those topics that have a direct or indirect impact on an organisation’s ability to create, preserve or erode economic, environmental and social value for itself, its stakeholders and society at large”. The materiality of each issue in the matrix is evaluated on two levels: the issue’s impact in relation to Chiesi’s business, and its relevance for our main stakeholders. The term “impact” considers both how the topic can influence Chiesi’s business in terms of risks and opportunities and how our business can influence the topic (outside-in and inside-out perspectives). The materiality analysis is performed using Datamaran, the only cloud-based software in the world that supports a comprehensive data-driven process for monitoring external issues and risks, including ESG. Datamaran strengthens our understanding of and in-house ability to monitor the evolution of ESG, geopolitical, technology and emerging issues. In 2021, Chiesi updated its Materiality Analysis: the key topics identified and mapped in our materiality matrix were confirmed, with the exception of one addition (Privacy and Data Security). The appearance of this topic reflects an increased focus on keeping sensitive healthcare and other data safe and secure, in order to build trust with our stakeholders and prevent a negative impact on our business.

Determining the activities is made on the basis of three pillars. The pillars of Sustainability Action Plan are the following:

1. Environment & Health
2. Community Development
3. Emergency

Overview of material topics by chapter

More information on each of the material topics can be found in pages 119-121 of the sustainability report. The table with specific boundaries for each of the material issues which define for each issue the impact generated, determining its relevance, on p. 131-132 of the Annual & Sustainability Report 2021

 Chiesi Hellas, within the action "We Act" (We Actively Care for Tomorrow), actively supports social and environmental needs arising both due to the economic and health crisis and the climate change that we face as humanity.

Indicative Actions:

• In September 2022, we planted trees in collaboration with the Municipality of Trikala, a city selected by the European Commission among 377 cities in Greece to participate in the EU program for "100 Climate Neutral and Smart Cities by 2030"
• In 2021 we supported villages of the affected northern Evia after the devastating fires of the summer
• We supported health structures, hospitals, etc. with pharmaceutical material during the pandemic
• We participated in solidarity and volunteering activities (Smile of the Child, Ark of the World).

See also: Chiesi Annual & Sustainability Report 2021, p. 5-6, 14.

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3. Objectives

ADMINISTRATIVE PRACTICES

Sustainability is a pillar of the company's strategic plan, which has adopted a sophisticated business model. The establishment of short-term and long-term targets in relation to Sustainable Development and Responsibility is mandatory and runs through all departments of Chiesi.

In particular, at the beginning of each year, the Group announces to all subsidiaries the targeting for each department (CCO, Global Strategy & Corporate Development, Finance, Procurement, Legal, IT, R&D, HR, GMD, GC & ER, SV & S, Rare Diseases). This is the 'One Page Goal Sheet'. Each subsidiary integrates the targets per division into its strategy scheme. The targets are also reflected in the Sustainability Action Plan and are even specialized per department in specific actions.

The evaluation and prioritization of the targets is performed per department. The achievement of the targets is closely monitored by the Leadership Team. In addition, objectives in relation to Sustainable Development and Responsibility is placed in the mbo (Management by Οbjectives) of each employee, the achievement of which is controlled by the head of each department.

Targeting is not an one-off process. The Organisation monitors developments and changes in the external environment and adapts accordingly. Indicative examples:

• A typical example is the effective management of the difficulties / challenges that arose due to the Covid19 pandemic.
• In addition, the Organisation demonstrates adaptability and flexibility to social needs. Proof of this is the organization, the design and implementation by Chiesi Hellas of the global Interstellar program of the Chiesi Group, aiming at the transformation of the company towards a customer-centric culture and an exceptional experience for the healthcare professional. The educational

program "Empathy, Empowerment, Communication" of the Hellenic Respiratory Society, implemented with the kind sponsoring of Chiesi Hellas aims to improve the communication between pulmonologist and patient at all levels of health, through strengthening empathy and empowering pulmonologists in an ever-changing and demanding working environment. Chiesi Hellas, as a recertified BCorp company and focusing on the patient and the healthcare professional, contributes substantially to the lifelong training of hospital and private doctors.

• In February 2020, a department specifically dedicated to the development and distribution of products for rare and exceptional rare diseases was developed. Patients with rare diseases face difficulties for early and accurate diagnosis, for access to effective treatment and for social, professional and social integration. At Chiesi we believe that no patient should stay behind and that's why we created a specialized department.

Chiesi updates its BIA (B Impact Assessment) self-assessment on an annual basis, in order to analyse progresses and weaknesses and define short and long-term improvement targets.

2022 Objectives

Commitment to continuous innovation towards sustainability of processes and all business practices in order to minimise negative impacts and enhance positive impacts on people, the biosphere and the territory

• Towards Carbon Neutrality

In 2022 we aim to go beyond the reduction targets approved by SBTi, by developing a reduction plan for each emission source in our greenhouse gas inventory, as well as identifying specific reduction targets. We are convinced that, for a meaningful and serious approach towards carbon neutrality, it is our duty to spare no efforts in minimising all emission sources but, at the same time, to implement measures to remove as much carbon dioxide as possible from the atmosphere. Therefore, by 2022 we aim to finalise a specific carbon removal strategy for the Group in accordance with the highest offsetting standards.

We also aim to continue our emission reporting actions in our Annual and Sustainability Report and within the CDP initiative.

In 2022 we want to take further specific actions:

• Optimising our HFA gas abatement system to achieve a 60% reduction in emissions from propellant leakage during the production process;
• Obtaining LEED EB:OM certification for the new building (Pilotis) at the Parma production site and implementing the necessary actions to obtain LEED EB:OM certification for the Fontevivo (Parma) warehouse;
• Launching, in some subsidiaries, the Better Buildings programme, a global programme to assess and improve the Group’s corporate sites according to the highest standards in sustainable building management such as LEED and Green Building Standards;
• Further improving our supply chain-related greenhouse gas emission inventory, with the inclusion of increasingly timely and primary databases, to replace methods of estimating emissions, albeit considered effective and in line with the most stringent emission calculation protocols.

In 2021, events such as COP26 further promoted climate crisis management issues, to which Chiesi has been committed for years. For this reason, in 2022, one of our goals is to constantly monitor developments on this topic and to evaluate new reference models, such as SBTi’s new Net Zero standards.

• Towards eco-friendly products

In 2022, we aim to identify and finalise the analysis parameters for the Eco-friendly products programme - a preparatory action for a complete measurement of the environmental impact of our medicines, integrating these parameters into our internal LCP assessment tool.

The evolution of sustainable product issues at a European level is accelerating. In 2022, we will therefore focus on monitoring the international scenario on these issues, assessing the adaptation of our approach to the latest innovative technological and regulatory trends. Other specific actions planned in 2022 in this area include the following:

• Using FSC paper for secondary packaging in at least 75% of products, the manufacturing of which is outsourced.
• Evaluating the feasibility of expanding pilot projects for the recovery of spent pMDI devices in other European countries where the Group is present.
• Evaluating a pilot project on possible environmental labelling (e.g.
• Environmental Product Declaration) on one of our products.
• Evaluating all R&D projects using the Life Cycle Perspective analysis tool.

Positive impact on people and patients, with the aim of improving their health, wellbeing and quality of life

• Spending on Research and Development

Continuing to allocate around 20% of revenues to Research and Development, with a focus on the respiratory, neonatology, rare disease and specialist areas.  

• Launch of a pilot project for a Humanitarian Access Programme in the area of rare diseases

Launch of the pilot project for a Humanitarian Access Programme. The aim of the programme is to provide free access to treatment for rare diseases to patients in low-income countries where no treatment options are available. The programme will start with a pilot phase of one year to set up a medical governance body to assess requests for access to therapies from treating physicians and to initiate import/export mechanisms for the international supply of drugs.

• Awareness-raising campaigns on respiratory diseases, particularly COPD (Chronic Obstructive Pulmonary Disease)

Public awareness of the social and economic relevance of respiratory diseases can only be achieved through medium- and long-term strategies. This is the reason why it is crucial for us to provide continuity to this type of activity. In 2022, we therefore aim to continue supporting multistakeholder initiatives, such as the Breathe Coalition promoted by EFA, the European Lung Health Group (ELHG) and the recently created International Respiratory Coalition, to contribute to the prioritisation of respiratory diseases, and COPD in particular, in national and international healthcare plans, in view of improving the care of people living with respiratory diseases.

• Our people

In the area of diversity and inclusion, we have two main goals: on the one hand, the goal of launching the action plan to achieve pay equity (equal pay for equal work, regardless of gender) by 2023 in parallel with the equal opportunities plan, and on the other hand, ensuring the social inclusion of people with disabilities. We aim to promote the Employee Resource Groups (ERGs), i.e groups of colleagues united by the desire to propose possible new initiatives to foster an inclusive work environment that values and enhances diversity, with the assistance of the internal Diversity and Inclusion Committee (D&I Committee). We are committed to relaunching the Group’s whistleblowing system, which is also open to external stakeholders, for reporting violations of our Code of Conduct, including any discrimination issues, with a particular focus on genderbased violence. Pursuing the creation of shared value, we aim to identify the main traits that characterise a “Sustainable” Leadership style for Chiesi, as well as communicate and integrate them into the selection, development and promotion processes of our future leaders.

Contribution to the development of the local communities in which the Company operates

• Contribution to territorial development

For years Chiesi has been committed to community development in the territories in which the Group is present. In particular, since 2015 we have identified a specific support and sustainable development strategy for the communities in which we operate, equipping ourselves with a specific internal committee aimed at defining the objectives and methods of intervention, as well as evaluating development projects (Committee for Social Activities and Community Development). In 2022, we aim to contribute approximately 1.4 million euros to initiatives dedicated to the development of the Parma area.

• Commitment to local schools

In 2022, we will continue the B Corp School project through the involvement of 3 schools and the Respira con il Cuore project by involving other schools in the area. These projects are designed to promote a regenerative economy model and disseminate the concept of shared value by involving younger generations.

• KilometroVerdeParma and environmental sustainability activities

In 2022, we will continue our active participation in the initiatives of the KilometroVerdeParma Consortium by creating additional plantations on the Company’s land. We will also evaluate our contribution and participation in new projects to promote environmental sustainability in the area.

• “Parma, io ci sto!”

In 2022, we aim to continue our support to the “Parma, io ci sto!” association, in particular to the #Dieci project promoted by the association, to define a local development strategy for the next ten years.

Promotion of a responsible and sustainable way of doing business, also through collaborative dialogue with stakeholders

• Involvement of patients in business processes

We aim to provide continuity to the ever-increasing inclusion of the patient perspective into company processes. Within this framework, we aim to implement the following activities:

• • Implementing collaboration agreements designed to progressively include patient and caregiver input into our development models and clinical trial design. We would also like to involve patients from the EUPATI initiative in a survey focusing on the digital approach in clinical trials;.
  • Disseminating the study conducted by EFA on asthma and COPD patients on the implementation of digital services.
  • Collaborating with ERS (European Respiratory Society) to set up a working group on digital tools and methods applied to therapeutic solutions.
  • Consolidating the input collected from patients on low carbon inhalers and extending the analysis to spontaneous responses on the environmental impact of inhalers to build a collaborative dialogue with patients and patient associations locally and globally.
  • Continuing to collect - through studies, interviews and questionnaires - patients’ needs to turn them into evidence generation and the definition of products, projects and non-pharmacological solutions to support wellbeing and health in respiratory and neonatal areas.

• Implementation of the Code of Interdependence with suppliers

In 2022, we aim to carry out the following activities:

• Completing the rollout of the standard supplier qualification process (Vendor Qualification) for

the Russia and EEC subsidiaries.

• Returning and sharing with suppliers the engagement plans and co-creation of any opportunities for improvement, for the entities involved in the audit and training process, specifically related to sustainability issues, also implementing training, webinars and meetings specific to each issue. The objective will be to give all suppliers involved the opportunity to improve their social and environmental performance.
• Global launch of an ESG (Environmental, Social, Governance) performance assessment platform for our suppliers.

See also the reporting of activities and targets with respect to the year 2021, as well as the specific goals, as per Strategic Plan 2018-22 in p. 167-175.

General Common Benefit Purposes and Impact Assessment

As a Benefit Corp, in addition to the economic objectives inherent in its business activity, Chiesi is committed to pursuing common benefit purposes and to operating in a responsible, sustainable and transparent manner towards people, communities, territories and the environment, cultural and social assets and activities, bodies and associations, as well as other stakeholders. Intending to comply with legal obligations and report on the impact generated by the company, Chiesi uses the third-party standard B Impact Assessment, the assessment tool underlying B Corp certification. Certification of the impact generated is not required by law. Nevertheless, as this report was in development, an audit of the B Lab certificate was underway to confirm the global B Corp certification for the Chiesi Group. The impact assessment for 2021 related to the Italian perimeter was 112.1 points, measured with version 6 of the B Impact Assessment. There was an increase in the score due to the implementation of the strategic plan, which was updated to incorporate a series of improvement actions derived from the analysis of the B Impact Assessment on Governance, Mission, People, Community, Environment and Customers guidelines. It should be noted that on January 1, 2021, the company Chiesi Italia S.p.A., which is a wholly-owned subsidiary of Chiesi Farmaceutici S.p.A, was established as a Benefit Corporation. The Group’s specialities in the business unit relating to marketing activities in Italy were also transferred. The score given in the following Impact Report therefore also includes the structure transferred as a business unit, as it is in line with the Group’s B Corp re-certification and audit process that will take place in 2022. For more information on the specific score of the company Chiesi Italia S.p.A., please refer to the Impact Report published on the website https://www.chiesi.it/.

Chiesi’s 2021 SDG Scorecard

Chiesi is committed to playing its part in advancing the UN SDGs. This year’s results demonstrate that Chiesi’s activities pose no potential risks to the achievement of any of the SDGs. In fact, Chiesi positively contributes to many SDGs, frequently outperforming average scores for both the pharmaceutical sector and the country of Italy. In 2021, our overall score was higher than in 2020, with a baseline score of 72.8% (up from 69.3% in 2020). This a measurement of the Baseline module, a specific area of the SDG Action Manager tool which assesses the general approach of the company to the SDGs. The Baseline module includes questions on topics such as commitments to human rights, positive labour practices, environmental management systems, and good governance (e.g. anti-corruption) – rooted in the Ten Principles of the UN Global Compact. This allows us to better understand and act on fundamental practices related to managing social and environmental practices generally, while also contributing positively to the UN SDGs.

See more: Chiesi Annual & Sustainability Report 2021, p. 122-127.

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4. Management of Value Chain

ADMINISTRATIVE PRACTICES

Through our global operations, at Chiesi we aim to create value for a wide range of stakeholders, including our local communities, capital providers, Public Administration, employees and collaborators, suppliers and vendors. The amount of wealth generated in 2021 and distributed to Chiesi’s main stakeholders is summarised in the graphic below. The Economic Value Generated indicates the wealth created based on our operations and amounted to €2.43 billion in 2021. 77.6% of the economic value generated was distributed to stakeholders, and 22.4% was retained by the company.

Chiesi’s global manufacturing and distribution network ensures an end-to-end supply of our medicines to patients. While the supply chain encompasses the process between producing and distributing the product, dealing with the suppliers and logistics of getting the product to market, at Chiesi we take a holistic approach to our operating business which encompasses the entire value chain – a set of activities carried out by the company to create value every step of the way. The lingering effects of the Covid-19 pandemic on global value chain management prevailed in 2021, as lockdowns and travel restrictions disrupted activity in every industry and every part of the economy. Manufacturing was heavily affected, as raw material flows slowed, or even stopped completely, affecting the value of finished goods. While demand vanished in some sectors, it escalated elsewhere, causing businesses to significantly alter the structure and function of their supply chains, focusing on more flexibility, agility and resilience. This shake-up also prompted the adoption of an approach that would physically change value-chain management, increasing the number of collaborations and partnerships embarked upon and reassessing value-chain footprints.

Chiesi’s value chain network is a crucial part of our production and distribution process, ensuring that therapies reach those patients that need them. In this regard, our purpose in the area of value chain management is to ensure end-to-end oversight of value and supply, from procuring active ingredients, packaging and raw materials to deliver the final product in each of the countries we supply to directly. In addition to this primary ambition, Chiesi is also committed to ensuring we manage our value chain as responsibly as possible. We do this by promoting our principles with regards to sustainable governance and by ensuring supplier compliance on a number of issues, such as human rights, environmental protection and ethical working methods. By doing so, we can leverage mutual advancement of our business, its people and the planet.

We constantly seek ways to improve and deepen our links with our partners to the benefit of all those involved. These efforts can lead to building a robust and long-lasting relationship with our external suppliers and Contract Manufacturing Organisations (CMOs). This is important so that we can ensure there are no disruptions in our end-to-end value chain, so that patients will continue to be able to receive the therapies that they need.

 
Safeguarding reliable value chains

The Covid-19 pandemic altered the way that we needed to manage our value chains. Despite this, Chiesi’s manufacturing and distribution network remained fully operational. We are in constant contact with our network of partners, suppliers and distributors involved across the value chain to identify potential risks and take appropriate measures to avoid any disruption. No supply disruptions of Chiesi’s products are currently anticipated. Chiesi will continue to take the necessary steps necessary to safeguard the reliable supply of its medicines as this global situation evolves. In 2021, we progressed on our journey towards expanding and refining our value chain to become more agile and increasingly sustainable. This included a first update of our Code of Interdependence, introducing a new evaluation system to monitor our suppliers’ progress in the area of sustainability and expanding our new Biotech plant project so that we can continue to offer innovative advanced therapies to our patients.

Code of Interdependence

In 2019 Chiesi co-created, alongside its business partners and suppliers, the Code of Interdependence, the code of conduct for suppliers and all strategic partners, which has been rolled out globally. The Code of Interdependence is a set of common values through which Chiesi aims to collaborate only with companies and partners that share its commitment to sustainability. Because of this, it is built upon eleven of the UN SDGs. In addition, through the Code of Interdependence, companies which form part of the Chiesi ecosystem commit to following the same high standards with regards to environmental impact, social performance and transparency as Chiesi Group, as well as operating in a responsible manner. The format used for the Code of Interdependence changes the concept of a value chain into an ecosystem, which recognises each of us as essential to the others within a process of mutual learning and co-evolution. The Code includes both mandatory requirements, which represents a minimum level to be implemented, and to “improvement actions” which represent a guide for those that wish to go even further towards implementing future improvements of the principles outlined in the document. In 2021, the Code of Interdependence was revised to include two new SDGs, now reaching a number of 11 SDGs, in total. These new additions include UN SDG #5 Gender Equality, and UN SDG #11 Sustainable Cities and Communities. Despite the challenge of incorporating such a large number of SDGs into the Code, by doing so, we ensure we are always pushing the boundaries further, to deepen our impact while guiding and supporting our suppliers to do the same. More than 50% of Chiesi’s global spending passed through the Code of Interdependence in 2021. We have also begun to carry out audits on our suppliers based on their compliance with the Code of Interdependence to help them reach their aims. This is structured around the Pharmaceutical Supply Chain Initiatives (PSCI), ILO (International Labour Organization), UN SDGs (Sustainable Development Goals) and B Corp principles. In 2021 we audited 11 suppliers, either through our audit process or through Self Assessment Questionnaires.

More sustainable value chains

One of the main areas where we aim to create an impact in our value chain is by encouraging our suppliers and partners to reduce their carbon footprint. This will simultaneously help Chiesi in our quest to reach our own environmental targets. Chiesi is conscious that it has wide reaching commitments and expects the same from its suppliers. We realise that for many of our partners, these expectations can be challenging and overwhelming. To aid our suppliers as part of our joint commitment to improve sustainability dimensions, we have been sharing information with our suppliers on sustainability topics, and advising them on possible pathways towards achieving their goals.

• EcoVadis

In 2021, Chiesi selected EcoVadis, the provider of business sustainability ratings as its partner of choice for assessing our suppliers on elements such as environmental protection, labour and human rights, sustainable procurement practices and ethical business practices. These dimensions are closely linked to Chiesi’s own sustainability goals and allow us to qualify our vendors based on their level of sustainability. We also use the information provided through the EcoVadis scoring system to monitor Chiesi’s own progress on our Scope 3 emissions goals. The benefit of this scoring system is that it allows Chiesi to commence and continue our dialogue regarding sustainability with our partners, encouraging them to deepen their own commitments in line with our own goals.

• Vendor Day and Suppliers Award

Chiesi’s first Vendor Day took place in November 2019. Due to the Covid-19 pandemic, the Vendor Day was cancelled in 2020, placing even more importance on the 2021 edition. The 2021 event (arranged both remotely and in person), which was dedicated to the Group’s suppliers at an international level, focused on the evolution of the Value Chain. During the event, Chiesi members and Top Management presented the medium to long-term objectives the company intends to achieve with the help of its partners, particularly in the field of sustainability. One of the highlights of the event was the Supplier Award ceremony, which recognised those suppliers that had notably contributed to sustainability aims.

IMDD – International Markets Development Division

Once again in 2021, our International Markets Development Division organised its annual contest through which partners could showcase the sustainability actions being carried out across Chiesi’s international markets. Through our work with over 75 partners around the world we believe our IMDD team can help demonstrate Chiesi’s own credentials and sustainability efforts and influence other companies by giving them tangible examples and strategies for starting on their own sustainability journey, if they have not done so already.

 
Vendor qualification

 In order to ensure comprehensive engagement globally, at affiliate level, we have rolled out a qualification process to establish a consistent supplier governance framework. The vendor qualification process, which was revised in 2019 to incorporate sustainability parametres, follows a phased approach and now includes affiliates in 11 markets on top of our Head Quarter spend. In 2021 Spain, China, Poland, Greece, Austria and the USA were included in this process, so that we are now covering about 90% of Chiesi spend with vendor qualification. In 2022, we will be launching this qualification process with six affiliates from Eastern Europe and Russia.

In the context of the Code of Interdependence that the Company applies, it controls its partners regarding the adherence to procedures that concern the protection of the environment, compliance with GDPR provisions and the provision of proper educational services and patient support.

The company requests ISO certificates where they exist and records the technical and organizational measures implemented for the processing of personal data.

Value Chain/Economics

In 2021, in Italy, Chiesi Farmaceutici S.p.A. sourced 47% of its goods from national suppliers. The Group total spending on local suppliers represents 61% of global supply expenses. See more on p. 138

Excluding Healthcare Professionals and catering suppliers Chiesi Hellas cooperates with about 80 suppliers.

See more: Chiesi Annual & Sustainability Report 2021, p. 93-101.

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5. Responsibility

ADMINISTRATIVE PRACTICES

In 2015, we created a Shared Value & Sustainability Department, whose role it is to define the Group Sustainability Strategy, measure and quantify the company’s impact on society and the environment, develop integrated improvement plans and communicate transparently about company environmental and societal performance. In this endeavor the SV&S team is supported by the Impact Committee, whose membership is determined by accountability of the members relative to the areas of impact identified by the company. The Impact Committee defines sustainability objectives in line with Chiesi’s purpose of common benefit expressed in our corporate by-laws, performs the Materiality Analysis, assesses the results achieved and releases our annual Impact Report. Moreover, the Impact Committee provides inputs for the Annual & Sustainability report, the budgeting process as well as the Strategic Plan, ensuring that all of Chiesi’s processes incorporate an impact driven perspective.

Also, we have a specific strategy that guides our actions in local communities, with a dedicated governance body at Headquarter level, the Committee for Social and Community Development Activities. This strategy is implemented both within the territory of Parma and its surrounding areas and at affiliate level, considering specific local needs.

The B Corp certification binds the Management of the company as explicitly stated in the annual Financial Statements - Balance Sheets. By decision of the Chiesi Group from 2023 each subsidiary is obliged to have an authorized executive with exclusive occupation the topics of Shared Value & Sustainability and budget solely for the activities of the department. The department informs in monthly basis of the course of the Sustainability Action Plan both the subsidiary and the competent department of the group company (SV&S Global Team). The authorized executive reports directly to the head of the Value, Access & External Affairs department and reports indirectly (dotted report) to the President & CEO of Chiesi Hellas.

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6. Rules & Processes

ADMINISTRATIVE PRACTICES

Advancing sustainable transformation together

We have reviewed our governance frameworks to ensure we operate in a responsible, sustainable and transparent way towards patients and their caregivers, our employees, the planet and our communities. Companies are being rightly held accountable and scrutinised for the impact they have on the world. As the World Economic Forum points out, “it is no longer acceptable for companies to make empty promises and leave behind the action.” Employees, customers, consumers and society at large expect corporations to create value for society beyond simply generating profit. This change is also reflected in regulatory frameworks, such as the EU Corporate Sustainability Reporting Directive (CSRD), which is expected to enter into force in 2022 and make reporting on Environmental, Social, and Governance (ESG) issues a mandatory requirement for companies all across Europe. To advance sustainable transformation together, Chiesi has reviewed its governance to ensure we operate in a responsible, sustainable and transparent way towards patients and their caregivers, our colleagues, the planet and our communities.

Chiesi uses the B Impact Assessment third party standard, the assessment tool which forms the basis of B Corp certification to report on the impact we generate. The Group is engaged at an international level to follow the continuous evolution of the ESG frameworks and promote a stronger global harmonisation. We participate in ad hoc workstreams within EFPIA, IFPMA and innovative platforms such as the Biopharma Sustainability Roundtable.

We have a specific strategy that guides our actions in local communities, with a dedicated governance body at Headquarter level, the Committee for Social and Community Development Activities. This strategy is implemented both within the territory of Parma and its surrounding areas and at affiliate level, considering specific local needs.

B Corp recertification

B Corps represent one of the most innovative models in terms of positive corporate social and environmental impact. We are profit-seeking companies with a clear purpose: creating value for all stakeholders. Together, we form part of a global movement of ‘Purpose Driven Businesses’, whose aim is to promote a more advanced economic model, which sees the companies as key players in regenerating society and the biosphere. To measure their impact, B Corps use the B Impact Assessment (BIA), developed by the non-profit organisation B Lab, to assess whether they generate more value than the resources they consume (i.e. if the company is regenerative). A company which exceeds a score of 80 (out of 200) on the BIA is eligible for B Corp certification – the only transversal measurement framework which encompasses everything from governance, customers, employees, environmental and community impact. You can find our most recent B Lab certified assessment result here. Chiesi updates its BIA self-assessment on an annual basis, in order to analyse progresses and weaknesses and define short and long-term improvement targets. Meanwhile, the process of certification and recertification is an important opportunity for improvement. To maintain B Corp certification, companies must update their impact assessment every three years and submit it to B Lab for auditing. 2021 saw us begin the process of re-certifying our B Corp status, by compiling details of our progress to date and plans for the future – with the audit phase of the process set to conclude in July 2022. As the largest pharmaceutical certified B Corp, we want to inspire a conversation about corporate action, and the need to move from celebrating commitments to celebrating measurable progress. With our #ActionOverWords campaign, Chiesi wants to cut through the language of corporate sustainability commitments, which often focus on words rather than the actions to achieve them.

In addition to our B Corp recertification efforts, in 2021 Chiesi obtained an ESG rating for the company’s 2020 performance from Cerved rating agency for the first time. We were awarded with an A score, reaching 73.7 points – which was among the best performing companies in the Healthcare Products sector. For 2021, we will again seek a rating from the same agency and we expect to receive the results of these efforts in summer 2022.

Chiesi has been engaging with the B Corp framework for several years and we have reached several related milestones:

• 2018: Chiesi changed its structure and by-laws in Italy and the U.S., adopting the new legal status of Benefit Corporation, for the creation of shared value, generating value both for its business and for society and the environment. This change made sustainability binding and central in decisionmaking processes.
• 2019: In June, Chiesi received the B Corp certification by B Lab, a non-profit body that serves as a global movement of people who want to use business as a force for good. They assessed the social and environmental performance of all Chiesi affiliates through the B Impact Assessment (BIA).
• 2021: In March, Chiesi joined the B Corp Climate Collective (BCCC), committing to the United Nations Framework Convention on Climate Change (UNFCCC) “Race to Zero”. This is a global campaign to rally leadership and support from businesses, cities, regions, investors for a greener future. The objective is to build momentum around the shift to a decarbonised economy.
• 2021: In April Chiesi France was announced as the healthcare sector’s first “Société à mission” (SAM).

Managing our Impact

Chiesi has defined a specific sustainability governance to ensure effective and efficient processes to pursue our purpose, to hold people accountable and responsible for goals and achievements, and to regularly monitor, coordinate and facilitate the implementation of global sustainability projects throughout the company. In 2015, we created a Shared Value & Sustainability Department, whose role it is to define the Group Sustainability Strategy, measure and quantify the company’s impact on society and the environment, develop integrated improvement plans and communicate transparently about company environmental and societal performance. In this endeavor the SV&S team is supported by the Impact Committee, whose membership is determined by accountability of the members relative to the areas of impact identified by the company, and more precisely:

• Mission and Governance
• Human Resources
• Health, Safety and Environment
• Finance and risk management
• Ethics and compliance
• Global Research & Development
• Patient engagement, advocacy and support
• Value chain
• Public affairs

The Impact Committee defines sustainability objectives in line with Chiesi’s purpose of common benefit expressed in our corporate by-laws, performs the Materiality Analysis, assesses the results achieved and releases our annual Impact Report. Moreover, the Impact Committee provides inputs for the Annual & Sustainability report, the budgeting process as well as the Strategic Plan, ensuring that all of Chiesi’s processes incorporate an impact driven perspective.

Risk management

Chiesi is subject to risks and uncertainties inherent to our business and the complex, rapidly evolving environment in which we operate. To better understand and manage our exposure to these risks and to seize any related opportunities, specific processes and procedures are handled by dedicated business and staff functions. To further support and integrate these processes and in order to allow a transversal and holistic view of the overall risk profile, the Group continues the development of an Enterprise Risk Management system that is inspired by international best practices (CoSO ERM - Integrating with Strategy and Performance). The system allows us to identify and assess risks that may impact our business, including ESG risks. At the end of 2021, we integrated our risk assessment and strategic planning processes. We also set up an improved structure for the integration of ESG risks into our Risk Management framework, including those relevant in the medium to long-term (e.g. risks related to climate change, risks related to long-term sustainability objectives) or those which evolve quickly and continuously (e.g. risks related to the evolution of the regulatory framework). In addition, to better understand the climate risks to which we are potentially exposed and to foster more resilient supply chains and business activities, we are analysing such risks in accordance with the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD) promoted by the Financial Stability Board.

 
Ethics and compliance

As a biopharmaceutical company, Chiesi is part of a large and diverse ecosystem, which draws on the wider talents and skills within our sector and the scientific community to serve our patients. We exchange knowledge to move forward together and we embed the highest level of respect, transparency and ethical behaviour as a foundation for all our interactions. The respect of these values is also expected from all our employees, suppliers and partners, when interacting with each other and with our customers. To fully integrate such principles in its business, Chiesi has adopted a specific structure and a set of compliance policies and procedures, in particular:

In 2003, Chiesi implemented the requirements set forth by Italian Legislative Decree no. 231/2001 (“Decree 231”), applicable across the whole Italian territory, by adopting an Organisational, Management and Control Model (known as a “Model 231”), which clearly defines Chiesi’s ethical commitments and responsibilities while conducting its business. In particular, Model 231 defines rules and processes that Chiesi has adopted in order to prevent and avoid unlawful behaviours (as reported within Decree 231) and identifies the role and responsibilities of the Surveillance Body. The Surveillance Body is entrusted with supervising the correct application of Model 231 and periodically reports the outcomes of such activity to the Board of Directors. Model 231 includes the Code of Conduct (updated in 2021), which is binding for all Chiesi bodies and employees and aims to stress the Group’s commitment to using its business as a force for good and contributing to the UN SDGs. Model 231 is available to all employees via Chiesi’s intranet (C-Share) and it is subject to periodic review and revisions.

In 2012, a Corporate Compliance Committee (composed of Chiesi’s Chief HR Officer, Group Compliance Officer and Head of Internal Audit) was appointed to supervise compliance topics affecting the Group and to provide support to Chiesi’s companies and Board of Directors on relevant assessment and management. In 2015, Chiesi’s commitment to compliance led to the formal creation of the “Group Compliance” function. Following this, Chiesi adopted a Group Standard Operating Procedure (SOP) on Interactions with Healthcare Professionals (HCPs) and Healthcare Organisations (HCOs), defining a set of binding principles that each company of the Group must comply with while interacting with HCPs and HCOs. These are aligned with IFMPA, EFPIA and Farmindustria’s respective Codes of Conduct. In 2016, Chiesi adopted a Group Anti-Bribery Policy, encompassing a set of rules and principles on how to recognise and deal with bribery and corruption issues and how to comply with anti-bribery rules and regulations. This Policy is directly applicable to all companies of the Group. In 2016, Chiesi also achieved the highest score of three stars on ethics (“Rating di legalità”) from the Italian Competition and Market Authority (AGCM), a testament to the company’s pursuit of the highest level of compliance when carrying out its business. This three-star rating has been re-confirmed in 2018 and 2022. In 2017, the Chiesi Confidential Reporting System was established to allow any employees to anonymously report potentially unfair or even illicit behaviour or occurrences that could potentially damage Chiesi’s business or reputation. Reporting is done through a web-based platform, independent of Chiesi’s IT system. This tool will be updated in 2022, extending access to both employees and non-employees such as suppliers, and integrating the webbased reporting platform with a multilingual hotline service. In 2019, Chiesi adopted the Suppliers’ Code of Interdependence, expressing Chiesi’s commitment to social and environmental issues and outlining the principles of sustainability which form the basis of our Company’s mission. This Code establishes mandatory requirements (i.e. the rules of conduct all Chiesi people and suppliers must comply with when carrying out their activities) and improvement actions (i.e. actions that Chiesi and its suppliers intend to take to increase the sustainability of their activities). The Code was updated in 2021 to increase the engagement with our partners and stakeholders with key sustainability topics. You can learn more in the Value Chain chapter of this report. In 2021, we reviewed and updated the Chiesi Code of Conduct in alignment with our Values & Behaviours, and taking into account Chiesi’s status of certified B Corp and our approach to inclusion.

Internal auditing

Internal Auditing oversees risk assessments and audits for all Chiesi Group affiliates and a Corporate Internal Audit function has existed since 2008. The Head of Internal Auditing is a member of both the Surveillance Body and the Corporate Compliance Committee, providing them with auditing activities and investigation support as needed. Periodic meetings are held with the Surveillance Body, Corporate Compliance Committee, Statutory Auditors, and External Auditors to share information, results and insights. The Board of Directors is briefed annually on audit activities and related results.

Tax control

Since 2018, we have had an internal Tax Control Framework (TCF) for the detection, measurement, management, and control of tax risks arising from our activities. Within the same framework, we committed to perform ongoing monitoring and maintenance activities required by the model itself. Such activities are framed in the Cooperative Compliance regime we entered in November 2019 and are therefore a duty required by the Italian Tax Authorities (Italian Revenue Agency, Agenzia delle Entrate). In 2021, we also reinforced our collaborative and open approach with the tax authorities, by completing a joint project started in 2020: the International Compliance Assurance Programme (ICAP). ICAP is an innovative worldwide pilot project hosted by the Organisation for Economic Co-operation and Development (OECD), in which multinationals disclose selected tax data with a group of tax authorities, who carry out an open and combined tax risk assessment. The goal of this project is to draft a common consensus among the authorities on the low level of risks – and the connected high assurance provided by our robust tax procedures – of the international transactions and activities carried out by the Chiesi Group. The outcome of this project rewarded Chiesi’s collaborative approach and our tremendous effort in this unprecedented proactive data sharing.

Privacy and data security

As part of our 2021 Materiality Analysis, we also identified one new addition to the priority topics list: Privacy and Data Security. This reflects our increased focus on keeping sensitive healthcare and other personal data safe and secure, in order to build trust with our stakeholders and prevent negative impacts for our business. While a strong focus in this context is placed on patient data, Chiesi follows stringent guidelines for the processing and use of all types of data and in all of the company’s operations, as required by the relevant Data Protection Authorities. To this end, we are fully compliant with the rules laid out in the European General Data Protection Regulation (GDPR, EU Regulation No 679/2016). In 2021, at Group level, a total of six complaints concerning breaches of customer data were received from outside parties and substantiated by the company. They mainly refer to complaints associated with human mistakes that have not led to any notification to Data Protection Authorities or concerned parties. No complaints from regulatory bodies nor leaks, thefts or losses of customer data were registered.

The Organization has incorporated the European regulation into the Chiesi Hellas Privacy Policy as well as internal communications to Employees. The Policy also applies to the forms to the CR (e.g. EOF form, Declarations of consent, corporate Contracts).

 
Pharmacovigilance

Pharmacovigilance is a transversal activity within the company and involves a close relationship with different internal and external stakeholders. In 2021, we reorganised the Global Pharmacovigilance function into three core units – Office, Operations, and Risk Management – to more accurately reflect our future business objectives, our growth in both, new strategic areas (i.e. rare diseases) and traditional core businesses (i.e. respiratory, special care and neonatology), and the increasingly complex regulatory landscape we operate in. This new structure will allow us to continue ensuring the highest standards of quality and safety that exceed patient and other stakeholder expectations.

• Digitisation

We also tapped into the exciting potential of digitisation with the development and deployment of a Robot Process Automation (RPA) for certain repetitive but essential tasks, including the extraction and categorisation of safety information related to Chiesi medicinal products from the European safety database. By automating this process, we have improved the efficiency of data collection and freed up time for our colleagues to focus on quality checks and continuous monitoring of our medicines. In the last two years we also completed two “virtual” pharmacovigilance inspections performed by MHRA and Health Canada, in 2020 and 2021 respectively, both with a positive outcome (i.e. no findings critically impacting on patients’ safety).

Health & Safety management

1. The Organization has a Health and Safety Policy. Organize frequent employees’ trainings on health and safety by the Occupational Doctor. It is also a key part of training when hiring new partners.
2. Chiesi Hellas has a policy for the management of the corporate fleet, including Road Safety based on

European regulations and directives.

See more: Chiesi Annual & Sustainability Report 2021, p. 23-37.

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PERFORMANCE INDICATORS

Our values

Our values and behaviours lay the foundation for Chiesi’s company culture, helping to characterise our internal ethos, and guiding the actions we carry out on a daily basis. You can learn more about our values in the People chapter of this report. Æ At Chiesi, we act with integrity and trust, to foster authentic, transparent relationships with each other and within all our interactions. Æ At Chiesi, we are focused on unlocking each individual’s potential to improve and develop, and in doing so to build on each person’s talents and perspectives to collaborate as an inclusive team. Æ At Chiesi, we act as a force for good, working to generate innovation and value for society and the planet as a whole, while always putting patients first.

At Chiesi, everyone of us is different – everyone of us is Chiesi.

Our purpose

For almost 90 years, Chiesi has been synonymous with delivering transformative solutions that change lives. From our founder Giacomo Chiesi, whose dreams of embarking on cutting-edge research led him to start the company in 1935, all the way through to the creation of Chiesi Global Rare Diseases in 2020 – with many more notable milestones in between – our company has always been driven by the desire to leave a positive footprint for the future.

Values and Behaviours

The Chiesi values and behaviours were reshaped in 2020 in line with our B Corp philosophy. They are known by every person working within the organisation and are applied on a daily basis as a common cultural foundation. In 2021, we carried out a number of training sessions to help widen the understanding of the evolution of our long-standing values and behaviours and ensure that all our colleagues understand what they mean and how they should be applied to their work.

In Chiesi we have adopted the:

• Code of conduct
• Code of ethics
• Suppliers Code of Interdependence
• Code of conduct of the Hellenic Association of Pharmaceutical Companies
• Internal Rules of Procedure
• Anti-Bribery Policy
• Privacy Policy
• Car Policy
• Values & Behaviours Handbook
• Internal Regulation Guide
• Mobility Policy & SOP
• Training & Development SOP
• Recruiting & Selection SOP
• HSEE SOP
• Travel Risk Management SOP
• Group Diversity & Inclusion Policy
• Smart Working Guidelines
• Work Life Harmony_(Νέοι τύποι αδειών Ν.4808/21)

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7. Monitoring

ADMINISTRATIVE PRACTICES

B Corporation Legal Framework

The B Corp legal framework allows companies to protect their mission while ensuring continuation of stakeholder governance even after capital raises and leadership changes. In this regard, the B Corp legal framework is thought to promote good corporate social responsibility. Chiesi has adopted four key purposes of common benefit into its bylaws in line with its Benefit Corporation legal status in Italy, France and the United States, which help guide our business activities. These also align with the key focus areas of the Impact Profile and include:

• a commitment to continuous innovation with regard to the sustainability of all company processes and practices in order to minimise negative impacts and to amplify positive impacts on people, on the biosphere and on the territory, in pursuit of an economy with zero climate-altering gas emissions, in line with European objectives on climate neutrality and national objectives on ecological transition.
• a positive impact on people and patients, with the aim of improving their health, well-being and quality of life.
• a contribution to the development of the local communities where the company operates.
• the promotion of a conscientious and sustainable way of conducting business through a collaborative dialogue with the stakeholders.

B Impact Assessment

The B Impact Assessment is a digital tool that has been designed by B Lab to help companies measure and improve impact across five main categories: governance, workers, community, the environment, and customers. This tool is used to determine whether a company can become a B Corp. Companies wishing to reach B Corp status must achieve a minimum score of 80 in the B Impact Assessment. Even though Chiesi is currently undergoing the recertification procedure as a B Corp, it continues to carry out its own self-assessment based on its results on an annual basis. To do this, it adopts the B Impact Assessment to ensure that it continues to improve upon its sustainability goals. The B Impact Assessment also feeds into the Chiesi Impact Profile, given that the key focus areas are based on the same criteria found in the B Impact Assessment (BIA).

In addition to our B Corp recertification efforts, in 2021 Chiesi obtained an ESG rating for the company’s 2020 performance from Cerved rating agency for the first time. We were awarded with an A score, reaching 73.7 points – which was among the best performing companies in the Healthcare Products sector. For 2021, we will again seek a rating from the same agency and we expect to receive the results of these efforts in summer 2022.

Chiesi Group’s issued the fifth sustainability report. The report provides an overview of our annual activities and their impact on sustainability, demonstrating the value that Chiesi creates for patients, for our employees, for communities, for the planet and for our shareholders, today and in the future. All data and indicators have been selected from a variety of economic, social and environmental factors central to Chiesi’s business and the company’s stakeholders.

The Sustainability Report was prepared in accordance with the “GRI Sustainability Reporting Standards” established by GRI – Global Reporting Initiative (“GRI Standard”): Core option. Regarding the financial data, the scope of reporting corresponds to that of Chiesi’s consolidated financial statement. Regarding the qualitative and quantitative data on social and environmental aspects, the scope of reporting corresponds to Chiesi and its subsidiaries consolidated on a line-by-line basis in the consolidated financial statement. Any exception, regarding the scope of this data, is clearly indicated throughout the Sustainability Report.

Unless otherwise indicated, data and information contained in this Report refer to the year 2021. However, to facilitate an evaluation of the ongoing trend of the activity, the data and information related to the previous year, if available, are reported for comparative purposes. Any restatements of data and figures published in the previous Sustainability Report is clearly indicated throughout the document. To provide the most accurate representation of performance and to ensure that the data is reliable, directly measurable quantities have been included while limiting, as far as possible, the use of estimates. Any figure that has been estimated is indicated as such. The Report has not been subject to external assurance. The report is available on the Chiesi website (www.chiesi.com) in the “Sustainability” section.

Please see the performance indicators according to GRI Standards on pages 151-160

World Economic Forum Framework on pages 161-165 Annual & Sustainability Report 2021

How we measure our impact

When it comes to driving sustainable progress and shared value in the healthcare sector, actions speak louder than words. At Chiesi, we are committed to measuring our impact both within and beyond our organisation in a systematic way. Our methodology for impact measurement integrates different reporting frameworks:

• B Impact Assessment from B Lab
• The Benefit Corporation legal framework
• Global Reporting Initiative (GRI) Standards
• UN Sustainable Development Goals (SDGs)
• World Economic Forum’s recommended metrics (from the Measuring Stakeholder Capitalism white paper) for non-financial reporting.

Chiesi Impact Profile

This report’s content is structured in alignment with our Chiesi Impact Profile and encompasses the six following areas: Patients, Environment, Community, Value Chain, People and Governance, Mission & Engagement. Chiesi’s Impact Profile is a qualitative graphic representation of the company’s positive impact on different areas. The development of the profile originates from the impact areas mentioned above and covered in the B Impact Assessment (BIA), the related scoring system and the company’s Materiality Analysis. The Impact Profile tool is endowed with a qualitative-quantitative description of actions in place and actions for improvement, which Chiesi elects to use as a tool to monitor its impact related evolution, and to define yearly and mid-term targets and improvement plans across the organisation.

Our Impact Report 2022 on pages 166-177 Annual & Sustainability Report 2021. As a Benefit Corporation, Chiesi Farmaceutici S.p.A. is required to draw up an impact report containing activities and objectives for the achievement of common benefit purposes, pursuant to Italian Law.

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8. Incentive and reward systems for Sustainable Development

ADMINISTRATIVE PRACTICES

Chiesi Hellas provides an inclusive (SDG #10) remuneration and benefits system (SDG #8) to all employees, included a bonus system. There is also a specific a Remuneration & Payment Policy (including increases) communicated to all for transparency reasons. Indeed, in 2021 the Remuneration Policy focused on narrowing the gender pay gap (SDG #5).

Additional Benefits

• Private Insurance for Medical & Hospital Coverage
• Pension plan
• Provision of meals (ticket restaurant)
• Provision of equipment (laptop and mobile)
• Leaves
• Travel expenses
• Provision of company car

Our Remuneration Policy ensures basic criteria for remuneration performance and increase in the result of work and contribution to the organization, based on the position and grading of each colleague while confirming a fee of more than 50% of the market.

All of Chiesi’s management is held accountable for reaching the Group’s sustainability goals which are included in the company rewarding system.

In the Rules of Procedure it is indicated 20 hours of voluntary work per employee per year subsidized by the company, so that during working days and time to devote time to social and environmental contribution. In 2021, 300 hours have been used and in 2022 412 hours so far.

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PERFORMANCE INDICATORS

Renumaration policy

All of Chiesi’s management is held accountable for reaching the Group’s sustainability goals which are included in the company rewarding system.

Annual total compensation ratio

Chiesi considers the CEO Pay Ratio to be sensitive information whose disclosure may impact the company’s strategy. For this reason, it has not been disclosed.

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9. Stakeholder Engagement

ADMINISTRATIVE PRACTICES

To better inform our materiality analysis, we engaged with stakeholders developing specific surveys to capture the voices of employees, suppliers and other external interested parties. Our stakeholder map provides the starting point from which we determine which stakeholders are impacted by our business activities and to help us pinpoint which areas within the business require attention in terms of strategic input, alongside those topics identified within the materiality matrix.

Stakeholder engagement methods

The following table summarises all methods used for stakeholder engagement according to the different categories of stakeholders

To this end, we collaborate closely with a range of different associations within the sector worldwide to contribute to increased access to our products in relevant therapeutic areas, including rare diseases, while working alongside healthcare authorities to increase disease awareness and promote training for healthcare professionals. Our engagement with all relevant stakeholders – from governments, healthcare authorities and healthcare professionals, to patient advocacy groups – is guided by our desire to understand and address gaps in access to care, to deliver concrete solutions to bridge these gaps, and to move together towards more sustainable healthcare for all.

 
Carbon Minimal Inhaler

In 2021, we continued to progress at pace, alongside our plan to deliver the first Carbon Minimal Inhaler by 2025. We have an open dialogue with many customers and stakeholders following our progress in this area, including medical institutions and consortia, patient groups and healthcare providers, governments and institutions. This is a complex process, and as we navigate this trajectory, which falls between both environmental and health policy, we will remain in contact with all those groups that need to be involved. This will enable us to create awareness about the crucial work we are carrying out in this area and to achieve our goals through collaboration.

Chiesi Foundation

Over the course of 2021, the Chiesi Foundation team embarked on a collaborative process involving different internal and external stakeholders, which led to the definition of a long-term 2030 strategy. The strategy focuses on three clearly defined axes:

• For Chiesi Foundation to be known and recognised as an enabler corporate Foundation operating in the field of global health with a specific focus on neonatal and respiratory care in low and middle income settings.
• For the NEST and GASP models to be recognised at institutional level as an effective intervention model for neonatal and respiratory care.
• For all Chiesi Foundation interventions to be based on a data-driven quality improvement approach.

Engaging with patients for greater impact

Our patients are the reason why we are in business. The value of the treatments, care, and solutions that we provide extends beyond merely treating the symptoms of chronic diseases. We want to give our patients and their loved ones the support needed to live more active and fulfilling lives throughout the entire health journey. To be able to do that, we listen to their voice at every step of the way. We make a constant effort to understand what our patients go through and not just from a clinical perspective. We listen to their emotions, desires and needs, which motivate them in going about their daily lives. We involve them in the definition and design of meaningful health outcomes. We pride ourselves in deep, long-lasting relationships of trust, which we have built with our patient communities around the globe. To Chiesi, innovating for impact means looking beyond the clinical benefits of our medicines and therapeutic targets; being there for our patients in their entire journey (including the daily management of their diseases, rehabilitation, their ability to lead autonomous, fulfilling lives). We constantly seek to engage with associations representing those who live with severe diseases, so that we can better understand their needs and gather feedback to adapt and adjust the solutions we provide. At Chiesi, we facilitate participation in clinical studies and generate questionnaires to collect and assess patient-reported outcomes of clinical trials. The shared value mindset is completely embedded in all our R&D processes, with a particular focus on the positive impact that we can create for patients and the environment. Chiesi has several ongoing R&D projects focused on embedding patients value and voices within product development, as well as capturing patient needs.

• Voice of Patients Analysis: we developed a new method to derive insights on patients’ experiences, which could complement traditional approaches to drive more patient-focused drug development. The results of the analysis for bronchiectasis patients were submitted to the European Respiratory Journal Open Research and the analysis for Idiopathic Pulmonary Fibrosis (IPF) was presented at the European Pulmonary Fibrosis Patient Summit.
• Project HOPE: cross-company initiative which aims to embed patient engagement culture across all teams, using a methodology (the Human factors science) recognised by regulatory authorities, to gather patient feedback, analyse results and take formally documented design decisions to improve product development. This encourages knowledge sharing and team collaboration, so that the insights can be applied to every aspect of our work, and be documented in a regulatory-friendly way that supports our claims around patient impact.
• Project EUPATI: we are committed to an active and collaborative dialogue that involves patients, caregivers and other health stakeholders. For instance, we work with EUPATI (European Academia of Patients), an important European patient association, in order to learn more about their reality, objectives and ongoing activities.

In Chiesi Hellas, we have subscribed to a syndicated database of healthcare professionals, import them into a complete cloud based Customer Relationship Management (CRM) system and identification and targeting of the most operationally important of them for a sustainable management Clientele.

Additionally, we continuously conduct market research & customer satisfaction surveys with the aim of identifying customer needs, expectations, behaviors, their opinion about pharmaceuticals, our services and our people with the aim of keeping our leading position in the categories we operate through a sustainable development practice.

We identify our clientele in personas identification and proceed to strategic communication management based on their needs and corporate viability.

We record all communication interactions for all our stakeholders individually and per category and we evaluate them through the CRM system.

Detailed mapping of the following channels:

• face-to-face, telephone and video communication
• group and individual email sending
• group activities such as presentations, webinars and satellite symposia

Evaluation of the results of the actions using:

• Market and satisfaction surveys
• Email marketing metrics such as open rate, click rate, bounce rate
• Additional actions to receive feedback via SMS, email and QR code surveys

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PERFORMANCE INDICATORS

SRS-102-44: Σημαντικά θέματα και προβληματισμοί που προέκυψαν.

We also use other indicators to measure our impact such as:

• Quantitative performance indicators: Percentage of achievement of the strategic plan.
• Quality indicators (customer satisfaction): NPS, CSAT

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10. Product Responsibility and Innovation

ADMINISTRATIVE PRACTICES

The need for an increasingly sustainable world to benefit the health of the planet and civilisation, is clearer than ever. At Chiesi, we are acutely aware of this need. The starting point for all our actions centres around one simple question: how can we provide outstanding therapeutic solutions and improve people’s quality of life worldwide while driving a sustainable and responsible business?

WE GENERATE INNOVATION AND VALUE PUTTING THE PATIENT FIRST

• We take responsibilities and risks in looking for new challenges and opportunities, leveraging on our entrepreneurial spirit
• We listen to the voice of patients and their needs to create the best solution for them, their families and HCPs
• We innovate and challenge the status quo leveraging our creativity, competencies and intuitions
• We pursue excellence to ensure the highest quality in our results and products
• We put passion and heart in our job to compete with the best and win our challenges

One of our key focus areas of our Impact Profile include

• our commitment to continuous innovation with regard to the sustainability of all company processes and practices in order to minimise negative impacts and to amplify positive impacts on people, on the biosphere and on the territory, in pursuit of an economy with zero climate-altering gas emissions, in line with European objectives on climate neutrality and national objectives on ecological transition.
• our positive impact on people and patients, with the aim of improving their health, well-being and quality of life.

 
Innovating for the future

Our research and development (R&D) team plays a key role in generating sustainable value – for our business and beyond. Leveraging cutting-edge technologies and innovations, our R&D teams oversee a number of integrated functional areas focused on pipeline projects, including discovery and preclinical research, chemistry and manufacturing controls, drug delivery technology, clinical development, regulatory affairs, pharmacovigilance, intellectual property, quality assurance, project management and leadership, and R&D portfolio management. The team also supports post-market surveillance activities, as well as life cycle management programmes. The research and development team has its headquarters in the Research Centre in Parma (Italy) and integrates with six other major research centres in Paris (France), Chippenham (UK), Cary (USA), Lidingo (Sweden), Shanghai (China) and Toronto (Canada). Approximately 81% of Chiesi’s turnover is generated from products developed as a result of internal research. In 2021, Chiesi was confirmed as the leading Italian pharmaceutical company in Europe in this regard, having filed 42 Patent Applications at the EPO (European Patent Office). Furthermore, 2021 saw our company achieve a milestone of more than 5,600 global patents.

 
Investments in Reseach & Development

Chiesi is committed to driving sustainable value for patients by providing outstanding therapeutic solutions. In order to ensure we continue to do so, research and development (R&D) plays a key role in developing new solutions through leading technologies and innovations.

• In the 2021 EU Industrial R&D Investment Scoreboard, Chiesi was listed 1st among the Italian pharmaceutical companies
• In 2021, Chiesi was confirmed as the 1st Italian pharma company in Europe for patent deposits.
• In 2021, the Chiesi portfolio included more than 5,643 worldwide patents.

One area of rapid growth for the life-science industry lies in biotechnology – a sector which includes the flexible production of cells and active ingredients and the development of monoclonal antibodies (MAb), enzymes and other proteins. In the past 30 years, the biological sector has grown at an annual rate of more than 12 per cent, with the volume of business expected to double by 2030. The field of biotechnology holds a great deal of promise for tackling patients’ unmet needs, particularly when it comes to rare diseases – but greater production capacity is needed to keep up with demand. At Chiesi, we are keen to bring the promise of this technology to serve our patients. To this end, we have announced the creation of a Biotech Centre of Excellence Plant to be operational from 2024. Located adjacent to our current production plant in Parma, Italy, this new hub will employ 105 people to focus on biotechnological activity, starting with MAbs produced with recombinant DNA techniques from a single type of immune cell. Our investment will consolidate and build upon our existing biotechnology know-how, and will also support future R&D activities, the integration of newer products into our portfolio and the sharing of best practices across our manufacturing network. The first finished products from the new plant are expected to roll-out in 2025. You can learn more about the new Biotech Centre of Excellence in the Value Chain chapter. As part of our mission to do business in a way that generates value for society and the environment, this new plant will exploit innovative technologies and solutions to ensure maximum sustainability, while still enabling us to bring cutting-edge therapies to those who need them. By considering environmental efficiency from the start of the design process, and adhering to high standards as regards water consumption, waste generation and employee wellbeing, we aim to create a facility which embodies Chiesi’s overall B Corp-led way of working. When it comes to fostering a more sustainable pharmaceutical sector, it is paramount to ensure efforts to increase our positive social and environmental impact do not come as a cost to patient-centricity. We are committed to delivering high-quality, effective therapeutic solutions that relieve the burden of disease from patients and their caregivers – and we believe it is possible to do this while also making a difference for our planet’s wellbeing.

Development of new services for patients in the area of rare diseases

In 2021 we set for ourselves the goal of following up service programmes to support patients with rare diseases in view of improving their living conditions, as well as those of their caregivers. The goal also included the extension of certain primary immunodeficiencies, a new strategic area for rare diseases, and evaluating the feasibility of a humanitarian access programme for certain therapies. The target was achieved and executed through the following activities:

• Initiation of collaboration with Eversana, a leading company in specialised pharmacy services, for drug access support and home delivery of pegademase in the United States, for patients with adenosine deaminase deficiency.
• Home delivery and administration, in several European countries, of velmanase alpha, approved for the treatment of alpha-mannosidosis.
• Launch and execution of the pre-authorisation access programme of pegunigalsidase alfa (PRX102) for patients with Fabry disease in the United States.
• Launch and execution of the pre-authorisation access programme of velmanase alpha for patients with alpha mannosidosis in the United States.

Clinical Trial Transparency and Data-Sharing

We have several projects aimed at capturing indirect data on patients’ needs and sharing clinical knowledge with patients and researchers. Chiesi is committed to Clinical Trial Transparency and Data Sharing. In accordance with local legislative and applicable requirements on clinical studies, our company discloses Clinical Protocol and Study-related Information, as well as summary results of clinical studies sponsored by Chiesi Farmaceutici S.p.A. and Chiesi Italia S.p.A, in public registries (e.g. ClinicalTrials.gov, EU Clinical Trials Register, CTIS portal). All activities surrounding clinical trials and data sharing are undertaken in full respect of data privacy and compliance with all required legal privacy and data-sharing requirements. Chiesi has also adopted mechanisms to enable the sharing of clinical trial information and results with trial participants and the general public, consistent with applicable laws.

Product safety and quality

Ensuring the quality and safety of our highly diverse product portfolio starts with our production processes – we adhere to the highest European and international manufacturing standards (e.g. European Good Manufacturing practices, US FDA, Sino FDA, Brazilian ANVISA). Our production plants are regularly inspected and certified by all relevant regulatory bodies. To monitor the performance and safety of our therapies once on the markets, we apply a global, proactive approach to pharmacovigilance. We collect and collate adverse patient experiences, analyse the data to identify any causal relationship between the product and the experience in question, and submit this information to the pharmaceutical regulatory authorities as required. This allows us to maintain a continuously updated risk-benefit profile for all our medicines, ensuring liability and appropriate action as necessary for products marketed or under clinical development. Pharmacovigilance is a transversal activity within the company and involves a close relationship with different internal and external stakeholders. In 2021, we reorganised the Global Pharmacovigilance function into three core units – Office, Operations, and Risk Management – to more accurately reflect our future business objectives, our growth in both, new strategic areas (i.e. rare diseases) and traditional core businesses (i.e. respiratory, special care and neonatology), and the increasingly complex regulatory landscape we operate in. This new structure will allow us to continue ensuring the highest standards of quality and safety that exceed patient and other stakeholder expectations. Our products are labeled with precise composition (quantity and name of each material). In line with the applicable regulatory frameworks, pharmaceutical products are considered special waste and to be disposed of accordingly by the end user.

 
Towards environmentally sustainable products

In 2021, we initiated a global programme for the environmentally friendly conversion of our products (called ‘Eco-friendly products’) through a Life Cycle Perspective (LCP) approach to comprehensively analyse the environmental impact of our products. The aim is to consider the entire life cycle of products, implementing sustainability criteria at an early stage of research and development. This programme is complementary to the Carbon Footprint analyses already carried out on our main products, which have allowed us to finalise the inventory of greenhouse gas emissions. One of the first actions taken in this regard concerns the use of FSC (Forest Stewardship Council) certified paper for the secondary packaging of major products at all our production sites. In 2021, we also conducted and supported pilot projects for the recovery of spent pMDI products (pressurised inhalers) in some of our subsidiaries, in view of decreasing the environmental impact of these drugs in the end-of-life phase. For projects in the R&D phase, our aim is also to optimise the environmental impact of the active ingredients, other ingredients, excipients and packaging used. To this end, we have developed an internal LCP (Life Cycle Perspective) analysis tool that will enable us to support the evaluation and identification of improvement actions throughout the Research and Development (R&D) and industrialisation cycle.

• Our commitment to sustainable innovation

Chiesi will adopt a new generation propellant (HFA 152a) with a low global warming potential to develop carbon minimal pMDI products by 2025.

 
Carbon Minimal Inhaler

One of the main projects that Chiesi is working on, as a means to reduce emissions derived from the therapies we provide, is the Carbon Minimal Inhaler project. This project is of the utmost importance for Chiesi, because one of our greatest contributors to GHG emissions comes from the use of the propellant contained in some of our devices for inhalation of antiasthmatic drugs. The challenge this project aims to overcome is the high climate-altering effect caused by the propellant gas present in one type of inhaler: the so-called pressurised metered-dose inhalers (pMDIs) or spray inhalers, which serve to release the drugs effectively. The goal Chiesi has set is to replace the current propellant with a new one, called HFA152a, which has a much lower Global Warming Potential (GWP), in order to reduce the impact and make inhalers more sustainable. In 2019, Chiesi was the first company to announce such a solution to reduce the carbon footprint of inhalers by up to 90%. We will do this alongside continuing to invest in Dry Powder Inhaler (DPI) technology as well, to make sure we provide all the therapeutic options that asthma and COPD patients need both now and in the future. The path to achieving this goal includes a €350 million investment to accelerate the development of a Chiesi solution to address the carbon footprint of pMDIs. The first carbon minimal inhaler will be developed by 2025. By 2030 we expect to be able to extend the availability to every geographic area in which we operate.

Patient safety and efficacy represent the primary driver in the complex choice of the most suitable inhaled therapy taken between physicians and their patients.

Here is how your contribution can have a great positive impact on environmental protection

Eco-Friendly Products

To reinforce and improve the environmental sustainability profile of Chiesi’s therapies, we also launched our Eco-Friendly Products Challenge in 2021. The Eco-Friendly Products strategy aims at achieving the following macro-objectives:

• Assess the environmental sustainability of Chiesi products in accordance with circular economy principles
• Promote the improvement of the sustainability profile of products
• Support a green design approach for Chiesi products, to contribute to the UN SDGs and meet the demands of future regulations
• Participate in international working groups contributing to environmental sustainability guidelines and interacting with regulatory agencies

An important step to improving the impact of Chiesi products has been to equip all those in charge of researching, developing, and bringing to market new products with a Life Cycle Perspective (LCP) tool. By collecting inputs from the different development phases, the LCP tool enables informed choices through the measurement of the sustainability profile of each product. The tool analyses four main areas – chemistry, design and materials, natural resources and ethics – by providing a synthetic score for each area. The tool will also be applied to the products already on the market to further explore life cycle management opportunities to improve their sustainability profile.

Animal Welfare

Chiesi is committed to keep the number of animals involved in the scientific research setting to a minimum and to always respect their well-being. This objective is pursued according to the principles of the 3Rs by adopting all of the latest scientific and technological innovations to facilitate the implementation of these principles and, where possible, introduce alternatives. The 3Rs principles are:

• Replace the use of animals with alternative techniques or avoid the use of animals;
• Reduce the number of animals used to a minimum, to obtain information from fewer animals or more information from the same number of animals; and
• Refine the way experiments are carried out, to make sure animals suffer as little as possible. This includes better housing and developments to procedures which minimise pain and suffering and/or improve animal welfare.

In June 2021 Chiesi animal facility received the full accreditation from the Association for Assessment and Accreditation of Laboratory Animal Care (AAALAC).

B Corp School

The B Corp School project is promoted by Invento Innovation Lab, a B Corp that aims to promote new regenerative business models with a special focus on schools, thus accompanying students in the creation of start-ups based on the B Corp model. In 2021 we involved three schools in the Parma area that received specific training and actively worked creating several start-ups based on positive impact models.

See also: Annual & Sustainability Report 2021, p. 21, 40, 45, 54-55, 65, 70, 75, 111, 118, 170, 173

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PERFORMANCE INDICATORS

In 2021, 19,8% of our revenues were dedicated to R&D €479m total expenses in R&D

In 2021, we had €479m total expenses in R&D

• Respiratory 70.7%
• Rare Disease 13.1%
• Neonatology 8.4%
• Special Care 7.8%

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11. Usage of Natural Resources

ADMINISTRATIVE PRACTICES

The health of the planet and that of its inhabitants are interdependent.

2022 will mark the 50th anniversary of the Club of Rome’s landmark report, ‘The Limits to Growth’. This report – first published on 2 March 1972 – was the first to model our planet’s interconnected systems and make clear that if growth trends in population, industrialisation, resource use and pollution continued unchanged, we would reach and then overshoot the carrying capacity of the Earth at some point in the next one hundred years. Some fifty years on, the call for a change in direction is more urgent than ever. The report’s modelling was remarkably accurate and prescient as the world declares the climate emergency to be real and global ecosystems to be at breaking point. The planet is currently facing a climate emergency, which will affect not only future generations but also our own. Collectively, we must do all that we can to immediately reduce CO2 emissions and help all communities worldwide rapidly adapt to the consequences of rising global temperatures. 2021 saw the celebration of the COP26 international climate conference which took place in Glasgow in November. While the main goal was to secure global net zero by 2050 and keep a minimum of 1.5°C of warming within reach, other goals were also achieved. These included fast-tracking the phase-out of coal as well as mobilising at least $100bn in climate finance per year. The Glasgow Climate Pact was signed, and the Paris Agreement’s Rulebook was completed following 13 days of negotiations, renewing the global pledge to keep planetary concerns at the top of the priority list. Also in 2021, the Intergovernmental Panel on Climate Change (IPCC) Working Group I contribution to the Sixth Assessment Report provided a physical understanding of the climate system and climate change, bringing together the latest advances in climate science. It drew the conclusion that human influence had warmed the atmosphere, ocean and land and that global warming of 1.5°C and 2°C will be exceeded during the 21st century unless deep reductions in carbon dioxide (CO2) and other greenhouse gas emissions occur in the coming decades. Chiesi is committed to detecting and eliminating any adverse environmental impact to benefit the health of current and future generations.

Eco-Friendly Products

An important step to improving the impact of Chiesi products has been to equip all those in charge of researching, developing, and bringing to market new products with a Life Cycle Perspective (LCP) tool. By collecting inputs from the different development phases, the LCP tool enables informed choices through the measurement of the sustainability profile of each product. The tool analyses four main areas – chemistry, design and materials, natural resources and ethics – by providing a synthetic score for each area. The tool will also be applied to the products already on the market to further explore life cycle management opportunities to improve their sustainability profile.

One of the main programmes which already exists and which relates both to this challenge and to the Carbon Neutrality project is the Carbon Minimal Inhaler, aimed at transitioning our pMDI platform to a new low Global Warming Potential propellant.

Better Building

The Better Building project aims to improve sustainability performances across the built surrounding, from buildings, to cities and beyond. Our journey began in 2020 from our HQ in Parma and has gradually scaled up to all our affiliates, with the aim of reaching and connecting all our sites. Better Building is a global programme with the aim of improving the well-being of people working in our facilities as well as the sustainability performance of our sites, by reducing the environmental impact on natural systems and local communities, from the processes of new constructions to the operations of existing structures. The main outcomes of the programme are:

• Sustainable buildings, as examples of biosphere restoration (Planet) and improvement of well-being and quality of life of people (People).
• Conscious communities, living in these buildings and actively contributing to a better future.

We achieve progress towards the first goal by taking into account the entire building lifecycle, from its design, to construction and finally to its operation. Our ambition is to:

• Achieve environment and people centred design for all new buildings.
• Ensure all new facilities are eco-friendly from the construction stage.
• Carry out continuous monitoring & ranking to track the progress of continuous improvement processes.

E-Mobility

Mobility is another significant area in the journey towards the reduction of our GHG emissions. Building on our Human Transportation policy that was expanded in 2020, we continued to put our efforts into reducing the environmental impact of our transportation structure. This includes reducing the emissions of our own corporate car fleet, as well as encouraging our employees to opt for more environmentally friendly transportation means, such as cycling or public transport. An important project in this context is the E-save predictive tool, currently under development by our Corporate Mobility department, which has the aim to reduce the GHG emissions arising from our corporate car fleet. We aim to roll out this instrument to our affiliates during the second half of 2022 depending on the driving profile, country specificities (taxation, incentives etc.) of each affiliate and the availability of electric cars over the next few years. We have been charting a reduction curve of the GHG emissions from our entire car fleet in terms of a target to work towards. E-save is a predictive tool that can be modified, as required, and it will be updated as the initiative expands, giving us a picture of the present car fleet performance in terms of GHG emissions. Following this, we will be able to develop a strategy to reduce its contribution towards our 2030 goals. We are also encouraging our employees to think about the way they travel to and from work. In terms of commuting, we are offering alternatives for our employees such as subsidies or other contributions for train or bus tickets. In Parma, we have a dedicated shuttle which provides transportation to all our sites. Similar activities are available elsewhere across the globe, in line with our Global Human Transportation policy and Mobility Guidelines.

In Chiesi Hellas, the sustainability program includes several initiatives aimed at adopting a truly sustainable business approach, in which strategy and sustainability go hand in hand and align with the Company's value and mission to combine commitment to results with integrity, operating in a responsible manner.

The success of a sustainable business model can only be achieved by measuring its impact.

We have developed a systematic approach that incorporates the various impact measurement and representation frameworks that are considered key to our mutual benefit strategy.

Energy

The company covers its energy needs using RES and specifically wind energy provided by a wind farm which must be younger than 5 years old.

Materials - Recycling

A central recycling point has been created in the building, where all recycling materials are collected before their transfer to the respective collection agencies. Recycling concerns paper, plastic, glass, aluminum, lamps, lids, organic waste, batteries and anything that can be systematically recycled.

Water

The company takes care of the responsible use of water with photocell systems, flow controlled chillers, hygiene and purity. filters The water is discharged through the central network in which the company has no right of intervention or alternative choice (centralized sewage system).

Product Life Cycle

In Chiesi, we monitor the lifecycle footprint of our products and implements plans for improvement and evaluation purposes, which we disclose, as it should, according to our commitments as a Benefit Corporation.

See also: Annual & Sustainability Report 2021, p. 58-77

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PERFORMANCE INDICATORS

Waste diverted from disposal

Energy consumption

Water consumption

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12. Resource Management

ADMINISTRATIVE PRACTICES

Chiesi as a certified B Corp Company chooses to act as a force for the collective good by serving two objectives, business benefit but also mutual benefit in terms of people and the environment. Therefore it is on its obligations to target the footprint of its business activities, to measure performance and to make the results publicly available. The Group discloses the quantitative and qualitative targets it sets in an annual basis in relation to the resource and energy efficiency, the use of renewable energy sources, and how they are fulfilled. Through the Sustainability Report posted annually on the Group's website, the total results are reported in terms of the Company's environmental footprint. The Company measures water consumption, electricity, recycling materials (e.g. paper, plastic, organic waste), the quality of the air in its facilities. Through the evaluation of the BIA (B Impact Assesment) of the independent non-profit organization B Lab, the Group measures its performance, identifies points of improvement and prepares its strategic actions in terms of resource management.

2022 Objectives – Group Company

Towards Carbon Neutrality

In 2022 we aim to go beyond the reduction targets approved by SBTi, by developing a reduction plan for each emission source in our greenhouse gas inventory, as well as identifying specific reduction targets. We are convinced that, for a meaningful and serious approach towards carbon neutrality, it is our duty to spare no efforts in minimising all emission sources but, at the same time, to implement measures to remove as much carbon dioxide as possible from the atmosphere. Therefore, by 2022 we aim to finalise a specific carbon removal strategy for the Group in accordance with the highest offsetting standards. We also aim to continue our emission reporting actions in our Annual and Sustainability Report and within the CDP initiative. In 2022 we want to take further specific actions:

• Optimising our HFA gas abatement system to achieve a 60% reduction in emissions from propellant leakage during the production process;
• Obtaining LEED EB:OM certification for the new building (Pilotis) at the Parma production site and implementing the necessary actions to obtain LEED EB:OM certification for the Fontevivo (Parma) warehouse;
• Launching, in some subsidiaries, the Better Buildings programme, a global programme to assess and improve the Group’s corporate sites according to the highest standards in sustainable building management such as LEED and Green Building Standards;
• Further improving our supply chain-related greenhouse gas emission inventory, with the inclusion of increasingly timely and primary databases, to replace methods of estimating emissions, albeit considered effective and in line with the most stringent emission calculation protocols.

In 2021, events such as COP26 further promoted climate crisis management issues, to which Chiesi has been committed for years. For this reason, in 2022, one of our goals is to constantly monitor developments on this topic and to evaluate new reference models, such as SBTi’s new Net Zero standards.

Towards eco-friendly products

In 2022, we aim to identify and finalise the analysis parameters for the Ecofriendly products programme - a preparatory action for a complete measurement of the environmental impact of our medicines, integrating these parameters into our internal LCP assessment tool. The evolution of sustainable product issues at a European level is accelerating. In 2022, we will therefore focus on monitoring the international scenario on these issues, assessing the adaptation of our approach to the latest innovative technological and regulatory trends. Other specific actions planned in 2022 in this area include the following:

• Using FSC paper for secondary packaging in at least 75% of products, the manufacturing of which is outsourced.
• Evaluating the feasibility of expanding pilot projects for the recovery of spent pMDI devices in other European countries where the Group is present.
• Evaluating a pilot project on possible environmental labelling (e.g. Environmental Product Declaration) on one of our products. Æ Evaluating all R&D projects using the Life Cycle Perspective analysis tool.

In Chiesi Hellas, we have introduced a series of actions to achieve the environmental objectives:

• We support a recycling program for paper, plastic, packaging, bottle caps, batteries, metal, lamps and coffee capsules. Relevant collection bins are located at the recycling point and on each floor with clearly visible signage. The collection of their contents is done by the respective recycling companies, while the collection of paper and coffee capsules is done by the Municipality.
• In the context of reducing our footprint on the planet, we are implementing the use of glass glasses and dishes, replacing disposable kitchen supplies.
• We support and promote electricity saving (2% annually) by using low-power light bulbs LED and not using electricity in offices when no one is inside. Also, photocells were placed in common areas of low traffic and the space was equipped with white appliances and A class air-conditions.
• We record the consumption of energy (electricity, water, recycling, etc.) in the relevant "recycling green paper" and keep an electronic record. We regularly inform our employees.
• We adopted the "Paperless" policy while encouraging the use of digital communication and work and implementing specific KPIs annually. The aim is to reduce paper consumption by at least 5% per year.
• We use recycled paper or/and FSC certified to protect the environment. Similarly, the cleaning crew uses biological (chemical-free) and environmentally friendly detergents.
• We adopted the "Plastic Free" policy and we reduce the use of plastic within the company by replacing them with paper products. We also abolished the use of plastic water bottles with a device directly connected to the mains supply.
• We measure our footprint in organic foods
• We encourage the use of video calls versus travelling (physical presence at meetings) in order to help reduce emissions from airplanes and cars (5% per annually).
• We are gradually replacing conventional company cars with hybrid or plug-in hybrids, implementing CHH's 3-year sustainability plan (2019-2022), which have very low CO2 emissions.
• We provide to those employees who live at a great distance from the company free toll coverage of Attiki Odos in order to speed up access to work and reduce CO2.
• We encourage the use of public transport and subsidize monthly travel cards by bus, train or metro.
• We collect our corporate non-financial data on HSEE issues and post our footprint on a relevant corporate website so that annually we can make improvements to these indicators (in line with GRI's and carbon neutrality targets). We look at the connections and synergies between the data for the indicators required to complete them.

See also: Annual & Sustainability Report 2021, p. 169-170

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PERFORMANCE INDICATORS

Energy consumption reduction

Waste diverted from disposal

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13. Climate-relevant emissions

ADMINISTRATIVE PRACTICES

Our commitment to carbon neutrality

The road towards carbon neutrality is full of challenges, but Chiesi is fully committed to achieving this essential goal, for people, planet and prosperity. Therefore, we want to be bold, even if we are aware that it is a difficult journey with obstacles and one where we are likely to experience setbacks. Given this, we will need to readjust our route based on unexpected outcomes but will always communicate this journey in a transparent way. We are mindful that achieving our aims will require a strong effort from all those involved, including our people, suppliers and partners. We encourage our employees to get involved in our activities around planet health, inviting them to take part in our “Action over Words” campaign. In 2021, we worked with other companies to create “CO2alizione Italia”, a collaboration of 50 Italian enterprises committed to incorporating climate neutrality as an objective into their bylaws, as a purpose to be pursued over time. To this end, Chiesi Farmaceutici decided to modify one of its common benefit purposes and include into its bylaws “a commitment to continuous innovation with regard to the sustainability of all company processes and practices in order to minimise negative impacts and to amplify positive impacts on people, on the biosphere and on the territory, in pursuit of an economy with zero climate-altering gas emissions, in line with European objectives on climate neutrality and national objectives on ecological transition”. The coalition will be officially launched in 2022. You can find more about our common benefit purposes in the Introduction and Community chapter of this report.

Action Over Words

Climate change is an emergency and an existential threat to life on planet Earth. At Chiesi, it also affects our promise to guarantee patient access to environmentally friendly solutions and we therefore stand with all those doing their part to stop climate change. Our strong beliefs define our actions, and the way we do business. That means we make commitments which are clear and can be measured. We also commit to report transparently on our environmental impact and progress every year. To this end, in May 2021, we unveiled our plan to become carbon neutral by 2030 on direct greenhouse gas (GHG) emissions and indirect GHG emissions from purchased electricity and heat (scope 1 and 2) and by 2035 on all other indirect GHG emissions (scope 3). Chiesi’s reduction targets have been approved by the Science Based Target Initiative (SBTi) and are aligned with the Paris Agreement’s most ambitious goal to limit global temperature rise to 1.5°C above pre-industrial levels by 2100. Our carbon neutral plan was launched together with our #ActionOverWords campaign, emphasising the importance of the larger global corporate sustainability movement. Chiesi is not the first company to make a public commitment to reduce its carbon footprint. With the #ActionOverWords campaign, we want to cut through the language of corporate sustainability commitments, which often focus on words rather than the actions to achieve them, using terms like carbon neutral, net zero and climate neutral interchangeably based on which one sounds more impressive. To date, only a few refer to official standards to measure progress towards their commitments on an individual company level.

Sustainability commitments stand or fall based on the actions taken to reach the goal. If these actions are not independently verified by international standards, the commitments themselves are just words. Comprehensive and long-lasting measurement standards and frameworks are essential to encourage and track progress towards a low carbon society. They allow businesses to plan and implement carbon reduction targets with accuracy and transparency. And they help citizens and policy makers identify those mitigation measures that make the difference. To support the campaign, the #ActionOverWords website was created as a platform to engage a broad community of colleagues, affiliates, patients, healthcare professionals and policymakers.

 
Emissions reduction

Our carbon neutrality goals include becoming carbon neutral by 2030 on direct greenhouse gas (GHG) emissions (scope 1) and indirect GHG emissions from purchased electricity and heat (scope 2), and on all the other indirect GHG emissions (scope 3) by 2035. In order to ensure the scientificity and rigorousness of our approach, in 2021 we submitted our carbon neutrality goals to the Science Based Targets initiative (SBTi). The SBTi partnership between CDP, the United Nations Global Compact (UNGC), World Resources Institute (WRI) and the World Wide Fund for Nature (WWF) mobilises business and industries to set near and long term science-based targets in line with the Paris Agreement. More details about Chiesi’s strategy towards carbon neutrality are available on the Action Over Words website. Our emission reduction plan is devised according to the PAS 2060, the internationally recognised standard for carbon neutrality. For 2022, we plan to certify Chiesi’s GHG global emissions inventory the GHG global emissions inventory with a third party in order to have robust references on our emissions results. Comprehensive and long-lasting measurement standards and frameworks are essential for encouraging and tracking progress towards a low carbon society, allowing businesses to plan and implement carbon reduction targets with accuracy and transparency.

Scope 1: All direct emissions generated through company-owned facilities and vehicle fleets.

Scope 2: Emissions released through purchased energy, such as electricity and heating.

Scope 3: Indirect emissions such as employee use of sold products, purchased goods and services, and business travel.

Our strategy is to:

• Improve business operations, being as energy efficient as possible.
• Maintain 100% renewable energy consumption at Chiesi sites that have already achieved this.
• Transition to 100% renewable energy at remaining sites.
• Electrify the car fleet.
• Reduce GHG emissions with the goal of reducing emissions to the maximum extent
• Transition to the Carbon Minimal Inhaler.

Chiesi adopts a hierarchical approach to its mitigation strategy: Avoid, Reduce, Substitute and Remove. In this way, by avoiding carbon-intensive processes by design, we reduce the emissions we produce.

As of March 2021, Chiesi joined the B Corp Climate Collective (BCCC), committing to the United Nations Framework Convention on Climate Change (UNFCCC) “Race to Zero”. This global campaign aims to encourage leadership and support from businesses, cities, regions and investors towards creating a greener future.

Our GHG Emissions

Chiesi’s reduction targets for GHG emissions use 2019 as the reference year. In 2021, Scope 1 and 2 emissions were reduced according to plan, compared to the 2019 baseline as the reference year, while 2020 data were strongly influenced by the Covid-19 pandemic. For example, Scope 1 emissions linked to our car fleet saw an increase between 2020 and 2021 as employees started returning to the office and the business car fleet grew again at Group level. The rise of biogenic emissions is due to an increase in the consumption of biofuels. Emissions coming from the production process of our pressurised Metered Dose Inhalers (pMDIs) were reduced thanks to the introduction of a dedicated cryogenic abatement system in the Italian and French manufacturing sites. The abatement system aims to prevent emissions containing F-gas propellant with Global Warming Potential (GWP) to be released into the atmosphere by liquefying it instead. The introduction of our Carbon Minimal Inhaler (pMDI containing a propellant with a much lower GWP compared to the current option) is expected to significantly reduce greenhouse gases emissions. Alongside the growth of the Group car fleet between 2020 and 2021, the introduction of hybrid cars also contributed to this Scope 1 GHG emissions increase, due to a lack of charging infrastructure and the type of use (electric for city driving but fossil fuels for highway). This is something we will be improving over the coming years, by introducing home charging points and increasing training and education opportunities for our employees on sustainable driving. Scope 2 (indirect) emissions decreased due to an increase in the sourcing of renewable energy, which now amounts to 37% of our total energy consumption. Electricity is derived 100% from low impact renewable energy for Italian sites and exclusively from renewable energy sources for all manufacturing sites.

The increase in our Scope 3 emissions between 2020 and 2021 is mainly due to an increase in emissions linked to products sold, as well as a rise in emissions linked to the purchase of goods and services, capital goods and fuel and energy related activities. When compared to the 2019 baseline, Scope 3 emissions increased by 9% due to the coupling of production, sales and GHG emissions. We expect to obtain decoupling in 2027. On the other hand, the overall increase is partially reduced thanks to the reductions of emissions linked to business travel, logistics and distributions. To this end, 2021 saw the widening in scope of our initiatives which span the entire value chain. For example, we continued to reduce the number of shipments carried out by air and increased shipments by sea.

Energy consumption

In 2021, energy consumption increased overall by 15%. The higher energy needs reflect the widening of business activities primarily carried out at production and research sites. In Italy, this includes the increased production for the respiratory portfolio at the San Leonardo plant, the related expansion of storage capacity in the Fontevivo warehouse, the start-up of the new Pilotis office building in Parma and the scaling up of research and development activities in the R&D Centre. In France, we note the expansion of the Blois site related to the upgrading of the production capacity of the pMDI form. Finally, the rise in energy consumption is also linked to worse climate conditions compared to 2020. In order to reduce energy consumption, increase energy efficiency and promote the best energy practices, Chiesi is establishing appropriately structured energy management systems across its sites. To this end, the Research Centre in Parma (Italy) and the manufacturing sites in Parma (Italy) and Blois (France) are certified against the ISO 50001:2018 standard. In the third manufacturing site of the Group - Santana de Parnaiba (Brazil) - the implementation of ISO 50001:2018 certification is in progress, with the aim to receive the certification by the end of 2022. This will enable Chiesi to have all manufacturing sites covered by the ISO 50001:2018 standard.

Carbon Disclosure Project

In 2021, Chiesi joined the Carbon Disclosure Project, a not-for-profit charity that runs the global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts. Over the past 20 years, a system was created that has resulted in unparalleled engagement on environmental issues worldwide. Chiesi reported against the Climate Change questionnaire and received a score of B, in recognition of our efforts to measure and reduce climate risks across the organisation. Scoring a level B on the climate change questionnaire means being recognised at management level for the carbon neutrality strategy, taking coordinated action on climate issues. Chiesi is committed to being transparent in our climate change impact management efforts and we are working to improve our score year-on-year. As part of this overall score, we were awarded an A grade for governance on climate change topics, which recognises the effort being made on addressing the carbon neutrality strategy at a global level. We are working to deepen the analysis of risks and opportunities connected to climate change, with the purpose of being aligned with the recommendations of the Task Force on Climate Related Financial Disclosure (TCFD). Submitting the climate change questionnaire yearly to CDP is part of the group commitment to 100% transparency: complete transparency on the results achieved, the challenges faced and the strategy adopted.

In Chiesi Hellas

• We measure the CO2 emissions from the company cars.
• We measure the CO2 emissions of personnel flights for business purposes.
• We measure the emissions of CO2 and volatile hydrocarbons (VOCs) in the atmosphere of the company's facilities.
• The disclosure of the data concerns internal updating of the departments and the whole company.
• A CO2 emission cap for professional aviation flights per segment will be set in 2023.
• 90% of the corporate fleet consists of hybrid and plug-in hybrid cars. By internal regulation only hybrids Cars can make up the corporate fleet and 25% of new cars must be Plug-in Hybrid.
• The electricity used in the installations comes from renewable energy sources (wind energy) according to the certification of the Directorate of Management of Guarantees of Origin and Energy Mix (DAPEEP)

See also: Annual & Sustainability Report 2021, p. 59-66

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PERFORMANCE INDICATORS

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14. Employment Rights

ADMINISTRATIVE PRACTICES

Putting people at the centre

Our people’s well-being and professional growth are central to our ambition to create a fair, equal and diverse work environment where everybody is valued. Around the world, many people have used the pandemic years as an opportunity to re-evaluate and reset their expectations in terms of how they want to make a living. Employees look for a greater sense of purpose from work and alignment with their own personal values. Gartner has identified topics of fairness, equity and inclusion as priorities for attracting and retaining top talent. This includes access to hybrid and remote work; flexibility is an expectation in our post-pandemic world. Finally, as LinkedIn has pointed out, people increasingly want to work for employers who value their physical and emotional well-being. Employers therefore need to meet employees where they are – while also providing resources to prevent burnout and ensure work-life balance is maintained. In the past year, society had to reassess the way it navigates life given the changing restrictions due to the global pandemic. This has had a profound effect on our well-being and in a work setting, it has also changed the way we view the traditional work-life balance.

At Chiesi, we have paid special attention to the well-being of our employees during these trying times, introducing a hybrid working model in those regions where Covid-19 health restrictions allowed it. As an organisation, we create a culture for our employees to thrive at work, so they feel safe and supported at all times. Our ambition is to prioritise fairness and equality allowing for a workplace where everybody is valued. We nurture cultural perspectives and diverse talents and we inspire a culture of inclusion. By doing so, we believe that we can reach the best business outcomes for all stakeholders. We continue to invest in training, including on sustainability dimensions with a view to allowing our people to gain a better understanding of our core values as a B Corp. At the same time, as part of our Shared Value proposition, we promote acting as a force for good to generate a positive impact for the environment and society.

During 2021, the Covid-19 crisis persisted, which made us continue to prioritise the care and well-being of our people. We adapted working models so that employees were able to work from home, supporting them as they continued to deal with the challenges of these uncertain times. Thanks to our flexible working policy, our IT infrastructure and employee support programmes, we were able to continue working to guarantee the ongoing supply of our therapies to the patients who need them as well as putting systems and procedures in place to safeguard those critical workers that had to physically be on site in our facilities to ensure that the production and distribution of our products continued. Our value system, which was reshaped and updated in 2020, forms the basis of all People Management processes, and helps shape our overarching internal culture, integrating ethics and integrity into our DNA. The many global projects and processes that have been launched can have an impact on operational activities for our employees. This requires a strong alignment on timeline, communication, procedural alignment and training. Becoming a truly global company, we had to align all affiliates and Global functions on different HR processes.

Diversity & Inclusion

Diversity is a fact, but inclusion is a choice we make every day in Chiesi. In our journey towards a truly inclusive environment our path to go beyond the bias begins with supporting, mentoring, and sponsoring diverse women and men to become leaders and entrepreneurs. Every year we will focus on different areas of intervention to nurture this journey, guided by the Sustainable Development Goals of UN’s 2030 Agenda we decided to commit to. Chiesi continues to advance in the area of Diversity and Inclusion, furthering our efforts not only in terms of diverse representation, but also refining our processes, systems and policies. The concept of Fairness is central to the actions we develop for our people, as we continue to strengthen our offering for employees and grow awareness of all diversity dimensions throughout the business.

Furthering our Diversity & Inclusion Awareness Programme To advance on our D&I journey, we continued to roll out our awareness programme throughout different levels of the organisation. The Executive Committee pursued our “From Visible to invisible” educative training programme, which seeks to raise awareness about the different D&I dimensions. This training will continue in 2022 as a global project. Through a collaboration with consultancy Global Diversity Practice, we guided all Chiesi leadership teams through a soft learning programme to address unconscious bias and encourage inclusive teams and leadership.

At affiliate level, we also offered the opportunity for people managers to partake in the unconscious bias training and we developed a specific D&I catalogue for Chiesi colleagues, which detailed courses for those that wished to learn more about the topic and the various dimensions. In 2022, we will be setting up Employee Resource Groups, offering a bottom-up approach to our D&I activities. Employees Resource Groups are groups made up of staff volunteers who are united by the desire to propose new initiatives to foster an inclusive work environment that enhances diversity. This will help us identify concrete proposals based on our colleagues’ needs whilst understanding more about the ideas of activities we could implement within the business to the benefit of our people.

• 240 Leaders were involved in the activity with Global Diversity Practice

Values and Behaviours

The Chiesi values and behaviours were reshaped in 2020 in line with our B Corp philosophy. They are known by every person working within the organisation and are applied on a daily basis as a common cultural foundation. In 2021, we carried out a number of training sessions to help widen the understanding of the evolution of our long-standing values and behaviours and ensure that all our colleagues understand what they mean and how they should be applied to their work.

Great Place to Work

Great Place to Work is part of Chiesi’s new strategy of inclusive and empowering leadership, which believes that “listening” to our people is a strategic company responsibility. By boosting innovation and organisational learning we can also build trust and psychological safety. This is the main pre-requisite to then move to a collective commitment to positive change starting from co-design and co-creation. In this way, Great Place to Work is an integral part of the bigger cultural transformation journey we have embarked on as a group, which has our values and behaviours as a foundation, and which encompass our company identity as a B Corp. We aspire to an inclusive workplace where everybody feels comfortable and can express themselves and their talent. Great Place to Work is a tool to help us achieve that, allowing us to measure the temperature, listening to perceptions and ways to improve. As of 2021, we received Great Place To Work certification in over 20 of the countries in which we operate.

In Chiesi Hellas, we have established an Internal Rules of Procedure detailing the rights and obligations of each employee, as well as the Code of Ethics with detailed reports on the operation and behavior of each employee. We have also issued Training & Development, Recruitment and Diversity & Inclusion Policies to shape a fair work environment (SDG#10), which cares about equality for all its employees (SDG#5,10).

We have communicated the Policy against Harassment and Workplace Violence and use tools for whistle blowing and reporting of corresponding incidents.

Additionally, we annually use a job satisfaction survey for all our employees and participate in strict criteria certifications (eg Top Employer), from which we have received certification for the year 2022.

See also: Annual & Sustainability Report 2021, p. 103-111.

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PERFORMANCE INDICATORS

• Currently, the company numbers 76 workers, with a 50% gender balance.
• Their age structure is: 26-34> 8%, 35-44>40%, 45-54>42% and 55+>10% .
• In the Management Team, the structure is 14% women and 86% men, with 14% presence of a person under 40 years of age, while 43% of management positions are held by women.

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15. Equal Opportunities

ADMINISTRATIVE PRACTICES

2021 marked the starting point to focus on ensuring all people processes in the business are free from bias. As part of this endeavour, we started a global initiative called the Global Gender Equality Challenge. The aim of this project is to reach equal pay, by closing the gender pay gap, and establishing equal opportunities, balancing the gap between men and women in leadership positions. As part of this undertaking, we collaborated with Mercer to define our global gender equality challenge in terms of equal pay and equal opportunities, and to calculate the current gender pay gap. Mercer conducted the analysis according to a specific certified methodology, that compares remuneration by gender for the same position and conditions. The analysis revealed a small but statistically significant ‘unexplained gender pay gap’ in the company – a gap that cannot be explained by factors that drive pay at Chiesi, such as performance, experience, job grade, or location. In Chiesi Group, the unexplained pay gap is approximately 1.5%, which is lower than the reference benchmark (2% -5%) for organisations starting on their pay equity journey for the first year. Within the pharmaceutical industry, the average unexplained pay gap is 2.2%. Chiesi has set the goal to reduce the unexplained pay gap and reach Equal Pay - no difference in pay by gender for the same position and at the same conditions - by 2023. Our actions for the future on this topic include:

• Salary review interventions to close the gap gradually.
• Monitoring of gender pay gap annually.
• Communication to all Chiesi people when the goal will be reached.

But equality and fairness are not just about the pay: among other things, this approach also involves a huge work on recruitment practices, people development and career opportunities. Considering the headcount in December 2021, at Group level the Chiesi workforce is gender balanced and composed of slightly more females (54%). The greatest difference can be found in leadership positions where males account for about 60% of staff. Compared to 2019, there is an encouraging trend towards gender balance in leadership positions (about +5% in 2021 vs September 2019). Nevertheless, our equality journey is an ongoing process and we continue to seek improvement. Research was conducted and a survey was launched to understand perceptions within the group around gender equal opportunities. From the survey, the following elements emerged as possible barriers in career progression and gender balance: cultural barriers or biases; lack of transparency on job opportunities; lack of visibility opportunities; difficulties to balance work and personal life. This is why, next to the target of reaching equal pay by 2023, Chiesi also decided to set another long -term target regarding equal career opportunities: we want to grant equal career opportunities to all genders at all levels and have a fair and balanced distribution of leadership positions by 2030. Reaching our gender equity targets will require a combination of different solutions:

• Recruiting: ensuring recruitment diversity to build a stronger gender balance of candidates across all levels and stages of the recruitment process and a mixed panel of interviewers to avoid biases in the process.
• Work life balance: create a trusting and flexible culture (for example parenting policy, smart working flexibility) which encourages employees to achieve work life harmony and create an environment that supports employees at every stage of the family life cycle.
• Development: evaluate and implement a programme of career progression support and sponsorship, enabling colleagues to find clarity, visibility and direction to make positive changes in career paths and to monitor the balance in successions pipelines.
• Culture: promote an inclusive culture creating awareness of cultural barriers and biases that can occur (performance management, people development processes and respect of different leadership styles).
• Monitoring of and communication around progress made.

All of these actions are going to support gender equity and the increase of women in leadership positions and, at the same time, will have a positive impact on all genders. In order to cater for all generations in the workplace, we have initiated a reverse mentoring initiative, which allows young people within the group to mentor higher-level managers. This consisted of training around 15 young mentors who delivered their first reverse mentoring activities including some of the members of the Executive Committee and other Leaders. In 2021, 11 pathways were completed. The pilot was very successful allowing for a “mindset” exchange and activating specific ideas for new projects.

Health, safety and well-being

The Covid-19 pandemic remained a challenge to the health, safety and well-being of people over the course of 2021. With this in mind, we continued to balance remote working and in-person attendance for our employees, depending on local restrictions and measures within the markets where we operate, globally, on a case-by-case basis. Likewise, we ensured we complied with health safety measures, guaranteeing the safety of those colleagues in our facilities who needed to be present in order to maintain the production of our therapies. People Care remains the foundation for preserving the safety and well-being of our employees at work at headquarter level, and ensures that the Chiesi workplace is a positive, healthy and safe work environment. We carefully monitor health and safety aspects for employees and visitors to Chiesi sites, providing a strong focus on physical safety in the workplace, particularly for those working in potentially hazardous environments.

In 2021, we created the first global Well-being policy at Chiesi. This has been developed in the form of a global guideline and the programmes are selected at local level. We also launched dedicated guidelines which focus on several pillars: Work Life Harmony, Volunteering, Well-being Education, Healthcare, Welfare. We provided individual support on well-being, such as life-coaching and psychological support, which we offered through webinars to educate people on topics such as families, relationships with children, education, and time saving initiatives. Going forward, we aim to carry out periodical surveys amongst our employees to better understand the well-being levels of our workforce.

Well-being programmes

Chiesi Well-being programmes are branded PEOPLE CARE

Training and development

The ongoing ability for Chiesi’s people to adapt and evolve is paramount for the group’s long-term success. Training and development is a fundamental aspect of career development for all Chiesi employees. In 2021, we continued to mature our health and safety management systems in addition to an ongoing learning programme through formative learning and other educational activities. Overall, in 2021, we calculated over 300,157 hours of training, matching with an overall average training hours of 48.8 per worker. This reflects an overall increase in average training hours per worker by 0.9% from 2020 to 2021. The increase in hours is mainly due to a series of initiatives that covered a large part of the group’s workforce, such as the Chiesi Values training and the Diversity & Inclusion training. There was a focus on the Cultural transformation during the Learning strategy at Chiesi in 2021. This included unconscious bias training and training on the new Chiesi Values and Behaviours, in addition to technical learning initiatives. Another project that engages both younger and more senior team members is the Junior On Strategy Project (JOY). By coming together to interact and collaborate on specific strategic topics, innovative solutions are uncovered through the exchange of experience and diverse points of view. The main topics of discussion in 2021 were “From complexity to simplicity” and “From product to patient centric.”

The first topic (“From complexity to simplicity”) enabled participants to evaluate the utilisation of a new habits in dealing with feedback and inspired the development of a ‘Meeting Galateo’, in order to have more efficient meetings with the aim to free our calendars of ineffective hours. The second topic (“From product to patient centric”) led to the creation led to the creation of a new indicator related to Engagement, with the aim to measure the impact of employees’ work on patients, complementary to the common usage of classic KPIs.

In Chiesi Hellas, we have set up a Committee of Diversity & Inclusion in order to communicate both internally and externally the practices we have adopted ensuring equal gender treatment and balance. In this context, Chiesi Hellas was distinguished at the "Diversity & Inclusion Awards 2022", winning the Bronze Award in the category "Best Diversity & Inclusion Culture in Pharma" on 7/2022. The award refers to all actions and initiatives in relation to the acceptance of equality, diversity and inclusiveness. We have established a Diversity, Justice & Inclusion Policy and use tools to hear our employees ideas (eg The Time of the Ballot Box, Idea Bank, Round tables, Ask&Give Feedback) and at the same time we inform our employees through the monthly meetings (Townhall meetings) and internal intranet.

In addition, we have  renewed the values in 2021 adding one that stands for Diversity: "We work together as a team that embodies everyone, inclusivelly" and explaining it with 5 specific behaviors that we wish to recognize to all our employees. For these behaviors the employees are evaluated annually and rewarded through remuneration schemes.

We have developed a Wellbeing Team, which has undertaken an internal employee information campaign implementing the program '55+ actions for Wellness' (benefits of the Organization) in the context of implementing a specific policy eg.remote work. Also, in 2022-2023, a specific project is underway to achieve a balance between personal and working life.

In 2022, the Company was evaluated by its own employees as a healthy working environment, with satisfaction idex 94%.

Health & Safety

In the context of strengthening occupational health and reducing work-related stress, the company provides the option of choosing office hours by revising it on an annual basis if necessary.

In addition:

• We make sure that the annual regular leave is exhausted within the current year with the aim of giving the employee a rest during the year
• We provide via the group insurance program free preventive health checks
• We implement a non-smoking policy for all employees. Inside the building it is prohibited to use any regular or electronic cigarettes in the interior and outdoor areas of the building.
• We ensure the provision of equipment per workplace that helps the employee to perform their work more comfortably and efficiently.
• We provide introductory H&S training to all employees when they start their work at CHH. This training covers the general principles and rules that the company supports and implements. Also, we offer personalized advice to employees as well as annual retraining by the safety technician on emergency response issues.

See also: Annual & Sustainability Report 2021, p. 107-110

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PERFORMANCE INDICATORS

Work related injuries

• Zero Incidents

Health and Safety

• It is offered to all employees additional private insurance (hospital, pharmaceutical) as well as life insurance for themselves and all dependents, free of charge. In addition, free annual preventive examinations (differentiated for men and women) are offered, as well as ophthalmological checks.

Average employee training hours

• 60Hours

Discrimination incidents

• Zero incidents/complaints

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16. Qualifications

ADMINISTRATIVE PRACTICES

Around the world, many people have used the pandemic years as an opportunity to re-evaluate and reset their expectations in terms of how they want to make a living. Employees look for a greater sense of purpose from work and alignment with their own personal values. Gartner has identified topics of fairness, equity and inclusion as priorities for attracting and retaining top talent. This includes access to hybrid and remote work; flexibility is an expectation in our post-pandemic world. Finally, as LinkedIn has pointed out, people increasingly want to work for employers who value their physical and emotional well-being. Employers therefore need to meet employees where they are – while also providing resources to prevent burnout and ensure work-life balance is maintained.

In the past year, society had to reassess the way it navigates life given the changing restrictions due to the global pandemic. This has had a profound effect on our well-being and in a work setting, it has also changed the way we view the traditional work-life balance. At Chiesi, we have paid special attention to the well-being of our employees during these trying times, introducing a hybrid working model in those regions where Covid-19 health restrictions allowed it.

As an organisation, we create a culture for our employees to thrive at work, so they feel safe and supported at all times. Our ambition is to prioritise fairness and equality allowing for a workplace where everybody is valued. We nurture cultural perspectives and diverse talents and we inspire a culture of inclusion. By doing so, we believe that we can reach the best business outcomes for all stakeholders. We continue to invest in training, including on sustainability dimensions with a view to allowing our people to gain a better understanding of our core values as a B Corp. At the same time, as part of our Shared Value proposition, we promote acting as a force for good to generate a positive impact for the environment and society. Fostering a working culture where people are happy, healthy and safe is fundamental to ensure we can deliver on our commitments.

Chiesi continues to make progress in several people-related areas. In 2021, the overall internal workforce increased by 3%. This growth is mainly driven by the expansion of Chiesi Global Rare Diseases BU (+41.6%), and Chiesi China where staff grew by 20%. Italy continues to be our first country for internal workforce.

As a B Certified Corp company we are committed to "acting as a force for the collective good" and "embracing everyone without  exclusions" with an emphasis on equal opportunities for vulnerable or under-represented populations.

Currently, the company numbers 76 workers, with a 50% gender balance. Their age structure is: 26-34> 8%, 35-44>40%, 45-54>42% and 55+>10% .

Specifically, in 2020-2021, 42,8% of the new hires of Chiesi Hellas concerned people from families that a member had lost its job due to the economic crisis in the country and had joined the unemployment fund.

Respectively, during the above mentioned period, we offered the possibility of internships to 5 students of different scientific disciplines, giving them the opportunity to get to know the business of medicine and innovation from within.

Additional Benefits

• Private Insurance for Medical & Hospital Coverage
• Pension plan
• Provision of meals (ticket restaurant)
• Provision of equipment (laptop and mobile)
• Leaves
• Travel expenses
• Provision of company car

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17. Human Rights in the supply chain

ADMINISTRATIVE PRACTICES

Chiesi’s global manufacturing and distribution network ensures an end-to-end supply of our medicines to patients.

While the supply chain encompasses the process between producing and distributing the product, dealing with the suppliers and logistics of getting the product to market, at Chiesi we take a holistic approach to our operating business which encompasses the entire value chain – a set of activities carried out by the company to create value every step of the way. The lingering effects of the Covid-19 pandemic on global value chain management prevailed in 2021, as lockdowns and travel restrictions disrupted activity in every industry and every part of the economy. Manufacturing was heavily affected, as raw material flows slowed, or even stopped completely, affecting the value of finished goods. While demand vanished in some sectors, it escalated elsewhere, causing businesses to significantly alter the structure and function of their supply chains, focusing on more flexibility, agility and resilience. This shake-up also prompted the adoption of an approach that would physically change valuechain management, increasing the number of collaborations and partnerships embarked upon and reassessing value-chain footprints. Chiesi’s value chain network is a crucial part of our production and distribution process, ensuring that therapies reach those patients that need them. In this regard, our purpose in the area of value chain management is to ensure end-toend oversight of value and supply, from procuring active ingredients, packaging and raw materials to deliver the final product in each of the countries we supply to directly. In addition to this primary ambition, Chiesi is also committed to ensuring we manage our value chain as responsibly as possible. We do this by promoting our principles with regards to sustainable governance and by ensuring supplier compliance on a number of issues, such as human rights, environmental protection and ethical working methods. By doing so, we can leverage mutual advancement of our business, its people and the planet.

We constantly seek ways to improve and deepen our links with our partners to the benefit of all those involved. These efforts can lead to building a robust and long-lasting relationship with our external suppliers and Contract Manufacturing Organisations (CMOs). This is important so that we can ensure there are no disruptions in our end-to-end value chain, so that patients will continue to be able to receive the therapies that they need.

Code of Interdependence

In 2019 Chiesi co-created, alongside its business partners and suppliers, the Code of Interdependence, the code of conduct for suppliers and all strategic partners, which has been rolled out globally. The Code of Interdependence is a set of common values through which Chiesi aims to collaborate only with companies and partners that share its commitment to sustainability. Because of this, it is built upon eleven of the UN SDGs. In addition, through the Code of Interdependence, companies which form part of the Chiesi ecosystem commit to following the same high standards with regards to environmental impact, social performance and transparency as Chiesi Group, as well as operating in a responsible manner. The format used for the Code of Interdependence changes the concept of a value chain into an ecosystem, which recognises each of us as essential to the others within a process of mutual learning and co-evolution. The Code includes both mandatory requirements, which represents a minimum level to be implemented, and to “improvement actions” which represent a guide for those that wish to go even further towards implementing future improvements of the principles outlined in the document. In 2021, the Code of Interdependence was revised to include two new SDGs, now reaching a number of 11 SDGs, in total. These new additions include UN SDG #5 Gender Equality, and UN SDG #11 Sustainable Cities and Communities. Despite the challenge of incorporating such a large number of SDGs into the Code, by doing so, we ensure we are always pushing the boundaries further, to deepen our impact while guiding and supporting our suppliers to do the same. More than 50% of Chiesi’s global spending passed through the Code of Interdependence in 2021.

We have also begun to carry out audits on our suppliers based on their compliance with the Code of Interdependence to help them reach their aims. This is structured around the Pharmaceutical Supply Chain Initiatives (PSCI), ILO (International Labour Organization), UN SDGs (Sustainable Development Goals) and B Corp principles.

In 2021 we audited 11 suppliers, either through our audit process or through Self Assessment Questionnaires. Human rights are a significant area covered by Chiesi’s Code of Interdependence. We promote decent work in all its possible expressions, such as fair working conditions, child labour prevention, rights at work, and social dialogue. The evaluation of all of our suppliers includes a key element of respecting human rights, which is considered a crucial precondition for their selection. Chiesi is unwavering in its commitment to make an impact in the domain of human rights, stimulating and encouraging high ethical standards of working and the fair treatment of all human beings. We have a zero-tolerance approach to any form of human rights abuse. This pledge links directly to one of the SDGs Chiesi has committed to, namely SDG10, Reduced Inequalities.

Vendor qualification

In order to ensure comprehensive engagement globally, at affiliate level, we have rolled out a qualification process to establish a consistent supplier governance framework. The vendor qualification process, which was revised in 2019 to incorporate sustainability parametres, follows a phased approach and now includes affiliates in 11 markets on top of our Head Quarter spend. In 2021 Spain, China, Poland, Greece, Austria and the USA were included in this process, so that we are now covering about 90% of Chiesi spend with vendor qualification. In 2022, we will be launching this qualification process with six affiliates from Eastern Europe and Russia.

The Company makes use of the Jaggaer questionnaire to assess strategic suppliers, to examine whether meet the criteria set by Chiesi Group regarding sustainable development, processing of personal data and compliance with labor laws and the fight against corruption.

See also: Annual & Sustainability Report 2021, p.93, 96, 100

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PERFORMANCE INDICATORS

For 2021, 129 contracts have been signed in Chiesi Hellas and where there is relevance, the terms of the Chiesi Code of Interdependence, through which the above criteria are met, are mentioned and co-signed.

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18. Corporate Citizenship

ADMINISTRATIVE PRACTICES

We care for the communities where we operate, creating shared value and deepening our local connections. We are committed to creating an impact, not only on patients, but also on societal health and well-being more widely. The 2021 Edelman Trust Barometer Report has revealed that the public places greater trust in businesses in certain countries than their own national governments. Within this context, corporations are viewed as capable of bringing about positive change within the wider community, both in terms of their ethical aptitude and their competence to reach those objectives. By becoming agents of social transformation through collaborations with external partners in their local communities, businesses play an integral role in contributing and doing their part to help achieve global societal and planetary goals. They are also active providers of aid and donations to the communities they operate in. At Chiesi, the “shared value” approach is central to the work we carry out as a B Corp. We ACT is a people engagement programme that encompasses community-based initiatives in which we contribute to and take care of the communities where we operate. Engaging with and supporting the community is a significant part of our success as a company and promotes long-term sustainable growth, which benefits all our stakeholders.

The work we undertake in the wider community includes both financial contributions, goods and drugs donations, and voluntary work carried out by our people. Our community outreach efforts are guided by the Group’s specific strategy and dedicated guidelines, which affiliates use to devise their own strategy based on the needs of local stakeholders.

Voluntary actions

A) We Act Day 2022

Chiesi Hellas, consistent with its commitment to use business as a force for the collective good, implemented again this year environmental actions within the framework of the corporate program "We Act-Day" (We Actively Care For Tomorrow). The programme for the strengthening of local communities and protecting the environment is an important corporate responsibility initiative of the

Chiesi Group and is part of its broader strategy for sustainable development and the creation of mutual benefit. It started in 2018 as the Group's response to the urgent need to reduce greenhouse gas emissions from human activity. During a day every year the employees of all subsidiaries voluntarily participate in actions with a positive impact on society and the environment.

For this year's action of Chiesi Hellas, -with the central message "WeAct to 0 Impact"- was dedicated to the value of tree planting. Trikala of Thessaly was chosen as it is one of the 100 climate neutral and smart cities in the EU, according to the European Commission. On September 1st, in collaboration with the Municipality of Trikala, 105 large trees were planted in an area of 4 acres in the settlement of Karyes (riverside area under redevelopment next to the University facilities Thessaly). A total of 380 hours of voluntary work were carried out (76 employees for 5 hours).

B) Smile of the Child

At Chiesi Hellas we motivate our people to actions of solidarity and volunteerism. And in 2022 we helped in the “Smile of the Child” Organisation in the classification of toys and essentials (food) in the two Support Centers of the Organization in Ilion and Nea Makri. A total of 32 hours of volunteer work took place (8 employees per 4 hours).

 
Donations/sponsorships (economic and social sustainability)

• Nurture Science

Scholarships for young scientists (ELKE, School of Pharmacy, University of Athens, National Technical University of Athens)

• Community Support -Hospitals

Donations of medical equipment due to covid-19 (tubes, oximeters, spirometers)

• Community Support -Supporting Communities (PA)

Hellenic Respiratory Society, Greek Patients Association, Humane support for the creation of patients’ hub

• Community support -Supporting Communities (PIN (People in Need))

Ark of the World, Pediatric University Clinic of the Hippocrateon Hospital of Thessaloniki and more specifically, the clinic for Cystic Fibrosis, Smile of the Child.

• Support of the GIVMED Network

Through the Network we provided medicines to people who belong to socially vulnerable groups and are unable to meet their pharmaceutical needs due to financial difficulties. 139 charitable organizations participate in the Network (social pharmacies, nursing homes, non-profit organizations, structures for children, structures for refugees).

Educating the young generation on the principles of sustainable development

Chiesi Hellas participated in seminar courses for postgraduate students of the Athens School of Pharmacy. The goal was to acquaintance students with the world of innovation in the field of Medicine and the interconnection of the labor market with the educational community through synergies. As a recertified B Corp company, Chiesi contributes to sustainability by providing today's students with access to knowledge for tomorrow's innovation.

Awareness Campaigns

Chiesi Hellas contributes to raising the awareness of stakeholders and the public about the quality of life of patients and their right to enjoy a good life

• Rare Diseases Awareness (February 2022 + September 2022)

1. 1. On the occasion of rare disease day, Chiesi Hellas organized an online event, which began with its screening short film festival "Rare Land" followed by a round table discussion in Athens and Thessaloniki with the participation of distinguished guests from the field of public administration, the medical community and patient collections. The event was honored with the presence of the Deputy Minister of Health, Ms. Mina Gaga. The event took place under the kind support of the Patients Association "95" Hellenic Alliance for Rare Patients.
   2. Tokyo Paralympic Gold Medalist in the 100 meters (category T11) with a world time record of 10.82. (at the age of 10 diagnosed with Stargardt's disease, which led to a gradual loss of vision), Nasos Gavelas, is the central figure in the rare disease awareness video of Chiesi Hellas. The aim of the collaboration is to raise public awareness of the rare diseases, but also to transmit a message of optimism and hope to all patients with rare diseases and to their families those facing challenges around and beyond their illness.

• 10 years myasthma.gr (May 2022)

On the occasion of World Asthma Day and the 10th anniversary of the creation of the myasthma.gr, Chiesi Hellas supported the event "10 Years of Digital Information on Asthma of the Hellenic Respiratory Society", organized by the Hellenic Respiratory Society in collaboration with the Asthma Scientific Group. The event was attended by top pulmonologists, while the Deputy Minister of Health, Ms. Gaga, addressed a greeting.

• Ithaca Project (the educational program "Empathy, Empowerment, Communication" in Athens, Thessaloniki and Crete)

The workshops for hospital pulmonologists and for private pulmonologists were successfully completed. The Purpose of the initiative is the improvement of pulmonologist-patient communication at all levels of health, through the enhancement of empathy, and  the empowerment of pulmonologists in an ever-changing and demanding work environment. Chiesi, as recertified B-Corp company, focusing on the patient and the health professional, contributes substantially to lifelong education of the hospital and private doctors.

• Life with COPD (September + November 2022)

For the first time, an exercise plan was created with instructions for home exercise of patients with COPD, in order to improve their physical status. All material is in the www.zoimehap.gr. This is an initiative of the Hellenic Respiratory Society with the courtesy of Chiesi Hellas. The purpose of this initiative is to break the cycle of fear and to give patients with COPD a better life.

• Chiesi Hellas also implements Chiesi Group campaigns

- AwAIRness (May 2022)

-30 years of new breaths (Chiesi Group in collaboration with the BBC, July 2022)

-MSLs (March 27, 2022)

- COPD Campaign (November 2022)

See also: Annual & Sustainability Report 2021, p. 79

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PERFORMANCE INDICATORS

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19. Initiatives and Political Influence

ADMINISTRATIVE PRACTICES

The Organization is a member of the Hellenic Association of Pharmaceutical Enterprises (SFEE). The President and CEO of the Organization is the Vice President of the Association (SFEE).

The Group is engaged at an international level to follow the continuous evolution of the ESG frameworks and promote a stronger global harmonisation. We participate in ad hoc workstreams within EFPIA, IFPMA and innovative platforms such as the Biopharma Sustainability Roundtable.

Project EUPATI: we are committed to an active and collaborative dialogue that involves patients, caregivers and other health stakeholders. For instance, we work with EUPATI (European Academia of Patients), an important European patient association, in order to learn more about their reality, objectives and ongoing activities.

Partnerships in the Respiratory focus area

• The Breathe Vision
• International Respiratory Coalition
• EFA DIG-IT
• Speak up for COPD

Partnerships in the Rare focus area

• EURORDIS
• OD Expert Group
• International Rare Disease Research Consortium
• Rare Disease Company Coalition

Partnerships

• Parma, io ci sto!

Chiesi is among the founders of the association Parma, io ci sto!, which was born in 2016 to enhance the local territory by putting together ideas and projects to attract talents and resources and promote the development of the city. Today the association includes more than 120 affiliations of companies and citizens.

• Fondazione ASPHI

Chiesi has been a partner of Fondazione ASPHI since 2015. ASPHI Foundation is a non-profit organisation which promotes the inclusion of people with a disability in school and work environments as well as society more widely through digital technology.

• Italy for Climate

Italy for Climate is an initiative of the Foundation for Sustainable Development promoted by a group of companies and business associations particularly sensitive to the issue of climate change. Chiesi is among the promoters of the Foundation.

• The Regenerative Society Foundation

Chiesi is among the founders of the non-profit organisation, that aims to promote a regenerative socio-economic model to companies to have the highest possible impact in terms of circularity, ecosystem services, and people’s well-being, with the ultimate goal of producing profitable environmental and social co-benefits and achieving the ecological transition. The Foundation will do this through a ‘one-health’ ethically-driven, systemic approach, capitalising on scientific knowledge.

• Fondazione Sodalitas

Chiesi has been a partner of Sodalitas since 2019. In Italy, Sodalitas Foundation is the reference partner for companies that consider sustainability as a distinctive aspect of their strategy to be integrated into the business.

• Fondo Ambiente Italiano (FAI)

Since 2017, Chiesi has been supporting FAI, a foundation born in 1975 to protect and valorise the historical, artistic and natural heritage in Italy.

Political Contributions

Political contributions may represent forms or methods of corruption and, therefore, may entail corruption liabilities. Political contributions by Chiesi cannot be used, in particular, as an improper corruption tool aimed at maintaining or obtaining a business advantage (by way of example, using political contributions to influence awarding of contracts, to obtain licences or authorizations, to reach legislative reform which can bring advantages with reference to Chiesi’s business). In light of such risks, Chiesi does not allow any direct or indirect contribution, in whatever form, in favour of political parties, political or union organizations, committees, or in favour of the relevant representatives, unless such contributions are deemed binding by applicable local laws and regulations.

Chiesi Hellas does not make donations to political parties, nor payments to Governments.

See also: Annual & Sustainability Report 2021, p. 23, 40, 50, 53, 87

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PERFORMANCE INDICATORS

Donations to political parties

• Zero donations to political parties

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20. Corruption prevention and alleviation

ADMINISTRATIVE PRACTICES

As a biopharmaceutical company, Chiesi is part of a large and diverse ecosystem, which draws on the wider talents and skills within our sector and the scientific community to serve our patients. We exchange knowledge to move forward together and we embed the highest level of respect, transparency and ethical behaviour as a foundation for all our interactions. The respect of these values is also expected from all our employees, suppliers and partners, when interacting with each other and with our customers. To fully integrate such principles in its business, Chiesi has adopted a specific structure and a set of compliance policies and procedures, in particular:

In 2003, Chiesi implemented the requirements set forth by Italian Legislative Decree no. 231/2001 (“Decree 231”), applicable across the whole Italian territory, by adopting an Organisational, Management and Control Model (known as a “Model 231”), which clearly defines Chiesi’s ethical commitments and responsibilities while conducting its business. In particular, Model 231 defines rules and processes that Chiesi has adopted in order to prevent and avoid unlawful behaviours (as reported within Decree 231) and identifies the role and responsibilities of the Surveillance Body. The Surveillance Body is entrusted with supervising the correct application of Model 231 and periodically reports the outcomes of such activity to the Board of Directors. Model 231 includes the Code of Conduct (updated in 2021), which is binding for all Chiesi bodies and employees and aims to stress the Group’s commitment to using its business as a force for good and contributing to the UN SDGs. Model 231 is available to all employees via Chiesi’s intranet (C-Share) and it is subject to periodic review and revisions.

In 2012, a Corporate Compliance Committee (composed of Chiesi’s Chief HR Officer, Group Compliance Officer and Head of Internal Audit) was appointed to supervise compliance topics affecting the Group and to provide support to Chiesi’s companies and Board of Directors on relevant assessment and management.

In 2015, Chiesi’s commitment to compliance led to the formal creation of the “Group Compliance” function. Following this, Chiesi adopted a Group Standard Operating Procedure (SOP) on Interactions with Healthcare Professionals (HCPs) and Healthcare Organisations (HCOs), defining a set of binding principles that each company of the Group must comply with while interacting with HCPs and HCOs. These are aligned with IFMPA, EFPIA and Farmindustria’s respective Codes of Conduct.

In 2016, Chiesi adopted a Group Anti-Bribery Policy, encompassing a set of rules and principles on how to recognise and deal with bribery and corruption issues and how to comply with anti-bribery rules and regulations. This Policy is directly applicable to all companies of the Group. Also, in 2016, Chiesi achieved the highest score of three stars on ethics (“Rating di legalità”) from the Italian Competition and Market Authority (AGCM), a testament to the company’s pursuit of the highest level of compliance when carrying out its business. This three-star rating has been re-confirmed in 2018 and 2022.

In 2017, the Chiesi Confidential Reporting System was established to allow any employees to anonymously report potentially unfair or even illicit behaviour or occurrences that could potentially damage Chiesi’s business or reputation. Reporting is done through a web-based platform, independent of Chiesi’s IT system. This tool will be updated in 2022, extending access to both employees and non-employees such as suppliers, and integrating the web-based reporting platform with a multilingual hotline service.

In 2021, we reviewed and updated the Chiesi Code of Conduct in alignment with our Values & Behaviours, and taking into account Chiesi’s status of certified B Corp and our approach to inclusion.

Anti-Bribery Policy

Chiesi Group is committed to carry out its business with fairness, honesty, transparency and integrity and in compliance with laws, regulations, standards and guidelines, both domestic and international, which apply to its business, in all the jurisdictions in which the Chiesi Group operates. Pursuant to the laws of the Countries in which Chiesi operates, any activity involving offering, promising, giving, requesting or receiving (directly or indirectly) money or any other benefits – to ensure an advantage in relation to its business or as an inducement or reward to act improperly, whether committed by Chiesi or its affiliates, Chiesi People, relevant Business Partners or whoever operates on behalf of Chiesi – is illegal.

The purpose of this Policy is to provide Chiesi People (wherever located and wherever they operate) and whoever acts on behalf of Chiesi, in any capacity, with a set of general principles and rules on how to recognise and deal with bribery and corruption issues and how to comply with anti-bribery rules and regulations, in line with the provisions laid down within Chiesi’s Code of Ethics and Conduct.

Training on this Policy forms part of the induction process for all Chiesi People and regular training will be provided as necessary.

Chiesi’s zero-tolerance approach to bribery and corruption must be communicated to all Business Partners at the outset of Chiesi’s business relationship with them and as appropriate thereafter. The prevention, detection and reporting of bribery and other forms of corruption are the responsibility of all Chiesi People.

Interactions with Health care professionals

The Chiesi Group pays specific attention in its interactions with healthcare professionals and healthcare organizations, also in light of the fact that, in some of the jurisdictions where Chiesi operates, healthcare professionals are deemed Public Officers. In this respect, Chiesi People shall comply with the principles laid down within the operative procedures on interactions with healthcare professionals and healthcare organizations adopted and implemented by each affiliate of the Chiesi Group.

In Chiesi Hellas, we publish annually all the benefits to Health Professionals (HCPs) & Scientific Health Bodies (EIF) to the Authorities (EOF), the Association (SFEE). The information is on Company’s website (www.chiesi.gr).

Accounting Procedure

According to the applicable laws, including accounting and fiscal laws and regulations, Chiesi shall keep detailed and complete accounting records relating to its business operations. Chiesi’s accounting records shall be compliant with the applicable accounting principles and shall reflect, in an as-much-as possible transparent and complete way, the facts underneath each business operation. Any costs, debts, incomes, payments and commitment of expenditure shall be promptly included within the financial information, in an as-much-as possible accurate and complete way. They shall be properly documented, released and reported according to the applicable laws and regulations, as well as to the internal control and auditing principles. Any registration made within Chiesi’s accounting records, as well as the relevant documentation, shall be made available to any external auditor when required. Any payment made and relevant business operation performed by Chiesi shall be properly registered within the relevant accounting records, so that the same records may correctly reflect, in detail, said business operations, transfers and acquisitions of goods. Such principle shall be applied to any cost and operation, without regard to significance or materiality.

 
Infringement warnings

Any actual, believed or suspected activity which may entail a bribery or corruption conduct (including any improper or unconventional request from or on behalf of a Public Officer or a third party) shall be communicated (by Chiesi People, Business Partner, party of the Joint Venture or contractual counterparty who detected the bribery activity) to the relevant direct supervisor or superior, or to the primary contact of the Business Partner or Joint Venture in Chiesi, or to the contact of the contractual counterparty in Chiesi and to the Compliance Function. Chiesi People cannot be fired, professionally downgraded, suspended, threatened, burdened or discriminated at work in case such people refused to carry out activities in violation of the principles set forth in this Policy. Any infringement of such Policy will not be tolerated by Chiesi, which will also adopt disciplinary actions, up to and including suspension or termination of the business relationship.

In particular:

• Chiesi People who infringe on the Anti-Bribery Policy will be subject to any disciplinary action deemed appropriate, up to termination of employment, as well as any further legal action necessary to protect Chiesi’s interests and reputation.
• Business Partners who infringe on the Anti-Bribery Policy will be subject to any contractual remedy deemed appropriate, including the suspension or termination of the agreement, prohibition of doing business with Chiesi and any possible suit for compensation for damages.

SpeakUp&BeHeard (Whistleblowing system) policy

Based on the SpeakUp&BeHeard (Whistleblowing system) policy that the Group has developed, Chiesi Hellas supports the use of tools aimed at preventing, detecting and notifying breaches of laws and regulations or misconduct that may endanger Chiesi's reputation and/or business or harm third parties. For this reason, Chiesi encourages anyone (such as employees currently working in the company, former employees, suppliers or other interested parties) become aware of such misconduct/violations, report them to Chiesi through the 'SpeakUp&BeHeard' system.

Through the System it is possible to report violations:

• involving legal representatives, board members, directors and/or employees of Chiesi, or companies controlled by the Group, companies in which the Group holds a significant participation, joint ventures or – in any case – anyone acting on its behalf Chiesi
• relating to the Chiesi Code of Conduct and related matters, such as Bribery and corruption

A report can be submitted either through the Platform or through the Hotline. In both cases, the Complainants have the option to remain anonymous or declare their identity. Once the results of the reports have been evaluated, the Responsible Person takes a decision on the alleged violation and assesses possible disciplinary and corrective measures that will propose.

Once a year a No Confilict Declaration is sent for signature to all Leadrship Team members.

See also: Annual & Sustainability Report 2021, p. 33-34

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PERFORMANCE INDICATORS

• In 2021, no fines or non-monetary sanctions for non-compliance with laws and regulations were registered.
• In 2021, no incidents of non-compliance with laws and regulations in the social and economic area were registered.

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