Sustainability statements

Sustainability statements – People

 
2017
2016
2015
2014
2013
      
Total workforce
21,054
20,786
20,796
21,351
23,485
Female/male ratio
27/73
27/73
28/72
27/73
26/74
% by age category1
     
<26 years
6
6
5
6
6
26-35 years
26
25
26
25
24
36-45 years
28
28
30
29
30
46-55 years
25
27
27
28
28
>55
15
14
12
12
12
% non-Dutch1
     
Executives
56
53
49
51
50
Management
70
67
68
64
65
Other
85
81
82
77
78
% female1
     
Executives
17
15
15
12
11
Management
27
26
27
24
23
Other
28
29
29
28
27
      
% executive hires1
     
Non-Dutch
95
88
79
88
75
Female
43
13
38
25
23
% new hires by region1
     
Netherlands
11
5
11
11
10
Rest of Europe
26
23
22
19
23
North America
20
27
16
26
26
China
16
20
18
18
16
Rest of Asia-Pacific
11
8
13
18
19
Rest of the world
15
17
22
8
6
      
Total number new hires (excluding acquisitions)
2,203
1,730
2,171
1,997
1,834
Acquisitions
247
46
1810
169
199
      
Outflow of employees
     
Voluntary resignations
766
585
1,153
1,011
1,043
Dismissed
895
781
647
411
224
Reorganization
157
208
230
221
408
Retirements
112
143
170
167
259
Deceased
13
12
12
11
34
      
Total outflow (excluding divestments)
1,943
1,729
2,212
1,821
1,968
Divestments
42
57
2,324
2,479
78
      
Voluntary resignations (% total workforce)
4.1
2.8
5.5
4.7
4.4
Total resignations (% total workforce)
10.2
8.3
10.6
8.5
8.4
      
Development training in hours per employee
19
25
29
25
25
      
Net sales per employee (x €1,000)
420
386
374
409
401
      
Safety
     
Frequency Index of Recordable Injuries (per 100 DSM employees and contractor employees)
0.36
0.33
0.41
0.47
0.38

1 For the indexes based on age, nationalities, gender, inflow and outflow, the companies that are not integrated into the HR systems (approximately 10% of the total workforce) are not taken into account.

Sustainability statements – Brighter Living Solutions

 
2017
2016
2015
2014
2013
      
Brighter Living Solutions sales as % of net sales
62
631
-
-
-

1 2016 was the first year of reporting; consequently, there are no comparative figures for the previous years.

Sustainability statements − Planet

 
2017
2016
20151
20141
20131
      
Energy and greenhouse gases
     
Energy use (in petajoules)
23.6
22.6
20.9
39.1
41.1
Energy efficiency improvement (in %) versus 2015
3
22
   
Greenhouse-gas emissions scope 1 + 2, location-based
(in CO2 equivalents x million tons)
1.6
1.5
1.1
4.2
4.2
Greenhouse-gas emissions scope 1 + 2, market-based
(in CO2 equivalents x million tons)
1.5
1.42
   
      
Emissions to air
     
Volatile Organic Compounds (x 1,000 tons)
6.6
8.9
3.1
4.2
4.3
Nitrogen oxide (NOx) (x 1,000 tons)
0.7
0.8
0.4
1.5
1.6
Sulfur dioxide (SO2) (x 1,000 tons)
0.28
0.33
0.04
0.08
0.07
      
Discharges to water and landfill
     
Chemical Oxygen Demand discharges to surface waters
(x 1,000 tons)
2.5
2.4
2.1
3.9
4.8
Waste recycled (in %)
84
832
   
(Landfilling) Non-hazardous waste (x 1,000 tons)
20
17.5
12.9
18.2
22.7
      
Water
     
Water consumption (x million m3)
23
222
   
Water use (x million m3)
114
104
101
118
150
      
Raw materials
     
Renewable raw materials (in %)
15.4
16.5
16
10.8
9.9
      
Biodiversity
     
Sites in or adjacent to protected areas (in %)
61
60
58
52
40
      
Fines (in €)
128,400
27,900
35,600
62,500
62,300
Non-monetary sanctions
4
2
5
4
4
Environmental incidents
101
1093
257
297
261
Environmental complaints
35
21
31
56
42

1 DSM completed several material acquisitions and divestments over the period 2013-2015. The figures presented here are not restated for the effect of this activity and so do not accurately represent our environmental trends. For year on year comparison, please see 2016-2017 data. For more information on our environmental footprint please visit the company website.

2 2016 was the first year of reporting; consequently, there are no comparative figures for the previous years.

3 As of 2016, the Loss of Primary Containment of non-hazardous substances is no longer included in this number.

This report has been prepared in accordance with the GRI Standards: Comprehensive option. The GRI content index is provided on the company website.

DSM aligns with the recommendations of the International Integrated Reporting Council (IIRC) Framework where possible.

Stakeholder Engagement

In the following pages, we present some examples of how we engage with external stakeholders, including the partners in our value chain. For an overview of all our stakeholders, please see Stakeholders. For information on how we engage with our employees, see Workforce engagement in 'People'.

Customers

Customers are the driving force behind our business. They are our most important partners for realizing both our strategic growth ambitions and our vision to improve the lives of people today and for generations to come. For more information on our businesses and our relationships with customers, see Review of business.

Providing value to customers

Although our bright science-driven solutions are not always immediately visible to consumers, they are of strategic importance to our customers and recognized as such. Our solutions enable our customers to differentiate and solve consumer needs. Our unique products and innovations not only ensure a strong loyalty from our customers, they are also driving our growth.

To bring value to our customers, we not only focus on the products we bring today; we also deepen our understanding of the total ecosystem in which our customers operate to anticipate future consumer needs. Through our consumer and customer insights, we aim to become a stronger strategic partner for our customers and to increase their loyalty. It is through this customer-centric approach that we become a more valued strategic partner.

For example, through this approach we have become a valued strategic partner of carpet company Mohawk. Together Mohawk and DSM-Niaga won the Surface Innovation Award at the Floor Surfaces Trade Show in Las Vegas (Nevada, USA), where Mohawk launched the first fully recyclable carpet based on our technology. By supporting development and commercialization of 100% recyclable carpet, DSM-Niaga helped Mohawk address society's need for more responsible consumption and production based on the principles of the circular economy.

Customer loyalty

Net Promotor Score (NPS) is our key metric to measure customer loyalty. Our ever-increasing awareness around customer loyalty has ensured that all our business groups have in place a robust NPS cycle which provides valuable insight. In 2017, our NPS score reached 39 (2016: 38).

Our business groups create improvement programs to increase customer loyalty based on their feedback. DSM Feedlot Tour is a strong example of a program to address this. It is a circuit of annual technical meetings occurring during the dry season in Brazil. At these gatherings, DSM shares knowledge and training on the latest technology in animal nutrition worldwide. These Feedlot Tours are organized together with our customers, and we actively demonstrate the impact of our solutions, from the dietary ingredients and additives to the zootechnical and economic results. Partners like the economic research center, CEPEA, at ESALQ (Luiz de Queiroz College of Agriculture, University of São Paulo, Brazil) support us.

A key driver to increase customer loyalty is the ease of doing business with DSM. This requires a genuinely customer-centric approach. In many business groups, we are deepening our understanding of customer journeys and customer touchpoints. These outcomes are used to improve our online and offline customer interactions and will result in easier and stronger interaction. The 24/7 EngineerConnect program developed by DSM Engineering Plastics was created to make it easier to do business with DSM. Engineers in the automotive industry strive for faster time-to-market and first-time-right products and solutions. They want to understand in an early stage of development what the available possibilities and solutions might be. 24/7 EngineerConnect is a digital platform that gives our customers' engineers access to the latest innovations, concepts, materials and technology. Through artificial intelligence and our extensive knowledge, they can connect with the right expert at the right time and collaborate on new design projects at the earliest stage.

Personal interaction with our customers is important and our bright minds and skilled professionals support our customers to match their needs with the solutions we offer. Therefore, we put continuous effort in educating and training our commercial crew. In 2017, many Marketing & Sales (M&S) colleagues from all business groups were certified on the key principles in M&S. Through an actionable and inspirational blended learning program, co-developed with Vlerick Business School (Gent, Belgium), M&S professionals learn the essentials of customer-centricity. This allows us to better understand the needs of our customers and their consumers, and ensure DSM keeps developing relevant solutions.

Brand value

The combination of a true customer understanding and a smooth customer interaction defines the success of our customer-centric approach. Our strong brand reflects this and articulates what DSM stands for: 'Bright Science. Brighter Living.' These values drive our customer relationships and form the basis of our growth.

We consider our brand an important business asset and we aspire to be a company with a reputation for providing innovative and sustainable solutions that fulfill the needs of our market segments and society. DSM's brand value as assessed by Brand Finance has grown considerably over the last five years and for 2017 was valued at €807 million. The increase versus prior year was primarily attributable to strong revenues and forecasts, based on improving financial results.

Brand Value

Suppliers

We engage with approximately 34,000 suppliers through our Supplier Sustainability Program (SSP) to strengthen our supply chain, reduce risk, lower cost and create value for society and our company. Annual supplier sustainability plans and sustainability roadmaps are used to gain insights. The Supplier Sustainability Plan 2017 addressed a number of relevant topics for the materiality matrix: 'Resource scarcity / Circular & bio-based economy', 'Responsible business practices' and 'Climate change & renewable energy'.

DSM Supplier Sustainability Program

supplier sustainability Program

Supplier Sustainability Program strategy

Compliance and Solutions are the two main elements of DSM's SSP. Insights gathered in the compliance program enabled us to very clearly define how we choose to do business with our suppliers. We have invited suppliers to contribute to our competitiveness in areas of sustainability, innovation, business growth, security of supply, new business models and strategic alliances. This occurs via our 'better business' projects and other initiatives.

Our assessment of the maturity level of our SSP was conducted in 2016 and addressed four dimensions: Strategy/Plan; Supply Risk & Opportunity; People, Infrastructure & Measurements; and Processes. Those insights were used to develop our sourcing strategy and position to meet the ambition level for 2020.

Internal skills and capabilities

Internal capability-building regarding supplier sustainability continued in 2017. We have shifted the focus from delivering training toward providing hands-on support and promoting peer learning. The peer learnings offer practical experience and knowledge-sharing on integrating sustainability into the daily work of sourcing professionals. The Strategic Sourcing Methodology Award and Best Supplier Innovation Award highlight sustainability as a key topic in selecting the winners.

Collaboration

We work with external partners to enhance collaboration in the supply chain such as the Roundtable for Sustainable Palm Oil (RSPO) and Together for Sustainability (TfS).

Our exposure to palm oil is very limited. DSM Nutritional Products is a member of RSPO due to the potential risks to the environment, human rights issues and labor practices in the palm oil supply chain. DSM Food Specialties has improved the sustainability of their sourcing of palm-derived glycerin. For more information, see 'Better business' in this chapter.

We have 'Friends of the Sea' certification for over 96% of our fish oil purchases. This helps ensure that the fisheries involved in providing fish oil for the production of our omega-3 product range are sustainable.

Compliance

Our approach to compliance is defined in our Supplier Code of Conduct (SCoC). Through assessments and audits, we check that suppliers act in compliance with external and internal norms and values. Where a risk or breach occurs, DSM works with suppliers to define and execute an improvement plan. If non-compliance still persists, DSM may choose to terminate the relationship with the supplier. In 2017, 96% of DSM's spend was covered by the SCoC.

Supplier Sustainability Program results

2017
2016
 
Target
Achieved
Leverage TfS pool1
Target
Achieved
Leverage TfS pool1
Spend coverage SCoC
95%
96%
-
91%
96%
-
Sustainability assessments
110
68
1,230
200
200
996
Sustainability audits
21
19
132
20
20
105
Quality audits
-
343
-
-
241
-
Solutions
35
62
-
36
50
-

1 Total number of DSM suppliers assessed by TfS members.

We focus on approximately 1,000 critical suppliers, defined as those that provide critical components, are located in potentially high-risk countries, supply a high volume of products or services, are non-substitutable, or have the potential to create shared value in areas of innovation and sustainability.

Since 2015, we have been actively collaborating with TfS. Founded in 2011, TfS now has 20 members and aims to develop and implement a global audit program to assess and improve sustainability practices within the chemical industry's supply chain. TfS works with EcoVadis, a recognized provider of CSR ratings, to implement the program. The EcoVadis methodology is aligned with international standards and supervised by a scientific committee. This collaboration gives DSM access to assessments and audits which are executed by other TfS members and shared on the TfS platform. It enabled DSM to screen approximately 4,700 suppliers in 2017, resulting in 1.2% being identified as 'suppliers at risk'. In line with internal follow-up guidelines, these will be further investigated by means of an on-site audit of their facilities so as to ensure that improvement plans will be made. DSM was able to screen 10% of new suppliers with regard to their environmental performance, impact on society, human rights and labor practices. The average EcoVadis sustainability performance score of DSM's supply base was 54 in 2017, the same as in 2016. The average of the supplier performance level indicates that our suppliers are engaged with sustainability.

The collective (potential) supply base of the TfS members has been rated by 8,962 EcoVadis assessments and 1,187 TfS audits. In total, 1,794 sustainability assessments were shared among TfS members and 441 new TfS audit reports were received by the initiative.

Better business

While compliance remains the cornerstone for achieving a sustainable supply base, procurement activities will increasingly focus on so-called 'better business'.

As part of our drive to foster better business through our supplier solution projects, DSM's Sourcing organization engages in proactive dialogue with suppliers in order to move the business agenda forward on topics such as climate change, food and nutrition security, health, and the circular economy. In this context, DSM Sourcing pursues initiatives to create joint value, awareness and engagement using similar drivers to those in our Brighter Living Solutions methodology.

We continued to engage in joint initiatives with suppliers that led to environmental benefits in the value chain. These included in packaging (e.g. the switch to fully recyclable fiber drum solutions) and logistics (e.g. the collaboration platform 'Biceps' in marine transport) resulting in significant reductions in CO2 emissions. Via the CO2 Emission Reduction Initiative, the physical distribution team investigates suppliers' footprints in road transportation, marine, packaging and, as of 2016, also air transportation to explore opportunities for improvement. This is a continuation of the Green Tender Initiative that began in 2012 with the aim of achieving a 20% reduction per unit of measurement in emissions associated with logistics and packaging. Since 2012, over 47% of the attainable global spend on physical distribution has been covered by the Green Tender Initiative. The cumulative CO2 emission reduction compared to 2010 reached 18% per unit of measurement at the end of 2016, the latest reporting period.

In Emmen (Netherlands), a project was executed to improve Hands on tool time (Hott). This project started by identifying where time is lost in the work permit process. Based on the outcome of this, together with the local maintenance department, a new work-permit process and tool were implemented. This project resulted in a 40% reduction in preparation time for work permits, an 80% reduction in permit mistakes and reduced waiting times by one third.

DSM Food Specialties' purchasing team continued to work on replacing palm-derived glycerin with glycerin from more sustainable sources. Working closely with their suppliers, DSM succeeded in switching to a number of more sustainable products in 2017. In Asia, we switched to a palm-derived glycerin with RSPO mass balance certification, replacing a non-sustainable version. Meanwhile, operations in the US successfully switched altogether from palm-derived glycerin to glycerin derived from rapeseed (also called canola).

Investors

DSM actively maintains contact with current and potential shareholders of DSM and with analysts who advise shareholders. DSM provides quality information to investors and analysts about developments at DSM, ensuring that relevant information is equally and simultaneously provided and accessible to all interested parties.

Relevant information is made available through annual and quarterly reports, press releases, presentations to investors and the company website. In addition, DSM organizes analyst conferences, regular road shows for investors and conference calls. Any explanations and discussions are based on information that is already in the public domain. DSM engaged with our investors and their representatives on topics such as the SDGs, climate change, sustainability in supply chain management, natural and social capital, and responsible taxation.

In June, we hosted an Environmental, Social and Governance (ESG) seminar for investors at the Brightlands Chemelot Campus in Sittard-Geleen (Netherlands), providing insights into DSM's ESG performance and our ambitious targets and initiatives.

In September, an Investor Day was hosted in the Netherlands, with a visit to DSM's new biotechnology center in Delft and a conference in The Hague (Netherlands) in which DSM gave an overview of the status of the implementation and progress of Strategy 2018. Special attention was given to the growth profile and aspirations of the Nutrition and Materials businesses.

Scientific Research Institutions

DSM provides funding and shares knowledge, research and facilities with renowned research institutions.

DSM is one of the founding partners of EIT FOOD, which is one of the six European Knowledge and Innovation Communities (KICs) of the European Institute of Innovation and Technology (EIT). The aim of EIT FOOD is to transform the food ecosystem. By connecting consumers with businesses, start-ups, researchers and students from around Europe, EIT FOOD supports innovative and economically sustainable initiatives which improve health, access to quality food, and our environment.

DSM Nutritional Products has broadened its successful collaboration with the Biomedical Sciences Research Institute at the University of Ulster, Coleraine (United Kingdom). This collaboration focuses on understanding the role of vitamin B2 in hypertension in genetically predisposed subjects. The results so far indicate that optimizing this vitamin's level in the subjects shows promise for managing their high blood pressure.

We are a founding member of the world-class nanotechnology center at MIT in Boston (Massachusetts, USA). Called 'MIT.nano', the center will provide nano research facilities to MIT researchers and students, as well as to industrial partners like us. Nanotechnology drives advances across many of our areas of interest, like solar energy and energy storage. We expect that the facility will be ready to move into as of June 2018.

NGOs

DSM works with NGOs and civil society to work towards solutions for the world's societal challenges.

DSM sent a delegation of 23 young professionals, representing all business groups and all regions, to the One Young World Summit in Bogotá (Colombia). This global platform brings together the brightest young leaders from companies, NGOs and academia, empowering them to formulate and share innovative solutions to the world's most pressing issues such as malnutrition and climate change. On their return, the delegates champion local sustainability initiatives, including coordinating our local Earth Day activities.

The Vocational Educational Center ('Centro Educacional Assistencial Profissionalizante', CEAP) contributes to educational development in Brazil. Over 6,000 teenagers have already benefitted from educational and vocational programs. DSM's partnership with CEAP aims to make a positive contribution to these teenagers' lives through more prepared and qualified trainings.

In China, we continue to engage with a number of NGOs such as World Wildlife Fund, World Vision China and the Climate Group on topics such as climate change, renewable energy and nutrition improvement. We also started engaging with the China National Institution of Standardization on green product design and life cycle assessment.

In Japan, we hosted the DSM Environmental Forum with guests from local universities, the UN Environment Programme - Finance Initiative, and industry representatives. The event was open to the public and included a screening of the National Geographic documentary 'Before the Flood' in Tokyo.

Local communities

DSM engages in the communities in which we operate on topics that are locally relevant.

In North America, we worked with the Seafood Nutrition Partnership to develop a community education and awareness platform on the benefits of eating seafood, and on the role of omega-3 in healthy diets.

We engaged in several events, together with the US Chamber of Commerce Foundation on food security and the circular economy, and the Diversity Council to highlight issues relating to gender, race, age and handicap inclusion and diversity.

In Brazil, we ran several projects to reach out to schools and communities. These projects provided opportunities for local students to learn about the job market, educate teachers on and provide training materials about topics like environment, health and work, and to educate communities on the consumption of natural resources and electricity.

Governments

Our engagements with governments are increasingly important considering our commitment to supporting the Paris Agreement and the Sustainable Development Goals.

We are actively involved in the EU's Horizon2020 Framework Programme and are participating in a variety of projects ranging from bio-based feedstock for polymers, process control, product safety and various Marie Curie training networks.

In China, our CEO Feike Sijbesma engaged with government officials, thought leaders and business leaders on topics including the Chinese economy, climate change, carbon trading and pricing, and renewable energy.

Management approach for material topics

In the following tables, we elaborate on the material topics defined in the materiality matrix (see Materiality Changes in 2017) and describe how we manage these topics.

Society

Health & wellness
Management approach
Relevant sections
The global population is growing and aging. People are living longer. Consumer preferences are shifting toward healthier diets including food perceived as natural. At the same time, there are an increasing number of people who are overweight/obese, which is driving higher levels of noncommunicable disease like diabetes. Businesses are expected to provide safe workplaces. Health and safety issues at home or in the workplace have detrimental effects on individuals, businesses and the rest of society. This topic aligns with SDG 3 (Good Health and Well-being).
Health and wellness is a key focus for DSM. Our Nutrition strategy targets health and well-being, including products addressing sugar and salt levels. Our EBA Biomedical works with the medical industry to provide products that improve health and quality of life and combat disease. Through our Materials strategy, we focus on the elimination of hazardous substances in our supply chain, and offer products that are safer to use. We strive to offer our staff a safe and healthy workplace.
Malnutrition & nutrition security
Management approach
Relevant sections
The cost of malnutrition to society is vast. The impact of undernutrition on health and development affects all of society. There are many people who have an insufficient intake of micronutrients (vitamins and minerals) and cannot access food that is both calorifically and nutritionally sufficient to foster health and well-being. This topic aligns with SDG 2 (Zero Hunger).
DSM works closely in partnerships with UN agencies, governments and NGOs to address the quality and availability of the food basket in the developing world. Our Nutrition cluster provides nutrition and food solutions that address both emerging and developed markets.
Emerging economies
Management approach
Relevant sections
The emerging economies include what are referred to as the 'BRIC' countries, as well as other economies such as those of South East Asia, Latin America and Africa. These continue to show population and economic growth. We also see increasing urbanization and growing demand for energy, infrastructure and discretionary items.
DSM’s Strategy 2018: Driving Profitable Growth is central to the management of our regional approach and footprint. Our regional footprint means we are locally represented and understand local dynamics. We manage our global supply chain through our Supplier Sustainability Program and Human Rights Policy.
Geopolitical tensions & inequalities
Management approach
Relevant sections
Recent political events, such as elections and referenda, and other events, such as (the threat of) terrorist acts, around the world show the increasing role of tension and inequality on global stability. These tensions have the potential to delay or derail our efforts towards achieving the SDGs.
We address the potential impact of this topic through stakeholder engagement activities, such as the World Economic Forum (WEF) and the UN Global Compact (UNGC). Corporate Risk Management also monitors developments in this area.

Environment

Climate change & renewable energy
Management approach
Relevant sections
It is widely accepted that human activity is responsible for climate change. Recent events, such as repeated coral bleaching, highlight that we need to take this topic seriously. The Paris Agreement will set the regulatory framework within which society needs to navigate to achieve a less than 2°C average temperature increase. We see tackling climate change as both a responsibility and an opportunity for businesses that are prepared to embrace it. Renewable energy forms an integral part of this topic to contribute to a low-carbon future. This topic aligns with SDG 7 (Affordable and Clean Energy) and SDG 13 (Climate Action).
We manage this topic by reducing our own carbon footprint. This is done via a range of initiatives, including increasing our use of renewable energy (our Responsible Care Plan identifies the key metrics that influence this topic); enabling the low-carbon economy through innovative solutions in our value chain (our Materials and Advanced Solar businesses offer solutions that are lighter, more durable, better-performing and have lower carbon footprints); and advocating action on climate by engaging with stakeholder groups and climate advocates such as UNGC, the Carbon Pricing Leadership Coalition (CPLC), RE100 and the Dutch Sustainable Growth Coalition. We publicly disclose our impact and strategy through, among others, CDP.
Resource scarcity / Circular & bio-based economy
Management approach
Relevant sections
The circular economy is one that is restorative by design. We include in this topic the bio-based and sharing economies, which help to address growing resource scarcity. We see opportunities in product and system design, and to investigate lower-impact business models, including sharing models that highlight reusability, renewability and recyclability. This topic aligns with SDG 12 (Responsible Consumption and Production).
The circular and bio-based economy is identified as one of DSM's sustainable growth areas and plays a central role as a business driver. This topic is a key driver for the strategy and portfolio of, among others, our Materials business, our EBA DSM Bio-based Products & Services and our joint venture, DSM-Niaga. We engage with likeminded partners on this topic such as the Ellen MacArthur Foundation and Circle Economy.
Water security
Management approach
Relevant sections
Water is a global issue that has local impact and is growing in importance to society. Many areas of the world already face water scarcity and water pollution issues, and the impact of climate change will only make this worse. Water availability and water quality are issues that impact on industry and society at large. Water security is an operational and reputational business risk for companies, including DSM.
We are committed to the responsible use of water resources. Our approach to water is guided by our Responsible Care Plan, and addresses water from a regional perspective. Our management approach focuses our resources on regions of water scarcity and sites that have a relatively high groundwater consumption or waste water discharge. Through this risk-based approach, we ensure that appropriate measures are taken where they are needed most. DSM is a signatory to the UN CEO Water mandate. We were awarded an A-rating for our policy and performance on water by CDP. We address water in our supply chain via the Supplier Sustainability Program.
Sustainable food systems
Management approach
Relevant sections
The growing global population is placing increasing pressure on food systems to produce larger quantities of food, and food that is more nutritious. These food systems place pressure on, and are under pressure from, the environment. New and sustainable food systems are needed to provide a reliable food supply for society.
DSM addresses food systems through our portfolio of Animal Nutrition & Health. We explore new opportunities in sustainable proteins such as our Clean Cow project, the Proteins of the Future project (e.g. CanolaPRO™), and the Green Ocean partnership. DSM Food Specialties provides innovative food ingredient and packaging solutions that address food waste through extended shelf life and more efficient processing. We are a founding member of FReSH where we contribute to its aim to transform global food systems.
Biodiversity
Management approach
Relevant sections
Biodiversity refers to the variety and variability of life on earth and is an important condition for a sustainable planet. Biodiversity supports relevant ecosystem services that we require, such as food, water and clean air.
Biodiversity is a locally relevant issue that potentially impacts on our operational locations. The DSM Responsible Care Plan defines how we monitor and assess the impact of our operations on these locations. We support the ambitions of the Convention on Biological Diversity and we continue to explore the role the Natural Capital Protocol can play in supporting our decision making. Our position paper on Biodiversity can be found on the company website.

Business Enablers

Open innovation
Management approach
Relevant sections
Open innovation encourages us to look beyond our own borders for ideas and knowledge, and enables us to pool capabilities and resources with others. Companies that embrace open innovation typically grow faster and generate more sales. Open Innovation and new technologies will help us deliver on the SDGs.
Innovation is a key growth driver in Strategy 2018: Driving Profitable Growth. We collaborate with our suppliers, customers and other value chain partners to create new solutions in a collaborative way. We employ partnerships, funding and crowd sourcing to foster open innovation. In 2017, the Bright Minds Challenge drew on the knowledge and resources of scientists around the world to address the challenges of scalable renewable energy solutions, and together with our partners, we supported the scale-up of the three winning solutions.
Careers & employment
Management approach
Relevant sections
Employees are one of the most important stakeholder groups for a company, and careers and employment are an important topic to companies and their stakeholders. Employees seek rewarding career opportunities and a healthy work-life balance. They actively seek companies, and engage with employers, that share their values.
Our HR strategy and policies define how we find, retain and reward our employees. We monitor trends in careers and employment to ensure that our organization is able to adapt to the challenges that we face, such as the role of digitization, and the global footprint of our operations and value chains. We apply the International Labour Standards of the ILO.
Advocacy & stakeholder engagement
Management approach
Relevant sections
Companies are playing an increasing role in contributing to the SDGs. Business leaders are urged to be advocates on issues that are important to their business activities. Companies should engage with internal and external stakeholders to understand key issues and the positions they should take.
DSM is a vocal advocate on issues relating to Climate and energy, Circular and bio-based economy and nutrition as we believe these are important sustainability challenges which we are uniquely positioned to influence. We actively manage our sustainability profile and reputation, and ensure that we take responsibility for our own operations.
Trade barriers
Management approach
Relevant sections
This topic is closely linked to 'Geopolitical tensions & inequalities'. It needs specific attention due to the potential impact of trade barriers on our business, such as trade controls, sanctions and embargoes, restrictions on chemicals, and technology.
The DSM Code of Business Conduct is central to our approach on this topic. In our supply chain, the Supplier Code of Conduct and our Supplier Sustainability Program define our approach. Trade Control Compliance is managed through our standard business processes and practices.
Digital transformation
Management approach
Relevant sections
Digitization is transforming the world we live in and the way we do business. The rise (and potential fall) of cryptocurrencies, mobility, social media and the sheer scale of data production are changing the landscape in which we operate. We see the influence of digital transformation on business especially in the areas of manufacturing, marketing and sales, and careers and employment. Digital transformation may also disrupt many of our end-markets, from medical to automotive.
Global shifts and digital transformation are identified in Strategy 2018: Driving Profitable Growth as one of the megatrends to which we are responding. We are piloting big data-based approaches in business applications and continue to develop data science competences within our R&D and IT disciplines. Our Information Security Office and Privacy Policy guide our approach towards the security of information assets.

Governance

Responsible business practices
Management approach
Relevant sections
Responsible business practices now includes 'Taxation', and 'Transparency and reporting'. Companies such as ours are expected to do business in a responsible way. This topic covers a wide range of sub-topics including taxation; corporate governance; human rights; labor policies; safety, health and environment (SHE); anti-bribery and corruption; and privacy.
We take our responsibilities as a business seriously. Our approach is guided by the Code of Business Conduct, and in the supply chain, by the Supplier Code of Conduct and Supplier Sustainability Program. Our human rights policy, HR policies and other policies cover the People-related aspects of this topic. Our tax position is consistent with the normal course of our business operations and reflects our corporate strategy as well as the geographic spread of our activities. Through this report, and our public statements on the company website, we provide transparency in our reporting. Our position paper on Taxation can be found on the company website.
Product & food safety
Management approach
Relevant sections
The importance of product and food safety can be seen through the impact of poor safety standards on employees and consumers. Poor product and food safety can cause injury or even death.
We address the importance of product and food safety through the Supplier Sustainability Program and our approach to Product Stewardship. Our business processes require us to have practices in place that address quality through the production, handling, preparation, storage and use of our solutions.
Bioethics
Management approach
Relevant sections
Biotechnology has a strong role to play to provide products and solutions that will address growing and aging populations, and resource scarcity. At the same time, biotechnology, such as genetic modification, is viewed with suspicion and concern by some sections of the population. It is important to address these concerns ethically and openly.
We manage this topic through our consultations with relevant scientific organizations, industry, NGOs and governments. We use genetically modified micro-organisms (GMMs) in the production process of some of our products, however we do not sell GMMs or products containing GMMs. All GMMs are contained within our production processes. Our position paper on Biotechnology can be found on the company website.
Product Stewardship
Management approach
Relevant sections
Adding Product Stewardship to our Materiality Matrix is a reflection of the increasing expectations of society that companies take responsibility for their products throughout the product lifetime. Inherent in this is our responsibility for the hazards presented by our products and ensuring they are managed in a responsible way.
Our Product Stewardship network manages regulatory issues relating to Product Stewardship and actively monitors and participates in discussions relating to this topic. We continually update our inventory of Substances of (Very) High Concern within DSM based on the latest information with the ultimate goal of phasing out the use of toxic chemicals throughout our value chains where possible. For all our materials we conduct robust scientific risk assessments of the products and production processes to ensure that we source, make and distribute them in a safe way.

Philanthropy and sponsorships

We are recognized for our efforts in our sustainable growth areas of nutrition, climate and energy, and circular and bio-based economy. On top of this, we also engage in philanthropic and sponsorship activities. In 2017, we donated more than €5.7 million to a range of initiatives. As outlined in our Code of Business Conduct, we do not make political donations. The full text of the Code can be found on the company website.

Asia-Pacific

The Bright Experience event in China was launched together with the World Food Programme to raise awareness and funds to help solve the issue of child hunger and malnutrition. DSM China has been part of the event since it was first introduced in 2007. With this year's theme 'Solve Hunger, Bright Experience', the event attracted DSM employees and their families, as well as partners, from 15 sites in 14 cities including Shanghai and Beijing.

Now in its second year, POSHAN, the CSR program in the state of Maharashtra (India) has reached in total 2.3 million women to communicate the importance of good nutrition for mothers of child-bearing age. DSM is the partner in this program supporting the offline distribution of content. In Pune (India), our program promoted preventative health care education and vocational skills for children, women and the elderly.

Europe

In the Netherlands, we focus on sponsorships in knowledge and education, innovation, arts and culture and sports. We are engaged in long-term partnerships, such as the Nemo Science Museum in Amsterdam; Artis Microbia (Amsterdam), the world's first museum of microbes; the Bonnefanten Museum in Maastricht; and Natuurmonumenten, a Dutch association that manages and protects natural resources in the Netherlands.

In Switzerland, we donated clothes, toiletries, toys and other items as part of the winter charity collection of the Sovereign Order of Malta Switzerland for people in need on the Slovakian border, and Dyneema® gloves to 'IG der Tauchclubs beider Basel', a diving community that cleans the Rhine river in the Basel area. In addition, we sponsored a number of sports clubs in the vicinity of our locations.

Latin America

In Latin America, in-kind sponsorship included campaigns in Brazil donating winter clothing and personal hygiene items to local institutions in the vicinity of our Brazilian sites, the donation of MixMe™ sachets to Hai Africa, a Brazilian charity, that were sent to Nairobi (Kenya), and Project 'New Dreams' providing food baskets to vulnerable families in São Paulo (Brazil).

The Young Professional Project in Mairinque (Brazil) focuses on public school students and gives them insight into the operation of the factory. During the project, students discuss the importance of technical and higher education, how to choose a job/career, the reality of the labor market, the various lines of action, opportunities for professional growth and the activities carried out in the Mairinque factory. So far, more than 5,250 students have participated in this project.

North America

DSM contributed to the Union County College Foundation Close the Gap initiative to provide scholarships to help African American students complete their degrees, thus closing the 'Achievement Gap' in graduation rates between this group and the general student population. The initiative has realized a tripling in graduation rates since the engagement began.

We continued to work with the Global Health Corps to underwrite the cost of two Fellows to 1,000 Days to enable advocacy and engagement in early childhood nutrition issues in the US and around the world.

Sight and Life

The Sight and Life Foundation is a humanitarian nutrition think tank delivering innovative solutions to eliminate all forms of malnutrition in children and women of childbearing age and improve the lives of the world's most vulnerable populations. Through continued support of the Sight and Life Foundation, DSM furthers the advancement of research, implementation science, innovations, and leadership capacity development in nutrition.

The Sight and Life Foundation engaged in a public-private partnership in Ghana, known as Affordable Nutritious Foods for Women (ANF4W), working to establish a market-based solution to improve the nutritional status of women of reproductive age with fortified food products. This included the successful launch of the Obaasima quality seal identifying fortified products. In Nigeria, DSM announced a new partnership with UNICEF and Sight and Life to deliver better nutrition to at-risk children and mothers and advocate on a global scale for micronutrient supplementation. In addition, Sight and Life continues forces with PATH, a non-profit organization charged with global health innovation, and Johns Hopkins Bloomberg School of Public Health on systematic reviews of underlying causes of stunting.

Leadership is important to bring about change, therefore Sight and Life recognized two inspiring women, Shilpa Bhatte and Ellen Piwoz, with the Sight and Life Leadership Award at the SUN Global Gathering in Ivory Coast. With the right mix of funding, knowledge, technology, and enabling policy, Sight and Life advocates with its partners the global fight against all forms of malnutrition and micronutrient deficiencies.