Sustainable Corporate Strategy

Evonik’s aspiration is to create sustainable, value-added solutions for its customers. That promise is expressed in our purpose: Leading beyond chemistry to improve life, today and tomorrow. We lead beyond chemistry by networking competencies, perspectives, and partners. 

Economic challenges and geopolitical crises have become part of our everyday lives. We do not see this as a reason to reduce our commitment to greater sustainability. On the contrary, we regard our sustainability management as a key cornerstone when it comes to safeguarding and extending both Evonik’s resilience to geopolitical crises and our market success on a lasting basis. Our sustainable corporate strategy makes a significant contribution to this with ambitious goals and management tools that help us translate transformation requirements into profitable growth. The strategy comprises the following elements:

• Giving sustainability a firm place in our market proposition and purpose

• Integrating sustainability into our strategic management process

• Increasing the proportion of attractive growth businesses in our portfolio with a clear focus on sustainability (Portfolio transformation)

• Foresighted resource management with ambitious environmental targets, including systematically considering the impact of our business along the value chain as well as taking account of the Sustainable Development Goals (SDGs)

• Selective improvement of our sustainability reporting.

As part of Next Generation Evonik, sustainability is an integral component of key core processes such as portfolio and innovation management, production and technology as well as human resources work. This strategic integration paves the way for us to meet our promise to be an enabler of sustainability in a wide range of markets and walks of life.

In view of the transformation requirements made on our business activities, we draw a distinction between market-driven, asset-elated, and human resources impact drivers. Accordingly, our sustainable corporate strategy is focused on three core processes: Next Generation Solutions with the sustainability analysis of our business (market perspective), Next Generation Technologies with the Evonik Carbon Footprint (asset perspective), and Next Generation Culture involving all levels of our HR work (human resources perspective).

We have hence set ourselves strategic sustainability targets. These relate, on the one hand, to the transformation of our portfolio, where we aim to increase the proportion of sales from Next Generation Solutions to over 50 percent by 2030. Viewed long-term, we aim to keep the proportion of sales generated with products that are classified as challenged as a result of changes in market conditions, consumer behavior, rising reference levels, or tighter regulation to below 5 percent. On the other, we have pursued our climate strategy for the period 2021 through 2030 in keeping with our commitments to the Science Based Targets initiative (SBTi). Selective investment in Next Generation Technologies will contribute to our target of reducing Scope 1 and 2 emissions by 25 percent between 2021 and 2030. We aim to reduce our Scope 3 emissions by around 11.07 percent by 2030.

To meet these targets, we intend to invest more than €3 billion in the growth of our Next Generation Solutions between 2022 and 2030. These are products and solutions whose sustainability profile is above—or even significantly above—the market reference level. In the same period, we aim to invest €700 million in Next Generation Technologies. These are notably actions at production plants as well as infrastructure that are geared to reaching the goal of further reducing our CO₂ emissions. The aim of Next Generation Culture is to firmly embed sustainability at all levels of the human resources process—from recruiting through vocational training and continuing professional development to including sustainability metrics in remuneration systems. Through these three Next Generation Evonik building blocks, we are harnessing our agility to the full in order to create a business model that balances economic, ecological, and social aspects, thereby strengthening our resilience.

Our sustainability strategy is likewise the basis for our Green Finance Framework. In 2025, Evonik successfully issued its third and fourth green bonds—a senior bond in January and a hybrid bond in September, each with a nominal value of €500 million. The proceeds from the two bond issues will be allocated in accordance with our Green Finance Framework, with a particular focus on investments to expand our Next Generation Solutions and Next Generation Technologies.

In order to manage Evonik’s business development with a view to non-financial performance indicators, we need high-quality sustainability data. Alongside ESTER, our global ESHQ software for systematically capturing environmental data, our sustainability data management program—which we are gradually expanding to include additional sustainability-related management and reporting data—makes an important contribution here. Our ESRS reporting and our overview of Evonik’s sustainability metrics contribute to enhancing transparency and the ability to rapidly retrieve data.

Continuous sustainability analysis of our businesses is the key tool for the strategic management and ongoing development of our portfolio. The methodology is based on the chemical industry standard for portfolio analysis. Extensive evaluation of these sustainability signals in all three dimensions of sustainability—economic, ecological, and social—provides insights for the foresighted management of individual products as well as entire business lines. The analysis findings are used in our strategic management process.

Climate Targets 2021 - 2030

Evonik announced its commitment to the Science Based Targets initiative (SBTi) in 2022. SBTi is a partnership of CDP, the United Nations Global Compact, the World Resources Institute, and the World Wide Fund for Nature. It defines and encourages best practices for science-based target-setting and independently evaluates targets set by companies from this perspective. These have now evolved into internationally accepted standards.

In 2023, the emission reduction targets submitted by Evonik were validated by the SBTi. It confirmed that the ambitious target set for Scope 1 and 2 emissions is suited to helping limit global warming to well under 2°C. Our superordinate group-wide target is an absolute reduction in Scope 1 and 2 emissions by 25 percent between 2021 and 2030. Reducing our CO₂ emissions (Scope 1 and 2 emissions) is likewise embedded in the remuneration of the executive board and other executives and thus forms part of the long-term incentive. In addition, Evonik has given an undertaking to reduce absolute Scope 3 emissions in the upstream categories and in the downstream category “transportation and distribution” by 11.07 percent within the same period.

Evonik is involved in national and international competency networks in the area of sustainability. The organizational units inform the executive board about new insights and relevant content. This is how we integrate the necessary sustainability expertise into the group. We are a member of the World Business Council for Sustainable Development (WBCSD) and are committed to its Vision 2050. Furthermore, we collaborate with econsense—Forum for Sustainable Development of German Business—, Chemie³, the sustainability initiative of the German chemical industry, and the global GRI Community.

As a member of the UN Global Compact, we have given an undertaking that, within our sphere of influence, we will actively respect and promote labor rights and human rights, protect people and the environment, and fight against corruption. In addition, we make a contribution to achieving the United Nations 17 Sustainable Development Goals (SDGs). To this end, we have identified the SDGs that are most relevant for the Evonik Group. In addition, Evonik is one of the six founding members of the Together for Sustainability (TfS) initiative, which aims to increase transparency in the supply chain through collaboration.

Procedure used for the materiality assessment

We evaluated actual and potential positive and negative impacts of our business on our area of activity (inside-out perspective) and the impact of external factors on our business activities (outside-in perspective). Our double materiality assessment comprises five steps:

1. Analysis/description of Evonik’s environment

First, we examined Evonik’s business environment, including the upstream and downstream value chain. This was aimed at supporting the identification of current and potential positive/negative IROs. To this end, we took into account such aspects as our business model and Evonik’s global operations, our sustainable corporate strategy, key performance indicators, and our communication with stakeholders.

2. Identification of IROs

At its core, the second step involved identifying IROs. For this, we evaluated a wide range of internal and external data sources. Examples of internal sources included the sustainability analysis of our businesses, our risk management and our compliance, environment, and safety management systems. In addition, we considered aspects of the questionnaires for the sustainability rankings that are of relevance to us, such as those from MSCI and EcoVadis, as well as of reporting frameworks such as GRI, SASB, and TCFD.  Using this diversity of sources, we covered both the business and the stakeholder perspective. The IROs thus filtered out were determined in a gross analysis and are to be regarded as prior to formulating strategies or taking action. We combined the IROs on the long list into a consolidated long list.

3. Assessment of the significance of the IROs

Based on this consolidated long list, we generated an evaluation sheet to determine the impact materiality and financial materiality. This was assessed by internal experts who possess both an understanding of Evonik’s business model and a close affinity to sustainability issues. When selecting these experts, we aimed for a well-balanced mix with regard to functions, regions, businesses, and age groups. The corporate functions ESHQ, Compliance, Human Resources, Innovation, Strategy, Investor Relations, Communications, Finance, Accounting, Controlling, and Sustainability were all involved, as well as Governmental Affairs and Procurement.

IROs were assessed using different criteria and scales. The impact materiality assessment was performed using the severity criteria defined in the ESRS (scale, scope, irremediability) and the likelihood of occurrence, with the latter relating solely to potential impacts. Financial materiality was assessed based on the ESRS and the implementation guidance published by EFRAG  This involves assessing the likelihood of occurrence and potential scale of the impact in a single step according to a five-point scale from “minimal” = zero to “critical” = four.

The corporate functions involved served as proxies for stakeholders with direct or indirect influence on Evonik as well as for affected stakeholders and users of the sustainability statement. Stakeholder engagement took place notably in process steps two, three, and five: identification and assessment of the IROs and final validation of the material topics. Our more extensive analyses of opportunities and risks in relation to biodiversity, water, product stewardship as well as in our supply chain are based on the listed, data-based investigation methods and our stakeholder engagement described; as of today, they do not include any broader engagement of (potentially) affected parties or their representatives at the sites.

4. Cut-off, clustering, and prioritization

Analysis of the evaluation sheets led to four IRO rankings, subdivided into impact materiality and financial materiality—and further subdivided in each case into positive and negative IROs. Due to the significance (product of severity and likelihood of occurrence), we applied materiality thresholds for impact materiality. For financial materiality, we applied the materiality threshold of more than two recommended by EFRAG (classifications of “important”, “significant”, and “critical”).

The result of this process step was the total amount of material IROs in the categories impact materiality and financial materiality. By clustering these IROs, we identified the material topics. These were then re-examined in light of company-specific and external conditions.

As a result, “diversity and equal opportunity” was added as an additional topic in the prioritization process. 

5. Validation of the material topics

We presented the findings of the materiality assessment, together with the underlying process and the methodological approach, to internal and external sustainability and financial experts who had not previously been involved in the evaluation. External validation was undertaken by representatives of industrial unions, industry associations, NGOs, sustainability consultancies, and the financial sector. The feedback we received generally confirmed our approach and prompted fine-tuning of the terminology for the material topics.

The final outcome, following the prioritization and validation steps, was a list of material topics. This list was then approved by the Evonik executive board member responsible for sustainability. This means that the focus of our reporting and the reporting boundaries are based on the sustainability topics derived from our materiality assessment.

Each year, we review and update the findings of our double materiality assessment. If trigger events occur, such as significant acquisitions/divestments or modifications to the business model, we review the impacts, including changes in the scope of consolidation. Moreover, we incorporate any fundamentally new insights provided by our opportunity and risk management.

In 2025, we again reviewed and validated the topicality and completeness of our material sustainability topics using a peer and media analysis. Changes to the scope of consolidation, as well as new findings from our opportunity and risk management, were reviewed; no such trigger events occurred. Based on our current understanding, Evonik’s material sustainability topics, which are reflected in both the ESRS disclosures and the results of the materiality assessment, remain both complete and up to date. This means that the 13 material sustainability topics for Evonik remain unchanged.

In preparation for the expected transposition of the Corporate Sustainability Reporting Directive (CSRD) into German law, we provided the Transformation Committee of the Works Council, the employee representative body, with detailed information about the process and the outcomes of the materiality assessment and exchanged views on the planned scope of the report. 

After assessing the materiality of the topical standards, we completed the review and definition of the materiality of the underlying data points on the basis of ESRS 1 Appendix E. For this purpose, we used available data and expert opinions from our specialist colleagues.

The IROs aggregated into material topics that resulted from this process define the structure of our sustainability report 2025. We allocated these topics to the General information, Environmental information, Social information, and Governance information chapters stipulated in the ESRS.

The chart “IROs and material topics” shows the IROs allocated to the respective material topics as well as the positive/negative and actual/potential impacts of Evonik, whether these could give rise to a future opportunity or risk over the short, medium, or long term, the time horizon, and the focus in the value chain. We refined and, in some cases, updated the assessment of IROs with high impact materiality, whether potential or actual.

We firmly believe that only companies that act responsibly, enjoy people’s trust, and are open to continuous improvement will be successful. This includes listening very carefully to how we are perceived by our stakeholders. In this way, we aim to counteract any potential lack of trust on the part of our key stakeholders—such as customers, suppliers, and shareholders.

Dialogue with our stakeholders is important as it gives us a better understanding of different perspectives and lets us regularly review our own positions. It enhances our insights into present and future societal challenges. In addition, we harness our stakeholder engagement to improve our grasp of how new market trends and developments may impact our business. This makes it easier for us to pinpoint potential opportunities and risks at an early stage and position Evonik more resiliently. We use the following criteria to define and prioritize our stakeholder groups:

• Type of influence (direct, indirect)

• Impact cluster (for instance, business, financial market)

• Characterization (for example, customers, employees, suppliers)

The following chart shows the stakeholder groups of relevance to Evonik and their influence on our company.

DIALOGUES WITH OUR STAKEHOLDERS

Our dialogue with stakeholders is a continuous process—both in the operating business and at group level—and includes a wide range of topics and events. We use stakeholder-specific communication channels, including in-person or virtual meetings, site visits, our sustainability reporting, the Evonik website, and social media. Our whistleblower system provides a protected channel for reporting legal violations within the company. Additionally, employees have the opportunity to participate in town hall meetings and staff meetings. We also conduct customer, supplier, and employee surveys.

Each year, our dialogue with stakeholders takes place through a wide range of topics and events (see chart “Stakeholder engagement). Our executive board plays an active role in stakeholder engagement by attending events such as our annual shareholders’ meeting, investor meetings, site visits, and town hall meetings. We share the insights gained within the company. These flow into the relevant processes, such as the sustainability analysis of our business and the materiality assessment. Our approach to engaging with our stakeholders includes involving Evonik’s regions. In general, we take care to achieve the widest possible coverage of operational, political, social, and community perspectives, and also regularly hold a stakeholder conference.

You find more information concerning our stakeholder dialogues in 2025 in our Financial and Sustainability Report.