For the following disclosures, we have used the option to present them by reference. The disclosures under ESRS 2.40 (a) can be found in the “Business Model” and “Organization” sections, the disclosures under ESRS 2.40 (e) in the “Impact, Risk and Opportunity Management” section, and the disclosures under ESRS 2.40 (f) in the “Business Model” and “Group Strategy” sections. The disclosures under ESRS 2.42 (a) can be found in the “Procurement” section, the disclosures under ESRS 2.42 (b) in the “Business Model” section, and the disclosures under ESRS 2.42 (c) in the “Business Model” and “Value Chain” sections. The disclosures under ESRS 2.45 (c) can be found in the “Group Strategy” section. The disclosures are identified accordingly there.
Against the backdrop of our commitment to sustainability, the SDGs are critically important to us as a guideline for improving living conditions worldwide. The SDGs serve primarily as a source of direction and inspiration for innovation and as a guide for the future positioning of the company. In this regard, they complement our purpose, “To make the world a brighter place.” We have published our commitment to the United Nations Sustainable Development Goals on our website.
The Covestro Group generates modest sales in connection with fossil gas in accordance with Article 8(7)(a) of Commission Delegated Regulation (EU) 2021/2178.
We set sustainability targets as early as in fiscal 2016 and continually adapt these targets in line with our strategy and vision.
The fact that a sustainability component has been embedded in our management system should also be considered in this context. This sustainability component covers direct and indirect GHG emissions (Scope 1 and Scope 2) of Covestro’s main sites. From fiscal 2025, it will also include the Scope 1 and Scope 2 GHG emissions of all Covestro’s environmentally relevant sites.
The sustainability matters of circular economy, climate neutrality, and sustainable solutions are an integral part of our Group’s Sustainable Future strategy.
We distinguish between the stakeholder groups that might potentially be affected by the impacts of our business activities and relationships and the users of our sustainability reporting. Depending on the topic and its relevance, we identify and prioritize our stakeholders and select the appropriate dialogue format and frequency of contact in each case. The exchange may take place directly or indirectly.
An open and continuous exchange with our regional, national, and global stakeholders is the foundation for mutual understanding and societal acceptance of Covestro’s decisions. Our stakeholders include: capital market representatives; customers and their workers; our employees; suppliers and their workers; the public and local communities; persons in vulnerable situations; nongovernmental organizations; associations; science; and regulators and public authorities. We view nature as a silent stakeholder that is represented by science or nongovernmental organizations, for example.
Internal representatives of relevant stakeholder groups were involved at various points of the materiality assessment, e.g., in identifying and assessing impacts, risks, and opportunities. In this context, relevant stakeholder groups include especially those that might potentially be affected by the impacts of our business activities and relationships. The internal representatives of these groups are usually in contact with members of the stakeholder groups in the course of their day-to-day work.
Exchanges with our stakeholders are conducted by the relevant internal expert groups. We have a number of different channels available to facilitate our dialogue.
Discussions with those stakeholders with which we have a close and collaborative relationship may provide us with new inspiration and important recommendations. They assess our company not only from a legal standpoint, but also according to whether we do business in a sustainable and ethical manner. In order to identify material sustainability matters, we continuously analyze the interests, expectations, and needs of our stakeholders and incorporate the results into our materiality assessment, our sustainability agenda, our human rights management system, and our opportunity and risk management activities throughout the Group.
The following table lists examples of our interactions with various stakeholder groups.
| Stakeholder interaction | ||
|---|---|---|
| Stakeholders | Examples of interaction | Category |
| Own employees | Events for employees with the participation of the Board of Management and top management; ad hoc circulars and presentations; company intranet; social media; internal campaigns and dialogue between managers and employees; continuous dialogue between the Board of Management and works councils; reporting suspected or potential human rights abuses using our existing whistleblower tool | (Potentially) affected stakeholder group |
| Customers and their employees | Continuous personal dialogue via employees in the sales and marketing units; customer surveys, audits and inquiries; participation in international trade fairs, webinars, and digital showrooms; reporting suspected or potential human rights abuses using our existing whistleblower tool | Users of the sustainability report; (potentially) affected stakeholder group |
| Suppliers and their employees | Together for Sustainability initiative and the associated audits, events, and workshops with suppliers on the subject of sustainability; continuous exchange via employees responsible for procurement, including Supplier Code of Conduct; reporting suspected or potential human rights abuses using our existing whistleblower tool | Users of the sustainability report; (potentially) affected stakeholder group |
| Nature | We view nature as a silent stakeholder whose interests are represented by nongovernmental organizations, local communities, and legislators, for example. | (Potentially) affected stakeholder group |
| Non-government organizations | Ad hoc dialogue; press releases; collaborations | (Potentially) affected stakeholder group |
| General public and local communities | Ad hoc dialogue, e.g., in the event of investment projects, in the neighborhood and via the Chempark neighborhood offices (in Germany) and Community Advisory Panels (CAP, in the United States); press releases | (Potentially) affected stakeholder group |
| Regulators and authorities | Regular dialogue with authorities, ministries, and politicians | (Potentially) affected stakeholder group |
| Vulnerable groups | Some members of the various stakeholder groups, e.g., our own employees, the employees of our business partners, or local communities, may be particularly vulnerable. This may be the case if, for example, they have a limited capability to communicate their interests and needs. We seek to be especially attentive in our interactions with these stakeholder groups. | (Potentially) affected stakeholder group |
| Associations | Active membership of national and international associations, e.g., the German Chemical Industry Association (VCI), Plastics Europe, American Chemistry Council (ACC), and China Petroleum and Chemical Industry Federation (CPCIF); press releases and position papers | Users of the sustainability report; (potentially) affected stakeholder group |
| Capital market representatives |
Annual General Meeting; Annual Report, Half-Year Financial Report, and Quarterly Statements; various events for investors and analysts with different focuses; online information on investor.covestro.com; active participation in ratings that provide the most added value for our stakeholders and for us. |
Users of the sustainability report |
| Science | Long-term national and international collaborations with leading universities and public research institutes | (Potentially) affected stakeholder group |
Covestro cultivates good relationships with its workers’ representatives and unions so that all issues concerning HR policy, working conditions, and change processes can always be resolved by management and labor in a collaborative manner.
As part of our social responsibility, we regard respect for human rights as fundamental for our business activities. Covestro is a member of the United Nations Global Compact and is committed to respecting and safeguarding human rights on the basis of the United Nations (UN) Universal Declaration of Human Rights, the Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy of the International Labour Organization (ILO), and the UN Guiding Principles on Business and Human Rights.
The Board of Management has appointed the head of the Group Quality department within the Group Innovation & Sustainability function as Group Human Rights Officer. This role reports directly to the Board of Management and is responsible for monitoring Covestro’s human rights risk management processes.
Information from the Board of Management and/or the Supervisory Board on certain interests of the affected stakeholder groups in respect of sustainability-related impacts is provided via the reporting line. Material impacts may therefore result in material risks, which in turn are discussed along the designated reporting lines as part of the Group risk management process. Impacts, risks, and opportunities in connection with sustainability issues are discussed on an ad hoc basis by the relevant committees such as the Sustainability & Innovation Governance Body (SI GoB).
Our sustainability reporting covers eight of the matters specified in ESRS 1 AR16 as well as the entity-specific topic of “Sustainable Solutions.” We report on the impacts, risks, and opportunities identified as material for Covestro during the double materiality assessment in tabular format at the beginning of the chapter concerned. These tables contain a brief description of the material impacts, risks, and opportunities and their allocation to the respective relevant sub-topics and sub-sub-topics. In addition, the tables provide information on the point in the value chain where the impacts and risks have been identified, whether they are positive or negative as well as actual or potential impacts, and on the time horizon for which the impacts, risks, and opportunities have been classified as material. Furthermore, the tables show which policies and actions we use to counter them and whether we have set ourselves specific targets for this. The policies, actions, and targets are described in more detail after the tables, together with the specific ESRS disclosure requirements.
ESRS 2 generally also requires qualitative and quantitative disclosures on the anticipated financial effects of material risks and opportunities. In accordance with ESRS 1 appendix C, Covestro applies the phased-in disclosure requirements in the first year of preparing the Group Sustainability Statement. According to this expedient, the disclosures specified may be omitted in the first year.