Compliance and Integrity

We apply risk management processes at both a micro and macro level across our business – from the manufacturing floor of a single site, to the whole Lonza Group. We take a precautionary approach to risk management across our activities.

Our Enterprise Risk Management (ERM) program provides a mechanism and appropriate governance for our risk management and strategic planning activities. It enables us to identify the most significant risks to our organization and stakeholders, and to develop mitigation plans to minimize the probability and/or impact of negative risks. The risk identification process includes a specific focus on ESG risks, in particular those related to climate change. Our comprehensive risk management program is an essential element of our corporate governance, and we are committed to continuously embedding risk management in our culture.

Risk Categories

We have identified six risk categories:

• Strategic risks
• Financial risks
• Corporate governance and reputation risks
• Political, legal and regulatory risks
• Products and services risks
• Operational and performance risks; operational risks include business interruption risks (e.g. natural catastrophes) and environmental risks

This identification process enabled the development of a Lonza-specific risk map. We have identified risks for each segment and for the corporate functions, and the risks are being tracked.

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

We are committed to operations and practices that prevent harm to people and damage to environment or property. The principles for environment, health, safety and sustainability (EHS&S), as well as security, result from the company's ethical conviction. These principles are a priority and apply throughout the whole company.

Our Policy

As set out in our Safety and Sustainability Policy, our commitment to environmental and social sustainability has five streams:

• Regulatory compliance and integrity
• Vision Zero
• Our people
• Our environment
• Value for society

We actively manage Environment, Health, Safety and Sustainability (EHS&S) as an integral part of our businesses, operations and practices. We require global and local management to comply with the applicable laws and the internal and external EHS&S requirements. Security measures are integrated into the management systems and must meet defined minimal standards. Our Vision Zero – zero injuries, zero process incidents, and zero environmental incidents – underlines our commitment to safe and healthy workplaces.

Transparency and Reporting

We report environmental, social, governance and performance indicators under various frameworks. As part of our overall sustainability commitment, we foster transparency and reporting in line with the Global Reporting Initiative (GRI) Standards, which represent the We report environmental, social, governance and performance indicators under various frameworks. As part of our overall sustainability commitment, we foster transparency and reporting in line with the Global Reporting Initiative (GRI) Standards, which represent the industry practice for tracking performance on a range of economic, environmental and social indicators.

We signed the Responsible Care Global Charter in 2009 and in March 2015 we signed the ICCA RC Global Charter.

Management System

Whereas the Safety and Sustainability Policy defines high-level principles, our corporate EHS&S management system and our detailed guidelines support their implementation. Our EHS&S Management System is aligned with ISO 14001 and 45001 standards, supplemented by detailed guidelines for people’s safety. This program applies to all locations and all employees. In addition, selected sites have relevant third-party certificates, e.g. ISO 9001, ISO 14001, ISO 45000, ISO 13485, HACCP. More than 20% of our sites are ISO 14001 certified.

At each site, a safety committee oversees the implementation of workplace safety programs. Corporate EHS&S guidelines outline the mandatory management systems, and the implementation is required at manufacturing sites and R&D centers. Corporate EHS audits sites for EHS&S performance in accordance with these guidelines.

Compliance: Audits and Loss Prevention Visits

EHS&S performance audits are carried out at regular intervals, typically three years, at all production sites, warehouses and R&D sites. They cover all aspects of safety, health and environmental protection and serve to monitor whether compliance with internal and external standards is achieved. These audits are conducted by internal independent experts through interviews and site inspections, following a comprehensive inspection plan.

Technical experts from insurers visit our manufacturing and R&D facilities to identify, assess and evaluate any property risks and business interruptions. They are working with us to identify cost-effective risk mitigation strategies. Our internal experts within the Corporate EHS team support these audits. We highly value this service as it helps us ensure the safety of our plant operations and stay informed about any potential risks.

Animal Welfare

Wherever possible, we use validated alternatives to animal testing. We have developed alternatives, including the primary cell and media product lines, which can replace animal models in research and development labs.

Many regulatory authorities continue to require animal testing to verify the safety of products such as health ingredients. In such cases, we carefully select independent contract laboratories that meet the highest ethical and quality standards and are accredited for animal welfare protection.