Our Group has conducted a preliminary analysis of the exposure and vulnerability of its activities to physical climate risks, as defined in section II of Annex A to the European regulation. This analysis was carried out by the Insurance and Risk Management department based on our insurers’ reports on the prevention of natural and climate risks at our high asset value sites, and on the internal knowledge of our main sites. In 2024, the Group reinforced this approach with simulations of global warming scenarios, based on the IPCC’s assumptions, which made it possible to map the risks identified and their degree of importance for our main sites worldwide. Using this as a basis, we are now working on completing our action plans to limit the potential impact of these risks.

Virbac has identified climate-related risks and opportunities. Based on the CSRD, the Group divides its climate-related risks and opportunities into two categories:

• physical: risks and opportunities related to the physical impacts of climate change;
• transition: risks and opportunities related to the transition to a low-carbon economy, which can lead to significant political, legal, technological and market changes.

ACTION PLAN

The risks related to the effects of climate change have encouraged us to help reduce greenhouse gas emissions of scopes 1 and 2. In our company, direct greenhouse gas emissions (scopes 1 and 2, as defined in the GHG protocol) represent emissions linked to the consumption of various forms of energy including gas and electricity, as well as greenhouse gas emissions linked to refrigerants.

The main actions taken to reduce our greenhouse gas (GHG) emissions scopes 1 & 2 are as follows:

• optimization of energy consumption;
• emissions related to refrigerant gases;
• use of renewable electricity at certain sites;
• greening of the company vehicle fleet;
• eco-design of our future sites.

Since 2023, we have been conducting an in-depth assessment of our GHG emissions, which has enabled us to complete our carbon assessment for scopes 1, 2 and 3, and to launch complementary actions to reduce indirect emissions such as:

• the optimization of the transport of finished products and upstream freight;
• a responsible purchasing approach.

Work has begun to define a transition plan compatible with the Paris Accord; actions have already been targeted and launched (see above). An initial estimate was made, but the work will continue until 2025 with the final estimate (reduction of GHGs, time horizon), the evaluation of resources, and the support of contributors.

To adapt our plants and improve working conditions in areas where climate risk analyses have revealed significant risks of heat waves and rising temperatures, we are ensuring that we implement actions to limit the effects of high temperatures on our employees and infrastructure (areas equipped with shade or green spaces installed to offer an area away from the sun, actions on the organization of working hours to limit employee exposure, use of thermally efficient materials, etc.). We are not defining a time horizon for this action plan as implementation takes place with each new construction or development of existing infrastructures.

POLICY

Our energy consumption policy is part of an approach to optimize the resources we use. We seek to control the consumption of energy, water and materials used in our manufacturing processes.

We are committed to reducing our energy consumption through the energy efficiency of our equipment and facilities, the implementation of indicators as close as possible to end users for better management of energy consumption, and implement in our industrial sites the Best available techniques (BAT) applicable to our activity, in the choice of our equipment and monitoring. A second part of our policy is dedicated to energy supply, with the inclusion in our investment strategy of the development of renewable energies on all new investment projects, as well as on some historic sites (Australia, Chile, South Africa), and finally the security of energy supply through regular monitoring and contractual negotiations.
It is important to note that Virbac is dependent on the requirements in force in the pharmaceutical sector that limit the ability to deploy certain levers for reducing energy consumption. Pharmaceutical manufacturing processes must meet product quality requirements.

PERFORMANCE LINKED TO CLIMATE CHANGE

As part of our veterinary medicine manufacturing business, we use substances that present health, fire and/or explosion, emission and discharge risks during the various phases of development and marketing, from R&D and manufacturing to storage and shipping.

To limit these risks, which could cause harm to people, property and the environment, we comply with the safety measures prescribed by the laws and regulations in force, implement current Good manufacturing practices and Good laboratory practices and provide training for our employees. Our manufacturing sites and research and development facilities are also regularly inspected by regulatory authorities.
Therefore, we are focusing on the real impacts of our activity, atmospheric emissions, effluents or hazardous waste resulting from our activities or products by increasingly investing in environmental compliance: taking into account EHS impacts in the management of industrial projects, improvements in the environmental performance of existing facilities, etc.
Furthermore, the Group’s environmental principles are adapted to countries according to different local regulations. Here again, the objective is to identify good practices at the subsidiary level to be consolidated within the Group context.

ACTION PLAN 

Effluents

For effluents as well as other environmental releases, our goal is to facilitate across the Group the consolidation of the various local initiatives carried out locally and subject to specific regulatory frameworks, in particular on the optimization of the frequency at which our facilities are cleaned. In this sense, our vigilance translates into conservative guidelines. For example, many sites must recover and treat a large portion of manufacturing water discharges in accordance with related standards for hazardous waste.

Hazardous waste

In addition to the constant search to control the volumes generated and improve collection for maximum treatment and recycling, we ensure traceability of all our hazardous waste up to the point of disposal: soiled packaging; laboratory, production, medicinal or infectious wastes; and chemical effluents (mostly incinerated and therefore thermally treated or recycled for solvent recovery). Controlling waste volumes also begins at the research and development stage by considering treatment application methods so as to limit wastage and residues that could harm the environment (targeting or optimizing sprays, for example). It should be noted that at the Carros site in France, we have signed a new hazardous waste management contract with a target of 80% recovery.

Substances of very high concern

Substances of very high concern are substances or groups of chemicals that can cause adverse effects on human populations and/or the environment. In accordance with the REACH Regulation, we monitor these substances and work continuously (to the extent technically possible and economically viable) to replace them with other substances whose properties are not of concern. 

Preserving the environment is one of our main commitments for sustainable development. Drinking water is essential to health but its availability is becoming a major issue for humanity.
We are committed to responsible water management, in order to have an ecologically sustainable and socially equitable use of this essential resource. Responsible management of water resources focuses on key aspects of our business, such as the continuity of our industrial activities to ensure the availability of our products. 

ACTION PLAN 

• Implementing measurements of the main water consumption stations per site for optimized monitoring;
• Participating in the think tank on the water sobriety plan for the sector;
• Training the Group’s employees to limit the environmental risks associated with our activity, particularly in terms of water consumption and pollutant discharges, and in this respect, to carry out a major training program in France in 2024;
• Encouraging employees to behave in an environmentally friendly manner, by adopting eco-responsible attitudes, including managing water throughout the company.

PERFORMANCE RELATED TO WATER AND MARINE RESOURCES

Our company is committed to integrating biodiversity conservation into its sustainability strategy. Through the use of the Integrated biodiversity assessment tool (IBAT), we have mapped all our sites that are located near protected areas (Natura 2000, national parks, etc.), or near a sensitive area identified as Key biodiversity areas (KBAs) which are sites that significantly contribute to the global persistence of biodiversity, in terrestrial, freshwater and marine ecosystems. Natural sites are considered global KBAs if they meet one or more defined criteria¹. 

The mapping carried out with the IBAT tool identified three Virbac sites located in a protected or sensitive area: an industrial site in Australia (KBA Richmond Woodlands), a distribution site in Costa Rica (Unesco-MAB² biosphere reserve established in 1988), and a distribution site in Thailand (KBA Lower central basin). 

For our two distribution sites in Costa Rica and Thailand, no significant direct impact on biodiversity has been identified due to the lack of natural habitats and the predominance of the urban environment. Our industrial site in Australia is located in an area specifically dedicated to industrial activities.

ACTION PLAN 

In connection with the IROs of the biodiversity and ecosystem issue, our Group continues to work specifically on alternatives to antibiotics to reduce the risk of antimicrobial resistance in the context of a One Health approach preserving biodiversity and ecosystems. 

_{1 - eleven criteria are grouped into five categories (threatened biodiversity, rare biodiversity, high ecological integrity, important biological processes, irreplaceable according to quantitative criteria)}

_{2 - Unesco Man and the biosphere program (United nations educational, scientific and cultural organization)}

Virbac sees the circular economy as an opportunity to direct its activities towards a more sober and efficient consumption model of resources, and a limitation of waste production. The circular economy embodies the objective of going beyond impact reduction, in favor of a model of positive social, economic and environmental value creation. 

In the context of optimization of the resources we employ, we are specifically seeking to control our consumption of energy, water and materials used in our manufacturing processes.

Again with a view to the sustainable use of resources, we are committed to fine-tuning our consumption of active ingredients, excipients and packaging items as much as possible in order to avoid product wastage or packaging proliferation. With the help of our strategic suppliers, we have also given a new impetus to innovation that can reduce wrapping and packaging. This requires optimized supply management to limit warehousing and internal transfers. We are also progressing on optimizing flows and the speed of shipments. 

Primary packaging that comes in contact with medicines is subject to strict pharmaceutical industry quality standards that limit the use of recycled materials. However, a cross-functional think tank was put in place at the end of 2021 with the first concrete action being to take into account these concepts, in particular that of recyclability, as a criterion of choice in all current and future projects. 

For companion animal products that do not require a marketing authorization (MA), we integrate eco-design principles as early in the creation process as possible. These same principles are implemented for secondary or tertiary packaging, starting with the research and development stage, in partnership with our suppliers.

ACTION PLAN 

• Using new environmentally friendly technologies to develop and update our products.
• Recycling initiatives and extension of the duration of use of equipment.

PERFORMANCE RELATED TO RESOURCES USE AND CIRCULAR ECONOMY