Management report - Sustainability

Sustainability

Retention of qualified employees in healthcare

The number of employees of the Galenica Group continued to grow in the 2022 financial year. At the end of 2022, Galenica had 7,608 employees (previous year: 7,239). Employee development is a high priority and Galenica invested CHF 4.6 million in the training and development of its employees in the reporting year (previous year: CHF 3.7 million). Galenica is actively involved in preventing the shortage of qualified employees. With the aim of promoting the next generation of qualified employees, 838 apprentices were trained in the Service and Business Units in the financial year. In addition, a task force was initiated on the topic of the shortage of qualified employees and a large number of measures were implemented, particularly in pharmacies. Among other things, for example, the areas of responsibility of pharmacy assistants were expanded, their minimum wage was raised and the recruitment process was further optimised.

In the reporting year, Galenica introduced joint bonus-related sustainability goals for members of the Executive Committee, the Senior Management and Management, which are valid from 2023. These relate to customer and employee satisfaction. These new objectives are intended to strengthen the network philosophy and the focus on social objectives. With this step, Galenica is also focusing on the joint achievement of its goals and thus the further strengthening of Group-wide cooperation.

Social Key Figures

Solidarity with Ukraine

In early 2022, Galenica, together with suppliers and partner organisations, used its own logistics and procurement expertise to support the Ukrainian people. Three aid consignments brought medicines and supplies for hospitals to the country affected by the Russian offensive war. Galenica also launched a fundraising appeal for Swiss Solidarity. The amount donated by employees was doubled by the company, so that a total of CHF 232,000 was collected.

Patients and customers

Since an individual initiative such as the use of the e-Mediplan in Galenica Group pharmacies has only a limited impact on patient safety, the Sustainability Committee decided to place the original goal (“We will expand the use of the e-Mediplan in Galenica pharmacies by 10% a year until 2023”) in a wider context and expand the scope. The new goal focuses on the use of Clinical Decision Support Checks (CDS.CE Check) and includes not only pharmacies but also other service providers in Switzerland, such as hospitals and doctors. These checks enable pharmacies and medical practices to do things like check the patient’s used or planned medication for known risks, interactions and duplication. After performing a CDS.CE Check, they can also generate an e-Mediplan directly. The CDS.CE Check is integrated into all software systems at Galenica pharmacies.

In 2022, Verfora conducted a survey of several pharmacies to identify the additional languages and product classes required. Based on the results, it was decided to adjust the goal and, in a first phase, to start translating the patient information for all Algifor^® preparations into two languages (English and Portuguese) instead of five languages as planned. Patient information on important cold products was also translated. Since the end of 2022, patients have been able to access the patient information for all Algifor^® preparations and important cold products in English and Portuguese using a QR code. Flyers with the QR codes are available in all pharmacies in Switzerland. The goal has thus been achieved. An initial evaluation will take place in 2023. If demand is high, the patient information should be translated into additional languages and products for the treatment of (small) children should be integrated.

In 2022, Galenica identified its top ten suppliers based on order volumes. The next step is to revise the Supplier Code of Conduct and develop the questionnaire for suppliers.

The newly introduced bonus-relevant sustainability target intends to increase customer satisfaction in the pharmacies. To measure it, the relative Net Promoter Score (rNPS) of the pharmacies Amavita, Sun Store and Coop Vitality is applied. The NPS measures the extent to which consumers would recommend a product or service to others.

Employees

In the reporting year, 71% of employees took part in the employee survey. The participation rate has therefore increased by over 20% compared to the 2021 survey. Employee motivation has also improved compared to the previous year, with a Group-wide score of 74 out of a possible 100 points. In order to increase the participation rate, communication to employees who do not work in administration was improved and a QR code was sent to all by post, among other things. The results of the survey show that there is room for improvement, particularly in the areas of prospects and exceptional commitment. In a next step, the Executive Committee and the departments concerned will analyse the identified potential for improvement and develop effective measures to strengthen employee satisfaction and motivation.

Galenica further optimised its recruitment process in the reporting year. The aim is to reduce the time-to-hire and thus contribute to retaining qualified employees. The time-to-hire for IT was around 65 days in 2022 and around 60.5 days for Pharmacies. This corresponds to a reduction in time-to-hire for vacant IT positions of around 15%. For Pharmacies, the time-to-hire increased by around 21% compared to the previous year due to the worsening shortage of skilled employees in the health and care sector.

Gender equality is a key concern in the area of diversity. For this reason, the two original goals (“We will improve diversity, in particular gender equality, in all Service Units by 2024” and “We will maintain the proportion of women in management at 50%”) have been combined into one goal. The proportion of female managers in 2022 was over 50%, i.e. 52.6%. A Group-wide and comprehensive diversity concept will be developed in 2023.

As it is not possible to determine the absence rate due to mental illness for reasons of privacy protection, the original goal (“We will reduce the absence rate due to mental illness by 5% by 2024”) was adjusted and the number of cases per 100 FTEs was determined as a new measurement parameter. The total number of long-term absences (> 30 days) due to mental illness is known. In order to ensure anonymity, however, Galenica only receives the proportion of cases due to mental illness, from the daily allowance insurance records, in the event of a large number of cases. The exact illness-related reason for the absence is unknown. This means that no conclusions can be drawn and privacy protection is guaranteed. Compared to the previous year, the number of cases per 100 FTEs due to mental illness has decreased by 34%.

Occupational health is one of the focal points of the revised HR strategy. In 2022, the cooperation with Movis, an independent, external advisory centre for employees on issues relating to the protection of personal integrity, was expanded in order to strengthen the early detection and prevention of mental illnesses. All employees now have access to counselling services for mentally stressful situations such as stress management or burnout prevention.

In 2022, Galexis introduced an accident barometer at its Niederbipp and Lausanne-Ecublens locations in order to raise awareness among employees and prevent occupational accidents. Every month, the number of occupational accidents compared to the previous year is made visible to all and an additional campaign is launched on a specific topic, such as personal protective equipment. There are plans to introduce an accident barometer at Alloga in 2023. In order to make employees aware of accidents outside work, Alloga and Galexis have run several poster campaigns on various topics such as road traffic and ticks. Compared to the previous year, the absence rate for occupational and non-occupational accidents remained relatively unchanged.

In accordance with the requirements of the Federal Act on Gender Equality (GEA), Galenica carried out an equal pay analysis for companies with more than 100 employees in 2021. The salaries of the Galenica Group were analysed using the Logib method (the federal government’s standard analysis tool) on the basis of April 2021. The analysis showed that an overwhelming majority of employees enjoyed equal pay. Equal pay is a major concern for Galenica. Accordingly, targeted measures were implemented as of 1 January 2023.

Environment

All of the Galenica Group’s own operational and administrative sites obtain electricity from hydropower and photovoltaic systems. Almost all of the pharmacies' sales outlets are rented, which makes it more difficult to influence the electricity mix. However, Galenica has set itself the goal of obtaining electricity from renewable sources for the rented premises as far as possible. Previous data on the electricity consumption of pharmacies are extrapolations based on a representative sample of a total of 20 pharmacies. The focus is therefore on improving the availability and quality of the data base for the Service Unit Pharmacies.

Galenica is also working to improve the data base for its operations, processes and supply chains as part of its goal to reduce greenhouse gas emissions. The renovation of the Galexis distribution centre in Lausanne-Ecublens was completed in 2022. All buildings and roofs were refurbished to increase energy efficiency and a photovoltaic system was installed. Plans are currently under way to connect the distribution centre to the local district heating network. Galexis is also planning a photovoltaic system at the Niederbipp site for 2023, which will make an important contribution to sustainable energy production. Thanks to the commissioning of the groundwater heat pump at Alloga, natural gas consumption for building heating was reduced by 57% compared to the previous year.

Galexis evaluated the procurement of an electric vehicle for the local distribution of medications and other products in 2022 and will be piloting the first all-electric delivery vehicle with certified GDP status from 2023. Charging times remain a major challenge, which means that vehicles are only used at 50% capacity. In the case of lorries, there is still great potential in rapidly developing hydrogen technology. Specific investigations are ongoing. Furthermore, the Group-wide company vehicle policy was adjusted in favour of e-mobility and a charging infrastructure for electric vehicles was installed at the Niederbipp location. A charging station will be operational in Lausanne-Ecublens at the beginning of 2023. Today, around 11% of company vehicles are electric or hybrid.

The total weight of municipal waste has increased by 7% compared to the previous year. This increase is mainly due to the widening of the data base. In the case of pharmacies, only estimates of municipal waste are currently available, which is why the focus, with this goal too, is on improving the data base. Galexis has initiated a cooperation with two product suppliers to avoid packaging waste, and the introduction of circulation-type packaging (secondary packaging) with these partners is planned for 2023. Further specific measures to reduce municipal waste for all Business Units are being developed in workshops.

Outlook for 2023

The regulatory requirements for non-financial reporting are increasing. The new due diligence and reporting regulations on non-financial matters, conflict minerals and child labour entered into force on 1 January 2022 (Art. 964 CO; DDTrO). The Federal Council also adopted the Implementation Ordinance on Climate Reporting in November 2022, which will enter into force on 1 January 2024. Galenica is working on implementing these new requirements and is stepping up its commitment to upholding human rights throughout the supply chain and protecting the environment.

We also plan to anchor the topic of sustainability even more systematically at the strategic level as well as in internal structures, processes and business activities in 2023. In this context, the relevant sustainability topics identified are also being reviewed, with a specific focus on the impact of these topics on the environment, society and the economy.