Non-Financial Statement

Our Approach to Sustainability

QIAGEN believes in sustainability as long-term economic success combined with respect for the natural environment and for the people who are our stakeholders – employees, customers, suppliers, neighbors. By reducing emissions, providing healthy, high-quality workplaces, and ensuring suppliers and partners uphold our environmental and social standards, QIAGEN sees itself as a good corporate citizen sincerely striving to make improvements in life possible.

The COVID-19 crisis has demonstrated these two facets of our responsibility to best effect. Our business success came hand in hand with our working closely with public officials and customers around the world to ensure the availability of critical testing components to fight the pandemic. At the same time, QIAGEN honored its commitment to its highly dedicated employees by ensuring workplace flexibility, support for those looking after families, and safe working conditions in essential production facilities and offices.

Like no other year in living memory, 2020 showed that social and environmental developments can quickly and sweepingly affect business. QIAGEN is affirmed in its commitment to sustainability, which goes beyond formal regulations. As a market and innovation leader in life sciences and molecular diagnostics, we believe innovation can drive sustainable development in our industry – and in our world. We are committed to continuing on this path.

Our dedicated Global Environment, Health and Safety (EHS) team continuously addresses, monitors, and manages sustainability topics. It oversees the company-wide implementation of EHS management systems and sets goals to limit the use of energy, water, and plastics. The team reports to the Head of Global Operations, who is a member of our Executive Committee.

We are committed to protecting the environment by driving more energy savings and further reducing the negative impacts of our operations. We pledge to look after the welfare and safety of our employees, providing a safe, inclusive working environment for their development and growth. We also pledge to collaborate and work with our suppliers to build a framework tailored around our social and environmental goals in 2021.

We will also continue to engage with all stakeholders to gain a better understanding of our operating environment, including market developments and cultural dynamics. We will continue to approach employees, customers, patients, suppliers, shareholders, non-governmental organizations (NGOs) and communities using means as diverse as standard questionnaires and one-on-one conversations. Employee-led volunteer sustainability committees contribute to environmental debates and improvements throughout the company.

In 2020, we demonstrated our sustainability commitment by executing a €400 million sustainability-linked credit facility with an interest rate linked to our environmental, social and governance (ESG) rating. We will donate margin gains of improved ESG rating to sustainability-linked causes. We are the first provider of molecular diagnostics solutions with a sustainability component built into its corporate borrowings. It reinforces our commitment to further integrate sustainability into every part of our business.

Our Management Report contains more information about our business model, structure, products, customers, and strategy – as well as a description of the main trends and most important issues of 2020. We will provide a separate content index report on our website. This report will link our most material topics in scope for non-financial reporting with the standards provided by Global Reporting Initiative (GRI) and Sustainability Accounting Standards (SASB). This content index will make the reported information traceable and increases creditability and transparency. You also can find a summary report on QIAGEN’s commitment to sustainability on our website: https://www.qiagen.com/us/sustainability

Material Non-financial Information

For guidance on materiality and non-financial disclosure, we base our non-financial reporting on the Reporting Standards as provided by GRI as well as on relevant guidance as issued by the SASB.

For management purposes, we also work on the basis of defined materiality topics relating to sustainability. In the reporting period, we reviewed the materiality analysis first conducted in 2019. Our senior management validated the following list of material topics:

• Environmental matters: energy and emissions, water consumption, resource efficiency, sustainable procurement;
• Employee matters: employee satisfaction, occupational safety and health protection, employee development, responsible employer, equal opportunities;
• Social matters: access to healthcare, quality and product safety, customer satisfaction, data and cyber security;
• Respect for human rights: conflict minerals; and
• Anti-corruption and bribery matters: antitrust, anti-corruption.

Please refer to our non-financial statement 2019 for a detailed description of the procedure.

Environment

At QIAGEN, we are committed to minimizing the impact of our business operations on the planet – from the energy we consume and the resources we use in our manufacturing processes, to the materials we use in our laboratories and offices. Reducing our environmental impact is a key corporate goal for 2021, and we encourage our employees to be actively engaged in pursuing this goal by continually looking for ways to eliminate harmful substances and reduce waste from our products.

We recognize that climate change is one of the most pressing global challenges and acknowledge climate change risks such as extreme weather events and changes in regulation or customer behavior. Operations could, for example, be negatively impacted by volatility in the cost of raw materials, components, freight, and energy. New laws or regulations adopted in response to climate change could increase energy costs, the costs of certain raw materials, components, packaging, and transportation. Our customers are generally very conscious of the environment and therefore of issues including plastic consumption and the recyclability and durability of products. These aspects influence their choice of supplier.

To proactively address climate change, we have committed to reducing emissions in line with a 1.5-degree Celsius climate target as demanded by the 2015 Paris Agreement. Our 2019 carbon footprint, which was calculated with market-based emissions factors, serves as the base year. By the end of 2020, we achieved a reduction of 9.1% in scope 1 and 2 emissions and a reduction in business travel emissions of 81.8% below base year. The 2020 reduction was mainly achieved through the implementation of energy efficiency measures as well as the overall effects of the COVID-19 crisis. QIAGEN is currently reviewing climate targets and will make an announcement in June 2021 on its revised climate goal against science-based targets by 2050.

Environmental Performance

To increase transparency regarding our own global energy consumption and greenhouse gas (GHG) emissions, QIAGEN extended the coverage of its energy consumption data in 2018 by integrating a centralized data collection process for all production sites, research centers and offices. This expansion has enabled us to more accurately calculate our corporate carbon footprint (CCF) for scope 1, 2 and 3 emissions for each reporting year (see QIAGEN Corporate Carbon Footprint 2020).

Scope 1 covers direct GHG emissions from the combustion of fossil fuels on our own premises and with company vehicles.

Scope 2 emissions are reported using both a location-based and market-based approach, which cover our indirect emissions originating from external generation of electricity for our operational and business activities. A location-based calculation method for scope 2 emissions reflects the average emissions intensity of grids on which energy consumption occurs; a market-based method reflects emissions calculated with the energy source mix used by each QIAGEN site. Location based scope 2 emissions decreased by 14.5% to 15,854 tCO₂ in 2020 compared to 18,540 tCO₂ in 2019.

Continuing its progress, QIAGEN included additional scope 3 emissions data related to transportation and distribution for the years 2019 and 2020 in our GHG emissions calculations. In general, scope 3 emissions include emissions that occur along our value chain, for example through transport services, suppliers, and business travel.

QIAGEN’s energy data used to calculate our scope 1 and 2 emissions can be viewed by source in Figure 1 QIAGEN GHG Emissions by Site.

In addition to our energy data, we collect data regarding freshwater consumption, waste and recycling. We can confirm that none of our manufacturing sites are in water-stressed regions.

The table below lists the environmental performance data for 2018 through 2020. The data is shown as a ratio of our consolidated environmental data in relation to our net sales (NS in $ thousands), to establish a system for a long-term monitoring.

Beginning in 2018, all relevant scope 1 and 2 emissions were calculated following a location-based approach. The additional calculation using a market-based approach for scope 2 emissions was introduced for 2019 as part of our climate strategy. We will continue to report the location-based emissions to ensure consistent methodology (see QIAGEN Environmental Indicators).

Product Life Cycle Assessment

Last year, QIAGEN conducted a life cycle assessment (LCA) for one of its best-selling – and therefore representative – products, the QIAamp DNA Mini Kit. The aim was to assess the complete carbon footprint of the QIAmp DNA Mini Kit in order to gradually improve its environmental performance over the following years.

The scope of the study was the full life cycle of the product (so called “cradle to grave”), including extraction and processing of raw materials, transport to the customer, energy and material input required when using the product, as well as transport to the disposal facility and incineration of remaining materials. The LCA identified the largest relative environmental impacts within the life cycle of a QIAmp DNA Mini Kit, laying the foundation for a subsequent carbon-reduction process. A detailed report on the LCA can be found on QIAGEN's website in the Sustainability section.

Plastic Footprint Reduction

The environmental impact of plastic materials is becoming a major concern for customers. QIAGEN uses plastics in many of its products and production support materials, as well as for transport and packaging. We and our industry face a number of challenges in reducing plastic materials due to safety, hygiene, and regulatory concerns; however, we recognize that we must work to eliminate plastics where possible. In 2020, QIAGEN far exceeded its corporate goal to reduce plastic transportation packaging material by 3% below 2019 levels. The goal was achieved in 2020 with a 42-ton reduction in plastic transport packaging. This was primarily achieved by the reduction in gel packs used in cold room shipments in the European Union (EU) and a change in demand for cold room products during the pandemic. Our goal for 2021 is to reduce plastic transport packaging by 9% below 2020.

Our global, cross-functional, plastic footprint reduction team identifies opportunities to reduce plastic, investigates more environment-friendly alternative materials, and optimizes recyclability where possible. In 2020, we successfully switched some of our expanded polystyrene (EPS) boxes used in dry-ice shipments for the U.S. to ClimaCell liners, which use paper and starch for insulation. In 2021, this initiative is expanding to include more cold room shipments both in the U.S, Europe, and APAC regions.

Many of our existing plastic reduction initiatives are focused on packaging. As our responsibility extends throughout our supply chain, we are also working with our logistics suppliers on initiatives to reduce shipping waste. These include, for example, re-usable passive temperature control shipping systems for certain cold-chain products.

Environment-Friendly Facilities

We also aim to make our buildings environmentally friendly by seeking LEED certification for new construction. Hilden’s research and development and the production facility were awarded LEED Gold certification, and an extension to the QIAGEN Germantown facility received Silver certification. Our initiatives to improve energy efficiency include energy modeling during the design phase of buildings, energy extraction from co-generators, improved insulation, heat recovery, lighting replacements, and installation of intelligent building systems.

To reduce the environmental impact of employee commuting, several QIAGEN sites have installed charging stations for electric cars and introduced bike-to-work schemes. These include Hilden, Germantown, and Manchester. Many facilities provide discounted train and bus tickets to encourage employees to use public transportation.

Our volunteer sustainability committees have initiated projects to reduce waste at their sites by introducing recycling and composting programs, replacing single-use items with reusable versions, and donating surplus office furniture and lab equipment to local community organizations.

Employees

QIAGEN’s long-term success and growth are shaped decisively by the knowledge, skill and passion of our employees. Focusing on human capital therefore drives our economic performance and considerably influences the sustainability of our operations. We are convinced that the professional and personal development of our employees is an integral factor in creating value for our customers, patients, colleagues, partners and shareholders. Being the industry’s employer of choice by attracting and developing top talent is one of our global goals. To achieve that, QIAGEN creates a work environment that empowers and involves employees at all levels.

As a company headquartered in the EU, freedom of association and collective bargaining are cornerstones of the good relationship between management and representatives of employees. Around 76% of our workforce is employed in member states of the Organization for Security and Cooperation in Europe (OSCE), and in all regions where we operate, we comply with all applicable laws regarding freedom of association and collective bargaining and respect local laws and regulations concerning labor relations. Our commitment on this issue can also be found in our Human Rights Policy on our Sustainability webpage. This policy is communicated to all employees globally on an ongoing basis via the company intranet and also given to newly hired employees. QIAGEN strives to foster an open-door workplace culture where employees are able to approach management and/or Human Resources about their concerns without fear of retaliation. Our policy states that employees may communicate openly with management regarding their working conditions without threat of reprisal, intimidation, or harassment.

Among all QIAGEN guidelines, the following policies aim to incorporate QIAGEN’s culture and values into all of our internal and external relationships. These are available internally for all employees:

• Our Corporate Code of Conduct and Ethics is intended to provide our employees with a clear understanding of the business conduct and ethics that are expected of them.
• Our Ethical Standards Policy: QIAGEN's cultural norms and values are defined in our mission, vision, and identity. Our values form the basis of our business success. Every employee is expected to treat everyone in an open, honest, and respectful manner.

Depending on local law and custom, there are different types of employment ranging from long-term fixed contracts to temporary positions, also including flexible time and programs for parents returning from childcare. In 2020, we employed 3.0% part-time employees (2019: 3.03%) and 2.1% temporary employees with a QIAGEN contract / fixed-term work contract (2019: 1.24%).

Employee Training

As a fast-growing technology and knowledge-based company, we consider high-quality training and career development to be an integral part of our success. We offer various training platforms as QIAlearn, QIAGEN Academy, and MasterControl that provide the possibility to either use our global e-learning portfolio or to participate in personal trainings usually offered in a blended format. The focus is on job-specific skills, compliance, competencies, and leadership development.

In 2020, we ran a mix of virtual instructor-led and e-learning courses attended by 2,470 employees (2019: 3,951). In addition, 74 (2019: 46) top talented employees participated in our advanced leadership development programs, which took place in two groups in 2020. All trainings were conducted virtually in 2020 due to the COVID-19 pandemic.

As part of our talent and succession management, we have established transparent career paths with the QIAGEN Profile Navigator (QPN). It defines jobs, core competencies and approaches to advancement across the global organization.

In addition, QIAGEN’s global Performance Enhancement System (PES) creates a clear framework of regular one-on-one review sessions for each employee and their manager to discuss career development. These include discussions of goals and achievement levels, assessment of relevant competencies, as well as training needs and career planning steps.

The supervisor feedback process provides the opportunity for employees to give anonymized feedback to their supervisors. For 2020, employees provided overall very positive feedback.

Diversity

At QIAGEN, we are committed to creating an environment that is rich in diversity and empowers all employees. Diverse teams strengthen our organization through the variety of ideas, perspectives and approaches they bring to our business. Our teams outperform and succeed when they are composed of individuals with the widest possible range of personalities, backgrounds and traits. That’s why we value each person’s uniqueness and maintain an environment where all individuals can contribute to our success based on their strengths and characteristics.

We want to provide an environment where all individuals have the equal opportunity to grow and contribute to our progress, regardless of their age, educational background, sex (including gender identity, gender expression and sexual orientation), nationality, ethnicity, veteran status, physical abilities or religion. Diversity makes QIAGEN a great place to work.

Our strategic initiative on gender diversity started in 2018 has yielded remarkable results, particularly regarding leadership positions. The participation of women in leadership roles rose from approximately 28% in 2018 to approximately 32% in 2020 because of a series of initiatives to drive awareness, engagement and development of this area among our leadership team. More information about the policy on diversifying the Management Board and the Supervisory Board can be found in the Corporate Governance Report.

The QIAGEN Executive Council of Equal Opportunity (ECEO), made up of senior representatives from each of the business areas across the organization, has a lead function in driving change within QIAGEN around diversity and inclusion. Globally agreed cross-functional objectives are tied directly to our corporate goals on diversity and inclusion and drive initiatives within each organizational area. In addition, the ECEO works closely with the Diversity and Inclusion Ambassador Program. The ambassador program includes more than 25 employees from around the world who volunteer to champion diversity and inclusion across our global sites. The ambassadors host site-specific roundtables, organize trainings, workshops and events to educate the community – at QIAGEN and beyond – on diversity and inclusion topics throughout 2020. In 2019, our parental leave guidance in the U.S. was updated, which was a direct result of the diversity forums led by our ambassadors in conjunction with the executive committee members. The ambassadors have worked on updating our unconscious bias training package that will be rolled out in early 2021.

Employee Satisfaction and Retention

Recognizing that QIAGEN’s employees are the key to our success, we seek to be a great place to work. QIAGEN offers opportunities to work on exciting tasks and projects in an engaging work environment. Employees join QIAGEN and stay with QIAGEN because they can see how their work makes a difference to people’s lives everywhere in the world. Internal and external ratings have improved significantly and show QIAGEN’s reputation and preferred position in the global working environment. Specific targets for 2020 in terms of retention were reached – both the overall (under 10%) and the management level (under 5%) voluntary turnover were significantly lower.

A prudent work-life balance is an important measure to create and maintain employee satisfaction. We provide services to help employees balance their personal lives with the company’s dynamic work environment, including in-house childcare, sabbatical programs, and flexible working hours. In the U.S., we recently updated our parental leave policies to allow 12 to 14 weeks of fully paid leave. We also allow short-term bereavement leave. With regard to the COVID-19 pandemic, we were and continue to be flexible and allow our employees to work from home as guided by local regulations as well as personal situations.

QIAGEN has implemented frameworks for performance-based compensation and equity-based compensation, and incentive programs for new ideas and innovation. These programs aim to ensure fair and attractive compensation and to encourage each employee to work for the company’s long-term benefit. The QIAGEN remuneration report provides detailed information on the compensation practices regarding the QIAGEN Managing Board and can be found in our Renumeration Report online in our Corporate Governance pages.

An essential component of QIAGEN’s efforts to maintain a high level of satisfaction at work is our corporate health and safety management. We offer a wide range of measures and tools, from annual “health days” with free counseling, screening and medical check-ups to sports opportunities in the form of in-house gyms, on-site soccer fields and beach volleyball courts.

QIAGEN’s commitment to being an employer of choice is also reflected in the high number of applications for open positions, which exceeded 40,000 applications in 2020 (2019: 27,000). At the same time, the average voluntary annual turnover rate has decreased from approximately 12% to less than 10% year over year. In 2020, QIAGEN was once again recognized as a “Top Employer” in Germany. The Top Employer Institute is a global authority on recognizing excellence in people practices. The title is awarded after a very rigorous process where companies must provide detailed information on their HR practices, have an onsite review and several employee interviews. In July 2020, our Brazil subsidiary was certified for the first time as a “Great Place to Work,” and in November 2020, it was awarded one of the “Best Workplaces” in healthcare as well as Top 5 in diagnostic medicine. To receive the certification, at least 7 out of 10 employees must classify the company in a survey as a “Great Place to Work.” For the ranking, an assessment of the cultural practices and a complementary questionnaire are taken into account. Finally, QIAGEN’s US headquarters in Germantown, Maryland, received five different awards by the Alliance for Workplace Excellence (AWE), including the Workplace Excellence Seal of Approval, Diversity Champion Award, and Best Practices Supporting Workers 50+. All award recipients undergo a rigorous assessment process led by an independent review panel.

Occupational Safety and Health Protection

QIAGEN recognizes its responsibilities with respect to occupational health and safety in all our operations and meets all applicable regulatory requirements. A dedicated EHS manager provides direction and oversees the implementation of global EHS policies and procedures in alignment with the international standard ISO 45001 and our own quality management system.

All QIAGEN facilities coordinate, manage and monitor site-specific occupational health and safety risks and activities, which include the management of permits and licenses, risk analysis and assessments, planning for unplanned events, accident reporting, and health and safety inspections. In 2020, a senior manager for EHS was appointed at the Hilden manufacturing site as part of the company’s commitment to improve the safety of its employees at this large manufacturing site. All employees of the company are required to adhere to local health and safety procedures and practices. Safety, orderliness, and cleanliness are a key success factor at QIAGEN.

QIAGEN committed to an all-company goal in 2020 to reduce the rate of lost days due to injuries per 100 employees based on calculated working hours, to drive and encourage initiatives to improve the safety culture in QIAGEN. The Days Away Restricted and Transferred (DART) are collected monthly from 13 QIAGEN sites located across Americas, EMEA and APAC. The DART goal was set in 2020 as <4.5 per 100 employees and we achieved 4.0.

The table below shows the total number of recordable incidents (recordable accidents include lost workdays, restricted work, and medical treatment beyond first aid) and lost workdays for 2020, 2019 and 2018. The data is obtained from QIAGEN’s key manufacturing sites in Germany, the U.S., China, Sweden and Spain. It also includes the research and development site in United Kingdom, and the large business service center located in Poland. Thus, the data equates to 56% of the total average number of employees. There were again zero reported fatalities during 2020 as in previous years.

In 2021, near misses reporting will be implemented at the sites that provide data to support the DART metrics. To promote further safety awareness and implement continuous improvement initiatives, health and safety training programs are planned for 2021. Sites that have implemented lean management processes will utilize the blue safety cross to capture this information. The blue safety cross is a visual data collection tool for recording metrics on the number of safety incidents. The tool is used to improve safety and promote good practice by raising awareness within the teams regarding safety incidents tracked. It provides real time incidence data and includes near misses, accidents that are recordable and incidents that are not recordable.

As the health of our employees is a significant priority, we established free coronavirus testing at our location in Hilden following the outbreak of the pandemic. Starting in March 2020, we implemented systems and processes so that all Hilden-based QIAGEN employees and external service providers could be tested voluntarily at least once a week. Our internal laboratory was able to analyze up to 380 samples per working day. On average, approximately 200 tests per working day were conducted. The provision of regular and free testing facilities was an important factor in ensuring the uninterrupted flow of production.

Human Rights

QIAGEN believes that the respect for human rights is an essential component of promoting sustainability in our global business. As a publicly listed company with international operations, we regard ourselves as a responsible corporate citizen in all the countries and regions where we do business. This role includes rights and obligations governed by international and national law, with human rights as one of the foundations of international law.

In this sense, we acknowledge and endorse the UN Universal Declaration of Human Rights, the European Convention on Human Rights, and the business-related Organization for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises, the ILO Declaration on Fundamental Principles and Rights at Work, and the UN Guiding Principles on Business and Human Rights and its application in National Actions Plans of our relevant jurisdictions.

Our Human Rights Policy is designed to provide guidance on all human rights issues in our sphere of influence such as in our relationship with customers, on the employee level, and in our supply chain. For more information on our due diligence processes with regard to human rights in our supply chain, please refer to the "Sustainable supply chain management" section. Our Human Rights Policy can be found online on our Sustainability webpage.

Sustainable Supply Chain Management

We strive to ensure that our quality standards, compliance with laws and regulations as well as environmental and social standards are maintained along the entire value chain of suppliers and partners. We demand the same from our business partners. Our procurement policy includes specific requirements for corporate governance, environmental and social standards, which we expect from our suppliers as minimum standards. Among other issues, it includes the obligations to reduce the use of substances of concern, to ensure collective bargaining and freedom of association among employees, fair wages, and regulations concerning maximum working time. The procurement policy is available online in the Resources area of our website under Service and Support.

COVID-19 demanded that our supply chain increase its previous capacity by three to five times its former volume. This was achieved in close cooperation with our partners, mainly through investment in machinery and alternative shift models to reach the capacity required.

In alignment with QIAGEN’s Compliance Program (especially QIAGEN’s Corporate Code of Conduct and Ethics), every QIAGEN employee must conduct themselves honestly, fairly, and objectively in all business relationships with suppliers and all others with whom QIAGEN maintains business relationships. Our compliance training program ensures that employees in the procurement organization understand our guidelines and comply with them.

Structure of our Supply Chain

QIAGEN operates in over 35 locations worldwide. Our sites are supported by a global supplier network that includes approximately 9,000 (2019: 9,000) suppliers in over 60 (2019: 60) countries, supplying resources such as chemicals and bioreagents, plastics, packaging materials, as well as other materials and services essential to our business. In 2020, 76% (2019: 83%) of our overall purchasing volume came from OECD countries.

Due Diligence Process

To minimize compliance, environmental and social risks in our supply chain, we apply a multi-stage vendor selection process. Suppliers are subjected to a risk analysis regarding environmental and social criteria based on their geographic location. These criteria were supported by information from the MVO Nederlands platform financed by the Dutch Foreign Ministry as well as the Bertelsmann Stiftung’s Sustainable Development Goals Index in 2020. As a result, 70 suppliers were identified for whom potential risks exist due to geographic location and sales to QIAGEN.

In 2020, all new suppliers signed QIAGEN’s procurement policy. As a rule, all new suppliers need to sign the policy as part of the contracting process. The policy contains requirements regarding legal compliance, bribery and corruption, labor rights, non-discrimination and fair treatment, health and safety as well as environmental protection and conservation. QIAGEN provides a whistleblower hotline, which can be used by all employees. The contact details can be found on QIAGEN’s website within the section Corporate Code of Conduct and Ethics. In addition, first-tier suppliers must confirm REACH, RoHS and conflict mineral compliance as appropriate.

As part of our supplier selection process, we additionally assess the suppliers’ policy with a perspective on QIAGEN's requirements. Some suppliers are analyzed with a supplier risk tool. This includes all QSR suppliers, suppliers with a risk class of A, B or C and suppliers with a high critical impact on QIAGEN’s security of supply. They are all analyzed once a year on several criteria including quality management, financial stability, embargos, risks of natural disaster. The relevant data for the assessment is either submitted via a questionnaire, or the suppliers are assessed on site during a visit. If all criteria are not fulfilled, the further procedure is decided on an individual basis.

Supplier audits are conducted if non-compliance is suspected. Audits are conducted on site at least every three years for all “A”-categorized direct suppliers. Audits are documented and results are being shared with audited suppliers. To our knowledge, there were no violations regarding corporate governance, environmental and social standards in the reporting period.

Conflict Minerals

The sourcing of certain minerals (known as “conflict minerals”) has been linked with human rights abuses in the Democratic Republic of Congo (DRC) and other conflict zones. QIAGEN has performed an extensive inquiry into the company’s supply chain to confirm that the products supplied to us are either DRC conflict-free or that the suppliers are not aware of any non-compliance in their supply base. QIAGEN has no indication that any conflict minerals from the Democratic Republic of Congo or adjoining countries are used in the company’s laboratory instruments. To prove this, we receive compliance certificates from our vendors.

Our products consist of sample and assay kits, known as consumables, and automated instrumentation systems. We do not believe that any conflict minerals are necessary to the production or functionality of any of our consumable products. We conduct due diligence measures annually to determine the presence of conflict minerals in our instrumentation products and the source of any such conflict minerals. Because we do not purchase conflict minerals directly from smelters or refineries, we rely on our suppliers to specify their sources to us and declare their conflict minerals status. We disclosed our findings to the U.S. Securities and Exchange Commission (SEC) for the calendar year ending December 31, 2020, on Form SD on March 26, 2021, and will provide updated disclosure to the SEC annually.

Data and Cyber Security

As the external threat landscape continues to evolve, managing cyber security risk is a priority for QIAGEN. The company is committed to making investments in its capabilities to enhance the cyber resilience of our organization, products and services and to preserve the trust of our customers, partners, and employees.

QIAGEN's cyber security program continues to ensure that data and cyber security efforts and initiatives reflect evolving business requirements, regulatory guidance, and emerging threats. Our membership in private and public cyber security organizations (such as Health Information Sharing and Analysis Center, Information Security Forum, BSI Alliance for Cyber Security) facilitates close collaboration with peer organizations and government authorities to share industry-relevant best practices and threat information.

Business Ethics

For QIAGEN, conducting business in a responsible way includes looking beyond our day-to-day business operations into the ethical foundations of our company. This means, in particular, the respect for human rights and legally compliant business behavior.

QIAGEN's Approach to Tax

QIAGEN is committed to conducting business lawfully, ethically, and with the highest integrity. These fundamental values and principles, as defined in our three I’s (Integrity, Inspiration, and Insight), are the undisputed key to the long-term success of our company and also the basis for our tax strategy.

Our tax strategy is embedded in the following guiding principles which reflects our status as a listed company and the regulated nature of our business.

• Tax accountability and governance

  Tax is part of QIAGEN’s corporate governance and is supervised by the QIAGEN Managing Board. The tax function of QIAGEN is centrally managed and controlled by its Global Tax Department, which is part of the Global Finance organization. It is led by the global Head of Tax, who is ultimately reporting to the Chief Financial Officer of the QIAGEN Group. Under the ultimate responsibility of our Audit Committee and Managing Board, the Chief Financial Officer regularly reviews, evaluates, approves and where necessary adjusts QIAGEN’s approach to tax.

• Tax follows business

  One of the basic principles for sustainable tax management is that taxes should be paid where economic value is generated. The volume of product and service flows among entities within the company is significant, and the price of transactions among QIAGEN entities is an important factor in QIAGEN’s overall tax organization. Our transfer pricing team determines the policy for the pricing of such transactions based on a full analysis of the value drivers of our business, ensuring that international and local rules are respected. Our objective is for all entities to be remunerated at “arm’s length” in accordance with OECD guidelines and country-specific rules.

  The intellectual property related to our products and also to marketing specific intangibles are key profit drivers within QIAGEN, and profits generated with the employment of such assets are appropriately remunerated with the respective owner. The owner is the company controlling and taking the entrepreneurial risk of investing in the intellectual property. Our main entrepreneurs and intellectual property owners are companies in Germany, the U.S. and Spain.

  We will only use business structures that are driven by commercial considerations, are aligned with business activity and which have genuine substance. QIAGEN does not operate in countries that are in the EU list of non-cooperative jurisdictions for tax purposes.

• Seeking and accepting tax incentives

  Like many companies, QIAGEN seeks to optimize its global tax position by accepting tax incentives. In doing so, we always try to achieve an appropriate balance between corporate, employee and shareholder interests on the one hand and public interest on the other. QIAGEN is committed to conducting business lawfully, ethically, and with the highest integrity. We seek to comply with the letter and the spirit of the tax laws wherever we operate, and we anticipate paying tax on profits where our business activities take place. If possible and appropriate, we apply for tax incentives and exemptions.

• Compliance

  We are committed to complying with the tax legislation of the countries in which we operate and pay the right amount of tax at the right time, in the countries where we create value. We strive for full and timely tax compliance. To minimize any tax compliance risk, a frequent review process is in place to secure timely and correct tax filings and tax payments. In the execution of tax compliance, third-party tax service providers are often involved under the supervision of the Global Tax Department.

• Stakeholder engagement

  We seek an open dialogue with our stakeholders, including relevant tax authorities, our shareholders, customers, business partners, employees, governments, regulators, NGOs and the communities in which we operate.

  In some cases, QIAGEN and the respective tax authority may disagree on the correct application of local tax law. In the event of disputes, QIAGEN collaborates with the respective authorities in a fair and positive spirit to find balanced solutions in accordance with the applicable laws.

  During 2020, QIAGEN’s tax policy received public interest. More specific, details on two former structures the company used to collect certain tax incentives have been disclosed. The structures that have been disclosed derive from a period in which there was no or limited discussion about base erosion and profit shifting and should been seen within the spirit of time. In line with QIAGEN’s business requirements and considering the rapidly changing global tax developments and environment, the mentioned structures were abandoned.

• Transparency

  Country-by-Country Reporting (CbCR) requires multinationals to provide information on their global allocation of profit, taxes paid, and certain indicators of economic activity among the countries in which they operate. This requires QIAGEN N.V., the ultimate parent of the QIAGEN Group, to file an annual Country-by-Country Report to the Dutch tax authorities.

  QIAGEN submitted its 2019 CbCR to the Dutch tax authorities in 2020. The Dutch tax authorities will share the report with tax authorities in other jurisdictions where QIAGEN operates, subject to an international agreement that permits automatic exchange of data. QIAGEN has established appropriate processes to comply with CbCR requirements that ensures the integrity of the data.

Payments to Governments for Income Taxes

Income tax is paid on profits and not on revenues. If an affiliate makes marginal profit, for example following capital investment, significant R&D expenditure or restructuring expenses, it will accordingly pay less income tax.

We pay income tax related to the value added by QIAGEN's operational activities to the governments in the global regions of operations as follows:

In addition to income taxes, QIAGEN also contributes significantly to local communities, directly and indirectly as collector on behalf of governments, through local taxes, custom duties, payroll taxes and social security payments.

Financial Assistance from Governments

We recognize government grants when there is reasonable assurance that all conditions will be complied with and the grant will be received. Our government grants generally represent subsidies for specified activities and are therefore recognized when earned as a reduction of the expenses recorded for the activity that the grants are intended to compensate. Thus, when the grant relates to research and development expenses, the grant is recognized over the same period that the related costs are incurred. Otherwise, amounts received under government grants are recorded as liabilities in the statement of financial position. When the grant relates to an asset, the value of the grant is deducted from the carrying amount of the asset and recognized over the same period that the related asset is depreciated or amortized.

The company has received cost grants and investment grants. In 2020, the company received income from government grants in the amount of $3.0 million (2019: $1.4 million).

COVID-19 Related Grants

Since early 2020, we have been working closely with governments, public health authorities and customers to ensure availability of critical COVID-19 testing diagnostics across the globe, while also developing new dedicated COVID-19 tests to cover all stages of the infection cycle. In this regard, QIAGEN launched its largest investment program ever to increase production capacity in Hilden (Germany), Maryland (U.S.) and Barcelona (Spain). The program involves an investment of more than EUR 110 million.

This investment program is being supported by a grant of EUR 18 million from the government of North Rhine-Westphalia (Germany), a grant of $0.6 million from the U.S. government and a grant of EUR 0.5 million from the Spanish government.

COVID-19 Related Financial Measures

Governments around the world are acting decisively to protect their businesses and people from economic disruption resulting from the COVID-19 virus pandemic. QIAGEN has not proactively applied for any COVID-19-related financial stimulus. Some countries, however, have introduced generic measures that apply automatically to all or certain business areas. In this respect, QIAGEN was exempted from certain employer taxes the following local COVID-19 support in 2020 to retain local employees: $0.7 million under the Singapore “Jobs Support Scheme” and $1.8 million under the Chinese “Relief on Social Security Fees and Other Issues.”

Compliance

As a publicly listed company with international operations, QIAGEN is subject to regulation in various jurisdictions. Unethical behavior and non-compliance with laws and regulations have the potential to seriously harm our business, our reputation and our shareholders and to expose our employees to personal liability. QIAGEN has established a comprehensive Compliance Program, which translates legal and regulatory requirements as well as our fundamental values into clear, precise and understandable guidelines in our Corporate Code of Conduct and Ethics and supplementing specific policies for our employees. Our Corporate Code of Conduct and Ethics can be found here on our Compliance webpage under Investor Relations.

The policies include, but are not limited to, aspects such as conflicts of interest, insider trading, revenue recognition, confidentiality and social media. Interactions with healthcare professionals are fully compliant with the AdvaMed Code of Ethics and are described in detail in our Global Sales and Marketing Policy. Moreover, QIAGEN does not make or receive any payments to or from political parties or political action committees. Such actions are prohibited by QIAGEN’s Code of Conduct.

Special attention is paid to antitrust and anti-corruption laws (see: https://corporate.qiagen.com/investor-relations/compliance-and-ethics). Our specific antitrust and anti-corruption policies set forth our commitment to ensure that QIAGEN and its subsidiaries abide by the antitrust and anti-corruption laws of the countries in which we operate. Our policies on anti-trust and anti-corruption can be found on our Compliance webpage under Investor Relations.
We extend our Compliance Program not only to our management and employees, but also to third-party intermediaries as distributors or agents. Third-party due diligence lies in the remit of the Sales Compliance Manager. This contains the following five elements:

• Anti-corruption questionnaire and certification for new distributors, resellers and agents
• Annual risk assessment based on a calculated risk score, which factors location of business (Transparency International Index Score, TIIS) and annual sales revenue for distributing QIAGEN products.
• Training.
• Contractual obligations.
• Due diligence (including selected background checks); also including payment monitoring.

All our policies are available to employees through the company’s Compliance@QIAGEN intranet pages. Compliance awareness of our employees in all areas of the world is increased by regular trainings, which are held by external as well as inhouse legal and regulatory experts. In addition, QIAGEN has entered a long-term online training program focusing on topics such as antitrust and competition, bribery and corruption, conflicts of interest, data protection, gifts and entertainment, harassment, insider trading, reporting as well as respectful communication.

Online training reaches all employees in local language, supported by multiple communication resources. New employees are required to take online training on our Corporate Code of Conduct and Ethics at a minimum. Additional trainings customized to the specific area of responsibility are mandatory. Employees in sales and marketing as well as upper management are required to take training on anti-corruption and antitrust laws. These basic trainings are followed by refresher courses on a regular basis. In 2020, our employees completed more than 7,000 (2019: 10,000) online training modules. In addition, employees are informed through the company’s Compliance@QIAGEN intranet page and regular updates on compliance topics via the company’s internal communication platform Yammer and its Compliance Newsletter issued quarterly.

We provide a hotline for reporting accounting-related concerns on an anonymous basis in good faith. In accordance with the U.S. Sarbanes-Oxley Act and the listing standards of NYSE, QIAGEN follows as strict non-retaliation policy. QIAGEN will diligently investigate all such complaints and will protect the anonymity of the complainant. We also offer a direct e-mail and telephone hotline for employees to address questions or make suggestions for our Compliance Program.

Our Compliance Program is overseen by the Compliance Committee under the leadership of the Head of Global Legal Affairs and Compliance, who reports in this function directly to the Audit Committee of the Supervisory Board. The Compliance Committee consists of managers from Legal, Internal Audit, Human Resources, Commercial Operations, Trade Compliance and Regulatory functions.

In the reporting period, QIAGEN had 0 (none) legal actions pending or completed regarding antitrust or corruption.

Social Matters

QIAGEN’s mission is to make improvements in life possible by enabling our customers to achieve outstanding success and breakthroughs in life sciences, applied testing, pharma, and molecular diagnostics. We are committed to customers and their patients in delivering innovative solutions that unlock new insights for scientific research, forensics, food safety or better treatment decisions. We understand and live up to our responsibility to customers and patients who depend on us for reliable, efficient, and safe workflows.

Customer Satisfaction

Customer satisfaction is an integral part of the QIAGEN mission of making improvements in life possible, which is therefore the direct responsibility of the Chief Executive Officer. Our customers have high expectations on reliability, safety and the environment-friendly manufacturing of our products. We develop our products and services in close contact with our customers and incorporate their feedback into our processes.

QIAGEN commits to continually improve the customer experience, taking into account their evolving needs and expectations. We established a global systematic approach to measure customer experience in the form of an aggregated Customer Experience Indicator (CEI). The CEI is measured monthly through a set of internal KPIs (product and delivery performance, phone support, etc.) and external customer feedback directly linked to customer experience in our transactions. Thus, we can identify quickly and systematically areas for improvement while staying closely connected with our customers.

Departmental and employee contributions to the CEI performance is embedded into our annual goal-setting process. For 2020, a full year score of 93 (2019: 96) points (out of a maximum 100 points) was achieved. The drop in CEI points compared to the previous year is caused by the steep demand increase for COVID-19-related test products that could not be fulfilled immediately. Since early 2020 we have been working closely with governments, public health authorities and customers to ensure availability of critical COVID-19 testing components across the globe. With several products listed in the U.S. CDC and WHO COVID-19 testing protocols, we have seen a rapid increase in orders of our RNA extraction kits and automation instrumentation, as well as for our newly developed COVID-19 single and multiplex syndromic tests, and antibody and antigen tests. We have been working around the clock to meet this testing demand.

We are currently supporting COVID-19 testing in more than 100 countries. Despite the vigorously increased production output, QIAGEN has not been able to immediately honor all of the COVID-19-related demand increase. Hence, the performance of the KPI “Product availability” scored lower and led to a decreased 2020 CEI value.

Quality and Product Safety

QIAGEN stands for quality. Since QIAGEN’s founding 30 years ago, we have always been committed to the highest quality, and we always strive to exceed our customers’ expectations. QIAGEN’s reputation as a quality supplier is best-in-class in our industry and is the foundation of our loyal global customer base. Therefore, we offer a 100% satisfaction guarantee to all our customers. This means that if our customers are not entirely satisfied with the performance of a QIAGEN product, we will exchange or refund it free of charge.

To achieve and maintain our quality standards, we established quality management systems (QMS) in all of our manufacturing facilities around the globe. These assure constant high quality as well as safe and effective medical devices. QIAGEN’s QMS are certified according ISO 9001, ISO 13485, ISO 18385, and comply to 21 CFR 820 and all other applicable medical device standards around the globe (see section “Government Regulations” in the Management Report).

QIAGEN products and their components are safe to use by customers as well by our employees. In the early stages of product development, the Chemical Compliance Department provides a statement and guidance about the use of specific substances. During this evaluation, a special emphasis is laid on substances of very high concern (according to REACH in the EU), and care is taken to ensure that these substances are not added to new products. One tool to reach this goal is the component tree – a list of all materials that can be used in development, providing an overview of qualified substances, suppliers and components and also highlighting substances that must not be used (e.g. substances of concern). Further we have developed a strategy to reduce substances of concern in our production processes.

When assessing the manufacturability of a new product, the evaluation considers technical aspects, regulatory requirements, financial aspects, and timeline constraints. QIAGEN aims to fully eliminate the use of OPnEO and NpnEO (substance groups for substances of very high concern). Therefore, we set up a project to guarantee that within the next five years OPnEO and NpnEO are exchanged in non-regulated/non-in-vitro diagnostic (IVD) products, and within the next ten years in IVD and otherwise regulated products. For this, a detailed technical evaluation is being conducted to assess the scope and feasibility of substitution of substances of concern. A holistic analysis of multiple parameters will determine the prioritization and sequence of substitution. Such parameters consider:

• volume and concentration of substances of concern in an affected product;
• total annual volume turnaround of the affected product and substance;
• economic aspects (revenues and revenue projection) of the affected product;
• complexity of substitution; and
• product sustainability.

This systematic approach allows QIAGEN to determine the most effective substitution of substances of concern from affected products. All instruments are compliant according to RoHS.

Our transparent and responsible product and development policy also includes communication and marketing. As with all companies in the medical device/IVD industry, product claims and product properties are verified and validated during development and approved by regulatory bodies around the world as part of the product submission process. As part of their development process, all IVD products are specially tested for safety and usability. We market products only in accordance with their approved intended purpose and declare potential residual (or remaining) risks in the information for use of each product.

QIAGEN, like other companies, is exposed to the financial implications of potential recalls and other adverse events due to equipment failures, manufacturing defects, design flaws, or inadequate disclosure of product-related risks. In the event of a recall, QIAGEN has established global procedures applicable to all QIAGEN sites that aim to avoid the further use of the product and to guarantee cost-neutral procedures for our customers. Processes, responsibilities, and improvement programs are defined as required by regulating authorities to avoid the recurrence of recalls. There is full traceability of each product to the final customer; therefore, any recalls are executed by direct customer notifications. Required actions for recalls are for each case highly individual. They can range from providing additional information to physically recalling a product. Due to QIAGEN’s stringent quality management, recalls rarely occur: 2020 (6), 2019 (3), 2018 (4), 2017 (0), 2016 (3), 2015 (1). The percentage of affected product is low as well: 2020 (0.14%), 2019 (0.15%), 2018 (0.09%), 2017 (0%), 2016 (0.21%), 2015 (0.022%). In past recalls, 90% to 100% of customers have been reached and confirmed recall notification.

Access to Healthcare

QIAGEN cares is the company’s Corporate Social Responsibility program, an umbrella for supporting initiatives that improve lives by fighting diseases in which our products can play an important role. In developing countries with scarce resources, new ways are needed to ensure access to affordable diagnostics that play a critical role in helping to prevent and treat diseases. In particular, infectious diseases and various malignancies can be treated much more cost-effectively through early and precise detection – and with improved patient outcomes. However, many emerging countries lack properly trained lab personnel and technical infrastructure to utilize the latest molecular testing technologies.

Therefore, we collaborate with non-governmental health organizations, local nonprofits, and ministries of health to help ensure efficient distribution of donations. Our social responsibility efforts aim to provide access to cutting-edge molecular technologies to people worldwide, regardless of their economic or social status, including diagnostic solutions designed especially for settings where limited medical resources are available.

Tuberculosis Testing

One example is our global effort to advance diagnostics for tuberculosis (TB) in low-resource, high-disease burden countries. Tuberculosis is the world’s leading infectious disease killer, claiming 1.25 million lives in 2019. In October 2019, we announced the addition of QuantiFERON TB Gold Plus (QFT-Plus) to the diagnostic catalogue of the Stop TB Partnership’s Global Drug Facility (GDF). The GDF facilitates access and helps match demand for TB diagnostics and drugs with funding from donors, governments and NGOs on a global scale. The acceptance of QFT-Plus to the GDF catalogue advances our strategy to help expand screening with modern blood-based assays for latent TB infection in regions with high disease burden but limited resources.

To reach the highest risk populations needing TB testing, QIAGEN is building upon our high-volume, state-of-the-art QuantiFERON-TB Gold Plus assay with the development QuantiFERON-TB Access, a field-friendly test with ultrasensitive digital detection on a portable device. Launching in 2021, this public health solution has already gained recognition by the Joint United Nations Program on HIV/AIDS.

COVID-19 Testing

Since early 2020, we have been working closely with governments, public health authorities and customers to ensure availability of critical COVID-19 testing diagnostics across the globe, while also developing new dedicated COVID-19 tests to cover all stages of the infection cycle. In order to meet the rapid increase in orders of our RNA extra extraction kits and automation instrumentation, as well our new COVID-19 testing solutions, we have dramatically scaled up production, moving to 24-hour, seven-day-a week operations at our manufacturing sites, and are investing in additional equipment capacity.

Dedicated COVID-19 tests brought to market in 2020 to address the pandemic include:

• QIAstat-Dx Respiratory SARS-CoV-2 Panel - a multiplex PCR test with EUA-authorization for the detection of SARS-CoV-2 plus more than 20 other respiratory pathogens;
• NeuMoDx - single-plex (also approved for saliva sample type) and multiplex;
• QIAprep&amp rapid PCR test - a solution that streamlines RNA extraction and PCR analysis into one process, delivering a result in under one hour and requiring less disposable laboratory plastic-ware than standard PCR tests, helping to avoid resource bottlenecks;
• QIAreach Antibody test - allows clinicians to detect immune status of individuals and has applications in determining vaccine efficacy;
• QuantiFERON SARS-CoV-2 T cell assay - enables researchers to explore longer-term immune responses to the virus and vaccines; and
• a suite of next generation sequencing (NGS) and bioinformatics tools - used for epidemiological studies.

Support for Local Initiatives

QIAGEN supports a broad range of activities in communities where our businesses are based. These include sponsorship of science education, disease awareness campaigns, installation of school laboratories and promotion of biology in school curricula. Our local engagement goes beyond financial. In Hilden, for instance, QIAGEN is collaborating with the local Rotary Club to help integrate refugees from Syria and other war-torn countries through a program that includes language training and cultural orientation, assessment centers, and internships at QIAGEN. Since April 2019, QIAGEN has supported 18 candidates through the program, many of which are still employed with the company.

Hilden also works with Hephata, a local institution for citizens with disabilities, who undertake a broad array of operational tasks for the company, including certain packaging and production responsibilities.

In North America, our employees are granted 8 hours of paid community service time and in 2020 committed around 720 hours of volunteer time to meeting community needs. Our Community Service Committee mobilizes volunteers and provides company funds for projects that improve the lives of people locally and nationally.