Greenhouse gas emissions and resources

Management of the material topics (GRI 3-3)

The high quality requirements, consistent compliance with good distribution practices (GDP) and good manufacturing practices (GMP) as well as the high availability of medications in the Swiss healthcare system require a considerable amount of infrastructure for the storage and distribution of merchandise. High-frequency distribution (“same-day”) to consumers throughout Switzerland is energy- and emissions-intensive. Galenica therefore has an intrinsic interest in implementing measures to optimise the sustainability of its emissions profile as part of its core processes of procurement, storage and distribution of medications. External regulatory requirements are also a relevant driver for increasing the efficiency of the use of resources. In addition, we are seeing growing interest from customers in Galenica’s ESG initiatives, meaning that efforts to reduce greenhouse gas emissions can ultimately serve as a competitive advantage in the market.

Electricity and fuels are the main energy sources used by Galenica today. Electricity accounts for 46% of total energy consumption. Transport is the main cause (approx. 60%) 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.

Binding targets agreed with the FOEN/SFOE

In order to reduce CO₂ intensity and increase energy efficiency, the major consumers (electricity consumption of at least 500 MWh p.a.) Alloga in Burgdorf, Galexis in Lausanne-Ecublens and Niederbipp as well as the Bichsel Group in Interlaken, have defined binding reduction paths for energy consumption with the Federal Office for the Environment (FOEN). In return for this 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 binding targets are individually tailored to the potential of the individual sites in collaboration with the Energy Agency of the Swiss Private Sector (Energieagentur der Wirtschaft, EnAW) and the FOEN. A binding energy reduction pathway has already been drawn up and implemented in collaboration with the FOEN as of 2016 for the Galexis sites in Niederbipp and Lausanne-Ecublens as well as Alloga in Burgdorf. As a result of these long-term measures, cumulative energy savings of 2,700 MWh at the Niederbipp site, 670 MWh in Lausanne-Ecublens and 1,050 MWh at Alloga could be realised by 2024.

A new binding reduction pathway for Galenica’s major energy consumers is currently being prepared by the SFOE for the years ahead. This is also being developed in collaboration with the EnAW and will be adopted during 2025.

Focus on increasing energy efficiency during renovations

When renovating its infrastructure, Galenica always takes into account potential measures to improve energy efficiency and looks into the feasibility of installing photovoltaic systems.

Thanks to energy-efficient construction, new measurement and control technologies, insulation and the installation of a photovoltaic system during the renovation and new construction of the logistics and administration building at the Lausanne-Ecublens site, annual energy consumption was reduced by 617,695 kWh and 107.4 tCO₂. Furthermore, the site was connected to the local district heating network in addition to the reduction path, resulting in a long-term 80% CO₂ reduction.

At the Galexis site in Niederbipp, a solar installation with around 5,700 solar modules was connected to the grid at the end of 2023. With an output of over 2,100 MWh, this installation covered around one quarter of Galexis’ electricity requirements in Niederbipp in 2024. This is enhanced by the heat pump, which was installed previously and has saved 227,360 kWh and 67.9 tCO₂ per year compared with heating with fossil fuels. Furthermore, the introduction of a new measurement and control technology for climate control in 2024 (as well as climatic influences) enabled Galexis to reduce energy consumption for heating requirements by around 47%.

In early 2022, Alloga put a groundwater heat pump into operation, saving 428,245 kWh/126.6 tCO₂ per year, compared to fossil fuels. A further increase in energy efficiency of approx. 10–15% was achieved by installing new thermal insulation in the 25,000m² flat roof in 2023 and replacing the air compressors.

The UFD headquarters in the canton of Ticino was also fully fitted with a solar installation with 1,210 photovoltaic elements in April 2024, which, with an annual output of 43 MWh for 2024, covered around 7% of the company’s own electricity requirements.

Finally, Lifestage Solutions moved into a new company building in 2024 that is certified according to the Minergie Eco standard. The heating and hot water requirements are covered exclusively by the use of natural wood waste produced by the landlord. The cooling requirements are covered by surplus solar power generated by the photovoltaic system installed on the roof. In fact, 85% of the electricity is supplied by the company’s own photovoltaic system in combination with a storage battery. The remaining 15% is generated from renewable hydropower.

The Galenica Group’s own operational and administrative sites obtain electricity from hydropower and photovoltaics. Almost all of the sites in the Pharmacies unit 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. Since 2023, the electricity consumption of the pharmacies has been recorded centrally on the Swenex platform, which is used to plan further efficiency measures.

Promotion of renewable energies in distribution

Galenica has set itself the goal of promoting the use of renewable energies in distribution logistics and has embedded this as part of its distribution strategy. Galexis has been successfully using its first biogas-powered vehicle since 2021, followed by another vehicle in early 2022.

Galexis started supplying customers in the greater Zurich area with two electric GDP delivery vehicles in early 2023 for the first time. Another electric vehicle has been in use at the Lausanne-Ecublens site since late 2023. GDP-compliant electric delivery vehicles are still little used in Switzerland. The short range and long charging cycles only result in an efficiency of around 50%, compared to the service life. The higher procurement costs (factor 2) also hinder the company-wide roll-out of an electric GDP fleet from an economic point of view.

The potential of hydrogen technology is under consideration. Nationwide deployment of this technology in GDP distribution is not yet realistic due to the current supply situation in Switzerland.

In order to reduce fuel consumption, companies in the Pre-wholesale and Wholesale units regularly 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) and the initiation of joint pilot projects for the use of delivery vehicles with alternative drive systems. Since 2020, Galexis, UFD and Pharmapool have been converting their own fleet of delivery vehicles to more efficient vehicles with a higher load capacity. External logistics service providers are contractually obliged to use only vehicles that meet or exceed the Euro VI standard.

As part of a continuous improvement process, the fixed delivery runs are optimised in order to increase customer service and efficiency in execution. In 2024 alone, Galexis was able to reduce travel by more than 100,000 km. In addition, all drivers from Galexis, UFD, Pharmapool, Bichsel and Alloga regularly attend mandatory driver training courses to learn an environmentally friendly, fuel-efficient driving style in addition to safety. Galenica continues to support sustainability initiatives for logistics companies as part of associations (e.g. GS1) and in collaboration with authorities and other public institutions (e.g. hospitals).

Environmental Code of Conduct and mobility concept

There is an Environmental Code of Conduct that 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, a further mobility concept was introduced in Lausanne-Ecublens as part of the renovation work 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. As of late 2024, around 15% of personal company vehicles have electric or hybrid drive systems.

Scope 3 roadmap

In 2024, a Scope 3 screening of Group processes and flows of goods was carried out for the first time as part of Galenica’s sustainability strategy. Actual consumption data and activity-based consumption from 2023 as well as estimates based on standards and statistical data were used for the screening, and coverage of more than 80% of emissions relevant to Scope 3 was recorded. Based on this data, a roadmap is to be developed and adopted in 2025. This roadmap aims to establish a net-zero reduction pathway in line with Switzerland’s climate targets.

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 UFD use the groundwater for the heating and cooling cycle, either extracting heat or using it directly for cooling. Water also plays a key role at Bichsel as a raw material in the production of vital infusion solutions. The water is sourced from the local primary supplier and only the necessary quantity is pharmaceutically treated and processed by Bichsel. After being used, the water required for production purposes is fed into the wastewater treatment plant and returned to the water cycle.

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 site in Niederbipp, Galenica made a small contribution to protecting these endangered animals and conserving biodiversity in 2023.

Galenica is pursuing ambitious targets of keeping greenhouse gas emissions from the main sources as low as possible within its own operations. Galenica wants to work exclusively with electricity from renewable sources in its own operations. For this reason, 100% of the electricity purchased from 2025 onwards is to come from renewable sources.

Furthermore, energy from 40% of fossil fuels is to be replaced by renewable sources by 2032, compared to 2021. These and other measures are intended to reduce direct and indirect (Scope 1+2) greenhouse gas emissions by 25% by 2025 and by 50% by 2030 compared to 2021. In order to take better account of the Group’s organisational development when setting goals and planning measures, the measurement parameter used to track progress towards target achievement was changed to tCO₂e/FTE (intensity) in the reporting year.

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 in order 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/SFOE: 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 2024, 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)

In the reporting year, Galenica adjusted its energy consumption analysis (including retrospective adjustments to the figures already published for 2023). In order to avoid double counting in connection with the purchase of guarantees of origin and certified hydropower, electricity purchased from the grid is sometimes now no longer counted as renewable. In addition, electricity consumption is now recorded, excluding the heat pump and electric vehicles. The energy consumption of the heat pumps is counted as heat consumption. In the reporting year, Galenica recorded the electricity consumption of Padma, which was acquired in 2023, for the first time (536 MWh).

The declared energy consumption outside the organisation is limited to upstream transport. Galenica uses the number of full-time equivalents (FTEs) as the organisation-specific parameter to calculate the energy intensity ratio. The quotient takes into account energy consumption within and outside the organisation.

Reduction of heat requirements in the Group's own operations

In 2024, the Galenica Group’s total energy consumption – both within and outside the organisation – amounted to 70,914 MWh (previous year: 70,639 MWh). Total energy consumption per full-time equivalent decreased slightly from 11.96 MWh/FTE to 11.59 MWh/FTE. Heat consumption within the organisation in particular has fallen sharply (approx. 3,800 MWh). This is mainly due to structural measures (use of pellet heating at the temporary site) at the headquarters in Bern (saving approx. 1,400 MWh) and the switch to district heating at the Galexis Lausanne-Ecublens site (saving approx. 500 MWh). The heat consumption of pharmacies was extrapolated and was lower in the reporting year than in the previous year (minus approx. 1,400 MWh).

In contrast, the fuel consumption of transport service providers has increased compared to the previous year (approx. 3,540 MWh), which is why the energy balance within and outside the organisation has only changed slightly overall.

Stable electricity and fuel consumption despite growth

Electricity is the main energy source used by Galenica. Electricity (excluding heat pump and electric vehicles) accounts for almost 46% of total energy consumption within the organisation. In 2024, Galenica’s electricity consumption increased to 23,938 MWh (previous year: 23,543 MWh), which corresponds to an increase of 1.7%. Taking into account the first-time recording of Padma consumption (536 MWh) and the estimate of electricity consumption in pharmacies based on the previous year’s figures, Galenica’s electricity consumption has largely stagnated. Nevertheless, the Group has taken a major step forward in terms of its goals. Through the expanded purchase of guarantees of origin for electricity from hydropower, Galenica obtains 86% renewable electricity for all operational and administrative sites. Galenica will purchase the missing guarantees of origin for 2024 and, therefore, reports a 100% proporation of electricity from renewable sources. Furthermore, the commissioning of the photovoltaic system in Niederbipp at the end of 2023 enabled almost all remaining electricity requirements to be covered by solar energy in the reporting year (2,242 MWh). Only 0.3% of total electricity consumption in 2024 came from fossil sources such as heating oil and diesel, primarily for emergency power generation.

The fuel and electricity consumption of the Group’s own delivery and pool vehicles remained stable in the reporting year (14,958 MWh) compared with the previous year (14,830 MWh). Even if they only still make up a small proportion of overall consumption, the energy requirements of electric vehicles increased significantly in 2024 year-on-year to 122 MWh (previous year: 1 MWh).

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

In the reporting year, Galenica adjusted the evaluation of greenhouse gas emissions (including subsequent adjustment of the previously published values for 2023). The biogenic share of diesel fuel available in Switzerland is now included in the calculations. In addition, refrigerant losses are now included in Scope 1 emissions. Galenica uses the market-based calculation approach when calculating Scope 2 emissions. An emission factor from the International Energy Agency (IEA) is now used for electricity purchased from the grid. This is significantly lower than the previous emission factor (treeze, 2017). If the emissions are calculated using the location-based approach, which does not take into account the specific electricity production by hydropower for Galenica, this results in Scope 2 emissions of 2,638 tCO₂e.

Successes in reducing greenhouse gas emissions

In the reporting year, the heat consumption of the Galenica Group decreased. In particular, the reduction in heating oil consumption at the headquarters in Bern is making a significant contribution to the reduction in emissions (372 tCO₂e). In addition, indirect greenhouse gas emissions were reduced by around 1,000 tCO₂e according to the market-based calculation method due to the additional purchase of guarantees of origin for hydropower.

The Scope 3 emissions analysis includes the CO₂e emissions caused by the contracted drivers of Galexis, Alloga and Pharmapool. Of these, 87% relate to transport services provided for Galexis.

Water and wastewater (GRI 303-3)

For the first time, data on water use by Padma, which was acquired in 2023, is included.

In 2024, water withdrawal by the Galenica Group amounted to 1,419,862 m³ (previous year: 1,149,293 m³), with 88% coming from groundwater and 12% from the municipal water supply. The increase from the municipal water supply can mainly be explained by the fact that data was collected from Padma for the first time (withdrawal of around 89,000 m³). The sharp increase in groundwater demand compared to the previous year is due to the fact that, depending on the weather, more or less water is used to cool or heat the buildings.