About this Report

Covestro provides comprehensive and transparent information on issues that are material to the company and our . We measure our sustainability performance using both financial metrics and material nonfinancial indicators, all of which are published in the Covestro Annual Report. Through this process, we aim to illustrate how environmental and societal considerations are closely linked to our long-term business success.

The Annual Report and the supplementary sustainability information contained in this GRI Supplement comprise our annual sustainability reporting. The contents of this GRI Supplement are a further contribution to transparent reporting, by which we fully comply with the requirements of the “core” option of the internationally recognized GRI Standard. The reporting period covers the period from January 1 to December 31, 2018. The most recent Annual Report and its associated GRI Supplementary Report were published in February 2018.

Covestro’s sustainability reporting follows international guidelines and recommendations, including those on the definition and selection of nonfinancial indicators and on reporting. Our sustainability reporting is prepared in accordance with the “core” option of the ’s (GRI) Sustainability Reporting Standards (SRS). A GRI Index can be found at the end of this document. The United Nations Sustainable Development Goals (SDGs) are a guiding force behind our corporate strategy. They are key to shaping the direction of our company, for example by also serving as a source of innovation. In this Report, the UN Sustainable Development Goals were not linked to the individual GRI indicators in the GRI Index. How the SDGs relate to the individual GRI indicators can be seen on the GRI website.

In this reporting period, we have for the first time separately referenced content that follows the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). A corresponding overview immediately precedes the GRI Index.

As required by the (HGB §§315b, 315c in conjunction with §§289c to 289e) relating to nonfinancial statements (NFS), reporting on sustainability matters is included in the Group Management Report and the associated statements were audited along with the consolidated financial statements.

In selecting and measuring indicators, the relevant GRI aspects focusing on key sustainability issues were taken into account. Our greenhouse gas emissions (Scope 1 and 2) are recorded in line with the requirements of the (GHG Protocol).

Data collection for nonfinancial metrics

We compile our nonfinancial metrics, on areas such as safety and environmental performance for example, for the Group as a whole using our site information system. With this system we cover all fully consolidated companies in which Covestro generally holds at least a 50% share. This framework is used to globally compile all the local environmentally relevant figures and indicators from defined sites, predominantly our production as well as research and development (R&D) centers. Irrespective of Covestro’s stake in these companies, their environmental performance metrics are fully consolidated. If other external companies are present at a site (e.g. in chemical parks) or if joint venture partnerships exist, only the part attributable to Covestro’s operating activities is reported. Data on workplace accidents, transportation and environmental incidents are collected at all sites worldwide.

Our human resources metrics are obtained from our global human resources information system. Compliance incidents throughout the Group are compiled in an incident database. These are then carefully reviewed so appropriate remedial action can be identified and implemented. Similarly, we record violations and complaints about our products in a reporting system, evaluate them and initiate appropriate measures.

As one of the six founding members of the (TfS) initiative launched by leading chemical companies, Covestro is working toward the global harmonization of its suppliers’ sustainability assessments and audits. Covestro evaluates the sustainability performance of its suppliers by means of assessments conducted online via the TfS platform or with on-site audits. All results of the sustainability assessments and audits are available to TfS members on an online platform. This platform provides them with information for continual monitoring with a view to encouraging improvements using the supplier evaluations.

External assurance

KPMG AG has audited this report on a limited assurance basis to assess compliance with the requirements of the GRI SRS. The audit was conducted in accordance with the International Standard on Assurance Engagements (ISAE) 3000 (Revised). The data calculated by the external provider EcoVadis and is not a component of this audit. The independent assurance report forms part of this report. The sustainability section in the combined management report for the 2018 fiscal year has been audited in full with “reasonable assurance” by the external auditor in accordance with §317 of the German Commercial Code (HGB).

Reporting principles

Non-discrimination

We are committed to non-discrimination. For the sake of readability, this report generally avoids using gender-specific wording. All references to persons are intended to apply equally to all genders.

Rounding

As the indicators in this report are stated in accordance with commercial rounding principles, totals and percentages may not always be exact.

Language versions

This GRI Supplement is available in both German and English. If there are any differences, the German version is authoritative.

Publication date

This GRI Supplement was published on February 25, 2019.

Stakeholders
Internal and external interest groups which are directly or indirectly impacted by the company’s corporate activities and/or may be so in the future
GRI/Global Reporting Initiative
Guidelines for the preparation of sustainability reports by companies, governments and non-governmental organizations (NGOs)
HGB/German Commercial Code
Comprises much of the German accounting legislation
GHG Protocol/Greenhouse Gas Protocol
International accounting system for greenhouse gas emissions developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD)
TfS/Together for Sustainability
An initiative undertaken by various companies in the chemical industry to standardize supplier assessments globally in order to improve sustainability practices in the supply chain
TfS/Together for Sustainability
An initiative undertaken by various companies in the chemical industry to standardize supplier assessments globally in order to improve sustainability practices in the supply chain