ESG (Environmental, Social, and Governance) risks

Environmental, social and governance (ESG) risks are assessed as part of Orion’s double materiality assessment process, resulting in the identification of material risks from a sustainability perspective. These risks are reported in annual sustainability statement as part of Orion’s Financial Statements.

Orion has a long and complex upstream supply chain where there are risks related to external suppliers’ ESG impacts, or their non-compliance with ESG business ethics or requirements, or related to unforeseen negative ESG events, such as physical effects of climate change. Due to these risks Orion may face financial losses or reputational damage, miss business opportunities, Orion’s critical medicines could become unavailable or Orion’s supply chain resilience of reliability could decline. None of these risks are material separately, but they are material in aggregate.

Risks that are not material but connected to Orion’s most material environment-related impact: Pharmaceuticals in the Environment (PiE)

Orion’s Branded Products as well as Generics and Consumer Health businesses may experience sales growth challenges and limitations to keep products on the market, if business case(s) for new products in Generics and Branded Products businesses become restricted or unfeasible due to the added costs of environmental risk assessment (ERA) generated by new studies to comply with the new mandatory requirements applicable to all new Marketing Authorizations in Europe effective 1 September 2024.

EU Urban Wastewater Treatment Directive obligates the pharmaceutical, cosmetics, and hygiene products industries as manufacturers in the so-called extended producer responsibility system to cover the investment and operational costs of the removal of micro-pollutants from wastewaters. This will increase costs in Orion’s own operations and increase data requirements.

Learn more in our Sustainability Statement.