Key impacts, risks, and opportunities
We believe that economic success, sustainability and social acceptance are inextricably linked. Symrise’s corporate strategy is based on the three pillars of growth, efficiency and portfolio. It incorporates aspects of sustainability at all levels in order to enhance the company’s value over the long term and minimize risks.
With our business model, we help meet basic human needs for health, nutrition, care and well-being. At the same time, we consider the ways in which our company grows and is successful to be of vital importance. Many of the traditional production processes in our industry are energy-intensive, release potentially harmful emissions and consume precious natural resources. At the same time, if we want to deliver innovative and sustainable products, we are dependent on a new generation of well-educated employees as much as on rich biological diversity from which we can derive our inspiration and creative ideas.
We are convinced that only such an expanded view, one that goes beyond narrow corporate limits, helps to secure our long-term growth and to increase our efficiency while also enabling us to further develop our innovative and sustainable product portfolio. Therefore, the four pillars of our sustainability agenda, Footprint, Innovation, Sourcing and Care, form the foundations of our integrated corporate strategy. In these fields, we intend to make a concerted effort to reduce the negative impact of our business activities and to enhance our societal added value. In the process, we actively contribute to the achievement of the sustainable development goals. Using our updated materiality analysis, we have systematically assessed the impacts of our business activities in the reporting year within the context of sustainability and our stakeholders’ expectations (see also 102-46).
We have established a Group-wide risk management system to identify the rewards and risks that are associated with our sustainability challenges. This covers sustainability-relevant issues as a subcategory of nearly all other risk categories – from environmental and industry risks via procurement and product risks to operating risks. Rewards and risks, particularly those relating to climate change, water, forest, and biodiversity, are evaluated at least twice a year by the Sustainability Board over a horizon of more than six years (see also 201-2).
In addition, we view our sustainability efforts and communications as a tangible opportunity to ensure the growth of Symrise and to generate a competitive advantage. The decisive factors of influence in this connection are in part intensifying regulatory developments (e.g. in the areas of climate or human rights), the increasing specific requirements of our major customers in terms of the performance of our products in terms of sustainability as well as investment decisions of the capital markets, which depend to an ever greater degree on our core business’s orientation toward sustainability.
In particular, we regard the preservation of biodiversity as an important foundation for the growth of our business. Biological diversity is the basis for safe nutrition, while enabling and promoting good taste as well as health and well-being. As a result, it is at the core of our business model and is crucial to our growth opportunities (see also management approach to biodiversity). The topic of animal welfare is a second important growth factor. Increasing consumer awareness here has given rise to markets for products for which stringent standards for animal welfare exist and additional cost is accepted (see also management approach to animal welfare).
At the same time, our sustainability efforts help minimize risks that could jeopardize our growth. In particular, this involves risks that could arise from our globally networked supply chain. Specifically, a shortfall in the supply of important raw materials could occur as a result of the consequences of climate change or natural catastrophes. On the other hand, if risks to the reputation of our suppliers emerge from the potential disregard for environmental or social standards, this could have an impact on Symrise. Through our sustainable supplier management, we proactively ensure that these risks are minimized (see also management approach to procurement practices, supplier environmental assessment and supplier social assessment).
In the further professionalization of our sustainability management, we see significant opportunities to improve the efficiency of our business activities, while simultaneously reducing possible negative effects on humans and the environment. For example, energy costs have a material influence on our profitability and therefore our competitive position. Furthermore, we meet customer expectations and can create added value by helping our customers achieve their carbon goals (see also management approach to energy and emissions). We have had all of our German sites certified to the ISO 50001 standard for systematic energy management and are planning measures to increase our energy efficiency. Energy audits according to the regulations of the Energy Efficiency Directive (EED) were performed at our other European sites. Thanks to the support of our TPM teams, most of our other production sites have also been certified to environmental management system standards (ISO 14001). The teams regularly analyze manufacturing processes looking for opportunities to save energy or to increase process efficiency in a sustainable manner.
Moreover, increasing eco-efficiency in the area of waste and wastewater is another area in which we combine the reduction of our ecological footprint with efficiency gains for Symrise. With the continuous reduction in chemical oxygen demand in our wastewater, we not only mitigate the expense that arises with the cleaning of our wastewater in municipal sewage treatment plants, but also avoid process losses in production at Symrise (see also management approach to effluents and waste).
With regard to our employees, our efforts to ensure a safe and healthy workplace aim to reduce illness-related absences and to increase employee motivation (see management approach to occupational health and safety). Conversely, potential risks may arise here from a high accident and illness rate. In order to improve worldwide performance in the area of occupational health and safety, the concept of a zero-accident culture was introduced in 2017. Essential components of this program were special workshops on zero-accident culture for upper and midlevel managers as well as management safety visits for the first and second management level of the entire organization. The conduct of training to increase awareness of occupational safety is a personal target agreement for managers. In addition, there is a series of legally required annual training courses on health and safety, which is mandatory for every employee. As a result of these measures, our accident rate (MAQ*) was 4.3 in 2019 after 4.7 in 2017 and 4.1 in 2018. Since we assume that many of our measures will require a longer time horizon to have the desired impact, we have adjusted our original goal of MAQ < 2. We are now striving for a MAQ < 2.5 by 2020, while we would like to reach an industry leading MAQ of < 1.5 by 2025.
With the steadily growing demand for sustainable products, the growth opportunities Symrise seeks by focusing on innovative and sustainable products also improve.
We develop a customized sustainability concept for each of our strategic product groups. Sustainability itself is a strong driver of innovation: By complying with strict sustainability criteria in product development, we maximize the social and ecological added value of products and create value for customers and stakeholders. The “Product Sustainability Scorecard System” we have created makes an important contribution to the development of innovative and sustainable product solutions. The externally audited process makes it possible to recognize the environmental impacts of raw materials and products and to compile them in a scientifically sound analysis. The ten sustainability criteria include traceability, water consumption, the impact on biodiversity in the supply chain as well as the product’s biodegradability. As a result, we can transparently present the respective sustainability advantages of the products relative to conventional alternatives for our customers.
We develop our products primarily in the regions where they are sold. The different market requirements we address with this approach simultaneously also present us with challenges. For example, key sustainability topics and consumer preferences differ from region to region. Therefore, our segments consistently set different priorities for each region in order to offer tailored product solutions.
We have set ourselves ambitious goals and enacted corresponding measures for the continual integration of business and sustainability. We will only achieve sustainable growth if we implement our economic efforts in a proactive and responsible way. Our economic ambitions are therefore aligned with our integrated corporate strategy of goals and measures in keeping with the four pillars of our sustainability agenda.
Our commitment to sustainability pays off and is also positively evaluated by external organizations: In the spring of 2019, Symrise was again recognized with the ETHIBEL Sustainability Index (ESI) Excellence Europe. For seven years, Symrise has been a member of the index, which includes the shares of 200 European companies leading in corporate social responsibility (CSR). The assessment is based on analyses by the European sustainability rating agency VIGEO EIRIS.
In addition, since 2015, Symrise has ranked in the coveted A category by the leading US sustainability rating agency MSCI, which attests to its above-average sustainability performance. In its analysis, MSCI highlights the fact that Symrise is very committed to climate protection and pursues ambitious goals in this area.
It also praises our company’s good corporate governance and responsible handling of hazardous materials. The international rating agency SUSTAINALYTICS also continuously assesses the sustainability performance of Symrise – as the basis for investment and credit decisions across Europe by more than 200 financial service providers and institutional investors. Symrise is considered an “outperformer” in the industry – in terms of our sustainability performance, these analysts rank us 17th among 129 companies. Special mention is given to the performance of Symrise in the areas of environment and corporate governance as well as the sustainability reporting of our company.