Social responsibility
During 2002 the profile and importance of corporate social responsibility (CSR) continued to grow, particularly in Europe and the USA. Well-publicised cases of corporate financial mismanagement and fraud have threatened to undermine investors’ and the public’s confidence in business. Amersham is alert to the threat such a climate of distrust might pose to its long-term success and has acted to ensure that its reputation as a responsible and socially aware company is maintained and protected. We describe elsewhere in this Annual Report our approach to Corporate Governance and the manner in which the company is managed. We have also worked to provide greater transparency on aspects of our operations, and focused on the integration of the principles of CSR throughout our business.

Enhanced transparency was demonstrated with the publication in July of our first full Environment and Social Report. This is available both in print and on our website and provides information on our performance in managing health, safety and the environment during 2000-2001, as well as commentary on a range of employment, community and social issues including our positions on animal testing and stem cell research. A web based update to our Environment and Social Report providing key data and information from 2002 is available here.

The report also provided a platform for publication of Amersham’s Code of Business Conduct, which applies to all of our employees worldwide and sets out the standard of business behaviour that the company expects of its people. In August, the publication of our interim results was also used to provide further information to stakeholders on our progress in managing the challenges posed by CSR.

In the second half of 2002, Amersham conducted a review of its performance in the key areas embraced by CSR. Specialist consultants were engaged to interview staff and key external audiences, including customers, ethical and mainstream financial investors and non-governmental organisations. The assessment covered a wide range of issues including Amersham’s management of our people, environment, health and safety, risk and corporate governance as well as our engagement with customers and suppliers, the communities around our facilities and other external stakeholders. The results have enabled Amersham to assess its CSR strengths, identify good practice and indicate areas for improvement. A CSR Steering Committee reporting to the Chief Executive, who has taken Board level responsibility for CSR, has now been established. The Committee will co-ordinate the application of best practice throughout the company, prioritise areas where we may need to improve or amend our existing procedures and ensure that the company integrates CSR appropriately throughout its operations. This work will be conducted progressively and will focus on areas that impact upon our people, our customers, the communities around our facilities and our investors. We intend to report on our progress in managing CSR in summer 2004.

During 2002 Amersham maintained its listing in the FTSE4 Good ethical trading index and was pleased to gain entry for the first time to the Dow Jones Sustainability Index, widely regarded as a leading indicator of good performance by ethical and socially responsible investors. Amersham also completed its submission for Business in the Community’s new Social Responsibility Index, the first major attempt to provide a benchmarking index for companies’ application of CSR, published in March 2003. Amersham hopes that indices such as these will provide sufficient information to guide investment decisions in this rapidly expanding investment sector.

Corporately and at individual sites, Amersham continued to demonstrate social responsibility, especially in our core areas of science and education. The successful Genes, Medicine and Society series at the Royal Institution, London was concluded in November following seven topical and well-received lectures. Similar lectures on biomedical science were held at the Rikshospital in Oslo, Norway. Amersham’s Board approved a new Charity and Community Engagement Policy that will be implemented at our sites throughout 2003 and beyond. The policy determines our areas of focus in support for good causes and encourages local sites to harness the resource and expertise of their staff in the local community. As an example, the SET to Help school support programme in place at our sites in the Amersham (UK) area continued to expand and now involves some 40 schools. We have also developed formal links with a local school specialising in the teaching of science to help extend the school’s outreach into other schools and the local community. Education of the general public and students was also the principal goal of a week-long festival of science in Oslo where our staff arranged lectures and educational programmes and took science onto the streets of Oslo as part of a major public exhibition. In Piscataway (New Jersey, USA) our staff supported a scholar programme at the local university, providing time, equipment and reagents.

Throughout the world, Amersham’s staff continued to help good causes and those less fortunate. In the UK, two hospices and a treatment centre for children with cerebral palsy were chosen by staff for their fundraising activities, which raised almost £50,000. Donations of money, gifts in kind and staff time in the UK were valued at over £330,000, enabling the company to maintain its membership of Business in the Community’s PerCent Club in the UK. In Norway, community engagement was also improved with a financial contribution excluding staff time of £140,000 including a donation of approximately £30,000 to help the poor and homeless. In the USA, our Arlington Heights, Illinois facility participated in food and toy collections for underprivileged families, local sports, education and science programmes and also made a $14,000 donation to support service men and women separated from their families. Over a third of our staff in Princeton, New Jersey, participated in the Race for the Cure for cancer research, raising $12,500. Amersham Health sponsored the Father’s Day Race in Central Park, New York, to raise awareness of prostate cancer. Amersham Biosciences continued to sponsor Science magazine’s Young Scientist Prize competition. Two regional winners were awarded in each of Japan, Europe and the USA plus one from Israel, all for work in the molecular biology field. The grand prize winner, who received a $25,000 grant and publication of his essay in Science, was Jared Rutter, for his work describing the cellular sensing mechanism that responds to environmental factors and affects the body’s daily rhythm.

Environment
Our Environment and Social Report provides data on emissions to the environment, energy and water use, waste generation, accidents at work, exposure to radiation and a number of other parameters of particular significance to our operations. The report, together with our broader work on CSR, has identified areas, such as the management of our supply chain and verification of our data, that we need to carefully examine and consider whether improvements can be made.

Overall, 2002 was a year of further improvement in our health, safety and environmental performance and we are pleased to report that no prosecutions were brought against the company in these areas during the year. The new wastewater treatment facility at our Arlington Heights (USA) facility gained the 16th Annual Illinois Governor’s Pollution Prevention Award – given to companies that demonstrate outstanding efforts in environmental protection. A similar liquid effluent plant has now been installed at the Maynard Centre (Cardiff, UK) where, in addition, good progress was made in the designs for the recovery and recycling technology that will capture a high proportion of the facility’s waste carbon¹⁴ and tritium. Effluent treatment improvements were also made at Shanghai (China). Our Lindesnes (Norway) contrast media production site gained ISO 14001 (Environmental Management) accreditation and our Nihon Medi-Physics joint venture facility in Chiba (Japan) successfully passed the first inspection review of its ISO 14001 certification. The Grove Centre (UK) and Shanghai both received safety commendations from external organisations and a new risk assessment, management and training system implemented at our production plant in Cork (Ireland) resulted in a significant reduction in lost time accidents.

Amersham’s commitment to improved resource management also continued with increases in the amounts of material recovered and recycled at many locations. Solvent recovery at Lindesnes (Norway), Staffanstorp (Sweden) and Uppsala (Sweden) totalled over 30,000 tonnes and the Swedish sites also supplied more than 1,000 tonnes of used solvents and fructose for reuse by other industries. As part of the company’s return chain project that takes back unused or returned products for recycling, Lindesnes processed 33 tonnes of material for iodine recovery, and recovered 26 tonnes of X-ray contrast media bulk substance. A new office paper recycling scheme at Amersham Place Head Office, the Grove Centre and other sites in the Amersham area, recovered over 92 tonnes of paper and card, enabling the recycling contractor to donate 12 trees to the local community. The Gloucester (UK) site reduced its generation of waste glass vials by 37 per cent and Piscataway and Sunnyvale in the USA both benefited from enhanced recycling programmes. While the diversion of this material from disposal is welcome, the focus is now turning to reducing the volume of waste generated in the first place. New energy conservation measures implemented at Arlington Heights resulted in a 17 per cent increase in the production of their most energy intensive product with only a 1.2 per cent increase in overall energy use.

Amersham Biosciences sales and commercial staff in Freiburg (Germany) participated for the ninth year in their annual purchase and planting of 5,000 trees in the Ester mountains in Bavaria. In Japan, the company was pleased to support the World Wildlife Fund in its programmes for nature and habitat conservation. Amersham continues to support the global conservation research organisation, Earthwatch, and is now part-funding six study fellowships on global projects in 2003. Through Earthwatch’s facilitation, the company is also engaged in an environmentally friendly land management plan for 60 acres of farmland it owns adjacent to the Grove Centre. The plan will restore natural flora and fauna to the area and promote biodiversity.

Major public consultations were conducted during the year by the UK’s Environment Agency as part of the process of determining new authorisations for emissions from the Grove and Maynard Centres. At both sites, Amersham’s applications provide for significant reductions in discharges to the environment. The company participated fully in the extensive public consultation process, speaking at meetings, making presentations to local interest groups, and distributing explanatory literature to local residents and the media.

We welcome greater public scrutiny of our operations. This involvement improves the understanding of our business and allows us to demonstrate the ways we work to protect health, safety and the environment. Our open door policy for local communities has resulted in visits to our facilities by the public in the UK, Germany, Norway, the USA and Ireland. We view this approach to our operations as an integral part of our commitment to CSR and we will continue to explore new opportunities to improve our stakeholders’ understanding of our work and our environmental impact.

Sir William Castell Chief Executive