The company s business model Whether you consider the company's flow of products through its value chain in Denmark or

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2 Based on its global business structure, Fertin Pharma wishes to develop its business and meet strategic challenges in an economically and socially responsible manner. Group manufacturing is primarily located in Denmark; however, a smaller manufacturing unit is located in Goa, India. Several subcontractors from other parts of the world are used, and the products are exported to several continents such as Europe, Asia, and the United States. For a few years, the group s internal and primary focus has been on managing the business in a socially sound manner, characterised by the company's two core values, credibility and commitment. This is emphasised by the company's "Code of Conduct", which makes the same demands of our suppliers. The company s business model Whether you consider the company's flow of products through its value chain in Denmark or India, the flow will be as indicated below and with the same social and environmental impact: Primary CSR elements of the company s business model Whether you consider the company's flow of products through its value chain in Denmark or India, the flow will be as indicated below and with the same social and environmental impact: The social responsibility and behaviour of the model is supported by a written "Code of Conduct", which is a general set of rules for the conduct and values of Fertin. Environmental Policy, including reduction of climate impact Fertin Pharma strives to minimise its impact on the surrounding environment by complying with European and national environmental legislation, as well as through the continuous improvement of the company's environmental situation. In 2017, Fertin Pharma continued to focus on the reduction of air emissions from manufacturing processes. During the year a project proposal was prepared for the installation of a further carbon filter, which will reduce odour emissions from the main storage. It is anticipated that the filer will be installed during 2018, when efforts to reduce the company s total emissions will continue. Mandatory report on CSR, pursuant to Section 99a of the Danish Financial Statements Act 2

3 Relevant Fertin Pharma A/S environmental situation Emissions (VOC, Odours and dust) Noise Raw material/packaging Electricity Natural gas Water Product Waste Waste water In consultation with the municipality of Vejle, Fertin Pharma has chosen to review the company s current environmental approvals. The main purpose of the review is to condense the five existing approvals into a comprehensive approval, which will be updated to comply with applicable legislation, and which will provide an overall view of Fertin Pharma s environmental situation. Because of the extra focus being put environmental factors, as at 1 November 2017, a fulltime environmental specialist was employed to secure Fertin Pharma the proper skills and resources for the maintenance and development of the company's environmental policy and management. Statement of consumption: The consumption of Fertin Pharma is shown in the table below: Energy consumption Unit 2017 kwh per kg product 5.59 Water consumption Unit 2017 m³ per kg product Natural gas Unit 2017 m³ per kg product 0.41 Statement of waste for disposal In 2015, Fertin Pharma entered into a partnership with Wastegroup Denmark with the view of mapping company waste fractions and ensuring proper disposal in accordance with national legislation. Fertin Pharma s total statement of waste for disposal is shown in the tables below: Mandatory report on CSR, pursuant to Section 99a of the Danish Financial Statements Act 3

4 In 2018, Fertin Pharma will continue to collect data and focus on reducing the amount of combustible waste. Policy on social and employee relations, including compliance with human rights Human rights It is the policy of Fertin Pharma to comply with national legislation on conditions relating to employment and remuneration and to also comply with the ILO Convention as well as comply with the ETI Base Code. This means that we have good systems in place to secure our employees freedom of expression, freedom of organisation and to negotiate collectively. The development of our employees skills is an integral part of our personnel policy, and a framework exists for the preparation of a skill matrix for all areas. Employee relations Our employees are the group's most important resource and are a prerequisite for Fertin Pharma being able to continue its desired development and growth. We therefore continuously focus on work climate and job satisfaction through dialogue-based quarterly surveys. By the end of 2017, the rating of our work climate was at 4.2 (5 being the best). The equivalent rating for 2016 was 4.1. In 2015, we began a management trainee programme for employees who wish to take on personnel management and have the desire and ambition to eventually take on a management position. The first two candidates complete the full course in December In 2017, two new groups started - a total of 29 candidates completing a 3-year programme. All newly appointed and recently hired managers attend an internal training programme on The Fertin Way of Leadership, which provides them with a good idea of what we expect of our managers and provides them with concrete tools in support of their work. As regards other activities for the benefit of employees and our surroundings, it is worth mentioning that, in 2017, we sponsored Team Best of Lillebælt's trip to Paris. Team Best of Lillebælt focuses on exercise, teamwork and charity for the benefit of children and youth in Middelfart and Fredericia. Another sponsorship was awarded to the UEC European Youth Mountainbike Championships in Graz, Austria. Young Danish mountain bikers attended the event to try to win medals for Denmark. Mandatory report on CSR, pursuant to Section 99a of the Danish Financial Statements Act 4

5 Development of employee skills By the end of 2015, the first TWI (Training Within Industry) courses for Fertin Pharma employees were launched. TWI training is performed as a supplement to other training undertaken by our employees. TWI training means looking in-depth at areas which are critical to the value chain of Fertin Pharma, amongst others. The aim of TWI training is therefore to improve and develop the quality of our processes, to strengthen and increase skills of our employees, and to share knowledge across the organisation. In 2017, 33 employees gained a TWI Certificate. The aim is that all manufacturing units in Denmark will implement TWI in manufacturing, ensuring that processes are efficiently practised, and the skills level is continuously increased. Work environment Our Health and Safety policy: Fertin Pharma wishes to be a safe and healthy work environment, where our employees thrive and are not injured during their work day. Through proactive and continued efforts, we will work to reach concrete aims and to improve efforts made to the work environment while considering the risks to health and safety existing within Fertin Pharma. In 2017, a new structure for work environment efforts was introduced which, in addition to the statutory setup, added 30 work environment ambassadors who help communicate and are active in select work environment projects. 600 employees were given training in Safety Awareness in Vejle and in GOA a management system according to the ISO 14001/OHSAS standards is being set up. On 1 October 2017, a new Fertin Pharma safety campaign "GO GREEN" was introduced. The purpose of the campaign is to make visible the efforts made in the area of safety and to ensure continued focus on the area. The campaign was kicked off by students of Tørring Gymnasium who, through their efforts at Fertin Pharma on that day, were able to raise money in support of post-secondary education in Zambia. Mandatory report on CSR, pursuant to Section 99a of the Danish Financial Statements Act 5

6 Diversity Fertin Pharma aims to be a workplace for employees with the right skills and the will to work in a high-performance organisation. An important focus area is the promotion of gender equality among managers at all levels. We ensure this through both recruitment and succession planning. In 2017, the distribution of genders was as shown below: Employee group No of men in % No of women in % Executive management (3 men and 2 women) Management generally Workers in manufacturing Other staff Total The aim of promoting diversity and gender equality among managers at all levels is to ensure that different groups of employees can have a career without experiencing cultural, geographical, gender-based or organisational barriers. Composition of the board of directors: Composition of the board of directors The board of directors and alternate directors Objective (aim) for gender distribution: The aim is to match the composition of the Executive Management % distribution between genders male/female 70/30 60/40 Policy on anti-corruption and bribery It is the policy of Fertin Pharma to participate in fighting corruption and bribery. We do this by ensuring that our external partners acknowledge and follow the Fertin Pharma s Code of Conduct. In addition, all Fertin Pharma staff are trained in this and have, in their training, agreed to adhere to this policy. The training is revisited on an annual basis. As a further effort in fighting corruption and bribery, an external "whistle-blower" arrangement has been established which may be used by anyone who experiences events that violate Fertin Pharma s Code of Conduct. Throughout 2017, we have worked on implementing a new online supplier assessment system to ensure that our primary suppliers also comply with the ethical requirements made of us by our customers. Policy on land grapping It is the policy of Fertin Pharma not to participate in, be responsible for or in any way be associated with any actions which may be deemed to be land grapping. Mandatory report on CSR, pursuant to Section 99a of the Danish Financial Statements Act 6