Human rights

We strongly believe that it is our duty to respect internationally recognized human rights, including the rights of people along our entire value chain. Human rights are integral to our purpose-led and performance-driven strategy. We believe that the basic rights and freedoms to which all people are entitled should be understood, respected, and promoted by all companies as the cornerstone of responsible business.

Respecting human rights means that we follow international guidelines and implement the United Nations Guiding Principles (UNGPs). We execute audits to monitor whether our codes and policies are followed within our own operations, as well as use Human Rights Impact Assessments (HRIAs) on our own operations. This allows us to keep defining our salient human rights areas and provide feedback on how we can further improve our efforts. We have elaborated on this in our human rights policy, available on our company website, including our process on human rights due diligence. Grievances relating to human rights are addressed according to the Code of Business Conduct and our whistleblower procedure, DSM Alert.

In 2022, we continued to implement our due diligence structurally as part of our human rights approach. Our salient issues are child labor, health and safety, living wage, forced labor, migrant workers, harassment, land acquisition and resettlement, human rights defenders, and freedom of expression and rights issues from industrial agriculture. DSM is continuously looking for ways to address and assess the impact of our operations. In 2022, we engaged with a strategic supplier to assess our potential human rights impact in the fish oil value chain, and to develop an action plan as needed. This engagement will continue in 2023, and the results of the assessment will be known in 2023. The results will also be used for future guidance towards implementing the UNGPs.

Throughout 2022, we undertook an in-depth analysis of our internal risk management procedures to identify gaps between existing and necessary management of human rights risks. In particular, our supplier due diligence was reviewed as part of our sustainable procurement practices. The results have been prioritized and will be further implemented throughout 2023. DSM joined the UN Global Compact Business and Human Rights Accelerator Program that will start in early 2023. The Business & Human Rights Accelerator is a six-month program that will further support DSM to move from commitment to action on human rights and labor rights. Through identifying salient human rights impacts, establishing an ongoing due diligence process and developing an actionable plan, the Business & Human Rights Accelerator will empower DSM to further advance our human rights journey.

We recognize that other human rights may become greater priorities over time, and we will regularly review our focus areas.

Fair remuneration

DSM is committed to the principle of equal opportunities for all employees, which includes providing our employees with a living wage. We align our calculations with the Anker methodology (Anker and Anker 2017). We also aim to reward our employees for their overall contributions to the company, setting equal pay for men and women doing similar work that requires equivalent qualifications and skills. Our Fair Remuneration Statement, available on our company website, elaborates on our position.

Gender pay gap and equal pay

We continue to use the GRI 405-2 topic disclosure as guidance for calculating our gender pay gap. Our 2022 results showed a gender pay gap of 6% in favor of women, (female:male pay ratio of 106:100), a narrowing of the gap by 1 p.p. compared to 2021. This is mainly due to changes in the average salary of both genders, particularly in North America where we say the gap decrease by 2 p.p., and headcount fluctuations in the six regions.

This ratio is based on validated employee base pay data for locations where we have significant operations and covers approximately 63% of our global employee base. These locations include Brazil, China, India, the Netherlands, Switzerland, and the US, excluding our operations in Pentapharm (Switzerland and Brazil), Twilmij (Netherlands) and Hydrocolloids (China). The pay gap can primarily be attributed to a higher proportion of male employees in lower-level positions, and it does not necessarily indicate whether we pay men and women equally for doing similar work. While we strive to complete an analysis on equal pay, a more holistic approach on employee data governance is required first. This is an area we plan to further advance on in 2023.

Living wage

We are committed to paying a living wage to all our employees, based on WageIndicator’s benchmark methodology. When analyzing our wage levels, we started with our locations where we have significant operations as defined above. In 2022, we added six countries to the living wage reporting scope. The six countries are: Canada, Costa Rica, Malaysia, South Africa, Egypt and UK. With the addition of these countries 68% of the total DSM workforce is covered. Of the workforce in scope, we include all employees in the calculation that have been in active service for more than 1 year with the exception of apprentices and interns.

We aim to further expand the number of countries included over the coming years. In 2022, we assessed wage levels against WageIndicator’s typical family, with higher-bound (our target level) and lower-bound (for comparative purposes) living wage figures. We apply the following definitions from WageIndicator’s methodology:

• The typical family is defined as two adults with a number of children derived from the national fertility rate
• The employment rate is defined as one adult working full time, while the employment rate of the other adult is derived from the national employment rate
• The higher-bound living wage figure uses prices (for housing, food, and other indispensable goods or services) at the 50th percentile (where 50% of people report higher prices), while the lower-bound figure uses prices at the 25th percentile (where 75% of people report higher prices)

Based on our assessment, no employees were paid below the typical family with higher-bound (and consequently, lower-bound) living wage figures.