What are the material issues the company has identified?

In its 2017 GRI Supplementary Report Covestro identified a range of material issues, such as environmentally efficient operations, innovative solutions for climate change mitigation, product stewardship, occupational health and safety in operations, innovative solutions that contribute to the UN Sustainable Development Goals. Among these, promoting compliance stands out as a key material issue for Covestro.

Stakeholder engagement in accordance with the GRI Standards

The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:

“The reporting organization shall identify its stakeholders, and explain how it has responded to their reasonable expectations and interests.”

Stakeholders must be consulted in the process s of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.

Key stakeholder groups Covestro engages with:

Stakeholder Group	Method of engagement
Partners	·      Customer surveys, specialist forums and conferences ·      Dialog with employees and labor representatives ·      Supplier days ·      Research projects
Social interest groups	·      Exchange via various media ·      Press conferences and releases ·      Issue-related dialog, e.g. via community offices
Regulators	·      Expert dialog, e.g. regarding energy and environmental policy ·      Exchange at specialist workshops and conferences ·      Site visits
Financial market participants	·      Financial reporting ·      Annual General Meeting ·      Investor events and telephone conferences

How stakeholder engagement was made to identify material issues

To identify and prioritise material topics Covestro conducted interviews with external stakeholders who included associations, NGOs, scientific institutions and investors, asking stakeholders to rank sustainability issues according to importance.

What actions were taken by Covestro to promote compliance?

In its 2017 GRI Supplementary Report Covestro reports that it took the following actions for promoting compliance:

• Implementing a Corporate Compliance Policy
• Covestro’s Corporate Compliance Policy details its commitment to fair competition, integrity in business dealings, the principles of sustainability and product stewardship, upholding of foreign trade and insider dealing laws, the separation of business and private interests, proper record-keeping and transparent financial reporting, as well as to providing fair, respectful and non-discriminatory working conditions. Covestro’s senior executives help implement the Corporate Compliance Policy. Leading by example, they play a key role in making sure that this important code of conduct is adhered to in practice. Executives may lose their entitlement to variable compensation components and be subject to disciplinary measures, if systematic violations of applicable laws that result in possible loss or damage to Covestro occur within their sphere of responsibility which could have been prevented if they had taken appropriate action. Additionally, compliant and lawful conduct forms part of the performance appraisal of all senior managers. Every employee is required, as a matter of principle, to immediately report any infringement of the Corporate Compliance Policy, unless this is not permitted by national law. Employees can personally report potential compliance violations to the Compliance Officer, or use a worldwide hotline or email address that also permit anonymous reports. A Group policy sets out the principles for handling compliance incidents at Covestro, the related responsibilities and procedures, and the consequences if any breaches are found. All suspected compliance incidents are recorded in a central database, confirmed cases are evaluated and organisational, disciplinary or legal action is taken if necessary.

• Applying a compliance management system
• In setting up its compliance management system (CMS) Covestro applied the framework of the Committee of the Sponsoring Organizations of the Treadway Commission (COSO). The design, appropriateness, implementation and effectiveness of the CMS were confirmed in the reporting period, without restriction, in accordance with Auditing Standard 980 of the Institute of Public Auditors in Germany (IDW) in the areas of antitrust law, anticorruption measures and export controls.

• Addressing compliance risks
• Covestro systematically identifies and evaluates compliance risks during its risk management process and, if necessary, defines measures to minimise risk. These focus on the areas of antitrust law, anticorruption measures, export controls, conflicts of interest, insider dealing and antidiscrimination regulations. A local risk assessment covering antitrust law and anticorruption measures is conducted for every country in which a Covestro Group company is domiciled. As regards anticorruption, gifts and invitations, tenders, donations and collaboration with certain business partners such as customs agents, have been identified as high-risk areas. Through extensive communication and training, Covestro helps employees develop a lasting awareness of appropriate conduct and integrity, as well as of the potential consequences of non-compliance.

Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?

The GRI Standards addressed in this case are:

1) Disclosure 205-1 Operations assessed for risks related to corruption

2) Disclosure 206-1 Legal actions for anti-competitive behavior, anti-trust, and monopoly practices

 

Disclosure 205-1 Operations assessed for risks related to corruption corresponds to:

• Sustainable Development Goal (SDG) 16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
• Business theme: Anti-corruption

Disclosure 206-1 Legal actions for anti-competitive behavior, anti-trust, and monopoly practices corresponds to:

• Sustainable Development Goal (SDG) 16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
• Business theme: Compliance with laws and regulations

 

78% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.

7 GRI sustainability disclosures get you started

Any size business can start taking sustainability action

GRI, ISEP, CPD Certified Sustainability courses (2-5 days): Live Online or Classroom  (venue: London School of Economics)

• Exclusive FBRH template to begin reporting from day one
• Identify your most important impacts on the Environment, Economy and People
• Formulate in group exercises your plan for action. Begin taking solid, focused, all-round sustainability action ASAP. 
• Benchmarking methodology to set you on a path of continuous improvement

See upcoming training dates.

 

References:

1) This case study is based on published information by Covestro, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:

http://database.globalreporting.org/

2) https://www.globalreporting.org/standards/gri-standards-download-center/

Note to Covestro: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us.

What are the material issues the company has identified?

In its 2017 GRI Supplementary Report Covestro identified a range of material issues, such as innovative solutions for climate change mitigation, product stewardship, occupational health and safety in operations, innovative solutions that contribute to the UN Sustainable Development Goals. Among these, promoting sustainability throughout its supply chain stands out as a key material issue for Covestro.

Stakeholder engagement in accordance with the GRI Standards

The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:

“The organization should identify its stakeholders, and explain how it has responded to their reasonable expectations.”

Stakeholders must be consulted in the process s of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.

Key stakeholder groups Covestro engages with:

Stakeholder Group	Method of engagement
Partners	·         Customer surveys, specialist forums and conferences ·         Dialog with employees and labor representatives ·         Supplier days ·         Research projects
Social interest groups	·         Exchange via various media ·         Press conferences and releases ·         Issue-related dialog, e.g. via community offices
Regulators	·         Expert dialog, e.g. regarding energy and environmental policy ·         Exchange at specialist workshops and conferences ·         Site visits
Financial market participants	·         Financial reporting ·         Annual General Meeting ·         Investor events and telephone conferences

How stakeholder engagement was made to identify material issues

To identify and prioritise material topics Covestro carried out interviews with external stakeholders from associations, NGOs, scientific institutions and investors.

What actions were taken by Covestro to promote sustainability throughout its supply chain?

In its 2017 GRI Supplementary Report Covestro reports that it took the following actions for promoting sustainability throughout its supply chain:

• Implementing a Supplier Code of Conduct
• Covestro’s Supplier Code of Conduct lays down key social, ecological and ethical standards that Covestro expects its suppliers to respect and apply. It aims to strengthen a joint understanding between Covestro and its suppliers of how sustainability has to be practiced in everyday business. The Code’s principles play an important role in supplier selection and evaluation, and Covestro also expects suppliers to replicate them further down the supply chain.

• Conducting supplier audits and online assessments
• Covestro regularly assesses the sustainability practices of its suppliers, according to the “Together for Sustainability” (TfS) program. Covestro selects suppliers to be assessed on the basis of a combination of country and material risk, as well as their strategic importance regarding its corporate goals. Covestro also aims to reassess suppliers at least every three years, or earlier if needed. In 2017, Covestro carried out reassessments at 284 suppliers, approximately 66% of whom significantly improved their sustainability performance.

• Carrying out sustainability training and dialogue
• To make sure its procurement employees have a comprehensive understanding of the importance of sustainability in the supply chain, Covestro conducts company-wide sustainability training, plus region- and country-specific training on the issue of sustainability audits. In addition, to enable suppliers to successfully comply with its sustainability requirements, Covestro provides a range of training and dialogue opportunities for them.

Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?

The GRI Standards addressed in this case are:

1) Disclosure 308-2 Negative environmental impacts in the supply chain and actions taken

2) Disclosure 414-2 Negative social impacts in the supply chain and actions taken

Disclosure 308-2 Negative environmental impacts in the supply chain and actions taken does not correspond to any SDG.

Disclosure 414-2 Negative social impacts in the supply chain and actions taken corresponds to:

• Sustainable Development Goal (SDG) 5: Achieve gender equality and empower all women and girls
• Business theme: Workplace violence and harassment
• Sustainable Development Goal (SDG) 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
• Business theme: Labor practices in the supply chain
• Sustainable Development Goal (SDG) 16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
• Business theme: Workplace violence and harassment

 

78% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.

7 GRI sustainability disclosures get you started

Any size business can start taking sustainability action

GRI, ISEP, CPD Certified Sustainability courses (2-5 days): Live Online or Classroom  (venue: London School of Economics)

• Exclusive FBRH template to begin reporting from day one
• Identify your most important impacts on the Environment, Economy and People
• Formulate in group exercises your plan for action. Begin taking solid, focused, all-round sustainability action ASAP. 
• Benchmarking methodology to set you on a path of continuous improvement

See upcoming training dates.

 

References:

1) This case study is based on published information by Covestro, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:

http://database.globalreporting.org/

2) http://www.fbrh.co.uk/en/global-reporting-initiative-gri-g4-guidelines-download-page

3) https://g4.globalreporting.org/Pages/default.aspx

4) https://www.globalreporting.org/standards/gri-standards-download-center/

Note to Covestro: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us.