Basis of reporting

FURTHER INFORMATION ON OUR SUSTAINABILITY MANAGEMENT

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. Responsibility for sustainability management is defined in a corporate policy. The supervisory board also regularly addressed sustainability issues in 2022.

In view of the increasing relevance of sustainability for the management of the Evonik Group, we integrated further ESG aspects into our governance framework in the reporting period. Since September 2022, our sustainability council has met at the executive board level, chaired by the chairman of the executive board. To strengthen the alignment with our businesses, alongside the executive board, members include the heads of the divisions. The sustainability council is responsible for the management of sustainability-related aspects and the associated decisions. Following approval by the executive board, the measures are implemented by the operational units in close consultation with the relevant functions, for example, Strategy, Sustainability, Research, Development & Innovation, and Procurement. The decisions taken by the sustainability council are prepared by the sustainability circle, which comprises representatives of the functions and departments of relevance for sustainability. The sustainability circle is chaired by the chief human resources officer, who is the executive board member responsible for sustainability. Among other things, in the reporting period, both the sustainability council and the sustainability circle considered the results of the sustainability analysis of our business, the EAGER project to reduce greenhouse gas emissions at our sites, and the establishment of sustainability data management.

Moreover, starting in 2023, further sustainability aspects will be integrated into the long-term remuneration of the executive board and senior executives.

Governance structure sustainability

Engaging with our stakeholders

We are convinced that only companies that act responsibly, enjoy people’s trust, and are open to continuous improvement can be successful. That includes listening very carefully to how we are perceived by our stakeholders. In this way, we want to strengthen the trust of our most important stakeholders—for example, customers, suppliers, and shareholders.

Dialogue with our stakeholders is important to give us a better understanding of different perspectives and regularly review our own positions. It enhances our understanding of present and future societal challenges. In addition, we use our stakeholder engagement to improve our insight into the impact of new market trends and developments on our business. That makes it easier for us to identify possible opportunities and risks at any 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 example, business, financial market)
• Characterization (for example, suppliers, employees, customers).

Stakeholder groups of relevance for Evonik and their influence on our company

In our materiality analysis 2022, we reviewed the stakeholder groups we had defined and added contractors’ employees, future generations, and trade unions. This was partly in connection with the recommendations of the new GRI 3 Material Topics 2021. 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. The chart provides an overview of the main communication channels we use for this:

Stakeholder communication channels

Our approach to engaging with our stakeholders includes the involvement of the Evonik regions. In general, we take care to achieve the widest possible coverage of operational, political, social, and community perspectives.

We have developed various formats for social dialogue. These help us engage with both direct and indirect stakeholders. As a result of the ongoing coronavirus pandemic, in the reporting period we were not able to use these formats as we normally would. Our large annual stakeholder conference, Evonik Perspectives, has been held digitally since 2021. Evonik Perspectives, which is organized with our cooperation partner DENEFF, the German enterprise initiative on energy efficiency, has become established as an expert forum and a platform for informed debate on key aspects of sustainable development.

Impact valuation

Since Evonik is an industrial company, it is important to monitor the impact of our business activities. We use an impact valuation to regularly measure and analyze the direct and indirect impacts from an economic, ecological, and social perspective. This supplements our established analytical approaches. We anticipate that this will allow early identification of potential future opportunities and risks, make our business model more resilient, and improve our understanding of the long-term value that our business activities create for society.

This procedure provides an insight into

• the scale of the positive and negative ecological, social, and macroeconomic impact of our corporate activities;
• Evonik’s benefits for society as a whole; and
• the key levers to reduce negative impacts and maximize positive impacts along our value chain.

Our impact valuation is based on the input-output-outcome-impact (IOOI) model, which takes account of the input of resources and the measurable outcomes of corporate activity. In addition, short- and long-term impacts are identified, measured along the value chain, and evaluated.