Greenhouse gas emissions and resources

Management of the material topic (GRI 3-3)

In order to provide their services, Galenica Group companies consume renewable as well as non-renewable resources. These processes generate gaseous, liquid and solid waste products as well as greenhouse gases. Electricity and fuels are the main energy sources used by Galenica. Electricity accounts for 34% of total energy consumption. Transport is the main cause (40%) of direct and indirect greenhouse gas emissions at Galenica. Greenhouse gases in the atmosphere are primarily responsible for global warming and climate change, with serious consequences for humans, animals and the environment.

Galenica therefore aims to use resources as efficiently as possible with economically viable measures and to reduce the related environmental impact as much as possible. The basis for this is the strategic Efficiency programme, which focuses, among other things, on the sustainable use of resources with the aim of reducing the company’s CO₂ emissions by increasing efficiency in logistics and installing solar modules at its operating sites.

Binding targets agreed with the FOEN

In order to reduce CO₂ intensity and increase energy efficiency, the Alloga site in Burgdorf, the Galexis sites in Lausanne-Ecublens and Niederbipp, as well as the Bichsel Group agreed on binding targets with the Federal Office for the Environment (FOEN). In return for their commitment, the companies can apply for a refund of the CO₂ incentive tax on fossil fuels or a subsidy to implement sustainability measures, provided they comply with the agreements. The targets are agreed individually based on each site’s potential. Galenica is working with the Energy Agency for Industry (EnAW) to define an efficiency path with various commercially viable measures. As part of the target agreements with the FOEN, Galexis achieved thermal savings of 227,360 kWh and 67.9 tCO₂ per year at the Niederbipp site by installing a heat pump. The conversion of the Lausanne-Ecublens site resulted in a reduction of annual energy consumption by 617,695 KWh and 107.4 tCO₂. Alloga put a new groundwater heat pump into operation at the start of 2022. In 2023, the savings amounted to 428,245 kWh per year and 126.6 tCO₂. As part of the target agreement with the FOEN, the flat roof at Alloga was also re-insulated and an air compressor replaced.

Reduce fuel consumption

To reduce fuel consumption, pre-wholesale and wholesale companies regularly review and implement energy efficiency measures – both internally and with external logistics partners. This includes the use of commercial vehicles that meet the highest emissions standard (currently Euro VI) for all Group companies and the initiation of joint pilot projects for the use of delivery vehicles with alternative drive systems. At the same time, since 2020 Galexis has been converting its own delivery fleet and introducing more efficient vehicles with a higher load capacity to avoid multiple journeys when large loads are being delivered. External contract drivers are contractually obliged to use only vehicles that meet at least the Euro VI standard or higher. All drivers from Galexis, UFD, Pharmapool, Bichsel and Alloga regularly attend mandatory driver safety training, which aims to teach them an environmentally friendly, fuel-efficient driving style, among other things. Galenica also pursues and supports sustainability initiatives for logistics companies through associations (such as GS1) and in cooperation with public authorities.

Environmental Code of Conduct and mobility concept

The Environmental Code of Conduct applies to all employees of the Galenica Group. This provides guidance on saving energy and making efficient use of natural resources in the workplace and in transport.

Galenica encourages its employees to use public transport and electric vehicles and has implemented specific mobility concepts at some locations, such as the headquarters in Bern. Employees who commute to work by public transport receive a financial contribution towards their travel costs. In January 2022, another mobility concept was introduced in Lausanne-Ecublens as part of the renovation at the site. Only limited parking spaces are available for employees. Galexis encourages employees to organise carpools or use public transport to get to work and provides employees with financial support for the use of public transport. In 2022, Galenica amended its Group-wide company vehicle policy in favour of e-mobility. Today, around 12% of company vehicles have electric or hybrid drive systems.

Starting to implement renewable energies in distribution

Galenica wants to promote the use of renewable energies in distribution logistics and has adopted a memorandum of understanding to this effect as part of its distribution strategy. The first vehicle powered by biogas has been successfully in use at Galexis since 2021, and the second vehicle was also put into operation at the beginning of 2022. Since the start of 2023, Galexis has been supplying the first customers in the Greater Zurich area with an electric GDP delivery vehicle, and another of its own electric vehicles went into operation at the Lausanne-Ecublens site at the end of 2023. However, GDP-compliant electric vehicles are still rare in Switzerland. Charging times remain a major challenge, which means that vehicles are only used up to 50% of their capacity and are therefore inefficient from an economic point of view. Galenica sees great potential in hydrogen technology for trucks and is therefore in the process of identifying the specific steps that need to be taken to implement hydrogen technology in logistics. Discussions have been held with a logistics service provider that already operates several hydrogen-powered lorries in Switzerland about a pilot test with a view to putting them into operation as internal goods transport. A major challenge here is the requirement for temperature-controlled transport in accordance with GDP guidelines, as the air-conditioning system consumes a lot of energy. Furthermore, the Group-wide company vehicle policy has been adjusted in favour of e-mobility and charging infrastructures for electric vehicles have been installed at the Niederbipp and Lausanne-Ecublens sites.

Focus on increasing energy efficiency during renovations

When carrying out renovations, Galenica always takes into account measures to improve energy efficiency and looks into the feasibility of installing photovoltaic systems. Alloga has been using a new heat pump to heat its warehouse building in Burgdorf since the start of 2022. State-of-the-art technology helps to save around 120 tCO₂ emissions every year. Alloga also fitted the 25,000m² roof with additional insulation. The new insulation allows for additional energy savings of 10–15% each year. During the renovation of the Galexis distribution centre in Lausanne-Ecublens, for example, all buildings and roofs were refurbished to improve energy efficiency and a photovoltaic system was installed. At the Niederbipp site, a solar installation with around 5,700 solar modules was also connected to the grid at the end of 2023. This will enable one-third of Galexis’ electricity needs in Niederbipp to be covered in future. A photovoltaic system has also been in operation on the roof of the Alloga building in Burgdorf since 2018, and the UFD headquarters in the canton of Ticino will be equipped with a solar power system in 2024. In the Service Unit Pharmacies, there is only a very limited choice of energy sources for heating and electricity as almost all the premises are rented. However, electricity consumption can be controlled, which is why Galenica is consistently focusing on energy-saving lighting and the installation of motion detectors when renovating pharmacies.

Responsible use of land and water (GRI 303-1, 304-1, 304-3)

Galenica strives to use the vital resources of land and water responsibly. The company pays attention to the careful use of water and does not use groundwater, but feeds it back into the groundwater flow. Alloga, Galexis and Unione use the groundwater for the heating and cooling cycle, either extracting heat or using it for cooling. In addition, water plays a central role in Bichsel’s production processes.

Galenica has no sites in or near protected areas or areas of high biodiversity value outside protected areas. With the construction of a wild bee park at the Galexis distribution centre in Niederbipp, Galenica made a small but important contribution to protecting these endangered animals and conserving biodiversity in 2023.

The Galenica Group’s own operational and administrative sites obtain electricity from hydropower and photovoltaics. 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. In 2023, the electricity consumption of the pharmacies in the Service Unit Pharmacies was recorded centrally via Swenex for the first time. This will serve as a platform for further efficiency measures.

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.

Today, around 15% of company vehicles are powered by renewable drives. More information on renewable energies in distribution can be found in the section “Starting to implement renewable energies in distribution”.

Evaluation of the management approach and measures

• Key figures: Key environmental figures relating to greenhouse gas emissions and energy consumption by the Group are collected at least once a year to check whether the environmental targets are being achieved.
• Galenica’s sustainability objectives form part of its collaboration with partners (suppliers, logistics service providers, service providers) throughout the supply chain.
• Targets agreed with the FOEN: EnAW provides Galenica with annual feedback and recommendations on how to improve energy efficiency and reduce CO₂ intensity.
• ESG topics are part of the contractual agreements in investment planning and the awarding of contracts.
• CDP: Galenica completes the CDP questionnaire once a year. CDP is an international, non-profit organisation that provides the largest and only worldwide environmental database for companies and cities. Its aim is to encourage as many companies as possible to disclose their impact on the environment and natural resources. This information is collected on behalf of more than 680 institutional investors, who together represent more than USD 130 trillion in assets. In 2023, as in the previous year, Galenica ranked C in its level of engagement score. This certifies that the Galenica Group understands how environmental issues affect the business model. The results are published at www.cdp.net.

Energy (GRI 302-1, 302-2, 302-3, 302-4)

It does not include data for companies that have only been part of Galenica since 2023 or the heat consumption of Pharmapool and Verfora. Heat consumption was reported for the first time for Galexis Ärzteservice in 2023. Since 2021, the fuel consumption of the Group’s own company vehicles and the heat consumption of the Galenica Group headquarters have been included. In 2022, the heat consumption of ApoDoc and Lifestage Solutions was included for the first time. In 2023, the heat consumption of all pharmacies was extrapolated.

The declared energy consumption outside the organisation is limited to downstream transport and distribution. To calculate the energy intensity ratio, Galenica uses the number of full-time equivalents (FTEs) as an organisation-specific parameter (denominator). The quotient takes into account the energy consumption within the organisation and includes the following types of energy: fuels used by the company’s own delivery and service vehicles, electricity and heat consumption.

Adjusted data basis for energy consumption

In 2023, the Galenica Group’s total energy consumption – both within and outside the organisation – amounted to 254,500 GJ (previous year: 205,734 GJ). This increase also led to a slight increase in total energy consumption per full-time equivalent, from 10.77 MWh/FTE to 11.97 MWh/FTE. The increase in total energy consumption of 24% can primarily be attributed to the expanded data basis for energy consumption within the organisation, which accounts for 81% of total energy consumption. In the reporting year, an estimate of the total heat consumption of all pharmacies was included for the first time through extrapolation. The pharmacies obtain 51% of their heat from district heating and approximately 33% from the combustion of natural gas. This is reflected in the increase in heat consumption for the entire Group to 67,193 GJ (previous year: 24,775 GJ). Energy consumption outside the organisation, which includes downstream transport – i.e. the fuel used by contract drivers – was almost the same as in the previous year (46,669 GJ) at 47,937 GJ.

Reduction of electricity consumption

Electricity and fuels are the main energy sources used by Galenica. Electricity accounts for 34% of total energy consumption within and outside the organisation. In 2023, the Group reduced its electricity consumption to 85,972 GJ (previous year: 88,503 GJ), which corresponds to a reduction of 3%. All operational and administrative sites of the Galenica Group obtain electricity from photovoltaics and hydropower, with the Group purchasing 12,255 MWh of hydropower from certified, sustainable sources or certifying it with guarantees of origin in the year under review. At the pharmacies’ sales premises, the choice of energy source for electricity can only be influenced to a limited extent and the electricity is obtained from the Swiss electricity grid.

Emissions (GRI 305-1, 305-2, 305-3, 305-4, 305-5)

It does not include data on companies that have only belonged to Galenica since 2023, nor the heat consumption of Pharmapool and Verfora. Heat consumption was reported for the first time for Galexis Ärzteservice in 2023. Since 2021, the fuel consumption of the Group’s own company vehicles and the heat consumption of the Galenica Group headquarters have been included. In 2022, the heat consumption of  ApoDoc and Lifestage Solutions was included for the first time. In 2023, the heat consumption of all pharmacies was extrapolated. Scope 3 includes the CO₂ emissions caused by the contract drivers of Galexis, Alloga and Pharmapool.

District heating data increases greenhouse gas emissions

In the reporting year, an estimate of the total heat consumption of all pharmacies was included in the calculation for the first time through extrapolation (see Emissions). Fuel consumption across the entire Group increased by 17% in 2023. This had an impact on greenhouse gas emissions: in 2023, the Galenica Group’s emissions amounted to 12,669 tonnes of CO₂-equivalents (tCO₂e), equivalent to an increase of 26% over the previous year. The expanded data base for pharmacies is reflected in Scope 1 emissions and in the Scope 2 emissions due to new extrapolation of the pharmacies’ district heating purchases. In addition, losses of refrigerant occurred at Galexis in 2023 due to a leak. Due to the high global warming potential of the emitted substance, there is therefore a significant greenhouse gas effect equivalent to the emission of 523 tCO₂e.

Water and wastewater (GRI 303-3)

This includes data from Bichsel, Alloga, Unione and Galexis. Since 2022, the data of some pharmacies, Lifestage Solutions and Pharmapool have been included. The figures for 2023 also include the figures for Galenica headquarters and Spagyros. Water withdrawals by pharmacies were extrapolated in 2023, which is representative of all pharmacies as a whole.

In 2023, water withdrawal by the Galenica Group amounted to 1,149,293 m³ (previous year: 976,438 m³), with 7% coming from the municipal water supply and 93% from groundwater. This increase is partly due to the expanded data basis in the form of an extrapolation for pharmacies. According to an extrapolation, water withdrawal from all pharmacies accounts for around 40% of the water supplied by the communal water supply. The sharp increase in groundwater demand compared to the previous year is due to the fact that Alloga installed a groundwater pump in 2022, which was operational over the entire period for the first time in the reporting year. In addition, water plays a central role in Bichsel’s production processes.