ESRS E5 Resource use and circular economy [E5] Resource use and circular economy

Our impacts, risks, and opportunities [E5 SBM-3] Material impacts, risks, and opportunities and their interaction with strategy and business model

Natural resources are becoming increasingly scarce all over the world. We can only operate sustainably if we use the raw materials available to us efficiently and carefully. However, stringent safety and hygiene regulations to protect staff and patients can result in high consumption of raw materials, products, and packaging materials. This can contribute to the depletion of natural resources and therefore have a potential negative impact on the environment in the short-term. Reducing the amount of waste we produce is already a challenge for us. Local regulations and necessary safety regulations provide us with a tight framework within which we can operate with our waste management concepts. This means, for example, that we can only use recycled materials in direct contact with pharmaceuticals to a limited extent. In order to avoid unwanted interactions, it is sometimes necessary to use new materials causing an actual negative impact on resource use and the circular economy.

To counteract our actual and potential negative impacts, we are pursuing various approaches to reduce our consumption of resources. Due to the size of our international healthcare Group, we already identify established resource-saving measures as a lever for the responsible use of raw materials: In the production and distribution of healthcare products, we use bulk packaging with dosing aids to save material. The aspect of resource conservation also plays a role in the development of new product designs. In addition, we are currently creating market transparency for selected items in our hospitals and other healthcare facilities with regard to switching from disposable to reusable items.

Our approach [E5-1] Policies related to resource use and circular economy

Environmental Policy

At Group level, there is a central Environmental Policy that also addresses the use of resources and the circular economy. In this policy, we commit to the efficient use of resources and the use of sustainably sourced, renewable and recycled materials as an alternative to new raw materials, where legal regulations permit. We support the transition to a circular economy. We strive to maximize the lifespan of materials, reduce the amount of waste generated, and increase the proportion of recyclable materials in our waste streams. The waste hierarchy (prevention, preparation for reuse, recycling, energy recovery, disposal) and waste separation concepts form an integral part of our waste management processes.

Further information on the Environmental Policy can be found in topical standard E1 Climate change, section E1-2 Our approach.

Further concepts related to resource use and circular economy

The handling of waste in the health sector is strictly regulated. All locations are subject to their respective local regulations and laws. In addition, internal requirements for waste management are included in our environmental standard operating procedures.

As a healthcare Group, professional, safe waste disposal goes hand in hand for us with the requirements of hygiene and sterility in production processes and treatments in hospitals. Our approach extends from the selection of suitable disposal containers to cleaning and sterilization procedures and the occupational safety of our employees in the professional disposal of hazardous, e.g., infectious, waste. The waste must not pose a danger to our patients or the environment, either.

As the business models of our business segments differ, Fresenius conducts waste management on a decentralized basis. Responsibility for that lies with the management of the sites, local EHS managers, waste managers, or waste officers. Risks are assessed individually and, where necessary, internal guidelines for dealing with waste are established. The responsible persons provide training to their employees and carry out checks to ensure that the standards contained therein are adhered to. In our hospitals, the right handling of waste is trained during introduction. Where necessary, local training courses on waste management are conducted. Our waste management systems are part of internal and external audits.

In the following, we describe our systematic waste management. It aims at an efficient use of resources and at minimizing the impact of our waste management on people and the environment.

Further information on our comprehensive environmental management and responsibilities can be found in topical standard E1 Climate change, section E1-2 Our approach.

Waste disposal

Responsibility for the disposal of waste in accordance with the applicable local regulations lies with local organizations and healthcare facilities. All sites are required to separate their waste according to local, national, and industry-specific regulations and to store the waste under consideration of measures to protect the environment. Non-recyclable waste is disposed of by incineration or is sent to landfill.

Fresenius Kabi records waste volumes generated at the production sites, logistics centers, compounding centers, and the other ISO 14001-certified organizations and categorizes them by waste type and disposal method. Waste is mainly generated as a by-product of production processes or in the downstream value chain as packaging material of the product containers in hospitals, private households, or nursing homes. This includes both non-hazardous and hazardous waste, i.e., solvents, cytostatics, or antibiotics.

Plastic waste represents the largest portion of classified non-hazardous waste in production. Hazardous waste is, to a large extent, processed and reused. Non-recyclable hazardous waste is disposed of in accordance with legal requirements, e.g., incinerated and a part of it is led into energy recovery.

At Fresenius Helios, no special requirements are placed on the collection and disposal of non-hazardous hospital-specific waste from an infection prevention perspective. Together with wound and plaster dressings, underwear, disposable clothing, and diapers, for example, they make up the largest proportion of the total waste generated in our healthcare facilities. Potential hazardous waste such as infectious items or cytotoxic and cytostatic waste is specially disposed of by professionals. Disposal routes were not fully recorded in the reporting year and therefore will not be disclosed.

Waste reduction and recycling

If the design of a product is under the control of an ISO 14001-certified organization, as part of the life cycle perspective, the design phase must take environmental aspects into account, for instance, sustainable, e.g., recycled components or packaging. The influence of the organization on pharmaceutical products can be limited due to the importance of patient safety and product quality requirements. Fresenius Kabi takes environmental aspects into account during the development phase and tries to reduce the environmental impact of its products, e.g., by reducing the amount of plastic in containers, while at the same time ensuring the quality of the products.

There are also various projects in our hospitals to improve the reduction, recycling, avoidance, and reuse of waste. Medical instruments and supplies are cleaned, sterilized, and packaged separately to enable reuse, except single-used products as established by law.

Our actions [E5-2] Actions and resources related to resource use and circular economy

In the reporting year 2024, Fresenius did not adopt any central guidelines for measures relating to resource use and circular economy. At present, approaches to this are mainly organized locally, but the framework is provided by the environmental management systems of the business segments.

In the reporting year, we implemented operational measures to address potential impacts, risks, or opportunities related to resource use and circular economy. At Fresenius Kabi, for example, all EHS managers were trained on waste reduction and recycling.

Our goals and ambitions [E5-3] Targets related to resource use and circular economy

We strive to maximize the lifespan of materials, reduce the amount of waste generated and increase the proportion of recyclable materials in our waste streams. In addition, we aim to reduce our material consumption and minimize the amount of waste produced through systematic waste management. Beyond that, there is currently no measurable Group target for the use of resources and the circular economy. We plan to set ourselves a target in the future.

We monitor the effectiveness of our policies by measuring and evaluating defined KPIs, as described in the following section.

Metrics

Resource inflows [E5-4] Resource inflows

The resource inflows associated with our material impacts, risks, and opportunities differ between our business segments.

The most important materials in the production of Fresenius Kabi are active pharmaceutical ingredients (API), and excipients, followed by plastic parts, and primary and secondary packaging.

In the healthcare facilities of Fresenius Helios, the main resource inflows are consumables for nursing care and for medical treatment, pharmaceuticals, and prostheses.

In the upstream supply chain, various raw materials, and preliminary products such as metals, plastics, silicone components, water, wood, chemicals, animal and plant products are used to manufacture the products and preliminary products that we source. For information on our approach to conflict minerals, please refer to topical standard S2 Workers in the value chain, section S2-1 Our approach.

We source organic materials such as certain fish, soy, sunflower and rapeseed oils that are certified for their sustainably sourced origins, e.g., fish oil certified by Friend of the Sea® or soy oil in accordance with the ProTerra Standard^™.

In order to indicate the total weight of the products as well as technical and biological materials consumed during the reporting period, we made different assumptions depending on the business segment. For Fresenius Helios, for example, the underlying assumption was that the quantity of material outflows is equal to the material inflows. In order to record consumed materials that are not recorded in the material outflow (e.g. food, and medicines such as infusions), the corresponding value is converted into kilograms using the conversion factor and added to the material outflow.

At Fresenius Kabi, the quantities of materials consumed are based on the purchase values converted into kilograms using a conversion factor. Weight data for API, excipients, raw materials and packaging materials are either based on information from the suppliers or through master data.

Resource outflows [E5-5] Resource outflows

Products and materials

Fresenius Kabi manufactures medical devices such as infusion pumps and equipment for blood collection and processing. All the devices are developed to last for several years and can be repaired by trained and certified service personnel in the event of misdiagnosis. We provide relevant manuals for this purpose and manufacture appropriate spare parts at our production facilities. If the production of a device is discontinued, we keep spare parts in stock for seven to ten years to enable further repairs. We also provide our customers with the necessary software updates.

We manufacture a wide range of products with varying durability ranging from 7 to 15 years if maintained regularly. We recommend appropriate maintenance intervals for all products, which depend on how they are used or, in the case of batteries, on how long they are used for. Due to the large number of different products, we do not list them individually here. As one example, our AmiCORE Apheresis System is used for blood donation and has an expected life span of 15 years. Due to lack of data, we are currently unable to provide information on industry averages.

In the healthcare sector, for reasons of hygiene, disposable items are needed, and their repairability is not assessed. In addition, we do not have an established assessment system for evaluating the repairability of our reusable products.

The options for recycling our medical products are limited. Taking into account legal and hygiene requirements, we try to close recycling loops. Items made of paper, e.g., manuals, as well as packaging, like all of our corrugated packaging and folded boxes, are recyclable. We do not yet systematically record the recycling share of our products.

Waste

Due to the diverse activities of Fresenius, there is a large number of waste streams. Fresenius Helios generates infectious and non-infectious hospital waste, electronic waste from medical equipment, food waste from canteens, construction waste from remodeling work, chemical waste from laboratory work and household waste such as packaging waste, paper waste and residual waste. At Fresenius Kabi, plastic waste, paper and cardboard waste, wood waste, electronic waste, metal waste, glass waste, organic waste, residual waste, demolition and construction waste, and hazardous waste are generated. The materials contained in the waste include, biomass, plastics, chemicals, pharmaceuticals, textiles, paper, metals, glass, wood, construction waste, and aluminum.

The total amount of hazardous waste generated in the reporting year was 29,314 t. There was no radioactive waste.

We record the total amount of waste in accordance with the European waste classification codes both where regulatory required as well as voluntary. In addition, there are countries where local waste codes are used. For consolidation, we transfer these values into our system based on the European waste codes. If the further processing option (e.g. recycling, reuse, incineration, etc.) is known, we categorize the waste accordingly and add it up. If the further processing is not known, country-specific statistics are used for allocation to recovery and disposal types. If no total waste quantity is available (at Fresenius Kabi this only applies to market units), the waste quantity is estimated based on the waste data collected at the Bad Homburg site per FTE (full-time equivalent).

At sites with ISO 14001 certification, the waste management systems, that are also used to collect the key figures, are audited by an external auditor. The auditor determines the specific aspects to be audited.