Reporting policy and justification of choices made
In this Report, DSM reports for the calendar year 2016. The company reports on its People, Planet and Profit information in such a Report on an annual basis. The previous DSM Integrated Annual Report was published on 1 March 2016.
In the Report by the Managing Board, DSM explains its vision and policy with respect to sustainability practices and reports on its activities in this field during 2016. In addition to disclosing data and developments in the categories of People, Planet and Profit, DSM also reports on the global societal megatrends that drive its strategy, its sustainability strategy, its sustainability governance framework, stakeholder engagement activities, and management approach on material topics. DSM proactively seeks out the views of its key stakeholders on issues of material importance to the company.
UN Global Compact
DSM has been a signatory to the UN Global Compact since 2007 and commits to annually report on progress in implementing the UN Global Compact’s 10 Principles in the areas of human rights, labor, the environment and anti-corruption. This Report is DSM’s Communication on Progress 2016, submitted to the UN Global Compact Office. DSM’s Code of Business Conduct, its Sustainability, Human Resources, and Safety, Health and Environment (SHE) policies, and its Supplier Sustainability Program are the foundations on which DSM applies the standards of the Global Compact.
DSM has also aligned its sustainability strategy with the Sustainable Development Goals (SDGs). DSM is familiar with the opportunities and responsibilities that the SDGs represent for DSM’s business, and while our mapping shows that we contribute to all of them, we have chosen to focus on the goals which most closely align with our strategic ambitions. In this report, we have started to build the SDGs into our reporting process, for example by mapping SDG reporting priorities in our value creation model, and our material topics.
Principles of the UN Global Compact1
DSM Code of Business Conduct and relevant page(s) in the Integrated Annual Report 2016
Support of human rights
Exclusion of human rights violation
Observance of the right to freedom of association
Abolition of all forms of forced labor
Abolition of child labor
Elimination of discrimination
Precautionary environmental protection
Specific commitment to environmental protection
Diffusion of environmentally friendly technologies
Measures to fight corruption
Global Reporting Initiative
DSM bases its sustainability reporting on international non-financial reporting guidelines. For this Report, the company used the Global Reporting Initiative (GRI) Standards. DSM is constantly (re-)assessing to what extent sustainability aspects become material to DSM and its stakeholders. In case specific indicators become relevant to the company’s sustainability performance, appropriate actions are taken that allow the necessary data to be collected so as to be able to disclose progress in the future. A detailed overview of how DSM reports according to the GRI Standards comprehensive indicators, including a reference to relevant sections in this Report, is provided on the company's Integrated Annual Report website.
Integrated Reporting Framework
DSM aligns with the recommendations of the International Integrated Reporting Council <IR> Framework where possible. The intention of the <IR> Framework is to provide additional guiding principles and content elements for an integrated report. Aligning with the framework allows DSM to better identify and communicate how it creates value for DSM’s stakeholders in People, Planet and Profit, as well as the interconnection between these three dimensions.
Selection of topics
The topics covered in this Report were selected on the basis of input from internal and external stakeholders and the related materiality analysis, which assessed the relevance and impact of selected topics for DSM and its various stakeholders. On the basis of the principle of materiality (using the GRI Standards), DSM distinguishes between topics whose importance warrants publication in this Report (relevant to both DSM and its stakeholders), and topics whose importance warrants publication on the company website only (topics important to either DSM or its stakeholders). DSM reports on a selection of its external recognition in External recognition and Review of business in 2016. Other examples of external recognition can be found on the company website.
The People, Planet and Brighter Living Solutions data in this Report cover all entities that belong to the scope of the Consolidated financial statements, provided that DSM also has operational control. As such, three small units have been excluded from the scope. Planet reporting covers manufacturing units where commercial production by DSM occurs.
Acquisitions and divestments
The HR data (People) for newly acquired companies are reported from the first full month after the acquisition date. The Safety, Health (People), Environment (Planet) and Brighter Living Solutions data for newly acquired companies are reported at the latest in the year following the first full year after acquisition, because these companies’ reporting procedures first have to be aligned with those of DSM. In the case of divestments, safety data are consolidated until the moment of divestment and planet data are reported to the last full year at DSM.
The progress on the key environmental performance indicators is evaluated and established on a yearly basis. Data on these indicators are collected bi-annually for DSM’s large and medium-sized sites. Small sites report annually. The data for the DSM sites are based on these sites’ own measurements and calculations, which are based on definitions, methods and procedures established at corporate level. The site managers of reporting units are responsible for the quality of the data. Data are collected based on measurements and calculations in the production processes, information from external parties (e.g. on waste and external energy) and estimates based on expert knowledge.
Reporting units have direct insight into their performance compared to previous years and are required to provide justifications for deviations above the threshold. For most parameters, the threshold is set at 10%. The year-on-year comparability of the data can be affected by changes in the portfolio as well as by improvements made in the measurement and recording systems at the various sites. Whenever impact is relevant, it is stated in the Report. Details for the individual sites as well as the methodology and calculations are published on the company website, together with an explanation of the definitions used.
People and HR data are collected per business group and consolidated at corporate level.
Brighter Living Solutions
In 2016, DSM changed the reporting of its sustainability as a growth driver KPI from ECO+ to Brighter Living Solutions to include People+, reflecting the company’s steering on the impact of both Planet and People. For a definition of Brighter Living Solutions, see 'Brighter Living Solutions' on page 22. DSM reports twice yearly the percentage of Brighter Living Solutions within its running business portfolio.
The sustainability assessments to support the qualification for Brighter Living Solutions (ECO+ and People+ consolidated) are made by internal Life Cycle Assessment (LCA) experts and reviewed using the four-eyes principles with at least one internal, independent senior LCA consultant. The financial data are validated with the Corporate Sustainability department and consolidated as DSM Brighter Living Solutions KPI performance and reviewed by Group Control & Accounting.