Sustainability Report 2013 Lek d.d.

25 Environment 31 GRI Indicator G4-EN30 32 GRI Indicators G4-EN33, G4-LA15 33 GRI Indicator G4-EN30 2.1.5 Optimization of business processes Based on Lek’s business strategy and environmental policy, the company’s environmental performance improved, being part of Lek’s projects aimed at optimizing the business process- es. The key business process optimization projects include: TH!NK SANDOZ Initiative TH!NK SANDOZ, a web-based idea management program, was launched as a pilot project in April 2012 and has brought excellent results. In 2013, our associates from all four sites contributed 866 ideas (600 in 2012), of which 45% were adop- ted and approved for implementation. Over 300 ideas have already been applied in practice. Interesting suggestions and ideas were proposed by as many as 454 different associates, which represent 11% of all application users (employees, inc- luding external associates). The ideas adopted resulted in di- rect measurable savings of over EUR 3 million. According to our estimates, more than 10% of improvements are directly HSE-related, and at least 5% are environment-related. European Integrated Facilities Management (EIFM) Project-related activities are performed simultaneously in se- veral European regions. Slovenian sites are comprised in the region that includes Novartis organizational units in Germany, Austria and Switzerland. We are creating a uniform basis for effective facility and equipment maintenance, waste manage- ment, landscaping, and other factors. The new working meth- od will be supported by appropriate information technology solutions, and will improve the business transparency, contri- buting to long- term savings. With regard to Integrated Facility Management (IFM), the year 2013 was the first year of the project and has been declared as the most productive pro- ject to have been rolled out in the past year. Its performance across countries varied in accordance with the level of facility management (FM) development in these countries. For Slovenia, IFM was a challenging project, as this is an area that our market is only gradually adopting. The same applies to the ISS company which was selected by Novartis as a five -year contractual partner in Slovenia and as it lacks some of the major FM functions therefore it struggles to give the necessary contractual support to its partner – Novartis. As a result, waste management by ISS had to be cancelled during the course of last year. Explosion safety – ATEX In 2013 we continued with the maintenance certification for individual buildings, especially at the Menge‰ and Ljublja- na sites, as these sites have a larger number of buildings for which such certification is required. We managed to certify an additional 11 buildings (4 in Menge‰ and 7 in Ljubljana). We renewed the certification of competence of the maintenance personnel for the Ex-equipment maintenance. Maintenance teams at Ljubljana, Menge‰ and Lendava sites already received their certificates. The Prevalje team has already become qualified; however, the receipt of the certificate is expected in 2014. We are Sandoz initiative The “We are Sandoz” initiative is instrumental in developing the organization and creating an excellent working environ- ment. It gives every employee the opportunity to contribute to the company's future and openly express their opinions: • Great people. Sandoz’ global success would not be possible without numerous individual achievements of our associates worldwide. The focus of the initiative is to improve employee visibility and recognition at both the local and global level. • Outstanding achievements. We foster cross-func- tional alignment of operations, particularly in the Pro- duct Development, Quality Management and Technical Operations units. • Customer focus. At Sandoz, customers play an important role. Each and every employee therefore focuses on cooperation with customers and on how to improve their satisfaction. Leading Solution, Leading Breakthrough, and Leading Manager awards The ideas coming from employees, contributing to the quality of the work process, are awarded as a part of the innovative award scheme: Leading Solution, Leading Breakthrough, and LeadingManager. Initiatives receivedare collectedonamonth- ly basis, and assessed by a special committee which will reveal the results for 2013 after the publication of this report. The Lek Leading Solution award 2012 was given to the BCS- -biowaiver project, a novel approach to the registration of fast- -release solid dosage forms. The leading Breakthrough 2012 award was presented to Du‰an Tesliç and his team from the department Development of Pharmaceutical Active Ingredient Processes for their project Pharmaceutical Particle Engineer- ing. The Leading Manager award was given to Vatroslav Spudiç, Head of the Bioprocess Development at Technical Development in Biopharmaceuticals. In year 2012, his depart- ment contributed the largest number of ideas per employee and also implemented most of them. 2.1.6 Indirect environmental impacts 31 As indirect environmental impacts we consider primarily im- pacts on the suppliers’ side. Therefore we expect our sup- pliers to be committed to the principles of the Novartis Corporate Citizenship policy. By signing a supply agreement, the supplier undertakes the commitment to mitigate his environmental im- pact, environmental accountability being one of the key sup- plier selection or confirmation criteria. The signing of a supply agreement should be preceded by an environmental audit of the supplier's operations. The agreement constitutes the supplier's guarantee to comply with all applicable HSE laws and regula- tions, fair work practices and unlawful discrimination. 32 For waste management, we only select suppliers that have all the required authorizations, and only those suppliers that are recorded as contracting providers with the respective Ministry. Transport is one of the major sources of indirect environmen- tal impact. It is mitigated by more extensive use of teleconfe- rencing and videoconferencing which replace long-distance business travel. For all the fleet cars used by Lek employees, fuel consumption, mileage and CO 2 emissions are monitor- ed on a regular basis. 24 For the 115 fleet cars in 2013 (96 in 2012), a total traveling distance of 3,380,216 km was recorded, with fuel consumption of 209 m 3 , and CO 2 emissions of 465 tonnes. 33