CDP. Module: Introduction. Page: Introduction. Climate Change 2015 Information Request CC0.1

Transcription

1 CDP Climate Change 2015 Information Request Lundbeck A/S Module: Introduction Page: Introduction CC0.1 Introduction Please give a general description and introduction to your organization. About H. Lundbeck A/S: Lundbeck is a global pharmaceutical company highly committed to improving the quality of life of people living with brain disease. For this purpose, Lundbeck is engaged in the research, development, production, marketing and sale of pharmaceuticals across the world. The company s products are targeted at diseases such as depression and anxiety, psychotic disorders, epilepsy and Huntington s, Alzheimer s and Parkinson s diseases. Research and development: Lundbeck is one of Denmark s most research-intensive enterprises. We employ more than 1,300 highly-trained specialists in our research and development units. Each year, Lundbeck ploughs back around 20% of its revenue into research and development of new pharmaceuticals to improve treatment options for the millions of people around the world living with brain disease. Key figures: Lundbeck employs approximately 6,100 people worldwide, 2,000 of whom are based in Denmark. We have employees in 57 countries, and our products are registered in more than 100 countries. We have production facilities in China, Denmark, France and Italy and research centres in Denmark, China and the US. Lundbeck generated core revenue of approximately DKK 13.5 billion in In 2014, 37% of our revenue derived from Europe, 28% from the US and 31% from the International Markets region. Management: Lundbeck s Executive Management consists of three members, headed by Kåre Schultz, President and CEO. Corporate responsibility: Lundbeck recognise that as a business we have a responsibility to respect human and labour rights, to commit to environmental protection and to work against corrupt behaviour. Our Corporate Responsibility approach takes in our business responsibilities, environmental impact and social influence: Our business responsibilities are about being fair, transparent and accountable. Lundbeck systematically monitors, evaluates and acts on opportunities and risks to our company in order to develop best practices and business standards.

2 Lundbeck works systematically to minimise our environmental impact. The precautionary principle guides our efforts, and we ensure continuous improvements in research, development and production, applying certified environmental management systems. We acknowledge our social influence on people, the community and society, and strive to be known as a company that advances responsible social relations. Internally, Lundbeck provides sound people policies covering the Lundbeck Group. Internationally, we promote agreed conventions on human and labour rights and promote access to health through the Lundbeck Institute as well as by donations. By generating profit, we contribute to The Lundbeck Foundation, one of the largest private contributors to public research in health and natural sciences in Denmark. Each year we report on our progress within corporate responsibility to the UN Global Compact. Through FTSE4Good Index Series Lundbeck is scored against globally recognized corporate responsibility standards. In 2014 Lundbeck scored 98 points of 100 possible. Our environmental approach: One of our important coporate responsibilities is that we address our environmental impact by our Health, Safety and Environmental (HSE) Policy. It states that our ambition is to be among the leading companies in the fields of HSE. In five position documents it is described shortly how we work with HSE and how we strive to reach this ambition. One of the Position document deals specifically with Climate change. Our HSE efforts are developed, conducted and controlled through our corporate HSE system that is certified according to ISO CO2 strategy: For many years we have worked with energy optimization and in 2007, Corporate Management established our CO2 strategy, making a firm commitment to minimizing corporate CO2 emissions, and confirming our ambition to be among the leaders within the pharmaceutical industry. By challenging routines and conventional thinking and without compromising product quality and employees safety we reached a 46% reduction of our CO2 emission in 2014 compared to In 2014 we revised our long term target to 55% reduction of CO2 emission in 2020 compared to CC0.2 Reporting Year Please state the start and end date of the year for which you are reporting data. The current reporting year is the latest/most recent 12-month period for which data is reported. Enter the dates of this year first. We request data for more than one reporting period for some emission accounting questions. Please provide data for the three years prior to the current reporting year if you have not provided this information before, or if this is the first time you have answered a CDP information request. (This does not apply if you have been offered and selected the option of answering the shorter questionnaire). If you are going to provide additional years of data, please give the dates of those reporting periods here. Work backwards from the most recent reporting year. Please enter dates in following format: day(dd)/month(mm)/year(yyyy) (i.e. 31/01/2001).

3 Enter Periods that will be disclosed Wed 01 Jan Wed 31 Dec 2014 CC0.3 Country list configuration Please select the countries for which you will be supplying data. If you are responding to the Electric Utilities module, this selection will be carried forward to assist you in completing your response. Select country CC0.4 Currency selection Please select the currency in which you would like to submit your response. All financial information contained in the response should be in this currency. DKK CC0.6 Modules As part of the request for information on behalf of investors, electric utilities, companies with electric utility activities or assets, companies in the automobile or auto component manufacture sub-industries, companies in the oil and gas sub-industries, companies in the information technology and telecommunications sectors and companies in the food, beverage and tobacco industry group should complete supplementary questions in addition to the main questionnaire.

4 If you are in these sector groupings (according to the Global Industry Classification Standard (GICS)), the corresponding sector modules will not appear below but will automatically appear in the navigation bar when you save this page. If you want to query your classification, please If you have not been presented with a sector module that you consider would be appropriate for your company to answer, please select the module below. If you wish to view the questions first, please see Further Information Question 0.1. For more general information about the company see our annual report. For more information about our CSR efferts we have attached our Un Global Compact Progress Report. For more information about our HSE policy and Climate change position we have attached our HSE policy and our Position on Climate change. Attachments Change 2015/Shared Documents/Attachments/ClimateChange2015/CC0.Introduction/UN Global Compact Progress Report_2014.pdf Change 2015/Shared Documents/Attachments/ClimateChange2015/CC0.Introduction/Position on climate change 2015 final.pdf Change 2015/Shared Documents/Attachments/ClimateChange2015/CC0.Introduction/HSE policy.pptx Change 2015/Shared Documents/Attachments/ClimateChange2015/CC0.Introduction/Lundbeck_Annual_Report_2014.pdf Module: Management Page: CC1. Governance CC1.1 Where is the highest level of direct responsibility for climate change within your organization? Board or individual/sub-set of the Board or other committee appointed by the Board CC1.1a

5 Please identify the position of the individual or name of the committee with this responsibility i. The Health Safety and Environmental (HSE) Council is the committee with the highest level of responsibility for climate change.the Group Senior Vice President of Supply Operations & Engineering,also member of the Corporate Management Group (CMG,) is appointed by the Cheif Executive Officer to be chairman for Lundbecks HSE Council. Apart from the Chairman the HSE Council consists of 3 managers: 1 Group Senior Vice President, that is also member of the Corporate Management Group, and 2 Vice Presidents) appointed by the chairman and 3 employees elected by and among HSE representatives in the organisation. Through this all parts of the company (Supply Operations and Engineering, Research & Development and Administrative areas) are represented in the HSE Council. The two members og CMG can bring relevant topics to CMG where also 3 members of the Board (our CEO and two executice vice presidents) are members. ii. The HSE Council acts on behalf of the Corporate Management Group in respect of HSE matters including climate change. Decisions in the HSE Council cover all of Lundbeck. The role of the HSE Council is to: Define and evaluate corporate HSE policies, strategies, guidelines and corporate activities and targets. Evaluate Lundbecks HSE performance quarterly and annually at the meetings. Communicate corporate decisions to managers and employees at all sites. Respond to enquiries from managers and employees. The Council have 1 meeting every quarter of the year. Climate change issues are considered to be one of the significant environmental issues in Lundbeck and are therefore managed and controlled like all other significant HSE issues by the HSE Council. This means that Lundbecks Climate strategy (The CO2 strategy) and our longterm CO2 emission target is decided by the HSE Council. In order to implement and coordinate the necessary energy and CO2 emission reduction initiatives, Lundbeck has set up a Corporate Energy Forum. All Lundbecks production and research sites are represented in this forum. The forum coordinates energy initiatives at all the sites and exchanges experinces and possibilities about energy and CO2 emission reduction. At each site energy teams, consisting of engineering and maintenance employees, perform energy screenings and implement energy reducing initiatives. CC1.2 Do you provide incentives for the management of climate change issues, including the attainment of targets? Yes

6 CC1.2a Please provide further details on the incentives provided for the management of climate change issues Who is entitled to benefit from these incentives? The type of incentives Incentivized performance indicator Comment Chief Operating Officer (COO) Chief Operating Officer (COO) Business unit managers Facility managers Monetary reward Monetary reward Monetary reward Monetary reward Emissions reduction target Energy reduction target Emissions reduction target Energy reduction target Emissions reduction target Energy reduction target Emissions reduction project Emissions reduction target Energy There is an annual bonus for meeting short term targets related to energy reduction and GHG emission reduction targets. The short term targets (4% CO2 reduction in 2015 compared to 2014) is created by breaking down the Corporate long term target about GHG emission down to business functions. The size of the bonus is managed in our Performance Management System. In the Performance Management System all managers and employees have individual goals, including climate related goals. Once a year the performance is evaluated and scored and the score is determining the size of the bonus. There is an annual bonus for meeting short term targets related to energy reduction and emission reduction targets that affect scope 1 and 2 emissions. The short term targets is created by breaking down the Corporate long term target about scope 1 and 2 emissions down to business functions. The size of the bonus is managed in our Performance Management System. In the Performance Management System all managers and employees have individual goals, including climate related goals. Once a year the performance is evaluated and scored and the score is determining the size of the bonus. There is an annual bonus for meeting short term targets related to energy reduction and emission reduction targets that affect scope 1 and 2 emissions. The short term targets is created by breaking down the Corporate long term target about scope 1 and 2 emissions down to business functions. The size of the bonus is managed in our Performance Management System. In the Performance Management System all managers and employees have individual goals, including climate related goals.once a year the performance is evaluated and scored and the score is determining the size of the bonus. There is an annual bonus for meeting short term targets related to energy reduction and emission reduction targets that affect scope 1 and 2 emissions. The short term targets is created by breaking down the Corporate long term target about scope 1 and 2 emissions down to business functions. The Facility Manager is heading the Corporate Energy Forum and responsible for the cross organizational energy reduction

7 Who is entitled to benefit from these incentives? The type of incentives Incentivized performance indicator Comment Other: Environment/sustainability managers Other: All employees (around 1000 persons) in Supply Operations and Engineering Monetary reward Recognition (nonmonetary) reduction project Energy reduction target Emissions reduction target Energy reduction target Behaviour change related indicator Emissions reduction project Energy reduction project Efficiency project Behaviour change related indicator projects. The size of the bonus is managed in our Performance Management System. In the Performance Management System all managers and employees have individual goals, including climate related goals. Once a year the performance is evaluated and scored and the score is determining the size of the bonus. There is an annual bonus for meeting short term targets related to energy reduction and GHG emission reduction targets. The short term targets is created by breaking down the corporate long term target about GHG emission down to business functions. Environmental/substainability managers are also rewarded monetary if they complete activities that supports energy reducing activities. For instance by carrying out campaigns or motivate employees in other ways to behave in an energy conscious way. The size of the bonus is managed in our Performance Management System. In the Performance Management System all managers and employees have individual goals, including climate related goals. Once a year the performance is evaluated and scored and the score is determining the size of the bonus. Every month an implemented initiative is rewarded and communicated to all other employees in Supply Operations and Engineering. The initiative must support Lundbecks Business principles. Energy reducing activities supports many of these Business principles and can therefore also be rewarded. All employees Recognition (nonmonetary) Emissions reduction project Energy reduction project Behaviour change related indicator All employees can be recognized with a story on Lundbecks intranet. The criteria is, that they have participated in implementing a good HSE initiative which definitely includes energy reducing initiatives. All employees Recognition (nonmonetary) Emissions reduction project Energy reduction project At a yearly HSE seminar a HSE price, including a gift, is given to a good HSE initiative. Energy reducing initiatives can be chosen as well as other HSE initiatives. The area that get the price get a reward. The price will in 2015 be given in september.

8 Who is entitled to benefit from these incentives? The type of incentives Incentivized performance indicator Comment Efficiency project Behaviour change related indicator All employees Other: Hourly emplyees in Supply Operations in DK Other nonmonetary reward Monetary reward Energy reduction project Behaviour change related indicator Energy reduction project Behaviour change related indicator All employees in Lundbeck are covered by a Performance Management System. Through this system individual goals, including eventually climate related goals can be set. Especially employees that are a part of the local energy team can have individual energy goals. The employee participates twice a year in performance dialogues. Once a year the employee performance is evaluated and scored and good initiatives are recognized through a scoring system. The score is used as input to promotion and salary adjustments. Every year an implemented initiative is rewarded by a monetary gift. The initiative must support Lundbecks Business principles. Energy reducing activities supports many of these Business principles and can therefore also be rewarded. Further Information Page: CC2. Strategy CC2.1 Please select the option that best describes your risk management procedures with regard to climate change risks and opportunities Integrated into multi-disciplinary company wide risk management processes CC2.1a

9 Please provide further details on your risk management procedures with regard to climate change risks and opportunities Frequency of monitoring To whom are results reported? Geographical areas considered How far into the future are risks considered? Comment Six-monthly or more frequently Board or individual/subset of the Board or committee appointed by the Board The risk management system includes our global operations in all countries we are operating in. > 6 years Assessment of risks related to climate change is an integral part of our corporate risk management system. The principal aim of Lundbeck s risk management is to strike the right balance between risk exposure and value generation. Our risk management processes are constantly updated and adapted to match internal and external requirements. This gives our Corporate Management Group an accurate overview of current activities and resources, and a clear basis for decision-making on Lundbeck s overall risk exposure. Lundbeck uses a Financial Longterm Model for long-term strategic and financial planning. Both results from Lundbecks corporate risk management system and input concerning business opportunities are used in this model. The result is presented to the Corporate Management Group. The Chief Executive Officer brings relevant information and decisions to the Board of Directors. CC2.1b Please describe how your risk and opportunity identification processes are applied at both company and asset level RISKS on both COMPANY and ASSET level are identified and managed through the same risk management system. Our fundamental risk management principle is that risks, in addition to central monitoring and coordination, must be managed by decentralized business units as they have the most extensive knowledge of such risks and the best possibility of mitigating the exposure. The individual business units take a systematic approach to monitoring, identifying, quantifying and responding to risks. Furthermore, we have defined reporting, decision-making and follow-up procedures and routines. The decentralized risk evaluation in the business units is regularly reported and processed by the risk management organization. The manager of the Corporate HSE department has a specific focus on climate change risks at company level eg regulatory risks, and the site facility managers has focus on risks at asset level. An important input to risks at asset level is our insurance inspections, that are performed every second year at all our sites. OPPORTUNITIES are continuously identified and managed by the same decentralized business units. As a part of the daily work opportunities are identified and discussed by employees and managers. Evaluation of identified opportunities and decisions are taken in the units. Some opportunities are implemented immediately

10 in the units. For example-most energy reducing activities are identified and implemented in the units. Other more strategic opportunities are reported up in the line organization following the defined procedures for communication and decision making. Climate change risks and opportunities, at both COMPANY and ASSET level, are also evaluated at HSE Council meetings quarterly. The project manager for the CO2 strategy reports to the HSE Council about climate related opportunities and risks. For instance are regulatory requirements evaluated in the HSE council. The Chairman of the HSE Council reports into the risk management system. CC2.1c How do you prioritize the risks and opportunities identified? Materiality of the risks is determined by combining the individual risks probability and impact. RISKS are assessed both as gross risks and net risks. The assessment of gross risk assumes that no mitigating actions have been implemented, whereas net risk assessment takes into account implemented mitigating actions and their anticipated effect. Lundbeck strives to have as many risks mitigated as possible. Eg we do secure our facilities against extreme weather situations. These initiatives are based on decentralized risk analysis performed by the organization. Lundbecks corporate risk register provides a consolidated picture of our risk exposure by detailing each risk, risk category and type. The risk descriptions give details of the event, its current status, the status of the response, an assessment of likelihood and potential impact, and the person responsible for managing the risk. Our reporting process defines 6 risk categories: 1. Research and development 2. Market conditions 3. Infrastructure. Risks related to climate change issues, including reputational, regulatory, physical and other climate related risks, is categorized under Infrastructure. 4. Reputation 5. Legal rights 6. Financial matters The risk categories are defined into three risk types: external, actionable or strategic. Climate change risks are typically defined as external or actionable risks. Using this information, the Risk Office assesses the overall risk exposure and reviews it with the Corporate Management Group. After this, the Corporate Management Group presents a two-dimensional risk heat map which is shared with the Board of Directors annually. Climate change OPPORTUNITIES are decided on the basis of the priorities in our business strategy. On the short timeline 1-2 years many decisions are taken in the decentralized units eg energy reduction plans. On the long timeline, more than 2 years, opportunities are evaluated and decided according to our Financial Longterm Model. CC2.1d

11 Please explain why you do not have a process in place for assessing and managing risks and opportunities from climate change, and whether you plan to introduce such a process in future Main reason for not having a process Do you plan to introduce a process? Comment CC2.2 Is climate change integrated into your business strategy? Yes CC2.2a Please describe the process of how climate change is integrated into your business strategy and any outcomes of this process i. Lundbecks strategic path is built on six pillars. Climate change mitigation and adaptation is closely related to two of the pillars: Organizational efficiency and Highperformance culture. In the pillar Organizational efficiency we work targeted with our Fit-for-the-Future program that aim to reduce complexity, increase organizational efficiency and free up resources. Our targeted work by optimizing energy efficiency and continuously improve our buildings and production facilities free up resources. In the pillar High performance culture our focus is to create a workplace that attracts, develop and retains the best employees. We believe it matters for Lundbeck employees that they work in a company that takes e.g. climate change seriously. And we expect everyone to live our corporate values eg. about being Responsible, which means that Lundbeck employees are expected to act responsibly towards colleagues, the environment, including climate, and the external community. This is underlined by our signing of UN Global Compact and by our CO2 strategy. HERE WE HAVE MADE A FIRM COMMITMENT TO REDUCE OUR CO2 EMISSION, AND BREAK THE CORRELATION BETWEEN BUSINESS GROWTH, ENERGY CONSUMPTION AND THE RESULTING CO2 EMISSION. Through our annual target setting process and our Global Performance Management Process all managers and employees work towards supporting the Business strategy e.g. all managers with specific influence on climate performance have individual climate performance targets. Climate change also influence Lundbecks strategy through the systematic work in our HSE organization. Eg the HSE council meets quarterly and evaluates our progress towards reaching our CO2 target and decides on new corporate initiatives. Future risks and opportunities like changing regulation or reputational possibilities are also discussed. The chairmen of the HSE council is member of the Corporate Management Group (CMG) and report climate change issues with significant importance for the business strategy to CMG. ii.

12 Following aspects have influenced the business strategy and the way we work: - International and national energy targets set up expectations to companies about being responsible: Taking voluntary action to reduce our CO2 emissions is considered an act of responsibility. In 2014 we revised our long-term reduction target: We want to reduce our CO2 emission by 55% in 2020 compared to Furthermorewe have signed Global Compact and comply with FTSE4GOODs climate change criteria. We believe this contributes to our reputation about being responsible and build up trust among stakeholders. - Adaptation: Our continuous focus on efficiency in our production supports our work with energy on demand and reduced energy consumption and CO2 emission. By reducing energy costs we optimize the resilience of our operations towards rising energy prices, - taxes and the like. - Regulatory changes: Legislation about Energy review, building efficiency and Best Available Technology set up requirements to companies. These requirements are implemented in new or existing procedures. - Experienced physical climate changes like heavy rainfall and storms have influenced our strategy around climate change adaptation of our buildings so that they can withstand these climate changes. iii. 0-5 years: Our short term strategy has been influenced by climate change initiatives. - We have introduced integrated approach where a dedicated team of engineers and maintenance employees challenge habits and conventional thinking to identify new ways to reduce energy use. In particular optimization of ventilation and reduction of air change in production areas have been the major contributors to our energy reductions. OUR CO2 TARGET IS A DETERMINING FACTOR for the achieved results, as it clearly states our commitment to reduce CO2 emissions by 55% in 2020 compared to This helps us mitigate the risks related to rising energy prices. - OUR STRATEGY ABOUT MAINTENANCE OF OUR FACILITIES IS IMPACTED BY THE NEED TO MITIGATE CLIMATE CHANGE RISKS. We continuously develop our sites so they can resist weather events. For instance we have built water reservoirs at selected locations in order to avoid damages from heavy rain. - We continue optimization of our facilities also in our affiliates. The target is to reduce our facilities from 36 m2/employee to 20 m2/employee. This minimizes the total square meters that must be heated or cooled. - In 2014 we decided to implement the EU directive on energy efficiency in our existing Health Safety and Environmental management system at our production and research sites worldwide. This will strengthen our systematism about energy review. - Regulatory reporting requirements and reputational considerations affect the way we communicate about our business. E.g. Lundbeck has made it a priority to be able to track and report our CO2 emissions. In our UN Global Compact Progress Report we communicate specifically about our climate performance. - We expect to develop our evaluation of suppliers and partners climate performance in order to maintain a strong supply chain and build up good partnerships. iv. More than 5 years: After Changes in our CO2 strategy will continuously be integrated in our business strategy. We expect to develop our CO2 strategy with more ambitious CO2 targets and focus on renewable energy like introduction of solar panels. - The continuous focus on energy efficiency in Production of active pharmaceutical ingredients and R&D facilities will continue to be an important activity in becoming an even more efficient business. This also includes development of new technologies towards a more flexible production. An example is our cooperation with the technical university of Denmark where we develop continuous production and get a more flexible and less energy consuming production. v. The overall focus on production efficiency, a strong supply chain and our systematic approach to identify and act on climate risks and opportunities is considered a competitive advantage. It supports our Business strategy and secures our ability to produce more with less and thereby support our future business. We also believe that our climate related activities and communication enhances our reputation. vi. The most substantial business decisions in the reporting year influenced by the climate change driven aspects of the strategy is that we have: - Decided a new long term CO2 target: In 2020 we will reduce our CO2 emission by 55% compared to We have also revised our annual target for We will reduce energy consumption and reduce CO2 emission by min. 4%/year. - Implemented or introduced integrated approach at all sites. At our headquarter it has resulted in a 12% reduction of the energy consumption in 2014 compared to

13 Decided to implement the requirements in the EU directive for energy efficiency at all Research and production sites worldwide. CC2.2b Please explain why climate change is not integrated into your business strategy CC2.2c Does your company use an internal price of carbon? Yes CC2.2d Please provide details and examples of how your company uses an internal price of carbon In Denmark Lundbeck have indirectly a price of carbon. In Denmark energy suppliers and other consultancies have a price on energy reductions. This means that it is possible to sell energy reductions to these companies. When new projects in Lundbeck are identified, energy savings and carbon reductions are caculated and the benefit from selling the energy reductions is included in the final calculations for the project. This means that projects with large energy reduction potentials are favoured. In general low energy consuming equipment have a high priority in Lundbeck and we conduct risk assessment priori to sourcing new equipment to e.g. assess the energy consumption. Lundbeck have considered to develop other kinds of prices on carbon. So far the conclusion is that it has not been neccesary to implement other prices on carbon. The internal portofolie of energy reducing projects have been large and most of the projects have been approved. In general energy considerations are included in our building and maintenance projects. CC2.3

14 Do you engage in activities that could either directly or indirectly influence public policy on climate change through any of the following? (tick all that apply) Trade associations Other CC2.3a On what issues have you been engaging directly with policy makers? Focus of legislation Corporate Position Details of engagement Proposed legislative solution CC2.3b Are you on the Board of any trade associations or provide funding beyond membership? Yes CC2.3c Please enter the details of those trade associations that are likely to take a position on climate change legislation Trade association Is your position on climate change consistent with theirs? Please explain the trade association's position How have you, or are you attempting to, influence the position? UN Global Compact Consistent UN Global Compact have ten priniciples where 3 are related to environment which include climate change: - Businesses should support a precautionary approach to environmental challenges; - Undertake initiatives to promote greater environmental responsibility; and - Encourage the development and diffusion of environmentally friendly technologies. Lundbeck have signed the ten principles in UN Global Compact and we are funding UN Global Compact beyond the ordinary membership. We are not attempting to influence further.

15 CC2.3d Do you publicly disclose a list of all the research organizations that you fund? CC2.3e Do you fund any research organizations to produce or disseminate public work on climate change? CC2.3f Please describe the work and how it aligns with your own strategy on climate change CC2.3g Please provide details of the other engagement activities that you undertake Lundbeck continuously engage with different kind of stakeholders: Trade associations: Lundbeck participate in networks in The European Federation of Pharmaceutical Industries and Associations, The Danish Association of the Pharmaceutical Industry and the Confederation of Danish Industries. Lundbecks position to climate change is very close to the trade association s positions. E.g. The Confederation of Danish Industries where we have several memberships. The Confederation of Danish Industries works to ensure that the business competitiveness, a clean environment and energy security are utilized to create the foundation for long-term and sustainable growth - green growth. As a member of the networks we participate in meetings where upcoming and new legislation is discussed. We also comment on new legislation before it is defined finally. Typically the trade association gathers comments from member companies and then makes a common comment to the authorities. In 2014 issues related to climate change e.g. the implementation of the European Energy efficiency directive, which have been implemented in national legislation, have been discussed. This directive requires that large companies carry out energy review. This has been discussed in the Danish Association of the Pharmaceutical Industry and in the Confederation of Danish Industries. Lundbeck has advocated for a clarification of which companies that are covered by the directive in the individual EU countries, as well as a uniform authentication system in individual countries. In Lundbeck we have decided to implement the requirements in the directive at all production and research sites, that are covered by our Health, Safety and Environmental system, also outside Europe.

16 In the Confederation of Danish Industries also energy prices and taxes and carbon taxes have been discussed. Lundbeck support initiatives that ensure equal business competitiveness across countries and prices and taxes that reflect the impact on climate and the environment in general. Other: IN 2014 LUNDBECK INVITED THE COMMISIONER FOR CLIMATE Connie Hedegaard to our headquarter in Denmark. The purpose of this invitation was to give the commissioner an insight in the pharmaceutical industry both possibilities and challenges. Climate change was a big topic on the agenda and both the results Lundbeck have achieved and our wishes to the future regulation was presented and discussed with the commissioner. Lundbeck also sign and comply with international initiatives, which include climate issue. For instance we have committed us to the Global Compact and work continuously with improving the ten principles in UN Global Compact including the principle concerning climate changes. We also participate in climate network in the municipal. In this network we support the development of tools to manage climate issues in companies. These tools are available for all member companies on the internet. Direct engagement with policy makers: Lundbeck have entered a partnership with the Danish Agency for Environmental Protection. The purpose of the partnership is to influence on new BREF documents. In 2014 it has been the BREF about wastewater and emissions. The next BREF will be about fine organic chemicals and we expect also to be able to participate in a relevant partnership when the BREF about Energy Efficiency must be revised. CC2.3h What processes do you have in place to ensure that all of your direct and indirect activities that influence policy are consistent with your overall climate change strategy? The internal Communication concerning climate issues is coordinated and controlled through Lundbecks HSE organisation and through Lundbecks HSE management system that is certified according to ISO and OHSAS It is described in Lundbecks HSE management system how internal and external communication is coordinated in the company. All communication with authorities, trade associations and participation in other networks is coordinated and primarily performed by the Corporate HSE department. It is solely managers and employees from the Corporate HSE department that make written input to new legislation. Lundbecks Corporate HSE department is responsible for Lundbecks CO2 strategy and for the follow up on all Lundbecks climate initiatives and the long-term target. This means that it is the same managers and employees that are responsible for the internal climate initiatives, which participate in the network activities and the commenting on new legislation. This ensures consistent communication about our climate change strategy. Furthermore Lundbeck participate in interviews with external journalists concerning climate issues. This can indirectly influence on policy makers. Managers that participate in such interviews have always, prior to the interview, coordinated and agreed on the content of the answers with the Director of the Corporate HSE department. CC2.3i

17 Please explain why you do not engage with policy makers CC2.4 Would your organization's board of directors support an international agreement between governments on climate change, which seeks to limit global temperature rise to under two degree Celsius from pre-industrial levels in line with IPCC scenarios such as RCP2.6? No CC2.4a Please describe your board's position on what an effective agreement would mean for your organization and activities that you are undertaking to help deliver this agreement at the 2015 United Nations Climate Change Conference in Paris (COP 21) Lundbeck believe that our most significant environmental aspects are our use of chemicals and our emission of chemicals and pharmaceuticals to the environment. This use and emission have potentially much more significant impact on the environment than our business' impact on the climate. Therefore our primary focus is on use and emission of chemicals and pharmaceuticals. Even though we do have many initiatives in regard to climate change and we do not believe that an effective agreement would lead to significant changes in our work with climate changes, because: - Lundbeck is already working actively with carbon reductions and keeps our ambitions high by setting long term and annual targets. - We have already introduced renewable energy sources at some locations and intend to do it even more in the future. - We have integrated the environmental aspects in our evaluation of our supply chain and intend to continue to develop our tools for supplier audits. - Lundbeck already engages in political activities through network activities in trade associations and partnerships with relevant authorities like the municipal and the Danish Agency for Environmental Protection. - Lundbeck does provide information about our climate management in corporate reports and at the internet like our homepage and in CDP. And we do believe that this information is sufficient for our investors and other stakeholders. - Lundbeck have an indirectly price on carbon and do not consider at the moment that more carbon prices would change significantly on the amount of our activities to reduce carbon emissions. Further Information Question 2.1. In our annual report p. 19, 20 the risk management system is described. Question 2.2. In our annual report page 10,11 our business strategy is described. Question 2.2. In our Position on Climate change our long term CO2 goal and our activities is described. Question 2.2. In UN Global Compact Progress Report pages 12, 13 our results in 2014 is described. Attachments

18 Change 2015/Shared Documents/Attachments/ClimateChange2015/CC2.Strategy/Position on climate change 2015 final.pdf Change 2015/Shared Documents/Attachments/ClimateChange2015/CC2.Strategy/Lundbeck_Annual_Report_2014.pdf Change 2015/Shared Documents/Attachments/ClimateChange2015/CC2.Strategy/UN Global Compact Progress Report_2014.pdf Page: CC3. Targets and Initiatives CC3.1 Did you have an emissions reduction target that was active (ongoing or reached completion) in the reporting year? Absolute target CC3.1a Please provide details of your absolute target ID Scope % of emissions in scope % reduction from base year Base year Base year emissions (metric tonnes CO2e) Target year Comment Abs1 Abs2 Scope 1+2 Scope % 55% % 5% Lundbeck intends to break the correlation between business growth, energy consumption and the resulting CO2 emission. We have both a long term CO2 reduction target and an annual target for CO2 reduction. By the end of 2013 we reached our previous long term target, so in 2014 we defined a new ambitious target which is a 55% CO2 reduction in 2020 compared to Lundbeck intends to break the correlation between business growth, energy consumption and the resulting CO2 emission. We have both a long term CO2 reduction target and an annual target for CO2 reduction. The annual target for 2014 was to reduce CO2 emissions by 5% in 2014 compared to 2013.

19 CC3.1b Please provide details of your intensity target ID Scope % of emissions in scope % reduction from base year Metric Base year Normalized base year emissions Target year Comment CC3.1c Please also indicate what change in absolute emissions this intensity target reflects ID Direction of change anticipated in absolute Scope 1+2 emissions at target completion? % change anticipated in absolute Scope 1+2 emissions Direction of change anticipated in absolute Scope 3 emissions at target completion? % change anticipated in absolute Scope 3 emissions Comment CC3.1d For all of your targets, please provide details on the progress made in the reporting year ID % complete (time) % complete (emissions) Comment Abs1 57% 81% Abs2 100% 100% By the end of 2014 we had reduced our CO2 emission with 46% compared to By the end of 2014 we had reduced our CO2 emission by 9% compared to CC3.1e

20 Please explain (i) why you do not have a target; and (ii) forecast how your emissions will change over the next five years CC3.2 Does the use of your goods and/or services directly enable GHG emissions to be avoided by a third party? No CC3.2a Please provide details of how the use of your goods and/or services directly enable GHG emissions to be avoided by a third party CC3.3 Did you have emissions reduction initiatives that were active within the reporting year (this can include those in the planning and/or implementation phases) Yes CC3.3a Please identify the total number of projects at each stage of development, and for those in the implementation stages, the estimated CO2e savings Stage of development Number of projects Total estimated annual CO2e savings in metric tonnes CO2e (only for rows marked *)

21 Stage of development Number of projects Total estimated annual CO2e savings in metric tonnes CO2e (only for rows marked *) Under investigation 20 To be implemented* Implementation commenced* Implemented* Not to be implemented 35 CC3.3b For those initiatives implemented in the reporting year, please provide details in the table below Activity type Description of activity Estimated annual CO2e savings (metric tonnes CO2e) Scope Voluntary/ Mandatory Annual monetary savings (unit currency - as specified in CC0.4) Investment required (unit currency - as specified in CC0.4) Payback period Estimated lifetime of the initiative Comment Energy efficiency: Processes Energy efficiency: Processes Upgrade boiler system installation of a total dissolved solid system and a purging heat recovery system. Upgrade boiler system installation of a new tank for condensate receiving, pre heating and water degassing Scope 1 Scope 1 Voluntary Voluntary years 6-10 years years 6-10 years

22 Activity type Description of activity Estimated annual CO2e savings (metric tonnes CO2e) Scope Voluntary/ Mandatory Annual monetary savings (unit currency - as specified in CC0.4) Investment required (unit currency - as specified in CC0.4) Payback period Estimated lifetime of the initiative Comment Energy efficiency: Processes Energy efficiency: Processes Energy efficiency: Building services Energy efficiency: Building fabric Optimization of vent from biological water treatment system. Shutdown unused lab equipment and optimize energy consumption for servers, freezers etc. Lighting occupancy sensors and increase t-stat cooling temperature in IT and mechanical areas. Lowering ventilation during the night and on holidays (plant 1-4) Scope 2 Scope 2 Scope 2 Scope 1 Scope 2 Voluntary Voluntary Voluntary Voluntary years 6-10 years <1 year Ongoing <1 year Ongoing <1 year Ongoing Energy efficiency: Building fabric Lowering ventilation during the night and on holidays (Plant 5). 8 Scope 1 Scope 2 Voluntary <1 year Ongoing Energy efficiency: Building fabric Lowering ventilation during the night and on holidays (Pilot Plant). 4 Scope 1 Scope 2 Voluntary <1 year Ongoing Energy efficiency: Building fabric Lowering ventilation during the night and on holidays (Kilo lab). 7 Scope 1 Scope 2 Voluntary <1 year Ongoing

23 Activity type Description of activity Estimated annual CO2e savings (metric tonnes CO2e) Scope Voluntary/ Mandatory Annual monetary savings (unit currency - as specified in CC0.4) Investment required (unit currency - as specified in CC0.4) Payback period Estimated lifetime of the initiative Comment Energy efficiency: Building services Energy efficiency: Building services Energy efficiency: Building services Energy efficiency: Building services Energy efficiency: Building services Energy efficiency: Building services Redesign of the way the plant is controlled Reduce time for operation. 755 Relocation and shutdown of ventilation plants, cooling and heating coils. Rebuilding and optimization of animal facilities Rebuilding activities. 95 Repair of malfunctions. 200 Scope 2 Scope 2 Scope 2 Scope 2 Scope 2 Scope 2 Voluntary Voluntary Voluntary <1 year Ongoing <1 year Ongoing <1 year Ongoing Voluntary Mandatory Voluntary Voluntary years Ongoing <1 year Ongoing <1 year Ongoing Minor adjustments can be neccesary over time. The rebuilding activities was legally required and therefore mandatory. CC3.3c

24 What methods do you use to drive investment in emissions reduction activities? Method Comment Dedicated budget for energy efficiency Employee engagement Partnering with governments on technology development Internal incentives/recognition programs Internal finance mechanisms Lundbeck has a budget for energy saving investments every year. In 2014 Lundbeck invested around 3.9 MDKK. Apart from the energy efficiency projects this budget is used for energy screenings. In 2014 we established a dedicated team of internal engineers and maintenance employees who challenge habits and conventional thinking to identify new ways to reduce energy use. This team has successfully identified possibilities for closing down equipment and ventilation when it is not in use. Implementation of many of these activities only require employee hours and not financial investments. In 2015 the dedicated budget is 2 MDKK. Lundbeck involves employees in energy saving initiatives. Employees participate in; mapping energy using equipment, discussing possibilities for closing down equipment when it is not in use and running local energy campaigns in the organization. The annual achievements of the energy saving activities are published in our Health Safety and Environmental Management review, The UN Global Compact Progress report and in our internal HSE newsletter. At our chemical factory in Lumsås, Denmark we have a partnership with the Technical University about optimising equipment in the production towards continuously production. This will result in much more efficient equipment using less raw materials and less energy. Lundbeck uses monetary reward to managers that has a specific responsibility about energy savings. The reward consists of an annual bonus for meeting short term targets related to energy reduction and GHG emission reduction targets. The short term target is created by breaking down the Corporate long term target about GHG emission down to business functions. The size of the bonus is managed in our Performance Management System. In 2014 energy savings was integrated in our ordinary maintenance activities. A dedicated team of engineers and maintenance employees challenge habits and conventional thinking to identify new ways to reduce energy use. In particular optimization of ventilation and reduction of air change in production areas have been the major contributors to our energy reductions. Some of these activities require financial investments and are managed through our internal finance system for investments. In 2014 energy efficiency projects with a total investment on 4 MDKK was identified and approved for implementation in Other investment is taken from the dedicated budget for energy efficiency. CC3.3d If you do not have any emissions reduction initiatives, please explain why not Further Information