Environmental, Social and
Governance (ESG) Program
Beginning in 2020, we initiated a formal internal review of our ESG policies, procedures, and performance. Subsequently in February 2021, we publicly disclosed ESG information based on the framework and standards set by the Sustainability Accounting Standards Board (SASB) and the Taskforce on Climate-related Financial Disclosures (TCFD). Building upon our first report, we began with the goal of developing a formal, thoughtful, comprehensive and right-sized sustainability program that would be used as a foundation for effectively organizing, reporting, and measuring our performance to set ESG goals in the future.
In June 2021, we began a materiality assessment to guide our overall sustainability strategy. The intent of the materiality assessment was to understand what ESG topics were important to our key stakeholders, to take into consideration Cryoport’s business strategy development, and to understand Cryoport’s global internal priorities. There were three key activities for this phase of the process: Benchmarking against peer companies; ratings received from ISS, MSCI, and Sustainalytics; and interviews with key stakeholders.
The information and feedback received from the materiality assessment was aggregated into a customized and weighted materiality matrix. The following Materiality Matrix follows GRI Standards recommendations and plots topics based on their relative priority resulting from the materiality assessment.
Cryoport Materiality Matrix
Once the Materiality Matrix was developed, several meetings were conducted internally with our ESG committee and our Board of Directors’ Nomination and Governance Committee to evaluate the findings.
As we proceeded on our ESG endeavour in 2022, our initial key focus was on Greenhouse Gas (GHG) Emissions. GHG emissions were the foremost priority identified in our Materiality Matrix and represent a clear global significance for companies, consumers and other stakeholders.
Cryoport engaged an ESG advisor upon completion of our Sustainability Strategy to assist in creating a report of our estimated global GHG emissions during 2021. The following summarizes that report.
Summary of our 2021 GHG Emissions Report
We used the World Resource Institute’s Greenhouse Gas Protocol – Corporate Accounting and Reporting Standard (Revised Edition) to calculate the company’s GHG emissions. The standard provides accounting tools to measure, manage and report on GHG emissions. This protocol classifies emissions into three “scopes.” Scope 1 includes direct GHG emissions, which occur from sources that are owned or controlled by a company. Scope 2 includes indirect GHG emission from purchased electricity. Scope 3 includes all other indirect GHG emissions.
The reporting boundary for the purposes of the report is Cryoport, Inc. and its consolidated subsidiaries, which include our four business units (MVE, Cryoport Systems, CRYOPDP and CRYOGENE) comprised of 41 facility locations across 13 countries (United States, China, Netherlands, Portugal, France, Belgium, United Kingdom, Poland, Germany, Singapore, India, South Korea and Australia) in 2021.
The scope of the report includes our Scope 1 emissions (Direct) and Scope 2 emissions (Indirect emissions from purchased electricity), but generally excludes Scope 3 emissions (other indirect emissions). However, we did quantify Scope 3 emissions from business travel for three business units as well as waste for two business units because the data was readily available to quantify such emissions. The following sources of emissions were included in the scope of the report for the identified business units:
Data was not readily available for some of the Scope 3 emissions that contribute to our global carbon footprint. These include, but are not limited to, transportation and distribution provided by third parties in the performance of our services; use and end-of-life treatment of sold products; and purchased goods and services.
We used various assumptions to quantify GHG emissions in the report. As with any projections or estimates, actual results or numbers may vary based upon factors such as variations in processes and operations, availability and quality of data, and methodologies used for measurement and estimation. Changes to emission estimates may occur if updated data or emission methodologies become available. The following are some primary assumptions or estimates that we made in the report:
Stationary Combustion – Natural Gas. Natural gas usage for heating was estimated for several company locations based on either (i) square footage using U.S. average intensity for offices of 21.3 SCF/ft2, or (ii) spend data and regional utility rates, depending on what information was available.
Purchased Electricity (Location-Based). Electricity usage was estimated for several company locations based on either (i) square footage using a U.S. average intensity for offices of 13.6 kWh/ft2, or (ii) spend data and regional utility rates, depending on what information was available.
Utility Estimations. When there were gaps in electricity or natural gas data, the average of the prior and following months data was used to estimate the missing information.
Our 2021 Total Emissions, as calculated in the report are seen in Fig. 1 below. Fig. 2 shows the percent of total emissions in 2021 that was contributed by each type of emission quantified in the report.
2021 Carbon Footprint Intensities
The following table (Fig. 3) shows our 2021 carbon footprint intensity in relation to square feet of our facilities, revenue and employees.
Fig. 4 shows the intensity of 2021 emissions from stationary combustion and purchased electricity by square foot on for each facility. The average facility intensity was 0.0115 MT CO2–e per square foot, as indicated by the dashed horizontal line within the following chart.
Using the 2021 carbon footprint as a baseline, Cryoport plans to calculate an annual carbon footprint, which not only allows Cryoport to track changes (i.e., increases or reductions in emissions, fuel usage or energy usage by facility), but will also be helpful in ultimately setting emission reduction targets.
We are also considering focusing on another topic within our materiality matrix (e.g., resource efficiency) to further the company’s ESG journey.
Supporting Our People (end of December 31, 2022)
Total Headcount (Full-time 960, Part-time 8, Contingent 56)
Average Years of Service
Cryoport’s global team of employees is 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.
Our success depends on the health, talent and dedication of our global team. As we grow our team, we strive to retain, develop and provide advancement opportunities for our employees. We endeavor to make Cryoport a superior growth workplace with a diverse, inclusive and equitable environment where all team members have the opportunity to flourish.
Diversity, Equity & Inclusion (DEI)
We are committed to inclusion, equity and diverse representation for our employees across our company. 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 we provide an anonymous, third party-managed reporting hotline for employees to report incidents of harassment, discrimination and policy violations. We provide annual online corporate training programs on harassment, diversity & 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 and Career OneStop, and our recruiting targets also include Historical Black Colleges; Accounting and Financial Women’s Alliance; and Women in Technology.
HR departments in each Cryoport business unit manage HR priorities, including team member career development, engagement and health and wellness. Our Corporate HR department promotes consistency of policies across operating companies and manages executive development and team member benefits.
Cryoport understands that some of the industries in which we operate, including manufacturing , are typically male dominated. As of December 2022, women represented a total of approximately 31% of all employees, 27% of all managers, 38% of all directors and 14% of all senior leadership positions (vice president and above). Cryoport understands that there is work to be done to create a more equitable and representative senior leadership team and continue to push gender diversity throughout its operations.
We are committed to offering competitive compensation that accounts for geography, industry, experience and performance. Our compensation programs and practices are designed to attract new employees; motivate and reward performance; drive growth; and support retention. Compensation at Cryoport includes base wages and generally includes an incentive opportunity through cash bonus, equity stock options and/or restricted stock units. More than 99% of our employees participate in our incentive programs.
Employee Health & Safety
Safety is a priority in every aspect of our business. Across our companies, we are committed to making our workplaces and communities safer for our employees, customers and the public. Our corporate philosophy is embedded in our day-to-day work through rigorous policies and continual education.
Cryoport’s Employee Health & Safety (EHS) programs have resulted in strong safety performance. Our total injury rate (TIR) and lost time injury rate (LTIR) is 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.
To understand and improve our safety performance, we evaluate our operational performance across a variety of indicators—including lost-time-injury rate (LTIR)—on a daily basis. In FY22, our LTIR was 1.23, a decrease of 47.7% compared to FY21. In addition to looking at lagging indicators of safety performance, we frequently evaluate the effectiveness of new metrics, including leading indicators, as we strive to improve our safety performance. Cryoport’s operating companies are responsible for implementing policies and procedures aligned with international standards that account for their business and the associated health and safety risks.
We continue to have flexible working arrangements, including telecommuting and part-time arrangements, to maintain a safe working environment for our employees throughout the COVID-19 pandemic.
Cryoport recognizes the role we play in protecting the health and safety of current and future generations through services and solutions that promote sustainability, resilience and respect for the environment. We strive for a product base that is of the highest quality and with long-use phases to minimize impact associated with production of new products. Cryoport reviews opportunities to eliminate materials of concern and related managed waste streams on a regular cadence.
Product & Service Quality
As a temperature-controlled supply chain provider to the life sciences industry, Cryoport must comply with the safe transportation of regulated hazardous materials. As a result, we have designed and developed several features in our various products to comply with US DOT, IATA, ICAO and other regulatory and guidance bodies. Additionally, safety warnings are included in our product labeling and manuals. Our products are designed to conform to the following standards (where applicable):
- ISO 13485 (Section 7.3 Design and Development, ISO, QMS)
- ISO 14971 Application of Risk Management, ISO
- Medical Device Directive 93/42/EEC, and Directive 2007/47/EC amending Council Directive 93/42/EEC concerning medical devices
- Low Voltage Directive (LVD) (2014/35/EU)
- Electromagnetic Compatibility Directive (2014/30/EU)
- RoHS 2 (2011/65/EU) (we are actively working on RoHS 3 and REACH)
- Safety Requirements for Electrical Equipment for Measurement, Control, And Laboratory Use – Part 1:
- General Requirements [UL 61010-1:2012 Ed.3+R:29Apr2016]
- Safety Requirements For Electrical Equipment For Measurement, Control, And Laboratory Use – Part 1:
- General Requirements (R2017) [CSA C22.2#61010-1-12:2012 Ed.3+U1; U2]
- IEC 60601-1 – Medical Electrical Equipment – Part 1: General Requirements for Basic Safety and Essential Performance
- IEC 61326-1:2012 – Electrical Equipment For Measurement, Control And Laboratory Use – EMC Requirements – Part 1: General Requirements
- ASME SEC. VIII Pressure Vessel Code (Fusion Only)
- EU Pressure Equipment Directive (EU97/23/EC) (Fusion Only)
- FCC 47 CFR Class B Verification (Fusion Only)
- IEC 62304 Medical Device Software — Software Life Cycle Processes
These standards are woven into our development methodology used to design all new products within the organization. This development process includes a risk management assessment done in accordance with ISO 14971 that identifies hazards and mitigates risks via design improvements, process improvement and warnings (including labels and safety information shipped with the product).
We pride ourselves on our exceptional operational quality. Our temperature-controlled supply chain solutions focused on cell and gene therapies boast a 95.20% delivery success rate and, due to this performance, 12,572 additional patients were able to receive therapies over the past 24 months and 1,641 intended parents are potentially able to have successful cycles resulting in the birth of a child on an annual basis because of our CryoStork® solution.
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. There were no product recalls during 2022.
Product Lifecycle Management
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:
We strive for a product base with long use phases to minimize impact associated with production of new products. At our MVE Biological Solutions production facility, we manufacture cryogenic freezer units that utilize 1/587 of the energy used by conventional mechanical freezers used for similar applications. For example, our freezer production displaced annual electricity consumption by 166,255,209 kWh from what would otherwise be consumed from alternative products. This amount of electricity could power 15,513 homes (sized at 2,500 square feet) annually. This reduction in energy consumption from our freezer lines alone equates to 136,733,034 pounds of GHG emissions avoided, or the emissions equivalent to 13,364 passenger vehicles driven for one year.
Cryoport regularly reviews opportunities to eliminate the use of materials considered hazardous and related managed waste streams on a regular cadence. Although Cryoport does not utilize any Substances of Concern in our products, we do currently utilize minimal quantities of hazardous materials that are not listed as Substances of Concern in our operations, primarily in the form of isopropanol, epoxies, butyl cellosolve, lacquer thinner, paint, hyamine and isopropyl alcohol. These materials and the insignificant quantities of hazardous wastes generated in our production facilities are managed in compliance with all state and federal regulations. Any hazardous waste that is generated is tracked and managed with an overall goal of eliminating hazardous materials where possible.
Cryoport strives to have a conflict-free supply chain and is committed to working with its suppliers to increase transparency regarding the origin of minerals contained in its products, including minerals identified as conflict minerals (tin, tungsten, tantalum and gold), and has adopted a Conflict Minerals Policy, which is available on our website at cryoport.com on the “Investor Relations: Corporate Governance” page under the heading “Governance Documents.”
Cryoport recognizes constructive supplier relationships as essential to our ability to meet customer requirements for quality solutions. We expect our business partners to share our commitment to ethics, integrity, compliance, safety, human rights, data security 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.
We are committed 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 robust Code of Conduct and hold ourselves accountable to it in all we do. All 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, published in local languages where applicable and include guidance on topics including, but not limited to:
- Anti-Trust and Anti-Competitive Behavior
- Insider Dealings
- Bribes (e.g., explicit prohibition of facilitation payments)
- Conflicts of Interest
- Intellectual Property
- Truthful and Accurate Reporting
- Interactions with Healthcare Professionals
- Whistleblower Protections (including non-retaliation
- Political Activity and Contributions (e.g., explicit prohibition of contribution of any kind to any candidate or political party) without express prior approval of the Board of Directors. This covers both direct contributions and indirection support. (No political contributions have been made in recent years.)
In addition to our Code of Conduct, our senior leadership team actively oversees 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.
Cryoport does 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. Further, the company does not conduct lobbying activities.
Temperature-controlled supply chain support to the life sciences industry is critical to all that Cryoport does; therefore, we take an active approach to managing suppliers and partners to ensure that appropriate compliance, health, safety, labor practices and ethical standards are employed. Our internal diligence process for third-party vendors includes a supplier questionnaire that is required for vendor approval and a regular auditing scheme thereafter for existing suppliers. The questionnaire is intended to verify that programs exist to manage material risk areas associated with the given supplier’s operations and particular consideration is paid to bribery or other forms of corrupt activity. No suppliers are approved until this mandatory due diligence is complete and a completed assessment form is on file.
To help ensure product and employee welfare, we verify that our suppliers have programs in place to manage material risks for any given supplier. If our transportation suppliers employ or work with a Dangerous Goods Safety Advisor, we confirm the presence of 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 goods.
Our Code of Conduct extends through our suppliers and thus sets an expectation for our suppliers to commit to operating with honesty, truthfulness and transparency in accordance to the highest ethical and corporate governance standards. Per our Code of Conduct, Cryoport will not tolerate the use by suppliers of forced labor in any form.
Data Privacy & Security
Cryoport uses an outside Center for Internet Security (CIS) assessment firm to evaluate our data security controls in an effort protect our businesses 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.
Our customers rely on Cryoport to securely and reliably deliver temperature-controlled supply chain solutions globally, including providing a secure online portal for order entry, tracking, condition monitoring and the retrieval of historic information. Protecting the privacy of our customers and vendors is essential to maintaining their trust, and we take a proactive approach to safeguard all data and ensure a secure environment.
With the increasing presence and sophistication of online threats, we must ensure continuous improvement to protect our business and our customers. We regularly review our technology, policies and practices to maintain compliance with all relevant regulations. We do not sell customers’ data to third parties. Additionally, Cryoport employees with a computer are required to complete an annual online training course on information security and data privacy. The course addresses a range of topics related to information security and data privacy, including awareness regarding social engineering and cybercrimes, protecting the workplace, and protecting data.
Code Of Ethics
Our Code of Ethical Business Conduct applies to our directors and all employees, including our chief executive officer and chief financial officer and is available on our website at cryoport.com on the “Investor Relations: Corporate Governance” page under the heading “Governance Documents.”
The Cryoport Code of Ethical Business Conduct serves as the foundation of our corporate integrity and compliance program. Our officers, directors, and managers are responsible for promoting the principles within the code and fostering a culture of ethical conduct. We regularly review and update the code to ensure it remains relevant and available to our global employees. The code covers a breadth of topics, including conflicts of interest, equal employment opportunity and anti-harassment, environmental compliance and sustainability, insider trading rules, and how to report violations of company policies.
Our commitment to doing the right thing depends on our employees’ being comfortable in reporting any suspected violations of law or unethical conduct, and our leaders’ abilities to address suspected violations promptly and with respect. Our global policy against retaliation encourages employees to come forward to report concerns in good faith. When a matter is reported to a manager or Human Resources, the concern is reviewed to determine whether it should be escalated to the Legal department. The legal department also has criteria for further escalation, if necessary, to legal department management. Every new hire is introduced to the code through training and orientation.
We develop and update these policies when we identify a need for employee clarification, the emergence of new laws or regulations, or other external factors. We routinely update the language in our policies, and how we present information, to ensure our employees understand the risks they face in their jobs, and steps they can take to mitigate those risks and report potential problems.
Our commitment to human rights is an important part of our Code of Ethical Business Conduct. We are committed to protecting and advancing human rights in our operations around the world. We pay fair wages and comply with wage laws in all the countries where we operate. We prohibit the use of child, compulsory or forced labor, and we share the zero-tolerance policies adopted by the United States and other governments against slavery and human trafficking. We prohibit the trafficking of persons for any purpose and trafficking-related activities, and we expect the same from our suppliers and vendors.
Cryoport Societal and Environmental Impact Statements
Examples of some of our positive societal and environmental impacts for 2022 can be seen in Fig. 5.
Our positive impacts for 2022 were based on the following:
Access to Patients
Our calculation of the number of additional patients that were able to receive therapies was based our success rate for shipments, which is higher than the average success rate in the cold chain markets of 80%, pursuant to Rodrigue, J-P (2020), The Geography of Transport Systems, Fifth Edition, New York: Routledge.
Patient Success & Satisfaction
Our calculation of the number of intended parents able to have successful cycles resulting the birth of a child is based on the weighted average chance of a live singleton birth per intended egg retrieval across women of all ages of 27.09% as reported in the 2020 Society for Assisted Reproductive Technology (SART) Clinic Summary Report (CSR).
Energy Saved – MVE Biological Solutions
Our calculation of energy reduction is based on the reduced energy consumption from MVE freezer use compared to the average energy consumed by operation of mechanical freezers, which we assumed to be 31.7 kWh/day based on product specifications from a mechanical freezer manufacturer.
Energy Saved – CRYOGENE
CRYOGENE contracted with an energy provider with carbon-free energy credits (EFEC). At least 35% of the power consumed for CRYOGENE is from emission-free resources. Our calculation of GHG emissions avoided is based on the output mission rates for GHG emissions from the EPA eGRID data (2021) for the Electric Reliability Council of Texas (ERCOT).