UN Photo/Milton Grant

Keywords: Innovation (2 hits),

Preamble

The German Sustainability Code is a standard offering transparency as to a com­pany?s sustainability performance. It creates a scope of validity by applying bench­marking to corporate social responsibility. Its application is voluntary. The commen­tary provides details on the application of the GSC.

The German Council for Sustainable Development strives to see the German Sus­tainability Code applied well beyond the group of companies already actively en­gaged in sustainability reporting. It will critically monitor the application of the GSC.

The German Sustainability Code arose during a dialogue process involving numer­ous stakeholders. Representatives from the financial markets, businesses and civil society actively participated in the dialogue process. Businesses have field-tested the German Sustainability Code and found it to be highly practicable.

Content of the German Sustainability Code

STRATEGY

Strategic Analysis, Strategy and Goals

1 The company discloses how, for its main activities, it analyses the opportuni­ties and risks related to sustainable development. The company outlines what measures it is taking in order to operate in line with the main and recognised sector-specific, national and international standards.

2 The company discloses how the strategy devised for its main activities and the systematic implementation of the strategy takes into account all aspects of sustainability which have a substantial impact on the company, for example strategic competition-based positioning, Innovation management, business ac­tivities that conserve the climate, environment and resources; demographic developments, the value-added chain, the product life cycle, the product port­folio, etc.

3 The company discloses what qualitative and/or quantitative as well as tempo­ral sustainability goals are set and operationalised, and how their level of achievement is monitored. The company discloses how the main suppliers, employees, capital markets, customers and main stakeholder groups are in­cluded on a regular basis.

4 The company states how deep into the value-added chain the sustainability criteria are verified and what significance sustainability has for added value.

Key performance indicators (KPI) GRI 1,2 Description of key impacts, risks, and opportunities

or

EFFAS 1.5.1. The company should outline the importance of ESG for the corporate strategy and explain how ESG aspects are taken into account when implementing the strategy.

PROCESS MANAGEMENT

Rules and Processes

1 Within the company, accountability for the sustainability of the company is specified in corporate management.

2 The company discloses whether the sustainability strategy is implemented us­ing rules and processes. The company depicts specific circumstances from purchasing, production, services, human resources, investment, research and development as well as logistics/transport and marketing and describes how suppliers, customers as well as other stakeholder groups (e.g. employees) are taken into account.

3 The company discloses how, along the lines of financial parameters, key per­formance indicators on sustainability are integrated into periodical internal planning and control and how the reliability, comparability and consistency of data applied to internal controls and external communication are safeguarded through appropriate processes.

Incentive Schemes

8. The company discloses how target agreements and remuneration schemes for executives are also geared to achieving the sustainability goals and how these are geared towards lasting value creation. It discloses the extent to which sustainability performance forms part of the evaluation of the top man­agement (board/managing directors) conducted by the monitoring body (su­pervisory board/advisory board).

Stakeholder Engagement

9. The company discloses how the relevant stakeholders are identified, how a dialogue takes place with them on a regular basis and how they are system­atically integrated into the sustainability process.

place with them on a regular basis and how they are system­atically integrated into the sustainability process.

Innovation and Product Management 10.The company discloses how innovations in products and services are en­hanced through processes which improve sustainability with respect to the company?s utilisation of resources and to the user. A further statement is made as to whether the economic, social and ecological effects of the com­pany?s main products and services are currently or will be assessed and im­proved through its value-added chain and product life cycle.

Key performance indicators (KPI)

GRI EN6 Initiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives.

GRI EN26 Initiatives to mitigate environmental impacts of products and services, and ex­tent of impact mitigation.

GRI FS11 Percentage of assets subject to positive and negative environmental or social screening.

or

EFFAS E13-01 Improvement rate of product energy efficiency compared to previous year.

EFFAS V04-12 Total investments in research on ESG-relevant aspects of business such as

e.g. eco-design, eco-efficient production processes, decreasing impact on bio­diversity, improving health and safety conditions of employees or supply chain partners, consulting on integration of ESG aspects in change management, development of products to exploit ESG opportunities etc. in monetary terms

i.e. currency as a percentage of revenue.

EFFAS V04-13 Percentage of products or services for -increasing eco-efficiency of client applications or operations, -developing and using clean technologies, -increasing fuel-efficiency, -offsetting climate change, carbon emissions, resource depletion, -making ESG-relevant products operable, -financing of ESG-relevant products or services.

ENVIRONMENT

Usage of natural resources

11.The company discloses the extent to which natural resources are used for the company?s business activities (input and output of e.g. materials, water, soil, waste, energy, emissions, land, biodiversity). It discloses in what way the sus­tainability management system incorporates the entire product life cycle into the analysis.

12.The company discloses what qualitative and quantitative goals it has set itself with respect to the efficient use of resources, the use of renewable energy sources, the increase in raw material productivity and the reduction in the us­age of natural resources and how these goals have been met.