CSL Ltd Annual Report 2019

Seqirus influenza vaccine manufacturing facilities are rapidly transitioning from single to multi-product plants to support market expansion. This demands standardised manufacturing and strong change-management to keep our processes in-step with each other. Our strategy aims to create a manufacturing network that is much more flexible and robust, and to reduce costs by minimising the need to airfreight large quantities of finished goods across continents. In 2018/19, Seqirus achieved FDA approval of its next generation cell-based manufacturing process at Holly Springs, US. The approval will enable Seqirus to more than double current production levels of FLUCELVAX ® QUADRIVALENT for supply in the 2019/20 influenza season. Environment, health and safety CSL is committed to continuously improving our Environment, Health, Safety and Sustainability (EHS 2 ) performance with culture-driven, risk-centred methodologies that are focused on preventing workplace injuries and illnesses and reducing environmental impacts of our operations and products throughout their lifecycle. Our EHS 2 Management System provides the platform for policies, procedures and guidelines, which manage our business processes. The following principles are applied and practised by CSL employees. We: –– adhere to applicable EHS 2 laws and regulations and in the absence of governmental standards, we apply sound EHS 2 practices; –– instil ownership at all levels in the organisation; –– establish opportunities for EHS 2 involvement and expect all employees to be responsible for EHS 2 ; –– set performance objectives and regularly measure and communicate results, progress and opportunity with our employees and stakeholders; –– provide the resources to implement an EHS 2 culture that proactively identifies and controls EHS 2 risk; –– share best practices with the intent to improve our operations and our communities; –– conduct internal audits to ensure the integrity of our operations against our EHS 2 Management System; and –– provide training to all employees to ensure that they have the right level of skills, ability and knowledge to perform their work. For further information on our environmental performance and participation in voluntary disclosures please see page 54 of our 2018/19 Directors’ Report and CSL.com (corporateresponsibility.csl.com/environment) . Supply chain management In 2018/19, CSL continued to focus on critical suppliers and supplier risk more generally. The investment in transforming the strategic sourcing organisation has paid dividends with many new suppliers being introduced, which has both reduced risk and improved supplier quality performance. In manufacturing operations, the global sourcing team completed a deep review of all suppliers supporting the top products and assessed risks that will emerge due to CSL’s continued growth. The review has identified certain risks and due to this forward thinking there is sufficient time to introduce or develop suppliers to mitigate the risk. In addition, collaboration with a number of suppliers has improved process performance and reduced the consumption of filters and packaging materials, having a positive cost and environmental impact. Sourcing in collaboration with the supplier quality team ensures the required level of quality and performance is demonstrated consistently across the CSL business. The focus on consistency removes variation for suppliers, thus simplifying their efforts to support CSL and further reduces risks and inefficiencies in our operations. Our global security function is also turning its attention to our supply base as further support for ensuring continuity of supply. This new focus will become more prominent in the coming year with the intention to implement technology to provide early warnings for events that may impact supply. Logistics remains focused on driving freight to the ocean to reduce cost, our carbon footprint and the risk of temperature deviation. Many new distribution pathways were validated that provide greater opportunity to utilise ocean freight, especially into the emerging Middle Eastern markets. During the second half of 2018/19, CSL Behring introduced a new capability – supply chain integrity. Once matured, the capability will ensure and demonstrate that CSL’s supply chain partners are conducting their business to a standard aligned to CSL’s Code of Responsible Business Practice (CRBP) and expectations brought about by supply chain transparency and modern slavery legislation. This year, Seqirus created new action plans to address materials of strategic significance while increasing our contractual coverage to protect our supply position across all territories. CSL’s Statement on the Prevention of Human Trafficking, Slavery and Forced Labour can be found on CSL.com (corporateresponsibility.csl.com/workplace/employee- relations-and-diversity). Supplier assessments In 2018/19, CSL conducted 580 quality audit of suppliers.* This level of effort reflects our continued focus on understanding our suppliers across our value chain and the expansion of the numbers of suppliers to accommodate growth. A risk-based methodology was introduced; this resulted in an initial spike in audits which is expected to decline and improve efficiency in the coming year. Our CRBP includes a commitment to forbid the solicitation, facilitation or any other use of slavery or human trafficking, and under no circumstance should any engagement with CSL deprive individuals of their freedom. From 1 July 2018 to 30 June 2019, no instances related to human trafficking or slavery and forced labour were reported. * Does not include Ruide. Indicator externally assured by Ernst & Young. In October 2018, Seqirus presented real-world evidence (analysis of 1,353,862 medical records) that FLUCELVAX ® , cell-based quadrivalent influenza vaccine, was 36.2%more effective than standard (non-adjuvanted with standard dose of antigen) egg-based quadrivalent vaccines in preventing influenza-like illnesses during the 2017/18 influenza season in the US. This is likely due to the predominance of the H3N2 virus and its propensity for mutation when it is adapted for influenza vaccine production in hen’s eggs. CSL Limited Annual Report 2019 25