Sustainability

By pursuing sustainable corporate practices, Tecan is looking to secure the long-term expansion and prosperity of the Company for the benefit of all interested parties. Tecan sees sustainable corporate practices as more than just a series of individual measures. Instead, they are a basic mindset that shapes all corporate processes and unites economic, regulatory, ecological and social aspects.

In September 2015, the United Nations (UN) adopted the 2030 Agenda for Sustainable Development at a sustainability summit convened as a meeting of the General Assembly. The agenda’s 17 Sustainable Development Goals (SDGs) target fundamental improvements in the living standards of people alive today as well as of future generations. They also comprise objectives aimed at protecting Planet Earth.

Tecan not only supports the Sustainable Development Goals, but the Company’s activities and products allow customers to have a direct beneficial impact to help reach these sustainability goals. For instance, nearly all the Group’s sales are generated in areas that are defined in the individual SDGs. Tecan develops and sells flexible automation solutions that are deployed in a wide area of applications, from drug discovery to the sustainable management of fish stocks in the Pacific, for example. The individual end markets and areas of application as well as the fundamental trends and the Company's strategic orientation are described in more detail in the "Markets and Strategy" section (p. 20). 

Also, some of Tecan’s products have a direct beneficial environmental impact. For examples, automated workstations support research into the potential of plant-and microbial-based renewable resources.

However, by far the largest share of Tecan’s Group sales is attributable to SDG 3, which aims to promote good health and well-being for people of all ages. The majority of end-users come from the diagnostics market, accounting for around 60% of Tecan's total sales. In the various defined sub-goals of SDG 3, Tecan supports both research applications and processes in routine laboratories and helps researchers to discover novel medicines. The use of Tecan products also promotes other UN SDGs, including 2, 6, 14 and 15. Examples of how Tecan products are used in these areas of application are available at www.tecan.com/tecan-journal. Searching for keywords such as “crop”, “environment”, “food”, “fish”, “water”, “marine” or “animal” will provide specific examples of how customers use Tecan products.

In the search of novel therapies, for example to treat a number of neuromuscular diseases, some researchers use stem cells that can differentiate into other types of cells. Many researchers are doing differentiation of induced pluripotent stem cells (iPSCs) generated directly from adult cells. Some also use embryonic stem cells that were for example excluded as part of preimplantation genetic screening. Tecan’s products are used in laboratories around the world for a variety of applications in life science research and diagnostics. Although Tecan instruments are not specifically designed for research using embryonic stem cells, human fetal tissue or cell lines, customers could adapt and use them for such purposes, e.g. in pre-­clinical predictive toxicity testing to discover novel drugs. However, Tecan estimates that overall only a very small number of customers could possibly use its instruments for such applications. Tecan does not perform or has not performed any own research nor has it contracted out such research using embryonic stem cells, human fetal tissue or cell lines. Tecan also does not participate in, or knowingly fund, any external studies that use embryonic stem cells, fetal tissue or cell lines.

For Tecan, client focus is the most important guiding principle and the basis for a sustainably successful business model. Tecan is synonymous with innovation and a high level of reliability. Every day around the world, Tecan products are used in life science labs, as well as in daily operations in diagnostic labs that carry out investigations that are critical for human lives.

Tecan’s central customer promise is “Always There For You” – all of the Company’s activities are geared toward its customers. This promise is put into practice in an exemplary manner by numerous Tecan employees across the world in their daily dealings with customers and colleagues. To measure whether the customer promise is also met at company level beyond individual examples, Tecan regularly carries out comprehensive, international customer surveys. In these major surveys, existing customers who have bought Tecan products in the past few years are asked about their satisfaction levels and other aspects of the collaboration in the different business areas and regions. The surveys show that the vast majority of customers are satisfied with Tecan’s products and services, with most describing themselves as “very satisfied” or even “completely satisfied”. A large proportion of customers would also recommend Tecan to someone else – both within and outside of their own organization. 

Open communication and implementation of continual improvements are essential in order to guarantee high satisfaction levels over the long term which also boosts loyalty to Tecan. Customer feedback forms an important basis in this regard. Further measures were taken or already implemented in the year under review that should help continue to improve the overall customer experience. Customer satisfaction is also continually measured as an additional important pillar in the customer satisfaction program and to consolidate customer focus. Since 2018, customers have also been surveyed directly after transactions, service interventions or at set intervals. This feedback also forms the basis for ongoing improvements.

Tecan is a leading brand in laboratory automation. It stands for the highest standards, quality, reliability and innovation. These are decisive success factors for building up and strengthening a brand in this sector on a long-term basis. A carefully selected and nurtured portfolio of several brands is of prime importance to Tecan and is a necessity if it is to differentiate itself from its competitors. The Company’s most important brand is the Tecan umbrella brand, followed by various brand names for product platforms.

With the "Every Lab. Every day. Empowered.” vision, Tecan aims to maintain a global presence with outstanding technologies, products and support. Clear positioning, consistent communication and a convincing profile in electronic media as well as at traditional trade fairs are important components of successful brand management.

Tecan also has a clearly identifiable visual signature, including a five-color barcode. The red dot reinforces the design of the Tecan corporate logo; it appears as a unique sign-off at the end of headlines and after the product name on instruments.

Tecan is a pioneer and has been the market leader in laboratory automation for 40 years. Tecan’s success is based on core competencies that the Company has systematically acquired and expanded over the years. Tecan makes above-average investments in research and development to maintain and reinforce its position as market leader. Protecting its intellectual property is also of major importance in ensuring that the development of new products and technologies gives the Company a sustainable advantage in the market. Tecan registers patents on relevant developments for the most important markets in a timely manner. The Company has several hundred patents in various patent families. Once again, numerous new patents were granted in the year under review. 

Patents strengthen Tecan’s competitive position in a variety of productsand applications. Numerous patents were also registered for the Fluent liquid handling platform and the Spark reader platform, many of which have already been granted. These patent registrations relate to a variety of basic inventions in the fields of both hardware and software that were made during the development of the platforms. 

An overview of the various patents has been published on Tecan’s website. The overall strategy to protect intellectual property includes patents, trademark registrations of the names of product platforms, registering designs to protect Tecan products from copycat products and protecting individual graphic software elements by means of design rights and trademark rights. Tecan also arranged for key branding elements of the new design to be protected and applied for brand registration.

At Tecan, prudent corporate activity is an integral component of the daily routine of both employees and management. This requires clearly structured, transparent business processes. It is important that Tecan employees are familiar with globally binding internal corporate guidelines, business processes, and country-specific laws and regulations. Employees can access the most up-to-date version of these documents at any time in the Tecan Management System (TMS). The documents also convey intangible values that form the guiding principles of the corporate culture. The TMS is rated as a model tool by customers and external partners alike. Tecan develops the TMS on a continuous basis.

Tecan has had a continual improvement process (CIP) in place for many years. Employees in all areas of the Company should identify potential improvements at a day-to-day level, put forward solutions and contribute to their rapid implementation. The aim of the CIP is to enhance efficiency as well as quality and occupational safety, improve internal collaboration and finally increase profitability. Where possible, the success of the CIP is measured by examining key performance indicators. For example, in production this is done by looking at productivity, throughput time and inventories.

Tecan developed and installed the production and logistics system PULS specifically for continual process improvements as part of just-in-time manufacturing. This integrated system enables Tecan to identify opportunities and to better achieve the required, ever-­stricter quality standards. The sustainability of the improvements is ensured by means of an audit system, which covers the relevant areas from occupational safety and environmental protection to management and collaboration. One of the guiding principles of PULS is to avoid waste caused, for example, by overproduction, standby time, excessive inventories and defective units. 

As part of the existing lean production, a consistent one-piece flow approach – an “employee-linked workflow” – was adopted in the production system. The employees accompany the instrument along the entire production path to completion, with no interruptions between the various work steps. Not only does this production process shorten production times and further improve quality, it should also further increase employees’ motivation levels.

At the Männedorf site, all employees have clearly defined responsibilities in the manufacturing process of the various product lines, and each product line is overseen by a production manager. Responsibility for the timely execution of orders, the procurement of materials and the observance of the agreed objectives is clearly allocated to individuals. Performance reviews are undertaken on the basis of KPIs (key performance indicators). Each morning, the production manager discusses the next steps to be undertaken with the entire team before production gets underway.

A continual improvement process is also being implemented in areas other than production. For example, sales, service or support processes are continually optimized, including on the basis of customer surveys. Driven by the strong growth of the past few years, greater significance will be given to standardizing processes in future.

Tecan has established several organizational control mechanisms with the aim of ensuring correct corporate behavior. In particular, the Internal Audit department has the task of periodically assessing the effectiveness of the internal control system.

The internal control system consists of all organizational measures taken by the Company in order to maintain the effectiveness of its operations, protect the corporate resources, appropriately manage the risks and ensure compliance with laws and regulations, while always keeping a strong focus on the trustworthiness of the financial reporting.

In this perspective, the Internal Audit has the power to check and verify processes, systems, management activities, projects and contracts, acting as a supervisory body independent from operations andis reporting directly to the Audit Committee of the Board of Directors. In the year under review, the Audit Committee and Head of Internal Audit also held several meetings.

The Head of Internal Audit is a certified member of the Institute of Internal Auditors of Switzerland (SVIR) and the department is subject to the international standards for internal auditing.

Tecan has a formalized Code of Conduct that is binding for all employees, managers and Board members. In this Code, Tecan undertakes to maintain the highest standards in its business activities and to respect ethical values. The document is available to the public on the Company’s website. With the Code, Tecan aims to document internally and externally that the Company is a credible and reliable business partner and employer in all situations. The Code of Conduct also brings together in a comprehensible form the key guidelines that are already included in other tools, such as the employment regulations or the Tecan Management System. It helps employees understand the Company structure, and to seek further information or support in cases of doubt. The Code promotes compliance with standards on occupational health, safety and the environment. It provides instructions on ensuring data protection and handling confidential information, and requires accurate and timely communication of information and careful logging of relevant meetings and processes by Tecan staff. The Code also stipulates compliance with competition law as well as national and international trade law for the import and export of products. It guarantees anonymity for whistleblowers. Although Tecan only generates a smaller portion of its sales in countries with an increased risk of corruption according to the criteria of the organization Transparency International, the Code of Conduct has a zero-tolerance policy toward bribery and corruption. Line managers are responsible for ensuring that all their staff know and understand the content of the Code of Conduct. All employees must attend and successfully complete a training course on the Code. 

The Code is established worldwide and the relevant employees have been given training on it. Tecan conducted the training for some employees in the form of e-learning courses. People exposed to higher business risks in their function, such as sales or procurement staff, also had to attend training courses in person. The Code is available in English and German as well as other languages, including Spanish, Chinese and Japanese. By providing these different language versions, Tecan wishes to ensure that this important document is understood by employees all around the world.

Due to the broad product portfolio and long life cycles of its products with ongoing spare parts support, Tecan as a company manages a total of more than 500 suppliers at its different production sites. These suppliers are mainly high-tech design and component makers in Europe, North America and Asia that supply parts or modules to the Company for final assembly. In spending terms, between 60% and 80% of Tecan’s purchase volume is typically sourced in the same region of the production site to balance cost efficiency, inventory needs, just-in-time delivery, freight cost, experience of suppliers and quality aspects.

Direct suppliers are subject to an audit program and Tecan’s most important suppliers are provided with a dedicated version of the Tecan Code of Conduct, to which they must commit. This document, the “Tecan Supplier Code of Conduct”, defines the minimum requirements by which all suppliers must abide. These refer to internationally recognized ethical standards relating to labor and the environment, as well as business practices. 

In order to prevent violations of the Company’s Code of Conduct, for employees and for suppliers, the Internal Audit department is in charge to provide assurance that the intended ethical standards are applied and takes the responsibility of the investigations in case events of non-compliance are reported. The Head of Internal Audit is a certified member of the Association of Certified Fraud Examiners (ACFE). 

Since 2018, Tecan is a signatory of the United Nations Global Compact, a voluntary initiative for companies wanting to align strategies and operations with principles of human rights, labor, environment and anti-corruption. In the framework of the UN Global Compact, Tecan is committed to supporting and implementing, within its sphereof influence, the ten fundamental principles relating to human rights, labor standards, the environment and the fight against corruption:

i. Protection of human rights
ii. No complicity in abuse of human rights
iii. Recognition of freedom of association and collective bargaining
iv. No forced or compulsory laborv
v. No child labor
vi. No discrimination
vii. Precautions against environmental challenges
viii. Promotion of environmental responsibility
ix. Promotion of environment-friendly technologies
x. Fight against corruption.

At the end of 2019 Tecan submitted – and published on its website – the annual Communication on Progress, which is a summary of the various activities in relation to the UN Global Compact.

Tecan also carries out regular detailed screening of its distributors, and has established a separate process with a TMS directive (Distributors and Intermediaries Anti Bribery Due Diligence) for this purpose. The screening is carried out with the assistance of an external specialist service provider who draws up a due diligence report. This process is supplemented by Internet research and a database analysis as to whether companies or individuals related to Tecan appear in connection with corruption, bribery or other behavior which is not tolerated. In particular, the TMS directive requires that all Tecan distribution partners and their owners, directors and employees refrain from bribing representatives of governments or state-owned or private enterprises, or from taking bribes. It does not matter whether bribery is prohibited, tolerated or allowed in the countries in which business is being done. Bribes are prohibited irrespective of whether a bribe is connected to a specific act or omission or is granted or received with a general view to the future execution of duties. Bribes do not only involve cash payments but also mean, for instance, lavish gifts, hospitality and entertainment. Distributors and intermediaries need to ensure that their representatives and their sales force are trained and adhere to Tecan’s standards on doing business. In this perspective, the representatives of the Company’s distribution partners are required to give evidence of their understanding and acceptance of the Tecan Code of Conduct by answering an online questionnaire.

In individual cases, the screening has led to Tecan terminating relationships with intermediaries. The process is also applied during the selection of new distributors.

Tecan has established processes Group-wide and at its individual business locations to ensure compliance with national laws and regulations as well as with internal guidelines on safety and environmental protection. The Company invests substantial amounts each year in pursuit of further improvement. Tecan cooperates closely with public authorities and standard-setting bodies around the world to recognize new trends in regulation, occupational safety and environmental protection as early as possible and to integrate them in its corporate processes. The Company actively shapes these developments in significant economic regions by participating in key industry associations.

Internal and external experts regularly inspect whether Tecan’s locations comply with country-specific regulations and the Company’s internal standards for product and occupational safety as well as health and environmental protection. These inspections also cover measures that Tecan has to implement if it fails to meet any requirements. Each year, the locations are subject to a number of audits conducted by regulatory authorities, testing, monitoring and certification agencies, customers, and Tecan’s own specialist teams. As part of a continual improvement process, gap analyses are performed and improvement measures implemented. In 2019, Tecan was again subject to a number of sometimes extensive audits by customers at its production sites. These included leading diagnostics companies that Tecan supplies with instruments through its OEM business in the Partnering Business, or will supply in the future. The audits covered areas including processes, quality management systems, product design, validation and documentation. The customers again attested a high standard at Tecan with regard to the relevant requirements. Tecan is also subject to regular extensive audits by international authorities at its production sites. The US Food and Drug Administration (FDA), for example, inspected Tecan’s main production sites for instruments in Männedorf (Switzerland), Grödig (Austria) and San Jose (USA) between 2014 and 2016. All audits were successfully concluded with zero formal observations. 

During 2018, Tecan US, the importer and sales and service arm for the Americas, was inspected by FDA with zero observations. The production site for immunoassays in Hamburg (Germany) was already successfully certified for the Medical Device Single Audit Program (MDSAP). The MDSAP is a catalog of requirements for manufacturers of medical products drawn up by a number of participating countries. It aims to ensure that audits are performed in a standard and thus simplified manner. Thus, manufacturers of medical products can gain access to several markets by means of a single audit. Countries currently participating in the MSDAP are the USA, Canada, Japan, Brazil and Australia. Health Canada has mandated transition to MDSAP program in order to market and obtain device licenses for Class 2, 3 and 4 devices as of January 1, 2019. As part of the Company’s continuous improvement efforts, additional Tecan production sites will enroll in the MDSAP program.

Another focal point in Tecan’s regulatory efforts is the supporting of customers in the Partnering Business, with Tecan making key documentation available for authorization applications for new diagnostic instruments. Furthermore, Tecan is building up strong, regulatory partnerships in order to guarantee successful marketing beyond market launch during the entire product life cycle.

To ensure these efforts were compliant with the relevant regulations, they were based on various ISO standards. Tecan put together an ISO 14971-certified product risk management process for medical devices that covers the entire lifespan of a product and evaluates all possible risks, especially those pertinent to patients and users. The Tecan parent company, all production sites and almost all sales subsidiaries have now transitioned to the latest ISO 13485:2016-certification well ahead of the required transition date. The quality systems at acquired companies are also being transitioned to the Tecan standard. For example, the now renamed Tecan SP in California, which was acquired in the fall of 2016, was already certified to ISO 13485:2016 with no observations in 2018. The most important difference versus prior versions of ISO 13485 lies in the greater focus on risk management. As part of the risk assessment, processes are analyzed, for example during the development phase of a product, to determine whether the processes can influence product quality. At the same time as transitioning to the latest ISO 13485 standard, Tecan has completed transition to the current ISO 9001:2015 standard for its production sites.

As part of its ISO certification strategy, Tecan obtained a full, Groupwide matrix certificate based on ISO 13485. The Company wants to ensure that all units worldwide work according to the same processes and strive together to continuously improve their products and services. The matrix certificate also accommodates the current and future Group structure with an increasing number of subsidiaries. In Europe, the sales subsidiary in Germany was awarded the main certificate, while subsidiaries in other countries received sub-certificates. This new method of coordinated certification has benefits for customers and Tecan alike: greater transparency; the possibility to systematically monitor processes worldwide; and harmonized, standardized systems that also accommodate differences in the markets. The matrix certificate results in considerable simplifications and increased safety compared to individual certificates. The certifying body verifies the certification annually with sample checks at different subsidiaries. Tecan products must also satisfy the following important requirements, among many others: US QSR (Quality System Regulation)/21 CFR 820, Canadian Medical Device Regulations SOR/98-282, PMD Act (Pharmaceutical and Medical Device Act) and CCC (Chinese Compulsory Certification). New opportunities are developing for Tecan in emerging markets, which will place additional requirements on the Company.

Regulatory requirements are increasing around the world. To ensure that the current versions of these are understood and satisfied everywhere, Tecan is in constant contact with local organizations and authorities. As an example, the Tecan Global Regulatory team is actively working on implementation of the new EU IVDR regulations across the Company’s facilities. Although companies have a fiveyear transition time frame, Tecan launched a global regulatory project during 2018 to ensure readiness and implementation of IVDR by the May 2022 deadline.

Tecan has a central Quality & Regulatory organization at Group level to ensure ongoing improvements in the high quality standards worldwide. In Europe, all of the quality systems of the national subsidiaries and organizations have been harmonized and processes standardized, including sales, service and complaint processes. Tecan operates a Central Complaint Unit for customer complaints. The Company performs a global management review every year in which relevant data from all Group companies are reviewed centrally. The process assesses whether quality management is still optimized to the legal requirements and regulations for the products and services supplied by Tecan. Tecan undertakes this review with regard to the individual national markets as well as from a Group-level perspective.

Tecan’s approach to product development is also characterized by an awareness of quality and regulatory requirements. Specialists collaborate from an early stage, supporting the process in a series of structured stages that span the product’s entire life up to the point where it is withdrawn from the market.

The Company attaches great importance to acting responsibly and in an environmentally friendly manner in the development, manufacture and global distribution of Tecan products as well as in all services it provides. In a Policy Statement for Product Environmental Compliance published online, Tecan expresses its commitment to provide customers with safe, high-quality, and environmentally friendly products and to comply with all relevant product environmental legislations. The Company strives to continually identify and realize opportunities to reduce the environmental footprint of its products during product design, manufacture, use and disposal. 

All Tecan production sites and the majority of suppliers are located in stringently regulated markets. Direct suppliers are subject to an audit program in order to ensure sustainable business.

In the production process of instruments – unlike, for example, the mass production of consumer goods – Tecan focuses on the final assembly of a relatively small number of items of laboratory equipment. In comparison with companies with extensive production processes, Tecan therefore emits only very low levels of pollutants. Tecan implemented numerous controls as part of the ISO 13485 certification, which applies to all production sites and sales subsidiaries. ISO 14001 certification, which provides guidelines for the establishment or improvement of an environmental management system, has not been applied for, as the production sites neither emit CO₂, methane nor other greenhouse gases (Scope 1 emissions) during the actual production process. Also, the ISO 14001 standard shares many common traits with ISO 9000, the international standard of quality management, which serves as a model for the ISO 14001 internal structure. Tecan has established the current ISO 9001 standard for its production sites. Two production sites produce direct emissions exclusively from the combustion of natural gas for heating purposes. Indirect emissions arise from energy purchased (Scope 2 emissions). On a comparable basis, these were further reduced by 4.3% in the year under review thanks to additional saving measures. Despite the significant growth, total emissions (direct and indirect) also fell by 4.3%, which corresponds to a reduction of more than 45 tons of CO₂ equivalents (t CO₂-eq). The emissions table also includes total emissions, including those of Tecan Genomics (formerly NuGen Technologies) which was acquired in fall 2018. 

Overall, Tecan is committed to taking responsibility for climate protection and to making a contribution. Concrete quantitative reduction targets for CO₂ emissions have therefore also been set for the first time. In an initial step, Tecan is looking to reduce by at least one third the absolute direct and indirect emissions (Scope 1+2 on a comparable basis to 2019 in t CO₂-eq) in the next three years (2020-2022).

As a reduction target, for example, Tecan also plans to install new photovoltaic panels on the roof of the main building of company headquarters in 2020; this should help to cover around 10% of the annual electricity consumption on site ourselves in future. The remaining electricity consumption will also be gradually converted to renewable energies at the various locations.

The manufacturing process itself is less energy-intensive and is limited to the final assembly. Energy costs therefore make up less than 1% of all operating costs. For the year under review, the table shows the values of the production sites in Männedorf (Switzerland), Grödig (Austria), San Jose (USA), Hamburg (Germany), Baldwin Park (USA) and for the first time Redwood City (USA). Due to changes in the reporting scope, these values are therefore not directly comparable to the previous years.

Some activities that are necessary for business operations, such as flying or freight transport, also generate greenhouse gas emissions (Scope 3). Tecan is also working on these areas to reduce emissions. The Company began to compensate for the climate-damaging effect of the remaining emissions in the year under review.

As a company, Tecan is aiming to become climate-neutral over the medium term. To do this,Tecan is working on a series of measures and evaluating whether, how and when the Company can achieve and implement this aim.

Tecan aims to be transparent and trustworthy regarding the Company’s emissions and therefore has participated in the annual Carbon Disclosure Project (CDP) for several years, also allowing its results to be made publicly available.

Overall energy consumption on a comparable basis only increased marginally at 3.2% in the year under review despite the much higher production output and increased business activities. By contrast, the energy intensity, which is the total energy consumption in relation to sales, decreased by 3.7%.

Based on an energy consumption analysis, Tecan has replaced conventional lighting with energy-efficient LED technology. At its largest site in Männedorf (Switzerland), about 2,800 new LED lights were installed which should help save between 160,000 and 180,000 kilowatt hours on an annualized basis. At the development and production site in Austria, new LED lighting saves about 29,000 kilowatt hours every year. The San Jose (USA) site also switched over to LED lighting in the year under review. On a comparable basis, energy consumption rose by 3.9% due to the much higher production output.

Tecan continuously invests in measures aimed at further increasing energy efficiency. The Company already implemented various energy-­saving measures such as the installation of new cold-water pumps, better insulation of the cooling distribution system as well as the acquisition of a new refrigeration system with a significantly better energy rating in the production facility in Männedorf. 

Tecan takes care to ensure that modern, energy-efficient technology is also used in the infrastructure of its buildings. For example, hot and cold water lines in the ceiling are the sole source of heating and cooling at the headquarters in Männedorf. Processed wastewater from the Männedorf public wastewater treatment plant supplies the heat pumps with energy.

Tecan uses water provided by utilities primarily for sanitary services and in the kitchen for the staff restaurants. No significant amounts of water are used as a production factor in the assembly and testing process or during development. As Tecan’s water requirements are met entirely by the communal water utilities they do not influence any water resources in protected areas. Overall consumption increased compared to the previous year mainly due to a higher number of employees and the increased use of steam humidifiers. Per capita consumption increased from 6.8 to 7.6 m³/head. Tecan returns water to the sewage system without contamination and has experienced no spills from operating processes or other instances of water contamination.

The areas used at the production sites consist exclusively of offices and rooms for assembling products, all of which are located in already developed commercial and industrial zones. Environmental considerations such as the impact on protected areas and biodiversity are therefore not relevant in the current circumstances. The net floor area was unchanged compared with the previous year. Due to the acquisition of Tecan Genomics, formerly NuGen Technologies, the overall net floor area rose by 6.2%.

Paper consumption compared to the previous year rose by 15.0%, which is roughly equivalent to the 2017 figure. Certain fluctuations on an annual comparative basis are also caused by greater inventory restocking at locations and not necessarily by the Company's own consumption.

Despite higher production output, total waste fell by 8.7% on a comparable basis. Of the total waste, recyclable waste and refuse again accounted for around 97%. Only a small portion of it was hazardous waste, which includes materials, solvents and chemicals contaminated through the automation of biological processes, for example. Tecan complies with legal requirements to transport and dispose hazardous waste solely through authorized disposal agents. 

1. Without Tecan Genomics (NuGen Technologies)
2. Including Tecan Genomics (NuGen Technologies)

Tecan operates on a global basis and business-related travel is essential to conduct business and run its operations with production sites, direct selling units and distribution relationships on six continents. Tecan has engaged a leading travel management company to efficiently book, manage global air travel as well as a smaller share of its railway travel activities and thereby help contain overall business travel spending. The greenhouse gas emissions shown in the table arising from business flights and rail journeys for the year under review and in the prior year period were calculated by the external travel management company using the available booking data. They contain all greenhouse gas emissions, i.e. methane and nitrous oxide as well as carbon dioxide. Total emissions are calculated based on the recognized GHG conversion factors of DEFRA (Department for Environment, Food and Rural Affairs, GB) in tons of CO₂ equivalents (t CO₂-eq). Booking class is also taken into account as well as the actual kilometers flown.

In 2019, the CO₂ emissions from business flights and rail journeys booked through this provider were 2,501 t CO₂-eq. Compared to the prior year, the emissions were stable, despite the increased business activities with a higher number of employees (2018: 2,528 t CO₂-eq). Three regions together contributed with more than 90% of those travel-related emissions: about 50% originated from Tecan employees in Switzerland, 29% from employees in the US and another 12% from employees in China. The CO₂ emission intensity of business travel (expressed in t CO₂-eq/CHF million turnover decreased to 3.9 (from 4.3 in 2018). 

As business air travel cannot be avoided, Tecan began to compensate for the overall climate effect of all long-haul flights in the year under review. All long-haul flights originated in Switzerland in 2019 were compensated for the first time (about half of all emissions). By doing so, not only was the direct effect of burning fuel during flights compensated, but also the intensifying effect produced by other gases and by the reflection of rising heat on the cirrus clouds produced (RFI or Radiative Forcing Index=2.7). More information on this and the projects selected for 2019 can be found on p. 56 and 57.

Tecan encourages the use of information and communication technologies, such as modern video conference systems to reduce the need for air travel. To do so, the technical infrastructure was improved in dedicated conference rooms in the year under review in order to increase acceptance. The Company also incentivizes the use of public transportation where possible, as its availability differs in the various countries. At Tecan’s site in Switzerland, its largest site for development, production and administrative functions, the Company offers its employees a personal yearly travelcard at a significantly reduced rate which is valid in all zones of the Zurich Transport Network. With this contribution, Tecan wants to support its own workforce while endorsing environmentally friendly mobility.

Tecan also supports employees at the Männedorf location in their use of electric vehicles. The Company therefore significantly expanded its provision of separate parking spaces with charging stations that can still be used for free. The new charging stations came into use in December 2019. Now more than 10% of all parking spaces are equipped with charging stations. With increasing demand, we have already made technical provision for expansion. However, most employees use public transport to get to work.

* Excluding NuGEN Technologies (now Tecan Genomics)

**Methane, nitrous oxide, sulfur hexafluoride, nitrogen trifluoride

1 Without Tecan Genomics (NuGen Technologies)

2 Including Tecan Genomics (NuGen Technologies)

1 Verband Deutsches Reisemanagement e.V.

2 The Global Reporting Initiative, The Greenhouse Gas Protocol

3 The UK Department for Environment, Food and Rural Affairs

4 The International Civil Aviation Organization

In addition to business travel, the freight transport division also represents another source of Scope 3 emissions. This applies to both the transportation of unfinished materials and components of supplier companies to Tecan as well as to the conveyance of finished products to customers. In the year under review, Tecan also began to offset the emissions generated for a proportion of all transport. The program currently only covers a small proportion of all transport, but it will be continually expanded. More information can be found in the separate article on p. 56 and 57 of this report.

Tecan attaches great importance to using the most environmentally friendly materials and ecologically efficient processes possible. The Policy Statement for Product Environmental Compliance specifically describes the Company’s commitment to comply with the following laws and regulations:

• The European Union (EU) Directive on “Restriction of use of certain Hazardous Substances in electrical and electronic equipment”, 2011/65/EU (RoHS2 Directive)
• The Chinese Management Methods for Restricted Use of Hazardous Substances in Electrical and Electronic Products (China RoHS)
• The European Union (EU) Regulation EC 1907/2006 on Registration, Evaluation, Authorization and Restriction of Chemicals (REACH Regulation),
• The European Union (EU) Directive on Waste Electrical and Electronic Equipment Directive, 2012/19/EU (WEEE Directive)

Employees receive regular training and are familiar with the latest developments in this area. 

In addition to environmental aspects, such as avoiding toxic substances that are not readily biodegradable in electrical and electronic devices, there are also ethical aspects related to rare earth elements and mining conflict minerals. Tecan’s ultimate goal is to prevent the use of conflict minerals (gold, tin, tantalum, or tungsten) that originate from sources whose profits support armed groups and human rights abuses, yet support the use of materials from legitimate sources. The US Dodd Frank Act (section 1502) from 2010, addressing US publicly listed companies, is the first legislation that tackles this problem. Even if not affected directly, Tecan is committed to support its customers to comply with this legislation and adheres to the applicable elements of the OECD Due Diligence Guidance for responsible supply chains of minerals from conflict affected and high-risk areas. Tecan is working together with suppliers on these areas and requires a Declaration of Conformity that human rights are respected as part of supply agreements.

Through the reliable, robust and sustainable design of its products, Tecan continuously targets progress in their environmental sustainability. The PULS program set up by the Company also includes targets and measures to avoid wasting materials and energy. 

The products manufactured by Tecan are used in laboratories for life science research, in applied markets and in clinical diagnostics. The largest product group here comprises laboratory instruments for the automation of different repetitive work steps. These automationplatforms handle durable capital goods that can be used by customersover many years. The Tecan platforms can be very flexibly configured, which makes them highly durable, as they can be adapted to various requirements over time. This not only secures customers' investments, but also makes a contribution towards the sustainable use of resources.

Tecan customers mostly work in laboratories with biological agents, such as blood or possibly pathogens, and with chemical substances. This means that a circulatory system of material flows through recycling materials, as established in many industries, is only very limited or not possible at all. Depending on local legislation and the laboratory's biological protection level, i.e. hazard classification of biological agents, various disposal processes must be followed. Before leaving the protected area, the equipment must be fully decontaminated whenever possible. Tecan's customers often engage an external specialist company to do this and for ultimate special disposal.

Special consumables are also increasingly used for numerous work steps as part of automation. Even for applications involving genomics, many customers, for example, prefer to use disposable pipette tips for liquid transfers in order to avoid cross-contamination with other samples. Tecan also offers a broad portfolio of various consumables, such as disposable pipette tips, for differing volumes and areas of application. However, Tecan is one of the few suppliers to leave it up to the customer, depending on the application, as to whether steelneedles are used for pipette steps. To do so, Tecan has two completelydifferent technologies for liquid transfers. For applications where the risk of cross-contamination is only very minimal or even non-existent, it also makes sense to use steel needles for reasons of sustainability. The relevant areas of application are also the popular ELISA technology or immunoassays used in research and in diagnostics. A major OEM customer in the partnering business, market leader in immunohematology, also uses steel needles for determining blood groups and other important blood parameters.

After using disposable plastic pipette tips, laboratories are subject to the same fundamental guidelines as for the disposal of laboratory equipment. Depending on the application, they have to be decontaminated and properly disposed of. This means that recycling the plastic is only possible on a very limited basis and is sometimes impossible.

Tecan therefore focuses on the production process and on reducing material quantities, especially secondary packaging. In the year under review, a new packaging was introduced for certain pipette tips which contains 45% less plastic compared to the previous one. As well as reducing the amount of plastic, the new boxes also take up less room, making transport more economical and environmentally friendly. 

In general, Tecan also takes account of sustainability aspects in product design. For example, a lighter and more compact design of laboratory instruments means that CO2 emissions arising from their transportation can be reduced. The use of LED lamps also allows a great deal of energy to be saved in comparison with predecessor technologies. Electricity consumption is also taken into account for the operation of instruments. For instance, the Fluent automation platforms go into standby mode if idle for more than five minutes.

Customer service staff use tools that enable completely paper-free processes. The operating instructions of equipment are also availableelectronically rather than in paper form with several hundred pages. The continual expansion of remote customer services and visualization of instruments in the customer laboratory by augmented reality increasingly replace some customer visits or transportation of instruments, which thus helps cut down on emissions.

Tecan is very aware of the enormous responsibility it bears for its employees. They are the foundation of a company’s successful development, and each day they contribute to progress in life science research and diagnostics. This contribution, providing a positive influence on people’s well-being and health is an important part of Tecan’s corporate culture. The Company has grown strongly in recent years and wishes to continue growing in the coming years. This means that the number of employees will continue to rise significantly in the coming years. The changes in society resulting from demographics with a shortage of talent and specialists make an active personnel policy a focal point of corporate practices. In the year under review therefore, we initiated a new program to invest more specifically in development opportunities for our employees. 

The basis for working with Tecan is an open, diverse and integrated culture that focuses on dealing with one another respectfully, with the same rights and opportunities for all employees. To guarantee this, strict personnel policies were established that are binding at all companies around the globe. National hiring rules ensure compliance with laws on, for example, gender equality and non-discrimination. Both Tecan managers and employees are also held to strict ethical guidelines. These ethical guidelines are firmly established in the Code of Conduct and form part of the training requirements for all employees. As part of fundamental labor rights, Tecan is also committed to observing international labor and social standards that are based on the defined standards of the International Labour Organization (ILO), a specialized agency of the United Nations. The globally applicable minimum standards are intended to ensure workplace rights and thus decent work. The four basic principles of the ILO are freedom of association and the right to collective bargaining, the elimination of forced or compulsory labor, the abolition of child labor and the elimination of discrimination in respect of employment and occupation. Also by signing the UN Global Compact, Tecan committed to the principles relating to human rights and labor standards.

Tecan has a very cosmopolitan workforce comprising employees from 50 countries, and is increasingly present in all global regions. In 2019, the total number of employees increased by 10.4% on a comparable basis. Including the supplier's workforce that Tecan took on in the year under review, the total number of employees rose by 20.9% to 1,932 full-time equivalents. 

1 Excluding Tecan Genomics (previously NuGEN Technologies) 

2 Including an acquisition from 2019

3 Excluding an acquisition from 2019

Tecan’s success is based on core competencies that the Company has systematically acquired and expanded over many years. This expertise and the competency of employees should be retained in the Company. The type of employment relationships therefore plays a role in this. At around 96%, the largest proportion of the workforce by far are permanent employees; those employed on a temporary and fixed-term basis account for only 3% of the workforce, which is insignificant. Tecan offers flexible working hours with options for full-time or part-time jobs to differing degrees in order to accommodate the various needs and private circumstances of its employees. The average number of years of service was unchanged at 7.4 years. At less than 10%, the rate of voluntary fluctuation remainedat a healthy level in the year under review.

Contract Types (2019)

Employment

1. Without Tecan Genomics (previously NuGEN Technologies)
2. Without the acquisition from 2019

  

Flexible Work Options (2019)

1. Without USA

Staff Turnover and Retention

1. Without Tecan Genomics (previously NuGEN Technologies) 
2. Without the acquisition from 2019
3. Data for Switzerlnd only

Staff Turnover Rate (2019)

Tecan openly supports diversity and equal opportunities. The respective origin, gender, religion or personal ideology, age or sexual orientation play no role in our recruitment process and in careers in the Company. The Company also supports chronically ill employees and those with a disability, taking efforts to ensure they remain integrated in the workplace as far as possible.

The proportion of women in the workforce increased again to 35.7% (2018: 33.8%). The proportion of female managers also increased to 25.5% in the year under review (2018: 22.4%). Two of seven positions on the Board of Directors continue to be occupied by women. 

Gender diversity

1. Without Tecan Genomics (previously NuGEN Technologies)
2. Without the acquisition from 2019

Management per Category (2019)