Strategy and Analysis | G4-2

Description of key impacts, risks, and opportunities

We believe that economic success, sustainability and social acceptance are inextricably linked. Symrise’s corporate strategy is based on the three pillars of growth, efficiency and portfolio. It incorporates aspects of sustainability at all levels in order to enhance the company’s value over the long term and minimize risks. Our integrated corporate strategy is further defined and expanded by goals and measures along the four pillars of our sustainability activities: footprint, innovation, sourcing and care. In this way, we are making sustainability an integral part of our business model and turning it into a clear competitive advantage.
Using a materiality analysis, we have systematically assessed the impacts of our business activities within the context of sustainability and our stakeholders’ expectations (see also G4-18 through 22). We have established a Group-wide risk management system to identify the rewards and risks that are associated with our sustainability challenges. This covers sustainability-relevant issues as a subcategory of nearly all other risk categories – from environmental and industry risks via procurement and product risks to operating risks. Rewards and risks, particularly those that relate to climate change, water and biodiversity, are evaluated at least twice a year by the Sustainability Board over a horizon of more than six years.

Growth

With more than 25 production sites around the world, we develop our products primarily in the regions where they are sold. We source them locally and supply the materials mainly to customers in close proximity to the company sites. This is one way we significantly reduce traffic-related emissions. At the same time, this gives us short delivery times and greater flexibility.
This is why we decided to source onions, one of our most important raw materials, as locally as possible – usually within a radius of less than 100 kilometers. As a result, we reduced our CO2 footprint for onions by up to 75 % compared to conventional goods. Furthermore, we began operations at a new production site in Russia four years ago to avoid transporting high volumes of raw materials from Germany to Russia.

Efficiency

We certified all of our German sites to the ISO 50001 standard and are planning measures to increase our energy efficiency. Energy audits according to the regulations of the Energy Efficiency Directive (EED) were performed at our other European sites.
Most of our other production sites are becoming ISO 14001 certified, supported by our TPM teams. The teams regularly analyze manufacturing processes for opportunities to save energy or sustainably increase process efficiency.
Energy costs have a notable influence on our profitability and therefore our competitive position. Furthermore, we meet customer expectations and can create added value by helping our customers achieve their CO2 goals.

Product Portfolio

Processing raw materials is quite energy-intensive, which has a substantial impact on our operational costs. To avoid losses, we hold to an integrated approach that enables us to use resources as efficiently as possible. For instance, we use more than 98 % of the onion thanks to improvements from our last “onion optimization process” in 2015. This underscores just how important optimization is for our future.
Our menthol production has been greatly expanded. With our synthetic material, we are less dependent on natural menthol. The production processes for natural menthol emit about ten times as much CO2 as synthetic menthol. This provides us with long-term availability of raw materials. We are working on similar solutions for other raw materials. We are currently developing a process that creates one of our strongest revenue-generating products using renewable byproducts from other industries rather than mineral oil.

We have set ourselves ambitious goals and enacted corresponding measures for the continual integration of business and sustainability. Symrise can only achieve sustainable growth if we implement our economic efforts in a proactive and responsible way. Our economic ambitions are therefore aligned with our integrated corporate strategy of goals and measures in keeping with the four pillars of our sustainability agenda.

In terms of these goals, we are making good progress. The 2015 awards we received within various areas testify to this. And yet, we still face regular challenges that represent both opportunities for growth and areas for further continued improvement.
For instance, employee turnover was slightly higher than in the previous year. We are working on lowering this figure according to our goals with regard to the care focus area. An employee engagement survey is planned for 2016 that will help us determine the causes for this turnover and develop suitable measures for reducing it. In terms of our goals for the footprint and sourcing focus areas, the acquisition of Diana in 2014 presented us with special challenges regarding how we collect our sustainability data: While there is still room for improvement in this area, we are confident that we will finish harmonizing our data collection and processing structures in the coming reporting year. We also still see a need for improvement in terms of our joint supplier evaluation based on SEDEX criteria and site certification. We will therefore again focus intensively on this area in 2016.