The launch of our ESG program marks our first disclosure of ESG information based on the Sustainability Accounting Standards Board (SASB) and the Taskforce on Climate-related Financial Disclosures (TCFD), which are leading global sustainability frameworks. As a company focused on delivering lifesaving therapies by providing reliable and comprehensive temperature-controlled supply chain solutions for the life sciences industry, sustainability has always been integral to our work; however, this year we began a formal evaluation of our company’s ESG initiatives and we have elevated sustainability to be one of our key priorities for guiding our operating philosophy and corporate governance as we move forward.
Cryoport presents the following information to provide a snapshot of its commitment to and practice of good corporate and global citizenship and overall Sustainability and Environmental, Social, and Governance (ESG) performance. As we move forward, we are committed to continuing to grow our Sustainability and ESG programs through increased focus on substantive issues and transparency in our reporting.
As Cryoport continues to grow its business in a way that is considerate of our global community, we are committed to protecting our planet by using our world’s resources sensibly and minimizing our emissions and waste on a global basis. From an environmental standpoint, one example of our sustainability efforts is our cryogenic Cryoport Express® Shipper, which uses the non-hazardous dry vapor form of liquid nitrogen and proprietary informatics to drive efficiencies in the use of resources throughout our company. This service offering also employs multi-use and recyclable packaging. Knowing that there is much more to do to aid in our environmental efforts, we have recently developed a system to collect data on a global scale for the purpose of quantifying the impact of all our environmental initiatives so that we may demonstrate our performance on this important matter to our shareholders, customers, and other interested stakeholders.
Cryoport strives to operate in an efficient manner to ensure the optimization of raw materials, equipment, energy, and labor. As an example of this in our manufacturing operations, Cryoport measures the effectiveness and efficiency of our production practices by tracking the amount of scrap material disposed of or sold on an annual basis. Comparing 2019 and 2020, Cryoport saw an improvement in scrap volumes of approximately 50%, with 414 scrap units generated in 2019 vs. 215 generated in 2020. Cryoport’s targeted goal for 2021 is to reduce this number by an additional 20%.
In the instance of stainless-steel products that do not meet our stringent specifications, the subject products are generally reworked to meet original specifications, diverting the material from recycling. Products that cannot be brought into specification are scrapped. Scrap metals are recycled by third party recycling partners.
Cryoport understands the importance of energy conservation as it relates to the reduction of its operational carbon footprint, efficient use of resources and cost management. The area that has the largest impact on energy efficiency associated with our products is thermal efficiency. One example is our Logistics Center Network which utilizes the International Safe Transit Association (ISTA) standard 7E to test and evaluate thermal performance against stated requirements of 10+ days of maintaining internal temperatures at or below negative 150oC. Our products comply with this standard, and in turn, the products’ insulative properties require less energy to maintain prescribed temperature level. Another example is from our manufacturing operations: our dewars do not consume any electricity, and our freezer units utilize a liquid nitrogen as a cooling agent, which is the by-product of other processes, creating a closed-loop resource that reduces additional energy associated with sourcing, procuring, and delivery of resources purchased from third parties. Our efforts in these areas have a positive environmental outcome for Cryoport and its customers.
Materials of Concern
At Cryoport, we currently utilize minimal materials of concern in our operations, primarily in the form of isopropanol, epoxies, butyl cellosolve, lacquer thinner, paint, hyamine and isopropyl alcohol. We manage the minimal hazardous wastes generated in our production facilities in compliance with all state and federal regulations, and review opportunities to eliminate materials of concern and other managed waste streams on a regular cadence. As part of our strategy to reduce or eliminate materials of concern from our operations, in 2020 we began an initiative to discontinue the use of lacquer thinner as part of a larger paint line upgrade, which will significantly reduce the generation of hazardous waste throughout certain of our plants. Any hazardous waste that is generated is tracked and managed with an overall goal of eliminating hazardous materials where possible.
In addition, Cryoport does not utilize any minerals identified as conflict minerals, e.g., tin, tungsten, tantalum or gold, and we use our best efforts to ensure that our suppliers practice responsible sourcing practices.
Cryoport makes efforts where possible to minimize the environmental impact of our operations. We strive for a product base with long use phases to minimize impact associated with production of new product. At our MVE Biological Solutions production facility, we manufacture fusion freezer units that utilize 1/587 of the energy used by conventional mechanical freezers used for similar applications.
Our biostorage plant in Houston is powered exclusively by carbonless energy sources, translating to a significant reduction in carbon emissions compared to energy provided by coal-fired power plants. In 2020, the plant consumed 3,564,102 kWh of energy, which would have generated 3,487,702 pounds of greenhouse gas emissions if the plant was powered by traditional coal-fired power plants. This emissions savings is the equivalent of removing 544 passenger vehicles driven in one year.
Recently, our Paris, France operations moved into a new facility, which is designed with the highest French environmental standards and equipped with solar panels to reduce energy consumption and greenhouse gas emissions.
Cryoport creates unique products with long-term use in mind. Cryoport products are primarily constructed of recyclable aluminum or stainless steel and we approach the extension of product lifecycles through the following four areas:
Cryoport’s social efforts are focused on our global team of employees and communities. Our employees are our most valuable resource, from our teams on the front line in our global supply chain and logistics centers, to our manufacturing operations, to our business development personnel, to the engineers who design our products and services, to our quality assurance and regulatory teams that assure the safety, quality, compliance, and integrity of our products. Across our Company, we are committed to inclusion, equity, and diverse representation in our employees. Cryoport’s Employee Health & Safety (EHS) programs have resulted in strong safety performance, as demonstrated by our total injury rate (TIR) and lost time injury rate (LTIR) being significantly lower than the global industry averages. Facilitated by our culture of continuous improvement, we are committed to continue to work toward reducing our TIR and LTIR numbers even further.
Constructive supplier relationships are essential to our ability to meet customer requirements for quality solutions. We also expect our business partners to share our commitment to ethics, integrity, compliance, safety, human rights, and environmental protection. By the same token, as a provider accountable to thousands of companies worldwide, we pledge, through our ESG performance, to meet or exceed our clients’ requirements for the same.
Cryoport is an Equal Employment Opportunity employer and currently tracks gender distribution across its operations and management. We maintain clear policies related to anti-harassment, discrimination and retaliation, and provide and anonymous, third-party-managed reporting hotline for employees to report incidents of harassment, discrimination, and policy violations.
In 2021, Cryoport will enhance and roll out new online corporate training programs related to diversity, harassment and discrimination, so that all employees will receive, at minimum, annual training on the topics of harassment, diversity and inclusion, business ethics and code of conduct.
In addition, Cryoport’s recruiting programs include targeted outreach to a variety of under-represented constituents, including minorities, women, veterans, and disabled populations to help improve recruiting efforts while gaining valuable insights from a diverse set of recruits. Cryoport has partnered with or targeted organizations like Hire Heroes, Career OneStop, recruiting at Historical Black Colleges, Accounting and Financial Women’s Alliance, and Women in Technology.
In an effort to open opportunities for more female roles within our organization, Cryoport currently tracks gender distribution across operations. As of December 2020, women represented a total of approximately 28% of all employees, composing approximately 35% of managers and 37% of directors. Women representation in senior leadership positions, at Vice President and above, currently sits as approximately 10%. Cryoport understands that there is work to be done to create a more representative senior leadership team and will continue to develop gender diversity throughout its operations.
Temperature controlled supply chain support to the life sciences industry is critical to all that Cryoport does; therefore, we currently take steps to vet and audit our existing and potential suppliers to ensure that appropriate compliance, health, safety, and labor practices are in place. Cryoport currently maintains a supplier questionnaire delivered prior to vendor approval and as part of a vendor auditing process to help verify that programs exist to manage specific risk areas.
For example, we ask our transportation suppliers if they employ or work with a Dangerous Goods Safety Advisor, a credentialed role responsible for overseeing activities associated with dangerous goods, including but not limited to, employee training and coaching, reporting, and monitoring of activities associated with the transportation of dangerous good. The purpose of this inquiry is to gauge the degree of oversight over dangerous goods management by our suppliers to help ensure product and employee welfare.
Cryoport maintains an internal diligence processes pertaining to third-party vendors. We take steps to vet potential suppliers by collecting detailed information on a potential supplier’s background, capabilities, and reputation prior to engaging them. Particular consideration is paid to any suggestion or risk that the third party in question might be susceptible to engaging in bribery or other forms of corrupt activity. We typically do not approve vendors until this diligence is completed. Given Cryoport’s support of the healthcare industry and improving patient outcomes, we treat supplier diligence with the utmost care and caution.
Regarding safety features, Cryoport complies with the safe transportation of regulated hazardous materials. As a result, it has designed and developed several features in its various products to comply with US DOT, IATA, ICAO, and other regulatory and guidance bodies. Additionally, safety warnings are included in our product labeling as well as our manuals
While rare, recalls of product may become necessary. The primary responsibility for recall management lies with our Vice President of Quality Assurance and Regulatory Affairs for manufacturing. The executive staff is involved in decision and implementation processes depending upon the specifics of any recall required. Customer service personnel, sales staff and other resources would then be utilized in reaching all distributors and direct end users. Results of recalls are evaluated daily until the recall is closed.
We do not conduct clinical trials, animal testing or use human tissue of any kind in the manufacture or design of our products, and our Code of Conduct governs the ethical behavior of our employees across Cryoport operations.
Cryoport uses an outside Center for Internet Security (CIS) assessment firm to evaluate its data security controls in an effort protect our business and secure the information of our employees and customers. The evaluation process utilizes the CIS Critical Security Controls Capability Maturity Model Integration (CMMI) methodology, and is an ongoing initiative used to continuously improve the CMMI rating for the company.
Aluminum products (50% + of everything we manufacture) either do not have electronics or are non-connected. Stainless steel products include a one-way controller that allows information to be read but changed only physically on the device.
Integrity is one of our four Core Values as an organization, and we commit to operating with honesty, truthfulness and transparency in accordance to the highest ethical and corporate governance standards – mutual respect, integrity and trust are our foundation. As an ethical operator, we have developed a strong Code of Conduct and hold ourselves accountable to it in all we do.
All of our employees across our operations are provided with training and reference materials to reinforce this commitment to integrity and ethics in our business. Our policies are clearly defined and include guidance on topics including, but not limited to:
In addition to our Code of Conduct, our senior leadership team actively oversee the governance of our ethics programs to help ensure that commitment is driven from the top down, and that program owners are accountable for successful program compliance.
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