Sustainability statements
Sustainability statements – People
2019 | 2018 | 2017 | 2016 | 2015 | |
Total workforce | 22,174 | 20,977 | 21,054 | 20,786 | 20,796 |
Female:male ratio | 28:72 | 28:72 | 27:73 | 27:73 | 28:72 |
% by age category1 | |||||
<26 years2 | 5 | 5 | 6 | 6 | 5 |
26–35 years | 26 | 25 | 26 | 25 | 26 |
36–45 years | 29 | 30 | 28 | 28 | 30 |
46–55 years | 25 | 26 | 25 | 27 | 27 |
>55 | 15 | 14 | 15 | 14 | 12 |
% under-represented nationalities1 | |||||
Executives (non-European) | 31 | 31 | - | - | - |
Executives (non-Dutch) | 62 | 60 | 56 | 53 | 49 |
Management (non-European) | 44 | 43 | - | - | - |
Other (non-European) | 59 | 59 | - | - | - |
% female1 | |||||
Executives | 20 | 19 | 17 | 15 | 15 |
Management | 29 | 28 | 27 | 26 | 27 |
Other | 28 | 28 | 28 | 29 | 29 |
% executive hires1 | |||||
Non-European | 55 | 61 | - | - | - |
Female | 323 | 61 | 43 | 13 | 38 |
Non-Dutch | 86 | 83 | 95 | 88 | 79 |
% new hires by region1 | |||||
Netherlands | 11 | 13 | 11 | 5 | 11 |
Rest of Europe | 24 | 22 | 26 | 23 | 22 |
North America | 22 | 25 | 20 | 27 | 16 |
China | 18 | 16 | 16 | 20 | 18 |
Rest of Asia–Pacific | 12 | 9 | 11 | 8 | 13 |
Rest of the world | 13 | 15 | 15 | 17 | 22 |
Total number new hires (excluding acquisitions) | 2,372 | 3,005 | 2,203 | 1,730 | 2,171 |
Acquisitions | 1,161 | 80 | 247 | 46 | 1810 |
Outflow of employees 1 | |||||
Voluntary resignations | 1,118 | 1,098 | 766 | 585 | 1,153 |
Total outflow (excluding divestments) | 2,352 | 2,868 | 1,943 | 1,729 | 2,212 |
Divestments | 0 | 357 | 42 | 57 | 2,324 |
Voluntary resignations (% total workforce)1 | 5.4 | 5.3 | 4.1 | 2.8 | 5.5 |
Total turnover (% total workforce)1 | 11.2 | 13.9 | 10.2 | 8.3 | 10.6 |
Development training in hours per employee | 8.1 | 64 | |||
Net sales per employee (x €1,000) | 421 | 4295 | 420 | 386 | 374 |
Safety | |||||
Frequency Index of Recordable Injuries | 0.28 | 0.33 | 0.36 | 0.33 | 0.41 |
- For the indexes based on age, nationalities, gender, inflow and outflow, the companies that are not integrated into the HR systems (approximately 6% of the total workforce) are not taken into account.
- We do not employ people younger than 15 under DSM contract. We require our suppliers to not use forced labor or child labor according to our Supplier Code of Conduct.
- The decrease in 2019 is due to the relatively low number of executives onboarded in 2019, with a number of female executives who were recruited in 2019 expected to be onboarded in 2020
- In 2018, development training hours per employee were measured using a new standard with stricter definitions. Figures of previous years cannot be recalculated according to the new definitions, which means there are no relevant figures available for previous years.
- Excluding the temporary vitamin effect in 2018, see table Temporary vitamin effect 2018.
Sustainability statements – Brighter Living Solutions
2019 | 2018 | 2017 | 2016 | 2015 | |
Brighter Living Solutions sales as % of net sales | 631 | 622 | 62 | 633 | - |
- For a small percentage of sales (approximately 2%) classified as BLS, the environmental impact is considered 'best in class' together with other solutions.
- Excluding the temporary vitamin effect in 2018, see table Temporary vitamin effect 2018.
- 2016 was the first year of reporting; consequently, there are no comparative figures for the previous years.
Sustainability statements − Planet
2019 | 2018 | 2017 | 2016 | 2015 | |
Energy and greenhouse gas | |||||
Primary energy use (in PJ) | 21.2 | 20.8 | 23.6 | 22.6 | 20.9 |
Energy efficiency improvement (year-on-year) | 2.3 | 1.4 | 0.7 | 21 | - |
Greenhouse gas emissions scope 1 + 2, market-based | 1.17 | 1.232 | 1.50 | 1.571 | - |
Electricity purchased from renewable resources (%) | 50 | 41 | 21 | 8 | - |
Total purchased renewable electricity (GWh) | 632 | 446 | 229 | 79 | - |
Emissions to air | |||||
Volatile Organic Compounds (x 1,000 tons) | 2.7 | 4.9 | 6.6 | 8.9 | 3.1 |
Nitrogen oxide (NOx) (x 1,000 tons) | 0.4 | 0.5 | 0.7 | 0.8 | 0.4 |
Sulfur dioxide (SO2) (x 1,000 tons) | 0.06 | 0.09 | 0.28 | 0.33 | 0.04 |
Discharges to water and landfill | |||||
Chemical Oxygen Demand discharges to surface waters | 2.1 | 2.2 | 2.5 | 2.4 | 2.1 |
Waste recycled (in %) | 88 | 83 | 84 | 831 | - |
(Landfilling) Non-hazardous waste (x 1,000 tons) | 15 | 18 | 16 | 17.5 | 12.9 |
Total process-related waste (x 1,000 tons) | 222 | 177 | - | - | - |
Water | |||||
Water consumption (x million m3) | 23 | 22 | 23 | 221 | - |
Water use (x million m3) | 111 | 114 | 114 | 104 | 101 |
Raw materials | |||||
Renewable raw materials (in %) | 14.7 | 14.3 | 15.4 | 16.5 | 16 |
Biodiversity | |||||
Sites in or adjacent to protected areas (in %) | 25 | 66 | 61 | 60 | 58 |
Fines (in €) | 115,100 | 23,500 | 128,400 | 27,900 | 35,600 |
Non-monetary sanctions | 2 | 6 | 4 | 2 | 5 |
Environmental incidents | 60 | 71 | 101 | 1093 | 257 |
Environmental complaints | 58 | 53 | 35 | 21 | 31 |
- The baseline emissions for 2016 were recalculated due to the inclusion of nine acquired sites in the reporting scope.
- Including a one-time effect of large plant shutdowns, estimated at roughly 150 kt. These effects did not occur in 2019.
- As of 2016, the Loss of Primary Containment on non-hazardous substances is no longer included in this number.
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, see 'Stakeholders'. For information on how we engage with our employees, see 'People'.
Customers
Implementing our Strategy 2021 throughout our businesses where we enable, innovate and advocate on the three domains — Nutrition & Health, Climate & Energy and Resources & Circularity — has allowed us to strengthen our relationship with our customers and increase our impact on the total eco-system. Our customers are key stakeholders, and understanding their role in the total eco-system and their stakeholders is of utmost importance.
Customer loyalty and satisfaction
Customer loyalty and satisfaction starts with understanding our customers, their needs and their journey when interacting with us. In addition to daily connections with our customers, we worked in 2019 to understand better how they relate to us, both via digital channels and offline. Customer loyalty and satisfaction are measured through the Net Promoter Score (NPS) methodology and via Customer Journey mapping. These enable us to track results of the ongoing customer relationship improvement activities in all of our business groups. Longer-term customer loyalty and satisfaction are measured at fixed time intervals via a uniform system of online customer satisfaction research, followed by personal interviews with individual customers to better understand what lies behind customer feedback.
In 2019, our NPS score was 41 (2018: 40). With this improvement, we have seen an increase of our overall NPS score for four consecutive years (2016: 38). Additionally, several business groups have implemented an automated survey process to continuously measure customer satisfaction during specific interactions throughout the year. This provides instant performance feedback and new customer insights. Results are taken up in cross-functional meetings to drive the immediate optimization of processes and frontline staff interaction. Learnings from these initiatives are currently being applied to other business groups and will help us to further improve the overall customer experience with DSM.
Lead generation and lead management are one of the crucial roles that our marketing and sales professionals perform in the company. In addition, we know from our NPS methodology that customers expect a high ease of doing business along the full journey of considering, buying, applying and paying for our solutions. Digital technologies and capability development of our commercial employees are important investments that enable us to deliver a modern customer experience. This includes improving the digital expertise of our people, and amplifying the importance of being curious, empathic and agile. This also enables us to bring the voice of the customer to our functional areas such as innovation, procurement and finance.
Brand Value
Our brand is an important business asset. We are a purpose-led, performance-driven company that aspires to provide innovative products and solutions that support our purpose to create brighter lives for all. In 2019, our brand value continued to grow. Brand Finance attributed this growth to improved revenue expectations and a slightly lower risk profile.
DSM Brand Value1
(x € million)
- As measured by the Brand Finance valuation methodology.
Customer Value Propositions
We continuously sharpen our understanding of our customers' needs and build them into our value propositions. We emphasize why our solutions enable our customers to satisfy the needs of the consumers they serve as well as enable them to succeed in the market, ensuring we match the evolving customer needs and customer value drivers. Our value propositions clarify what the benefits are for our customers and for others in the ecosystems that might benefit from our solutions. The value propositions also highlight how these solutions fit our purpose-led, performance-driven portfolio.
Suppliers
DSM Sustainable Procurement Program
Procurement is essential to enabling our sustainable growth ambitions. Sustainable procurement is the process of making balanced purchasing decisions in such a way that they benefit not only our business, but society as a whole, while minimizing our impact on the environment. In a joint effort with our suppliers, we take responsibility to grow in an environmentally sustainable, economically viable and socially desirable way. We engage with approximately 32,000 suppliers across our company.
DSM's Sustainable Procurement Program (SPP) is instrumental in ensuring that we deliver on our promise to reduce our environmental footprint and improve the lives for people today and generations to come through our activities, products and innovations. Collaboration and innovation with our suppliers are important for sharing best practices and finding new sustainable solutions. Our commitment to sustainability is at the heart of everything we do.
Our Supplier Procurement Program comprises three elements: scope 2 greenhouse gas (GHG) emissions (from purchased electricity), scope 3 GHG emissions (throughout our value chain) and supplier development and evaluation. For more information on scope 2, see 'Scope 1+ 2 GHG emissions', and on scope 3, see 'Scope 3 GHG emissions'. As part of our supplier development and evaluation program, we focus on assessing, auditing and further improving our suppliers' sustainability performance by actively developing and following up on corrective actions.
Internal skills and capabilities
Internal capability-building focused on supplier sustainability continued in 2019. We shifted the focus from delivering training toward providing hands-on support and promoting peer learning. Peer learning offers practical experience and knowledge-sharing about integrating sustainability into the daily work of sourcing professionals.
In 2019, we developed the Procurement Vision 2021 to align with Strategy 2021. Five strategic choices were identified in the Procurement Vision: Customer-Centricity, World-Class Procurement, Value Creation, Sustainability Leadership and Innovation. Within the Sustainability Leadership stream, a new tool to assess Sustainability Maturity was developed. In 2019, all procurement groups within DSM performed a baseline assessment of their maturity, giving us insight into their current status and enabling us to set priorities for improvement and development in 2020. Three priorities were set for 2020: sustainable tenders, incorporating sustainability in category strategies, and key supplier management. Our Procurement Vision provides a framework against which we deliver our Sustainable Procurement Program.
Every year, our procurement community awards teams who have developed successful sourcing projects, including those with significant sustainability benefits. The Global Procurement Award recognizes and celebrates those committed to excellence in the procurement profession.
Collaboration
We work with external partners to enhance collaboration with our suppliers in the supply chain such as the Roundtable for Sustainable Palm Oil (RSPO), Friends of the Sea, the Marine Stewardship Council, and Together for Sustainability (TfS).
We use a limited amount of palm oil when making certain nutritional products. DSM Nutritional Products is a member of RSPO to mitigate the potential risks to the environment, human rights issues and labor practices in the palm oil supply chain. DSM Food Specialties sources RSPO 'Mass Balance' certified palm-derived glycerin in Asia. Our objective is to use 100% RSPO-certified sustainable palm oil and palm-derivative products using RSPO 'Mass Balance' supply chain models by 2020. Going forward, we aim to have all the production sites that use palm oil or palm oil derivative products RSPO-certified. For more information on palm oil, see the company website.
Protecting our marine environment is important to us as a company. We are committed to the responsible and sustainable use of natural marine resources. We have 'Friends of the Sea' certification for all our fish oil purchases. This certification helps ensure that the fisheries involved in providing fish oil for the production of our omega-3 product range are sustainable. Furthermore, we are currently in the deployment phase to have all our tuna oil suppliers Marine Stewardship Council (MSC) certified in 2020. We are proud to partner with the MSC, the global gold standard for certification and eco-labeling of seafood, to offer MEG-3® tuna DHA oils and powders that are MSC Chain of Custody (CoC) certified. This certification guarantees 'ocean-to-purchase' traceability throughout the entire supply chain, providing assurance that our tuna DHA products can be easily traced to certified fisheries.
Supplier Sustainability Evaluation
Sustainable Procurement Program results
| 2019 | 2018 |
Spend coverage SCoC | 95% | 95% |
EcoVadis assessments | 322 | 237 |
Together for Sustainability audits | 15 | 14 |
Our approach to compliance is defined by our Supplier Code of Conduct (SCoC). In 2019, 95% of our supplier spend was covered by the SCoC versus our target level of 95%. Through assessments and audits, we check that suppliers act in compliance with our norms and values. When suppliers cannot meet our expectations we will work with them to define and execute an improvement plan.
Since 2015, we have been a member of Together for Sustainability (TfS), a joint initiative of 23 chemical companies. Founded in 2011, TfS has developed and implemented a global assessment and audit program to improve sustainability practices within the chemical industry's supply chain. Through this initiative, TfS members can share all assessments and audit reports, which allows us to screen and address sustainability performance and risks for a high number of our suppliers.
To ensure a consistent and reliable supplier assessment approach, TfS selected EcoVadis as its partner and service provider. The objective of the EcoVadis methodology is to measure the quality of a company's sustainability system by checking its policies, actions and results. The assessment focuses on 21 criteria grouped in four themes: Environment, Labor & Human Rights, Ethics and Sustainable Procurement.
In 2019, TfS changed its metrics to increase the impact on sustainability for all its members. The revised focus is on enlarging the number of assessed and re-assessed suppliers, and at the same time driving improvements to support sustainability development in the value chain. In previous years, TfS' metrics focused on suppliers invited for an assessment by the individual member, whereas as of 2019, its metrics focused on the relevant supplier pool for each member, independent of the fact that our company or another TfS member initiated the assessment or re-assessment.
Through TfS, we assessed 322 suppliers in 2019, of which 295 were re-assessments. Of the re-assessed suppliers, 57% received an improved sustainability score. Moreover, the average EcoVadis assessment score of our suppliers was 52 in 2019 compared to 50 in 2018. The average of the supplier performance level indicates that our suppliers are further engaging in sustainability.
Supplier Projects
As part of our drive to foster better business through our supplier projects, our procurement organization engages in proactive dialogue with suppliers in order to move the business agenda forward in our focus domains of Nutrition & Health, Climate & Energy and Resources & Circularity.
As part of our scope 2 program, we remain committed to further increase the amount of purchased electricity from renewable resources for commercial production sites. For more information on our commitment to responsible and efficient use of energy, see 'Renewable energy'.
CO2REDUCE is our supplier engagement program covering scope 3. It focuses on understanding our run on suppliers' performance in reducing GHG emissions and developing reduction roadmaps in close cooperation with our suppliers. For more information on CO2REDUCE, see 'Scope 3 GHG emissions'.
The Global Logistics and Packaging (GL&P) team continued its journey on driving sustainability with its suppliers and set the ambition to reduce 20% CO2 emissions by 2025 (compared to 2016). Via the CO2 Emission Reduction Initiative, the GL&P team investigated suppliers' footprints not only in road, marine and air transportation, but also in various packaging categories. The successful achievement can be attributed to joint initiatives with suppliers that led to environmental benefits in the value chain. Projects such as stimulating shipment consolidation and optimizing and redesigning packaging products resulted in significant reductions in CO2 emissions.
The GL&P team has also developed a 'Purpose Led Wooden Pallet Sourcing Strategy', whereby we influence our contracted suppliers in Europe to purchase sustainably harvested wood. At the same time, the GL&P team established a unique collaboration with the European wood and pallet industry whereby we commonly drive the industry toward using only sustainably sourced wood to make pallets and packaging crates.
Investors
We value the essential role of our capital providers for the success and prosperity of the company, allowing us to pursue a long-term oriented, value-creating strategy. This should also lead to a continuous increase of the company's valuation for the benefit of its shareholders and provide a low risk profile for our debt holders.
We ensure that accurate financial and relevant non-financial information is communicated to the financial markets in a transparent and simultaneous way. All information is made easily accessible to the public via the company website. Next to the Annual General Meeting of Shareholders, we also reach out to the financial markets through events like the Capital Markets Day, participation in investor conferences, and by organizing roadshows. We also actively seek engagement with financial advisors who cover DSM on behalf of their financial market clients, such as brokers, credit rating agencies, proxy advisors, shareholder representative organizations, and ESG (Environment, Social, Governance) rating agencies.
We actively seek feedback from the financial markets, which is periodically discussed and assessed by the Managing Board and the Supervisory Board. We highly value the insights gained through these engagements.
We engage with our investors and their representatives on topics such as the SDGs, climate change, governance, sustainability in supply chain management, natural and social capital, and responsible taxation.
Our Strategy 2021: Growth & Value - Purpose led, Performance driven was launched in 2018, where we presented how we will capture growth opportunities offered by global megatrends and the UN SDGs, and disclosed our targets for profit growth and cash generation, as well as our clear step-up in sustainability aspirations. During 2019, we continued to update the market on our progress against our strategic targets as well as the sustainability ambitions and our progress with the large sustainability-driven innovation projects. We provided updates through quarterly conference calls and at various roadshows covering all large investor cities, as well as in conferences, visits from investors and by many telephone and video calls.
Purpose and profit go hand in hand at DSM, which has been demonstrated by a continuing strong performance on both financial and non-financial metrics. In 2019, DSM actively advocated purpose-driven entrepreneurship among our shareholders. We engaged with investors, including pension funds, to discuss their responsibility in long-term value creation for their customers, but also for the society and the environment their participants live in. We actively participated in various impact investment initiatives including De Nederlandsche Bank (DNB) working group on SDG Impact Measurement and the WBCSD Chemical sector TCFD Preparer Forum on climate-related risks.
We engaged with FCLT (Focusing Capital to the Long Term), which works to encourage a longer-term focus in business and investment decision-making and whose mission is to motivate business leaders to actively combat short-termism in our financial markets. Our engagement with FCLT emphasizes the need for including non-financial long-term metrics (environmental, societal and governance related) in the investment decisions of investors. In particular, we emphasize the need to make the metrics uniform, comparable and auditable.
We further stepped up our engagement with leading ESG advisors to the financial sector, including Sustainalytics, MSCI, Vigeo-Eiris and ISS-ESG. For more information, see 'ESG Ratings and Benchmarks'.
We also saw the number of direct engagements between investors and DSM on ESG topics including SDG impact, substantially increase in 2019. Being recognized as a leader in sustainability and at the same time showing continued good financial progress, we were frequently invited for in-depth engagement calls and meetings on how to include — and compare — important non-financial parameters in their investment processes.
Society
We engage with society at multiple levels – from local community initiatives to collaborations with universities and research institutes. We work with NGOs and civil society to develop solutions for societal issues, and advocate with governments and society on important issues relating to the Sustainable Development Goals and the Paris Agreement. We also engage in philanthropic and sponsorship activities to the average yearly amount of approximately €6 million. Here we share some examples of our collaborations with society.
In Brazil, we continued our support of a number of educational initiatives. These included the Agrinho Program (providing teaching materials and teacher training), CEAP (Vocational Educational Center, providing disadvantaged youths with educative and vocational training) and the Young Professional Project (hosting discussions for students on education, career development and the labor market).
In China, we collaborated with universities and institutes on research projects, such as with Beijing University on polymer physics, Shanghai Jiao Tong University on composite processing, the Institute of Chinese Academy of Science on application formulations for vitamins and Wuhan University of Science and Technology on additional application possibilities. We also participated in the 12th annual Bright Experience Hunger Walk in support of the UN World Food Programme and the China Foundation for Poverty Alleviation.
In India, we partnered with CII (Confederation of Indian Industries) to institute CAP 2.0°, a unique Climate Action Program to recognize industry best practices and innovation on climate action, as well as to enable capacity-building for corporates. CAP 2.0° helps companies seek expert intervention on climate action, with assistance throughout the process, and a gap/feedback report at the end of the cycle. In addition, the program provides certified training for selected professionals on the assessment methodology.
In Japan, the Oranda-Jima House, donated by the Oranda-Jima Foundation, celebrated its fifth anniversary in 2019. We provided in-kind and financial support for the construction of the House to support children in the region recovering from the East Japan earthquake and tsunami in 2011. The President of DSM Japan, who is Representative Director of the Foundation, made a congratulatory speech at the anniversary celebrations and expressed his hopes for the continued good use of the House.
In the Netherlands, we celebrated 150 years of biotechnology in Delft. To mark this occasion, we presented, together with ARTIS-Micropia, the ARTIS-Micropedia Experience titled 'Small Life, Major Impact: Microbes determine our world'. For more information, see 'Enabling DSM's Bright Science'. We also joined forces with three companies and eight knowledge institutes in a consortium for a project called 'Soft Advanced Materials'. For more information, see 'Innovation Partnerships'. We also extended our co-operation with The Ocean Cleanup design team, where ropes with Dyneema® are used as towlines to support the net that catches plastic in the Great Pacific Garbage Patch.
In Switzerland, DSM Nutritional Products participated in EXPO 19, a regional trade show. Our participation supported engagement with the local Rhine Valley community and helped showcase our science and expertise. Participants also had the opportunity to learn more about the role of UV filters in sun-creams, how to measure anti-oxidants through a vitality check, and how consumer preferences differ between countries regarding color and pigmentation in eggs.
In the US, we continued our support of the Union County College Foundation Close the Gap initiative that provides scholarships to African American students. We also continued to underwrite the costs of two Fellows with the Global Health Corps.
The Oranda-Jima House in Yamada, Japan.
Management approach for material topics
In the following tables, we elaborate on the material topics defined in the Materiality matrix, see 'Materiality' and describe how we manage these topics.
Environment
Climate & Energy | Management approach | Relevant references | |
|---|---|---|---|
This topic addresses our climate impacts in terms of greenhouse gas emissions, as well as developing and providing sustainable solutions that help other avoid emissions. | Climate & Energy is a focus domain of DSM, and we manage this topic by improving our own carbon footprint, enabling our customers through innovative solutions and advocating actions toward a low-carbon future. This supports our efforts to manage the physical and transitional opportunities and risks relating to climate change mitigation and adaptation. We publicly disclose our impact and strategy via this Report, CDP and others. | ||
Resources & Circularity | Management approach | Relevant references | |
|---|---|---|---|
Resources & Circularity refers to the efficient use of natural resources in order to minimize stress on the environment. A transition to a circular economy, addressing closed-loop solutions and renewable materials, is key to meeting the needs of current and future generations. | Resources & Circularity is a focus domain of DSM, and we manage this topic by improving the value extracted from the limited resources that are available, enabling the transition to a circular and bio-based economy through our solutions and advocating a shift away from a linear to a circular and bio-based economy. | ||
Water security | Management approach | Relevant references | |
|---|---|---|---|
Water is essential to life and all ecosystems. As water is becoming a scarcer resource, both the quality and quantity of available water constitute a global issue that has local consequences, from water scarcity to floods and storms. | We are committed to the responsible use of water. Our approach is defined in the new DSM Responsible Care Plan. We believe that water risks are local by nature, so we focus on local water risk assessments and thorough follow-up on these. We are a signatory to the UN Global Compact CEO Water Mandate and disclose our water management and strategy via CDP. | ||
Biodiversity | Management approach | Relevant references | |
|---|---|---|---|
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 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. | ||
Social
Nutrition & Health | Management approach | Relevant references | |
|---|---|---|---|
This topic refers to the transition to sustainable food systems within planetary boundaries that is needed to secure the future availability of food. An increasing global population and the impact of climate change will put greater strain on our ability to provide sufficient food that is also nutritionally complete — addressing issues including malnutrition, non-communicable diseases and obesity. | Nutrition & Health is a focus domain of DSM, and we manage this topic by improving the health of our own workforce, enabling healthy food systems through our Nutrition businesses targeting health and well-being and our Biomedical business improving health and the quality of life for surgical patients. We advocate for a change in food systems within planetary boundaries. | ||
Occupational health & safety | Management approach | Relevant references | |
|---|---|---|---|
Occupational health & safety addresses the company's ability to create and maintain a safe and healthy workplace environment that is free of injuries, fatalities, and illness (both chronic and acute). | The occupational health and safety of all our employees and contractors is our highest priority. Our approach to safety is defined in the DSM Responsible Care Plan and is spearheaded by our Life Saving Rules. We apply an occupational health model based on prevention, primary care and promotion to support employee health. | ||
Labor practices & human rights | Management approach | Relevant references | |
|---|---|---|---|
This topic encompasses decent working conditions for DSM employees, suppliers and other partners across the value chain. It addresses, among others, freedom of association, non-discrimination, the prohibition of child labor and forced labor, and fair compensation. | DSM has installed a cross-functional human rights steering committee and working group to manage our approach toward human rights which is defined in our position paper. Our whistleblower policy (DSM Alert) is available for employees and external stakeholders to report potential violations of human rights. | ||
Leadership & development | Management approach | Relevant references | |
|---|---|---|---|
This topic refers to the continuous development of employees' skills through training and development programs, and the company's ability to generate commitment among employees to the organization and its goals. | Leadership & development fuels the growth of our employees and leaders, which in turn should enable our overall growth as an organization. The DSM Leadership Model provides the common vision and language for leadership at DSM. Our People & Organization strategy shapes our engagement with our employees. | ||
Internationalization & diversity | Management approach | Relevant references | |
|---|---|---|---|
This topic revolves around equal opportunities in the workforce, and ensuring that company culture and hiring and promotion practices embrace the building of a diverse and inclusive workforce that reflects the makeup of local talent pools and our customer base. | We focus our activities on increasing the representation of women and the nationality diversity of our executive population and management pipeline. Through our Women's Inspired Network activities and training opportunities, we address gender diversity and bias. | ||
Business & Governance
Business ethics & transparency | Management approach | Relevant references | |
|---|---|---|---|
This topic addresses the company's approach to and public disclosure on ethical and fair business conduct, corporate governance and compliance. This includes taxation, privacy, bioethics, fraud, bribery & corruption and fiduciary responsibilities. | We take our responsibilities as a business seriously. Our approach to ethics and transparency is led by the DSM Code of Business Conduct and our Supplier Code of Conduct. DSM's tax position is consistent with the normal course of our business operations and reflects the corporate strategy as well as the geographic spread of our activities. It is available through our position paper. We transparently report on our business through this Report and our public statements. | ||
Geopolitical shifts & (trade) dynamics | Management approach | Relevant references | |
|---|---|---|---|
This topic refers to geopolitical shifts and dynamics such as political tensions and inequalities. It also includes the impact of trade policies and barriers. | Through our partnerships and stakeholder engagement activities, we monitor topics relevant to our business. We identify risks and mitigating actions through our risk management approach, and apply standard business processes and practices to manage trade control compliance. | ||
Innovation | Management approach | Relevant references | |
|---|---|---|---|
This topic refers to the company's technology capabilities and research & development investments to develop innovative, sustainable solutions. | Our innovation and research & development capabilities support us in achieving our growth targets. Through collaborations with our value chain partners, we bring new thinking and new solutions into the company. Through our venturing activities, we invest in emerging innovative companies around the world. | ||
Advocacy, engagement & partnering | Management approach | Relevant references | |
|---|---|---|---|
When companies engage with stakeholders, they become aware of the relevant issues that arise from business activities. Multi-stakeholder collaboration may support the achievement of the Sustainable Development Goals, in particular in developing countries through the development of suitable products and processes. | We engage with our stakeholders to help define the topics that are material to our business and our reporting. We collaborate in platforms and networks that contribute to our purpose and align with our focus domains of Nutrition & Health, Climate & Energy and Resources & Circularity. | ||
Product stewardship | Management approach | Relevant references | |
|---|---|---|---|
Product stewardship addresses the incorporation of sustainability factors in characteristics of products provided by the company. It covers managing the lifecycle impacts of products along the value chain, such as sourcing, packaging, distribution, use-phase resource efficiency, and other environmental and social externalities. | Our product stewardship statement describes our approach on this topic. We assess our products and will have an action plan in place for substances of very high concern. We take a risk-based approach to product stewardship and will use alternatives where feasible, and always where required. We also see the opportunities for safer products with fewer or no hazardous properties in the circular economy. | ||
Digital transformation | Management approach | Relevant references | |
|---|---|---|---|
Digital transformation refers to the application of digital technologies to all aspects of business and society. | Our Data Analytics Center of Excellence and Digital Acceleration Group will support us in the acceleration of digital insights and solutions. Digital solutions also support and strengthen our customer relationships. We monitor and mitigate potential risks relating to digital through Group Risk Management. Our Information Security Office and Privacy Policy guide our approach toward the security of information assets. | ||
Taskforce for Climate-related Financial Disclosures (TCFD)
The Taskforce for Climate-related Financial Disclosures (TCFD) recommendations are a set of voluntary, climate-related financial disclosures for use by companies to provide information to their stakeholders. In 2017, we were among the first companies to commit to implementing, as fully as practicable, these recommendations over the following three years as outlined in the TCFD's implementation path. The recommendations are structured around four elements — Governance, Strategy, Risk Management, and Metrics and Targets. This Report includes various disclosures relevant for the TCFD recommendations. To highlight this, for each TCFD theme reference is made to relevant sections.
Core Element | References |
Governance Sustainability, including climate-related risks & opportunities, is a direct responsibility of the Managing Board. The Managing Board is supported in this by advice from our external Sustainability Advisory Board and reports on progress to the Supervisory Board, via its Sustainability Committee. Our approach toward assessing and managing climate-related risks and opportunities is steered by our climate action agenda, containing key actions and deliverables that are owned by members of the Managing Board and Executive Committee. The DSM Responsible Care Plan and our greenhouse gas (GHG) reduction program translate the climate action agenda into concrete operational programs managed by Operations & Responsible Care, Sourcing and business management. All of these are regularly discussed and reviewed during the MB/EC meetings. | |
Strategy DSM has recognized climate change as a global megatrend for more than a decade. Climate change will impact our company directly, and indirectly via shifts in our value chains and end-markets. This poses a risk to our current business while providing ample opportunities for growth. Our portfolio and innovations seek to offer solutions to address changes coming from the shift to a low-carbon society. For example, in our nutrition business, we address transition risks through innovations, such as Project Clean Cow which reduces methane emissions from current animal (ruminant) protein production, as well as through plant-based proteins like CanolaPRO®. We are reducing our exposure to transition risks like carbon pricing and changing legislation through actively reducing GHG emissions from our own operations and in our value chain. Projects to underpin our related GHG targets for 2030 and 2050 are ongoing. We believe that the implementation of our business strategy and delivery upon our GHG targets provide some resilience toward transition risks, but more extensive risk assessments will provide further insight into additional transition risks. We believe that our exposure to short-term physical risks in our direct operations is limited, however we are still assessing the medium- and long-term impact on our operational footprint and total value chain. | |
Risk Management The management of climate-related risks is fully integrated into our regular risk management cycles. Climate-related risk is identified in the Corporate Risk Assessment in ‘Emerging risk 1’ (end-markets) and ‘Emerging risk 2’ (supply chain and own operations), with mitigating actions defined where appropriate. As with all risks, the responsibility for identifying and managing climate risks is with the management of the units, supported by Group Risk Management and assessed by Corporate Operational Audit. To support management, we have started a project to develop heatmaps for physical climate risks. These will provide more detailed insights into physical (acute and chronic) risks linked to climate change based on two different climate scenarios. | |
Targets and Metrics We report our climate-related metrics and targets via this Report and the company website. Our Science Based Targets are our key environmental targets within the DSM Responsible Care Plan, supported by supplementary targets and programs. Furthermore, we also report on avoided emissions, water, waste and other emissions. We apply a carbon price of €50/t CO2eq in our large investment decisions and in the Profit & Loss statements of the business groups for internal management reporting. Building on this, we now require all business growth projects to be carbon neutral, or else compensated for in the same business. Climate-related metrics form part of the Long-Term Incentives of the Managing Board and executives. |