2019Statements

Non-financial reporting policy

Reporting policy and justification of choices made

In this Report, we report for the calendar year 2019. The company reports on People, Planet and Profit information in such a Report on an annual basis. The previous DSM Integrated Annual Report was published on 7 March 2019.

In the Report by the Managing Board, we explain our vision and policy with respect to sustainability practices and report on our activities in this field during 2019. In addition to disclosing data and developments in the categories of People, Planet and Profit, we also report on the global societal megatrends that drive our strategy, sustainability governance framework, stakeholder engagement activities, and management approach on material topics. We proactively seek out the views of key stakeholders on issues of material importance to the company.

UN Global Compact

We have 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, child and forced labor, the environment and anti-corruption. This Report is our Communication on Progress 2019, submitted to the UN Global Compact Office. Our Code of Business Conduct, our Sustainability, Human Resources, and Safety, Health and Environment (SHE) policies, and our Supplier Sustainability Program are the foundations on which we apply the standards of the Global Compact.

We have also aligned our strategy with the Sustainable Development Goals (SDGs). We are familiar with the opportunities and responsibilities that the SDGs represent for our business. Based on our mapping, we believe that we contribute to all of them, and have chosen to focus on the goals which most closely align with our strategic ambitions. In this Report, we continue to include the SDGs into our reporting process, for example by mapping SDG reporting priorities in our value creation model, our material topics, and the solutions that we highlight.

Global Reporting Initiative

At DSM, we base our sustainability reporting on international non-financial reporting guidelines. We frequently assess to what extent sustainability aspects become material to our company and our 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.

This Report has been prepared in accordance with the GRI Standards: Comprehensive option. A detailed overview of how we report according to the GRI Standards comprehensive indicators, including a reference to relevant sections in this Report, is provided on our company's Integrated Annual Report website.

Integrated Reporting Framework

We align 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 us to better identify and communicate how the company creates value for stakeholders in People, Planet and Profit, as well as the interconnection between these three dimensions.

The Taskforce on Climate-related Financial Disclosures

The recommendations from the Taskforce on Climate-related Financial Disclosures (TCFD) are a set of voluntary, climate-related financial disclosures for use by companies to provide information to their stakeholders. DSM was among the first companies in 2017 to commit to implementing, as fully as practicable, these recommendations over the following three years as outlined in the TCFD's implementation path. This Report contains our second TCFD relevant disclosures on Governance, Strategy, Risk Management, and Metrics and Targets. For more information on how we report against the TCFD recommendations, see the 'Sustainability statements — TCFD'.

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 our company and various stakeholders. On the basis of the principle of materiality (using the GRI Standards), we distinguish between topics whose importance warrants publication in this Report (relevant to both DSM and stakeholders), and topics whose importance warrants publication on the company website only (topics important to either DSM or stakeholders). We report on 'External recognitions' in 'Stakeholders'. Other examples of external recognition can be found on the company website.

Scope

The People 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 People data 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, People data to the end of the month of divestment, and Planet data are reported to the last full year at DSM.

Planet methodology

Our progress on the key environmental performance indicators is re-evaluated annually. Data on these indicators are collected twice a year for all DSM sites. The data are based on these sites' own measurements and calculations, which in turn are founded 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 using 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 any 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 our portfolio as well as by improvements to measurement and recording systems at the various sites. Whenever impact is relevant, this is stated in the Report. Details for the regions, as well as the methodology and calculations, are published on the company website, together with an explanation of the definitions used.

People methodology

People data are collected per business group and consolidated at corporate level.

Brighter Living Solutions

For a definition of Brighter Living Solutions, see the Planet section in 'Explanation of some concepts and ratios'. We report twice a year the percentage of Brighter Living Solutions within the running business portfolio.

The sustainability assessments to support the qualification for Brighter Living Solutions are required to be made by internal Life Cycle Assessment (LCA) experts and reviewed using the four-eyes principle 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.