Lundbeck

Board of Directors

Governance structures and composition

Lundbeck is governed by a two-tier governance structure consisting of the Board of Directors and the Executive Management. The two-tier structure ensures a clear separation of strategic oversight and operational management.

Board of Directors composition and responsibilities:

• The Board consists of 6 shareholder-elected members and 2 employee-elected representatives
• Independence: 5 out of 6 shareholder-elected Board members are independent
• Diversity: The Board has achieved 37.5% female representation among all members
• The Board oversees strategic direction, risk management, and sustainability matters
• Board members bring expertise across pharmaceuticals, finance, sustainability, digital transformation, and international business

Key sustainability governance responsibilities:

• The Board oversees ESG strategy implementation and sustainability reporting
• Reviews and approves sustainability targets and climate commitments
• Monitors progress on material sustainability impacts, risks and opportunities
• Ensures integration of sustainability considerations into business strategy and decision-making

Board committees:

• Audit Committee: Oversees financial reporting, internal controls, and risk management including sustainability-related risks
• Remuneration Committee: Determines executive compensation and integration of sustainability metrics in incentive schemes
• Nomination Committee: Responsible for Board composition, succession planning, and ensuring appropriate competencies including sustainability expertise

Executive Management:

• Led by President and CEO with responsibility for day-to-day operations
• Executive Management team includes roles with specific sustainability responsibilities
• Regular reporting to Board on sustainability performance and material matters

Information provided to the Board on sustainability matters

The Board of Directors receives comprehensive information on sustainability matters through multiple channels:

Regular reporting mechanisms:

• Quarterly business reviews include sustainability KPIs and performance updates
• Annual sustainability strategy reviews and target-setting sessions
• Deep-dive presentations on material sustainability topics including climate, patient access, and business ethics
• Reports on regulatory developments including CSRD implementation

Sustainability information provided includes:

• Progress on Science Based Targets initiative (SBTi) climate commitments
• Patient access metrics and programs in low- and middle-income countries
• Workplace safety incidents and health & safety performance
• Business ethics compliance including Code of Conduct training completion rates
• Supply chain sustainability assessments and due diligence results
• Regulatory compliance status and any material violations

Board oversight of material topics:

• Climate change: Board reviews annual GHG emissions data, progress on reduction targets, and climate transition plan implementation
• Patient access: Oversight of global access programs, pricing strategies, and health equity initiatives
• Research ethics: Review of clinical trial diversity, patient safety protocols, and ethical research practices
• Business conduct: Monitoring of anti-corruption measures, political activities, and supplier relationships

External assurance: The Board receives reports on limited assurance provided by external auditors on selected sustainability data points to ensure data quality and reliability.

Integration of sustainability in incentive schemes

Lundbeck has integrated sustainability-related performance indicators into executive remuneration to align management incentives with the company's sustainability strategy and long-term value creation.

Short-term incentive plan (annual bonus):

• ESG objectives comprise a portion of the annual performance evaluation for Executive Management
• Sustainability KPIs included cover areas such as:
  • Patient access metrics and health equity improvements
  • Progress on climate targets including GHG emission reductions
  • Workplace safety performance (lost time injury frequency rates)
  • Business ethics compliance rates

Long-term incentive plan:

• The long-term incentive program incorporates sustainability criteria that must be achieved over a multi-year performance period
• Sustainability metrics are weighted alongside financial performance indicators
• Focus on material sustainability impacts that drive long-term value creation

Performance measurement:

• Sustainability targets are aligned with Lundbeck's approved Science Based Targets and other external commitments
• Performance is measured against both absolute targets and year-over-year improvements
• External verification of sustainability data provides assurance on performance measurement

Governance oversight:

• The Remuneration Committee oversees the integration of sustainability metrics in compensation
• Regular review of sustainability incentive structures to ensure continued alignment with strategy
• Transparent disclosure of sustainability performance outcomes in annual reporting

Statement on due diligence

Lundbeck has implemented comprehensive due diligence processes to identify, prevent, and mitigate adverse impacts across our operations and value chain, in line with our commitment to responsible business conduct.

Due diligence framework: Our due diligence approach is integrated into our business processes and covers environmental, social, and governance risks. We conduct due diligence across our entire value chain, from research and development through to patient delivery.

Key due diligence processes:

Supply chain due diligence:

• Comprehensive supplier qualification and assessment processes
• Regular audits of critical suppliers including on-site inspections
• Supplier Code of Conduct requirements covering labor standards, environmental practices, and business ethics
• Risk-based monitoring with enhanced due diligence for suppliers in higher-risk jurisdictions
• Corrective action plans and supplier capability building where needed

Clinical research due diligence:

• Rigorous patient safety protocols and adverse event monitoring
• Ethics committee approvals and regulatory compliance verification
• Clinical trial site assessments and monitoring
• Patient consent processes and data privacy protections
• Diversity and inclusion commitments in clinical trial design

Environmental due diligence:

• Environmental impact assessments for manufacturing operations
• Regular monitoring of air, water and soil impacts
• Waste management and chemical safety assessments
• Climate risk assessments including physical and transition risks

Business ethics due diligence:

• Third-party risk assessments including anti-corruption screening
• Know Your Customer (KYC) and sanctions screening processes
• Regular monitoring of business partners and intermediaries
• Whistleblower and grievance mechanisms

Effectiveness and continuous improvement: We regularly evaluate the effectiveness of our due diligence processes and make improvements based on learnings, stakeholder feedback, and evolving best practices. This includes updating our risk assessments, enhancing monitoring systems, and strengthening our supplier and partner requirements.

Risk management and internal controls over sustainability reporting

Risk management framework for sustainability: Lundbeck has established comprehensive risk management and internal control systems that encompass sustainability-related risks and opportunities. Our approach ensures that material sustainability matters are appropriately identified, assessed, managed, and reported.

Governance structure:

• Board oversight: The Board of Directors has ultimate responsibility for risk management including sustainability risks
• Audit Committee: Provides detailed oversight of risk management systems and internal controls
• Executive Management: Responsible for implementing risk management strategies and maintaining effective controls
• Risk Management function: Dedicated team coordinating enterprise-wide risk management activities

Sustainability risk identification and assessment:

• Regular risk assessments: Systematic identification of current and emerging sustainability risks and opportunities
• Materiality assessment: Annual evaluation of material sustainability topics based on stakeholder input and impact assessment
• Climate risk assessment: Specific evaluation of physical and transition climate risks following TCFD recommendations
• Integration with enterprise risk management: Sustainability risks are integrated into our broader ERM framework

Internal controls over sustainability reporting:

• Data management systems: Robust systems for collecting, validating, and reporting sustainability data
• Process controls: Defined procedures for sustainability data collection with clear roles and responsibilities
• Review and verification: Multi-level review processes including management review and external assurance
• Documentation: Comprehensive documentation of methodologies, assumptions, and data sources
• System access controls: Appropriate access restrictions and approval processes for sustainability data systems

Control activities:

• Monthly monitoring: Regular tracking of key sustainability KPIs and performance against targets
• Quarterly reviews: Management review of sustainability performance and control effectiveness
• Annual assessments: Comprehensive evaluation of internal controls over sustainability reporting
• External assurance: Limited assurance provided by external auditors on selected sustainability metrics

Monitoring and reporting:

• Dashboard reporting: Real-time monitoring of key sustainability indicators
• Management reporting: Regular reports to Executive Management and Board on sustainability performance
• Public disclosure: Annual sustainability reporting in accordance with CSRD/ESRS requirements
• Continuous improvement: Regular updates to controls based on internal assessments and external feedback

Strategy, business model and value chain

Business Model

Our purpose: Advancing brain health and transforming lives

Lundbeck is one of the few biopharmaceutical companies in the world working exclusively within neuroscience. We discover, develop, and commercialize treatments that make a difference to people affected by psychiatric and neurological disorders.

We cover the full value chain:

• Research: We build a strong pipeline consisting of promising molecules and antibodies
• Development: We develop our drug candidates into new medicines
• Manufacturing: We manufacture medicines at highly advanced production sites and continue to supply our drugs to patients in need
• Commercialization: We make our medicines available through healthcare systems in more than 100 countries

Our focus areas:

• Psychiatry: Covers psychotic disorders like schizophrenia, mood and anxiety disorders like depression, bipolar disorder, and post-traumatic stress disorder
• Neurology: Covers disorders like migraine, dementia, and movement disorders like Parkinson's disease, epilepsy, and multiple system atrophy (MSA)

Global presence: We are around 5,600 highly specialized employees across +50 countries

Value Chain

Input:

• Energy and raw materials to produce medicines
• Research organizations to conduct clinical studies and establish evidence for new drug candidates
• Medicines produced by contract manufacturers and partners
• Key opinion leaders e.g., healthcare professionals

Transformation: Lundbeck is headquartered in Denmark and operates in over 50 countries, covering:

• Research & Development
• Production & Supply
• Marketing & Sales
• Business enabling functions, such as Corporate Functions, People & Culture, Corporate Communications & Public Affairs

Output and Outcome:

• Value based treatment options for healthcare systems
• Improvement of health outcomes for patients
• Profitability to shareholders
• Reinvestment into R&D
• Jobs and skills development for employees
• Tax contributions to societies we are part of

Strategic Direction - Focused Innovator Strategy

In 2024, we launched our Focused Innovator Strategy addressing three main action points:

1. Securing mid-term growth:

• Strong foundation of strategic brands with double-digit growth rates
• Strategic brands reached DKK 16,462 million (+21% CER) representing 75% of total revenue
• Four strategic brands: Rexulti®, Brintellix®/Trintellix®, Abilify LAI franchise, Vyepti®

2. Leading with focused innovation:

• Transformation of R&D building innovative pipeline in neuro-specialty and neuro-rare conditions
• 90% of development pipeline focused on neuro-rare and neuro-specialty areas
• Acquisition of Longboard Pharmaceuticals enhancing neuroscience pipeline
• Four biological clusters: Hormonal/neuropeptide signaling, Circuitry/neuronal biology, Neuroinflammation/neuroimmunology, Protein aggregation/folding/clearance

3. Delivering sustainable profitability:

• Continual reallocation of finances and resources to ensure focused innovation and long-term growth
• Record revenue of DKK 22,004 million (+14% CER)
• Adjusted EBITDA of DKK 6,347 million (+20% CER)

Key Markets and Products

Geographic presence: Products registered in more than 80 countries with employees in more than 50 countries

Revenue by region (2024):

• United States: DKK 11,325 million (52% of group revenue)
• Europe: DKK 5,146 million (24% of group revenue)
• International Operations: DKK 5,219 million (24% of group revenue)

Strategic brands performance:

Sustainability Integration

Access to health as core strategy:

• 7.2 million estimated full-year patients reached in 2024
• Commitment to making innovative treatment available through R&D, promoting equitable accessibility, enhancing cultural acceptability, and providing efficacious medical products

Patient-centric approach:

• "Let the patient speak" events integrating patient perspectives into development programs
• Diversity commitments in clinical trials
• Focus on underrepresented populations and health equity

Environmental commitments:

• Science Based Targets initiative (SBTi) approved targets
• Climate transition plan towards net-zero
• 38% reduction in Scope 1 & 2 GHG emissions since 2019
• Construction of new chemical recovery unit to increase recycling rates

Innovation for sustainability:

• Focus on neuro-rare diseases addressing high unmet medical needs
• Partnerships with academia and other organizations to advance brain health research
• AI and digitization driving innovation efficiency

Interests and views of stakeholders

Key Stakeholders

Patients are an integral part of Lundbeck's full value chain ecosystem and fundamental to our patient-centric go-to-market approach. Their lived experiences and ability to point to unmet medical needs enable us to drive focused innovation across all aspects of our business.

While patients are the end-users of our pharmaceutical products, Lundbeck's customers are healthcare professionals (HCPs), including physicians and specialists, as well as authorities, such as regulatory bodies, and public and private healthcare providers. Our customers play an important role across our value chain, where HCPs are the point of contact with patients in the downstream value chain, and the authorities are regulating our access to the market.

Operating in a highly regulated industry, Lundbeck has strong procedures and internal processes in place to ensure compliance with pharmaceutical regulations, achieve operational excellence and instill trust across our value chain.

Leveraging our key partnerships across the value chain, including R&D, commercial and other types of partnerships, e.g., civil society and NGOs enables Lundbeck to drive our business, increase awareness and ensure societal impact.

As a listed company with many investors and shareholders, Lundbeck is committed to communicating a consistent message and delivering sustainable growth.

To pursue all these goals and serve people affected by brain disorders and society at large, Lundbeck relies on highly qualified and specialized employees. Furthermore, suppliers and the workers in the value chain are key to providing the fundamental inputs to produce Lundbeck's high-quality products.

Stakeholder Engagement Approach

Patient engagement:

• "Let the patient speak" events focusing on integrating patient perspectives into development programs
• Patient and caregiver insights incorporated into clinical trial designs
• Collaboration with patient advocacy groups to enhance clinical trial diversity
• Global platform launched in 2024 to provide medical education to healthcare professionals

Healthcare professional engagement:

• Medical education programs and scientific conferences
• Clinical trial collaborations and research partnerships
• Advisory boards and key opinion leader networks
• Regulatory dialogue and submissions process

Employee engagement:

• Annual employee surveys measuring engagement and satisfaction
• "Let the patient speak" internal events to maintain patient focus
• Training programs on neurodiversity and inclusion
• Company-wide training on sustainability and Code of Conduct (100% completion rate in 2024)

Supplier engagement:

• Supplier Code of Conduct requirements
• Regular supplier assessments and audits
• Capability building programs for suppliers
• Collaboration on sustainability improvements including GHG emission reduction

Community and civil society engagement:

• Partnerships with patient advocacy organizations
• Collaboration with academic institutions and research centers
• Participation in industry initiatives and standards development
• Support for low- and middle-income countries and areas affected by war and civil unrest

Investor and financial community engagement:

• Regular financial reporting and investor communications
• ESG-focused investor meetings and presentations
• Participation in sustainability rating assessments
• Transparent disclosure through annual reporting including CSRD compliance

Regulatory and policy engagement:

• Active participation in regulatory consultations and guideline development
• Engagement with health technology assessment bodies
• Policy advocacy on patient access and healthcare innovation
• Compliance with evolving regulatory requirements including sustainability reporting

Stakeholder Feedback Integration

Material topic identification: Stakeholder input is integral to our annual materiality assessment process, helping identify and prioritize the most significant sustainability impacts, risks, and opportunities.

Product development: Patient and healthcare professional feedback directly influences our R&D priorities, clinical trial design, and product development strategies.

Sustainability strategy: Stakeholder perspectives inform our sustainability commitments, target-setting, and performance measurement across environmental, social, and governance dimensions.

Business strategy alignment: Regular stakeholder engagement ensures our Focused Innovator Strategy remains aligned with stakeholder needs and expectations while driving long-term value creation.

Material impacts, risks and opportunities and their interaction with strategy and business model

Materiality Assessment Process

Lundbeck conducted a comprehensive materiality assessment in 2024 to identify and prioritize the most significant sustainability impacts, risks, and opportunities. This assessment involved extensive stakeholder engagement and expert analysis to determine material topics under the ESRS framework.

Material Topics Identified

Based on our materiality assessment, Lundbeck has identified the following material sustainability topics:

Environmental:

• Climate Change (E1): Material due to operational emissions, energy consumption, and climate-related physical and transition risks
• Pollution (E2): Material given pharmaceutical manufacturing processes and chemical usage
• Resource Use and Circular Economy (E5): Material due to raw material consumption and waste generation in pharmaceutical production

Social:

• Own Workforce (S1): Material given our dependence on highly skilled employees and need for diverse, inclusive workplace
• Workers in the Value Chain (S2): Material due to supply chain complexity and manufacturing partnerships
• Affected Communities (S3): Material through our patient access programs and community health impacts
• Consumers and End-Users (S4): Material as patients are central to our business model and purpose

Governance:

• Business Conduct (G1): Material given highly regulated pharmaceutical industry and ethical requirements

Impact Assessment

Positive Impacts:

• Patient health outcomes: Our treatments reached 7.2 million patients in 2024, improving quality of life for people with brain disorders
• Healthcare system value: Providing innovative treatments that address high unmet medical needs
• Economic contribution: Creating jobs, generating tax revenue, and supporting healthcare ecosystems globally
• Research advancement: Contributing to scientific knowledge and neurological/psychiatric treatment development

Negative Impacts:

• Environmental impacts: GHG emissions from operations, chemical usage in manufacturing, waste generation
• Access limitations: Potential barriers to patient access due to pricing, geographic availability, or healthcare system constraints
• Supply chain impacts: Potential labor and environmental impacts in complex global supply chain

Risk Assessment

Climate-related risks:

• Physical risks: Extreme weather events potentially disrupting manufacturing and supply chains
• Transition risks: Carbon pricing, regulations, and market shifts affecting operations and costs
• Opportunities: Energy efficiency improvements, renewable energy adoption, and climate-adapted business models

Social risks:

• Patient access: Regulatory changes, pricing pressures, and healthcare system constraints affecting patient reach
• Workforce risks: Talent retention challenges, skills shortages, and changing workplace expectations
• Supply chain disruption: Potential human rights and labor issues in global supply chain

Governance risks:

• Regulatory compliance: Evolving pharmaceutical regulations, sustainability reporting requirements
• Business ethics: Anti-corruption, transparency, and responsible business conduct expectations
• Data privacy: Patient data protection and clinical trial information security

Strategic Integration

Focused Innovator Strategy alignment: Our material sustainability topics are directly integrated into our Focused Innovator Strategy:

1. Securing mid-term growth:

• Patient access and health equity central to sustainable revenue growth
• Climate resilience ensuring operational continuity
• Diverse and inclusive workforce supporting innovation capability

2. Leading with focused innovation:

• Research ethics and responsible innovation practices
• Patient-centric development addressing unmet medical needs
• Environmental considerations in product development and manufacturing

3. Delivering sustainable profitability:

• ESG risk management protecting long-term value creation
• Stakeholder trust and reputation supporting market access
• Operational efficiency through resource optimization and circularity

Business Model Integration

Value chain integration:

• Research & Development: Patient safety, research ethics, diversity in clinical trials
• Manufacturing: Environmental impact reduction, worker safety, supply chain responsibility
• Commercialization: Patient access, healthcare professional education, responsible marketing
• Corporate functions: Governance, risk management, sustainability reporting

Performance measurement: We track progress on material topics through specific KPIs integrated into business performance monitoring:

• Patient access metrics (7.2 million patients reached)
• Climate targets (38% reduction in Scope 1&2 emissions since 2019)
• Workplace safety (3.2 lost time injury frequency rate)
• Business ethics compliance (100% Code of Conduct training completion)
• Diversity metrics (35% women in senior management)

Opportunities

Innovation opportunities:

• Development of treatments for underserved patient populations
• Digital health solutions improving patient outcomes and access
• Sustainable manufacturing and packaging innovations

Market opportunities:

• Growing neuroscience market with 8% annual growth rate
• Increasing recognition of mental health importance
• Regulatory support for breakthrough therapies and patient access

Operational opportunities:

• Energy efficiency and renewable energy adoption reducing costs
• Circular economy principles reducing waste and resource costs
• Enhanced stakeholder relationships supporting business resilience

Description of the processes to identify and assess material impacts, risks and opportunities

Materiality Assessment Framework

Lundbeck has established a comprehensive process for identifying and assessing material impacts, risks, and opportunities related to sustainability matters. This process is conducted annually and follows the double materiality approach required under CSRD/ESRS, considering both impact materiality and financial materiality.

Process Overview

1. Topic Identification

• ESRS topic review: Systematic review of all topics and sub-topics covered in ESRS standards
• Industry analysis: Assessment of sector-specific sustainability issues relevant to pharmaceuticals
• Peer benchmarking: Analysis of material topics identified by pharmaceutical industry peers
• Regulatory scanning: Review of emerging sustainability regulations and requirements
• Trend analysis: Identification of emerging sustainability trends and future risks/opportunities

2. Stakeholder Engagement

• Internal stakeholders: Interviews and workshops with Executive Management, Board members, and key functional leaders
• External stakeholders: Engagement with patients, healthcare professionals, investors, suppliers, and civil society organizations
• Patient perspectives: "Let the patient speak" events and patient advisory input
• Expert consultation: Engagement with sustainability experts and industry associations
• Survey methodology: Structured questionnaires to gather stakeholder prioritization input

3. Impact Assessment

• Value chain mapping: Comprehensive analysis of sustainability impacts across our entire value chain from R&D to patient delivery
• Geographic analysis: Assessment of impacts across different markets and jurisdictions
• Severity evaluation: Assessment of scale, scope, and irremediable character of negative impacts
• Positive impact evaluation: Assessment of scale and scope of positive contributions to sustainable development
• Time horizon consideration: Evaluation of short-term, medium-term, and long-term impacts

4. Financial Materiality Assessment

• Risk evaluation: Assessment of financial risks from sustainability matters including climate, regulatory, reputational, and operational risks
• Opportunity assessment: Evaluation of financial opportunities from sustainability trends and stakeholder expectations
• Scenario analysis: Stress-testing under different sustainability scenarios including climate pathways
• Quantification: Where possible, quantitative assessment of potential financial impacts
• Time horizon analysis: Short-term (0-1 years), medium-term (1-5 years), and long-term (5+ years) financial implications

5. Prioritization and Validation

• Materiality matrix: Development of materiality assessment results plotting impact materiality against financial materiality
• Threshold setting: Establishment of materiality thresholds based on significance criteria
• Management review: Executive Management and Board review and validation of materiality assessment results
• External validation: Where appropriate, external expert review of methodology and conclusions

Governance and Oversight

Board oversight:

• The Board of Directors oversees the materiality assessment process and approves final material topic identification
• Regular updates on emerging risks and opportunities provided to Board
• Integration of material topics into Board risk management oversight

Executive Management involvement:

• CEO and Executive Management team actively participate in materiality assessment
• Cross-functional working groups ensure comprehensive coverage of business areas
• Integration of material topics into strategic planning and business performance management

Internal coordination:

• Sustainability team: Coordinates overall process and methodology
• Risk Management: Provides risk assessment expertise and integration with enterprise risk management
• Business functions: Subject matter experts from relevant functions contribute specialized knowledge
• External affairs: Manages stakeholder engagement and external perspective integration

Methodological Considerations

Double materiality approach:

• Impact materiality: Assessment of organization's impacts on people and environment
• Financial materiality: Assessment of sustainability matters' effects on enterprise value
• Dynamic interaction: Recognition that impacts and financial effects can reinforce each other

Value chain perspective:

• Upstream impacts: Supplier and raw material sourcing impacts
• Own operations: Direct operational impacts from research, manufacturing, and commercial activities
• Downstream impacts: Product use, patient outcomes, and end-of-life considerations
• Business relationships: Impacts through partnerships, joint ventures, and other business relationships

Stakeholder-informed approach:

• Diverse perspectives: Ensuring representation from all key stakeholder groups
• Patient-centricity: Emphasizing patient and caregiver voices given our healthcare mission
• Expert input: Leveraging external sustainability and industry expertise
• Balanced representation: Geographic and demographic diversity in stakeholder engagement

Continuous Improvement

Annual review cycle:

• Annual refresh of materiality assessment to capture evolving context
• Regular monitoring of emerging issues and stakeholder expectations
• Integration of learnings from implementation and stakeholder feedback

Process enhancement:

• Continuous improvement of methodology based on best practices and regulatory guidance
• Enhanced data collection and quantification capabilities
• Strengthened stakeholder engagement approaches

Integration with business processes:

• Embedding materiality insights into strategic planning cycles
• Integration with enterprise risk management and internal controls
• Alignment with sustainability target-setting and performance measurement

Transition plan for climate change mitigation

Lundbeck is committed to achieving net-zero greenhouse gas emissions across our value chain. Our climate transition plan outlines the pathway and actions required to meet our science-based targets and contribute to limiting global warming to 1.5°C.

Climate Transition Strategy

Net-zero commitment: Lundbeck has committed to achieving net-zero greenhouse gas emissions across our entire value chain by 2050, with interim targets approved by the Science Based Targets initiative (SBTi) for 2030.

Science Based Targets:

• Near-term targets (by 2030):
  • Reduce absolute Scope 1 and 2 GHG emissions by 46% from 2019 baseline
  • Reduce Scope 3 emissions from purchased goods and services, upstream transportation and distribution, and business travel by 25% from 2019 baseline
• Long-term target: Achieve net-zero GHG emissions across the value chain by 2050

Transition Plan Components

1. Operational Emissions Reduction (Scopes 1 & 2)

Energy efficiency improvements:

• Comprehensive energy management systems across all manufacturing sites
• Implementation of energy-efficient technologies and processes
• Regular energy audits and optimization of building systems
• LED lighting upgrades and smart building management systems

Renewable energy transition:

• Systematic transition to renewable electricity across operations
• Power Purchase Agreements (PPAs) for renewable energy supply
• On-site renewable energy generation where feasible
• Green electricity procurement strategies in key markets

Process optimization:

• Manufacturing process improvements to reduce energy intensity
• Heat recovery systems and waste heat utilization
• Optimization of chemical recovery and recycling processes
• New chemical recovery unit construction (completion expected late 2025)

2. Value Chain Emissions Reduction (Scope 3)

Supplier engagement:

• Collaboration with suppliers on GHG emission reduction initiatives
• Supplier climate commitments and target-setting requirements
• Supply chain decarbonization roadmaps
• Supplier capability building and best practice sharing

Sustainable sourcing:

• Preference for suppliers with strong climate commitments
• Integration of climate criteria in supplier selection processes
• Sustainable raw material sourcing strategies
• Circular economy principles in procurement

Product lifecycle optimization:

• Product design considerations for reduced carbon footprint
• Sustainable packaging initiatives
• Transportation and logistics optimization
• End-of-life product considerations

Business travel reduction:

• Digital collaboration tools reducing travel requirements
• Travel policies prioritizing lower-carbon alternatives
• Carbon-efficient travel booking systems
• Hybrid and remote working arrangements

Investment and Resource Allocation

Capital investments:

• Significant investments in energy efficiency and renewable energy projects
• New chemical recovery unit investment (major milestone in 2024)
• Manufacturing process upgrades and optimization
• Digital infrastructure supporting carbon management

Operational resources:

• Dedicated sustainability team and climate expertise
• Cross-functional climate action working groups
• Integration of climate considerations in business planning
• Performance management systems tracking climate metrics

Financial planning:

• Climate investment budgets integrated into capital allocation
• Assessment of climate-related financial risks and opportunities
• Carbon pricing assumptions in investment decisions
• Green finance and sustainability-linked financing consideration

Governance and Monitoring

Climate governance:

• Board oversight of climate strategy and performance
• Executive Management accountability for climate targets
• Integration of climate metrics in performance evaluation
• Regular climate risk assessment and management

Performance monitoring:

• Annual GHG emissions inventory and verification
• Progress tracking against science-based targets
• Key performance indicators integrated in management reporting
• External reporting and transparency commitments

Third-party verification:

• Annual third-party verification of GHG emissions data
• SBTi target validation and progress assessment
• External assurance of climate disclosures
• Participation in climate disclosure frameworks (CDP)

Progress to Date

2024 achievements:

• 38% reduction in Scope 1 & 2 GHG emissions since 2019 baseline
• Construction started on new chemical recovery unit
• Continued expansion of renewable energy procurement
• Enhanced supplier engagement on climate action

Challenges and risks:

• 18% increase in Scope 3 emissions since 2019, requiring intensified action
• Supply chain complexity requiring enhanced collaboration
• Technology availability for certain emission reduction opportunities
• Market readiness for sustainable alternatives in some categories

Future Roadmap

2025-2030 priorities:

• Accelerate Scope 3 emissions reduction through supplier engagement
• Complete renewable energy transition for own operations
• Implement circular economy initiatives
• Develop carbon removal and offsetting strategies for residual emissions

Innovation and technology:

• Investment in breakthrough technologies for emission reduction
• Collaboration on sustainable pharmaceutical manufacturing innovations
• Digital solutions for carbon management and optimization
• Research and development of sustainable product alternatives

Stakeholder collaboration:

• Industry collaboration on decarbonization challenges
• Patient and healthcare system engagement on sustainable healthcare
• Policy advocacy for supportive regulatory frameworks
• Partnership with NGOs and sustainability organizations

Our climate transition plan is a living document that will be updated regularly to reflect progress, learnings, and evolving best practices. We are committed to transparency in our climate journey and will continue to report on our progress annually.

Policies related to climate change mitigation and adaptation

Climate Policy Framework

Lundbeck has established comprehensive climate policies that guide our approach to both climate change mitigation and adaptation across all business operations and decision-making processes.

Climate Change Mitigation Policies

Corporate Climate Commitment: Lundbeck is committed to achieving net-zero greenhouse gas emissions across our entire value chain by 2050, with science-based interim targets for 2030 validated by the Science Based Targets initiative (SBTi).

Energy Management Policy:

• Systematic approach to energy efficiency across all operations
• Preference for renewable energy sources in electricity procurement
• Regular energy audits and continuous improvement of energy performance
• Integration of energy considerations in facility design and equipment selection
• Employee awareness and engagement in energy conservation

Carbon Management Policy:

• Annual measurement and reporting of Scope 1, 2, and 3 greenhouse gas emissions
• Third-party verification of emissions data to ensure accuracy and credibility
• Integration of carbon considerations in business planning and investment decisions
• Carbon pricing assumptions applied to major capital investments
• Regular assessment of carbon reduction opportunities across operations

Sustainable Procurement Policy:

• Integration of climate criteria in supplier selection and evaluation processes
• Requirement for suppliers to disclose their climate commitments and emissions data
• Collaboration with suppliers on emission reduction initiatives and target-setting
• Preference for suppliers with science-based targets or strong climate action plans
• Regular assessment of supply chain climate risks and opportunities

Green Transportation Policy:

• Business travel guidelines prioritizing lower-carbon alternatives
• Digital collaboration tools to reduce travel requirements
• Sustainable transportation options for employee commuting
• Optimization of logistics and distribution to minimize transportation emissions
• Transition planning for fleet electrification where applicable

Climate Change Adaptation Policies

Climate Risk Management Policy:

• Regular assessment of physical climate risks to operations, supply chain, and markets
• Integration of climate risk considerations in business continuity planning
• Scenario analysis to understand potential impacts under different climate futures
• Adaptation measures to enhance resilience of critical operations and infrastructure
• Climate risk disclosure in accordance with TCFD recommendations

Operational Resilience Policy:

• Robust supply chain management to address climate-related disruptions
• Backup suppliers and alternative sourcing strategies for critical materials
• Infrastructure improvements to enhance resilience to extreme weather events
• Emergency response and business continuity procedures for climate-related events
• Regular testing and updating of resilience measures

Product and Service Adaptation:

• Consideration of climate change impacts on patient populations and healthcare needs
• Supply chain resilience to ensure continued medicine availability during climate events
• Packaging and storage considerations for changing climate conditions
• Distribution network optimization to maintain product integrity

Policy Implementation and Governance

Governance Structure:

• Board of Directors: Ultimate oversight of climate policy and strategy
• Executive Management: Accountability for policy implementation and performance
• Sustainability Committee: Cross-functional coordination of climate initiatives
• Site Management: Local implementation and performance management

Policy Integration:

• Climate considerations integrated into strategic planning processes
• Performance management systems include climate-related KPIs
• Regular management reporting on climate policy implementation
• Integration with enterprise risk management framework

Training and Awareness:

• Employee training on climate policies and individual responsibilities
• Management development programs including climate leadership
• Regular communication on climate performance and targets
• Recognition programs for outstanding climate action contributions

Stakeholder Engagement

Internal Engagement:

• Employee engagement surveys including climate-related topics
• Cross-functional working groups on climate action implementation
• Integration of climate considerations in role descriptions and performance evaluations
• Regular internal communications on climate progress and initiatives

External Engagement:

• Collaboration with suppliers on climate action and target-setting
• Participation in industry initiatives and standard-setting processes
• Engagement with investors on climate strategy and performance
• Partnership with NGOs and sustainability organizations
• Public policy advocacy for supportive climate regulations

Policy Monitoring and Review

Performance Monitoring:

• Annual tracking of key climate indicators against policy objectives
• Regular review of policy effectiveness and implementation progress
• Benchmarking against industry best practices and regulatory requirements
• Stakeholder feedback integration in policy evaluation

Policy Updates:

• Annual review of climate policies to ensure continued relevance and ambition
• Integration of learnings from policy implementation and external developments
• Alignment with evolving regulatory requirements and best practices
• Stakeholder consultation in significant policy updates

Compliance and Accountability:

• Clear roles and responsibilities for policy implementation
• Regular compliance monitoring and reporting
• Corrective action procedures for policy non-compliance
• Integration with internal audit and assurance processes

Alignment with External Frameworks

Science Based Targets initiative (SBTi):

• Climate policies aligned with SBTi methodology and requirements
• Regular reporting on progress toward science-based targets
• Commitment to net-zero target validation through SBTi process

TCFD Recommendations:

• Climate policies support TCFD-aligned disclosure and risk management
• Integration of climate scenario analysis in strategic planning
• Regular assessment and disclosure of climate-related financial impacts

Paris Agreement:

• Climate policies designed to contribute to Paris Agreement objectives
• Alignment with 1.5°C warming pathway through science-based targets
• Support for global climate action through industry collaboration

Our climate policies are designed to drive meaningful action while remaining practical and achievable. We review and update these policies regularly to ensure they continue to support our climate commitments and align with evolving best practices and stakeholder expectations.

Actions and resources in relation to climate change policies

Climate Action Implementation

Lundbeck has implemented comprehensive action plans and allocated significant resources to deliver on our climate commitments and policies. Our approach combines operational improvements, strategic investments, and stakeholder engagement.

Operational Actions

Energy Efficiency Initiatives:

Manufacturing optimization:

• Comprehensive energy management systems implemented across all production sites
• LED lighting upgrades completed at major facilities, reducing energy consumption by 15-20%
• Smart building management systems installed to optimize heating, ventilation, and cooling
• Process optimization projects reducing energy intensity of pharmaceutical manufacturing
• Heat recovery systems capturing waste heat for reuse in production processes

Chemical recovery and recycling:

• Major investment: Construction of new chemical recovery unit at our production site (started in 2024)
• Expected completion by late 2025, significantly increasing solvent recovery rates
• Current chemical recycling rate: 62% of selected organic solvents (up from 59% in 2023)
• Target to further increase recovery rates upon completion of new facility
• Reduced waste generation and lower need for virgin chemical inputs

Renewable Energy Transition:

• Systematic transition to renewable electricity across European operations
• Power Purchase Agreements (PPAs) secured for renewable energy supply
• Green electricity procurement strategies implemented in key markets
• On-site renewable energy feasibility assessments conducted
• Renewable energy share increased significantly in 2024

Supply Chain Actions

Supplier Engagement Program:

• Climate supplier assessments: Regular evaluation of supplier climate commitments and performance
• Capability building: Workshops and training programs for suppliers on emission reduction
• Target setting collaboration: Working with key suppliers to establish science-based targets
• Best practice sharing: Regular forums for sharing emission reduction innovations
• Performance integration: Climate performance increasingly weighted in supplier evaluation

Sustainable Sourcing:

• Preference criteria established for suppliers with strong climate commitments
• Alternative sourcing strategies developed to reduce transportation emissions
• Packaging optimization initiatives reducing material usage and weight
• Circular economy principles integrated into procurement processes
• Local sourcing strategies where feasible to reduce transportation impacts

Operational Improvements

Transportation and Logistics:

• Business travel reduction: 30% reduction in business travel compared to pre-pandemic levels
• Enhanced digital collaboration tools reducing need for in-person meetings
• Travel policy updates prioritizing train over air travel for shorter distances
• Carbon-efficient travel booking systems implemented
• Hybrid and remote working policies supporting reduced commuting

Facility Management:

• Building upgrades focusing on energy efficiency and HVAC optimization
• Waste reduction and recycling programs expanded across all locations
• Water efficiency improvements reducing overall resource consumption
• Green office initiatives engaging employees in climate action
• Sustainable commuting programs including electric vehicle charging stations

Resource Allocation

Financial Investment:

Capital expenditure:

• Major investment in new chemical recovery unit (multi-million DKK investment)
• Energy efficiency upgrades across manufacturing facilities
• Renewable energy infrastructure and power purchase agreements
• Digital infrastructure for carbon monitoring and management
• Research and development for sustainable manufacturing processes

Operational resources:

• Dedicated sustainability team: Full-time professionals managing climate initiatives
• Cross-functional working groups: Employees from all business units engaged in climate action
• Management time: Senior leadership committed time allocation for climate strategy
• Training and development: Employee programs building climate awareness and capabilities

Technology and Innovation:

• Investment in breakthrough technologies for emission reduction
• Collaboration with technology partners on sustainable pharmaceutical manufacturing
• Digital solutions for carbon management and optimization
• Research initiatives exploring sustainable alternatives to current processes

Performance Management

Monitoring and Reporting:

• Monthly tracking: Key climate indicators monitored and reported to management
• Annual GHG inventory: Comprehensive emissions measurement across Scopes 1, 2, and 3
• Third-party verification: External assurance of emissions data and methodology
• Progress reporting: Regular updates on science-based target progress
• Dashboard systems: Real-time monitoring of energy consumption and emissions

Target Achievement:

Stakeholder Engagement

Employee Engagement:

• Climate awareness campaigns: Regular communications on climate progress and initiatives
• Green teams: Volunteer employee groups driving local climate action
• Innovation challenges: Employee-led initiatives for emission reduction ideas
• Performance integration: Climate considerations in job roles and evaluations

External Collaboration:

• Industry partnerships: Collaboration with pharmaceutical industry on climate solutions
• Academic partnerships: Research collaborations on sustainable manufacturing
• NGO partnerships: Working with environmental organizations on climate action
• Policy engagement: Advocacy for supportive climate policies and regulations

Adaptation Actions

Resilience Building:

• Supply chain resilience: Backup suppliers and alternative sourcing strategies
• Infrastructure upgrades: Improvements to enhance resilience to extreme weather
• Emergency preparedness: Updated business continuity plans for climate events
• Risk assessment: Regular evaluation of physical climate risks to operations

Innovation and Development

Sustainable Manufacturing:

• Research into green chemistry approaches reducing environmental impact
• Process innovation reducing energy and resource intensity
• Collaboration with equipment suppliers on efficient technologies
• Pilot projects testing sustainable alternatives to current processes

Product Lifecycle:

• Sustainable packaging initiatives reducing carbon footprint
• Distribution optimization minimizing transportation emissions
• End-of-life considerations in product development
• Patient education on sustainable medicine usage

Effectiveness Measurement

Key Performance Indicators:

• GHG emissions reduction: Absolute and intensity-based metrics
• Energy efficiency: Energy consumption per unit of production
• Renewable energy: Share of electricity from renewable sources
• Supplier engagement: Number of suppliers with climate targets
• Cost efficiency: Cost savings from efficiency improvements

Challenges and Learnings:

• Scope 3 emissions: Requires more intensive supplier collaboration and innovation
• Technology readiness: Some solutions still in development phase
• Supply chain complexity: Need for enhanced coordination across global operations
• Cost-benefit optimization: Balancing climate action with business sustainability

Future Action Plans

2025 Priorities:

• Complete construction and commissioning of chemical recovery unit
• Accelerate supplier engagement on Scope 3 emission reduction
• Expand renewable energy procurement to additional markets
• Implement circular economy initiatives across operations

Medium-term initiatives (2026-2030):

• Achieve significant progress toward science-based targets
• Develop carbon removal and offsetting strategies
• Scale breakthrough technologies for emission reduction
• Enhance climate adaptation and resilience measures

Our climate actions are continuously evolving based on performance results, technological developments, and stakeholder feedback. We remain committed to transparent reporting on our progress and challenges as we work toward our net-zero commitment.

Targets related to climate change mitigation and adaptation

Science-Based Climate Targets

Lundbeck has established science-based targets validated by the Science Based Targets initiative (SBTi) that align with limiting global warming to 1.5°C and achieving net-zero emissions.

Near-term Targets (2030)

Scope 1 and 2 Emissions Reduction:

• Target: Reduce absolute Scope 1 and Scope 2 greenhouse gas emissions by 46% by 2030 from 2019 baseline
• Baseline year: 2019
• Baseline emissions: [Baseline emissions data from 2019]
• Target year: 2030
• Progress (2024): 38% reduction achieved since 2019 baseline
• Status: On track - significant progress toward 2030 target

Scope 3 Emissions Reduction:

• Target: Reduce Scope 3 greenhouse gas emissions from purchased goods and services, upstream transportation and distribution, and business travel by 25% by 2030 from 2019 baseline
• Baseline year: 2019
• Target year: 2030
• Progress (2024): 18% increase since 2019 baseline
• Status: Requires acceleration - implementing enhanced supplier engagement and circular economy initiatives

Long-term Targets

Net-Zero Commitment:

• Target: Achieve net-zero greenhouse gas emissions across the entire value chain by 2050
• Scope: All Scope 1, 2, and 3 emissions
• Approach: Combination of emission reductions and carbon removal for residual emissions
• Alignment: Paris Agreement 1.5°C pathway and SBTi net-zero standard

Operational Targets

Energy Efficiency:

• Target: Continuous improvement in energy efficiency across all operations
• Metric: Energy consumption per unit of production
• Initiatives: LED upgrades, HVAC optimization, process improvements
• Progress: Ongoing efficiency improvements implemented across facilities

Renewable Energy:

• Target: Transition to 100% renewable electricity for own operations
• Timeline: Progressive implementation through 2030
• Approach: Power Purchase Agreements (PPAs), green electricity procurement, on-site generation where feasible
• Progress: Significant increases in renewable energy procurement in 2024

Chemical Recovery:

• Target: Increase recovery rate of organic solvents used in chemical production
• Current performance: 62% recovery rate in 2024 (up from 59% in 2023)
• Initiative: New chemical recovery unit construction (completion expected late 2025)
• Expected improvement: Significant increase in recovery rates upon completion

Supply Chain Targets

Supplier Engagement:

• Target: Engage key suppliers representing significant portion of Scope 3 emissions to set science-based targets
• Timeline: Ongoing through 2030
• Approach: Supplier climate assessments, capability building, target-setting collaboration
• Metric: Percentage of suppliers (by emissions) with science-based targets

Sustainable Sourcing:

• Target: Increase sourcing from suppliers with strong climate commitments
• Approach: Integration of climate criteria in supplier selection and evaluation
• Metric: Percentage of procurement spend with climate-committed suppliers

Adaptation Targets

Climate Resilience:

• Target: Enhance operational resilience to physical climate risks
• Initiatives: Supply chain resilience building, infrastructure improvements, emergency preparedness
• Metric: Business continuity performance during climate events
• Timeline: Ongoing resilience enhancements through 2030

Risk Management:

• Target: Regular assessment and management of climate-related risks and opportunities
• Approach: Annual climate risk assessment, scenario analysis, TCFD-aligned disclosure
• Integration: Climate considerations in strategic planning and investment decisions

Target Governance and Monitoring

Accountability:

• Board oversight: Board of Directors reviews progress on climate targets quarterly
• Executive responsibility: CEO and Executive Management accountable for target achievement
• Performance integration: Climate targets integrated in management performance evaluation
• Incentive alignment: Climate performance considerations in executive compensation

Progress Tracking:

• Annual measurement: Comprehensive GHG emissions inventory and progress assessment
• Third-party verification: External assurance of emissions data and target progress
• Public reporting: Annual disclosure of progress in sustainability reporting and CDP
• Management reporting: Monthly and quarterly tracking of key climate indicators

Target Performance (2024)

Challenges and Mitigation

Scope 3 Emissions Challenge:

• Issue: Scope 3 emissions increased 18% since baseline, contrary to reduction target
• Root causes: Business growth, supply chain complexity, limited supplier engagement maturity
• Mitigation actions:
  • Enhanced supplier collaboration programs
  • Circular economy initiatives
  • Alternative sourcing strategies
  • Technology partnerships for sustainable alternatives

Supply Chain Complexity:

• Challenge: Global supply chain with diverse supplier base
• Mitigation: Prioritized engagement with highest-impact suppliers, capability building programs

Technology Readiness:

• Challenge: Some emission reduction technologies still in development
• Mitigation: Investment in innovation partnerships, pilot projects, technology scouting

Target Updates and Enhancement

Regular Review:

• Annual review of target appropriateness and progress trajectory
• Integration of learnings from implementation and best practice developments
• Alignment with evolving regulatory requirements and stakeholder expectations

Potential Enhancements:

• Short-term targets: Consider additional interim targets to 2030 for better progress tracking
• Scope 3 detail: More granular targets for different Scope 3 categories
• Adaptation targets: Quantitative targets for climate resilience and adaptation measures
• Innovation targets: Targets for sustainable technology development and deployment

Alignment with External Frameworks

Science Based Targets initiative (SBTi):

• Targets validated by SBTi and aligned with 1.5°C pathway
• Commitment to submit net-zero target for validation
• Regular reporting on progress through SBTi dashboard

Paris Agreement:

• Targets contribute to global Paris Agreement objectives
• Alignment with nationally determined contributions (NDCs) in key markets

Regulatory Alignment:

• Targets support compliance with emerging climate regulations
• Alignment with EU taxonomy and green finance requirements
• Integration with CSRD/ESRS disclosure requirements

Our climate targets represent ambitious yet achievable commitments that drive meaningful action while supporting business sustainability. We are committed to transparent reporting on our progress, challenges, and the actions we are taking to achieve these important goals.

Substances of concern and substances of very high concern

E2-5 - Substances of concern and substances of very high concern

Substances of Concern (SoC) and Substances of Very High Concern (SVHC) represents the quantities of SoCs and SVHCs purchased for production processes and those leaving Lundbeck facilities as emissions or as product components. The majority of SoCs and SVHCs leave Lundbeck's facilities as emissions, including liquid waste, which are treated using either internal technologies or specialized external partners. Only about 1% of these substances that are purchased by Lundbeck exit the facilities as product components.

Lundbeck uses three substances as part of its products. Opadry contains titanium dioxide, which is classified as carcinogenic in its powdered form but is converted into a non-carcinogenic liquid form during tablet coating. An EU Court ruling is pending to provide further clarification on its status. Vortioxetine is classified as a skin sensitizer, though it does not come into direct contact with the skin due to its coating, and it has potential long-term impacts on aquatic ecosystems. Aripiprazole has properties that may affect fertility, pose risks to unborn children, and is suspected of being carcinogenic. Lundbeck remains committed to product safety and environmental responsibility, ensuring that all products and processes are managed responsibly.

Accounting policies

Substances of concern and substances of very high concern development

Substances of Concern (SoCs) at Lundbeck are defined based on the criteria outlined in the annex to the Commission Delegated Regulation (EU) supplementing Directive 2013/34/EU. A substance qualifies as an SoC if it meets any of the following criteria: (1) It is identified under Article 57 and Article 59(1) of Regulation (EC) No 1907/2006. (2) It falls within specified hazard classes, including carcinogenicity, reproductive toxicity, endocrine disruption, or persistent and toxic properties. (3) It negatively impacts the reuse and recycling of materials, as outlined in relevant ecodesign requirements. Substances of Very High Concern (SVHCs) are those that meet the Article 57 criteria of REACH and are identified under Article 59(1). SVHCs include carcinogenic, mutagenic, or toxic substances (CMRs) classified as category 1A or 1B, persistent bioaccumulative and toxic (PBT) substances, very persistent and very bioaccumulative (vPvB) substances, endocrine disruptors, or other substances of equivalent concern.

The scope of reporting includes all Lundbeck entities; however, the use of SoCs and SVHCs is specific to the production and R&D sites. The SoCs and SVHCs used in Lundbeck's production processes are collected from the internal chemical register, and the amounts of SoCs and SVHCs are gathered from the quantities of purchased substances recorded in SAP.

The SoCs and SVHCs used in production processes leave the company's facilities either as emissions or as part of products. The amount of SoCs and SVHCs that leave as emissions is estimated based on the assumption that the majority of hazardous substances exit as hazardous liquid waste, which is treated by external partners using advanced filtration technologies. Consequently, a 95% reduction factor is applied to the quantities purchased (i.e., used in production processes) to estimate the amount of SoCs and SVHCs leaving Lundbeck facilities as emissions. The amount of SoCs and SVHCs that leave as products or as part of products is estimated using an input-output approach, which assumes that the quantity purchased equals the quantity exiting as part of products.

E5-4 – Resource Inflows

Lundbeck reports on the total weight and share of resource inflows related to products, technical and biological materials, as well as the weight and share of secondary reused or recycled components used in production activities. These metrics reflect efforts to reduce overall material consumption and increase the use of components with a lower environmental footprint.

Biological Materials

Lundbeck has biological materials consisting of lactose, cellulose etc. used in bulk production as inactive carriers of the active pharmaceutical ingredient (API). It is assumed that these materials are defined as biological materials as they are used as bulk components and serve as carriers for the active ingredients. Information on the certification schemes applicable to these biological materials will be further investigated in future reporting periods. As a result, 0% is currently reported.

Secondary Reused or Recycled Components

The use of secondary reused or recycled components is largely driven by the recovery and recycling of solvents at the production sites. At the Lumsås site, solvents are treated on-site using advanced recycling units, while at the Padova site, treatment is managed by external suppliers.

Accounting Policy

Resource inflow encompasses all Lundbeck entities and includes all goods purchased from external suppliers that fall within the GHG scope 3 boundaries for Category 1: purchased goods and services. It also includes solvents from internal recovery and palladium from third-party recycling. The materials used are assumed to be equivalent to those purchased, as they are acquired for planned production. These materials include both pharmaceutical products and packaging.

The absolute weight of secondary reused or recycled components includes solvents recovered internally at the Lumsås site and the recycled palladium content in 'Palladium (DBA)₂'. Internally recovered solvents at the Lumsås site are measured as the total volume of organic solvents regenerated on-site using recycling units. These volumes are converted from liters to kilograms using a standardized conversion factor.

Resource outflows

Recyclable content in products and packaging

The absolute weight of recyclable content in product and packaging was 1,427 tonnes in 2024, representing a 9% rate of recyclable content in product and packaging.

The resource outflow includes secondary and tertiary packaging materials, such as cartons, leaflets, and shipment boxes.

Product durability

The durability of Lundbeck's products is influenced by factors such as the longevity of active pharmaceutical ingredients (APIs), type of packaging, and specific market requirements.

Repairability

Repairability is not applicable, as pharmaceutical products are classified as hazardous waste and are incinerated at the end of their life cycle.

Waste

Total waste generated in operations

Waste management approach

In 2024, the total waste generated remained consistent with 2023 levels.

Waste is categorized into two main types: hazardous waste and non-hazardous waste. The hazardous waste stream includes organic, inorganic chemical substances and medicinal waste, while the non-hazardous waste stream consists of paper, plastic, cardboard, metal, glass, food and biological raw materials, pallets, and electronic waste.

Waste data is collected from the production sites located in Valby, Lumsås, Padova, and Valbonne. The collected waste data is based on supplier data, weight recipes and estimations (2%) where primary data is unavailable. For the remaining entities, data is derived from estimations (3%) based on the weight of the office waste per FTE at the Valby site in the prior reporting year.

Recycling covers paper, plastic, cardboard, metal, glass, food, and biological raw materials. Other recovery operations covers primary hazardous waste from Padova. Incineration covers primary hazardous waste from the chemical production sites.

Non-hazardous waste reduction and recycling initiatives

In addition to local recycling initiatives across Lundbeck's operations, Lundbeck consistently implements recycling initiatives for materials such as plastic, paper, cardboard, glass, and food waste across its production sites.

Despite ongoing initiatives to improve recycling efforts, Lundbeck's recycling rate for non-hazardous waste has decreased from 70% to 65%. To address this, Lundbeck will evaluate and implement additional recycling initiatives to enhance waste management practices across its operations.

General waste recycling target

In line with the goal to continuously minimize raw material use and waste generation, Lundbeck sets an annual target for general waste recycling at all four production sites. Achieving this target involves implementing measures to separate waste, increase recycling, and promote reuse.

For 2024, the target was to recycle 75% of general waste. Recycling of general waste reached 71% in 2024, falling short of the 75% target for the period. The slight underperformance was primarily driven by an increase in hazardous waste, which impacted overall recycling rates. Looking forward, Lundbeck's target for 2025 is to recycle 70% of general waste. This is lower than the 2024 target because the scope is expanded to include all sites globally, including all sales offices.