Merck Issues $1 Billion Inaugural Sustainability Bond

Merck (NYSE: MRK), known as MSD outside the United States and Canada, today announced its inaugural issuance of a $1 billion sustainability bond, which was part of an $8 billion underwritten public offering of notes that closed on Dec. 10, 2021.

Merck’s environmental, social and governance (ESG) efforts are grounded in the core values that have always guided the company’s mission to invent for life, with a responsibility to patients and animals in need of medicines and vaccines, and with respect, inclusion and accountability to its employees. The company’s 130-year legacy has been built on the understanding that operating responsibly, enabling access to health for the patients and communities it serves, investing in and cultivating the company’s employees, and reducing its impact on the environment underpins the success and long-term sustainability of its business.

“Today’s announcement is an important step to further integrate ESG into the core of our business, accelerate the achievement of our ESG goals, and measure and continue to be transparent about our progress,” said Caroline Litchfield, chief financial officer, executive vice president, Merck.

Merck intends to use the net proceeds from this bond offering to support projects and partnerships in the company’s priority ESG areas and contribute to the advancement of the United Nations Sustainability Development Goals. These company projects and partnerships include:

• Access to essential services – health care, such as medicines and vaccines, maternal health programs, health care system strengthening, product donations, medical outreach, disaster and emergency relief, and patient assistance programs
• Infectious disease research and development that includes antimicrobial resistance, neglected and emerging diseases, and sexual and reproductive health
• Socioeconomic advancement and empowerment, particularly for minority and women-owned business enterprise (MWBE) suppliers, employee diversity and inclusion initiatives, and health literacy programs which serve people of all ages, races, incomes and education levels
• Renewable energy generation projects such as new onsite or offsite solar or wind generating capacity, as well as electricity generated from renewable sources
• Energy efficiency expenditures related to the company’s operations, such as energy-efficient heating, ventilation, air conditioning, refrigeration, lighting, roofing or electrical equipment, energy monitoring, control solutions and energy assessments, including smart meters and control automation devices
• Green buildings, including the design, development, construction and certification costs for new/existing facilities to meet LEED Gold or Platinum standards (or equivalent), as well as those which achieve at least a 30% improvement in energy use or GHG emissions
• Sustainable water and wastewater management to improve water quality or water efficiency, such as wastewater treatment, recycling and harvesting, overall reductions and reuse
• Pollution prevention and control projects to reduce and manage emissions to air or water, as well as recycling projects and efforts to divert non-hazardous and/or hazardous waste away from landfills

The bond transaction is in line with Merck's newly introduced Sustainability Financing Framework, which facilitates the company's use of sustainable capital markets to finance or refinance eligible projects that align with its ESG commitments. This framework addresses the core components and key recommendations of the Social Bond Principles (2021), Green Bond Principles (2021), and Sustainability Bond Guidelines (2021), all of which are administered by the International Capital Markets Association (ICMA). V.E., a Moody’s affiliate, provided a second party opinion (SPO) on Merck’s Sustainability Financing Framework.

Merck has committed to annual reporting on the allocation of bond net proceeds to actual spend by social and/or environmental category, along with the remaining balance of unallocated proceeds. Where feasible, Merck will report estimated social and/or environmental quantitative impact metrics and provide qualitative case studies on eligible projects. For eligible social projects, Merck will seek to report impact metrics by target population to show how expenditures are enhancing access to the stated target population.

For more information on Merck’s ESG performance, policies and initiatives, please view the company’s 2020/2021 ESG Progress Report.

About Merck

For over 130 years, Merck, known as MSD outside of the United States and Canada, has been inventing for life, bringing forward medicines and vaccines for many of the world’s most challenging diseases in pursuit of our mission to save and improve lives. We demonstrate our commitment to patients and population health by increasing access to health care through far-reaching policies, programs and partnerships. Today, Merck continues to be at the forefront of research to prevent and treat diseases that threaten people and animals – including cancer, infectious diseases such as HIV and Ebola, and emerging animal diseases – as we aspire to be the premier research-intensive biopharmaceutical company in the world. For more information, visit www.merck.com and connect with us on Twitter, Facebook, Instagram, YouTube and LinkedIn.

Forward-Looking Statement of Merck & Co., Inc., Kenilworth, N.J., USA

This news release of Merck & Co., Inc., Kenilworth, N.J., USA (the “company”) includes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such statements may include, but are not limited to, statements about allocation of the proceeds of the sustainability bond among eligible projects. These statements are based upon the current beliefs and expectations of the company’s management and are subject to significant risks and uncertainties. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements.

Risks and uncertainties include but are not limited to, general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; the impact of the global outbreak of novel coronavirus disease (COVID-19); the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; technological advances, new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; the company’s ability to accurately predict future market conditions; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; dependence on the effectiveness of the company’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions.

The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the company’s 2020 Annual Report on Form 10-K and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www.sec.gov).

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