When it comes to sustainability, Merck Group does not take half measures.
By 2030, Merck will deliver more sustainable solutions through its portfolio and fully integrate sustainability into its value chains. Fast forward another 10 years after that and by 2040, Merck has set its sights on achieving climate neutrality and a reduction of its resource consumption in line with the Paris Agreement. As far as those within Merck are concerned, scientific progress and responsible entrepreneurship go hand in hand in order to achieve a brighter future for everyone.
Sustainability is a core component of Merck’s strategy today and the organisation believes that it can harness science and technology to help tackle many global challenges ranging from climate change to unequal access to health and resource scarcity. Merck’s passion for science and technology drives its 62,000 employees across 65 countries to meet today’s toughest challenges and develop more sustainable ways of living. Merck has three core business sectors which are Life Science, Healthcare and Electronics. With these in mind, Merck is dedicated to sparking discovery and elevating humanity to help power a more sustainable future.
“We are definitely on track,” reveals Dr. Verena Buback, Head of Procurement Sustainability Strategy and formerly Head of Procurement Excellence and Sustainability at Merck. “What I see as a reason why we’re advancing so well and where we perhaps have a different approach than some of the peer companies that I speak to is that we are aligned across all three business sectors and corporate functions. We have a corporate sustainability strategy that is then integrated, cascaded into business and functional strategies, including our Procurement North Star.
“Sustainability is integrated into compensation mechanisms. We have KPIs that are cross-sector and cross-functional. There’s really close collaboration across the teams and we are seeking to jointly build interconnecting solutions that include data and digital solutions as we progress.”
In 2021, Merck launched its Supplier Decarbonization Program to target Scope 3 emissions by engaging key suppliers to set emission-reduction targets, increase renewable energy use and adopt sustainable practices to reduce their emissions in their supply chain. As far as Buback is concerned, reducing emissions in the supply chain is a shared responsibility which means collaborating with suppliers is key to achieving success in sustainability. However, as Merck works with up to 57,000 suppliers, the means of engaging with all of them simultaneously is almost impossible.
“We started to approach those suppliers who are responsible for a major share of our emissions and increased the number of approached suppliers continuously according to our program strategy,” she says. “We approach the selected suppliers with a survey to understand their own decarbonisation ambitions and have already taken measures. We follow up with these suppliers in regular meetings to review the mutual ambitions, status quo and discuss further targets and actions.”
In 2025, Merck adjusted the program to leverage digitalisation and make it more data-driven. Buback explains this technology and data focus enables Merck to do a more targeted decarbonisation approach. “With the collection of primary data from suppliers, we can engage with them on concrete actions to reduce emissions on product level and have timeline agreements with them to do so,” she says. “Then data and technology enables us to go into lever assessments and forecasting.”
While progress is strong, Merck continues to navigate challenges such as data quality, supplier engagement variability, and ensuring compliance with the evolving regulatory landscape. Merck’s efforts extend beyond internal initiatives to taking active leadership roles in industry partnerships. As a member of Together for Sustainability (TfS) and Buback acting as one co-chair of the TfS Scope 3 GHG emissions workstream, the company plays a pivotal role in defining industry-wide standards, and developing solutions that drive supplier engagement and shared progress toward climate goals.
Merck’s growth journey
Over the last few years, Merck has been on an ambitious technology journey heavily focused on establishing a future-ready foundation with good data and AI at its core. As an example, since June 2023 (led by Walid Mehanna, Chief Data & AI Officer at Merck), the group launched an internal GenAI assistant only six months after ChatGPT emerged. Called ‘myGPT Suite’, it is the foundation of Merck’s AI value pyramid. Likewise, Merck as a whole, and Procurement specifically, have proactively invested in building a strong data foundation on strategic partner Palantir’s technology stack. A few years later, John Adjami, Head of IT Business Partnering for Procurement, reveals this cultural openness to experimentation, data readiness at scale and AI advancement, has allowed Merck IT and Procurement to partner closely and establish a strong digital roadmap and strategy to bring capabilities to the next level.
“We now have a mature structure around data ontology, which has allowed us to move into the AI space more agile,” says Adjami. “Since then, this capability continues to mature and become more part of people’s mindset to problem solving. We have also established strategic partnerships with key vendors, allowing us to build internal AI products/applications quicker and more agile. We are establishing a global program as we speak that can advance various critical Procurement AI use cases projects as quickly as possible to deliver optimal value and ROI. Some initiatives that were originally planned on a three-year roadmap are now expected to be achieved within the next 18 months. Where appropriate, we also make strategic decisions when ‘buying’ an IT solution is a better fit, and this is how Merck identified ORO Labs as a leader in AI-based process orchestration for procurement. In summary, we are advanced on the fundamentals and are now focused on maturing our ability to scale value based on them.”
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