The global community is facing numerous challenges that also affect our company and to which we are seeking answers. These challenges range from climate impact mitigation, resource scarcity, a growing global population and demographic change through to insufficient access to medicines for people in low- and middle-income countries. We are helping to find solutions to these issues and are continually working to sustainably shape technological progress for tomorrow. At the same time, we are working to become more resilient to potential risks.
Our approach: sustainable progress
Our ambition is to leverage science and technology to achieve lasting progress for mankind. For us, sustainable entrepreneurship and profitable growth go hand in hand. We can ensure our own future competitiveness only by creating value for society.
Responsible action is an integral part of our company culture. This also includes respecting the interests of our employees, customers and investors, as well as the community. For more than 350 years and across many generations, our company has been shaped and guided by strong values. Values that promote sustainability have always had a high priority – across all businesses.
Our innovative, top-quality products help us to resolve global challenges while securing our financial performance at the same time.
Safety and ethics matter just as much to us as business success. We mitigate ethical, economic and social risks as far as possible. We strive to keep our impact on the environment as low as possible, which is why safe production techniques, high environmental standards and strict quality management are a matter of course to us. Furthermore, we aim to strengthen our company by recruiting, developing and motivating talented employees. We want to set an example for ethical conduct.
We closely monitor new global trends and challenges. In order to clearly understand the complex nature of the expected changes, we make use of the so-called scenario technique, for example, which enables us to identify and incorporate aspects of strategic relevance. We also participate in dialogues and initiatives, share lessons learned and best practices with other organizations in our industry and assess media and news coverage. This allows us to minimize risks while also leveraging new business opportunities.
Defining a clear strategic direction
The rapidly growing challenges relating to society and the environment require a clear perspective for the coming years. That is why we are embedding the topic of sustainability into our Group strategy as an essential component. In 2020, we formulated new, strategic sustainability goals, which build on what we have achieved in recent years. Through our business activities, we want to be economically successful and create value for society. At the same time, we endeavor to avoid generating subsequent costs for society.
In order to firmly embed sustainability into our company, we have defined seven focus areas, within which we are currently implementing numerous initiatives and projects and will continue to do so in the future. We use various internal key figures to record and evaluate progress. Additionally, the company is planning to also link the long-term variable compensation of the Executive Board from 2022 onward with the progress made toward achieving the company’s sustainability goals.
In order to assess the sustainability of our products, technologies and business activities, we have developed Sustainable Business Value (SBV), a tool that enables us to evaluate the positive and negative impacts of our activities on society along our entire value chain. In addition to ESG (Environmental, Social, Governance) parameters, SBV also incorporates economic and ethical aspects as well as digitalization and the benefit of the product itself. This gives rise to a monetary value that quantifies the societal benefits a product offers, for example, which helps us drive sustainability across our business operations and position ourselves for future success.
How we steer sustainability
Our Executive Board, which has overarching responsibility for our sustainability strategy, has approved our three strategic goals.
The Group Corporate Sustainability unit, which is responsible for crafting and shaping the sustainability strategy, regularly informs the Executive Board about the progress made and the need for action. This unit is also part of our Group Corporate Affairs function, which reports to the Chairman of the Executive Board. Group Corporate Sustainability is also responsible for the outcomes of the Corporate Sustainability Council. Having a broader scope of tasks, the Corporate Sustainability Council replaced the previous Corporate Responsibility Committee. As was the case with the previous committee, the new council consists of representatives from our business sectors and from key Group functions, such as Procurement, HR and Environment. However, in the future, its composition will reflect regional aspects to a greater extent and include council members from the regions. The Corporate Sustainability Committee, which steers and monitors the implementation of the sustainability strategy, recommends corresponding initiatives to the Executive Board. The council uses the results of our regularly conducted materiality analyses and the comparison with the individual business strategies to adjust the sustainability strategy throughout the Group. In addition, it ensures that the initiatives of our various business sectors, Group functions and subsidiaries align with our Group-wide Sustainability strategy. The measures adopted by the Corporate Sustainability Council are implemented by our line managers as well as by interdisciplinary project teams.
In 2020, the Corporate Responsibility Committee met twice via video conference. The central topics were, firstly, the development of the new sustainability strategy, secondly, the Sustainable Business Value method to measure the effectiveness of sustainability activities and thirdly, the development of new climate impact mitigation goals. The participants also discussed supply chain legislation, human rights and animal welfare. In 2021, the new Corporate Sustainability Council will meet and thus replace the Corporate Responsibility Committee on the operating side as well.