Strategy and growth

Strategy and growth

Implementation of the strategic transformation
Significant investment in Next Generation Solutions
Systematic alignment of the portfolio to sustainability, transformation, and core processes

Business model

Evonik is one of the world’s leading specialty chemicals companies. Our strengths include the balanced spectrum of our activities, end-markets, and regions. Our strong competitive position is based on collaboration with customers, our innovative capability, and our integrated technology platforms. Our specialty chemicals products make an indispensable contribution to the benefits of our customers’ products, which generate their success in global competition. Close cooperation with customers enables us to build up a deep knowledge of their business, so we can offer products tailored to their specifications and extensive technical service. Technology centers and customer competence centers play an important role in this around the world. Market-oriented research and development is an important driver of profitable, resource-efficient growth.

Transformation and core processes

Evonik continued to work on the strategic transformation of its business in the reporting period. As part of Next Generation Evonik, sustainability is an integral component 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 have set ourselves ambitious sustainability targets. 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) .

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

In view of the transformation requirements made on our business activities, we draw a distinction between market-driven, asset-related, 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 2022 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.

Our contributions to improved sustainability are allocated to four Sustainability Focus Areas (SFAs): fight climate change, drive circularity, safeguard ecosystems, and ensure health & wellbeing. For each SFA, we show how Evonik reduces its own ecological footprint and the handprint resulting from the use of our products and solutions in the relevant markets.

Sustainable Finance

The transformation of our portfolio and the sustainability alignment of our products and processes are becoming increasingly important for the long-term financing of our business activities. Products and solutions from Evonik play a part in the sustainable transformation of many end-markets. Examples are the focus on circularity and climate neutrality for the future. The capital markets recognize our strategic and operational progress towards greater sustainability.

UN Sustainable Development Goals of relevance for Evonik

The Sustainable Development Goals (SDGs) provide guidance on actively aligning our current business activities to overarching development paths. An SDG is especially relevant for us if there is a significant positive or negative influence on or by Evonik. The SDGs of particular relevance for Evonik are:

Measurability and management

Extensive transparency and sound analyses are our response to the growing interest shown by our stakeholders in sustainability. We take into account ecological, social, and economic effects to arrive at a holistic assessment of our sustainability performance. Alongside potential future opportunities and risks for our business, we highlight the cost/benefit effects of Evonik’s activities for society. We see this as an important contribution to the acceptance by society of new technologies and industrial production.

Sustainability analysis of our business

The sustainability analysis of our business is the key tool for the strategic management and ongoing development of our portfolio.

Portfolio transformation

Portfolio transformation is one of the three top topics identified in our most recent materiality analysis. By transforming our portfolio, we want to make Evonik even more resilient and gain access to new, high-growth business opportunities. At the same time, our innovative products and technologies improve our customers’ sustainability performance and can therefore strengthen customer loyalty.

Materiality analysis

Basis: an extensive new materiality analysis in 2022

Our sustainability management is aligned with materiality. This report continues our strategic sustainability reporting, focusing on material topics. Steadily improving sustainability reporting is a key element in Evonik’s sustainable corporate strategy.

Chapters in the sustainability report

Our targets

Below is an overview of the targets set for our strategy and growth area of action.

Target attainment in 2023
	Increase the proportion of sales generated with Next Generation Solutions to over 50 percent by 2030. Status: 43 percent (2023)
	Proportion of sales from challenged products should be permanently below 5 percent. Status: 2 percent (2023)

Targets for 2024 and beyond
	Increase the proportion of sales generated with Next Generation Solutions to over 50 percent by 2030.
	Proportion of sales from challenged products should be permanently below 5 percent.