Social responsibility

Covestro is a signatory to the UN Global Compact charter and participates in the industry-led Responsible Care initiative and in global sustainability forums such as the World Business Council for Sustainable Development (WBCSD). We publish voluntary corporate commitments on important topics on our website, thus undertaking to comply with certain standards.

Due diligence on human rights

Covestro is committed to respecting human rights on the basis of the United Nations Guiding Principles on Business and Human Rights. We advocate for compliance with the various national action plans and laws on human rights due diligence. In doing so, we openly take responsibility as a company for respecting human rights in all of the Covestro Group’s activities, at subsidiaries and throughout global supply chains and value chains, as well as for guarding against violations of human rights.

The principles of our due diligence on human rights are delineated in various voluntary commitments, company policies and our Supplier Code of Conduct. In these documents, we have specified key international conventions and principles as the basis of our conduct. We expect our employees and business partners around the world to conduct themselves in accordance with these principles.

A key component of our due diligence on human rights lies in zero tolerance of child labor, forced labor and human trafficking. We made a public statement on the latter in the reporting period in our updated document “Corporate Commitment against Slavery and Human Trafficking.”

Covestro has also incorporated various sub-aspects of human rights in its management systems. This includes issues such as safety, product stewardship, compliance and human resources policy.

Covestro regards adherence to sustainability standards within the supply chain as a fundamental factor in value creation and an important lever for minimizing risks. In our Supplier Code of Conduct, we therefore require our suppliers to also protect the human rights of their employees and treat them with dignity and respect. We conduct detailed sustainability assessments of our suppliers that also focus on compliance with human rights due diligence.

Due to the growing importance of the issue of human rights due diligence, we systematically analyzed and assessed the risks of human rights issues in the year under review. The initial step was to identify and prioritize material human rights risks and their occurrence in our value chain (human rights risk assessment). Human rights risks are defined as any potential risk to those potentially affected that could arise from our business activity, supply chain or our products. The conducted risk analysis covered our own sites as well as the supply chain and the use phase of our products. In a workshop with selected departments, the potential risks were outlined, discussed and prioritized according to recognized criteria to be worked on further.

The risks were prioritized in two steps:

• Step 1: Identification and categorization of potentially unfavorable consequences for human rights. These include consequences that Covestro might have caused, under certain circumstances might have contributed to, or might be associated with indirectly in the course of its business activities.
• Step 2: Setting of priorities and identification of topics of particular relevance to Covestro (salient issues). For this purpose, both the severity of a possible human rights violation as well as Covestro’s degree of influence (leverage) were assessed.

This risk analysis resulted in the identification of 11 topics with a high to very high priority for Covestro. Based on this risk analysis and a status-quo comparison of existing processes and structures for selected topics, we developed a concept for a comprehensive human rights management system which will be promoted further in 2020.

A comprehensive human rights due diligence concept and its development status were presented to the Board of Management in the reporting period.

Alliance to End Plastic Waste

As a founding member of the Alliance to End Plastic Waste, Covestro is expanding its commitment against the uncontrolled disposal of plastic waste in the environment. This global network of companies strives to minimize, manage and reuse plastic waste – and above all, prevent plastic waste from entering the environment. By the end of 2023, USD 1.5 billion (around €1.4 billion) is expected to have been provided for this purpose by the network. More than 40 companies from the chemical, plastic, consumer goods and waste disposal sectors currently participate in this initiative.

For Covestro, this alliance represents an important step toward promoting innovation, establishing strategic partnerships, transforming ideas for waste recycling into economically viable and sustainable solutions, and encouraging sustainable consumer habits. The objective is to use plastic waste as a raw material to keep the volume of plastic waste that enters waterways and the environment to a minimum.

The measures Covestro itself takes are key, since both the Alliance and its members concentrate primarily on specific actions. In 2020, our contribution to the Alliance’s mission will be assessed for the first time using a newly developed list of criteria by the Alliance. Information about verified initiatives and projects will subsequently be published as long as they are not confidential.

Inclusive Business

We collaborate globally with customers as well as governmental and non-governmental organizations under the auspices of the Covestro Inclusive Business initiative to develop affordable solutions based on our technologies and products to benefit underserved populations and regions. Our employees focused on three regions (India, Southeast Asia and East/South Africa) and worked on improving the living conditions of underprivileged and mostly low-income people by implementing new innovative solutions for affordable housing, a secure food supply, as well as water and sanitary facilities. In cooperation with partners, we develop affordable products based on our raw material technologies tailored to user needs. One area of activity is post-harvest losses in the food industry in developing countries. Post-harvest losses are all losses occurring after the harvest (e.g., as a result of improper storage) and are an economic challenge particularly for smallholder farmers. Solar food dryers and cold storage, which are developed with industry partners within Inclusive Business, contribute substantially toward improving the financial situation of these farmers by reducing post-harvest losses. At the same time, innovative solutions help open up new markets for our company.

It is important to clearly distinguish between Inclusive Business activities and donation activities. This is mainly achieved by working with partners to focus on the joint development of new and affordable solutions whose financing is ultimately assumed by governmental and non-governmental organizations. Our work in consortia also ensures that the relevant segments of the population ultimately profit from the jointly produced end products.

In line with the UN Sustainable Development Goals (SDGs), Covestro is pursuing the goal of improving the lives of ten million people in underserved developing and emerging countries by 2025. The Board of Management is informed annually about these global activities. By 2019, we reached more than 650,000 people with Inclusive Business solutions. We arrive at this number for the installed solutions by considering the people that could potentially benefit from our projects as part of their work or daily life based on local conditions. These include farmers and their families, schoolchildren or the people employed for the installation. The data is collected with the help of participating governmental and non-governmental organizations as well as third-party sources of data for determining average family sizes in the respective countries.

In Africa, the focus has been mainly on post-harvest solutions, especially food drying. The initiative enabled initial solar dryers to be implemented successfully in Tanzania and the Seychelles. We can also look back on a successful start in South Africa, including the launch of a long-term partnership with Tshwane University of Technology (TUT). Students at TUT will now work with our support on various drying methods using solar dryers in the next three years. The goal is to enable local production of solar dryers in Africa in 2020. In the coming fiscal year, we will expand our focus in Africa to securing the supply of drinking water.

In India, Nepal and Sri Lanka, we have installed various solutions ranging from sanitary facilities and affordable housing units to drying or cooling systems for preserving food.

The Inclusive Business team in Southeast Asia also concentrates on post-harvest products as well as drinking water supply and sanitary facilities. We successfully partnered with Blue Dragon Children’s Foundation on a pilot project on sanitary facilities at Muong Mun Secondary School. The project facilitates the supply of water to disadvantaged children from ethnic minorities in the Dien Bien province in Vietnam. A water distillation system by our Melbourne-based partner company F Cubed Ltd. in Australia and our specialty films are used to supply over 600 students with drinking water.

Social engagement and dialogue

Social and societal matters are of great significance to Covestro. We address our responsibility to society comprehensively through corporate citizenship as well as ongoing constructive dialogue with authorities, neighbors, stakeholders and organizations interested in Covestro. More specifically, we maintain constant contact with authorities and conduct regular plant tours as well as operating neighborhood offices. Donations, support programs and special partnerships are further expressions of Covestro’s active commitment to society.

Access to education, technology and a better life

Covestro would like to facilitate access to education, technology and a better life, and achieve the SDGs faster through our social engagement. As one of the world’s largest polymer companies, Covestro uses its position to work with different organizations in numerous regions in the world to advance projects for protecting the environment, improving the welfare of society, and stimulating the economy. To achieve this, a central unit in the company supports Group-wide efforts to plan and implement cooperative efforts with partners and donation management in order to provide more resources for meeting the SDGs.