Numerous studies supported by leading scientists worldwide have concluded that a gradual warming of our climate, commonly referred to as climate change, is under way and is largely the result of human activity.
To address this serious concern, Merck is taking steps to adopt responsible policies and practices to reduce greenhouse gas (GHG) emissions. By taking early action to understand how we use energy and to reduce our GHG emissions, we also believe we will minimize the impact of anticipated regulatory requirements associated with climate change and reduce our current and future operating costs.
Merck's first corporate GHG reduction goal was to reduce GHG emissions from the company's global facilities and automobiles by 12 percent by the end of 2012 (from the baseline year of 2004). Merck achieved and exceeded that goal in 2009, well ahead of schedule. Following the merger, we established a new GHG emissions goal of a 10 percent reduction for the period 2009 to 2015 through energy-reduction efforts.
Since establishing our first corporate energy policy in 1994, Merck has made it a priority to reduce our demand for energy.
We established a Center of Excellence (COE) in Energy that is responsible for identifying and implementing best practices for reducing energy use across the company. Our program emphasizes conserving energy over the use of renewable energy, because reducing our energy demand is the better option for our business and for the environment. Because the majority of demand for energy occurs at our manufacturing, warehousing, laboratory and major office facilities, we target them in our energy demandreduction programs. We also evaluate how we use energy in our vehicle fleet and in employee business travel to identify opportunities to reduce costs and environmental impact.
In 2008, our Energy COE developed efficiency metrics for all major energy-using systems at Merck and continues to use these metrics to help improve performance. We also continue to improve our Best Practices Evaluation Tool, which sites use to identify improvement opportunities. The tool can be used to assess 14 categories of energy demand, including HVAC, steam distribution, meters, lighting and compressed air.
To achieve our corporate GHG goal, we expect to continue to increase our energy efficiency while reducing our reliance on fossil fuels. Projects include installation of variable speed drives in our manufacturing and research facilities; reassessment of production, green research and office buildings; the use of free cooling and heat recovery from recirculating water systems; and multiple renewable energy initiatives (e.g., solar and wind). Management has committed up to $50 MM over the five-year period (2009 – 2015) to help drive these reductions and better position the company to respond to energy demands in the future.
Merck tracks five greenhouse gases GHGs: carbon dioxide (CO2), methane, nitrous oxide, hydrofluorocarbons and sulfur hexafluoride.
Since 2005, we have been reporting our GHG emissions annually through the Carbon Disclosure Project, and we were a member of the U.S. EPA Climate Leaders program from 2002 until the agency phased out the program in late 2010.
Although we fully support and have participated in voluntary programs to reduce GHG emissions, we recognize that national and even multinational frameworks will be required to fully address climate change. The company supports a global approach that stimulates the development and broad use of energy-efficient technologies and avoids unnecessary economic disruptions and the inefficiencies of disparate local, state or regional requirements. Merck currently holds GHG emission allowances under the European Union (EU) Emission Trading System (ETS) at four sites in that region.
We expect to continue to reduce our GHG emissions. In line with our position on climate change, we are fully committed to implementing energy-efficient and environmentally friendly technologies, materials and products; using renewable energy resources; and reporting on our progress toward achieving our goals.
Merck is engaged in many initiatives worldwide to improve energy use and reduce greenhouse gas (GHG) emissions from our operations.
Because the vast majority of our GHG emissions are the result of energy use, we factor the potential for future emissions into capital expenditure planning, requiring all new facilities to comply with our Energy Design Guide and Energy Conservation Planner. When we purchase new facilities, we evaluate them for energy efficiency and assess them against our best practices as part of their integration into Merck.
We also have adopted a corporatewide global commitment to build all new laboratories and offices to achieve LEED® Silver Certification or its equivalent. Most recently, we achieved LEED certification for our new Hangzhou, China, multidivisional facility and for a laboratory in Durham, North Carolina.
Merck has one facility with a combination green and solar photovoltaic roof. The 25 kilowatt (kW) solar array comprising of 110 panels has generated almost 24 megawatt hours (MWh) of electricity. The 2,700 square feet of green plants provide insulation to the building and extend the roof's life by protecting it from ultraviolet (UV) light. In addition to the other benefits, the green roof reduces the impacts of stormwater runoff by capturing about 90 percent of rainwater or approximately 60,000 gal¬lons.
Renewable Energy Projects
- Seven sites installed solar arrays in 2011. Together they produced more than 5,400 megawatts (MW) of energy and eliminated over 2,500 metric tons of (MT) CO2 emissions
- Two 2 MW wind turbines installed at our Cramlington, U.K., site in late 2010 generated more than 11,700 MW of energy in 2011
Almost one tenth of our energy use is associated with our vehicle fleet. The merging of the two legacy companies' sales fleet and optimizing of the combined sales force have resulted in the reduction of GHG emissions by more than100,000 MT.
Between 2009 and 2011, we converted our U.S. Human Health sales fleet, which represents 28% of our corporate fleet miles driven each year, from 6 cylinder to 4 cylinder cars. In addition, pilot projects involving hybrid, alternative fuel and electric cars are under way.
U.S. Environmental Protection Agency (EPA) ENERGY STAR: This partnership provides a broad energy-management strategy that serves as a useful framework for measuring our current energy performance, setting goals, tracking savings and rewarding improvements.
In 2012, the EPA again recognized Merck with the Sustained Excellence Award. This is the seventh consecutive year we have been recognized by ENERGY STAR for excellence in energy management. For more information on our awards click here.
Business Roundtable Climate RESOLVE (Responsible Environmental Steps, Opportunities to Lead by Voluntary Efforts): The Climate RESOLVE initiative seeks to have every company in every sector of the economy undertake voluntary actions to control GHG emissions and improve the GHG intensity of the U.S. economy.
Carbon Disclosure Project (CDP): The CDP is an investors-backed group that annually requests emissions data from listed companies around the world. Merck has reported its GHG emissions since 2005 to the Carbon Disclosure Project and participates in workshops and seminars sponsored by the CDP. In 2011, at the request of a major customer of ours, we also participated in the CDP GHG Supply Chain project, which involved disclosing our GHG-related environmental impacts.