A materiality assessment seeks to identify the issues that are important to the business, the community and the environment, and to prioritize them for action by the company.

Merck's products include prescription medicines, vaccines, biologic therapies and a diverse portfolio of consumer and animal health products. Our global operations include research laboratories and farms; manufacturing and packaging facilities; warehouse and distribution centers; a field sales force; and business offices. In recent years, we have begun moving from manufacturing and packaging the majority of our products at our own facilities toward a supply model that also uses external manufacturers to augment our internal capabilities.

Our direct environmental footprint is largely related to the resources and materials we use to do research and to manufacture our products, as well as the wastes that are generated, treated and disposed of as the result of those activities.

The products that we make, especially our pharmaceuticals, vaccines and biologic therapies, require very pure ingredients and rigorous cleaning procedures. Synthesis of complex pharmaceutical compounds often requires multistep processes involving significant temperature changes and high-purity ingredients and solvents. Our vaccines and biologic therapies generally involve living microorganisms that require strict growth conditions and significant amounts of highly purified water.

As a result, the key areas identified by our environmental materiality assessment are:

• Water
• Energy & GHGs
• Solvents (generation, transport, use, and disposal life cycle)

While we largely focus in this report on the impacts of our own operations, the issues that are material to us are mirrored in our supply chain by the external manufacturing partners who also make products for us. For more information on our supply chain, click here.