Sustainability Report 2021

LUNDBECKFONDEN - SUSTIANABILITY REPORT 2021

LUNDBECKFONDEN - SUSTIANABILITY REPORT 2021

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LUNDBECKFONDEN - SUSTIANABILITY REPORT 2021

CONTENTS Lundbeck Foundation - Sustainability report 2021

Sustainability at the Lundbeck Foundation

3

Improving health and quality of life starting with the brain

5

Supporting responsible economic growth and job creation

6

Pioneering innovation within healthcare

7

Promoting sustainable practices and good governance

8

Key ESG figures and sustainability risks

11

Looking forward: Greater ambitions within sustainability

12

H. Lundbeck A/S

13

ALK-Abelló A/S

55

Falck A/S

90

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LUNDBECKFONDEN - SUSTIANABILITY REPORT 2021

SUSTAINABILITY AT THE LUNDBECK FOUNDATION With its 2030 strategy, Bringing Discoveries to Lives, the Lundbeck Foundation has articulated a clear commitment to making a positive and sustainable impact on society. With the strategy, the Foundation will continue to drive sustainable outcomes aligned with global goals within health, innovation, economic growth and good governance.

This report represents the statutory consolidated statement of the Lundbeck Foundation on Corporate Social Responsibility (CSR) in accordance with section 99a of the Danish Financial Statements Act. The report includes the sustainability reports of Lundbeck, ALK and Falck – each of which outlines company-specific policies, activities and results for 2021.

OUR BUSINESS MODEL The Lundbeck Foundation is a commercial foundation which owns and invests in healthcare companies and channels its profits back to society through investments in biomedical research with a special focus on the brain and neuroscience.

The Foundation is one of the largest commercial foundations in Denmark, with a net wealth in excess of DKK 67bn. In addition to its ownership of three healthcare companies, Lundbeck, ALK and Falck, the Foundation manages an investment portfolio of approximately DKK 24bn and a portfolio of 21 life science investments in the USA and Europe, including seven early-stage biotech companies in Denmark.

The investments generate dividends and profits, which are ultimately channelled back to society through philanthropic grants and donations of more than DKK 500m each year. In 2021, total grants amounted to DKK 803m. The grants support a broad spectrum of biomedical research projects at Danish universities and hospitals with a special focus on brain

* The percentage indicates the Foundation’s share of ownership

The purpose of the Lundbeck Foundation is to create powerful ripple effects that bring discoveries to lives through investing actively in business and science at the frontiers of their fields

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LUNDBECKFONDEN - SUSTIANABILITY REPORT 2021

research and neuroscience. Grants are also awarded to

OUR COMMITMENT

projects, underpinning the development of the neuroscience

As one of Denmark’s largest commercial foundations, the

and healthcare community Denmark, including activities

Lundbeck Foundation shares an important responsibility for

related to the dissemination of new scientific discoveries and

the sustainable development of the country’s local science and

competence building. Brain health is at the centre of the

business communities, and society in general. The Lundbeck

Foundation’s grant strategy and the amount awarded in

Foundation seeks to create sustainable impact in the four

support of brain research was approximately 79% of the total

areas shown in the figure below. These are:

awarded grant amount.

For detailed descriptions of the business models of the three strategic subsidiaries, please refer to page 6 in the 2021 H. Lundbeck A/S Sustainability Report, page 6 in the 2021 ALK Abelló A/S Sustainability report and page 6 in the 2021 Falck A/S Sustainability Report.

UN GLOBAL COMPACT AND THE SDGs The Lundbeck Foundation is a strong believer in the need for

Improving health and quality of life, starting with the brain

international solutions to international problems. It was the first commercial foundation in Denmark to sign the UN Global Compact in 2012, and the 10 UN principles serve as general guidelines for the Foundation’s policies, strategies, processes and for our behaviour in general.

Supporting responsible economic growth and job creation

The Lundbeck Foundation’s three subsidiaries are all signatories to the UN Global Compact: Lundbeck signed in 2009, while ALK and Falck signed in 2019.

Closely linked to UN Global Compact are the 17 Sustainable Development Goals (SDGs). In addition to using the SDGs as

Pioneering innovation within healthcare

a guideline for the Lundbeck Foundation’s own commitment to a more sustainable world, the Foundation also financially supported the development of a local Danish approach to the implementation of the SDGs, which led to the development of 197 Danish indicators to supplement the 231 global indicators.

This work finished in 2020 and provided Denmark with a specific toolbox to use the 17 SDGs, to measure the nation’s progress and prioritise efforts towards them.

Promoting sustainable practices and good governance

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LUNDBECKFONDEN - SUSTIANABILITY REPORT 2021

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IMPROVING HEALTH AND QUALITY OF LIFE STARTING WITH THE BRAIN SDG 3 constitutes an important strategic anchor for the Foundation’s

At the core of the Lundbeck Foundation’s purpose and strategy of bringing

philanthropic and commercial activities - especially sub-target 3.4

discoveries to lives is the commitment to drive new health discoveries that can

regarding the treatment of non-communicable diseases and mental health

improve people’s lives and well-being.

given the Foundation’s focus on the brain.

BETTER LIVES THROUGH BETTER SCIENCE

prevention, diagnosis, and treatment of brain disorders. In

and the BBC to produce a short documentary about the life of a

In 2021, the total grant sum of the Lundbeck Foundation

2021, approximately 79% of the granted amount –

migraine patient (https://lundbeckfonden.com/en/news/

amounted to DKK 803m. New scientific discoveries and

corresponding to DKK 632m – was awarded to brain research.

documentary-living-with-migraine-and-the-battle-better-

insights are a key enabler to reaching the goals of SDG3 (Good

This included the largest single grant ever: DKK 187m to

brain-health).

health and well-being). The Foundation’s grants cover basic

establish the Neuroscience Academy Denmark.

Over recent decades, neuroscience has been a somewhat

A RESPONSIBLE OWNER AND INVESTOR IN HEALTHCARE COMPANIES

also include application-oriented research grants with a

overlooked scientific topic in life-science research. The brain is

As an owner and investor in the healthcare sector, the

potential direct impact on the discovery of new treatments.

highly complex to study and often requires a translational

Foundation’s commercial activities are also part of its

The Foundation’s support for biomedical science includes

approach and challenging clinical studies, which take time,

commitment to improving health and quality of life. New

funding large-scale research projects, supporting the talent

resources, and access to biomedical as well as

scientific knowledge and insights are translated into treatments

development of the best scientists, and the development of the

sociodemographic data. Growing the awareness of the

through commercial business models, which can bring products

surrounding ecosystem in neuroscience and healthcare.

importance of brain health and neuroscience research within

and treatments to the market and thereby also to patients. The

the life science community, and in society in general, is

Foundation’s ownerships and direct investments are driven

IT STARTS WITH THE BRAIN

therefore also an important task for the Foundation as part of its

with the clear objective of reaching and improving the lives of

The number of people with brain diseases is growing around

strategic ambition of being an active public voice, that

patients - patients with brain health challenges (as with

the globe. Diseases such as Alzheimer’s and Parkinson’s are

contributes constructively to the development of society. In

Lundbeck), patients with respiratory allergy challenges (as with

known for their devastating consequences for people’s lives,

2021, the Foundation hosted a range of talks and events about

ALK), or people caught in a health emergency situation

but also for their significant economic burden on society.

brain health, new neuroscience studies and the cost of brain

requiring immediate action (as with Falck).

Furthermore, the economic costs are growing, due to ageing

disorders. The Foundation also partnered with NCD Alliance

research, which has limited short-term impact on health treatments, but is vital to understanding human biology. They

populations in many societies. Despite the significant burden of brain diseases, the world still lacks fundamental knowledge about the brain and its diseases, and this constitutes a critical barrier for the development of new and better treatments.

The Lundbeck Foundation is committed to bridging the scientific knowledge gap regarding the brain, and to generating new insights and knowledge that can lead to better

THE CONSEQUENCES OF BRAIN DISEASES IN DENMARK To understand the societal burden of brain diseases, the Lundbeck Foundation initiated a scientific study on the occurrence, mortality and cost of brain diseases in Denmark. The team of researchers at Aarhus University published their findings in 2020 showing: • • • •

Approximately one in five Danes will, during the courses of their lives, experience a brain disease The mortality rate is five times higher for Danes with one or more brain diseases Brain diseases make up a third of the 21 most common diseases in Denmark The total direct attributable cost of healthcare services for people with brain diseases in Denmark is estimated at DKK 39bn each year. This is particularly driven by diseases such as depression, stroke, and dementia

LUNDBECKFONDEN - SUSTIANABILITY REPORT 2021

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SUPPORTING RESPONSIBLE ECONOMIC GROWTH AND JOB CREATION As the engaged owner of three international healthcare companies and a direct investor in 21 biotech companies, the Lundbeck Foundation has a significant

As part of its engaged ownership, the Foundation contributes to SDG 8 through 8.1 (GDP growth) and 8.5 (Decent work for all men and women) as primary sub-targets.

responsibility to drive sustainable economic growth, job creation and to be a good employer, that can ensure a good working environment for its employees.

Consolidated figures for the Lundbeck Foundation Group Revenue (DKKm)

35,403 Revenue growth 2020-2021 (%)

6%

GROWING BUSINESSES AND GROWING PEOPLE

CREATING A MEANINGFUL WORKPLACE

Through its majority ownership of Lundbeck, ALK and Falck,

The Lundbeck Foundation acknowledges that its most direct

the Foundation shares a responsibility for more than 40,000

people impact is on the employees directly employed by the

full- and part-time employees, corresponding to more than

Foundation. The Foundation’s employees are its most

28,000 full-time equivalents (FTEs). The Foundation is proud

important asset, and it is – especially for a purpose-driven

to see its subsidiaries demonstrating a strong focus on people

organisation such as the Foundation – critical to foster a

development and care for their employees.

healthy and meaningful working environment. Hence, having grown the organisation in recent years, the Foundation

In 2021, all subsidiaries were committed to delivering on their

carried out its first employment engagement survey in 2020

commercial objectives while maintaining a consistent focus

and established this as a recurring process to be carried out

on people as part of their business leadership models. All three

every two years.

companies have solid HR-organisations with a voice on the respective leadership teams, and all three companies conduct wellbeing and satisfaction, and reporting on key people indicators in their annual reports.

Regarding economic growth, both ALK and Falck showed significant revenue growth of 12% and 23%, respectively.

Number of employees (FTEs)

28,842

Employee engagement score:

77

annual employee engagement surveys, measuring employee

Lundbeck saw a decline in revenue of 8% due to the erosion of ®

sales of Northera , however, 2021 saw continued solid growth from its strategic brands. Lundbeck is therefore on an important and challenging journey, which requires new approaches to innovation. It is therefore positive that, in 2021, the company started to see the impact of its new strategy and transformed approach to research and development (R&D), positioning the company well for renewed growth in the future.

Overall satisfaction and motivation In 2021, the 2020 engagement survey was followed up by a workplace assessment, reviewing both the physical and psychological aspects of working at the Foundation. Both surveys showed a good level of employee job satisfaction, motivation and loyalty, with high scores compared to external benchmarks. The surveys also showed aspects of the working environment which require further attention, and the Foundation strengthened the internal HR focus in 2021, supporting the Foundation’s small, but highly specialised and diverse organisation.

LUNDBECKFONDEN - SUSTIANABILITY REPORT 2021

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PIONEERING INNOVATION WITHIN HEALTHCARE The Lundbeck Foundation invests in people, businesses and science at the frontiers of their fields, with the aspiration of pushing the boundaries of the current level of insights and knowledge, and identifying the health solutions of

The contribution to healthcare innovation, through both its long-term ownerships and investment in early-stage biotech, is a key component of the Foundation’s impact on society, with a clear link to SDG 9 and sub-target 9.5.

tomorrow.

INNOVATION AS A CORNERSTONE OF THE ENGAGED OWNERSHIP MODEL

of expanding the Foundation’s ownership portfolio from

in major financing rounds. Portfolio company IO Biotech

three, to between five and eight companies in 2030.

raised approximately DKK 1.7bn in total from a Series B round (EUR 127m) and an IPO on Nasdaq (USD 115m). The proceeds

As the engaged and long-term owner of three healthcare companies, the focus on healthcare innovation, and R&D is a

RISK-WILLING CAPITAL FOR NEW BIOTECH

will fund clinical trials for its early- and late-stage immuno-

core part of the Foundation’s ownership model, guiding the

The journey from scientific discovery to healthcare innovation

oncology programmes.

subsidiaries towards continuous innovation, and research into

and new treatments is long and challenging, and requires

new medicines, treatments and healthcare solutions.

considerable risk-willing capital. In its role as a venture capital

In addition to ensuring the financial needs of the portfolio,

and seed investor, the Foundation drives healthcare

both Ventures and Emerge portfolio companies saw

For the two pharmaceutical companies in the portfolio –

innovation focusing on the biotech industry and on the

significant progress in R&D, taking new steps to bringing

Lundbeck and ALK - this is directly evident from the high

development of new innovative medicines and treatments in

their discoveries closer to patients. This included the filing of a

R&D spend. For Falck, delivering breakthroughs in the

areas of unmet patient need.

new drug (Spero Therapeutics), and the initiation of new clinical trials (VarmX and NMD Pharma).

healthcare service market has been defined as a key commitment in its 2025 strategy, launched in 2021.

Total R&D spend 2021 (DKKm)

3,823 631

R&D spend as % of revenue 2021

23% 16%

This focus is also reflected in the Foundation’s new strategy, which has initiated the external screening of the market in pursuit of new ownership targets in healthcare, with the goal

The Foundation’s international venture capital organisation, Lundbeckfonden Ventures, includes a portfolio of 14

From 2022, the Foundation has decided to merge Ventures

companies, of which, several are focused on specialty pharma

and Emerge with the ambition to invest even more in Danish-

segments, which is often overlooked by big pharmaceutical

based biotech, and to contribute to strengthening Denmark’s

companies. In 2021, the Foundation supported and

life science ecosystem as a whole.

participated in raising follow-on financing for several of its portfolio companies. In total, more than DKK 2bn was raised

BRIDGING THE GAP FROM SCIENCE TO BUSINESS

to support the further development of new treatments.

In 2021, the Foundation decided to institute a new grants

DKK > 4bn raised

by Lundbeckfonden Ventures and Lundbeckfonden Emerge portfolio companies in follow-on financing to advance new drug development The Lundbeck Foundation’s early investment unit based on Danish research, Lundbeckfonden Emerge, also participated

category: Frontier grants. This targets scientific research talents with research ideas that have commercial potential, but who might need support to mature their ideas to a stage where they can become relevant for commercial investors. The grant serves a dual purpose of developing the concrete research idea while also mentoring research talents to increase their ability to navigate in a commercial space, both now, and in potential future endeavours.

LUNDBECKFONDEN - SUSTIANABILITY REPORT 2021

PROMOTING SUSTAINABLE PRACTICES AND GOOD GOVERNANCE As a foundation, the footprint of the Lundbeck Foundation is

In its very different roles as owner, investor, philanthropist and public voice, the

primarily defined by the companies it owns, the investments it

Lundbeck Foundation has the opportunity to use its influence to promote

makes, and the recipients of its grants. The basis for promoting

sustainable practices across environmental-, social- and governance-related

sustainable development is the Foundation’s governance model.

dimensions.

A HISTORY OF GOOD GOVERNANCE The Foundation has, over the past decade, developed a strong

THE LUNDBECK FOUNDATION’S GOVERNANCE MODEL AND KEY PRINCIPLES

focus on governance. This has led to four principles, which constitute the core of the Foundation’s approach to governance: compliance, independence, transparency, and checks and balances.

Compliance

• General compliance with the Danish Recommendations on Foundation Governance • Where relevant, additional compliance with the Danish Recommendations on Corporate Governance, applicable for listed companies

Moreover, the Foundation has taken a shared responsibility • All members of the Board of the Foundation are external and independent. Former CEOs and

for driving environmental considerations and socially

executives of the Foundation and its subsidiaries cannot become members of the Board of the

sustainable practices, and this will be further expanded in the

Foundation

years to come.

• The three chairmen of the Foundation’s subsidiaries are external appointments and independent of the

Independence

Foundation • The Chairman of the Board of the Foundation cannot become non-executive board member of the subsidiaries • The CEO of the Foundation and one non-executive Board member of the Foundation have seats on the board of directors of each of the three subsidiaries. The CEO of the Foundation holds the Deputy chairmanship on each board

• The Lundbeck Foundation publishes its annual accounts in full alignment with the principles for listed

Transparency

companies (IFRS standards) • Key policies and governing documents are made publicly accessible on the Foundation’s website • Major decisions on philanthropic grants are communicated proactively via the website, social media and press

Checks and balances

• The Foundation’s organisation and key processes are designed to prevent the concentration of decisionmaking power • All grant-making-decisions are subject to external reviews by international experts to verify quality levels

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THE FOUNDATION’S WHISTLEBLOWER SYSTEM

issues related to the ESG policy, and develops an ESG status

With regards to international diversity, the Lundbeck

The Lundbeck Foundation has a whistleblower system that

report twice a year, which is then reviewed and approved by

Foundation values international experience highly, but is also

provides both employees and partners with a secure and

the CEO and the Investment Committee. In 2021, no

an organisation that derives its ‘licence to operate’ from

confidential reporting channel managed by an independent

investments were identified as being in violation of the ESG

legitimacy in its immediate local surroundings. The

provider. The whistleblower system can be used to report on

policy.

Foundation has, in some of its activities, a local focus on Denmark, while other activities are truly global, including its

concerns that involve legal or other serious risks to the Lundbeck Foundation. During 2021, no reports were made via

The Foundation continues to invest in forest land with a

financial investments, its ownership of three international

the whistleblower system.

positive CO2 footprint. In 2021, the Foundation took further

healthcare companies, and its philanthropic investments in

steps in this area by acquiring a 25% stake in Cresco Capital

neuroscience and brain research. These activities each require

A RESPONSIBLE ASSET MANAGER

Services, an asset management company specialising in direct

a strong international outlook. The Foundation values the

By the end of 2021, the net wealth of the Foundation

investments in, and the development of, forests.

international understanding and diversity that international experience brings, and this value is fundamental to its

amounted to more than DKK 67bn. The largest part of this was invested in Lundbeck, ALK and Falck, however, a significant

DIVERSITY AT THE LUNDBECK FOUNDATION

organisational development. The majority of people working

part (around DKK 24bn) was invested in a broad portfolio of

A core belief in the Lundbeck Foundation is that complex

in the Foundation therefore have significant working

shares, bonds and alternative investments (Invest). These

problems are best addressed by diverse teams – combining

experience outside Denmark and the Foundation has, in its

investments were made with a dual purpose: to contribute to

diversity of gender, functional skills, competences,

philanthropic activities, developed a network of international

the further growth of the Foundation’s asset base, and to act as

nationalities etc. At the same time, it is also recognised that

experts, who peer review projects and programmes, ensuring

a ‘war chest’ in times of crisis, providing the Foundation with

diversity may lead to complexity if not embraced by strong

the international competitiveness of the Foundation’s

the ability to support its subsidiaries, and to ensure a

and effective leadership. The focus on diversity needs to be

activities.

continuing ability to make annual grants totalling DKK 500m

paralleled by a conscious leadership approach, and this belief

or more.

has led to organisational adjustments in recent years, as the Foundation is a small organisation with a very broad range of

As a result, there is a clear need to drive financial return while

activities and competencies.

also investing responsibly with a solid focus on sustainability.

The guidance for the Foundation’s behaviour is the

The Foundation’s Board of Directors counts two women and

Foundation’s investment policy, which integrates

five men among its external members, and the Foundation’s

environmental, social and governance (ESG) factors.

top management team of six has a balanced gender

Investments are made based on the view that companies that

distribution of three women and three men.

act responsibly and ethically are able to create significant financial value. Therefore, financial return and sustainability

The Foundation also welcomes the fact that all three

go hand in hand.

subsidiaries, with their large organisations, have defined gender-balance targets for their own top management teams.

The Foundation’s investment policy balances risk with long-

Furthermore, Lundbeck, ALK and Falck report on their

term value creation. All investments must comply with the

individual targets in their annual reports, as well as on their

Foundation’s ESG principles. An external screening is

individual policies concerning gender balance at other

conducted twice a year by an external company –

management levels, if applicable.

Sustainalytics - which screens the financial investments for

LUNDBECKFONDEN - SUSTIANABILITY REPORT 2021

WORKING FOR DIVERSITY IN RESEARCH

Falck

In 2021, the Foundation also initiated a new dialogue with

In the Annual Report 2021, Falck reports the following on data

Danish universities around their talent nominations and

ethics:

talent management in general. As a result, nominations from Danish universities for the Foundation’s talent awards showed

Falck’s Data Ethics Policy was developed and approved by the

a significant increase in females compared to earlier years.

Board in 2021. It is based on the basic principles of data ethics set out by the think tank, Data Ethics, and covers the following

The Foundation also supported the international organisation

areas:

ALBA, which a is focused on growing gender diversity in international scientific research. Finally, in 2021, the

•

Purpose and usage: Human interests prevail over

Lundbeck Foundation took additional steps to increase

commercial interests. The data that we are legally required

gender diversity for The Brain Prize – the world’s largest brain

to store are held for the benefit of the individual

research prize. As a result of this, the share of female nominees for the 2022 award has increased from 21% to 25%.

•

Individual data control: Individuals should have primary control over the usage of their own data

DATA ETHICS IN RESPONSE TO THE DANISH FINANCIAL STATEMENTS ACT §99d

•

Transparency: We strive to be transparent when we

Data Ethics Policy for the Lundbeck Foundation (including

communicate purposes and interests of data usage to

Lundbeckfond Invest A/S) has been developed and approved

individuals via privacy notices and policies

by the Board. It is based on five principles: •

Accountability and governance: Efforts are made to

•

Human interests before commercial interests

reduce the risks to individuals and to mitigate undesirable

•

Transparency

social and ethical implications.

•

Anonymisation

•

Autonomy

A working group with representatives from global functions

•

Accountability and governance

and business segments has been established as an advisory board to local and global managements on data ethical

Please find the Foundation’s policy at the Foundation’s

matters. The policy is available at www.falck.com/data-

website: https://www.lundbeckfonden.com/en/policies

protection.

Lundbeck and ALK For further information about Data Ethics Policy of Lundbeck and ALK please see page 26 and 82,respectively.

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KEY ESG FIGURES AND SUSTAINABILITY RISKS The Lundbeck Foundation provides an overview of its key ESG figures as part of its ongoing efforts to be at the forefront of transparent behaviour by foundations.

ESG KEY FIGURES The chosen ESG figures are based on recommendations by the Chartered Financial Analysts’ (CFA) Society Denmark, the Association of Danish Auditors (FSR), and Nasdaq Copenhagen. They represent a first step in a process that, over the coming years, will enable the Foundation to provide stakeholders with further insights into the Foundation’s ESG profile by setting targets.

SUSTAINABILITY RELATED RISKS Sustainability risks can be divided into three areas: •

Risks related to the grant activities of the Lundbeck Foundation

•

Risks related to the portfolio investment activities (Invest, Ventures and Emerge)

•

Risks related to the activities of the three strategic subsidiaries: Lundbeck, ALK and Falck.

Risks related to grants are handled via a thorough and detailed application process, which also includes international peer reviews, and risk assessments and mitigation efforts to avoid the misuse of donated grants, and to prevent scientific

Unit

ESG key figures overview for the Foundation

2021

2020

2019

2018

Environmental data CO2e Scope 1

Tonne

0

0

0

0

CO2e Scope 2

Tonne

34

32

50

48

GJ

841

822

986

857

%

17

18

13

12

m3

266

264

261

257

FTE

41

37

37

36

%

41

45

46

53

Energy consumption Renewable energy share Water consumption Social data Workforce Gender diversity, percentage of women in the workforce Gender diversity, percentage of women in the management team

%

50

50

57

60

Times

1.6

1.7

1.8

1.8

Employee turnover ratio

%

11

11

17

9

Absence due to sickness

%

1

1

1

1

Gender diversity, Board

%

29

29

29

29

Board meeting attendance rate

%

96

98

91

95

Times

19.1

14.4

12.2

12.7

Gender pay ratio of men to women

Governance data

CEO pay ratio

Risks related to the subsidiaries include risks related to the

as part of their sustainability reporting.

environment, climate change, human rights, social and

misconduct.

employee conditions, and anti-corruption. Not all risks are

For an elaboration on the risks within the subsidiaries, please

directly relevant to the subsidiaries, but at a consolidated level,

refer to the relevant pages in the companies’ individual

Risks related to the portfolio investment activities are

the Lundbeck Foundation experiences risks related to all

sustainability reports. For Lundbeck (pages 7, 25, 30) , ALK

areas, and encourages its subsidiaries to assess, evaluate and

(pages 20-23, 29) and Falck (pages 8-10, 13, 20, 23).

managed via a thorough ESG process, as explained on page 9.

report on relevant risks in their respective annual reports and

LUNDBECKFONDEN - SUSTIANABILITY REPORT 2021

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LOOKING FORWARD: GREATER AMBITIONS WITHIN SUSTAINABILITY Making a positive impact on society is at the heart of what the Lundbeck Foundation always has done – and always will do. However, the Foundation acknowledges that it is on a journey to fully understand, explore and integrate the constantly evolving sustainability knowledge and concepts.

TAKING A GREATER RESPONSIBILITY FOR PROMOTING SUSTAINABLE PRACTICES

Within its philanthropic activities, the Foundation remains

enhance its transparency and communication with regard to its sustainability approach, also defining actionable targets

A commercial foundation has a broad and varied range of

collaborations and partnerships. This will not change, but the

underpinned by a tangible action plan.

commercial and philanthropic activities. Its business and

Foundation will review its travel policies as they relate to

sustainability model are therefore different from that of

research grants and activities, and will also further develop its

DEVELIVERING ON STRATEGY IS DELIVERING SUSTAINABILITY IMPACT

manufacturing companies, and there is no widely accepted

approach to talent development and competence building, and

framework or approach, which reviews and measures the

on growing diversity across all grant activities.

The 2030 strategy has defined the Foundation’s desired value

sustainability impact of commercial foundations, combining

creation towards 2030. With the close link between its

both commercial and philanthropic activities.

Looking ahead, the Foundation’s ambition is to further

highly focused on the need to build international

With its ownership of Lundbeck, ALK and Falck, the Foundation is proud to note that all subsidiaries are taking

strategy and sustainability commitments, the execution of the strategy will also contribute to a more sustainable society. For

In 2021, the Foundation carried out a project with the objective

significant steps towards becoming even more sustainable. A

example, by:

of defining an operating model for its sustainability approach, to

cornerstone of the Foundation’s 2030 strategy is the

be used in defining targets for sustainability activities covering

ownership of leading healthcare companies. In 2022, the

Increasing annual fixed grants to scientific research to

all the Foundation’s activities. While the Foundation has always

Foundation will therefore define a ‘sustainability codex’, to

DKK 1,000m will drive new knowledge, insights and

been committed to all relevant ‘soft law’ principles, such as the

fully articulate its understanding of sustainability as it applies to its concept of an engaged ownership model.

•

•

•

discoveries related to health and quality of life

UN Global Compact, it has also defined new commitments to

Expanding the portfolio of healthcare companies from

taking a more proactive and leading approach in key areas. The

three, to between five and eight will drive sustainable

new model was defined in 2021 and, in 2022, these ambitions

Finally, it is vital that the Lundbeck Foundation leads by

economic growth and strengthen Denmark as a life

will form the basis for the development of a new ‘sustainability

example. In 2022, the Foundation will again review its

science nation, with a critical mass of life science talents,

playbook’, outlining the actionable processes and tools that the

internal practices relating to facility management,

knowledge, and companies

Lundbeck Foundation will use.

transportation and energy consumption, in order to reduce the environmental footprint of its own operations while

Developing talents and innovative projects will help close the current gap between academic research, knowledge

This work will include new initiatives with the objective of

continuing to be a diverse, healthy and meaningful place to

and new treatments

promoting sustainable practices across its various roles as

work for all its employees.

investor, owner and philanthropist, and with regard to the Foundation’s own operational practices. It is still too early to provide specific details on these initiatives, however, some initial examples can be provided.

Sustainability Report 2021

Lily Chan Living with bipolar disorder Lundbeck employee

2

Lundbeck Sustainability Report 2021

Visit the Lundbeck website www.lundbeck.com Photography Frontpage and p. 2: Kong TSE; p. 4: Søren Svendsen; p. 10: ColourBox; p. 11: Clubhouse International; p. 18: Better Energy; p. 22: Sune Høegh; p. 19 and p. 24: Alastair Philip Wiper

Introduction

Unmet patient needs

Business ethics

Climate change & circularity

People & communities

ESG Factbook

This report constitutes Lundbeck’s compliance with the statutory disclosure on corporate social responsibility, see the Danish Financial Statements Act, sections 99a, 99b, 99d and 107d.

Design Make® February 2022

Ongoing commitment Lundbeck is a participant in The United Nations Global Compact which we became a signatory to in September 2009. We would like to express our continued support for the Global Compact and hereby renew our ongoing commitment to the initiative and its principles.

About Lundbeck Lundbeck is a global pharmaceutical company specialized in brain diseases

Living with bipolar is not the difficult part. Not being accepted because I have bipolar is the most difficult part.

Lily Chan

PA & Office Admin Manager, Lundbeck

For more than 70 years, we have been at the forefront of neuroscience research. We are tirelessly dedicated to restoring brain health, so every person can be their best. We are committed to fighting stigma and discrimination against people living with brain diseases and advocating for broader social acceptance of people with brain health conditions.

Our research programs tackle some of the most complex challenges in neuroscience, and our pipeline is focused on bringing forward transformative treatments for brain diseases for which there are few, if any therapeutic options.

HONG KONG

When first diagnosed with bipolar disorder, Lily Chan rejected the news. She feared the stigma she would face from her colleagues and community, and she held her own self-stigma. So, she denied and hid her illness. Then followed a years-long rollercoaster ride of uncontrolled mania with episodes of severe depression and a series of hospitalizations. In a new feature on Lundbeck.com, Lily shares how she finally

learned to accept her diagnosis, begin her healing and achieve recovery. And recovered she is, she emphasizes, even if she is not cured. For Lily, recovery means accepting and managing her brain disease so she can live her best life. “Living with bipolar is not the difficult part. Not being accepted because I have bipolar is the most difficult part,” she says. Read Lily’s full story on Lundbeck.com

3

Lundbeck Sustainability Report 2021

Introduction

Unmet patient needs

Business ethics

Climate change & circularity

People & communities

ESG Factbook

Contents 2

INTRODUCTION

4

Letter from the CEO

5

Sustainability key figures

6 7 8

Sustainability targets

9

UNMET PATIENT NEEDS

24 ESG FACTBOOK 25

Introduction to ESG Factbook

26

Environmental responsibility

Our business model

31

Management of social issues

Our most material issues

35

Governance and compliance

38

Accounting policies

13 BUSINESS ETHICS 16 CLIMATE CHANGE & CIRCULARITY 20 PEOPLE & COMMUNITIES

OTHER REPORTS

39 Management statement regarding the 2021 Sustainability Report 40

Independent Limited Assurance Report

Find our Annual Report, Remuneration Report and Corporate Governance Report on → Lundbeck.com

4

Lundbeck Sustainability Report 2021

Introduction

Unmet patient needs

Business ethics

Climate change & circularity

People & communities

ESG Factbook

LETTER FROM THE CEO

Steadfast on Sustainability 2021 marks the second year of Lundbeck’s Sustainability Strategy launched in early 2020. We are already seeing strong progress towards many of our 2030 aspirations, not least due to the foundation laid over decades. We are continuously striving to improve and are steadfast in our commitment to building our business sustainably and are confident we will achieve our long-term goals.

Lundbeck’s Sustainability Strategy aims are tightly integrated into our daily business. The long-term aspiration guides us as we pursue our purpose of restoring brain health, so every person can be their best.

The Executive Management team serves as the steering committee. I’m pleased about the progress we see in the workstreams and the results on the 2021 targets. We set stretch goals to make sure we challenge ourselves to reach higher. We believe we can achieve more through stretching, even if we do not achieve all goals than if we only set fully achievable targets.

Our sustainability aspirations for addressing unmet patients’ needs include leveraging our specialist expertise to address the burden of brain diseases and striving to make transformative medicines available.

We have made exciting advances in R&D this year, among other things, by focusing in on specialist treated and underserved niches within the broad area of brain disease.

We successfully met our targets this year for promoting awareness and accessibility to brain health through

impactful partnerships with a number of advocacy, educational and aid organizations. We plan to grow our collective impact in the coming year.

This also increases accessibility for more patients to participate in trials. This is an emerging field that will yield improvements over time.

Integrity and responsibility are foundational to maintain our mandate to operate. Business ethics and compliance with laws and regulations around the world is therefore a major focus in our management and governance. In 2021, we further strengthened our global compliance program and organization, engaging all employees in training.

Everywhere we operate, we strive to make a positive contribution to the people & communities we touch.

This means safeguarding and developing our employees, acting on gender equality, diversity and inclusion, and contributing to the communities where we do business by paying taxes and more. Great progress has been made this year and I’d like to thank the many employees across our global organization, who contributed to this.

Since 2006, we have reduced the carbon footprint of our own operations by 70%. And we’ve committed to another 60% reduction in the next 15 years from our own operations. Lundbeck is the anchor purchaser for energy from a new solar plant, completed in 2021.

Our entire Danish operations will be supplied through this renewable energy from 2022 onward.

Across our entire supply chain we look to reduce our carbon footprint. For example, in clinical trials we are working to reduce patient visits to medical centers through using virtual assessment tools for some visits.

We look to have sustainability metrics that we can hold ourselves accountable on – and welcome investor and other stakeholder interest in them.

Finally, a special thank you to our colleague Lily Chan for courageously sharing her story about living with bipolar disorder, included on the cover of this report.

Deborah Dunsire President and CEO of Lundbeck

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Lundbeck Sustainability Report 2021

Introduction

Unmet patient needs

Business ethics

Climate change & circularity

People & communities

ESG Factbook

Sustainability key figures ACCESS TO BRAIN HEALTH

BUSINESS ETHICS COMPLIANCE

CLIMATE ACTION

99.7% employees completed the annual e-learning on the Code of Conduct.

937

16%

26%

▼

▲

reduction in scope 1 & 2 carbon emissions vs. 2019 SBTi target baseline.

patients estimated to have been reached with our donation partnership in low- and middle-income countries.

estimated increase in scope 3 carbon emissions vs. 2019 SBTi target baseline.

Read more on page 10

Read more on page 14

Read more on page 17

CHEMICAL RECYCLING

WOMEN IN MANAGEMENT

HEALTH & SAFETY

65%

59%

2019

68%

2020

65%

2021

42%

43%

2019

42%

2020

42%

2021

6.5

Frequency of lost time accidents per one million working hours.

6.5

6.2 5.5

2019

2020

2021

We outperformed the target to recover and reuse 60% of the organic compounds used in chemical production. Targets are set annually based on expected production volume and mix.

The level of women in management is high with a gender split for people managers globally of 42% women and 58% men.

We have seen an increase in our accident rate this year compared to previous years. Even though a smaller share of the accidents were serious, we are determined to bend this curve.

Read more on page 19

Read more on page 21

Read more on page 22

6

Lundbeck Sustainability Report 2021

Introduction

Our Business KEY RESOURCES

Unmet patient needs

Business ethics

Climate change & circularity

People & communities

ESG Factbook

We are tirelessly dedicated to restoring brain health, so every person can be their best.

WHAT WE DO

Diverse talent pool 5,300 highly specialized employees across 50+ countries

VALUE CREATED

Development

Advocacy

We conduct clinical studies globally on new drug candidates, and we work to develop safe, reliable, efficient and sustainable manufacturing processes.

We enter partnerships to co-create and publish evidence that fights stigma, and we advocate for systemic change.

Manufacturing

Passionate and engaged employees

Medicine

4 state-of-the-art production sites

Continuous supply of products

Production We strive to create the best supply chain in the pharmaceutical industry through continuous improvement of reliability, quality, sustainability and cost.

Research & Development Premier neuroscience pipeline and expertise

Sustainable business Strong ESG ratings

Products

Research

Diversity & Inclusion

Strong CNS legacy with a strategic product portfolio registered in 100+ countries

We work to understand the underlying disease biology and identify new targets in the brain for innovative, transformative drug candidates.

We create the context, culture, and systems where all Lundbeck employees can be their authentic self and perform at their best.

Sustainable sourcing Responsibly and sustainably sourced raw materials

Shareholder value Sustained profitable growth

7

million patients treated daily Increased disease awareness and improved access to brain health

1

#

A highly rated and trusted partner among key stakeholders

20%

of revenue re-invested into R&D

Marketing & Sales

Ownership Solid majority foundation ownership with long-term commitment to brain health

We conduct scientific and promotional events to educate healthcare professionals about brain health and the safe and effective use of our products.

Partnerships

SOCIETAL CHALLENGES

Long-standing partnerships across the value chain

People

Increased quality of life for patients

Unmet patient needs

Business ethics

Climate change & circularity

People & communities

• Pressured healthcare systems • Access inequality and barriers • Stigmatization of brain disease • Neglected rare diseases

• Patient safety and product quality • Corruption and unethical marketing • Increasing demand for transparency

• Transition to zero emissions future • Scaling circular solutions • Environment and biodiversity under pressure

• Lack of gender equality • Disrespect for human rights • Safe and inclusive working conditions

7

Lundbeck Sustainability Report 2021

Introduction

Unmet patient needs

Our most material issues For over a decade, we have reported on our sustainability efforts, the most important challenges and impacts on our business, stakeholders and the societies in which we operate.

Business ethics

Climate change & circularity

People & communities

ESG Factbook

Lundbeck’s sustainability strategy aims to ensure that we mitigate our most significant sustainability risks and adverse impacts. We continuously evaluate what matters most to our business and our stakeholders, by applying so-called “double materiality”. This includes assessing how we best conduct our business in support of the UN Sustainable Development Goals (SDGs).

Lundbeck has joined The Biopharma Sustainability Roundtable, a sector-specific platform designed to connect and support senior biotech and pharma executives in driving their Biopharma sustainability agendas forward. The Roundtable also conducts focused investor dialogue where Roundtable participants discuss sustainability strategy and ESG performance disclosure directly with capital markets representatives.

SOCIETAL CHALLENGES Materiality aspects

Unmet patient needs

Ethical business conduct

Climate change & circularity

People & communities

What are the main issues affecting our stakeholders?

• Pressured healthcare systems • Inequality and barriers in access • Stigmatization of brain disease • Neglected rare diseases

• Patient safety and product quality • Corruption and unethical marketing • Increasing demand for transparency

• Transition to zero emissions future • Scaling circular solutions • Environment and biodiversity under pressure

• Lack of gender equality • Disrespect for human rights • Safe and inclusive working conditions

Why it matters to our business?

When Lundbeck is successful in positively impacting these challenges in society, it benefits the people we are dedicated to help and our business’ financial value creation.

When Lundbeck maintains ethical business practices and respects rules and regulations, we safeguard patient safety, uphold stakeholder integrity and minimize the risk of financial repercussions.

When Lundbeck is taking a leadership position on climate action and continuously integrating circular solutions, we are making our business highly energy and resource-efficient and robust towards future transitional changes.

When Lundbeck is successful in maintaining a safe, inclusive culture, free of harassment and discrimination, it helps us remain a preferred employer and attract the best talent.

How this represents a risk to our business?

If Lundbeck is not part of the solution to these challenges, it threatens our license to operate.

If we do not follow applicable rules and regulations, we risk losing public trust and our license to operate.

If we do not minimize our impact on the environment in the entire value chain, we risk restrictions that can disrupt our production and supply to the detriment of patients.

If we cannot retain and develop engaged and dedicated scientists and other staff, we will not develop new treatments for patients.

Which SDG is it related to?

8

Lundbeck Sustainability Report 2021

Introduction

Unmet patient needs

Business ethics

Sustainability targets

Climate change & circularity

People & communities

ESG Factbook

Lundbeck’s sustainability strategy aims to ensure that our business activities mitigate our most significant sustainability risks and adverse impacts.

We have long-term 2030 aspirations and set annual targets for the main workstreams of the strategy.

Below is an overview of how we performed on the 2021 targets and the targets we have set for 2022.

This year, 8 out of 10 targets have been achieved or are on track. We have raised the bar across the board for next year's targets. See the ESG Factbook section of this report for more on our performance on these targets and on a range of other sustainability KPIs that we use to steer and monitor our progress.

Issue

2022 target

ACCESS TO BRAIN HEALTH

Ensure all disease awareness sponsorships measurably support brain health in general, mental health and suicide prevention, or migraine

Ensure all disease awareness sponsorships within psychiatry measurably support suicide prevention or mental health awareness

Donate treatment for at least 1,000 patients in low- and middle-income countries through product donation partnership

Donate treatment for at least 900 patients through new product donation partnerships in low- and middle-income countries

Annual Code of Conduct training completed by all employees at work globally

Annual Code of Conduct training completed by all employees at work globally

Increase the share of employees stating in the annual ESS that they are confident in raising an ethical or compliance concern

Increase proportion of healthcare professionals supporting disclosure of collaborations compared to the previous reporting year

CLIMATE ACTION

Reduce total carbon footprint across own operations, supply and distribution in line with our Science-Based Target1

Reduce total carbon footprint across own operations, supply and distribution in line with our Science-Based Target1

ENVIRONMENTAL MANAGEMENT

Recycle 63% of the organic compounds used in chemical production

Recycle 60% of the organic compounds used in chemical production

Recycle 70% of all general waste

Recycle 62% of all general waste

DIVERSITY & INCLUSION

Build an even more inclusive organization with a specific 2022 initiative focusing on cultural awareness across the organization

Build an inclusive organization with a first initiative focusing on unconscious bias across the organization

Increase in share of underrepresented gender at senior management level2

Maintain an overall equal gender split for people managers globally

Lost time accidents frequency ≤ 5

Reduce lost time accident frequency ≤ 5

BUSINESS ETHICS

HEALTH AND SAFETY

2021 target

SDG Impact

Not more than four high-consequence work related accidents with absence

1) We report progress annually on our 15-year targets in Scope 1 & 2 (own produced energy and purchased energy) and Scope 3 (emissions from supply, services, distribution and more).

2) EVP, SVP and VP’s

Achieved

Not achieved

On track

9

Lundbeck Sustainability Report 2021

Introduction

Unmet patient needs

Business ethics

Unmet patient needs

Climate change & circularity

People & communities

ESG Factbook

The COVID-19 pandemic has demonstrated how effectively the global community can rally together to develop health solutions in record time. On the other hand, it has also shown that we still have a long way to go before good health and wellbeing become a reality for all people.

1 bn

people globally are estimated to live with at least one mental health disorder1

800,000

people die by suicide every year: that’s one person every 40 seconds

2030 ASPIRATION • Leverage our specialist knowledge to address the burden of brain diseases and continue to make medicine available • Promote accessibility of our medicines by addressing discriminatory, physical, economical and informational barriers • Improve mental health parity, reduce stigma, support national suicide prevention efforts and enhance cultural acceptability of brain diseases • Provide high-quality medicinal products, safeguard patient safety and combat counterfeit medicine

1) 970 million according to Lancet (2020), “GBD 2019 Diseases and Injuries Collaborators, Global burden of 369 diseases and injuries in 204 countries and territories, 1990–2019: a systematic analysis for the Global Burden of Disease Study 2019.”

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Lundbeck Sustainability Report 2021

Introduction

Unmet patient needs

Business ethics

Climate change & circularity

People & communities

ESG Factbook

Unmet patient needs BRAIN HEALTH IN AN UNEQUAL WORLD Brain health conditions are estimated to impact almost 3 billion people worldwide. From these 3 billion, 2.7 billion are impacted by neurological diseases (e.g. migraine, Alzheimer’s disease, Parkinson's disease), 970 million people are impacted by mental health disorders (e.g. depression, anxiety, schizophrenia, psychoses) and 162 million by substance abuse.2 The socio-economic impact of brain disorders is increasingly being recognized. For example, the Lancet Commission on Mental Health and Sustainable Development estimated that mental health disorders will cost the global economy $16 USD trillion from 2011-2030, which is more than cancer, diabetes and respiratory diseases combined.3 Despite its significant burden and impact, brain health remains under-prioritized even in “well-functioning” healthcare systems – and more so in countries with underfunded healthcare systems. The stigmatization of people with brain disorders aggravates the personal consequences for millions of ill people, their families and caregivers.

PROGRESS ON ACCESS TO BRAIN HEALTH One of the pharmaceutical industry’s most material sustainability issues is how the industry supports good health and wellbeing for all, leaving no one behind. With more than 70 years’ experience in developing innovative treatments for brain disorders, we are keenly aware of the many obstacles that can prevent an individual from achieving brain health.

Whether it be genetics, age, race, sex, ethnicity, socio-economic determinants or access to healthcare, understanding and fully evaluating the multitude of factors that influence a person’s health

are key to both the development of good medicine and equitable advances in brain health. Since adopting our Access to Brain Health strategy in 2020, Lundbeck has taken a number of proactive steps in our 2030 Access to Brain Health strategy.

OUR SCIENCE AND INNOVATION Our focus on research remains the most important pillar in Lundbeck’s ambition to improve access to brain health, by making innovative treatments available.

There is a significant unmet need in mental health and neurology, and we are committed to supporting those living with migraine and other neurological disorders.

And we are one of the few companies in the world that focus exclusively on a commitment to persist in the extremely challenging space of brain health. See more in our Annual Report 2021 on our scientific achievements in 2021, and our strategic reorientation to discover and develop transformative medications for niche and rare brain disorders.

SPARKING AWARENESS IN PARTNERSHIP In 2021, Lundbeck sponsored 12 global advocacy groups and their impactful awarenesss campaigns in the areas of brain health and research, neurology, and mental health. As an example, in September we were one of the sponsors of the International Association for Suicide Prevention’s (IASP) work to mark World Suicide Prevention Day, reaching an estimated 180 million people on social media and 42 million people through other channels.

Lundbeck has also been a proud supporter of World Mental Health Day since 2015, working in close collaboration with our global and local mental health advocacy partners to raise mental health awareness and fight stigma. This year, we published a new position paper Mental health in an unequal world with

Lundbeck’s views on the socio-economic determinants of mental health.

GIVING THE LIVED EXPERIENCE A VOICE We partner with large organizations, but also people with brain disorders, their families and the healthcare community. A main event of the year is Lundbeck’s #1VoiceSummit. It brings together a global and local patient empowerment community to exchange ideas, collaborate and partner up to find ways to amplify the voice of people with lived experience of brain disorders. This June, the event, which takes place annually, was held online and brought together nearly 80 advocacy groups from over 20 countries.

EXPANDING PRODUCT DONATION PARTNERSHIP In May, we commenced our collaboration with International Health Partners (IHP) to initiate their first mental health program in the Middle East & Africa (MEA) region. Through our partnership with IHP, we will raise awareness of mental health conditions, provide access to underserved communities, and offer much-needed support to those living with brain disorders. Manufactured to be donated, the medication provided by Lundbeck has enabled IHP to offer a targeted program in the region through its network of in-country partners such as charitable clinics. Working closely with NGOs on the ground, IHP is able to facilitate and respond to the specific medical needs of some of the region’s most vulnerable communities who would otherwise have no access to this kind of treatment.

In December, we signed a Letter of Intent to expand our partnership with IHP over the next three years.

We will increase our activities and the number of patients that we are able to reach with the program.

937

ACCESS TO BRAIN HEALTH

More than 900 patients estimated to have been reached with our production donation partnership in low-middle income countries.

2) The Lancet (2020) “Global burden of 369 diseases and injuries in 204 countries and territories, 1990-2019: a systematic analysis for the Global Burden of Disease Study.” The Lancet, Vol. 396, Issue 10258.

3) The Lancet (2020), “GBD 2019 Diseases and Injuries Collaborators, Global burden of 369 diseases and injuries in 204 countries and territories, 1990–2019: a systematic analysis for the Global Burden of Disease Study 2019.”

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Lundbeck Sustainability Report 2021

Introduction

Unmet patient needs

Business ethics

Climate change & circularity

People & communities

EXAMPLES OF HOW WE OFFER EDUCATION LOCALLY

ESG Factbook

DIVERSITY IN CLINICAL TRIALS COMMITMENT Building an inclusive clinical trials infrastructure, one that reflects the intended treatment population, is an important step toward combating health inequities and racial disparities in brain health.

In April, we launched the new, global Lundbeck Clinical Trial Diversity Principles, which entails execution of a new global strategy in collaboration with patient advocacy groups and implementing an integrated oversight approach with monitoring and setting targets for trial diversity.

BRINGING THE BEST KNOWLEDGE FORWARD IN JAPAN To mark World Mental Health Day, Lundbeck Japan collaborated with the think tank Health and Global Policy Institute and Betatrip, Inc., which runs one of the largest community sites in Japan for people with depression and their families, to hold an online seminar for the general public on “How to Cope with and Help Others Handle Mental Health Stress”. This multi-stakeholder event aimed at de-stigmatizing mental health and issuing knowledge on local mental health support systems through lectures from experts from the Japan Depression Center, the Mental Health Support Office and the Ministry of Health, Labor and Welfare. The 220 attendants also heard a patient speak about the lived experience of recovering from depression. 80% of attendants expressed satisfaction with the event.

To guide our efforts, the Lundbeck Diversity Steering Team will assess and drive efforts in this area and monitor our progress to keep us accountable for effecting long-term, positive change. Lundbeck is also a signatory to the PhRMA Principles on Conduct of Clinical Trials & Communication of Clinical Trial Results, the first-ever industry wide principles on clinical trial diversity in the U.S.

WOMEN’S MENTAL HEALTH TELECONSULTATIONS IN PAKISTAN ReliveNow is a Pakistan-based teleconsultation platform with 20+ psychologists and psychiatrists that provide virtual and affordable counseling, therapy, and psychiatric consultation that are easy to access and culturally apt. With support from Lundbeck, ReliveNow seeks to overcome the taboo associated with women’s mental health. In 2021, ReliveNow hosted 5 events sponsored by Lundbeck such as “Start Talking: Depression - it’s not just a phase” aimed at helping women to learn about depression, its symptoms and available interventions.

PATENT PRINCIPLES On Intellectual Property Day, Lundbeck and 25 other pharmaceutical companies, announced an approach to intellectual property (IP) for advancing cures and therapies with patient and societal benefit at its core. It is called the IP Principles for Advancing Cures and Therapies (IP PACT). We believe that IP is a key facilitator of medical progress, and we strive for patient and societal benefits as guiding principles in our IP practices. One of the principles is that we approach IP in the world’s poorest countries in ways that consider their unique socio-economic challenges. It is important to Lundbeck that patients and society understand the way we use IP and why it is essential to what we do. Therefore, together with other companies, we communicated these key IP principles that guide our use of IP to advance the goals of improving and extending patients’ lives.

See the ESG Factbook section of this report for Access to Health key performance indicators.

12

Lundbeck Sustainability Report 2021

Introduction

Unmet patient needs

Business ethics

Climate change & circularity

People & communities

ESG Factbook

Lundbeck has been instrumental in helping us shape and grow our virtual programming, and in supporting our work elevating the voices of people with lived experience of mental illness. We appreciate Lundbeck’s steadfast focus on brain health and look forward to continued collaboration in creating more mental health recovery opportunities for people around the world.

Joel D. Corcoran Executive Director & CEO, Clubhouse International

ABOUT THE PARTNERSHIP

Elizabeth, Independence Center, a Clubhouse in St. Louis, Missouri, USA

Clubhouse International is a global non-profit that helps start and grow Clubhouses globally where people with mental health disorders can go to get their lives back. Clubhouses provide opportunities for friendship, employment, housing, education and access to medical and psychiatric services in a single caring and safe environment for those who need it most. The Clubhouse International network of over 300 Clubhouses in 32 countries provides recovery opportunities for approximately 100,000 people, annually. Clubhouses make a positive impact on the

care, support and social rehabilitation of people living with mental health disorders.

Over the past 3 years, Lundbeck has provided the network with a sponsorship of 100,000 EUR to strengthen the capacity of the organization, allowing it to effectively adapt to an online model for Clubhouse training and development. With many physical Clubhouses closed due to the COVID-19 pandemic, this online shift has been crucial in ensuring Clubhouses globally continued to provide support and care for their members.

13

Lundbeck Sustainability Report 2021

Introduction

Unmet patient needs

Business ethics

Business ethics

Climate change & circularity

People & communities

ESG Factbook

At Lundbeck, we pursue our business purpose guided by the ethical principles in our Code of Conduct as a fundamental element of our sustainability strategy. In 2021, we reinforced the Code of Conduct Compliance Program that is brought to life by a global organization.

17 92%

Regional Compliance Officers represent our affiliates in the Global Compliance Organization alongside the Headquarter compliance functions

of all transfers of value from Lundbeck to doctors and other healthcare professionals is disclosed on public websites. This corresponds to 19,999 out of 21,842 interactions that took place this year. The disclosures are done across 36 countries, and are either mandatory or voluntary. We work continuously to decrease the share of transfers of value where we do not succeed in obtaining permission from the healthcare professional to disclose the value transferred.

2030 ASPIRATION • Promote business ethics including human and labor rights through strengthened collaboration with key business partners • Demonstrate that the Code of Conduct compliance program and organization work, i.e. sustains an ethical culture and prevents any form of corruption • Protect the integrity of the healthcare professionals we work with and use transparency as an asset

14

Lundbeck Sustainability Report 2021

Introduction

Unmet patient needs

Business ethics

Climate change & circularity

People & communities

ESG Factbook

Business ethics REINFORCED COMPLIANCE PROGRAM We are a research-based biopharmaceutical company and our products help thousands of people daily.

Because of the sensitive nature of our business, society’s expectations are high and constantly evolve.

Lundbeck’s well-established Code of Conduct conveys our ethical commitments and the expectations we have to our employees for areas that are critical to the industry.

During 2021, we reinforced the Compliance Program that is designed to ensure we uphold our Code of Conduct. It builds on the trust we have in our employees and is founded on Lundbeck’s core belief “Responsible – we act with respect and integrity in everything we do”.

The Compliance Program sets the actions in an improvement cycle, initiated by the annual management review in our compliance committee.

The review draws on multiple data points, e.g. external trends, new regulations, systematic risk interviews with key people, audits, investigations and other monitoring activities. The process defines the top priorities for the coming year, which are endorsed by the compliance committee representing Executive Management and key compliance functions in our headquarters.

INVESTING IN PEOPLE Lundbeck’s Senior Management are accountable and expected to act on current risks and priorities. In 2021, we invested in ensuring they have access to competent advice to make the right ethical decisions.

Today, our compliance organization led by Lundbeck’s

Chief Compliance Officer consists of headquarter functions and the 17 Regional Compliance Officers who serve our affiliates globally. The organization is truly global representing multiple perspectives, capabilities, educational backgrounds and cultures, which gives excellent conditions for providing solutions that are fit for global use. In 2022, we are bringing everyone to Copenhagen for Lundbeck’s 1st Global Compliance Summit to ensure we stay focused, connected and in development.

MAKING ETHICS EVERYBODY’S BUSINESS These examples illustrate how our management and specialists aim to enhance business ethics at Lundbeck.

However, their efforts are ultimately directed at our 5,300 employees working in more than 50 countries around the world. Therefore, we invest heavily every year in developing training and awareness activities that can transform these principles into ethical actions.

This year’s Code of Conduct e-learning was launched with a supporting message that all leaders are expected to be role models – also in ethics and compliance. It called on them and their teams to make a pledge to the Code of Conduct. This started a creative avalanche under the hashtag #MyPledge, which ended up going viral on Lundbeck’s internal Yammer channel.

MANAGING CHANGE IS BUSINESS AS USUAL An agile compliance design like Lundbeck’s is needed to stay attuned with the constantly evolving societal expectations, changing regulatory requirements and enforcement within a highly-innovative industry. As an example, we updated our Compliance Hotline investigation procedure. The new procedure is more

accessible for our employees and reflects the EU Directive 2019/1937 on protecting whistleblowers that entered into force in 2021.

Keeping pace with change is particularly relevant within fast-moving, innovative digital technologies.

Here clear and concise principles work better than detailed procedures. In 2021, we defined our Data Ethics Policy as a response to an update in the Danish Financial Statements Act. The policy shall help us make ethical and responsible decisions on the use of data with minimal harm for individuals and society.

Lundbeck processes data for well-defined purposes that ultimately aim to improve the lives of patients.

We have implemented rigorous controls to ensure adherence with our Data Privacy Policy. The Data Ethics Policy adds to these controls and is particularly relevant in the design of digital technologies. It applies to the processing of personal data from patients, partners and our employees as well as non-personal data, e.g. production and market data.

Ethical aspects of new digital technologies are assessed in consultation with our specialists within data privacy and ethics. The assessment considers stakeholder expectations, risks and benefits to individuals of the data use. Lundbeck will routinely monitor the effectiveness of the policy as part of our Compliance Program. You can read our Data Ethics Policy on Lundbeck.com.

See the ESG Factbook section of this report for Code of Conduct key performance indicators.

99.7%

BUSINESS ETHICS COMPLIANCE

99.7% employees completed the annual e-learning on the Code of Conduct.

Lundbeck Sustainability Report 2021

Introduction

Unmet patient needs

Business ethics

CODE OF CONDUCT #MYPLEDGE Every year, all employees are trained in the principles of the Code of Conduct.

This year, the annual Code of Conduct e-learning was launched with a supporting message that all Lundbeck leaders are expected to be role models - also in ethics and compliance. It called on them and their teams to make a pledge to the Code of Conduct.

The idea started a creative avalanche under the hashtag #MyPledge. Over the course of a month, more than 200 pledges were posted on Lundbeck’s internal Yammer channel by teams and employees across our global organization.

The record-breaking engagement and creativity showed that compliance is indeed everybody’s business. And once again, we reached a satisfying full completion rate of this year’s Code of Conduct e-learning.

YPLED

R

R

E

E

SH

A

GE

#M

15

M IT O N YA

M

Lundbeck employees and managers sharing their compliance pledge with their colleagues.

Climate change & circularity

People & communities

ESG Factbook

16

Lundbeck Sustainability Report 2021

Introduction

Unmet patient needs

Business ethics

Climate change & circularity

Climate change & circularity

People & communities

ESG Factbook

Historically, Lundbeck has demonstrated its commitment to cut carbon emissions. We have a responsibility to act, now more than ever. That is why we are committed to circular principles and net-zero emissions.

7th

consecutive year of achieving a Climate Disclosure Project (CDP) Leadership score. 13,126 companies worldwide disclosed climate change data to the CDP in 2021. Lundbeck got an “A” score and is placed amongst the 1.5% best-scored companies globally.

2030 ASPIRATION • Establish manufacturing processes based on circular economy principles to limit materials use, waste and carbon emissions • Expand application of circular economy principles to key partners • Use detailed knowledge about active pharmaceutical ingredients to minimize environmental impact

2030 ASPIRATION • Deliver on the “Business Ambition for 1.5°C” pledge • Transition electricity supply to renewable sources • Manage two-thirds of value chain carbon emissions equally as effectively as carbon emissions from operations • Minimize key business partners’ carbon emissions reflected in relevant agreements

17

Lundbeck Sustainability Report 2021

Introduction

Unmet patient needs

Business ethics

Climate change & circularity

People & communities

ESG Factbook

Climate change & circularity COMMITTED TO LEAD ON CLIMATE ACTION Climate change is undoubtedly one of the largest, shared challenges faced by our planet. Lundbeck has a history of being at the forefront of corporate leadership on climate change and we believe that we have a responsibility to act in a way that is in balance with nature.

In February this year, with the launch of the 2021 Sustainability Report, we announced a new science-based target towards achieving net-zero carbon emissions across the entire value chain. Our objectives include reducing our own emissions by two-thirds and our value chain footprint by almost a fifth in the next 15 years. The targets are consistent with the reductions required to keep global warming to a maximum of 1.5°C. This is what the scientists and experts in the IPCC tell us is needed to prevent the most damaging effects of climate change.

PROGRESS ON 15-YEAR TARGETS We can report significant progress on reducing scope 1 and 2 emissions and have achieved a 16% reduction against the baseline year 2019. This is mainly due to fewer emissions from company cars, as sales employees have been on the road less due to the COVID-19 pandemic.

We did see a small rise in fleet emissions in 2021 vs.

2020 as lockdowns lifted and business began to return to normal. We expect fleet emissions to rise further and new car policies have been agreed to counter this.

With regards to scope 3 emissions, we estimate increased emissions by 26% compared to the baseline year of 2019. This uncertain estimated increase is due to the fact that we currently calculate the majority of our emissions based on spend data and we have increased our clinical trial and other service purchasing as part of our business strategy.

In 2021, a detailed action plan for scope 3 has been developed, including plans to progress actual emission data collection and setting reduction targets with our main suppliers. With this plan, we are confident that we will reach our 15-year reduction target.

EMISSIONS IN OUR VALUE CHAIN Our biggest footprint outside of our fence stems from purchasing goods and services such as clinical trials, marketing, raw materials & packaging, distribution and business travel. To reduce our footprint, we work in collaboration with our suppliers and help them to reduce emissions – or we will choose new suppliers and solutions with a smaller footprint. Across the responsible functions in Lundbeck, we have appointed project managers to lead the change and from 2022 going forward climate targets will be integrated into the performance review of a growing number of employees and managers.

Collaboration with the largest of our partners/ suppliers in each area has already yielded good results in finding ways to reduce emissions. For instance, with one of our long-standing clinical trial partners, we have identified that the digital

experience gained with remote monitoring of clinical trials during the pandemic can also be used to limit the need to fly out to each location and reduce the carbon footprint going forward.

GREENING TRAVEL In December 2021, Lundbeck’s Executive Management approved a Global travel policy,

covering an area that had previously been managed locally. The new policy sets out the key principles for business travel in Lundbeck’s global organization considering our climate commitment. The policy will be implemented by promoting climate awareness among employees, setting targets for all Executive Vice Presidents, monitoring emissions and putting effective controls in place.

PROGRESS ON 15-YEAR CLIMATE TARGETS • 16% reduction in scope 1 & 2 carbon emissions vs.

2019 SBTi target baseline • 26% estimated increase in scope 3 carbon emissions vs.

2019 SBTi target baseline

3 ELEMENTS IN LUNDBECK’S NEW CLIMATE TARGET • Commit to carbon neutrality no later than 2050 • Further reduce carbon emissions from production and fleet drastically by almost two-thirds over the next 15 years1 • Work with our suppliers and customers to reduce our carbon footprint outside our premises by nearly a fifth over the next 15 years2

1) Reduce scope 1 and 2 CO2e emissions by 63% in 2034 compared to 2019.

2) Reduce a share of scope 3 CO2e emissions by 19% in 2034 compared to 2019.

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Lundbeck Sustainability Report 2021

ORDER IN OUR OWN HOUSE In 2021, our new science-based target accelerated our effort to reduce our own emissions. Site power and heat together with our company cars make up our scope 1 & 2 emissions. Since 2006, we have cut more than 70% of our emissions from our sites. This means we must be very innovative to reach the new target and cut two thirds of the remaining emissions.

Steadily pursuing increases in energy efficiency remain a part of our environmental management. In

Introduction

Unmet patient needs

Business ethics

2021, we saw an increase in our energy consumption at our sites due to start up challenges with a new air treatment system. We also consumed more district heating at our production site in Valby. We intend to continue to increase energy efficiency going forward, and increase the use of renewable energy.

This year, we defined roadmaps that will form the basis for our low carbon transition plan which we will disclose in 2023. The main elements are changing

Climate change & circularity

People & communities

ESG Factbook

our energy sources to renewable electricity or other renewable fuels, primarily using Power Purchasing Agreements (PPA).

SOLAR POWER IN DENMARK A new solar park built following an agreement between Lundbeck and the energy provider Better Energy is now connected to the power grid. As of January 2022, 100% of Lundbeck’s electricity consumption in Denmark is matched by the solar park’s production.

GREENING THE FLEET Another element in our roadmap to tackle our own emissions is the implementation of new green car policies that incentivize the transition to electric vehicles. Since the infrastructure of charging stations needs to appropriately accommodate our driving sales force and other employees, the transition will be faster in Europe than in the U.S. and Canada. In 2021, the Headquarter’s car policy was updated requiring cars in the Lundbeck fleet to be at least an A+ in the EU energy efficiency classification system.

The company car policies will be revised in 2025 and at regular intervals to account for the fast pace of technological advances and regulation in this area.

CIRCULARITY THAT DELIVERS ON CLIMATE During the year, a number of results have demonstrated that circularity can deliver on both resource recycling and on reducing climate emissions.

Identifying the main contributors to climate emissions in the development of a chemical process is of critical importance. Here the process steps, materials and discharges can still be changed. Our Italian colleagues in Padova have developed a model for assessing the climate emissions, while developing chemical production processes for new compounds.

Many early-stage developments never reach full production scale. Therefore, the assessment method needs to be readily useful and applied every time to have effect. With the new method, our developers can calculate and compare the carbon footprint of different chemical processes. This allows them to identify the major contributors and to model the chemical process that gives the lowest footprint.

Solar park built in 2021 through an agreement between Lundbeck and renewable energy company Better Energy, Denmark.

RECIRCULATING CHEMICAL WASTE Over the years, we have refined the skills and technical capabilities of our chemical production to increase recycling of organic compounds and reduce hazardous waste. We set targets each year to improve and in 2021, we are proud to report that we outperformed the target to recover 60% of the

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Lundbeck Sustainability Report 2021

Introduction

Unmet patient needs

Business ethics

organic compounds used in chemical production and achieved 65%. This year we have also carried out an investigation of possibilities for increasing internal recovery at our production facility in Lumsås, which we will continue to pursue along with opportunities for collaboration with innovative, external partners.

59%

2019

68%

2020

65%

2021

65% Chemical recycling

RECYCLING CHEMICAL WASTE We outperformed the target to recover and reuse 60% of the organic compounds used in chemical production. Targets are set annually based on expected production volume and mix.

RECOVERING RARE RESOURCES Another example of climate action via circularity from 2021 is Lundbeck’s innovative palladium recovery. In the production process of the Active Pharmaceutical Ingredient for one of our products, Lundbeck uses a palladium catalyst to ensure the correct chemical transformation. Palladium is a rare earth metal with a huge climate footprint. In collaboration with an Italian specialist company, Lundbeck has developed a recovery process. More than 75% of the palladium is expected to be recovered and reused in the production process. The recovery and reuse of the palladium ensures a CO2e reduction of more than 142 tons CO2e/year.

Furthermore, a spin-off effect from the optimization is the possibility to recover more than 200,000 liters of toluene from the process with a scope 3 CO2e reduction of more than 300 tons CO2e/year.

Climate change & circularity

People & communities

increase the focus on general waste even though the amounts are relatively small, and we have set a target to recycle 70% of all general waste, excluding building waste.

IDENTIFIED WATER SAVING POTENTIAL We work continuously to reduce our consumption of water and wastewater and have significantly done so over many years. Our savings on water consumption are due to technological improvements and various optimization activities on our production sites. In 2021, we have been mapping our water consumption to identify even more reduction potentials.

The mapping showed that the discharge of purified

WASTING LESS We have also made good progress on increasing the recycling of general waste. In 2021, we found ways to utilize unused raw materials from our production such as sugar, maize and potato starch instead of sending them to incineration. Approx. 25-30 tons of these materials are now being circulated at a bio-pulp plant and turned into a raw material for biogas production. However, an increase of waste sorting of packaging materials has not been possible in 2021 due to major rebuilding of the packaging plant air-lock at the Valby site, Denmark. When completed in Q1 of 2022, we will be able to increase sorting and recycling of packaging materials.

Collectively, these efforts together with others to increase recycling means that in 2021, we have sent 105 tons less waste to incineration. In 2022, we will

ESG Factbook

Jørgen Wiberg (left), Calibration Technician and Thomas Tingleff (right), Maintenance Technician, Lundbeck production site, Lumsås, Denmark

water holds significant reduction potential and we will focus our efforts here in the coming years.

See the ESG Factbook section of this report for Environmental management, Climate and Energy and Circularity key performance indicators.

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Lundbeck Sustainability Report 2021

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Unmet patient needs

Business ethics

People & communities

Climate change & circularity

People & communities

ESG Factbook

Everywhere we operate, we strive to make a positive contribution to the people & communities we touch. This means safeguarding and developing our employees, tacking action on gender equality, unconscious bias, and contributing to the communities where we do business.

5,300

employees as diverse as the patients we serve

2030 ASPIRATION • Be recognized by employees and externally as a workplace with an inclusive culture that offers equal opportunities for all • Influence the public debate on equality and inclusion by setting ambitious targets, enhancing data transparency and communicating actively • Request key business partners to promote diversity and prevent discrimination in all its forms

2030 ASPIRATION • Be recognized as a workplace that fosters physical and mental wellbeing • Show leadership to promote mental health with preventive actions at our workplaces globally • Achieve a lost time accident frequency below 3

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Lundbeck Sustainability Report 2021

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ESG Factbook

People & communities BUILDING AN INCLUSIVE ORGANIZATION To ensure that we reflect the diversity of our patients and their needs, we are focused on creating the context, culture and systems where all Lundbeck employees - no matter who and where they are - can be their authentic self and perform at their best. We believe that is the shared responsibility for all public or private, small or large employers. Additionally, Lundbeck wishes to demonstrate leadership when it comes to inclusion and understanding of neurodiversity: we are committed to building an inclusive culture in Lundbeck – also for people living with brain disorders.

The overall aim of Lundbeck’s Diversity & Inclusion (D&I) program is to build an even more inclusive organization where belonging is stronger and equal opportunities are proven. We strongly believe that if we build an inclusive organization, diversity will follow.

The first important milestone in 2021 was to accelerate the conversation on diversity and inclusion in Lundbeck. This included a conversation led by our CEO Deborah Dunsire on what D&I means to each of us, where she and employees across the organization shared their personal view. We also ran a number of conversations with a focus on homegrown talents, working in multinational teams, integrating company cultures, etc.

BETTER AWARENESS OF BIASES Our awareness program also has an educational part.

In December 2021, we launched an ‘Unconscious bias’ e-learning program, which helps employees

become better aware of biases, acknowledge biases and present tools to act on biases. This program was mandatory to all employees across the world. We also have a focus on ensuring a diverse perspective in our recruitment set-up and processes.

We have strengthened the governance and management of D&I at Lundbeck in 2021. Our D&I strategy is in place along with a governance structure that ensures our focus on building an inclusive organization both on a global and on an affiliate level.

Our global D&I Council met two times this year, and we established local D&I Forums in 4 affiliates, including the U.S., Canada, China and Denmark, with regular meetings focusing on local matters. We aim to establish more local D&I Forums in the coming years to ensure a local anchor in the D&I movement.

GENDER EQUALITY For some years, we have measured the gender distribution in managerial positions. We have established a target to maintain an overall equal gender split for people managers globally. In 2021, the proportion of female managers was 42% and the gender split for all employees was 55/45% female/male.

Lundbeck’s Board of Directors has a gender equality target for the members elected by the shareholders.

The target is to maintain equality in accordance with Danish legislation. In 2021, there were two female board members out of seven members elected by the shareholders, thus meeting the target. One out of three board members elected by Lundbeck’s employees was female.

SATISFIED EMPLOYEES Lundbeck is a people business, and employees’ health and safety has been and continues to be a top priority. In the first quarter of 2021, Lundbeck carried out its annual Employee Satisfaction Survey (ESS) for all employees globally and achieved a recordbreaking 95% response rate. Workshops to discuss the input and agree on actions have been conducted locally. Lundbeck remains in the top 5% of comparable, international workplaces on several of the rated parameters, though we do see a slight decrease in some scores from 2020 levels. In 2021, giving and receiving feedback was identified as an area for improvement and resulted in the launch of companywide training to address employee concerns in this area.

The ESS scores reflect strong satisfaction with jobs, rewards and recognition, Lundbeck’s image and satisfaction with immediate managers. This is reflected in the fact that we have been awarded several employer recognitions throughout the year: Lundbeck Italy, Lundbeck Canada, Lundbeck U.S., Lundbeck China, Lundbeck Valbonne (production site, France), and Lundbeck’s Global Service Center in Krakow, Poland to mention some of the sites which have qualified as a “Great Place to Work”.

DEVELOPMENT AND RETENTION OF TALENT All Lundbeck employees globally are appraised annually and have individual development plans which provide development feedback and set the direction of development opportunities and activities. Employees can find guidance on career and

43%

2019

42%

42%

2020

2021

42% Diversity & Inclusion

WOMEN IN MANAGEMENT

The level of women in management is high with a gender split for people managers globally of 42% women and 58% men.

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Lundbeck Sustainability Report 2021

6.5

6.2 5.5

2019

2020

2021

6.5 Health & safety

FREQUENCY OF LOST TIME ACCIDENTS We have seen an increased frequency of lost time accidents this year compared to previous years. Even though a smaller share of the accidents were serious, we are determined to bend this curve.

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Climate change & circularity

People & communities

ESG Factbook

competence development via Lundbeck’s development portal as well as a variety of training on Lundbeck’s internal learning platform. As of 2022, the development portal will be enhanced with on demand training tailored to individual needs as well as access to LinkedIn Learning. Additional training is funded on a per-needs basis as decided by people managers. Moreover, Lundbeck has in place three global talent management programs for all career paths depending on job level (entry level, specialist, manager/director) as well as an onboarding program for new leaders.

and unsafe times. To boost resilience, Lundbeck provided a short series of specific training to address mental health challenges, which everyone was encouraged to take. Employees also have access to a stress prevention platform.

HEALTH & SAFETY Lundbeck has seen an increase in work related accidents with absences amounting to 24 this year, compared to 20 last year where there were less activities on our sites because of COVID-19 measures.

See the ESG Factbook section of this report for People key performance indicators.

Each accident has been root cause analyzed and preventive actions have been implemented. We were, however, not successful in reaching our 2021 target of a frequency of lost time accident rate below 5, with a rate for the full year of 6.5. We see a trend that some of the accidents are related to ergonomics (e.g. lift, over-exertion) as well as injuries from trip, slip and falls. Plans for preventive actions will be set up and a new incident database will make it easier to report accidents and near misses, allowing for timely and targeted preventive actions.

Six of the accidents this year unfortunately are so-called high-consequence work related accidents with absence, that results in an injury from which the employee is not expected to recover fully to pre-injury health status within six months. As of this year, we report on this KPI for added transparency.

OPERATING SAFELY IN A PANDEMIC Since the outbreak of COVID-19, we have been taking necessary precautions to ensure that we can continue to provide treatments for an estimated 7 million people daily. We have also had increased focus on our employees’ mental health in these uncertain, unusual

Now when slowly returning to work physically, information on re-boarding the employees has been prepared to ensure a safe and healthy work environment. Our annual Employee Satisfaction Survey was testament to how our employees felt informed and safe at work during the pandemic.

PART OF LOCAL COMMUNITIES The pandemic has tested many communities to breaking point around the world in 2021. Being part of communities also means helping out in hard times.

In collaboration with other area life sciences organizations, Lundbeck U.S. funded a vaccine program for a high-risk, underserved local neighborhood near the Lundbeck Chicago site. Due to the mass vaccination site and 70 additional mobile events, the local health department and their partners were able to administer roughly 3,000 doses of the vaccine. In addition to funding, volunteers from Lundbeck served alongside the vaccination team. This is just one example of how Lundbeck helps build communities in the more than 50 countries in which we operate.

EVERY BRAIN IN THE GAME On Friday 20 August, more than 500 employees at our headquarter site in Denmark celebrated our very first Pride event at the premises. In the same week, thousands of people from near and far joined the World Pride events in Copenhagen and Malmö to celebrate the LGBTQ+ community and pave the way to a more equal and inclusive world. Unfortunately, COVID-19 limitations restricted us from joining the official Pride Parade in Copenhagen.

Instead we showed our support by holding our own event in the main street of Lundbeck in Valby.

Dressed in Lundbeck t-shirts in all colors of the rainbow flag around 500 colleagues walked in unity from the reception to the Main Gate.

Deborah Dunsire kicked off the event with a short talk on how we are committed to having

every brain in the game to restore brain health and making an inclusive environment, where people can bring their best self to work.

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Lundbeck Sustainability Report 2021

PAYING TAXES WHERE WE CREATE VALUE Through direct and indirect tax payments, businesses are an important source of revenue for governments and municipalities. Without it, sustainable communities cannot be built.

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Climate change & circularity

People & communities

ESG Factbook

2021 CORPORATE TAX PER REGION 2021 corporate tax amounts to DKKm 336.4• of that, our ten largest markets account for DKKm 248.8 (74%) and the rest of the world accounts for DKKm 87.6 (26%)

Complying with tax rules can be complex as the interpretation of legislation and case law may not always be clear and may change over time. We aim to always comply with the letter of the law as well as the legislators’ intention with the law, while managing a competitive effective tax rate.

For instance, we pay close attention to transfer pricing requirements and focus on pricing the value of these intercompany transactions on an arm’s length basis, according to best practice guidelines issued by the OECD. The guidelines ensure profits being taxed in the country where the economic activities generating the profits are performed and where the value is created.

HEADQUARTERS

58 •••

947

128 ••

NORTH AMERICA 227

EUROPE 90

254

TAXATION OF ACTIVITIES Lundbeck considers a fair tax policy and a robust management of this policy as part of our sustaina­ bility commitment. It is our policy that we pay tax where we make our profit and to offer transparency to stakeholders through reporting.

Lundbeck’s Tax policy is reviewed and approved by our Board of Directors annually. In the policy we disclose country by country level tax for countries classified as tax havens by the IMF and EU.

MIDDLE EAST & ASIA 84 33

LATIN AMERICA Intangible property

75 27

Sales Research and development Production

• Profit before tax and corporate income tax are disclosed before elimination of intra-group transactions and value adjustments of tax assets and therefore differs to the consolidated figures in the Annual Report.

•• The Danish Corporate Income tax is impacted positively by tax free dividends from subsidiaries and by Research and Development Incentives.

During 2021 H. Lundbeck A/S invested DKKm 3,600 in Research and Development.

••• The disclosed corporate tax does not include value adjustment of deferred tax asset of DKKm 82.

Profit before tax (DKKm) Corporate income tax for the year (DKKm)

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Lundbeck Sustainability Report 2021

Introduction

Unmet patient needs

Business ethics

Climate change & circularity

ESG Factbook We continuously set ambitious targets, report on progress and disclose a set of externally assured, non-financial indicators across all areas of corporate sustainability and business ethics compliance. This Factbook offers sustainability analysts detailed facts, figures and references on how we govern, manage and monitor sustainability at Lundbeck. The Factbook covers Environmental, Social and Governance (ESG) data.

IN THIS SECTION 25

Introduction to ESG Factbook

26

Environmental responsibility

31

Management of social issues

35

Governance and compliance

38

Accounting policies

39

Management statement regarding the 2021 Sustainability Report

40

Independent limited assurance report

People & communities

ESG Factbook

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Lundbeck Sustainability Report 2021

Introduction

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People & communities

ESG Factbook

Introduction to ESG Factbook This ESG Factbook contains our consolidated sustainability statements. It provides targeted information on our Environmental, Social and Governance (ESG) and sustainability management and performance. You will find facts and figures, status on targets, and reference guidance on where to find further information.

LUNDBECK IN BRIEF Lundbeck is a global pharmaceutical company with its head office in Denmark, doing business in more than 50 countries, with research facilities in Denmark and the U.S., and a vertical production set-up in Denmark (two sites), Italy (one site), and France (one site).

SUSTAINABILITY STRATEGY Lundbeck’s sustainability activities aim to mitigate risks and adverse impacts related to our business activities and to contribute to solving societal challenges where we can. We remain committed to the UN Global Compact Principles (Lundbeck became a signatory in 2009) and contribute to addressing seven of the UN Sustainable Development Goals.

ESG MANAGEMENT AT LUNDBECK Environmental, Social and Governance (ESG) on a corporate level is managed by Corporate Compliance & Sustainability, and on a topical level by selected subject matter experts. The Executive Management Group is the steering group for the sustainability

strategy, and a share of their short-term incentive program is linked to performance on targets related to the sustainability strategy, described in our Remuneration Report.

RISK MANAGEMENT Lundbeck has several processes in place to ensure that corporate risks are assessed, reviewed and mitigated. Sustainability, business ethics and compliance are a part of Lundbeck’s Enterprise Risk Management framework described in the Annual report. These topics and the related risks are reported regularly to the Audit Committee and Board of Directors.

Every year, Lundbeck’s Compliance Committee reviews and approves the Code of Conduct Risk Register covering approx. 25 individual risk titles. The review is based on interviews with internal compliance specialists across our global organization and various documented sources, including reported external trends, new regulations, internal audit findings and Compliance Hotline reports.

The outcome of the annual Risk Register review is a list of mitigating actions that are endorsed by the Compliance Committee to continuously improve the Code of Conduct Compliance Program.

GOVERNING DOCUMENTS We build our governance around the principles in our Code of Conduct, which are cascaded as needed into manuals, guidelines, policies and standard operating procedures. Relevant documents that are publicly available are referenced in this ESG Factbook under the respective issue.

OUR STAKEHOLDERS With growing interest in ESG in the financial sector, investors and financial institutions are important stakeholders for us. However, equally important to our ESG and sustainability work are stakeholder groups such as employees, civil society organizations, healthcare professionals, healthcare organizations, patient organizations, communities, suppliers and third parties. Listening and responding to our priority stakeholders is a core part of our materiality assessment. See our material issue on page 7.

ESG ACHIEVEMENTS IN 2021 Lundbeck continuously makes a concerted effort to report relevant information for investors and analysts. In 2021 this has resulted in strong ESG ratings. Among our achievements are:

ESG

INDUSTRY TOP RATED

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Lundbeck Sustainability Report 2021

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Climate change & circularity

People & communities

ESG Factbook

Environmental responsibility Our research, development and production activities are largely based on chemical synthesis, meaning we use considerable amounts of organic compounds and energy, generating waste and air emissions. Through diligent environmental management we seek to minimize any adverse environmental impacts, including impacts from the end-use of our medicines.

medicine. We test the environmental effects of new medicinal products and design processes with the least possible environmental impact.

We pursue approaches that balance healthcare needs and environmental considerations in line with the EFPIA’s Eco-Pharmaco-Stewardship Initiative to minimize pharmaceuticals in the environment.

BIODIVERSITY Lundbeck does not operate in areas of high biodiversity value, nor do we source scarce natural resources for our production. However, Lundbeck takes biodiversity seriously and we always strive to reduce our environmental impact at our sites and in our value chain in line with Lundbeck’s Position on Biodiversity.

Environmental management ENVIRONMENTAL POLICIES AND PERFORMANCE Lundbeck is committed to protecting the environment and believes that a healthy environment is a precondition for good health and wellbeing. Our environmental work is governed by the sustainability strategy, our Code of Conduct, our Health, Safety and Environment Policy, and our Health, Safety and Environment Strategy. In 2021, the HSE policy was updated to include new stakeholder expectations, new legislation and to better reflect our significant HSE aspects. Updates reflect our commitment to promote a high level of chemical safety by substituting hazardous chemicals and apply contained processes as well as circular economy principles.

Lundbeck has several positions in relation to the environment. Read about our Position on Environmental Footprint, Position on Climate Change, Position on Water and Position on Biodiversity on Lundbeck.com.

ENVIRONMENTAL MANAGEMENT We have a long-standing history of strong environmental management since the 1980s. We set our first CO2 target in 2006 and made our first CDP disclosure in 2007. Lundbeck’s corporate headquarters and our larger research, development and manufacturing facilities are today certified to the ISO 14001:2015 standard.

In 2021, we had no incidents with an impact on the environment that we have had to report on in accordance with the terms of our environmental permits. We had 7 environmental incidents without an impact on the environment and an increase in near misses to 42 compared to 34 in 2020. We take every incident very seriously and thorough root cause analysis has been carried out in each case to learn and prevent repetition.

PHARMACEUTICAL RESIDUES We acknowledge stakeholder concerns about pharmaceutical residues in the environment.

Residues mainly come from patients’ excretion of

Unit

2019

2020

2021

Environmental incidents

No.

4

7

7

Environmental incidents with impact on the environment

No.

0

2

0

Environmental near miss

No.

43

34

42

KEY PERFORMANCE INDICATOR

Notes

Sustainability accounting policies - definitions Environmental incidents

An environmental incident is an unintended release to the environment.

Environmental incidents with impact on the environment

Incidents have an impact on the environment only if severity is assessed as “Large” (Essential exceeding of environmental permit with consequence to the environment) or “Catastrophic” (Uncontrolled emission to the environment with consequence to the environment) in internal risk assessment.

Environmental near miss

An environmental near miss is a contained spill which did not release to the environment. The near miss could potentially have escalated to an environmental incident.

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Lundbeck Sustainability Report 2021

Introduction

CIRCULARITY, RESOURCE FLOWS AND RECYCLING Developing most of our own manufacturing processes gives us the opportunity to minimize

Unmet patient needs

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Climate change & circularity

material use, substitute unwanted substances and increase recycling. We expect our suppliers to deliver materials and handle waste sustainably. See the Climate change & circularity chapter of this report.

Circularity - Resource flows

People & communities

Sustainability accounting policies - definitions Revenue

See Annual Report 2021.

Finished goods production

Production units (e.g. one tablet or one ampoule).

Chemical production

Chemical production of Active Pharmaceutical Ingredients (API).

Raw materials

Raw materials consist of the consumption of: Organic compounds (chemical compounds used in R&D and production) and Active Pharmaceutical Ingredients (API) (used for pharmaceutical production).

Waste

Waste is measured as the sum of all the waste disposed from Lundbeck’s four production sites. Waste is divided into “Chemical waste” and “General waste” and subdivided into Recycling, Incineration, Biological treatment and Landfill.

KEY PERFORMANCE INDICATOR

Unit

2019

2020

2021

DKKm

17,036

17,672

16,299

Million Units

3,186

3,551

3,775

Chemical production

Tonne

406

369

417

Raw materials

Tonne

4,127

3,874

3,723

Organic compounds

Tonne

4,043

3,793

3,663

Revenue Finished goods production

ESG Factbook

Note

1

Waste is generally reported on the basis of invoices received from waste handlers. Incinerated waste water from chemical production processes is treated as waste - hence reported as waste and not waste water.

API

Tonne

75

72

54

Waste

Tonne

14,156

15,025

16,590

Chemical waste

Tonne

12,900

13,577

15,187

Recycling

Tonne

1,217

1,256

1,095

Incineration

Tonne

7,057

6,507

6,923

Biological treatment

Tonne

4,626

5,815

7,160

Landfill

Tonne

-

0

0

General waste

Tonne

1,256

1,448

1,403

Recycling

Tonne

769

985

1,043

Incineration

Tonne

487

459

354

Landfill

Tonne

N/A

4

6

Recycling rate - Organic compounds

%

59

68

65

2

Recycling rate - General waste

%

61

68

74

3

Water consumption

m3

285,671

236,810

223,339

4

Potable water

m3

195,289

181,093

174,711

Unfiltered water

m3

90,382

55,717

48,628

Waste water

m3

252,219

201,937

186,586

Recycling rate - Organic compounds

Organic compounds which are recovered and reused or recycled.

Estimated relative to tonnes of total organic compounds used at both our chemical sites (Lumsås (DK) and Padova (I)). Organic compounds are reused on site in Lumsås (DK) and recycled externally at a third party in Padova (I).

Recycling rate - General waste

Share of the total general waste reused or recycled.

Water consumption

Water consumption consists of: groundwater (unfiltered water) and water from waterworks (potable water). Data cover Lundbeck’s four production sites. Includes: water withdrawal for process use (boilers etc.), water withdrawal converted to steam or hot water, water withdrawal for use in production, labs, offices and other buildings.

Measured based on meter readings or invoices from suppliers.

Waste water

Waste water discharge includes potable water and discharged ground water/unfiltered water. Waste water includes all planned and unplanned discharges of water from Lundbeck’s four production sites.

Recorded based on meter readings or water consumption.

1) 2019 and 2020 data updated 2) New KPI added to reporting in 2021. Data for 2019 and 2020 based on estimated share of external recovery that is recycled.

3) New KPI added to reporting in 2021 4) 2020 data updated

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Lundbeck Sustainability Report 2021

Introduction

CLIMATE AND ENERGY MANAGEMENT Lundbeck is committed to achieving a zero-carbon economy and setting science-based targets. In 2020, we had a new science-based target approved. See the Climate change & circularity chapter of this report.

Unmet patient needs

Business ethics

Climate change & circularity

only to industries with business models focused on generating revenue from activities that make a substantial contribution to the mitigation of climate change or environmental damage. Our business model is focused on generating revenue from activities that contribute to sustainable activities related to healthcare and will not be eligible until a social impact dimension of the EU taxonomy is developed.

EU TAXONOMY Lundbeck is not eligible to report under the current EU taxonomy for sustainable activities, as it relates

People & communities

ESG Factbook

Sustainability accounting policies - definitions Greenhouse Gas Emission

Amount of calculated greenhouse gas (GHG) emitted to air reported in CO2e.

Scope 1 GHGs

Direct scope 1 emissions include greenhouse gas emissions (GHG) that occur related to energy from Lundbeck's four productions sites and four additional Lundbeck sites. Includes consumption of gas, oil and refrigerants used in production (e.g. emissions associated with fuel combustion in boilers, furnaces, vehicles).

All consumed energy is monitored by building specific meter readings or invoices. The quantity of consumed energy sources is multiplied by relevant emission factors provided by UK Department for Environment, Food & Rural Affairs (DEFRA).

Climate and Energy Unit

2019

2020

2021

Scope 1 GHGs

Tonne CO2e

29,025

22,050

24,689

Scope 2 GHGs (location based)

Tonne CO2e

17,745

14,861

15,798

Scope 2 GHGs (market based)

Tonne CO2e

9,405

8,480

7,486

1

Scope 1&2 GHGs (market based)

Tonne CO2e

38,429

30,530

32,174

2

Scope 3 GHGs: Purchased goods and services

Tonne CO2e

99,375

123,589

133,445

1

Scope 3 GHGs: Up-stream transportation and distribution

Tonne CO2e

11,815

12,858

12,491

1

Scope 3 GHGs: Business travel

1

KEY PERFORMANCE INDICATOR

Emissions from Lundbeck’s owned or controlled vehicle fleet is provided directly by the associated leasing company or calculated based on consumed fuel multiplied with relevant emission factors. Primary data from an estimated 43% of the company cars are retrieved and used to estimate emissions from Lundbeck’s full fleet activity.

Note

Greenhouse Gas Emission

Tonne CO2e

6,733

2,950

2,587

VOCs emitted to air

Tonne

45

39

24

Energy consumption

MWh

99,605

101,165

108,040

Natural gas, methane, city gas, F-gas

MWh

33,060

33,961

36,521

Gasoil, biooil, diesel

MWh

12,027

12,882

13,018

District heating

MWh

12,925

12,771

15,148

Electricity

MWh

41,593

41,551

43,353

%

50.5

52.9

54.2

Renewable energy share

1) New KPI added to reporting in 2021 2) 2019 and 2020 data updated with company cars now part of scope 1 reporting 3) Data for 2020 updated

1

Scope 2 GHGs (location based)

Scope 2 emissions includes all indirect emissions related to the generation of acquired and consumed electricity and district heating at Lundbeck's four production sites and four additional Lundbeck sites. All consumed energy is monitored by building specific meter readings and invoices if meter readings not available.

The emissions are reported as location based and derived from consumed energy multiplied with relevant location based emission factors provided by DEFRA.

Scope 2 GHGs (market based)

3

Includes all indirect emissions related to the generation of acquired and consumed electricity and district heating on all Lundbeck sites. All consumed energy is monitored by building specific meter readings or invoices.

The emissions are reported primarily as market based emissions, where consumed scope 2 energy is multiplied with market specific emission factors provided directly from the energy supplier. Where market specific emissions are not available, the best available location based emission factors provided by DEFRA are used for the reporting in line with the GHG protocol hierarchy.

3

1 Scope 1 & 2 GHGs (market based)

Combines the calculated scope 1 and scope 2 emissions using the reported market based scope 2 emissions.

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Lundbeck Sustainability Report 2021

Introduction

Unmet patient needs

Business ethics

Climate change & circularity

People & communities

ESG Factbook

Sustainability accounting policies - definitions (continued)

Sustainability accounting policies - definitions (continued)

Scope 3 GHGs

Energy consumption

Consumed energy is monitored by building specific meter readings or invoices if meter readings are not available, across our four production sites and four additional Lundbeck sites.

Renewable energy share

Share of renewable electricity purchased through either selected supplier or shares of renewable electricity in country specific grids. The share of renewable electricity is reported as the mean of consumed renewable electricity across four production sites and four additional Lundbeck sites.

Scope 3 GHGs: Purchased goods and services

Scope 3 includes and accounts for other indirect emissions in Lundbeck’s value-chain, which are not accounted for elsewhere.

The reported scope 3 emissions are limited to only include three targeted GHG-protocol categories; ‘Purchased goods and services’, ‘Upstream transportation and distribution’ and ‘Business travel’.

Purchased goods and services is divided into subcategories of product and non-product.

Emissions related to purchased products are estimated based on acquired quantities multiplied with appropriate emissions factors supplied by the Ecoinvent database.

Emissions related to purchased non-products are based on financial spend in USD multiplied with relevant spend-based emission factors supplied by the EEIO database.

Scope 3 GHGs: Up-stream transportation and distribution

Scope 3 GHGs: Business travel

Includes emissions from all purchased (non-owned) transport and distribution services. This includes inbound logistics (from Tier 1 suppliers), transport between Lundbeck sites in Valby and Lumsås (DK) and outbound logistics. A selection of Lundbeck’s key logistic suppliers provides specific emissions data for their activities related to Lundbeck.

Where this is not available, emissions are calculated based on financial spend in USD multiplied with relevant spend-based emission factors supplied by the EEIO database. This is primarily for locally procured logistics services.

Reduce total carbon footprint across own operations, supply and distribution in line with our science-based targets

All emissions related to the category are converted and calculated as well-to-wheel greenhouse gas emissions.

Includes emissions from the transportation of employees across the whole group for business-related activities owned or operated by third parties. This includes emissions that are caused due to employees traveling by air, road, rail and sea as well as emissions associated with hotel stays. The emissions from business travel related activities are calculated based on transported distance and number of stays at hotels, multiplied with relevant emissions factors provided by DEFRA. Flight related emissions are provided by associated travel agencies, covering 80% of total activity. The last 20% has been extrapolated.

VOCs emitted to air

Status on 2021 sustainability targets

Volatile Organic Compounds (VOCs) emitted to air from all four of our productions sites. An insignificant share of the VOCs from Lundbeck’s production have a global warming potential (according to IPCC) and the VOCs are therefore not reported as part of our scope 1 GHG emissions.

Status

Comment

Reduce scope 1 and 2 CO2e emissions by 63% in 2034 compared to 2019

On track

Reduction of 16% compared to the baseline.

Reduce a share of scope 3 CO2e emissions by 19% in 2034 compared to 2019

On track

Increase in estimated emissions of 26% compared to the baseline.

Action plan for 2022 onwards in place to reduce emissions.

Recycle 60% of the organic compounds used in chemical production

Achieved

We have recycled 65% of the organic compounds.

Recycle at least 62% of all general waste

Achieved

We have recycled 74% of general waste.

2021 TARGET

SDG

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Lundbeck Sustainability Report 2021

REPORTING ACCORDING TO CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD) Lundbeck supports the TCFD recommendations and believes they provide a useful framework to increase transparency on climate-related risks and opportunities within financial markets. As part of our support for the TCFD recommendations, Lundbeck comprehensively reports on governance, strategy, business opportunities, and risks related to climate change through the Climate Disclosure Project (CDP). In the table to the right is a summary and reference index. You can find our latest full CDP disclosure on Lundbeck.com.

Introduction

Business ethics

Climate change & circularity

People & communities

ESG Factbook

SUMMARY AND REFERENCE INDEX OF LUNDBECK’S TCFD REPORTING

A

Governance

Strategy

Risk management

Metrics and targets

Describe the board’s oversight of climaterelated risks and opportunities.

Describe the climate-related risks and opportunities the organization has identified over the short, medium and long term.

Describe the organization’s processes for identifying and assessing climate-related risks.

Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk management process.

The CEO has the overall responsibility of the sustainability strategy and presents major decisions to the board when relevant.

CDP 1.1a and 1.1b A key risk overview is reviewed by our Audit Committee and shared with the Board of Directors.

CDP 2.2

B

C

Source: Based on our 2020 Disclosure to CDP.

Unmet patient needs

Our risks and opportunities all have low impact, except physical risks of exposure to extreme weather events that can affect our sites, partners and suppliers, and conversely the opportunity to maintain resilient production.

CDP 2.3a and CDP 2.4a

Describe management’s role in assessing and managing climate-related risks and opportunities.

Describe the impact of climate-related risks and opportunities on the organization’s businesses, strategy and financial planning.

Risks including related mitigating actions and opportunities are assessed regularly by the Executive Management and reviewed together with the Board of Directors.

CDP 1.2a

Risk and opportunities are impacting our business to become highly energy efficient, increase our use of renewable energy and to engage with suppliers to mitigate future physical and transitional changes and to exploit opportunities.

CDP 3.3, 3.4 and 3.4a

N/A

Risks on both company and asset level, covering both direct operations and our upstream and downstream value chain, are identified and managed in our corporate risk management system.

The Risk Office assesses the overall risk exposure and discusses it with the Executive Management.

CDP 2.2

Emissions are reported annually in accordance with the Greenhouse Gas (GHG) Protocol (revised edition) in our CDP response and are broken down by type, country and business division.

CDP 4

Describe the organization’s processes for managing climate-related risks.

Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 GHG emissions, and the related risks.

The Risk Office assesses the overall risk exposure and discusses it with the Executive Management. A key risk overview is reviewed by our Audit Committee and shared with the Board of Directors.

CDP 2.2

Lundbeck discloses our Scope 1, Scope 2 and Scope 3 emissions through our CDP submittal and in our Sustainability Report on our Lundbeck.com.

CDP 6

Describe the resilience of the organization’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario.

Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s overall risk management.

Describe the targets used by the organization to manage climate-related risks and opportunities.

We do prepare scenario analysis using climate modeling scenarios predicting temperature increases. In 2021, our process for this analysis was evaluated with a view to strengthen cross-functional involvement.

CDP 3.2a

See section A and B above.

CDP 2.2

We have several targets to manage our climate-related risks and opportunities. See the Impact section of this report for our new science-based target.

CDP 4.1a, 4.2b and 4.2c

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Lundbeck Sustainability Report 2021

Introduction

Unmet patient needs

Business ethics

Climate change & circularity

People & communities

ESG Factbook

Management of social issues In the social area, Lundbeck’s most material issue is product and patient safety which is very robustly managed and governed. Access to medicine is a key material area and we have launched a new 2030 Access to Brain Health strategy to develop our efforts further in the coming years. Human rights and labor conditions for people working for us and our business partners are an important part of our social responsibility.

ACCESS TO MEDICINE For information on Lundbeck’s medicine donation program, our position papers, disease awareness material and patient support programs and more, see the Unmet patient needs section of this report.

Pricing Lundbeck acknowledges the challenges faced by healthcare systems under pressure from rising demands and we recognize concerns expressed on the affordability of innovative medicines. See more in our global pricing position.

Access to Health KEY PERFORMANCE INDICATOR

Donated treatment in Low-Middle Income Countries

Unit

2019

2020

2021

Notes

Patients

N/A

N/A

937

1

Combating falsified or counterfeit products We take stringent measures to secure our supply chain and ensure that genuine Lundbeck medicines reach patients every time. We protect the integrity of our products by labeling packages with batch numbers, serial numbers and 2D matrix technologies.

We use transport companies that have been risk assessed, audited if evaluated necessary and managed through service agreements.

We collaborate with customs authorities to surveil shipments claiming to contain Lundbeck products and engage with international organizations dedicated to fighting counterfeit medicine.

We also have channels dedicated to capturing concerns and complaints related to product safety and counterfeit medicine.

Status on 2021 sustainability targets 2021 TARGET

Status

Comment

Ensure all disease awareness sponsorships within psychiatry measurably support suicide prevention or mental health awareness

Achieved

All 12 corporate sponsorships increased awareness on mental health, including suicide prevention.

Donate treatment for at least 900 patients in product donation partnerships in Low-Middle Income Countries (LMICs)

Achieved

Medicine for treatment of 937 patients produced, shipped and distributed to clinics in Lebanon, Gaza and the West Bank.

Build an inclusive organization with a first initiative on rolling out a global training program on unconscious bias to all affiliates

Achieved

New D&I strategy approved by Executive Management. The entire organization trained in unconscious bias in Q4.

Maintain an overall equal gender split for people managers globally2

Achieved

Gender split for people managers globally was improved to 43/57% female/male.

Reduce lost time accidents frequency to ≤ 5

Not achieved

Lundbeck’s lost time accidents frequency was 6.5 in 2021.

Sustainability accounting policies - definitions Donated treatment in Low-Middle Income Countries

1) Initiated in 2020 and first donations made in 2021.

2) >40% considered equal.

Number of patients estimated by dividing number of doses shipped with medically recommended average treatment. The number is based on a mathematical calculation based on the donated amount of medicine.

The number is not based on an evaluation of actual treatment at clinics.

SDG

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Lundbeck Sustainability Report 2021

Introduction

Unmet patient needs

Business ethics

Climate change & circularity

People & communities

ESG Factbook

PATIENT SAFETY The Lundbeck Safety Board is the primary safety governance body at Lundbeck with a mandate to pause development activities globally for safety reasons, as well as to escalate safety issues directly to the CEO.

All Lundbeck production sites hold the necessary certifications to operate as a pharmaceutical manufacturer, and we cascade our standards in our value chain through audits and training relating to Good Manufacturing Practices and Good Distribution Practices.

promotional activities, including materials, produced at our headquarters. Our affiliates are responsible for ensuring that promotional activities, including materials, are reviewed and approved in accordance with applicable rules, before the materials are used within the specific local market.

In 2019, a Chief Medical Officer role was introduced and fully implemented in procedures in 2020. The role is linked to the Chair role of the Lundbeck Safety Board. In 2021, all employees globally were required to complete online awareness training on patient safety / pharmacovigilance.

In 2020 and 2021, there has been a reduction of physical audits due to the COVID-19 pandemic, so critical audits in our supply chain have been carried out through a combination of digital, physical and virtual audits.

OCCUPATIONAL HEALTH AND SAFETY It is key for Lundbeck that we provide a safe and healthy workplace and inclusive culture. This is addressed and enforced through regular training, awareness campaigns, and internal audits.

A COVID-19 emergency plan (Business Continuity Plan) for patient safety was activated in March 2020, and is still ongoing, with solid planning securing no disruptions in safety obligations, procedures or staffing over the year.

PRODUCT QUALITY Product quality is paramount at Lundbeck. All our sites are subject to both internal and external Good Process (GxP) audits as well as regulatory audits.

Work related accident with absence

An undesired event or exposure that occurred suddenly and gives rise to personal physical or psychological injury and results in incapacity to work for one or more calendar days in addition to the day of the accident.

Lundbeck’s independent Promotional and Advertising Review Committee reviews and approves

Work related near miss

A sudden, unexpected incident or situation where no personal injury occurred, but had the potential to do so.

Work related accident without absence

An undesired event or exposure that occurred suddenly and gives rise to personal physical or psychological injury, but does not result in incapacity to work in addition to the day of the accident.

Work related disease

A work related disease that arises after long-term harmful exposure from the work or working conditions. Must be recognized as a disease by the competent authority.

High-consequence work related accident with absence

Work related accidents with absence that are assessed as “Large” (work related injury with permanent injury) or “Catastrophic” (death or disability) in internal risk assessment and results in an injury from which the employee is not expected to recover fully from within 6 months.

Frequency of lost time accidents

The frequency is calculated as the number of accidents with absence and fatalities per one million working hours.

2019

2020

2021

Work related accident with absence

No.

23

20

24

Work related near miss

No.

554

470

449

Work related accident without absence

No.

91

66

81

Work related disease

No.

2

2

0

High-consequence work related accident with absence

No.

9

5

6

Frequency

6.2

5.5

6.5

No.

0

0

0

Fatalities

1) KPI added to reporting in 2021

Lundbeck’s corporate headquarters and our larger research, development and manufacturing facilities are certified to the ISO 45001 standard certification.

Sustainability accounting policies - definitions

Unit

Frequency of lost time accidents

Due to COVID-19, the efforts of the last two years have been directed at persons working on-site and those working from home. For persons who have had to come to work physically on-site, Lundbeck has taken all precautions to keep these people safe.

PROMOTIONAL ACTIVITIES Promotion of medicinal products is strictly regulated and monitored by local authorities and industry associations. We are committed to complying with applicable laws, regulations and industry codes. This means maintaining processes and providing extensive training to ensure that promotional activities are appropriately assessed.

Health & Safety KEY PERFORMANCE INDICATOR

Lundbeck’s Health and Safety performance is governed by our Code of Conduct, our Position on Health and Safety, Health, Safety and Environment Policy and our Health, Safety and Strategy.

Notes

1

Total number of working hours is calculated using an estimate of 225 working days a year multiplied by 7.4 hours per day multiplied by the number of employees.

Fatalities

Fatalities are the number of people who lost their lives as a result of a work related accidents. These accidents are included in the calculation of the Frequency of lost time accidents.

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Lundbeck Sustainability Report 2021

Introduction

WORKING AT LUNDBECK Our employees are our most important and critical resource. At Lundbeck, we ensure respect for the individual and the continuous development of our employees. We consider staying safe and healthy at work a fundamental right for all.

Diversity and inclusion Lundbeck is a diverse company determined to build an inclusive high-performance culture that allows all employees to enrich their professional skills and career at Lundbeck without discrimination. In 2020, we conducted training on respect in the workplace and updated our global Diversity and Inclusion Policy.

See the People & communities chapter of this report for 2021 activities.

Remuneration At Lundbeck, we strive to offer employees a competitive and market-related remuneration package consisting of fixed and variable compensation as well as monetary and non-monetary benefits. We believe that with an employee-focused, fair and transparent remuneration package we can attract and retain the most qualified talents in the market.

Unmet patient needs

Business ethics

Climate change & circularity

People & communities

All employees are also appraised annually and have an opportunity to discuss individual training needs and career aspirations with their immediate manager.

Lundbeck’s compensation and benefit programs are reviewed each year and benchmarked against the market to ensure that Lundbeck’s remuneration is competitive and aligned to our company goals and priorities.

For more information about working at Lundbeck, visit our career pages.

Lundbeck’s Management remuneration package consists of both fixed and variable components. All members of Management participate in Lundbeck’s Long-Term Incentive program (LTI) which is a part of the variable remuneration. Lundbeck’s LTI program is designed to retain Executives and to align with our shareholders’ long-term interests through a link to the performance of Lundbeck’s share price. The link provides Management with an incentive to drive innovation to Lundbeck’s growth on a long-term sustainable basis.

Employee satisfaction and development All employees globally participate in an annual Employee Satisfaction Survey, where results of the survey are shared internally, and action plans are put in place where necessary.

RESPONSIBILITY IN OUR VALUE CHAIN All raw material suppliers for commercial production and Contract Manufacturing Organizations are subject to a human rights and environmental due diligence screening prior to engagement with Lundbeck, as well as ongoing monitoring. All such facilities located outside the EU/ESS and North America are audited by qualified Lundbeck staff for health & safety, employment and environmental conditions.

KEY PERFORMANCE INDICATOR

Unit

2019

2020

2021

Average employee remuneration

mDKK

0.80

0.87

0.86

CEO/Employee ratio - without tax indemnification

Times

33.1

31.5

30.8

CEO/Employee ratio - with tax indemnification

Times

78.1

34.6

70.7

Gender balance - all employees

Female/male

53/47%

53/47%

55/45%

1

Gender balance - all people managers

Female/male

42/58%

42/58%

43/57%

1

No. / Total No.

1/5

1/6

2/7

1

1) KPI added to reporting in 2021

Third parties and suppliers are contractually bound to adhere to local and internationally recognized anti-corruption, labor rights, human rights and environmental standards as dictated by the UN Global Compact.

Critical or material collaboration partners and suppliers are contractually required to adopt our Third Party Obligations, which bind them to adhere to relevant sections of Lundbeck’s Code of Conduct.

To assess and verify compliance, we apply systematic due diligence with regards to respecting human and labor rights, environmental protection and preventing corruption.

Sustainability accounting policies - definitions Average employee remuneration

Total H. Lundbeck A/S remuneration excl. registered Executive Management members divided by total number of FTEs in H. Lundbeck A/S.

CEO/Employee ratio - without tax indemnification

Total CEO remuneration without tax indemnification divided by H. Lundbeck A/S average employee remuneration excl. registered Executive Management members.

CEO/Employee ratio - with tax indemnification

Total CEO remuneration with tax indemnification divided by H. Lundbeck A/S average employee remuneration excl. registered Executive Management members.

Gender balance - all employees

Includes all employees hired and paid directly by H. Lundbeck A/S. Gender is assigned as female or male. Gender balance reported as female/male shares of total.

Gender balance - all people managers

Includes all managers that have at least one direct report in their organizational structure. Gender is assigned as female or male. Gender balance reported as female/male shares of total.

Number of women on the Board (shareholder elected)

The total number of women divided by the total number of members of the Board for H. Lundbeck A/S.

People

Number of women on the Board (shareholder elected)

ESG Factbook

Notes

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Lundbeck Sustainability Report 2021

The specific risk areas assessed are: • Conflict of interest • Financial crime (including corruption, bribery, tax evasion and violations of trade sanctions) • Promotional misconduct • Human and labor rights violations • Significant environmental impact Often, we combine a due diligence process with train­ing, performance monitoring and compliance audits, where we emphasize continuous open dialogue with our suppliers and third parties.

HUMAN RIGHTS Our human rights statement expresses our commitment to respect human rights while our commitment to ending all forms of human slavery is reflected in our UK Modern Slavery Act Statement.

Additionally, we are advocates for the respect of human rights in relation to mental health. It is a tragic fact that people living with mental health conditions can be amongst the most vulnerable in society, enduring incarceration, chaining, coercion and over-medicalization, stigma and exclusion.1 Lundbeck is a longstanding member of the Nordic Business Network for Human Rights (NBNHR) moderated by the Danish Institute of Human Rights.

In 2021, Lundbeck and 11 other member companies demonstrated their support for human rights due diligence legislation at EU level in a joint statement released in January.

1) https://www.uhc2030.org/blog-news-events/uhc2030-blog/puttingmental-health-firmly-into-uhc-efforts-is-critical-to-the-success-of-uhcand-will-reap-benefits-far-beyond-the-health-sector-555439/

Introduction

Unmet patient needs

Business ethics

Data privacy Read our Data Privacy Policy to find out more about how we at Lundbeck are committed to safeguarding the rights of patients, research and business partners and our employees, in accordance with applicable personal data legislation.

Data Ethics Policy In 2021, Lundbeck developed and approved a new, global Data Ethics Policy on ethical and responsible decision making on the use of data. Our Data Ethics Policy states the principles we commit to apply beyond staying compliant with current data protection regulations. It is especially relevant in the development or application of fast-moving, innovative digital technologies. The Data Ethics Policy shall help us make ethical and responsible decisions on the use of data with maximal benefit and minimal harm for individuals and society.

Climate change & circularity

People & communities

ESG Factbook

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Lundbeck Sustainability Report 2021

Introduction

Unmet patient needs

Business ethics

Climate change & circularity

People & communities

ESG Factbook

Governance and compliance Our Code of Conduct Compliance Program ensures that relevant risks are identified, that procedures to manage them are established, understood and being followed, and that monitoring activities identify and manage needed improvements.

RESPONSIBLE BUSINESS CONDUCT Our Code of Conduct is the backbone of our ethics and compliance culture and is available in 11 different languages. It conveys our commitments and expectations to our employees for areas critical to the pharmaceutical industry. All Lundbeck employees and third parties working on Lundbeck’s behalf are obliged to observe the Code of Conduct and any stricter local regulations. Each year, all employees are trained in different areas of the Code of Conduct and we set targets for the completion rates.

COMPLIANCE MANAGEMENT Lundbeck’s Compliance Committee, led by the Chief Financial Officer representing Executive Management and Senior management, supervises the development of Lundbeck’s global Compliance Program. While Regional Compliance Officers, who report to the Chief Compliance Officer, are responsible for maintaining a Compliance Program covering Lundbeck’s affiliates within the region.

The global and local procedures around the Code of Conduct contain more operational requirements and good practices. Lundbeck maintains a Good Practice (GxP) quality management system for patient and

product safety to control risks, continually improve processes and meet regulatory expectations.

Our Business Ethics compliance audits and monitoring efforts aim to validate understanding of the requirements and capture suggestions for improvements of the processes and controls.

Lundbeck’s auditors provide feedback with corrective and preventive actions to ensure local management ownership and follow-up. An Audit Management Group coordinate across the corporate functions that are responsible for performing different types of audits.

TRANSPARENT INTERACTIONS We are committed to transparency and we are a member of the European Federation of Pharmaceutical Industries Associations (EFPIA).

We disclose the transfers of value we make to individual healthcare professionals and patients and to their respective organizations. In 2021, we disclosed the value of 19,999 interactions with healthcare professionals across 36 countries where such disclosures are either mandatory or voluntary.

Read more about interactions with healthcare professionals and patients, a methodological note on disclosures and Lundbeck’s EFPIA Disclosure Code Self-Certification Scheme on lundbeck.com.

SUPPLIER AND THIRD PARTY DUE DILIGENCE Our supplier and third party due diligence process specifically looks at identifying and mitigating risks in relation to: conflict of interest; financial crime including bribery, tax evasion and violations of trade sanctions; promotional misconduct; human and labor rights violations; and significant environmental impacts.

The due diligence process takes a risk-based approach and targets goods, services and collaborations where the risks are most prevalent: in chemical manufacturing, customs clearance, product price negotiations, obtaining product marketing authorizations, organizing promotional or educational events, and when selling Lundbeck products.

In 2021, our internal experts conducted 119 due diligence screenings to identify and mitigate 29 specific risks in relation to suppliers and third parties.

Read more about our due diligence process on Lundbeck.com, see the areas covered by our due diligence process, and the contractual obligations that third parties are required to adhere to.

COMPLIANCE HOTLINE Lundbeck has in place a Compliance Hotline (whistleblower system) as a secure and confidential reporting channel managed by an independent provider. Due to data protection regulations and other legal restrictions, only concerns that involve legal or other serious risks to Lundbeck may be reported via the Compliance Hotline.

All reported concerns are investigated and handled in line with Lundbeck’s global procedure. It safeguards the rights of individuals who report concerns, participate in investigations or are suspected of

Status on 2021 sustainability targets 2021 TARGET

Status

Comment

Annual Code of Conduct training completed by all employees globally

Achieved

Annual training launched in November.

Achieved a 99.7% completion rate.

Increase proportion of healthcare professionals supporting disclosure of collaborations compared to the previous reporting year

Not achieved

We maintained a high level of disclosure (92% this year, 93% last year), but were not successful in increasing the proportion.

SDG

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Lundbeck Sustainability Report 2021

misconduct, including their right to confidentiality and protection against retaliation. The reporter can anonymously communicate with the investigator through the Compliance Hotline. Concerns that are substantiated are followed by proportionate corrective and preventive actions.

Our substantiation rate has over the past five years been in the range of 30% to 50%. We continuously work to increase visibility of the Compliance Hotline via internal awareness campaigns and externally on localized Lundbeck websites. Read more on what allegations can be reported.

An Ombudsman is available to employees for work related grievances not covered by the Compliance Hotline. There are also channels available for

Introduction

Unmet patient needs

Business ethics

Climate change & circularity

reporting Adverse Drug Reactions and other patient and product safety related issues and complaints, including information about counterfeit medicine.

AUDITS AND MONITORING Lundbeck continuously performs a significant number of audit, monitoring and control activities within compliance. These cover both our internal processes as well as external partners such as suppliers. Despite the ongoing global COVID-19 pandemic in 2021, we were able to maintain a similar level of monitoring activities as in 2020, since their virtual nature gave us opportunities to join more activities than what is possible physically. Due to travel restrictions, it was not always feasible to conduct physical audits for our third parties and suppliers, therefore such activities were postponed or replaced with remote reviews.

People & communities

ESG Factbook

CLINICAL TRIALS Clinical trials are outsourced and continuously monitored on regulatory Good Practice requirements, as well as all relevant requirements from Lundbeck’s Code of Conduct.

via its clinical trial registry. Clinical trial reports will be accessible on the EudraCT site in accordance with EMA POLICY/0070. Non-interventional studies may also be disclosed if, for example, they are considered to provide important safety data.

Lundbeck registers clinical trial protocols and discloses the results of clinical trials, regardless of outcome, in a publicly accessible clinical trial registry (ClinicalTrials.gov). In addition, clinical trial protocols and information on the results submitted by Lundbeck to the EudraCT database is made publicly available by the European Medicines Agency (EMA)

Lundbeck will seek to ensure that disclosure of clinical trial information follows the IFPMA, EFPIA, JPMA, and PhRMA joint position paper “Disclosure of Clinical Trial Information via Clinical Trial Registries and Databases”, the Declaration of Helsinki and other relevant clinical trial disclosure requirements.

Sustainability accounting policies - definitions Patient & product safety audits

Includes the following audit areas: Good Clinical Practice, Good Laboratory Practice, Good Manufacturing Practice, Good Distribution Practice, Medical Regulatory Clinical Quality Assurance (MRC QA), Pharmacovigilance Audits, Chemistry, Manufacturing, and Controls Quality Assurance (CMC QA), Corporate Product Quality (CPQ), and Animal Welfare.

Health, Safety & Environment audits

Process for verifying that our internal operations, as well as the operations of our suppliers and third parties, meet our expectations and requirements with regards to health & safety performance, human and labor rights performance (applicable for suppliers and third parties), and environmental performance.

Business ethics and internal control audits

Compliance reviews, financial audits and reviews, audits and monitoring of field-based activities and employees.

Third parties and supplier audits

Compliance reviews of third parties and suppliers (based on contractual requirements and requirements stipulated in Lundbeck’s third party obligations), and information security reviews of external personal data processors.

Compliance Hotline reports

Reported concerns that involve legal, serious financial and reputational risks as specified at https://www.lundbeck.com/global/ compliancehotline.

Completion rate of annual Code of Conduct e-learning

Includes all permanent and temporary employees, excluding employees on leave. Completed by 31.12.2021.

Code of Conduct compliance KEY PERFORMANCE INDICATOR

Unit

2019

2020

2021

Total sum of all audits

No.

314

344

348

Sum of internal audits

No.

132

212

210

Patient & product safety audits

No.

75

71

46

Health, Safety & Environment audits

No.

7

8

13

Business ethics and internal control audits

No.

50

133

151

Sum of audits of external partners

No.

182

132

138

Patient & product safety audits

No.

166

120

106

Health, Safety & Environment audits

No.

14

2

9

Third parties and supplier audits

No.

2

10

23

Compliance hotline reports

No.

28

24

21

%

N/A

N/A

99.7

Completion rate of annual Code of Conduct e-learning

Notes

1

1) KPI added to reporting in 2021

37

Lundbeck Sustainability Report 2021

ANIMAL WELFARE As part of the development of new treatments, we are obliged to conduct tests on animals to ensure patients receive safe and effective medicines. We prioritize animal welfare and commit to the ethical treatment of animals used in our research. We provide appropriate care for our animals and continuously work to improve our animal research policy and procedures as well as our animal facilities.

Lundbeck’s Animal Care and Use Committee oversees all testing on animals and reviews animal models on a continuous basis using the principles of replacement, refinement and reduction of animals (3Rs) to which we are fully committed.

Additionally, a dedicated team of specialists is responsible for auditing and approving locations where testing on animals is performed on Lundbeck’s behalf. In 2021, we conducted 31 external animal welfare audits. All employees working with animals have appropriate and documented education (FELASA standards) and internal training that depends on the type of work being performed.

Lundbeck works with external partners on implementing the 3Rs for continuous improvements, actively supports the National 3R Center in Denmark and meets with animal welfare organizations regularly to discuss best practices and progress.

Our Animal Care and Use Committee consists of: a Chairman (SVP level), a researcher with hands-on experience, a representative from Animal facilities, laboratory animal veterinarians, a lay person and an external expert in laboratory animal science.

PUBLIC AND POLITICAL INFLUENCE We comply with the Danish lobby code for pharmaceutical associations. Global affiliates follow local legislation.

Our EU lobbying activities are registered in the official transparency register, and there is one meeting registered in 2021.

Introduction

Unmet patient needs

Business ethics

In the U.S., we are required to report quarterly to Congress (searchable through a public database) the costs associated with lobbying on behalf of Lundbeck (which includes our consultants and trade association dues attributable to lobbying), and also discloses the issues we lobby on.

CORPORATE GOVERNANCE Our governance framework is based upon the recommendations issued by the Danish Committee on Corporate Governance and consists of rules and principles that support sustainable financial performance and long-term value creation for our shareholders and for our societies. More information is also available in our Statutory Corporate Governance Report.

BOARD LEVEL COMMITTEES The Board of Directors has set up three advisory committees: The Audit Committee, the Remuneration & Nomination Committee and the Scientific Committee. More can be read in our Statutory Corporate Governance Report.

FOUNDATION OWNERSHIP The Lundbeck Foundation is Lundbeck’s largest shareholder. It is a separate entity holding 69% of the share capital and voting rights. The Foundation’s focus is on strengthening brain health and neuroscience through a series of research grants and collaborative research models. In addition, they award The Brain Prize yearly: it is the world’s largest brain research prize (approx. 1.3 million EUR) to one or more brain researchers who have had a groundbreaking impact on brain research.

Climate change & circularity

People & communities

ESG Factbook

38

Lundbeck Sustainability Report 2021

Introduction

Unmet patient needs

Business ethics

Climate change & circularity

People & communities

ESG Factbook

Sustainability accounting policies H. Lundbeck A/S is a privately held company with headquarters in Valby (DK).

We aim to develop our ESG data set to support our business and to disclose relevant and transparent information to our stakeholders. Several international ESG reporting frameworks are used as guidance in the data selection process (e.g. GHG Protocol, GRI, SASB).

Key issues are identified through ongoing stakeholder engagement and trendspotting, informed by data-driven analysis and addressed by programs or action plans with clear and measurable targets. The issues presented in the Sustainability Report are deemed to have a significant impact on Lundbeck’s future business performance and may support stakeholders in their decision-making. The accounting policies have been applied consistently for all the years presented. Any changes to historical data are only made if considered material.

REPORTING PERIOD All reported data are covering a full year period (1 January to 31 December 2021).

SCOPE The scope for ESG reporting data in the sections is as follows. Environmental management, Circularity - Resource flows, Climate and Energy and Health and Safety are our four production sites located in Valby (DK), Lumsås (DK), Valbonne (F) and Padova (I).

Data on energy consumption and emission of scope 1 & 2 GHGs covers both our four production sites and four additional Lundbeck sites (Krakow (Pl), La Jolla,

Deerfield and Seattle (USA)). Scope 3 GHG emission data covers the entire business worldwide and value chain according to the GHG protocol. Data on Recycling - Organic compounds relates only to our two chemical production sites Lumsås (DK) and Padova (I).

The above reporting covers the Health, Safety and Environment (HSE) performance of all significant impacts relevant to Lundbeck's production and R&D processes. The reported HSE scope covers approximately 50% of all Lundbeck employees, but the reported data covers a significantly larger proportion of the Group's total values on the reported HSE KPIs in relation to emissions, resource flows and accidents.

The remaining Lundbeck employees (primarily sales offices/sales reps.) are not in scope for HSE data.

The scope for Access to Health, People, and Code of Conduct compliance reporting is all sites and all employees.

Data from acquisitions and divestments are included or excluded to the reporting scope on 1 January, plus twelve months from the handover of the entire production facility.

DATA QUALITY AND CONSOLIDATION The objective is to report our annual HSE data completely and accurately, and with a high degree of credibility. This includes systematic documentation and verification of the HSE data. Lundbeck has designed processes to ensure that the qualitative and quantitative information that documents the HSE

dimensions of performance is assured, as well as the systems that underpin the data and performance. For the HSE data gathered at local sites, the quality assurance process makes sure that all attached documentation is crosschecked and signed off by a local, qualified employee or management. It is a requirement that data must be traceable back to the primary source.

HSE data are collected using an operational scope.

Most HSE data are all reported in the same consolidation system. However data on CO2 emissions are reported in our Climate footprint model. Data on incidents are based on registrations in an online incident management system. Number of employees are pulled from an internal database by the end of the reporting year. Data is based on internal Lundbeck employees only and does not include external contractors.

For some HSE categories, data can be based on assumptions, due to lack of primary data. Using a corporate standard value (summary of last 12 months available), an estimated number is calculated in cases where exact data are not available. This will be clearly disclosed in the reporting. If any data (resulting in a significant change) are reported after the annual cut off date or are by mistake missing in the annual reporting cycle the numbers will be updated and a note added in next year’s reporting.

All data presented follow the scope and policies above, unless otherwise specified in the accounting policies for the individual indicator.

DEFINITION OF INDICATORS Accounting policies are stated along with the KPIs on pages 26-29, 31-33 and 36 and are part of the collective Sustainability Accounting Policies.

BUSINESS CHANGES IN 2021 AFFECTING DATA None.

DISCONTINUED INDICATORS • Cleansing agents have been discontinued due to lack of relevance.

REVISED/NEW INDICATORS IN 2021 • Scope 1 and Scope 2 reporting has been expanded to disclose emissions from “Scope 1 GHGs”, “Scope 2 GHGs (location based)”, “Scope 2 GHGs (market based)” and “Renewable energy share”.

• Scope 3 reporting disclose emissions from “Purchased goods and services”, “Up-stream transportation and distribution” and“Business travel”.

• Accident reporting has been expanded to include the indicator “High-consequence work related accident with absence”.

• Waste reporting has been expanded to include “Recycling rate - Organic compounds” and “Recycling rate - General waste”.

• Number of women on the Board (shareholder elected).

• Gender balance - all employees has been added.

• Gender balance - all people managers has been added.

• Completion rate of annual Code of Conduct e-learning has been added (2021 data only).

• Donated treatment in Low-Middle Income Countries has been added (2021 data only).

39

Lundbeck Sustainability Report 2021

Introduction

Unmet patient needs

Business ethics

Climate change & circularity

People & communities

ESG Factbook

Management statement regarding the 2021 Sustainability Report The Board of Directors and the Executive Management have today considered and approved the 2021 Sustainability Report of H. Lundbeck A/S for the reporting period 1 January to 31 December 2021.

The ESG Data in the 2021 Sustainability Report has been prepared in accordance with the stated

sustainability accounting policies and the Greenhouse Gas Protocol guidelines regarding our carbon footprint.

in the reporting period, as well as a balanced presentation of our environmental, social and governance performance in accordance with the stated sustainability accounting policies.

In our opinion, the 2021 Sustainability Report gives a fair presentation of the Group’s sustainability activities and the results of our sustainability efforts

Copenhagen, 9 February 2022 REGISTERED EXECUTIVE MANAGEMENT

Deborah Dunsire President and CEO

Lars Bang Executive Vice President, Product Development & Supply

Anders Götzsche Executive Vice President, CFO

Per Johan Luthman Executive Vice President, Research & Development

Jacob Tolstrup Executive Vice President, Commercial Operations

Lars Søren Rasmussen Chairman of the Board

Lene Skole-Sørensen Deputy Chairman of the Board

Santiago Arroyo

Jeffrey Berkowitz

Lars Erik Holmqvist

Jeremy Max Levin

Ilse Dorothea Wenzel

Rikke Kruse Andreasen Employee representative

Henrik Sindal Jensen Employee representative

Ludovic Tranholm Otterbein Employee representative

BOARD OF DIRECTORS

40

Lundbeck Sustainability Report 2021

Introduction

Unmet patient needs

Business ethics

Climate change & circularity

People & communities

ESG Factbook

Independent Limited Assurance Report To the Stakeholders of H. Lundbeck A/S We have been engaged by H. Lundbeck A/S (‘Lundbeck’) to provide limited assurance on Selected Environmental, Social and Governance Data in accordance with the Sustainability Accounting Policies stated in the section “ESG Factbook” (pages 24-38) of the Lundbeck Sustainability Report 2021 for the period 1 January to 31 December 2021 and as positively referenced below in the section “Selected ESG data in scope” (the ‘selected ESG Data’).

OUR CONCLUSION Based on the procedures we performed and the evidence we obtained, nothing has come to our attention that causes us to believe that the selected ESG Data in the Lundbeck Sustainability Report 2021 have not been prepared, in all material respects, in accordance with the Sustainability Accounting Policies stated on pages 26-29, 31-33, 36 and 38 in the Lundbeck Sustainability Report 2021 (the ‘Sustainability Accounting Policies’).

• Circularity – Resource flows (Revenue, Finished

•

• •

This conclusion is to be read in the context of what we say in the remainder of our report.

•

SELECTED ESG DATA IN SCOPE The scope of our work was limited to limited assurance over the following selected ESG data:

•

• Environmental Management (Environmental

incidents, Environmental incidents with impact on the environment, and Environmental near miss) on page 26;

goods production, Chemical production, Raw materials (Organic compounds and API), Waste, Chemical waste, General waste, Recycling rate - Organic compounds, Recycling rate - General waste, Water consumption (Potable water and Unfiltered water), and Waste water) on page 27; Climate and Energy (Scope 1 GHGs, Scope 2 GHGs (location and market based), Scope 1&2 GHGs (market based), Scope 3 GHGs (Purchased goods and services; Up-stream transportation and distribution; and Business travel), VOCs emitted to air, Energy consumption (Natural gas, methane, city gas, F-gas; Gasoil, biooil, diesel; District heating; and Electricity) and Renewable energy share) on page 28; Access to Health (Donated treatment in Low-Middle Income Countries) on page 31; Health & Safety (Work related accident with absence, Work related near miss, Work related accident without absence, Work related disease, High-consequence work related accident with absence, Frequency of lost time accidents, and Fatalities) on page 32; People (Average employee remuneration, Gender balance - all employees, Gender balance - all people managers, and Number of women on the Board (shareholder elected)) on page 33; and Code of Conduct compliance (Total sum of all audits, Sum of internal audits (Patient & product safety audits; Health, Safety & Environmental audits; and Business ethics and internal control audits), Sum of audits of external partners (Patient & product safety audits; Health, Safety &

Environmental audits; and Third parties and supplier audits), Compliance hotline reports, and Completion rate of annual Code of Conduct e-learning) on page 36.

PROFESSIONAL STANDARDS APPLIED AND LEVEL OF ASSURANCE We performed a limited assurance engagement in accordance with International Standard on Assurance Engagements 3000 (Revised) ‘Assurance Engagements other than Audits and Reviews of Historical Financial Information’ and, in respect of the greenhouse gas emissions, in accordance with International Standard on Assurance Engagements 3410 ‘Assurance engagements on greenhouse gas statements’, both issued by the International Auditing and Assurance Standards Board’.

Greenhouse Gas quantification is subject to inherent uncertainty because of incomplete scientific knowledge used to determine emissions factors and the values needed to combine emissions of different gases.

A limited assurance engagement is substantially less in scope than a reasonable assurance engagement in relation to both the risk assessment procedures, including an understanding of internal control, and the procedures performed in response to the assessed risks; consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been performed.

OUR INDEPENDENCE AND QUALITY CONTROL We have complied with the independence requirements and other ethical requirements in the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (IESBA Code), which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behavior and ethical requirements applicable in Denmark.

PricewaterhouseCoopers applies International Standard on Quality Control 1 and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards, and applicable legal and regulatory requirements. Our work was carried out by an independent multidisciplinary team with experience in sustainability reporting and assurance.

UNDERSTANDING REPORTING AND MEASUREMENT METHODOLOGIES The selected ESG Data needs to be read and understood together with the Sustainability Accounting Policies, which Management is solely responsible for selecting and applying. The absence of a significant body of established practice on which to draw to evaluate and measure non-financial information allows for different, but acceptable, measurement techniques and can affect comparability between entities and over time.

41

Lundbeck Sustainability Report 2021

WORK PERFORMED We are required to plan and perform our work in order to consider the risk of material misstatements of the selected ESG Data. In doing so and based on our professional judgement, we:

Introduction

•

• • •

Climate change & circularity

People & communities

ESG Factbook

OUR RESPONSIBILITY We are responsible for:

• Designing, implementing and maintaining internal

• planning and performing the engagement to obtain

• • •

controls over information relevant to the preparation of the selected ESG Data that are free from material misstatement, whether due to fraud or error; Establishing objective Sustainability Accounting Policies for preparing the selected ESG Data; Measuring and reporting the selected ESG Data based on the Sustainability Accounting Policies and evidencing the data; and The content of the Lundbeck Sustainability Report 2021.

Hellerup, 9 February 2022 PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab CVR no. 3377 1231

Lars Baungaard State Authorised Public Accountant mne23331

Business ethics

MANAGEMENT’S RESPONSIBILITIES Management is responsible for:

• Made inquiries and conducted interviews with

Lundbeck’s Management with responsibility for management and reporting of the selected ESG Data, to assess reporting and consolidation processes, use of company-wide systems and controls performed; Checked data on a sample basis to underlying documentation, and evaluated the appropriateness of quantification methods and compliance with the Sustainability Accounting Policies for preparing the selected ESG Data; Conducted analytical review of the selected ESG Data and trend explanations submitted by all reporting entities for consolidation at Group level; Considered the disclosure and presentation of the selected ESG Data; and Evaluated the obtained evidence.

Unmet patient needs

Torben Jensen State Authorised Public Accountant mne18651

• •

limited assurance about whether the selected ESG Data for the period 1 January – 31 December 2021 are free from material misstatements, whether due to fraud or error, and are prepared, in all material respects, in accordance with the Sustainability Accounting Policies;. forming an independent conclusion, based on the procedures we performed and the evidence we obtained; and reporting our conclusion to the Stakeholders of Lundbeck.

Lundbeck Sustainability Report 2021

H. Lundbeck A/S Ottiliavej 9 2500 Valby Denmark Corporate Compliance & Sustainability Tel. +45 36 30 13 11 compliance@lundbeck.com www.lundbeck.com/global/sustainability CVR number 56759913

Sustainability report 2021

ALK-Abelló A/S Bøge Allé 6-8 DK-2970 Hørsholm Denmark CVR no. 63 71 79 16

Table of contents •

ALK sustainability report 2021

Table of contents ALK is committed to conducting business in accordance with the UN Global Compact’s 10 Principles. This report includes our progress within the areas of human rights, labour, environment and anticorruption.

3 CEO Letter

LinkedIn Annual report 2021

Allergy solutions for life

5 ALK at a glance 6 Business model 7 Sustainability performance 8 Access to allergy care

cf. sections 99a, 99b, 99d and 107d of the Danish Financial Statements Act

12 People

cf. Article 8 of the EU Taxonomy

24 Responsible business practices

Twitter

ALK-Abelló A/S Bøge Allé 6-8 DK-2970 Hørsholm Denmark CVR no. 63 71 79 16

Annual report Read more about last years financial performance in our annual report 2021.

Find our annual report here

18 Environment and climate

30 ESG key figures

Website Find more information about ALK on our website.

Read more on alk.net

Cover picture: Allergenic source materials like pollen from birch trees are cultivated at our own farming facilities.

2

CEO Letter •

CEO Letter

the United Nations Global Compact, to which I am pleased to reaffirm our ongoing commitment.

2021 was a year of great engagement across ALK With the involvement of global stakeholders, sustainability continues to progress our business strategy and operations towards achieving access to allergy care.

Charting the journey to a sustainable future 2021 marks significant milestones on ALK’s sustainability journey, where we continued to integrate sustainability and deliver on our long-term strategy.

We have established a Sustainability Committee, with members consisting

of key stakeholders from our Board of Management and senior leaders across the business, to discuss key issues and ensure progress on sustainability initiatives. Building on our materiality assessment, securing access to allergy care for all remains our greatest opportunity to positively influence our business and society in general. Additionally, ALK is focusing on creating positive impact on the environment and climate, diversity and inclusion, and responsible business practices.

Our sustainability activities are underpinned by the 10 Principles of

ALK sustainability report 2021

In addition, we continue to promote sustainable development by contributing to the realisation of the United Nations Sustainable Development Goals.

“

I believe such strong engagement is made possible by the positive ALK culture that unites our employees whenever the business faces challenges.

Carsten Hellmann, President & CEO

Expanding Access to Allergy Care for All Our Access to Allergy Care for All strategy describes our ambition, purpose and long-term goals and defines a series of short-term milestones to chart our progress.

Our aim is to make ALK products and solutions more universally accessible, while ensuring sustainable growth and an ethical, profitable business.

In line with this ambition, in 2021, we extended the reach of our allergy immunotherapy products to cover Saudi Arabia and Uzbekistan. We also established a new partnership with Grandpharma, a pharmaceutical company in China, to expand the availability of our adrenaline autoinjector Jext®, which is used for the emergency treatment of acute allergic Continues

3

CEO Letter •

Employee engagement contributes to our success We saw high engagement from ALK’s employees in 2021, which was a critical factor in our continuing success. I believe such strong engagement is made possible by a positive ALK culture that unites our employees whenever the business faces challenges, as seen in the way every employee responded to the COVID-19 pandemic.

Despite the many changes in working practices in 2021, the results of our global employee engagement survey produced results higher than the benchmark for our industry.

Addressing environmental impact across the value chain When it comes to the environment, we have embarked on a journey to reduce our environmental impact by optimising waste management and reducing energy consumption and CO2 emissions wherever possible. Our aim is to increase recycling and to create a more circular life-cycle for our products and materials. The introduction of new, recyclable and biodegradable packaging for selected products, and the migration of one of our production sites in France to being fully powered by renewable energy, are just some of the examples of progress in 2021. I look forward to us building on this positive momentum in 2022.

Best regards, Carsten Hellmann President & CEO

Our current focus areas We continuously conduct assessments based on trends and stakeholder input to ensure that our priorities remain relevant.

Environment and climate change Societal impact

reactions. Also in 2021, we reached an important step towards making our products more accessible to a wider range of patients, by adding the treatment of children and adolescent patients to the approved indications for our range of tablets in 10 additional countries.

ALK sustainability report 2021

Access to allergy care

Responsible business practices Inclusive culture and diverse workforce

ALK business impact

4

ALK at a glance •

ALK sustainability report 2021

5

ALK at a glance ALK is a global allergy solutions company, with a wide range of allergy treatments, products and services that meet the unique needs of people with allergy, their families and healthcare professionals. ALK offers products, services and resources covering a wide range of allergies, supplemented by diagnosis and emergency treatment products.

Find out more about ALK: https://www.alk.net/ our-company

Established

Employees

Markets

Patients in treatment*

1923

~2,600

47

~2.1 m

ALK has a history of consistently developing major advances for the treatment of allergy, most recently in the research and development of new, evidence-based allergy immunotherapy treatments.

ALK has approximately 2,600 employees across the globe, the majority of which are based in Europe.

Globally, ALK is present in 47 countries either directly, via our 23 subsidiaries, or through partnerships with distributors in additional markets. ALK is predominantly present in Europe, where more than 70% of ALK’s revenue is generated.

ALK continues to make allergy care more accessible with approximately 2.1 million patients treated.

Global headquarters

Shareholders

Management structure

ALK is headquartered in Hørsholm, Denmark, with production facilities in four countries.

ALK is a publicly listed company owned by approximately 20,000 shareholders. The majority shareholders include: Lundbeckfonden (The Lundbeck Foundation) which has a 40.3% interest and ATP which has an 8.8% interest.

ALK has a two-tier management structure consisting of the Board of Directors and the Board of Management. The two boards are independent of each other.

* covering ALK’s AIT and anaphylaxis treatments

Participated in clinical trials for the tablets

>24,000 ALK’s tablet-based treatments have the largest evidence-base of any form of AIT treatment.

Business Model

•

ALK sustainability report 2021

ALK’s Business Model

Becoming relevant for more people with allergy Deep understanding of natural allergens

Diverse talent Raw materials, water and energy

“

As a global allergy solutions company with a century of scientific knowledge and expertise, ALK’s business model is designed to help people to take control of their allergies and their lives.

Resources

Expertise from academic institutions

~2,600 employees, a net addition of 100 employees

Efficient large-scale production of AIT

Financial resources

Standardising, formulating, developing and documenting AIT treatments in large-scale clinical programmes

A profound understanding of allergy

Global commercial reach and leader in severe allergy care

Value created

2.1 million patients in treatment with ALK products

ALK share price up 364% since 31 December 2017

>24,000 participants in clinical trials* for the tablets * which saw 22 Phase III trials

6

Sustainability performance

Sustainability performance 2021

2021 Results

-

In progress

300,000

+100,000

5+

Saudi Arabia & Uzbekistan

-

In progress

10+

10

20,000

29,800

4,000

3,800

≤ 3.0 Max. 9 annually

0.3 1 accident

2025: Maintain gender balance of approximately 50% at Manager and Director levels

50%

53%

2025: Strive to increase the number of women in VP and Senior Director positions to 35% in 2025

35%

29%

2022: Reuse/recycle 47% of waste

47%

50%

2022: Annual water consumption levels should not exceed 2019-baseline of 122,000 m3

122,000 m3

128,000 m3

2022: Annual energy consumption levels should not exceed 2019-baseline of 47,000 MWh

Access to allergy care for all

2022: Establish a business model for partnership programmes that improve Access to Allergy Care, and which can then be used as a template for other partnerships 2023: Make ALK allergy diagnosis, immunotherapy treatments and/or adrenaline products accessible to at least 300,000 additional patients 2025: Introduce tablet-based AIT in 5+ new countries 2025: Make ALK allergy immunotherapy and adrenaline available in countries with no access to ALK allergy products 2025: Children/adolescent indication added to current indication in 10+ countries 2022: Strengthen knowledge about innovations in allergic disease via scientific communication to 20,000 healthcare professionals 2022: Establish partnerships to train 4,000 healthcare professionals in allergy treatment and immunotherapy

Planet

People

2022: Maintain the injury frequency rate ≤ 3.0

ALK sustainability report 2021

ALK’s sustainability strategy

2021-2025 Targets

Milestones

Resp. bus.

On track or above target Target not met

•

47,000 MWh

46,000 MWh

2025: 60% reduction in CO2 emissions including emissions from 1st leg distribution, travel flights and company cars against a 2019-baseline of total emissions from non-renewable sources

60%

42%

2022: Maintain ALK Code of Conduct employee training participation above 90%

90%

97%

2022: By 2022, we want women to make up 30% of the shareholder-elected members of the Board of Directors

30%

33%

Access to allergy care for all • Enable access to ALK • Strengthen knowledge about allergy diagnosis, innovations in allergic immunotherapy disease via scientific treatments and/or communication adrenaline products • Invest in evidence-based immunotherapy to treat allergies, including in child populations

• Establish partnerships to train healthcare professionals in allergy treatment and immunotherapy

People • Diversity & Inclusion • Employee safety

Environment and Climate • • • •

CO2 emission reductions Reduce/recycle waste Water use Energy use

Responsible business practices • Code of conduct training

7

Access to Allergy Care for All •

Access to Allergy Care for All

ALK sustainability report 2021

8

Access to Allergy Care for All •

ALK sustainability report 2021

9

Access to Allergy Care for All Allergy is the most common chronic disease in the world, and estimates show that more than 500 million people are affected by allergic rhinitis globally.1 Whether the patient’s trigger for symptoms is pollen, house dust mites or food, the consequences of allergic disease impact the everyday lives and well-being of millions of people.

Connecting people with the medicines they need is one of the greatest challenges facing society today, and this is just as true for people living with allergy and allergic asthma. Over 2 million people worldwide rely on ALK medicines to treat their allergies. This

figure represents just a fraction of those who might benefit from our treatments.

Some of the current barriers to gaining access to ALK’s medicine range from the relevant allergy medicines simply being unavailable in certain locations, to a lack of access to specialist doctors, or simply lack of awareness of the possible treatments.

To help address this issue, we have continued the ALK access to medicines strategy to enable Access to Allergy Care for All. Our goal is to make ALK products and medicines available to more people around the world and help treat people earlier in their allergy journey.

We are committed to leading the way in allergy treatment by applying our research and development expertise,

understanding of working effectively in partnerships and expert knowledge in highly regulated products to provide Access to Allergy Care for All. Expanding access to allergy care Allergy care is especially important when it comes to children and their Continues Access to Allergy Care for All has two guiding principles:

“

2030 Commitment: Enable access to ALK allergy diagnosis, immunotherapy treatments and/or adrenaline products by increasing the number of patients by at least 100,000 annually

Sources: 1

Brozek J et al. Allergic Rhinitis and its Impact on Asthma (ARIA) guidelines: 2010 Revision. J ALLERGY CLIN IMMUNOL VOLUME 126, NUMBER 3.

• Focusing primarily on people with allergy and their need for a correct diagnosis and treatment • Supporting healthcare providers and healthcare professionals is a precondition for providing efficient allergy care. Without a healthcare infrastructure, people with allergy cannot benefit from our allergy solutions

Find out more about our ATM Policy: https://www.alk.net/ sustainability

Access to Allergy Care for All •

People with allergy experience a significantly higher quality of life when well informed on how to minimise symptoms.

ALK sustainability report 2021

10

“

Anaphylaxis is an increasing health concern in China. By introducing an adrenaline pen, we hope to ensure that patients receive timely treatment without the need for trained personnel. Grandpharma’s existing franchises will provide a broad and strong launch platform for Jext®, and we look forward to a long and successful collaboration.”

Xian Ji, General Manager, ALK Greater China

Find out more about our solutions to the treatment of allergy: https://www.alk.net/ our-solutions

early development. We are conducting several studies to demonstrate the benefits of our medicines for younger people, with the intention of securing paediatric indications for our tablets in several more countries, including emerging markets. Subject to approvals, these products could minimise the burden of allergic disease in children and decrease their reliance on symptomatic treatment. With our solutions, we aim to help diagnose and treat allergy much earlier, and thus contribute to a better quality of life for children. Additionally, we extended the reach of our allergy immunotherapy products geographically to cover Saudi Arabia and Uzbekistan in 2021.

Partnerships In countries with no access to allergy immunotherapy treatments, partnerships often form the first step in the accessibility of ALK solutions.

In 2021, we established an exclusive licensing agreement with Grandpharma, where our Jext® adrenaline auto-injector (AAI) will be registered and launched in China. AAI’s are used for the emergency treatment of acute allergic reactions, also known as anaphylaxis, which can be triggered by exposure to certain foods such as eggs, milk, shellfish and nuts or exposure to the venom from bee and wasp stings. Jext® will be the first AAI registered in China.

Additionally, we are developing new Continues

Access to Allergy Care for All •

business partnership models with the aim to geographically expand access to allergy care.

Educational training We engage systematically in educational activities, training and dialogue with healthcare professionals to enhance insights into the diagnosis and treatment of allergic disease.

This work is instrumental in ensuring better patient care. In 2021, we trained 3,800 healthcare professionals in allergy and AIT and educated 29,800 healthcare professionals in allergic disease innovations via scientific communication. Additionally, we engage with patients’ organisations all over the world in their work to raise awareness about patient care and product safety.

“

Digital solutions We continued our efforts to raise awareness about allergy in the general population through our klarify digital platform. Klarify aims to empower people to take action on their allergies by offering information and guidance on how to avoid and alleviate the symptoms of allergy. Klarify is currently available in seven countries across North America and Europe. In 2021, ALK’s digital channels mobilised over 375,000 people to take action on their allergies. ALK tested several concepts in various countries to eliminate friction points on the path to prescription for the many untreated patients eligible for AIT treatment.

2030 Commitment: Educate 200,000 healthcare professionals and establish partnerships to train 50,000 healthcare professionals in allergy treatment and immunotherapy

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Number of countries tablet based AIT was introduced in:

2 Uzbekistan and Saudi Arabia

New patients:

+100,000 Increasing patients in treatment to 2.1 million in 2021

Training of healthcare professionals:

3,800 We plan to reach 4,000 healtchare professionals by 2022

Number of countries children & adolescent indications were approved in:

10 We plan to exceed 10 new country indications by 2025

Training healthcare professionals is a precondition for providing efficient allergy care. Without a healthcare infrastructure, people with allergy cannot benefit from our allergy solutions

People

People

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People

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ALK’s cultural beliefs Our cultural beliefs and behaviours describe the aspiration for our company culture and encompass the attitude and mindset required to become the world leader in allergy.

High engagement across the organisation In 2021, we introduced a new method of measuring employee engagement across ALK. Our new platform marks our transition towards digital solutions, enabling better dialogue between leaders and their employees.

The measurement from the annual engagement survey in 2021 will be used as a baseline to gauge future progress.

Out of the 93% of employees that responded, ALK registered an overall engagement score of 8.2, 0.6 above the healthcare industry benchmark, placing ALK in the top 25th percentile of the industry. In addition, more than 11,000 comments were submitted, containing

suggestions for improvements, as well as positive acknowledgements of the working culture at ALK. One area for improvement, highlighted in the survey, is the need to enhance communication of our company strategy across the organisation. In the spring of 2021, we held a series of what we call ‘Spirit Days,’ local town hall meetings throughout ALK, to ensure that our strategy was well

Do the right thing

communicated and understood by all employees. Similar events will be repeated in 2022 as part of a continuous drive to ensure our strategy is understood and applied across business units and geographies.

A subsequent engagement survey will take place in 2022 to assess our progress and identify future areas of focus.

“

Understand your role Take ownership and get the job done Have the courage to make tough decisions

Pursue growth Think ‘people with allergy’ first See change as an opportunity for improvements

We are very proud of the results from our engagement survey and believe that our continued efforts to secure a strong company culture, focusing on our values, has positively contributed to the high engagement. In addition, our purpose, good financial results and growth ambitions contribute to a sense of pride and engagement in our daily work.”

Lisbeth Kirk, Senior Vice President, Human Resources, Internal Communication and Sustainability

Look for better solutions

Build bridges Understand others’ perspective Reach out to colleagues Help others to be a success

People

People People are at the heart of everything we do, and the talent and dedication of our employees are critical to ALK’s continued growth. Therefore, our ambition is to create a work environment that can attract, develop and retain wellqualified and highly engaged employees.

Learning and development Growth opportunities continue to be one of the major drivers of engagement at ALK. Although learning and development opportunities at ALK were evaluated above the industry benchmark in our engagement survey, we still see a need to focus on growth opportunities and ensure career progression for all ALK employees.

As a part of employee development, individual performance is reviewed annually with direct managers. In 2021, 84% completed a development agreement. An important aspect of these dialogues is to enable a strong, continuous feedback culture as a mechanism for ensuring positive development for individual employees and the company as a whole.

Leading with impact Our Leading with Impact programme ensures a strong pool of future leaders across the organisation. In 2021, the programme had a specific focus on agility, strengthening our feedback culture and inclusive leadership.

The primary aim of developing our leaders, is to equip them to act in a volatile, uncertain, complex and ambiguous world, where we continuously prepare our organisation to respond to changing business Continues

ALK follows internationally recognised standards: • The Universal Declaration of Human Rights • The International Labour Organization’s Declaration on Fundamental Principles and Rights at Work • The UN Guiding Principles on Business and Human Rights ALK policies on human rights and labour rights: • • • • • •

Code of Conduct Conflicts of Interest Policy Diversity and Inclusion Policy Environment, Health and Safety Policy Harassment Policy Sustainability Policy

In this area we support: UN Global Compact Principles 1-6 https://www.unglobalcompact.org/ what-is-gc/mission/principles and UN Sustainable Development Goals 5,8,10 https://sdgs.un.org/goals

•

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People

circumstances. In turn, these leaders drive organisational development by adapting our structures and processes to fit our strategy execution. Today, 150 leaders are enrolled in the programme, which will expand to include ALK’s remaining 300 leaders in 2022-2023.

Talent development To further accelerate employee development, our talent programme ASPIRE is also being rolled out.

ASPIRE adopts a twofold approach where we focus on both individual talent development and opportunity identification. Talents are assessed, and individual development plans are created. We apply this process to both a local and global level, to identify talents early in their career, and maximise their opportunities for further development.

Lifelong learning ALK Learn is a learning platform for all employees where topics of importance and common interest are presented either by internal or external speakers.

The sessions are virtual and regularly attract audiences of around 200300 employees. Topics in 2021 have

included ‘Corona fatigue and how to overcome it’, ‘Peanut and food allergy’ and ‘Diversity and inclusion’.

Female VP and Senior Directors

Diversity and inclusion At ALK, we believe an organisation that ensures diversity and inclusion at all levels delivers better business results.

Our ambition is to continue building an inclusive work environment that fosters a sense of belonging, where different perspectives, abilities, talents and experiences are valued.

We plan to reach our goal of 35% female Vice President and Senior Directors by 2025

For us, diversity encompasses an individual’s uniqueness such as perspectives, competencies, work and life experiences, age, gender, race, ethnicity, religion, sexual orientation, ability or any other characteristics. This year we worked with external partners to train employees and leaders in how to ensure an inclusive work environment. Diversity and inclusion consists of several elements including talent management, succession planning, mentoring and sponsorship programmes, unconscious bias training, flexible working options, regular pay-gap assessments, paid parental leave and more.

•

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29% In 2021, we took a step towards reaching our goal of increasing gender diversity at the vice president and senior director level. We aim to achieve 35% female representation in 2025.

Currently, 29% of the vice presidents and senior directors are represented by women, up from 26% at the beginning of the year. Furthermore, our distribution of men and women at manager and director level stayed within our target of maintaining a gender balance of approximately 50%, with 53% women and 47% men at the director and manager level.

Female Managers and Directors

53% Our goal of approximately 50% female Managers by 2025 is currently fulfilled

Continues

Our office space promotes new ways of working, combining remote work and in office collaboration.

New ways of working As a result of the COVID-19 pandemic and our focus on keeping our people safe, we were flexible in finding alternative ways of business. This resulted in new ways of engaging with healthcare professionals, innovative solutions to maintain product supply, and many employees working from home for extended periods.

People

The Board of Directors ALK’s Board of Directors consists of six shareholder-elected members and three employee-elected members.

Two shareholder-elected members are women, fulfilling our target of 30% female representation. The goal will be maintained in 2022.

Female shareholder-elected board members

30% Our goal of 30% female shareholder-elected members is currently fulfilled

In addition, two of the employeeelected members are women. Two of the shareholder-elected members have nationalities other than Danish. Three of the shareholder-elected members are independent members in line with the recommendations on corporate governance.

The Remuneration and Nomination Committee, constituted by the chairmanship, is responsible for the selection and nomination of candidates for the Board of Directors. Selection

•

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is assessed by the Board of Directors and is based on a transparent process that defines the desired profile, taking into account the need for new talent, diversity, age and gender. Our diversity targets and results are disclosed in line with cf. section 99b and 107d of the Danish Financial Statements Act. Health, safety and well-being Together with Human Resources, our Environment, Health and Safety (EHS) organisation works in close dialogue with ALK’s leaders to ensure a healthy working culture at ALK, both in terms of psychological environment and a healthy work-life balance. EHS representatives are present at all production sites to ensure that the EHS policy and relevant procedures are followed.

The COVID-19 pandemic continued to be a major risk in 2021. Therefore, we continued the work of our global Corona Task Force to anticipate and mitigate the potential consequences of the virus. The safety of our employees remained our top priority, and we continued to adjust our contingency Continues

ALK aims to maintain approximately a 50% balance in gender diversity at the manager and director level .

People

plans to safeguard both employees and the ongoing supply of medicines.

Social distancing measures were put in place, and employees received safety kits with face masks and sanitising products. There were no disruptions to the supply of ALK medicine in 2021.

The Corona Task Force will remain engaged until the pandemic no longer constitutes a risk to our employees and patients.

Safety of our employees In 2021, there was one occupational accident at ALK facilities, resulting in an injury frequency rate of 0.3.

The accident was related to the ergonomics of the workplace and a root-cause analysis has been conducted to ensure that preventative measures are implemented.

We ensure good occupational health conditions and access to occupational healthcare services for all employees.

All employees have access to healthcare coverage and insurance for work-related accidents or diseases made available, or paid for, by ALK.

Workplace assessments are conducted regularly to ensure we mitigate health and safety risks. Safety training is adapted to local needs and allows flexibility in line with local laws. All relevant employees are trained in the Chemical Management System, which contains our safety data sheets and describes common hazards and the precautions to be taken.

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Find out more More details about the composition of the Board of Directors, its members, and their competences, are available on our website: https://ir.alk.net/ corporate-governance/ board-of-directors.

We will continue to monitor risks related to safety, health and well-being in 2022. We plan to strengthen our “duty of care” initiatives for travelling employees and explore new ways to safeguard the psychological work environment.

Human rights and labour rights The general nature of the work at ALK requires highly skilled employees who are well trained in our procedures.

ALK’s productions facilities are located in Denmark, France, Spain and the USA where laws and regulations are generally well-enforced. Combining these two factors, leads to a low risk of human and labour rights violations.

Should risks arise, ALK has mechanisms in place to prevent and mitigate them.

Move for Allergy More than 1,700 employees worldwide participated in our annual ‘Move for Allergy’ event, which emphasises the importance of collaboration, interconnectivity, and having a sense of belonging.

The event connects colleagues on the same day all around the world by encouraging everyone to exercise either by walking, running or cycling – alone or in small groups. Pictures and stories from the event were shared on our online social wall and created a sense of connectedness, even when separated physically.

Environment and Climate •

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Environment and Climate

Environment and Climate •

In France, ALK has launched a new packaging design for our allergy immunotherapy drops brand OSIRIS®.

This new packaging is not only more modern in design, but also 100% recyclable and biodegradable.

“

Nicolas Dufourt, General Manager, ALK France

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Introducing a recyclable and biodegradable packaging solution Packaging is a key concern when it comes to consumption and waste management. To avoid unnecessary waste, we are working on product life cycle solutions to packaging and medical waste.

The new OSIRIS® packaging is a good example of how ALK is integrating sustainability considerations across different operations. Our goal is to continue making improvements that not only contribute to our mission to become the world leader in allergy, but also protect the environment.”

ALK sustainability report 2021

With an increase in awareness and concern from our patients and healthcare professionals, we developed a new packaging solution in 2021 for our Osiris® products in France. Stringent testing ensured the quality of our medicines would remain uncompromised.

The total carbon footprint of OSIRIS® is 19 times lower than the previous packaging option, reducing plastic consumption by up to 60 tonnes annually.

In addition to the sustainability benefits, the new packaging is also more user-friendly with its colourcoded design, making it easier to read for patients who take multiple treatments. ALK intends to evaluate similar packaging solutions across the entire product range following the positive feedback from both patients and healthcare professionals.

Environment and Climate •

Environment and Climate The environmental impact of business activities and the ongoing climate crisis represent some of the greatest challenges facing the world today.

As a manufacturing company, ALK can be both part of the problem and a contributor of solutions. We strive to achieve sustainable resource consumption and are taking measures to reduce the impact our production processes have on the climate.

Most of the allergenic source material production occurs at our own farming facilities. This enables us to take ownership of our value chain and consider the environmental impact of all stages, from cultivating and harvesting raw materials to manufacturing, packaging and distributing our medicines.

Assessing and mitigating environmental risks As part of the Environmental Health and Safety (EHS) Management System, assessments of environmental and climate risks are conducted.

Climate mitigation and adaptation is increasingly important as droughts and flooding affect our production sites in different regions.

All of our production sites adhere to our Global EHS policy and are covered by our Global EHS Management System. In 2021, no incidents of non-compliance with environmental laws and regulations were recorded through our internal systems. Relevant departments and business units focus on monitoring and mitigating risks related to energy consumption, CO2 emissions, waste and water usage.

We will continue to exploring the possibilities to further reduce Continues

ALK follows internationally recognised standards: • Greenhouse Gas Protocol • EU Taxonomy ALK policies on environment and climate: • Code of Conduct • Sustainability Policy • Environment, Health and Safety Policy

In this area we support: UN Global Compact Principles 7-9 https://www.unglobalcompact.org/ what-is-gc/mission/principles and UN Sustainable Development Goals 6,7,12,13 https://sdgs.un.org/goals

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Environment and Climate •

greenhouse gas emissions, water consumption and waste, to prepare for potentially setting science-based targets, as described in the Science Based Targets initiative (SBTi).

Waste management Reducing, reusing and recycling our waste are important steps in minimising our environmental impact.

At our site in Post Falls, USA, part of the nutritional content from the house dust mites that we cultivate is used as a soil supplement for the fields where we harvest grass and tree pollen. The remaining house dust mite process material is sold as a bulking agent for waste water treatment facilities. In addition, our site in Oklahoma, USA has installed new recycling streams, introducing paper, wooden pallets and hazardous waste to the recovery cycle.

As a result, 38% more waste is reused, versus zero in 2020.

The environment and climate are carefully considered throughout every step of our value chain. Sorting our waste into various recyclable categories contributes to creating a more circular economy.

Furthermore, our team in France has embarked on a journey to optimise waste management, with the aim of achieving zero landfill waste and increasing waste recovery.

To achieve this objective, a new waste management provider introduced five recycling streams through the use of waste-specific containers. As a result, no waste is being sent to landfills and 40% of waste is now being recycled at ALK France.

In the future, further emphasis will be placed on improving waste sorting and handling expiry dates for chemicals, in order to avoid unnecessary waste.

We reused or recycled waste:

50% We achieved our target for 2022: to reuse or recycle 47% of waste on a global level

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Water Water is an important resource for the production of our natural allergenic source materials such as pollen from grass, trees or ragweed.

We have set ourselves an ambitious target which is to keep our annual water consumption at or below our 2019-baseline of 122,000 m3.

Water consumption at our plants in Denmark, France and Spain was unchanged in 2021, despite increase in output.

However, due to an unusually warm summer at our site in Post Falls, USA, our total water consumption increased to 128,000 m3 in 2021.

Continues

“

Waste management is a key priority to increase recycling at ALK. Moreover, by sorting at the source, we control the costs of processing the materials, which allows us to be more efficient.”

Eddy Pierron, EHS Manager at our Vandeuil site in France

Environment and Climate •

The potential consequences of climate change motivates us to take positive action to mitigate its effects. We continue to investigate opportunities to reduce our water consumption going forward.

Our water consumption in 2021:

128,000 m3 Our target for 2022 is to not exceed our 2019 baseline of 122,000 m3

For example, we are taking preventative action as heavy rain and flooding have become an increased concern in some of our US production sites. Therefore, we are investing in new drainage systems to help prevent flooding and manage water usage at the affected facilities.

Additionally, we have initiated a replacement of our WFI production system in Hørsholm, Denmark, an industrial water treatment system.

When this installation is completed in 2023, we will save on both water and energy consumption.

EU taxonomy ALK is currently not eligible to report under Article 8 of the EU Taxonomy.

However, we acknowledge that our sector may become eligible sometime in the future. We also acknowledge our responsibility to do what is needed, regardless of reporting requirements, to mitigate and adapt to climate change in our business.

Climate mitigation and adaptation Our geographical spread calls for risk planning in order to avoid emergencies, such as lack of, or poor access to raw materials like pollen. We are looking into mitigation strategies to implement at our production sites that frequently experience droughts and water scarcity.

Because our pollen source materials are cultivated in nature, they could potentially be affected by short- and long-term changes to the climate.

To mitigate risks from long-term changes in the climate, we are distributing our crops across a wider range of locations in the USA and Europe

to secure a stable supply of allergenic source materials.

Biodiversity ALK acknowledges the importance of biodiversity and is taking steps to make a positive impact on increasing biodiversity. In our facilities at Post Falls, USA, we rotate the crops seasonally to ensure rich soil and minimise the use of pesticides.

Energy Several initiatives were started in 2021 to support our target of maintaining energy consumption within our 2019 baseline of 47,000 MWh by 2025.

Our energy consumption in 2021:

46,000 MWh We achieved our target for 2022 to not exceed the 2019 baseline of 47,000 MWh

We have installed LED lighting and motion sensors in ALK facilities to reduce energy consumption during the night. We also implemented a new

ALK sustainability report 2021

ventilation system in production sites to reduce energy consumption during the evening.

CO2 Reducing 60% of global CO2 emissions at ALK calls for immediate action. We aim to reduce emissions from nonrenewable sources including transport, business air travel and company cars from our 2019 baseline by 2025.

We reduced our Scope 1 and 2 emissions, including refrigerants, by 42% in 2021 down from the baseline of 12,213 tonnes in 2019 to 7,130 tonnes in 2021. This reduction stems from a focused transition into renewable sources and shift in energy mix from e.g. natural gas to electricity. We are continuously investigating possibilities to accelerate this transition even further.

Our CO2 reduction:

42% Compared to the 2019 baseline of 12,213 tonnes

Continues

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Environment and Climate •

LED lighting and motion sensors contribute to reducing our energy consumption at our production facilities and offices.

For example, our production site at Varennes, France transitioned to 100% renewable energy in 2021, making it our first site fully powered by renewable sources. ALK production sites that currently do not have access to renewable energy sources use Renewable Energy Certificates, which are audited by independent third parties, to supplement its use of electricity from non-renewable sources.

In addition to reducing our Scope 1 and 2 emissions, we aim to secure a robust data foundation for Scope 3 emissions.

We are focusing on the most material emission sources including transport,

Find out more See the detailed data on page 30 in the ESG key figures

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business air travel and company cars.

We are establishing models to secure consistent and global data from our suppliers.

In order to reduce Scope 3 emissions, we have implemented a “green fleet policy” in Denmark in 2021 and will continue adding electrical cars to our company fleet as soon as local infrastructures allow for the transition.

Our work to secure valid and robust Scope 3 data will continue in 2022, and we will continue investigating potential, material categories to include in our Scope 3 reporting.

“

The most important thing for ALK is to engage in activities that make a real difference. We are implementing new, lower-emitting distribution paths. However, the biggest contribution to emissions reductions will come through energy efficiency initiatives and increasing the share of renewable energy used in our operations” Christian Houghton, Executive Vice President, Product Supply

Responsible business practices •

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Responsible business practices

Responsible business practices •

Responsible business practices ALK follows internationally recognised standards:

At ALK, we are committed to conducting business ethically and complying with all relevant laws, guidelines and international standards in every aspect of our operations.

Our Code of Conduct describes the required standards of behaviour for our interactions with stakeholders and outlines our expectations of employees when it comes to professionalism, honesty and integrity. The Code of

In this area we support: UN Global Compact Principles 10 https://www.unglobalcompact.org/ what-is-gc/mission/principles and UN Sustainable Development Goals 16 https://sdgs.un.org/goals

Conduct contains summarised versions of all broadly relevant internal policies and reflects international standards.

Continuous training efforts Internal training on the requirements of our Code of Conduct is carried out every year online, using relevant examples and posing useful dilemmas that are applicable to our industry.

All employees are also required to acknowledge that they have read and understood the Code of Conduct.

Training and acknowledgement are available in eight languages. In 2021, 97% of our employees completed the internal Code of Conduct training.

Interaction with healthcare professionals Transparent and ethical interactions with healthcare professionals and their organisations are an important part of our work.

Continues

• European Federation of Pharmaceutical Industries and Associations (EFPIA) • The Ethical Committee for the Pharmaceutical Industry (ENLI) • The International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) • The UK Bribery Act • The US Foreign Corrupt Practices Act • The Universal Declaration of Human Rights ALK policies for responsible business practices: • • • • • • • • • • •

Anti-corruption Policy Code of Conduct Data Ethics Policy Data Protection Policy IT Security Policy Third Party Code of Conduct Quality Manual Stakholder & Communications Policy Sustainability Policy Tax Policy Whistleblowing Policy

Find out more about our code of conduct: https://www.alk.net/code-conduct

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Responsible business practices •

Promotional material must be accurate, balanced, fair and approved by a medically qualified signatory, prior to publication. In addition, ALK strives to develop promotional material that is unbiased and representative of the local population.

Responsible tax management ALK’s tax policy applies to all ALK companies and our foreign branches and representations globally. The policy covers both direct and indirect taxes.

Responsible tax management implies a commitment to tax compliance including a focus on complying with transfer pricing requirements by applying the ‘arm’s length’ principle to all intercompany transactions, in line with applicable best practice guidelines issued by the OECD. Interactions with suppliers and other third parties The main elements of our current standard supplier and third party contracts include topics relating to human rights, labour rights, environment and anti-corruption. In 2021, we defined a Third Party Code of Conduct which specifically outlines

our expectations for interactions with suppliers and third parties. Building on our current policy, this code will cover our business relationships with all suppliers going forward.

We pride ourselves on transparent and ethical interactions with healthcare professionals.

We conduct an overall risk assessment of our direct suppliers on a regular basis. The majority of our spend is placed with international, well-established suppliers to the pharmaceutical industry. More than 99% of our major suppliers are located in Europe and North America, regions with historically low risk in regards to responsible business practices.

No observations of violations were made in supplier assessments in relation to human rights, labour rights, the environment, and anti-corruption in 2021.

In 2022, ALK will continue to improve the risk assessment process for third parties by digitalising the process and broadening its scope to enable more accurate and documented risk assessments, that will further enhance our interactions with critical suppliers.

Continues

Find out more about our tax policy: https://www.alk.net/ sustainability

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Responsible business practices •

Forced and child labour We have a zero tolerance towards child and forced labour, as clearly stated in our Third Party Code of Conduct. As a part of our due diligence process for suppliers and third parties, we assess the risk of child and forced labour. We adhere to the 2015 Modern Slavery Act and publish an annual statement according to its requirements.

Anti-corruption We are committed to working against corruption in all its forms, and we take a zero-tolerance approach to corruption, including facilitation payments, kickbacks, fraud and bribery. No ALK employees are allowed to accept gifts of significant value.

We require our suppliers to meet our high expectations on human rights, labor rights, and anticorruption.

We have expanded our Code of Conduct specifically to mitigate the risk posed by conflicts of interests among our employees. We did not observe any corruption cases in 2021.

High quality healthcare products Quality is a strategic priority for ALK, as it concerns both patient safety and public health and ensures

standardisation and consistency of our products.

Meeting quality standards in our production and manufacturing processes is a prerequisite for ALK’s licence to operate and our competitive strength. We adhere to GxP requirements which are described in various procedures within our Quality Management System. To mitigate risks, we invest significantly in ensuring robustness and compliance in our processes, personnel training and manufacturing facilities.

Production and manufacturing processes are subject to periodic and routine inspections by regulatory authorities. In 2021, three authority inspections of our manufacturing sites were successfully completed, two of which were performed on-site, while the other was performed remotely.

Patient safety ALK has a rigorous safety reporting system in place ensuring that safety data from any source, including clinical trials, are collected and analysed systematically by ALK’s global

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pharmacovigilance team. This ensures that the safety profile of our products stays beneficial, and the relevant authorities can be made aware of any safety issue arising from our products.

The overall risk of counterfeiting ALK medicines is considered low. The main risks, in connection with our products, come from failures to report side effects. We monitor the effects of our products both before and after they gain marketing authorisations. If a situation should occur in which it is necessary to recall a product, despite high levels of quality and safety, ALK has procedures in place to ensure swift and efficient management of the situation. During 2021, ALK issued one product recall notice. A small number of products with the wrong strength were shipped, resulting in a voluntary recall of the affected product in Italy.

In 2022, we will further develop the quality mindset across the organisation by continuing to train our employees, roll out systematic problem-solving tools, and develop employees through our online training framework.

Continues

Responsible business practices •

Clinical trials Safety, privacy, ethics and respect are the foundation of our clinical trials, which we conduct in close collaboration with healthcare professionals, scientists and people with allergy. We are also committed to the EFPIA’s and the Pharmaceutical Research and Manufacturers of America’s (PhRMA) Principles for Responsible Clinical Trial Data Sharing in a manner that safeguards the privacy of patients, respects the integrity of national regulatory systems, and protects proprietary information.

Data ethics As a pharmaceutical company, we process data in several different ways: clinical trials, research and development, human resources, customer interactions and pharmacovigilence. We utilise data to expand scientific and medical understanding, ensure patient safety, to generate a firmer evidence base to improve our products and services, and to deliver treatments to the right patients with the right commercial potential, efficiently and sustainably.

Our Data Ethics principles include following applicable data ethics laws, respecting people’s privacy, ensuring ethical considerations, sharing data responsibly, and avoiding bias when using algorithms. We apply our Data Ethics Principles in the absence of formal legal requirements. The management of data ethics is carried out by relevant business units, who have integrated these principles in their work. We commit to mitigating risks and resolving grievances, through our internal procedures or, if relevant, in collaboration with stakeholders. This constitutes our reporting according to cf. section 99d of the Danish Financial Statements Act. Privacy and data protection In 2021, we continued to work on ensuring the safety and responsible use of data in line with data protection regulations like the General Data Protection Regulation (GDPR). There were no data breaches reported in 2021.

We initiated a global training campaign specifically focusing on avoiding Continues

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Find out more about the 2021 UK Modern Slavery Act statement: https://www.alk.net/ sustainability

Find out more about our anticorruption policy: https://www.alk.net/ sustainability

When working with data, relevant business units ensure ethical considerations.

Responsible business practices •

phishing attacks. Furthermore, mobile phones were upgraded to a new security platform to better safeguard company data, and this was further supported by targeted awareness training on the handling of personal data.

Animal welfare Animal welfare is a focus throughout our research and development of new medicines. We select professional animal suppliers, who are well recognised, and accredited, according to the Federation of European Laboratory Animal Science Associations’ (FELASA) guidelines, to serve the pharmaceutical industry. Our commitment to animal welfare also covers the shipment and transport of animals to our animal facilities.

Alternative approaches to replace the use of animals are implemented whenever possible. This strategy is known as ‘the three R’s: replace, reduce and refine. ALK also strives to avoid any unnecessary repetition of animal studies. ALK conducts testing

on the cellular level whenever possible to minimise the number of animals needed for research.

Ethics hotline: ALK Alertline We encourage both employees and other stakeholders with a workrelated connection to ALK to report, in good faith, serious and sensitive concerns falling within the scope of our Whistleblowing Policy.

Guidance on the various ways in which employees can raise concerns, and how to approach situations where they believe the Code of Conduct may have been violated, are part of the annual training. Both employees and other relevant stakeholders can file a report via the ALK Alertline in multiple languages, either by telephone or via an online form. In 2021, a total of eight cases were raised via ALK Alertline or other channels. All relevant cases were diligently investigated, and appropriate remedial and disciplinary actions were taken.

Find out more about our data ethics policy: https://www.alk.net/ sustainability

Find out more about our code of conduct, Data Protection Policy: https://www.alk.net/ code-conduct

Find out more if you want to contact the external Alertline: https://secure.ethicspoint. eu/domain/media/en/ gui/33411/index.html

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ESG key figures

ESG key figures

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ALK sustainability report 2021

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ESG key figures

•

ALK sustainability report 2021

Our work with sustainability Sustainability reporting principles ALK uses Global Reporting Initiative’s (GRI) Sustainability Standards as guidance to determine report content in terms of stakeholder inclusiveness, context, materiality and completeness. The report’s quality is defined by balance, comparability, accuracy, timeliness, clarity and reliability.

The reporting period covered by this report extends from 1 January 2021 to 31 December 2021.

Reporting scope The environmental data in this report covers only ALK’s production sites in the USA, Denmark, Spain and France. All other data regarding human rights, labour rights and responsible business practices cover the entire ALK group, unless otherwise specified.

Data from 2019 is used as the baseline for our sustainability work and reporting.

Governance ALK’s sustainability planning and activities reflect actual and potential risks and opportunities covering human rights, labour rights, climate and environment, and anticorruption – directly or via ALK’s suppliers and partners.

Due diligence, risk management and grievance mechanisms The ALK Risk Committee assists the Board of Management with the overall responsibility of risk management. The ALK Risk Committee meets at least twice a year. The committee assesses risks and mitigation strategies relating to the entire ALK Group, including risks that could prevent us from reaching strategic and financial goals. ALK takes additional responsibility by vetting relevant external partners through the Procurement and Legal departments to minimise risks.

Transparency Our commitments, efforts and goals are disclosed in our Sustainability Report and on our website, and follow the Danish Financial Statements Act sections 99a, 99b, 99d and 107d. Further details of the risks associated with the Danish Financial Statements Act can be found in ALK’s Annual Report.

Find out more about our organisation: https://www.alk.net/ sustainability

Governance structure Board of Directors Overall responsible for ALK’s sustainability strategy and purpose, and have delegated the responsibility to the Board of Management

Board of Management Responsible for approval of all sustainability-related policies, development of strategy and purpose

ALK Sustainability Committee Responsible for ensuring implementation and monitoring of the ALK Sustainability Policy and governance

ALK Sustainability team Responsible for coordinating and supporting implementation and daily management of the sustainability strategy, including identifying and monitoring risks and relevant, complete, consistent, transparent, and accurate reporting. The ALK Sustainability team is also responsible for advising policy owners on policy content

Business units Responsible for daily management, monitoring and execution of the sustainability plans of action. Responsible for reporting to the ALK Sustainability team on a quarterly basis

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ESG key figures

ESG key figures – Environment and climate

Unit

2021

2020

CO2 emissions Total CO2 emissions (Scope 1, Scope 2, refrigerants) Tonnes 11,258 Renewables Tonnes 4,128 CO2 emissions (less renewables) Tonnes 7,130 Emissions intensity (GHG) Ratio 4.69

11,263 3,872 7,391 5.05

Reduction in CO2 since 2019

%

2019

12,213* 2,569 9,644 6.98

42%

39%

-

Energy consumption Natural gas MWh 15,914 Gas oil MWh 1,542 Diesel MWh 153 Electricity MWh 24,289 District heating MWh 3,788 Energy intensity Ratio 30.06 Renewable energy share % 45

15,275 1,270 352 23,814 4,730 31.06 38

15,594 1,171 215 23,817 5,965 33.84 20

Total energy consumption MWh

45,686

45,441

46,762*

127,520

110,530

122,461*

Waste Waste from production sites – recycled Tonnes 441 Waste from production sites – landfill Tonnes 227 Waste from production sites – other Tonnes 212

325 341 188

334 165 383

Total waste from production sites

Tonnes

880

853

882

Waste recycled from production sites

%

50

38

Environmental management Breaches of regulatory limit values # of incidents 0 Environmental policy Yes/No Yes Climate oversight/management Yes/No Yes

0 Yes Yes

Water consumption Total Total water consumption

*Baseline for improvement target

m3

38*

0 Yes No

•

ALK sustainability report 2021

32

ESG key figures

ESG key figures – People/Social

Unit

•

ALK sustainability report 2021

33

ESG key figures – Responsible business practices

2021

2020

2019

Engagement Participation rate % 93 Engagement score Index points 8.2

N/A N/A

N/A N/A

Employees Workforce Headcount 2,593 Gender diversity (total) % female 63 Gender diversity (all management levels) % female 49 Gender diversity (VP & Senior Director) % female 29 Gender diversity (Manager & Director) % female 53 Gender Pay Ratio (men to women) Times 1.18 Employee turnover ratio % 13 CEO pay ratio Times 34 Non-discrimination policy Yes/No Yes New hires # 487 Female new hires % 58

2,486 63 46 26 51 1.14 10 34 Yes 420 66

2,406 62 47 N/A N/A 1.13 11 29 Yes 352 62

2.9 9 3.1 Yes Yes

3.5 15 2.7 Yes Yes

Health & safety Lost time injury frequency LTIF 0.3* Accidents with absence Times 1 Absence due to sickness % 3.1 Global health & safety policy Yes/No Yes Child & forced labour policy Yes/No Yes

* LTIF includes all work-related injuries resulting in an individual being physically or mentally unable to work. In 2021, injuries were only included if diagnosed by a competent medical professional.

Unit

2021

Business ethics Alertline cases # 8 Cases related to discrimination # 0 Amount contributed to political parties DKK 0 Breaches of data protection incidents submitted to the national Data Protection Agency # 0 Governance Board diversity % female Board independence % Board meeting attendance rate % Supplier code of conduct Yes/No Ethics & anti-corruption policy Yes/No Code of Conduct employee certification % Data privacy policy Yes/No GDPR compliant Yes/No

33 50 94 Yes Yes 97 Yes Yes

2020

2019

6 0 0

8 1 0

0

3

20 40 98 No Yes 94 Yes Yes

17 50 97 No Yes 90 Yes Yes

ESG key figures

•

ALK sustainability report 2021

34

Definitions of calculations

Environment and climate All environmental data is reported for production sites only (Hørsholm, Madrid, Vandeuil, Varennes, Port Washington, Post Falls and Oklahoma).

ALK follows the Global Reporting Initiative (GRI) Standard 305.

CO2 emissions ALK adheres to the principles of the Green House Gas Protocol (GHG protocol) when reporting on GHG emissions. Emissions are measured in metric tonnes and include all material types of fuels and refrigerants like HFCs, natural gas, gas oil, diesel, and heating.

Emission intensity is calculated by dividing total Scope 1 and 2 emissions including refrigerants by cost of sales. CO2 reduction annually is calculated as: “Total scope 1+2 and refrigerants” minus “CO2 emissions minus renewables” divided by “total scope 1+2 and refrigerants” using 2019 as a baseline.

Energy Energy consumption includes natural gas, gas oil, diesel, electricity and district heating. Energy consumption is calculated in MWh based on meter readings and invoices of all energy types at production sites. Energy intensity is calculated as total energy consumption divided by cost of sales.

The share of renewable power used at production sites is reported according to the Greenhouse Gas (GHG) Protocol Scope 2 Guideline. It is calculated as the sum of power in each country that comes from 100% renewable sources, either sourced or selfproduced.

Water Water consumption is measured by meter readings in all production sites. It includes water

for irrigation, cooling, industrial and drinking from production sites.

Waste Waste is calculated by the sum of weight of each category (recycled, landfill, hazardous) at each production site.

People/Social Engagement Participation rate and engagement score are collected from a survey conducted by a third party.

Employees All employee-related data is downloaded from our internal HR-system Workday, except for Lost Time Incident Frequency data, which is reported directly from the Environmental, Health & Safety department. All employee data in this report is presented as headcount. Workforce is calculated as the sum of permanent and temporary employees on 31 December 2021. Part-time work is defined as any work below the local national standard in the countries in which we operate. Temporary employment is defined as employment, with a preagreed end-date.

Gender diversity is calculated as the percentage of women in the total company, Vice President and Senior Director levels, and Manager and Director level. The figures in 2020 do not include Gernany, as job grades were not yet approved by the worker’s council.

The gender pay ratio is calculated by comparing the median total compensation of men to women, excluding the salary of the CEO.

The turnover ratio is calculated by dividing the number of employees who left the company by the average number of employees in the reporting year. Number of new hires is measured as the total number of new full time employees and the percentage of female hires.

Disclosure requirementets, cf. §99a, 99b, 99d and 107d of the Danish Financial Statements Act

Health & safety Lost time injury frequency is defined as a workrelated Injury resulting in an individual being physically or mentally unable, as determined by a competent medical person, to work on the next scheduled day or shift, resulting in at least one day off the job (no. of accidents*1.000.000)/(FTE hours).

99a

Absence due to sickness is calculated as number of total working days with absence due to sickness, divided by total working days.

Responsible business practices Business ethics Alertline cases are taken from our external system Ethics Point. Code of Conduct training is calculated by the percentage of employees completing the training based on internal registrations.

Governance Board diversity is measured by the percent of female non-executive members. Board independence is measured by the percent of independent, nonexecutive members. The Board Meeting Attendance rate is calculated as (number of meetings*number of members)-meetings not attended/(number of meetings*number of members)*100.

The CEO pay ratio is calculated as total compensation divided by median staff total compensation.

Disclosure requirements

See page

Policies on Human rights 14-17, 25-29 Worker and social conditions 14-17 Environment and climate 20-23 Anti-corruption 25-29 Acitivities during the year Human rights 14-17, 25-29 Worker and social conditions 14-17 Environment and climate 20-23 Anti-corruption 25-29 KPIs and results 7 Sustainability risks 20-23, 29 99b Diversity in management Diversity in the Board of Directors

15 16

99d Data ethics policy

28

107d Diversity & inclusion policy

14-16

ALK-Abelló A/S Bøge Allé 6-8 DK-2970 Hørsholm, Denmark CVR no. 63 71 79 16 Tel. +45 45 74 75 76 www.alk.net

Sustainability Report 2021

Introduction

Health & well-being

People

Climate & environment

Falck Sustainability Report 2021

Trust

2

Contents Introduction

Transitioning to a green fleet Page 21

Annual Report 2021

Innovation in healthcare Page 11

Annual Report 2021 Read about our business progress here

→

Letter from the CEO Our commitment Business model ESG key figures

03 05 06 07

Health & well-being

08

Health and well-being Quality Innovation

09 10 11

People

13

Engagement Health and safety Diversity and inclusion

14 16 18

Climate & environment

20

Transitioning to a green fleet

21

Trust

23

Code of Conduct Whistleblower system

24 25

Accounting policies Sustainability governance

26 27

Introduction

Health & well-being

Letter from the CEO

Supporting society is our core business Falck is a leading international provider of healthcare and emergency response services.

Our job is to save lives, improve people’s health and well-being, and thereby support the communities we are part of.

People

Climate & environment

Trust

Falck Sustainability Report 2021

3

Introduction

Health & well-being

In 2021, Falck took a significant step on its sustainability journey.

We redefined how to measure our impact within the four sustainability areas relevant to our business, and we set ambitious targets for improvement.

People

Climate & environment

Falck Sustainability Report 2021

Trust

Every day, we go to work with the purpose of saving lives and promoting health and well-being of other people. We believe in the benefit of constantly raising the levels of health, safety and engagement among our employees. We seek to implement environmentally sustainable solutions in our business as soon as they become available. And we know we need to be a trusted business partner to the local authorities and communities which we serve in order to succeed.

These four areas, health, people, environment and trust, are at the core of Falck’s sustainability work. For each of these we have defined KPIs and set targets as described in more detail later in this annual Sustainability Report.

Our initiatives reflect our raised ambitions as well as the increasing interest in sustainability from all our stakeholders.

Our customers expect us to minimise our impact on the environment. Our employees rely on us to provide a safe and engaging workplace. Our owners consistently monitor not only our financial performance but also our efforts to ensure we act responsibly in relation to environment, social factors and corporate governance. This increased focus has accelerated the development in 2021.

Together with our financial partners, we have completed an ESG-linked refinancing of our long-term credit facilities, thereby underlining our long-term sustainability commitment.

Every day, we go to work with the purpose of saving lives and promoting health and well-being of other people.

It is our current assessment that Falck’s biggest adverse impact on the environment derives from the fuel consumption of our vehicles. We have therefore begun the transition from diesel and petrol-powered vehicles to electric vehicles and adopting the use of biofuels. Today’s battery technology does not support a shift to electric ambulances as speed and range are still too limited for ambulances to be fully functional. However, this has not stopped us from setting an ambitious target of a 50% reduction of our CO2 emissions in 2030 compared to a 2021 baseline. Furthermore, it is our intention to commit to developing Science Based Targets for our greenhouse gas emissions in 2022.

Similarly, we have set ambitious targets for the other sustainability focus areas; for employee engagement, Lost Time Injuries and training in our Code of Conduct.

Falck remains committed to supporting the UN Global Compact, to its ten principles on human rights, labour, environment and anti-corruption and thereby also to the principles for sustainable development.

It is our ambition to continue to develop our services to ensure a positive impact on society, minimise adverse effects on the environment and improve responsible business practices within our four key areas of health, people, environment and trust.

Jakob Riis CEO

4

Introduction

Health & well-being

People

Climate & environment

Falck Sustainability Report 2021

Trust

Our commitment We are committed to acting responsibly as a company and to contributing to a socially, environmentally and economically sustainable development.

Four main focus areas, four SDGs We are committed to supporting and contributing to the societies we are a part of.

Our commitment extends to acting responsi­ bly and to contributing to socially, environ­ mentally and economically sustainable developments.

We give particular attention to our impact on ① T he health & well-being of people throughout their lifetime ② The people we employ ③ Climate & environment ④ The trust of our employees, customers and other stakeholders

(Climate action) and SDG 16 (Peace, justice and strong institutions). This way, we ensure that we address the global challenges most closely linked to Falck’s business.

We integrate our sustainability efforts in our daily business decisions and strategy. Our commitment is firmly embedded in our ways of working, in our Code of Conduct and in our Winning Behaviours.

Commitment to the UN Global Compact Falck is a signatory to the UN Global Compact, and this report serves as our annual Communication on Progress. We commit to the Ten Principles of the UN Global Compact on human rights, labour, environment and anti-corruption derived from the Universal Declaration of Human Rights, the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development, and the United Nations Convention Against Corruption.

Health & well-being

People

Healthcare services, saving lives and promoting health and well-being is at the heart of our business and our business model.

We aim to provide our employees with an inspiring, diverse and safe workplace that provides equal opportunities and where everybody can thrive personally and professionally.

Climate & environment

Trust

We commit to identifying and mitigating risks, promoting sustainable processes and products and increasing energy efficiency with a special focus on fuel consumption.

Our compliance strategy and Code of Conduct contribute to our ability to build trust and develop a culture of integrity.

These four areas are described further in the four main chapters of this report.

For each focus area we have identified the UN Sustainable Development Goal (SDG) which best corresponds to our efforts and to which we believe we can contribute the most: SDG 3 (Good health and well-being), SDG 8 (Decent work and economic growth), SDG 13

This report serves as our third annual Communication on Progress to the UN Global Compact, to which we became a signatory in January 2019. The reporting covers our social, environmental, ethical and diversity impact and actions and therefore represents our statutory statement on corporate social responsibility and the underrepresented gender in accordance with sections 99a and 99b of the Danish Financial Statements Act. This Sustainability Report is part of Falck’s annual reporting and covers the same period as Falck’s Annual Report 2021.

5

Introduction

Health & well-being

People

Climate & environment

Falck Sustainability Report 2021

Trust

Business model Input

Output

People Our services are delivered by 33,000 engaged and skilled specialists

Equipment We use high-quality equipment enabling effective diagnostics and resolution

Partnerships We partner with local communities to customise our global services to local needs

1 Care and safety

Emergency Response

Direct Healthcare

Ambulance

Employee Healthcare

Emergency medical services and patient transport services

Occupational healthcare services and treatments to private businesses, insurance companies, pension funds and public organisations

Fire Services Fire prevention and firefighting services for municipal and industrial customers

Integrated healthcare services

Innovations We utilise new technology and explore new ways of working

Consumer healthcare subscriptions, patient transportation, roadside assistance and technical services

Community Healthcare Doctors on call services to individual subscribers, insurance holders and companies

Brand and reputation We benefit from a strong brand and a solid reputation for being effective, reliable and caring in everything we do

Assistance

We save lives, treat and transport patients, and care for the health and well-being of people

2 Customer value We support healthy workplaces, offering prevention, treatment and rehabilitation of their employees and save property and valuables

3 Supporting societies We support national healthcare systems with emergency response and healthcare services

4 A great place to work We offer challenging and purposeful work with opportunities for personal and professional development

5 Shareholder value Governance and policies

Standard processes and procedures

People management

Technology, systems and innovation

We deliver value to our shareholders

6

Introduction

Health & well-being

People

Climate & environment

Falck Sustainability Report 2021

Trust

7

ESG key figures The ESG dashboard presents a number of KPIs reflecting Falck’s1 performance related to Environmental impact, Social impact and Governance.

In 2021, targets were set for eight of the KPIs, reflecting where Falck aims to make the biggest impact given the nature of our business. The initiatives leading to the results as well as the definitions of the KPIs and the accounting policies are described in the following chapters of this Sustainability Report.

Baseline year

Unit

Target

Total tonnes

50% reduction in 2030 (Baseline: 2021)

Tonnes / revenue (DKK million)

10% reduction y-o-y

1

2021

2020

2019

2018

53,194

59,467

69,784

75,479

3.95

4.82

5.05

5.40

4.7%

-

-

-

8,064,000

6,570,000

-

-

72

72

71

69

40%

50%

33%

0%

22.1

17.9

14.3

11.9

1

11

6

-

1.32

1.17

1.07

0.20

55%

-

-

-

Environment 2,3

CO2e emissions, total

CO2e emissions, relative

2

Green kilometres

Kms in EVs + kms on HVO / total kms, %

Social No. of services delivered

Number

Employee engagement

Number (0-100 scale)

75 in 2025

Gender diversity, Executive Management

Female / Total, %

40%

Lost Time Injury Rate (LTIR)

LTIs per 1 million working hours

10% reduction y-o-y (Baseline: 2021)

Fatalities

Number

Zero

Whistleblower reporting ratio

Number of reports per 100 employees

>1

Code of conduct – training

% of employees trained

All full-time employees trained every year

Governance

1) Falck Core business 2) Scope 1 emissions 3) A major ambulance contract in San Diego started up in November 2021. This will impact the total CO2 emission in 2022 significantly. If adding the calculated full-year effect of the contract, Falck’s total CO2 emission in 2021 would be 56,683.

Introduction

Health & well-being

People

Climate & environment

Health & well-being As a provider of healthcare and emergency response services, promoting health and well-being is at the heart of our business.

Why this is

High-quality health and emergency care is vital for

important to

societies not only to preserve and promote the

society

population’s health and quality of life, but also to ensure optimal use of healthcare resources.

Why this is

Our core business is to provide prevention,

important

treatments and rehabilitation and thereby meet

to Falck

the healthcare needs of people throughout their lifetime.

Our ambition

To help more people wake up in the morning and live a healthy life.

Our risks

To provide services of unsatisfactory quality.

Medical malpractices. Patient incidents.

Our actions

Strict quality management procedures.

Development of new and innovative healthcare services.

Trust

Falck Sustainability Report 2021

8

Introduction

Health & well-being

People

Climate & environment

Falck Sustainability Report 2021

Trust

9

Health and well-being Health and well-being is our business. It is the very core of what we do. In all our business units, our job is to save lives, provide prevention, treatments and rehabilitation and care for the health and well-being of people.

Falck’s business forms an important and integral part of societies’ healthcare systems.

Our highly skilled ambulance staff saves lives and cares for patients’ well-being every day.

Our healthcare professionals provide psychological and physiological help, enabling people to return to work faster and continue a healthy working life. We offer people faster and easier access to treatment by doctors, nurses and therapists as a supplement to the services offered through the public system.

Our Patient Transport Service brings patients to and from hospitals and clinics. In Latin America, our doctors provide online consultations as well as treat patients directly in their homes, allowing patients to recover in a familiar environment. In Fire Services, our dedicated staff prevents accidents and loss of life every day.

In other words, health is part of our DNA, and our employees are proud to perform life-saving care for people. This is also reflected in the fact that Falck employees globally teach first aid courses, support the work of local commu-

nities in terms of bystander resuscitation (CPR), teach accident prevention and much more.

We believe that every time we have completed a trip, given a treatment, prevented an accident or delivered another of our services, we have improved at least one person’s life marginally – and sometimes fundamentally.

We have therefore included number of services delivered as a KPI in our ESG dashboard, thereby measuring the services provided in our Core business over the course of the year.

Falck’s commitment to saving lives and promoting health and well-being is reflected in our strategy, in our innovation agenda, and in our strict quality management procedures as described in the Annual Report and on the following pages.

Number of services delivered in 2021 Ambulance Ambulance trips

Employee Healthcare 3,702,000

Fire Services Interventions/call-outs

Physical treatments

449,000

Psychological treatments

133,000

Preventive care consultations

597,000

19,000

Assistance Patient transport trips

436,000

Roadside assistance trips

327,000

First aid trainings1

16,000

Community Healthcare Virtual consultations Physical consultations

+8 million Services delivered in 2021

828,000 1,557,000

1) No. of courses times average amount of people attending a course

Introduction

Health & well-being

People

Climate & environment

Falck Sustainability Report 2021

Trust

Quality Falck is committed to taking care of patients. To ensure patient safety, we follow strict quality and medical management procedures across our business.

Falck’s operations are highly process driven.

When arriving at the scene of an accident, the exact roles of our employees are clearly defined, and work is carried out according to specific procedures laid out in manuals. Our employees are trained in these on a regular basis. Data is accumulated and processed in one company system, and changes and continuous improvement initiatives are shared and distributed to frontline personnel. The processes are designed to minimise errors and optimise the health and safety of both patients and personnel and build on years of experience accumulated by our people through healthcare and emergency response incidents.

This approach has placed quality at the core of Falck’s services.

A global Business Quality Model (BQM) was established in 2020. The roll-out of the model continued in 2021 integrating Health & Safety.

Availability of global business processes leads to increased transparency, efficiencies and quality improvements across all business areas. It encourages the sharing of best practices and coordination of initiatives across the business entities, and underlines

Falck’s role as a reliable and trustworthy business partner.

Business Quality Model

Quality is further enhanced following a project started in 2021 defining a global operating model for the ambulance business. Among the expected outcomes is to establish global processes with a high degree of built-in and scalable quality assurance.

A revised risk management process was also implemented in Global Functions 2021 aiming to increase the overall awareness of business risks and the ability to mitigate these as early as possible. The process is planned to be implemented across Falck's business units in 2022.

Falck strategy

Ambulance

Fire

Governance and operating models

ISO

ISO

ISO

ISO

9001

14001

45001

27001/ 27701

Falck holds global ISO certifications from Bureau Veritas, based on a multisite setup, covering the ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018 certifications.

In 2021, Falck was also recognised for our work with information security and privacy information by having our Global IT processes certified in the ISO 27001:2013 and ISO 27701:2019 standards.

Compliance with regulatory requirements

Employee Healthcare

Processes and procedures

One company system (GEMS)

Community Healthcare

Assistance

Risk management, incident management and audits

Business Process Management

Health & Safety

Risk Management

Audit Management

Data Analytics & Improvements

Global quality model Safety

Audit

10

Introduction

Health & well-being

People

Climate & environment

Falck Sustainability Report 2021

Trust

11

Bystander support In 2021, Falck initiated a project looking into how we can reduce the distress of experiencing an emergency as a bystander. Twenty-five per cent of the Danish population have experienced an emergency either as a patient or a bystander, and Falck’s initial survey shows that one third of them were affected to some degree, e.g. in the form of sleeping disorders, anxiety, depression or PTSD. Early intervention is critical to help people process the event and reduce a prolonged psychological burden. The project combines Falck’s experience in emergency response and mental health, strengthening our position as an integrated healthcare services provider.

Innovation For Falck, innovation means always striving to save and improve lives – in a better way or at greater scale.

We deliver breakthroughs in healthcare by intentionally designing new outcome-based services that reflect a deep understanding of customer needs and the latest in health science and technology.

Innovation has played a pivotal role in Falck’s development since the foundation of the Company in 1906. Today, innovation takes place at three levels:

1 Innovation in operations How can we solve a given task smarter, more efficiently and at a higher quality? One example is the online medical consultations in Community Healthcare in Colombia.

2

paramedics begin the treatment of critically ill and injured patients. It is Falck’s ambition to continue to set the standard for emergency medical services of the future worldwide.

3

Innovation with our customers

Innovation in society

Falck has created one of the world’s most sophisticated emergency medical services in cooperation with its customers in Denmark. Today, an ambulance is an advanced point of treatment, a clinic on wheels, where doctors and

How do we respond to the major healthcare challenges in society caused by changing demographics and limited resources? One example is Falck’s work with drones aiming at bringing help closer to the patients with less resources.

AI in emergency response Falck entered into a partnership to develop Artificial Intelligence (AI) in ambulances. Corti, a Danish-founded start-up, uses speech recognition and natural language processing to provide second opinions, note-taking, and quality assurance in real-time. The technology has already been deployed at the emergency call centre of Denmark’s Capital Region, and by ‘listening in’ on 112 emergency calls, it can support quicker detection of cardiac arrests. The collaboration between the Region, Corti and Falck will explore how to apply this within the context of ambulance services.

Healthcare drones Falck aims to make manned drones an integral part of its fire and emergency medical services by 2025. By using a drone, a paramedic can arrive at the scene of an accident and start treatment much faster than when going by ambulance. In 2021, Falck continued the test flights with cargo drones aimed at transporting blood samples, medicine or defibrillators between hospitals and accident sites or to people living in

remote areas. Falck also entered into a partnership with Kitty Hawk, a company pioneering all-electric Vertical Take-off and Landing (eVTOL) aircraft. The plan is to establish a joint innovation platform around Kitty Hawk’s latest high-performance single-passenger aircraft project, Heaviside, to be used in emergency response situations.

Introduction

Health & well-being

People

Climate & environment

Falck Sustainability Report 2021

Trust

Deep dive

Reducing sick leave to create healthy workplaces Absent employees due to long term sick leave is a cost for the individual, the company and society. By working systematically with rehabilitation Previa helps businesses reduce sick leave and become healthy, sustainable workplaces.

With 1,000 experts in occupational healthcare and work environment management, Falck’s Swedish subsidiary, Previa, is the leading provider of services for a sustainable work life in Sweden. Rehabilitation accounts for 27% of the services delivered.

Almost half of all long-term sick leave start with a repeated short-term sick leave.

Therefore, its crucial to work with both a preventive and a remediate perspective.

Preventive actions identify risks of illness, injury and sick leave, both in the organisation and related to the individual, in order to work proactively to reduce them. Remediation or rehabilitation measures help individuals return to work as quickly as possible after long-term sick leave, accidents, or in conjunction with disputes and crises.

Previa’s concept for rehabilitation includes frequent inventorying of the situation, recommendations, counselling, rehabilitation services and education. Previa works in teams with a rehabilitation coordinator, occupational health physician, occupational health nurse, physiotherapist and psychologist or behavioral scientist. They work in cooperation with the customer to reach specific goals for both the individual and the organisation.

25% Lowered long-term sick leave

In a recent case, a Swedish company with more than 5,000 employees managed in cooperation with Previa to lower their sick leave rate from around 7% to 4.5% and lowered long-term sick leave by 25% in less than a year. This not only reduced the high sick leave costs but also created a healthier workplace to the benefit of all employees.

12

Introduction

Health & well-being

People

Climate & environment

People Falck is a people business and our workforce is our most important asset. We aim to provide all employees with an inspiring, diverse and safe workplace that provides equal opportunities and where everybody can thrive personally and professionally.

Why this is

Having diverse and inclusive workplaces with

important to

decent work conditions for all is essential in

society

ensuring sustainable economical growth.

Why this is

We are a people business; our workforce is our key

important

asset. The well-being of our employees is vital for

to Falck

a sustainable business.

Our ambition

A safe and healthy workplace. Fair pay, decent working conditions and equal treatment for all our employees. An engaged, skilled and mentally and physically fit workforce.

Our risks

Work accidents and sickness. High employee turnover. Staff shortages.

Our actions

Global health and safety focus. Implementation of actions increasing engagement. Continued focus on Falck as a diverse workplace.

Trust

Falck Sustainability Report 2021

13

Introduction

Health & well-being

People

Climate & environment

Falck Sustainability Report 2021

Trust

Engagement Employee engagement remained at the same level as last year, despite a challenging working environment related to COVID-19 and staff shortages in several countries.

Change communication, Decision making, and Action taking, which is the same picture as last year. The score for Work-life-balance decreased which may be a result of an increased level of pressure in a changing organisation and increased workload during the COVID-19 pandemic.

Falck wants to be a great and healthy place to work for professionals within healthcare and emergency response. An engaged workforce is more committed, better performing and delivers a higher level of services. To ensure a continued focus on employee engagement and to measure progress, we conduct an annual, global employee engagement survey managed by the external provider Glint.

The eSAT score is chosen as one of the KPIs in the ESG dashboard. The target is an eSAT score of 75 in 2025.

The 2021 survey was conducted in October 2021. 12,200 employees took the time to answer this year’s survey, and they provided 22,000 comments and suggestions on how to make Falck a greater place to work.

In 2021, Falck launched its new strategy, Care for more ’25. This has resulted in an increase in the scores related to confidence in the leadership team, overall direction, excitement about Falck’s future and satisfaction regarding how decisions are made. This was especially visible in Falck Assistance and global functions where the scores increased significantly.

The overall engagement score (eSat*) was 72, i.e., at the same level as last year.

This compares to the global external benchmark of 74, which is also the same as last year.

There are large differences between the scores across countries and business segments.

The highest scores across countries and segments were related to Purpose, Respectful treatment and Recommend manager, whereas the lowest scores were related to

The score on Purpose was once again exceptionally high; 83 vs. the external benchmark of 78, reflecting that Falck provides a purpose-driven and meaningful workplace for people who wish to save and improve lives.

*) Falck’s annual global employee engagement survey is managed by Glint. Glint finds that across all their customers and panels, the specific eSat question (“How happy are you working at Falck?”) is the single most highly predictive question for overall engagement and a leading indicator of attraction, performance and retention.

Employee engagement* 2021 score

72 2020 score: 72

2025 target: 75

An engaged workforce is more committed, better performing and delivers a higher level of services.

14

Introduction

Health & well-being

People

Climate & environment

Engagement survey

Prospects

18,200 employees invited to participate 26 questions 6 scores increased 11 scores decreased 68% response rate (-4%-points) 22,000 comments

Score

68

▲ 3%

Related question: “I am excited about Falck's future”

Purpose

Recommend manager

Score

Score

83

▼ 2%

95% of all respondents answer neutrally or favourably to their work being meaningful to them.

Related question: “The work that I do at Falck is meaningful to me.”

75

▼ 1%

Related question: ”I would recommend my manager to others”

Falck Sustainability Report 2021

Trust

15

Actions Following the survey, all managers were asked to develop action plans targeting the specific issues in their departments.

The teams that had defined action plans and worked with engagement based on the previous survey saw an increase in their scores significantly higher than the Group average.

This confirms the approach of requiring leaders at all levels to work with their teams and prepare action plans addressing local issues.

Falck Leadership Programme The Falck Leadership Programme launched in 2019 called “Dare to Care” was put on hold in 2020 due to COVID-19 and restarted in mid-2021. The programme is aimed at all leaders in Falck, with front-line managers being the first priority. It consists of nine learning blocks, covering the mindset and behaviours required of leaders in Falck, personal leadership and self-awareness, and how to lead others through communication, motivation and change management.

Currently, 350 leaders in Denmark, Sweden, Germany, Spain and United States are enrolled in Dare to Care. In 2022, leaders in Colombia and Norway will join. It is expected that all Falck managers with people leadership (a total of 550) will have completed the training in 2023.

The score on Purpose was once again exceptionally high, reflecting that Falck provides a purpose-driven and meaningful workplace for people who wish to save and improve lives.

Employee turnover The employee turnover rate increased to 29.0 in 2021 compared to 26.7 in 2020.

The rate shows the number of permanent employees who left Falck voluntarily or involuntarily during 2021 as a percentage of the average number of employees during the year, and it varies largely across Falck’s markets.

Introduction

Health & well-being

People

Climate & environment

Falck Sustainability Report 2021

Trust

Health & Safety Falck has built a business on a commitment to care, and we continuously strive to improve the health and safety of our employees.

Every day, Falck employees put themselves at risk to save the lives of other people. We therefore promote a culture where health and safety are embedded in our ways of working to ensure that our employees are safe when on duty to improve and save the lives of others.

As a provider of emergency response services working in the public area, Falck is not in control of all processes in our working environment. We therefore continuously assess our risks and improve our processes based on learnings and experiences.

Initiatives in 2021 In 2021, Falck’s Executive Management approved a new safety policy to strengthen our commitment and drive accountability and safety through the business.

A global reporting process was established which improves the opportunity to measure our health and safety performance, analyse data and take preventive action based on insights. This allows us to look into the root causes of incidents and tailor safety initiatives and develop documented processes where needed. A safety community with

representatives from all business units is put in place to ensure implementation of Falck’s safety strategy at all levels of the organisation.

In addition, Falck focused on further developing a safety culture where leaders engage and provide support for frontline workers promoting the sharing of knowledge and learnings.

Additional safety standards were implemented, and operational risk assessments were completed to increase the general understanding of main risks and improve reporting of incidents.

Fatalities 2021 Falck recorded one fatality in 2021. A Falck firefighter in Spain tragically lost his life while responding to an incident at our customer's premises. Every life is precious, and every single fatality is a tragic reminder that safety must always come first. Falck has conducted an internal investigation to ensure that learnings are captured and embedded in our organisation.

Number of fatalities is chosen as one of the KPIs in the ESG dashboard. The target for work related fatalities in Falck is zero.

Lost Time Injury Rate 2021 In 2021, Falck recorded 883 Lost Time Injuries resulting in an LTIR* of 22.1. COVID-19 related cases are included in this number due to the nature of Falck's services. For 2021, Falck registered 205 COVID-19 work-related cases,

corresponding to 23% of the total number of Lost Time Injuries reported internally.

Falck is aware of the risks associated with the nature of our business as well as the preventive measures needed to minimise the risk. While incidents still occur across our business, we are committed to minimise the number of these and ensure that the implications of these are as small as possible.

The LTIR is chosen as one of the KPIs in the ESG dashboard. The target is a 10% reduction year-on-year, with 2021 as our baseline year. In 2021, we increased focus on reporting and the integrity of safety data was improved.

In 2022, we will increase our focus on the critical operational risks related to health and safety: Driving, working on the road and use of equipment. By improving and implementing global processes for near misses and root cause analyses, we aim to continuously improve our health and safety performance.

Fatalities 2021

1

2020: 11

Target: 0

Lost Time Injury Rate 2021

22.1 2020: 17.9

Target: 10% reduction year-on-year (Baseline year: 2021)

*) LTIR = Lost Time Injury Rate calculated as number of LTIs per million hours worked

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Introduction

Health & well-being

Deep-dive

People

Climate & environment

Trust

Increasing safety on the road The majority of Falck’s activities within Public fire, Assistance and Ambulance are carried out in public areas. This is also where some of the severe traffic accidents take place.

In 2021, Falck invested in 30 TMAs (Truck Mounted Attenuators), also known as a crash cushion, mounted on the back of, e.g., the truck holding the signage when blocking a lane on the highway in connection with accidents.

It is designed to save lives of emergency personnel in the work zone by absorbing the impact from other vehicles crashing into it.

30 The 30 new TMAs will replace the existing Falck vehicles carrying warning signs which are in operation several times per day on the Danish highway network.

Traffic accidents in connection with work zones on highways have previously led to severe injuries and fatalies among Falck employees. The new TMAs are expected to increase safety significantly, not only for Falck's employees, but also for other emergency personnel, motorists, bystanders and workers at the site.

Falck Sustainability Report 2021

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Introduction

Health & well-being

People

Climate & environment

Trust

Diversity and inclusion Working within different countries, communities and cultures, we know that the different skills and approaches of our people are the key to success. Having a diverse workforce, fostering inclusion and representing the diversity of the communities we serve are both ethical and business priorities.

Falck is committed to a broad definition of diversity, covering both visible and hidden differences, including gender, ethnicity, nationality, physical ability, physical appearance, sexuality, religion, age, civil partnership status, class, education, and mental health.

Falck strives for inclusion of all those with visible and hidden differences but also diverse backgrounds and mindsets (Falck Global Diversity & Inclusion policy, 2020).

Diverse workforce Falck aims to be an organisation that attracts, develops and promotes a diverse range of talent. At every level of our organisation, we seek to represent the communities we serve. Diversity is emphasised throughout the recruitment and selection process to ensure balanced teams while still hiring the best-suited candidates.

Inclusive culture Falck aims to be a great place to work for present and future employees. It is therefore the shared responsibility of all employees regardless of geography or role to foster an inclusive culture where everyone feels valued, free and empowered to speak up without fear of retaliation.

Equal treatment and unconscious bias We strive to make decisions based on unbiased considerations. This is particularly relevant in HR processes such as recruitment, promotions, development, compensation and layoffs. However, Falck recognises that we all hold implicit or unconscious biases. We aim to raise awareness of these biases and challenge them and thereby aim for equal treatment in our decision-making and design of processes.

Respectful treatment At Falck, all employees should be treated with respect and dignity and be able to work in an environment free from fear, intimidation, intolerance and prejudicial biases. It is the responsibility of all employees at Falck to treat each other with respect and act according to the fundamental rights of the individual. Falck does not tolerate any form of discrimination based on gender, ethnic origin, race, religion, age, sexual orientation, parental or marital status, etc.

Falck Sustainability Report 2021

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79% Introduction

Health & well-being

People

Climate & environment

Trust

24%

Employee Healthcare Falck Sustainability Report 2021

21% 19 76%

Community Healthcare 56%

Fire Services

93% Male

Gender diversity Executive Management: (Female/Total) 2021

40% 2020: 50%

Target: 40%

Gender composition Falck works to ensure a balanced gender composition and increase the share of the underrepresented gender in management positions. Candidate pools for managerial positions at senior director level and above should always include candidate(s) from the underrepresented gender. The recruitment process requirements are communicated to hiring managers, global HR business partners, recruitment partners and to third parties involved in the recruitment processes.

Falck is committed to ensure a balanced gender composition among members of the Board of Directors of Falck A/S.

Falck's target for the composition of the Board of Directors for 2021 was to continue with equal representation, defined as 40/60 according to the guidelines from the Danish Business Authority (Erhvervsstyrelsen). This was fulfilled as two out of six elected members are women.* The target in 2022 is to continue with equal representation.

The gender composition for employees in Falck has changed marginally in 2021. In 2021, 31% of employees were women (30% in 2020) and 31% of managers were women (28% in 2020).

Four out of ten members of the Executive Management Team are women. Gender diversity for the Executive Mangement is chosen as a KPI in the ESG dashboard. The target is 40%.

Falck's Diversity and Inclusion Policy can be found here: www.falck.com/diversity-inclusion Governance The Board of Directors has the overall responsibility for approving the Diversity and Inclusion Policy. Falck’s global People & Culture function is responsible for outlining supportive activities, including monitoring of targets. Leaders at all levels in Falck are responsible for upholding the policy at all times, and all Falck employees are responsible for acting in accordance with the policy guidelines. Employee representatives are consulted when this policy is amended.

Examples of initiatives in 2021 In 2021, recruiters from various business units in Falck were invited to a workshop on unconscious biases and how the use of certain words and language in our materials and job adds may impact our ability to attract a diverse pool of talents. The aim is also to appoint the Falck recruiters, HR business partners and third parties involved in the recruitment processes as diversity ambassadors ensuring a strong local voice promoting a diverse and inclusive mindset throughout the organisation.

In 2020-2021, managers in Sweden attended virtual training in biases, with focus on understanding and acceptance of your own bias as a first step for action taking.

In Ambulance Spain, actions to increase diversity, inclusion, and equality lies in the hands of the Equality Committee. The committee consists of four employee union representatives and four members with functional responsibility. The committee meets once a month to discuss topics related to diversity and inclusion. First step has been to co-develop and agree on a four-year plan outlining diversity and inclusion activities for the unit.

7% Female

Gender composition per management level

Employees 69% 69%

Managers1 Executive Management

60%

31% 31% 40%

Board of Directors2 67% Male

33% Female

1) Managers are defined as employees with employee responsibility 2) Among BoD members elected at general meetings.

Gender composition per business segment

Ambulance 73% 79%

Assistance Employee Healthcare

24%

27% 21% 76%

Community Healthcare 56%

*) In accordance with the guidelines from the Danish Business Authority, equal representation is the number/percentage which is closest to 40/60, which for Falck is 2/6 (33 %) of the elected Board members.

44%

Fire Services

93% Male

44% 7%

Female

Introduction

Health & well-being

People

Climate & environment

Climate & environment We wish to minimise the negative impact our business activities may have on the environment and climate, focusing our efforts on the fuel consumption of our vehicles.

Why this is

Climate changes are having tremendous impact on

important to

society, i.e. extreme weather conditions, disruption

society

of ecosystems and human livelihoods.

Why this is

Action on climate change is urgent and required by

important

all companies. As saving and improving lives is at

to Falck

the core of Falck’s ambition, we wish to mitigate the adverse impact our activities may have on communities.

Our ambition

To reduce the adverse impact of our activities – first and foremost our CO2 emissions – to a minimum.

Our risks

Few viable electric options that can meet requirements for emergency vehicles.

Our actions

Green fleet policy. Shift to electrical vehicles for company cars and patient transport vehicles.

Investigating alternative fuel solutions for larger emergency response vehicles.

Trust

Falck Sustainability Report 2021

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Introduction

Health & well-being

People

Climate & environment

Falck Sustainability Report 2021

Trust

Transitioning to a green fleet Falck’s aim is to contribute to the improvement of people’s health and well-being with the least possible impact on the environment and the society around us.

It is our current assessment that Falck’s biggest adverse impact on the environment derives from the fuel consumption of our fleet which drove an aggregate of approximately 139 million kilometres in 2021. We have therefore begun the transition from diesel and petrol-powered vehicles to electric vehicles and adopting the use of biofuels.

We realise that our operations also impact the climate and the environment in other ways, e.g., through the energy consumption in buildings, the equipment used in our ambulances and the business travel of our employees, cf. scope 1-3 guidelines of the Greenhouse Gas Protocol Accounting and Reporting Standard. It is our assessment that we can make the biggest immediate impact within scope 1 related to the fuel consumption of our fleet of ambulances, roadside assistance trucks, firefighting vehicles, patient transport vehicles and other passenger cars.

Targets set for emissions In 2021, we set the target of reducing our total scope 1 CO2 emissions by 50% in 2030 compared to a 2021 baseline. Total

emissions will naturally be impacted by the growth of our business. Hence, we have also set an additional target of reducing our CO2 emissions relative to revenue by 10% year-on-year.

It is Falck’s intention to commit to the Science Based Targets initiative in 2022, and thereby commit to setting targets for our greenhouse gas emissions in line with the Paris Agreement goals.

Transitioning to a green fleet In 2021, Falck implemented its 100% electric company car policy in Denmark.

All new passenger cars ordered by Falck

after 1 January 2021 must be 100% electric (not hybrid). In scope are approximately 130 company/benefit cars, 130 station/support cars and 330 seated patient transport vehicles which are changed to electric when existing lease contracts expire. These account for 56% of Falck’s total fleet of passenger cars.

Sweden, Germany and Spain will implement the same policy from 2022.

For seated patient transport, Falck has ordered 50 new electric vehicles in 2021 and plans to increase the number to 100 in 2022.

When delivered, Falck will then have changed 30% of seated patient transport vehicles to electric.

CO2e emissions, total* Tonnes 2021

53,194 2020: 59,467

Target: 50% reduction in 2030 (Baseline year: 2021)

CO2e emissions, relative* Tonnes / Revenue (DKK million) 2021

3.95 *) Scope 1 emissions. These are direct greenhouse gas (GHG) emissions that occur from sources that are controlled or owned by an organisation (e.g. emissions associated with fuel combustion in boilers, furnaces, vehicles).

2020: 4.82

Target: 10% reduction year-on-year (Baseline year: 2021)

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Introduction

Health & well-being

People

Climate & environment

Falck Sustainability Report 2021

Trust

the vehicle and its power consumption while operating is significant. With current battery technology, an electric ambulance will therefore not be able to meet the requirements for speed, range and weight in order to be certified as an ambulance.

Falck aims to switch to electric vehicles as soon as this is feasible without compromising the quality of the ambulance service delivery.

In 2021, we have ordered a number of electric vans as support vehicles in Roadside Assistance to test their functionality.

To follow our transitioning to green fleet, we count the number of “green kilometres” driven, defined as kilometres driven in electric vehicles or on HVO in relation to total kilometres driven. In 2021, green kilometres amounted to 4.7% of total kilometers driven in Falck.

Green kilometres

4.7% Kms in EVs + kms on HVO / total kms, %

Ambulances account for 72% of all kilometres driven in Falck.

Today, an ambulance is built to provide the first life-saving treatment to patients on the scene of the accident before driving to a hospital. Once the van is converted and fitted with the necessary equipment, the weight of

We continue to work with our suppliers and customers to ensure that as soon as the technology is available, we can put it into operation for the benefit of the local communities we serve. It is our expectation that the first electric ambulance will be available for testing in the Capital Region in Denmark in late 2022.

Falck’s roadside assistance and firefighting trucks account for 8% of kilometres driven.

The electric solutions are limited, and Falck is instead looking at biofuels, hydrogen-power, natural gas or a combination of these to fuel the heavier vehicles in the fleet.

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Reusing ambulances and equipment Ambulances and their equipment are, to the extent possible, reused. Both in the US and in Germany, where ambulances are designed as an aluminium box placed on a vehicle chassis, the box is moved to a new vehicle chassis when the vehicle is worn out. After refurbishment and installation of new equipment in the box, the ambulance is tested and certified as a new ambulance and put into operation.

Code of Conduct and ISO certifications Environment is one of the 13 areas of Falck’s Code of Conduct, which states that all employees are expected to consider the environmental impact of their actions and the actions of our business partners. We expect our employees and business partners to support a precautionary approach to the environment and take steps to work in a sustainable manner. We encourage our employees to use resources sustainably and create a climate-conscious working environment.

In addition to the Code of Conduct, Falck holds the ISO 14001 environmental certification for our Ambulance Services in Sweden and Spain, our Fire Services in the UK, the Netherlands, Portugal, Spain, Romania and Slovakia and also our Patient Transportation Services in the UK and our headquarter in Copenhagen, Denmark.

Introduction

Health & well-being

People

Climate & environment

Trust Trust is vital to our license to operate, and it is essential that we conduct business in a way that never breaches the trust of our employees, our partners, our customers and the communities in which we operate.

Why this is

Unfair competition and unethical behaviour

important to

result in increased costs and erosion of trust

society

in government

Why this is

People rely on us to be there every day, and that

important

requires us to be a trusted business partner to the

to Falck

local authorities and communities which we serve.

Falck therefore has a zero-tolerance approach towards breaches of the Code of Conduct.

Our ambition

Falck is committed to ensuring trust throughout all operations where business is conducted with integrity and high ethical standards in compliance with applicable laws, regulations and internal policies.

Our risks

Breach of the Code of Conduct. Mistrust in Falck’s whistleblower system. Mistrust in management.

Mistrust in Falck as a service provider.

Our actions

Embedding the Code of Conduct in the way we work via training, communication and awareness campaigns.

Trust

Falck Sustainability Report 2021

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Introduction

Health & well-being

People

Climate & environment

Trust

Falck Sustainability Report 2021

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Code of Conduct Falck’s business is built on trust.

We make critical decisions every day when we assist people in need, and people trust us with their lives. We are committed to maintaining trust throughout all our operations.

Our way of conducting business at Falck is based on our global Code of Conduct. This sets the minimum standards and ethical principles applicable to all employees and business partners. It serves as a guideline and point of reference for anyone faced with dilemmas, doubts or concerns, and provides everyone with a common understanding of how we conduct business and how it ties into their role.

reviewed and updated as well as offering training and creating awareness. Global Audit & Compliance was made responsible for the whistleblower system, investigating the effectiveness of our ethics and compliance work, providing insight for continuous improvement and following up on the actions taken.

Code of Conduct training of employees is chosen as a KPI in the ESG dashboard. The target is to train all full-time employees every year and thereby foster a compliance culture in Falck.

In 2019, Falck developed the foundation for the compliance programme by developing the necessary policies. A global Code of Conduct training programme was launched, and by the end of that year, 80% of desk workers and the majority of frontliners in Falck’s core markets had completed the training. The remaning 20% of desk workers completed the training in the first months of 2020.

2021 initiatives In 2021, the updated Code of Conduct was made available in 12 languages. A refresher training was conducted in Q4. All full-time employees were offered training through a videobased e-learning course, covering all the areas under Falck’s Code of Conduct.

In locations where e-learning was not accessible, in-person training took place. In addition, specific GDPR training was rolled out to employees within the EU, and a refreshed Competition Compliance training was provided to a selected number of employees.

In 2020, all policies were reviewed, updated and approved by the Executive Management team, and managers in core markets were trained in competition compliance. Also, Falck separated the second and third lines of defence: Global Quality, Risk & Safety was made responsible for having the policies

In 2021, 55% of full-time employees completed the training. Falck does not consider the completion rate of 55% satisfactory to support our ambition of integrating compliance in the way we work. During 2022, Falck will take measures to ensure completion rate reaches 100%, e.g. implement a global learning

Code of Conduct training

2021

55%

Falck Code of Conduct Topics 01 Bribery and corruption 02 Facilitation payments 03 Gifts and hospitality 04 Conflict of interest

Target All full-time employees trained every year

05 Fraud 06 Competition compliance 07 Company assets and data protection 08 Working with business partners 09 Human rights 10 Occupational health and safety 11 Environment

management system and ensure validity of our employee master data. In addition, targeted face-to-face training and Code of Conduct awareness campaigns will be launched in risk areas to mitigate the risk related to the low completion rate. In 2022, Falck will offer additional risk-based training as well as include the Code of Conduct training in the onboarding processes globally.

Awareness campaigns will be rolled out to further support the embedding of the Code of Conduct in our way of working. Falck will continue to conduct internal audits.

12 Social investments 13 Falck Alert (whistleblower system)

Introduction

Health & well-being

People

Climate & environment

Trust

Falck Sustainability Report 2021

Whistleblower system Falck’s whistleblower system, Falck Alert, was introduced in late 2018 and has since then been available for all Falck employees, business partners and third parties.

efficiency, local investigators are engaged.

These are a selected group of designated employees who conduct investigations under the supervision and guidance of Global Audit & Compliance. They report directly to Global Audit & Compliance in terms of cases regardless of their official job function.

Falck continuously encourages employees to report concerns about irregularities or improper actions that fail to comply with applicable laws and regulations, the Falck Code of Conduct or internal policies. Various types of unethical behaviour are reported through the system, and these are all investigated and concluded on.

Compliance boards Two compliance boards have been established: The Compliance Advisory Board consists of a diverse group of senior Falck leaders, who set strategic directions in unprecedented matters. The Compliance Forum consists of employee representatives and is established to further build a culture of trust through compliance ambassadors.

Specific cases are never discussed, rather the forum is used to share knowledge.

The whistleblower reporting ratio is chosen as a KPI in the ESG dashboard. The target is a ratio above 1 report per 100 employees which is in line with the NAVEX Global database, which is used by Falck to set the benchmark for risk and compliance reporting. This is seen as an indication that employees trust the system and know they can use it without fear of retaliation.

In 2021, focus has been on further embedding trust in the system by implementing transparent and documented governance structures and processes around case handling, and by establishing compliance boards.

Governance and processes A globally standardised approach to investigations has been implemented. To increase the

2021 results In 2021, we received 227 reports (245 in 2020)* of which 61% were anonymous. This is in line with a weighted average for organisations within the NAVEX Global database.

The cases reported via Falck Alert fall within the following top-five categories: Misconduct or inappropriate behavior (28%) and Discrimination or harassment (13%): Falck has a zero-tolerance for discrimination, and action was taken without delay in these cases.

Leadership (11%): These reports were related to various managerial issues, e.g.

Whistleblower reporting ratio

Topics on cases reported*

No of reports per 100 employees Misconduct or inappropraiate behavior 28%

2021

1.32

Discrimination or harassment 13% Leadership 11%

2020: 1.17

Compliance with laws and standards 11% Target: >1

Working conditions 9% *) Top five categories reported

the leadership style, communication and fair distribution of work.

Number of reports

Compliance with laws and standards (11%) and working conditions (9%): Most reports were related to COVID-19 and the additional workload.

per 100 employees, %

3.00

1.32

Out of 227 cases reported, 16 led to termination of employment, 6 led to written warnings, 0.3 0.85 XXX 1 led to demotion and 22 led to additional 1.50 instructions or guidance. *) Total number of reports for 2020 covers Falck Group, including Portfolio. Total number for 2021 covers Falck Core 0.00 business. See definitions in Falck's Annual Report 2021.

2018

2019

2020

1.07

1.17

2019

2020

2021

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Introduction

Health & well-being

People

Climate & environment

Falck Sustainability Report 2021

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Accounting policies The Sustainability Report and accounting policies cover the period 1 January 2021 - 31 December 2021. The accounting policies covers disclosures made in the ESG key figures table on page 7.

Falck Group consists of Core business and Portfolio business. Scope for this reporting is Core business which is Falck’s strategic focus area. Core business covers Emergency Response (which includes Ambulance Europe, Ambulance US and Fire Services) and Direct Healthcare (which includes Employee Healthcare, Assistance and Community Healthcare).

Acquisitions are included in the ESG key figures from the following month of taking over control. Frisk Gruppen, which was acquired 15 October, is included in the ESG key figures as of 1 November 2021 unless otherwise stated below. Divestments are excluded from the ESG key figures from the effective date of the transaction.

CO2e emissions, total This indicator is defined as the total scope 1 CO2e emissions (CO2 equivalent) measured in tonnes. Scope 1 emissions refers to direct burning of fossil fuels – by either mobile (vehicles) or stationary (generators, heating systems, etc.) combustion. Excluded from Falck’s definition of Scope 1 are fugitive emissions from air conditioning or fire suppression systems.

It is calculated following Greenhouse Gas Protocol standards following an operational control model. The number of litres (separated by fuel type, type of combustion, and type of vehicle) is multiplied by the relevant EPA (U.S. Environmental Protection Agency) emissions factors. In certain locations it is not possible to get exact fuel data from our suppliers or internal systems. Where this is the case, estimates have been made from a comparable business entity or from historic fuel data.

The full year-effect of the San Diego contract which started up on 27 November 2021 is calculated as the CO2e emission from December 2021 multiplied by 12 (reported as the adjusted baseline). The actual number for 2021 includes emissions in December from San Diego.

CO2e emissions, relative The CO2e emissions, relative, is defined as the indicator CO2e emissions, total tonnes, scope 1 divided by revenue for Core business in DKK million according to Falck’s Annual Report 2021.

Green kilometres Green kilometres is defined as the total kilometres run on "green" energy as a percentage of total kilometres driven. Included as "green" are kilometres driven by Falck’s electric patient transportation services vehicles in Denmark and vehicles that run on HVO biodiesel in Denmark and Sweden.

Company cars are out of scope for 2021.

No. of services Number of services is defined as the sum of 10 specific kinds of services representing the Core business of Falck (Emergency Response and Direct Healthcare). All of the services have equal weight.

Emergency Response contributes with “Number of Ambulance trips” (Ambulance) and “Number of call-outs/interventions" from the Fire Services business.

Contribution from Direct Healthcare is the following: • Employee Healthcare contributes with “Number of physical treatments”, “Number of psychological treatments” and “Number of billed consultations in Previa” • Assistance is included with “Number of patient transportation services (PTS) trips”, “Number of roadside assistance (RSA) trips” and “Number of first aid trainings” • Community Healthcare participates with “Number of virtual consultations” and “Number of physical consultations” The number of services in 2021 does not include services in Frisk Gruppen.

Employee engagement Employee engagement is defined as the average employee satisfaction score (socalled eSAT score) on the question “How happy are you working at Falck?” in the annual employee satisfaction survey for the relevant financial year. It is measured on a 0-100 scale.

The survey is conducted by the external consultancy Glint and took place in autumn 2021.

In general, employees in Falck Core business are included in the survey. Included are employees who have a permanent or fixed term contract of employment with Falck and are paid through Falck's payroll system as well as selected freelancers (contractors) due to

Introduction

Health & well-being

the nature of their activities and how they are paid. Employees starting after July 2021 and employees registered leaving Falck 1 October 2021 or earlier are excluded.

Part-time workers in Ambulance in Denmark with less than 18 weekly working hours for the last 4 months and employees hired in connection with the COVID-19 antigen testing activities in Denmark are also excluded from the survey. In addition, local adjustments to the selection criteria for the survey may apply.

Frisk Gruppen is not included, as the survey was conducted before the acquisition on 15 October 2021.

Gender diversity, Executive Management Gender diversity, Executive Management, is defined as the percentage of female members of the Executive Management team. The Executive Management team is responsible for the day-to-day management and operation of Falck.

People

Climate & environment

Falck Sustainability Report 2021

Trust

Lost Time Injury Rate Lost time injury (LTI) is defined as a physical injury at work causing at least one day of absence counted from the first day after the actual injury. COVID-19 related cases are included in LTIs due to the nature of the work Falck performs. Lost Time Injury Rate (LTIR) is calculated as the number of LTIs per 1 million working hours. Working hours are defined as the total of normal working hours and overtime hours.

Included are employees who have a permanent or fixed term contract of employment with Falck and are paid through Falck's payroll system, as well as selected freelancers (contractors) due to the nature of their activities and how they are paid.

Reporting on Lost Time Injuries is performed through collection of data mainly using Microsoft Forms and monthly review meetings where LTIs may be re-classified and local registrations of injuries are assessed. Working hours are reported monthly to HR global, consolidated and validated. However, for some entities, working hours are estimated based on the number of FTEs due to missing reporting of working hours or historical data.

Fatalities Fatalities: Any fatality of employees, patients, subcontractors or third parties occurring at work.

Whistleblower reporting ratio Whistleblower reporting ratio is defined as the total number of reported whistleblower cases as ratio per 100 average FTEs for the financial year. The percentage difference between numbers of employees in Falck Core business compared to Falck Group is deducted from the total number of reports. FTE is defined as full-time equivalents which is the average number of employees calculated as total hours worked divided by full-time working hours per person for the year. Frisk Gruppen is excluded from the FTE number. Portfolio business was included in previous year's reporting.

Falck’s whistleblower system, Falck Alert, allows employees and third parties to report any concerns or actions committed about anything unethical they have experienced in or with the business 24/7.

Code of Conduct – training Code of Conduct – training measures the completion rate of the Code of Conduct training using percentage of full-time employees trained per year either online or in

person out of the total number of full time employees.

Frisk Gruppen is not included.

Sustainability governance Falck’s sustainability efforts are integrated in our daily business decisions and strategy.

Initiatives are managed by relevant business areas and Group functions by their respective management.

KPIs and targets are determined by the Executive Management and approved by the Board of Directors.

The central Sustainability Function is part of Global Communications, Branding and ESG. It oversees the initiatives across business areas and Group Functions, consolidates data and manages reporting and communication.

Annual results for each KPI are presented in Falck’s Sustainability Report and Annual Report and approved by the Board of Directors.

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Make® Falck A/S Sydhavnsgade 18 2450 Copenhagen SV Denmark Tel.: +45 70 33 33 11 www.falck.com www.falck.dk CVR no. 33 59 70 45

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