Sustainable Corporate Strategy

Evonik embarked on the next phase of its strategic business transformation in 2022. As part of Next Generation Evonik, sustainability is becoming an integral element of important core processes such as portfolio and innovation management, production and technology, and 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 areas of life.

Therefore, we set ourselves ambitious new sustainability targets in the reporting period. These relate, for example, to the transformation of our portfolio and the continuation of our climate strategy for the period 2021 through 2030, in keeping with our commitment to the Science Based Targets initiative (SBTi).

The transformation requirements at EVONIK

In view of the transformation requirements made on our business activities, we draw a distinction between market-driven, location-based, and human resources influences. In line with this, our Sustainable Corporate Strategy is focused on three core processes: Next Generation Solutions (market perspective), Next Generation Technologies (asset perspective), and Next Generation Culture (human resources perspective). Between 2021 and 2030, we aim to invest more than €3 billion in the growth of our Next Generation Solutions, in other words, products and solutions whose sustainability profile is above or even significantly above the market reference level. In the same period, we intend to invest €700 million in Next Generation Technologies. These are, in particular, measures at production plants and infrastructure that are geared to our goal of further reducing our CO2 emissions. The aim of Next Generation Culture is to establish sustainability firmly at all levels of the human resources process—from recruiting through training and continuing professional development to incentive systems and ideas management.

Transformation Requirements and core processes 2023 EN
Transformation requirements and core processes

Relevant objectives of the Sustainable Corporate Strategy

Through our Sustainable Corporate Strategy, we address the UN Sustainable Development Goals (SDGs) of particular relevance for Evonik. This 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
  • Foresighted resource management with ambitious environmental targets, including systematically considering the impact of our business along the value chain and on the SDGs
  • Selective improvement of our sustainability reporting

Sustainability analysis of the business

The sustainability analysis of our business 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. The extensive evaluation of these sustainability signals in all three dimensions of sustainability—economic, ecological, and social—gives us insights for the foresighted management of individual products and entire business areas. The results of the analysis are used in our strategic management process.

Climate targets 2021 - 2030

In 2022, Evonik committed to the Science Based Target initiative (SBTi). SBTi is a partnership of CDP, United Nations Global Compact, World Resources Institute and World Wide Fund for Nature.

In the year under review, SBTi successfully validated the emission reduction targets submitted by Evonik. In doing so, SBTi confirmed that the level of ambition of the Scope 1 and Scope 2 targets is suitable for helping to reduce global warming to well below 2°C. Our overarching Scope 1 and Scope 2 target envisages a 25 percent reduction in the corresponding emissions between 2021 and 2030.

In addition, Evonik has committed itself to reducing all other Scope 3 emissions from all upstream categories and the downstream category "Transportation and Distribution" by 11.07 percent over the same period.


Sustainability organization and management

The executive board bears overall responsibility for sustainability and all climate-related aspects at Evonik. Direct responsibility is assigned to the Chief Human Resources Officer (CHRO).

Responsibilities and responsibilities for sustainability management are set out in a Group policy. The Supervisory Board also regularly dealt with sustainability issues in 2023.

In view of the increasing relevance of sustainability in the management of the company, ESG aspects are integrated into our governance framework. Since 2022, our Sustainability Council has been meeting at Board level under the leadership of the Chief Executive Officer. In order to ensure close integration with the business, the members include not only the Board of Management but also the heads of the divisions. The Sustainability Council is responsible for steering and decision-making in relation to sustainability issues. After approval by the Executive Board, measures are implemented by the operating units in close coordination with relevant functions such as Strategy, Sustainability, Research, Development & Innovation or Procurement. The decisions of the Sustainability Council are prepared by the Sustainability Circle, in which the functions and departments relevant to sustainability are represented. This committee is chaired by the Chief Human Resources Officer as the member of the Board of Management responsible for sustainability.

In the year under review, the Sustainability Circle dealt with topics such as Next Generation Solutions, the EAGER project to reduce greenhouse gas emissions, and preparations for reporting in accordance with the European Sustainability Reporting Standard (ESRS).

Sustainability governance structure at EVONIK

Graphic Sustainability Governance Structure 2023
In addition, as of fiscal year 2023, Evonik has anchored further sustainability aspects in its long-term Executive Board and Management compensation.

Materiality analysis

15 Material Topics Icons 2023 EN

Our sustainability management is aligned to the criterion of materiality.

 

2022 we performed a completely new materiality analysis. Based on the concept of double materiality, 15 material sustainability topics were identified for Evonik.

 

The top three materiality topics identified for Evonik are:

 

  • „Green energy“,
  • "Portfolio Transformation"
  • „Circular Economy“

 

 

 

New topics compared with our materiality analysis 2018 are green energy, cybersecurity, and employee satisfaction. The results of our materiality analysis are grouped in six areas of action:

Strategy & Growth

  • Portfoliotransformation

Governance & Compliance

  • Responsible Corporate Governance/Human Rights
  • Cyber Security
  • Responsibility in the Supply Chain

Value Chain & Products

  • Circular Economy
  • Product Stewardship

Environment

  • Green energy
  • Fight climate change
  • Biodiversity
  • Water Management

Employees

  • Attractiveness as an employer
  • Employee satisfaction
  • Diversity and equal opportunities

Safety

  • Plant and occupational safety
  • Health protection and promotion

Materiality analysis activities in 2023

Since the materiality analysis was carried out, the ESRS has evolved, with interim results from November 2022 and June 2023 and the final ESRS from 31 July 2023. Against this backdrop, this year we compared whether our approach to materiality analysis meets the requirements of the final ESRS versions.

The topics identified as material were the focus of our ongoing project work in 2023. This is exemplified by projects on the top 3 key sustainability topics, which were further advanced in cooperation with renowned partners from the business world. The agreement of a PPA (Power Purchasing Agreement) with EnBW for the purchase of green electricity from the He Dreiht offshore wind farm, as well as the commissioning of a pilot electrolysis project as part of the H2annibal project, which was developed in cooperation with Siemens Energy, illustrate our commitment to green energy. On the topic of circular economy, we are working with BMW and other partners along the value chain to increase the rate of recycled plastics in the production of new vehicles. Together with Beiersdorf, we are committed to the use of more sustainable raw materials in skin care products. This goes hand in hand with a sustainable transformation of our product portfolio. 

More information on the projects mentioned can be found here.

For the sustainability topics published in our materiality analysis, an anonymous complaints mechanism is in place for both employees and external stakeholders. An important tool for this is our whistleblower hotline.

As part of the new materiality analysis, we also revised our stakeholder management concept.

DMA Process 2023 EN
MATERIALITY ANALYSIS PROCESS AND RESULTS

Stakeholder Management

We are convinced that only companies that act responsibly, enjoy people’s trust, and are open to continuous improvement  can be successful in the long term. That includes listening  very carefully to the concerns of our stakeholders.

We actively seek interaction so we can respond rapidly to key future trends, global developments, and changing market requirements. Stakeholders are individuals or groups that influence Evonik’s decisions and activities and/or are influenced by them. We use the following criteria to define and prioritize our stakeholder groups:

  • Type of influence (direct, indirect)
  • Impact cluster (e.g., business, financial market)
  • Characterization (e.g., suppliers, employees, customers).

The Chart below shows the stakeholder groups of relevance for Evonik and their influence on our company.

Stakeholder Groups
Stakeholder groups and their influence on Evonik

 

Dialogues with our stakeholders

We have developed various formats for our dialogue with stakeholders. These help us engage with both direct and indirect stakeholders. The pandemic prevented us from utilizing these in the normal manner. We endeavored to compensate for this by introducing a range of digital formats and sharing the insights gained within the company.
Our approach to stakeholder engagement includes Evonik’s regions and their wide-ranging contacts. In general, we take care to ensure the widest possible coverage of operational, political, social, and community perspectives.
When choosing topics for our specific dialogue formats, we are guided by our materiality analysis. We also use these events to validate and, where relevant, fine-tune the relevance of issues.

You find more information concerning our stakeholder dialogues in 2023 in our Sustainability Report.


Sustainability targets

In the year under review, SBTi successfully validated the climate targets submitted by Evonik. In doing so, SBTi confirmed that the level of ambition of the Scope 1 and Scope 2 targets is suitable for helping to reduce global warming to well below 2°C. Our overarching Scope 1 and Scope 2 target envisages a 25 percent reduction in the corresponding emissions between 2021 and 2030.

In addition, Evonik has committed itself to reducing all other Scope 3 emissions from all upstream categories and the downstream category "Transportation and Distribution" by 11.07 percent over the same period.

In order to harmonize with its existing environmental targets, Evonik has adjusted its previous energy target and is now focusing on the implementation of energy efficiency measures. The goal is to achieve total savings of 1,200 GWh of energy from implemented energy efficiency projects by 2030 (reference year 2021).

Evonik continues to strive for significant energy savings as part of the energy management system (EnMS) in accordance with the international ISO 50001 standard.

Evonik set itself a new waste target in the year under review: In the period 2021 to 2030, the specific volume of production waste is to fall by 10 percent in relation to production volume.

We save water wherever possible and endeavor to achieve a further reduction in our emissions. In the reporting period, Evonik adopted a water policy and published it on its website. Our aim is to reduce specific freshwater intake by 3 percent relative to production volume between 2021 and 2030.