March 18, 2026

Merck & Co. Sustainability

table of contents

Merck & Co., Inc. (known as MSD outside the United States and Canada) is a Rahway, New Jersey-headquartered global biopharmaceutical company delivering medicines, vaccines, and animal health products to populations across more than 140 countries, with medicines and vaccines reaching more than 450 million people in 2024. The company operates through two segments: Pharmaceutical, covering human health medicines and vaccines including KEYTRUDA, Gardasil, and Januvia, and Animal Health, covering veterinary products and health management solutions. The primary sources for this analysis are the Purpose for Progress: Merck 2024/2025 Impact Report (published August 2025), the 2024/2025 Performance Data Tables (updated August 2025), the 2023/2024 Impact Report, and the TCFD Report December 2024.

Merck committed to net-zero GHG emissions across Scopes 1, 2, and 3 by 2045, aligned with SBTi guidelines, a commitment formalized in 2024 alongside two SBTi-approved near-term targets. The company ranked No. 1 in the health sector in Barron’s Top 100 Most Sustainable U.S. Companies and No. 1 in JUST Capital’s America’s Most JUST Companies in 2024, and has received nine Green Chemistry Challenge Awards from the U.S. EPA and the American Chemical Society, including six consecutive awards since 2017.

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Sustainability Strategy and Goals

Merck’s sustainability program operates under a four-pillar framework: Access to Health, Employees, Environmental Sustainability, and Ethics and Values. The Strategic Policy and Sustainability Council (SPSC), composed of cross-functional senior leaders under guidance from the Executive Team, ensures the corporate Strategic Framework integrates public policy and sustainability commitments. Beginning in 2023, sustainability metrics accounting for 10 points on the Company Scorecard directly link compensation for most employees, including executives, to performance on Access to Health and Employees sustainability goals.

Merck reports under GRI Standards, SASB, the GHG Protocol, the UN Global Compact, and the UN SDGs, with select 2024 GHG metrics externally assured by a third-party accountant using AICPA AT-C Section 105 and Section 210 standards. The Board of Directors oversees ESG through its full Board and committee structure, with the Governance Committee assigned primary responsibility for monitoring environmental sustainability performance. The Environmental, Health and Safety (EHS) Council, chaired by the General Counsel and meeting quarterly, oversees environmental strategy, policy, and risk mitigation at the management level, with the Global Safety and Environment (GSE) Vice President communicating progress to the Board, Executive Team, and EHS Council.

Net Zero and Carbon Emissions

Merck’s SBTi-approved targets call for a 46% absolute reduction in Scope 1 and 2 GHG emissions by 2030 from a 2019 baseline and a 30% absolute reduction in Scope 3 emissions by 2030 from the same 2019 baseline. In 2024, the company formally committed to net-zero GHG emissions across all scopes by 2045, the full value chain net-zero goal aligned with SBTi guidelines. Combined Scope 1 and market-based Scope 2 emissions reached 884,200 MT CO2e in 2024, a 15.6% reduction from the 2019 baseline of 1,047,800 MT CO2e, against a 2030 requirement of 46%.

Scope 1 emissions (MT CO2e): 746,900 (2019 baseline) → 739,500 (2022) → 731,600 (2023) → 721,200 (2024); a 3.4% reduction from baseline
Scope 2 (market-based, MT CO2e): 300,900 (2019 baseline) → 217,300 (2022) → 170,100 (2023) → 163,000 (2024); a 45.8% reduction from baseline
Scope 2 (location-based, MT CO2e): 375,400 (2019 baseline) → 350,500 (2022) → 340,400 (2023) → 323,800 (2024); a 13.7% reduction from baseline
Total Scope 1+2 (market-based, MT CO2e): 1,047,800 (2019 baseline) → 956,800 (2022) → 901,800 (2023) → 884,200 (2024); a 15.6% reduction from baseline; 2030 target requires a further 30-percentage-point reduction
GHG intensity (Scope 1+2 market-based, MT CO2e per employee): 17.01 (2019 baseline) → 14.07 (2022) → 12.52 (2023) → 11.79 (2024); a 30.7% reduction from baseline
Scope 3 total (MT CO2e): 6,442,500 (2019 baseline) → 5,999,600 (2022) → 5,863,500 (2023) → 6,057,900 (2024); 6% below baseline but rising year-over-year in 2024
Scope 3 target: 30% absolute reduction from 2019 baseline by 2030; current progress: 6% below baseline, with a 24-percentage-point gap to the target

Water Stewardship

Merck’s water stewardship approach centers on site-level risk assessments and treatment standards, with a particular focus on managing pharmaceutical emissions to the environment (PiE) at manufacturing sites adjacent to water bodies. The company’s 2023/2024 Impact Report includes a dedicated Biodiversity chapter covering water quality outcomes and ecosystem protection for adjacent water systems. A company-wide absolute water withdrawal reduction target with a defined baseline year has not been published in the 2024/2025 Performance Data.

Total energy use (GJ): 17,261,000 (2019) → 17,197,000 (2022) → 17,186,000 (2023) → 16,965,000 (2024); a 1.7% absolute reduction from baseline over five years, indicating limited decoupling of energy from production growth
Natural gas share of total energy: 64% in 2019 and 65% in 2024, essentially flat, indicating continued heavy reliance on fossil fuel combustion for process heat
TCFD physical risk assessment: Drought was rated Low risk at present day, Medium at 2030, and High at 2050 across 10 critical facilities under the RCP8.5 scenario, signaling increasing operational water risk over the long term
No company-wide absolute water withdrawal or reduction target with a baseline year is published as of the 2024/2025 Performance Data

Deforestation and Biodiversity

Merck includes a dedicated Biodiversity chapter in its 2023/2024 Impact Report, covering ecosystem management approaches, PiE risk governance, and raw material sourcing impacts on adjacent ecosystems. PEC/PNEC (Predicted Environmental Concentration to Predicted No Effect Concentration) analysis is applied to active pharmaceutical ingredients, managing the risk of compound entry into waterways and ecological systems. The TCFD assessment identifies raw material availability as a medium- to high-risk transition risk by 2050 under the STEPS scenario, including risks related to biodiversity loss and genetic resource availability for drug discovery.

Green Chemistry Challenge Awards: 9 total awards including 6 consecutive since 2017, recognizing breakthrough synthesis innovations that reduce hazardous substance use, solvent intensity, energy consumption, and waste in API manufacturing
PiE management: PEC/PNEC analysis applied to new compounds and marketed medicines; results shared with regulators and relevant stakeholders
TCFD biodiversity risk: Loss of biodiversity and genetic resources for drug discovery identified as a medium- to high-risk supply chain transition risk by 2050 under the STEPS scenario
No time-bound, quantified deforestation or biodiversity targets published as of the 2024/2025 Performance Data

Packaging and Circular Economy

Merck’s circular economy approach centers on waste minimization through green chemistry in R&D and manufacturing, solvent reduction, and materials innovation embedded in the chemical synthesis process. The company’s SMART (in-Silico MSD Aspirational Research Tool) process mass intensity (PMI) tool provides molecule-aware PMI targets for API manufacturing, guiding developers toward greener, less material-intensive processes at every stage of synthesis. System-level recycling rate and landfill diversion targets have not been published in the 2024/2025 Performance Data.

Scope 3 Category 5 (waste in operations, excl. recycled and composted, MT CO2e): 18,800 (2019) → 24,900 (2022) → 19,500 (2023) → 20,800 (2024); a 6.7% year-over-year increase
Including recycled and composted waste yields negative Scope 3 Category 5 emissions of -53,300 MT CO2e in 2024, confirming a substantial recycling program at site level, though no recycling rate percentage is separately published
SMART PMI tool: Provides aspirational PMI targets for small molecule API processes; large molecule modality-appropriate metrics are being pioneered to supplement PMI for biologics and vaccine manufacturing
Sustainability bond allocation: $994 million issued in 2021, fully allocated by September 2023; 81% to completed or underway green and social projects and 19% to future-period projects
No company-wide recycling rate percentage or absolute packaging reduction target with a baseline year is published as of the 2024/2025 Performance Data

Human Rights and Responsible Sourcing

Merck’s responsible sourcing approach is governed by its Supplier Code of Conduct, covering labor standards, human rights, environmental practices, ethics, and product quality. The company grew its spend with small and diverse Tier 1 and Tier 2 suppliers from $3.2 billion in 2022 to $3.6 billion in 2023. Supplier GHG engagement has expanded to 400-plus partnership engagements in support of Scope 3 reduction goals, and in 2024 Merck began transitioning from spend-modeled Scope 3 estimates to primary supplier activity data collection for Categories 1 and 2.

Small and diverse supplier spend: $3.2 billion (2022) → $3.6 billion (2023)
Supplier GHG engagement: 400-plus partnership engagements supporting Scope 3 Categories 1 and 2 emissions reduction as of 2024/2025
Scope 3 primary data transition: Initiated in 2024 for Categories 1 and 2; 2019–2024 historical data restated to incorporate supplier-provided activity data where available, replacing economic input-output modeled estimates
Ethics training completion: Greater than 99% of employees completed the Leading With Ethics and Integrity training series in 2023
Privacy compliance: 100% compliance with privacy and data protection regulatory requirements maintained across 2022, 2023, and 2024

Nutrition and Health

Access to medicines and vaccines is the core of Merck’s social sustainability mission, with the MECTIZAN Donation Program representing the longest-running disease-specific medicine donation program of its kind globally. In 2024, Merck’s medicines and vaccines reached more than 450 million people, and access solutions enabled 247.7 million additional people to access innovative medicines and vaccines.

People reached with medicines and vaccines: more than 550 million (2023) → more than 450 million (2024); the reduction partly reflects reporting methodology changes
People enabled to access innovative medicines through access solutions: 66.7 million (2021) → 189.2 million (2022) → 240 million (2023) → 247.7 million (2024); cumulative total exceeds the 350 million by 2025 target, achieved ahead of deadline
Health equity social investments reaching LMICs and underserved HIC populations: 15.0 million (2021) → 18.6 million (2022) → 21.2 million (2023) → 11.4 million (2024); cumulative total: 66.2 million against a 50 million by 2025 target, achieved and exceeded
Countries reached with products annually: 79% (2021) → 76% (2022) → 79% (2023) → 92% (2024), a substantial year-over-year improvement
Annual product registrations: 79 (2020) → 156 (2022) → 159 (2023) → 213 (2024); a 34% year-over-year increase
R&D investment: $13.5 billion (2022) → $30.5 billion (2023, including $17.1 billion in business development charges) → $17.9 billion (2024, including $3.6 billion in BD charges)
MECTIZAN Donation Program: 358.9 million people reached (2022) → 385 million (2023) → 292 million (2024); 2024 decrease reflects supply timing for certain country distribution cycles

Community and Social Impact

Merck’s community impact is concentrated in health equity programs, disaster relief, and local partnerships coordinated through the Office of Social Business Innovation, with annual health access capacity-building investment reaching $42.67 million in 2024. Company Scorecard sustainability metrics, effective from 2023, tie health access and employee sustainability goals to compensation across the majority of Merck employees including executives.

Annual investment in health access capacity building: $48.77 million (2020) → $37.94 million (2022) → $43.93 million (2023) → $42.67 million (2024)
Health care workers trained through major partnerships: approximately 349,000 (2023) → approximately 38,000 (2024); the 2024 decline reflects phasing and reporting cycles of multi-year training programs
Employee Business Resource Groups: more than 21,000 employees are members of at least one of 10 Employee Business Resource Groups, representing nearly 30% of the global workforce
Pay equity: greater than 99% parity in global pay for female versus male employees and greater than 99% by race and gender in the U.S. for the third consecutive year through 2023

Governance and Transparency

Merck’s Board of Directors holds primary ESG oversight through its full Board and committee structure, with the Governance Committee monitoring environmental sustainability practices and receiving regular updates on Environmental, Health and Safety matters. The EHS Council meets quarterly and reports to the Board and Executive Team through the GSE Vice President. The Enterprise Capital Committee now incorporates GHG emissions impact into all proposed capital project decisions through the Environmental Sustainability Capital Principles, embedding decarbonization into investment approval processes.

Board independence: 92% independent directors (2024); 12 of 13 total
Women on Board of Directors: 46% (2022) → 50% (2023)
Company Scorecard sustainability metrics: 10 points (Access to Health and Employees); all goals achieved in the inaugural year (2023)
Third-party assurance: Scope 1+2 GHG and select Scope 3 categories (Categories 3 and 6) assured by an AICPA-accredited external accountant for 2024
Reporting frameworks: GRI Standards, SASB, GHG Protocol, UN Global Compact, UN SDGs, TCFD
Enterprise Capital Committee: Environmental Sustainability Capital Principles approved in 2024, requiring GHG emissions impact to be assessed for all proposed capital projects and investments

Technology and Innovation

Merck’s decarbonization strategy centers on three primary levers: operational efficiency to reduce Scope 1, renewable energy procurement to eliminate Scope 2 market-based emissions, and supply chain engagement to reduce Scope 3. The Low Carbon Transition Playbook (LCTP), a living document developed through cross-functional design thinking, supports site-level energy reduction and transition planning, providing gap assessments and short- and long-term decarbonization roadmaps for individual sites. The Green and Sustainable Science (G&SS) program is the company’s most structurally distinctive technology innovation, embedding hazardous substance minimization and energy reduction directly into chemical synthesis at the R&D stage.

Renewable electricity sourced: 41% (2021) → 45% (2022) → 57% (2023) → 61% (2024); a 20-percentage-point increase over three years; 2025 target of 100% not achieved
Scope 2 market-based reduction: 45.8% below 2019 baseline in 2024, the dominant driver of Scope 1+2 progress; driven by VPPAs, green tariffs, and on-site generation
SMART PMI tool: Provides molecule-aware aspirational process mass intensity targets for all API manufacturing processes; large-molecule modality-appropriate metrics pioneered for biologics and vaccines
LEED Zero carbon certification: South San Francisco facility achieved LEED Zero status using certified carbon offsets of 2,931.56 MT in 2024
Low Carbon Transition Playbook: Updated in 2024 with new technological solutions and an improved reporting interface to promote best-practice sharing across global sites
Scope 3 primary data collection: Methodology transitioned from spend-modeled estimates to primary supplier activity data for Categories 1 and 2 in 2024; 2019–2024 historical data restated
Sustainability bond: $994 million of $1 billion bond issued December 2021, fully allocated by September 2023 to green buildings, renewable energy projects, energy efficiency, and social access programs

Global Partnerships and Advocacy

Merck is a signatory to the UN Global Compact, aligning operations with the Ten Principles on human rights, labor, environment, and anti-corruption. The company actively participates in the Pharmaceutical Supply Chain Initiative (PSCI) to identify raw materials at risk from climate and supply chain disruption, and engages suppliers through 400-plus GHG partnerships. Merck’s MECTIZAN Donation Program is a multi-decade multilateral partnership with NGOs, governments, and the WHO covering river blindness and lymphatic filariasis eradication.

UN Global Compact: Signatory; Ten Principles embedded in Supplier Code of Conduct and corporate operations globally
PSCI membership: Active participation in identifying raw materials at climate and supply chain risk, including monitoring biodiversity and genetic resource availability for drug discovery
Supplier GHG partnerships: 400-plus engagement partnerships covering primary data collection, emissions target-setting support, and GHG reduction program co-development
Sustainability bond: $994 million fully allocated to green and social projects by September 2023; Sustainability Financing Committee oversees allocation and reporting

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Progress vs. Target Tracker

Commitment	Target	Current Status	Assessment
46% absolute reduction in Scope 1+2 vs. 2019 baseline	2030	15.6% below baseline in 2024; 884,200 MT CO2e vs. 1,047,800 MT CO2e baseline; 2030 target: 565,812 MT CO2e	At Risk (current pace: approx. 3.1% per year vs. 9.2% required)
30% absolute reduction in Scope 3 vs. 2019 baseline	2030	6% below baseline in 2024; 6,057,900 MT CO2e vs. 6,442,500 MT CO2e baseline; Scope 3 rose year-over-year in 2024	At Risk (Scope 3 increased in 2024)
Source 100% of purchased electricity from renewables	2025	61% achieved in 2024; 39 percentage points short at deadline	Missed (significant gap at deadline year)
Net zero GHG emissions (Scopes 1, 2, and 3)	2045	SBTi-aligned commitment formalized in 2024; long-term pathway and capital allocation plan under development	On Track (long horizon)
Advance health equity: 50 million people in LMICs and underserved HICs (cumulative)	2025	66.2 million cumulative (2021–2024); target exceeded	Exceeded
Enable 350 million people to access innovative medicines through access solutions (cumulative)	2025	Cumulative total exceeded in 2023; 247.7 million enabled in 2024 alone	Exceeded
Reach at least 75% of countries with products annually	2025	92% of countries reached in 2024, up from 79% in 2023	Exceeded
Maintain or exceed employee engagement index score	2025	On track in 2022, 2023, and 2024	On Track
Maintain or exceed inclusion index score	2025	On track in 2022, 2023, and 2024	On Track
100% privacy compliance for active incident monitoring	2025	100% maintained in 2022, 2023, and 2024	Achieved

Source

https://www.merck.com/wp-content/uploads/sites/124/2025/08/Performance-Data-2024_2025-1.xlsx
https://www.msd.com/wp-content/uploads/sites/151/2024/12/MSD-TCFD-Report-2024.pdf

Key Sustainability Innovations and Technologies

Merck’s most structurally distinctive sustainability innovation is the Green and Sustainable Science (G&SS) program, which embeds hazardous substance minimization and energy reduction into chemical synthesis at the R&D phase before manufacturing scale-up. The SMART PMI tool provides molecule-aware aspirational process mass intensity targets for every small molecule API synthesis process, and the company is pioneering modality-appropriate metrics for large molecules and biologics that outperform traditional PMI in identifying environmental reduction opportunities. Nine EPA Green Chemistry Challenge Awards, with six consecutive since 2017, provide sustained external validation of the program’s scientific rigor and real-world impact.

The Low Carbon Transition Playbook (LCTP) provides site-level decarbonization roadmaps and gap assessments, updated in 2024 with new technological solutions and a best-practice reporting interface. Combined with the Enterprise Capital Committee’s 2024 adoption of Environmental Sustainability Capital Principles requiring GHG impact assessment for all capital projects, this approach integrates environmental outcomes into the primary financial decision-making process, rather than treating them as a separate sustainability program.

Green Chemistry Challenge Awards: 9 total (6 consecutive since 2017), recognizing breakthroughs reducing hazardous reagents, solvent intensity, energy consumption, and waste per unit of API
SMART PMI tool: Molecule-aware aspirational PMI targets for all small molecule API processes; large-molecule metrics in development for biologics and vaccines
Low Carbon Transition Playbook: Site-level decarbonization roadmaps updated in 2024; includes gap assessments, short- and long-term carbon reduction plans, and best-practice sharing interface
Enterprise Capital Principles: Environmental Sustainability Capital Principles adopted in 2024; GHG emissions impact now required for every capital project and investment decision reviewed by the Enterprise Capital Committee
Renewable electricity procurement: 61% of purchased electricity from renewables in 2024, up from 41% in 2021, a 20-percentage-point increase driven by VPPAs, green tariffs, and on-site generation
Scope 2 market-based reduction: 45.8% below 2019 baseline in 2024, the single largest quantified decarbonization achievement in the program
Scope 3 primary data collection: Transition from spend-modeled estimates to primary supplier activity data for Categories 1 and 2 initiated in 2024; all 2019–2024 historical data restated
LEED Zero carbon certification: South San Francisco facility achieved certification using 2,931.56 MT of certified carbon offsets in 2024

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Measurable Impacts

Merck’s 2024 environmental performance shows a steady but slow Scope 1+2 reduction of 15.6% from the 2019 baseline, with Scope 2 market-based bearing the majority of the reduction (45.8%) while Scope 1 remains essentially flat at 3.4% below baseline. Total Scope 3 emissions rose from 5,863,500 MT CO2e in 2023 to 6,057,900 MT CO2e in 2024, a 3.3% year-over-year increase driven by a higher Purchased Goods and Services estimate in Category 1 following the transition to primary activity data. Energy consumption declined only 1.7% from the 2019 baseline by 2024, with natural gas maintaining a 65% share of total energy, indicating that process heat decarbonization has not yet begun in earnest.

Health impact metrics are the strongest performers in the entire sustainability portfolio. The cumulative access solutions target of 350 million people was achieved ahead of the 2025 deadline, and country product reach rose from 79% to 92% in one year. Both the health equity and access solutions targets were exceeded, demonstrating that health access commitments are operationally embedded and funded.

Scope 1 (MT CO2e): 746,900 (2019 baseline) → 739,500 (2022) → 731,600 (2023) → 721,200 (2024); a 3.4% reduction from baseline
Scope 2 market-based (MT CO2e): 300,900 (2019 baseline) → 217,300 (2022) → 170,100 (2023) → 163,000 (2024); a 45.8% reduction from baseline
Total Scope 1+2 market-based (MT CO2e): 1,047,800 (2019) → 956,800 (2022) → 901,800 (2023) → 884,200 (2024); a 15.6% reduction from baseline
Scope 3 total (MT CO2e): 6,442,500 (2019) → 5,999,600 (2022) → 5,863,500 (2023) → 6,057,900 (2024); 6% below baseline but rising in 2024
GHG intensity (MT CO2e per employee): 17.01 (2019) → 14.07 (2022) → 12.52 (2023) → 11.79 (2024); a 30.7% reduction from baseline
Renewable electricity: 41% (2021) → 45% (2022) → 57% (2023) → 61% (2024); 2025 deadline target of 100% not met
Total energy use (GJ): 17,261,000 (2019) → 17,197,000 (2022) → 17,186,000 (2023) → 16,965,000 (2024); a 1.7% absolute reduction over five years
Natural gas share of total energy: 64% (2019) → 65% (2024); flat
People enabled to access innovative medicines: 66.7 million (2021) → 189.2 million (2022) → 240 million (2023) → 247.7 million (2024); cumulative total exceeds 350 million target
Countries reached with products: 79% (2021) → 79% (2023) → 92% (2024)
Annual product registrations: 156 (2022) → 159 (2023) → 213 (2024); a 34% year-over-year increase
Small and diverse supplier spend: $3.2 billion (2022) → $3.6 billion (2023)
Pay equity (female vs. male, global): greater than 99% in 2023

Source

https://www.merck.com/wp-content/uploads/sites/124/2025/08/Performance-Data-2024_2025-1.xlsx
https://www.merck.com/wp-content/uploads/sites/124/2024/08/Merck_ImpactReport_2023-2024.pdf

Challenges and Areas for Improvement

Merck’s most critical unresolved gap is the renewable electricity target of 100% by 2025, reached only 61% in 2024, 39 percentage points short at the deadline. At the current pace of adding approximately 6.7 percentage points per year in renewable electricity, reaching 100% would take until 2031, missing the 2025 target by six years. The 100% renewable electricity commitment is also the primary mechanism for achieving the Scope 2 market-based reductions needed to maintain progress toward the 46% Scope 1+2 target by 2030.

Scope 1 reduction is the program’s deepest structural weakness. At 3.4% below the 2019 baseline after five years, Scope 1 emissions are essentially flat, driven by the continued 65% natural gas share of total energy and limited process heat electrification. The 46% Scope 1+2 target requires both Scope 2 market-based and Scope 1 reductions; achieving 46% through Scope 2 alone is mathematically impossible given the current energy mix.

Renewable electricity gap: 61% achieved in 2024 vs. 100% target by 2025; 39 percentage points short at the deadline; current pace implies 100% by 2031 at best
Scope 1 stagnation: 3.4% below 2019 baseline in 2024, driven by 65% natural gas share of total energy; process heat decarbonization has not materially progressed
Scope 1+2 pace vs. target: 15.6% reduction from baseline in 5 years vs. 46% required by 2030; current annual pace of approximately 3.1 percentage points implies reaching only 25% by 2030
Scope 3 uptick: Scope 3 rose from 5,863,500 MT CO2e in 2023 to 6,057,900 MT CO2e in 2024, a 3.3% year-over-year increase; current trajectory is 6% below baseline vs. 30% required by 2030
No supplier SBTi target coverage percentage published: unlike Novartis (97% Scope 3 supplier contract coverage) and Pfizer (65% supplier SBTi coverage), Merck reports 400-plus engagement partnerships but no percentage coverage or deadline
Water and waste targets absent: No company-wide absolute water withdrawal target, no recycling rate target, and no landfill diversion target with a baseline year published as of the 2024/2025 Performance Data
TCFD physical risk trajectory: Tropical cyclones rated High risk by 2050 at key facilities; inland flooding, drought, and extreme temperatures rated Medium to High by 2050, with operational disruption, CapEx damage, and employee safety risks identified across all 10 assessed sites
LEED Zero reliance on offsets: The South San Francisco LEED Zero certification relies on 2,931.56 MT of purchased carbon offsets rather than absolute emission reductions, a practice that does not advance Scope 1 reduction toward the 2030 and 2045 targets

Source

https://www.merck.com/wp-content/uploads/sites/124/2025/08/Performance-Data-2024_2025-1.xlsx
https://www.msd.com/wp-content/uploads/sites/151/2024/12/MSD-TCFD-Report-2024.pdf

Future Plans and Long-Term Goals

Merck’s 2030 to 2045 roadmap is governed by two SBTi-approved near-term targets and the 2045 net-zero commitment, with the Enterprise Capital Committee’s adoption of Environmental Sustainability Capital Principles in 2024 representing the most significant structural change in the company’s approach to funding decarbonization. Net-zero roadmaps for the top-emitting sites across the enterprise are being developed as a priority, ensuring that the highest-impact sites have specific, funded decarbonization plans in place. The sustainability bond proceeds have been fully allocated, and new financing mechanisms will be needed to fund the 2025–2030 capital program at a pace consistent with the 46% Scope 1+2 target.

2030 Scope 1+2 target: 46% absolute reduction from 2019 baseline; SBTi-approved; requires further 30-percentage-point reduction from current position
2030 Scope 3 target: 30% absolute reduction from 2019 baseline; SBTi-approved; requires further 24-percentage-point reduction from current position
2025 renewable electricity target (now overdue): 100% of purchased electricity from renewables; remains the critical near-term milestone even post-deadline
2045 net zero (all scopes): SBTi-aligned; long-term capital allocation and supplier engagement strategy under development
Site-level net-zero roadmaps: Being developed for the top GHG-emitting sites globally, incorporating the Low Carbon Transition Playbook and Environmental Sustainability Capital Principles
Scope 3 primary data program: Expansion of primary supplier activity data collection to additional Scope 3 categories beyond Categories 1 and 2, enabling more accurate supplier-level emission targeting
Supplier engagement program expansion: Building on 400-plus current partnerships to formalize percentage coverage commitments consistent with SBTi supplier engagement guidance
TCFD physical risk adaptation: Plans to circulate physical risk assessment findings to facility planning staff and leadership at the 10 assessed sites to prioritize resilience investments, particularly for tropical cyclones, inland flooding, and drought rated as High risk by 2050

Source

https://www.merck.com/wp-content/uploads/sites/124/2025/08/Performance-Data-2024_2025-1.xlsx
https://www.msd.com/wp-content/uploads/sites/151/2024/12/MSD-TCFD-Report-2024.pdf
https://www.merck.com/stories/merck-publishes-purpose-for-progress-impact-report-2024-2025/

Comparisons to Industry Competitors

Merck’s nearest pharmaceutical peers by revenue scale and ESG disclosure maturity are Pfizer and Novartis, both of which publish verified, externally assured ESG datasets covering comparable reporting periods. The comparison draws on all three companies’ primary disclosures and highlights the dimensions where Merck lags, matches, or leads its peer group.

Metric	Merck & Co.	Pfizer	Novartis
Scope 1+2 reduction vs. baseline	-15.6% from 2019 baseline by 2024; 2030 target: -46%	-15% from 2019 baseline by 2024; 2030 target: -46%	-45.3% from 2022 baseline by 2025; 2030 target: -90%
Scope 3 status	6,057,900 MT CO2e in 2024; +3.3% year-over-year; 6% below 2019 baseline; 30% reduction required by 2030	3,555,207 MT CO2e (2024); +14% vs. 2019 baseline; 10 of 15 categories disclosed	4,074,400 MT CO2e (2025); -16.4% from 2022 baseline; 42% required by 2030
Renewable energy coverage	61% of purchased electricity (2024); 100% target by 2025 missed	14.4% of purchased electricity (2024); 100% target by 2030	96% of purchased electricity (2024); 100% target for 2025
Supplier engagement	400-plus GHG partnerships (2024); no SBTi coverage percentage published	65% of suppliers by spend with SBTi targets (2024); 64% target exceeded early	97% of Scope 3 supplier emissions under environmental sustainability contracts (2025)
Net zero target year	2045 (all scopes, SBTi-aligned)	2040 (all scopes, SBTi-validated)	2040 (all scopes, SBTi-validated)
Waste and circular metrics	Scope 3 Category 5 waste up 6.7% year-over-year; no company-wide recycling rate published	6% total landfill rate; non-hazardous diversion at 56%	Waste not recycled down 70% vs. 2016; 100% PVC-free packaging

Merck’s Scope 1+2 reduction pace of 15.6% from baseline over five years is nearly identical to Pfizer’s 15% from the same 2019 base over the same period, indicating that both companies face structurally similar challenges in accelerating operational decarbonization. Novartis’s 45.3% reduction from its 2022 baseline in three years is substantially stronger than both, reflecting the combined effects of post-Sandoz spin-off footprint reduction, 96% renewable electricity procurement, and embedded equipment capital cycle requirements. Merck’s 61% renewable electricity is ahead of Pfizer’s 14.4% but significantly behind Novartis’s 96%, confirming that renewable energy contracting pace is the primary operational differentiator among the three companies.

Source

https://www.merck.com/wp-content/uploads/sites/124/2025/08/Performance-Data-2024_2025-1.xlsx
https://cdn.pfizer.com/pfizercom/2024_KPI_Table_Final_062625.pdf
https://www.novartis.com/sites/novartis_com/files/novartis-update-public-commitments-2025.pdf

What to Watch: 12 to 18 Month Indicators

Three specific signals will determine whether Merck’s sustainability trajectory recovers meaningful momentum or continues to fall behind the pace required by its own SBTi-approved targets.

Renewable electricity update for 2025. Merck closed 2024 at 61% renewable electricity, 39 percentage points short of the 100% target that expired at the end of 2025. The 2025 Performance Data update, expected in mid-2026 in line with Merck’s reporting cadence, will confirm whether the company deployed new VPPA or green tariff contracts in 2025 sufficient to close the gap materially. A 2025 figure below 75% would signal that the 2025 target was missed by more than 25 percentage points and that the 100% by 2030 milestone is now at serious risk without a large contracted capacity addition.

Scope 1 reduction trajectory and process heat decarbonization. Scope 1 at 721,200 MT CO2e in 2024 is only 3.4% below the 2019 baseline after five years, with natural gas maintaining a 65% share of total energy. The 2025 data will show whether the Enterprise Capital Committee’s adoption of Environmental Sustainability Capital Principles in 2024 has begun producing Scope 1 reductions through approved capital projects that replace gas-fired process heat with electrification or low-carbon alternatives. Any 2025 Scope 1 figure above 700,000 MT CO2e would indicate that the new capital governance approach has not yet translated into operational emissions reduction.

Supplier SBTi engagement formalization. Merck reports 400-plus supplier GHG partnerships but has not published a percentage coverage commitment comparable to Pfizer’s 65% by spend or Novartis’s 97% by Scope 3 emissions. The 2025 Impact Report will reveal whether Merck formalizes a quantified supplier science-based target engagement coverage goal, the absence of which is the most visible gap between Merck’s supplier program and those of its pharmaceutical peers. A formalized coverage percentage with a deadline would be a significant signal that Scope 3 Category 1 and 2 reductions are being actively governed rather than passively tracked.

Source

Merck’s sustainability program demonstrates a clear and growing gap between the strength of its health access execution and the pace of its environmental decarbonization. The health access pillar is genuinely exceptional, with 66.2 million cumulative health equity social investments, 247.7 million people enabled to access innovative medicines in 2024 alone, 92% country reach, and a 34% year-over-year increase in product registrations. The Company Scorecard integration of sustainability goals into compensation for virtually all employees, effective since 2023, creates accountability infrastructure that is structurally stronger than most industry peers.

The environmental program faces two compounding structural challenges that the 2024 disclosures do not yet resolve. First, Scope 1 at 3.4% below a 2019 baseline over five years reflects a manufacturing energy mix in which natural gas at 65% of total energy has not materially declined. Until process heat electrification or green hydrogen deployment produces visible Scope 1 reductions, the company cannot reach 46% Scope 1+2 by 2030 through Scope 2 alone. Second, the renewable electricity shortfall at 61% versus a 100% deadline confirms that procurement contracting has not been executed at the pace implied by the target, a pattern shared with Pfizer but absent from Novartis.

Three strategic takeaways stand out for practitioners benchmarking or replicating Merck’s approach:

Embed capital allocation governance into sustainability, not sustainability into capital allocation. Merck’s 2024 adoption of Environmental Sustainability Capital Principles through the Enterprise Capital Committee is the most structurally significant governance change in the recent report period. Requiring GHG impact assessment for every capital project is more durable than project-by-project sustainability funding. However, the impact of this change will only be visible in Scope 1 data one to three capital cycle years after adoption; practitioners should expect 2026 to 2028 performance data to be the first meaningful test of whether this approach has produced results.
Formalize supplier GHG coverage as a percentage with a deadline, not as a count of partnerships. Merck’s 400-plus supplier GHG partnerships are a credible operational program, but the absence of a coverage percentage means external stakeholders cannot assess the share of total Scope 3 emissions that are subject to active reduction commitments. Pfizer’s 65% by spend and Novartis’s 97% by Scope 3 emissions provide a direct comparable standard; practitioners benchmarking health sector supplier engagement should require both a coverage percentage and a deadline for their own programs.
Treat the Green Chemistry program as the highest-leverage long-term sustainability asset in the company. Nine Green Chemistry Challenge Awards since 2002, including six consecutive since 2017, confirm that Merck’s ability to design less hazardous, less energy-intensive synthesis processes is genuinely best-in-class. This program reduces Scope 1 and 3 process emissions at source, years before manufacturing scale-up, making it structurally more efficient per dollar of investment than end-of-pipe controls. Practitioners designing pharmaceutical R&D sustainability programs should treat green chemistry metrics (PMI, solvent intensity, hazardous substance elimination) as primary KPIs, not secondary sustainability indicators.

Source

https://www.merck.com/wp-content/uploads/sites/124/2025/08/Performance-Data-2024_2025-1.xlsx
https://www.merck.com/wp-content/uploads/sites/124/2024/08/Merck_ImpactReport_2023-2024.pdf
https://www.merck.com/stories/merck-publishes-purpose-for-progress-impact-report-2024-2025/
https://www.msd.com/wp-content/uploads/sites/151/2024/12/MSD-TCFD-Report-2024.pdf
https://cdn.pfizer.com/pfizercom/2024_KPI_Table_Final_062625.pdf
https://www.novartis.com/sites/novartis_com/files/novartis-update-public-commitments-2025.pdf

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