Disclosures on Sustainability Reporting

Nonfinancial Group statement

We publish the nonfinancial Group statement pursuant to Sections 315b and 315c in conjunction with Sections 289c through 289e HGB as an integrated part of the Group Management Report. The respective sections include the strategies we pursue in addressing environmental, labor, and social issues as well as protecting human rights and fighting corruption and bribery, including the due diligence processes followed and measures implemented, as well as the outcomes of these strategies.

We applied the GRI standards as a framework for preparing the nonfinancial Group statement.

Key topics relevant to the nonfinancial Group statement are identified in an internal process and in consideration of their significance and implementation within the company. The starting point for this is the materiality analysis and the material topics identified or updated as a result, i.e., the topics of high or very high relevance for Covestro. The following table provides an overview of the key sustainability topics with an eye to the relevant aspects and contains references to the specific sections in the Group Management Report. In order to identify and address current developments and sustainability-related opportunities and risks at an early stage, we also review whether there are any new findings relevant to opportunity and risk management.

Key sustainability topics of the Group’s nonfinancial statement (HGB)

Key topics of the Group’s nonfinancial statement (German Commercial Code)	Relevant aspects in accordance with the Group’s nonfinancial statement (German Commercial Code)	Section reference in the Group Management Report
Alternative raw materials	Environmental matters, social matters	”Strategy,” ”Management,” ”Circular Economy,” ”Innovation.”
Compliance	Environmental matters, fighting corruption and bribery, respect for human rights	”Opportunities and risks report,” ”Compliance.”
Employer attractiveness	Employee matters	”Employees.”
Equality, diversity, and inclusion	Social matters, employee matters, respect for human rights	”Employees.”
Greenhouse gas emissions	Environmental matters	”Management,” ”Circular Economy,” ”Environmental protection.”
Health and safety of our workforce	Employee matters	”Integrated management system for health, safety, environment, energy, and quality,” ”Safety.”
Human rights due diligence	Social matters, respect for human rights	”Management,” ”Social responsibility.”
Inclusive business	Social matters	”Management,” ”Social responsibility.”
Process and plant safety	Environmental matters, social matters	”Integrated management system for health, safety, environment, energy, and quality,” ”Safety.”
Product safety	Social matters	”Product safety.”
Recyclability and end-of-life solutions	Environmental matters	”Strategy,” ”Circular Economy.”
Renewable energy	Environmental matters, social matters	”Strategy,” ”Circular Economy,” ”Innovation.”
SDG-conform product portfolio	Environmental matters, social matters	”Management,” ”Innovation.”
Sustainability in sourcing	Environmental matters, social matters, fighting corruption and bribery, respect for human rights	”Procurement,” ”Management,” ”Sustainability in the supply chain.”
Sustainable innovation portfolio	Environmental matters, social matters	”Management,” ”Innovation.”

As an integral part of the Group Management Report, the nonfinancial Group statement was audited by the financial statement auditor, KPMG AG Wirtschaftsprüfungsgesellschaft, as part of the audit of the consolidated financial statements based on an expansion of the audit engagement.

A nonfinancial statement or nonfinancial report does not have to be provided at this time for Covestro AG.

HGB/German Commercial Code

Comprises much of the German accounting legislation

Due diligence

Information on the processes for identifying, preventing, and mitigating the actual or possible negative impact on nonfinancial aspects.

GRI/Global Reporting Initiative

Guidelines for the preparation of sustainability reports by companies, governments and non-governmental organizations (NGOs)

Materiality analysis

A materiality analysis enables companies to systematically identify the most important sustainability issues from the internal and external perspective.

Annual Report 2020

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Disclosures on Sustainability Reporting

Nonfinancial Group statement