Covestro Group at a Glance – Social Responsibility
Our Inclusive Business activities are an important aspect of our sustainability strategy. This business model focuses specifically on unmet needs of communities in underserved markets. Our collaborative approach offers scalable solutions to reach as many people as possible in these markets. We collaborate with our customers as well as governmental and nongovernmental organizations to develop affordable solutions based on our technologies and products to benefit underserved communities and regions by improving living conditions. Our employees concentrate on three regions – the Indian subcontinent, Southeast Asia, and Eastern and Southern Africa – with the main goal of implementing innovative solutions in the fields of affordable housing, food security, and water and sanitary facilities. In terms of food security, one of the areas we are actively engaged in is to fight against post-harvest losses, which are all losses that occur after the harvest (e.g., as a result of improper storage). They are an economic challenge particularly for smallholder farmers. Solar greenhouse 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. In addition, these innovative solutions help develop new sales markets – for instance, in Ethiopia or Tanzania – for Covestro.
OUR INCLUSIVE BUSINESS GOAL
We want 10 million people in underserved markets to benefit from our solutions by the year 2025. The goal is to improve their standard of living primarily through affordable housing, sanitation, and food security.
We want our solutions to improve the lives of 10 million people in underserved markets by the year 2025. By the end of the year under review, we reached 3.2 million people with inclusive business solutions (previous year: 1.1 million people). Covestro defines this figure by including people who potentially benefit from our activities as part of their work or daily life. These individuals include farmers and their families, school children, and other people who are positively impacted by completion of our projects or installation of our solutions.
Participating governmental and nongovernmental organizations helped us collect the data. The data collected as part of a defined process is reviewed at local and global level, and the processes are continuously refined. In fiscal 2021, the methodology for calculating the number of people reached was optimized. Instead of calculating the number of persons reached once immediately after implementing our inclusive business solutions, we now determine the cumulative number of all people reached over the years since the solution was installed. The Board of Management is informed annually about these global activities.
In the year 2021, we once again concentrated on collaboratively developing new, affordable solutions with partners who passed a due diligence review in advance. These solutions are financed by governmental and non-governmental organizations. Our work in consortia – always preceded by our standard due diligence process for new partners – also ensures that the relevant segments of the population profit from the jointly developed end products.
Our inclusive business activities were severely affected by the global coronavirus pandemic in the year 2021, as they were in the previous year, due to measures such as worldwide travel restrictions. Our activities in Africa and Southeast Asia felt the impact in particular. With the exception of a pilot project in Kenya, the announced water supply project was unable to begin operations. Due to the pandemic, the announced installation of solar greenhouse dryers already delivered in South Africa was successfully executed after an 18-months delay. None of our projects on the Indian subcontinent were canceled, but in most cases implementation was delayed. In Batticaloa (Sri Lanka), the project co-financed by KfW DEG (Deutsche Investitions- und Entwicklungsgesellschaft mbH) for purchasing sanitary facilities was once again delayed because of the pandemic.
In Africa, the main focus in the year 2021 was on food security. In the reporting year, we were able to continue our partnership with Tshwane University of Technology in Pretoria (South Africa). The students at the university are working on various research projects that use solar greenhouse dryers with a focus on alternative methods for drying traditional African fruits. We worked on another project in Tanzania in the year under review. Our collaboration with Community Forest International and the installation of the solar dryer system financed by the EU helped up to 2,000 local spice growers and their families in Mtambwe Dayaauf (Tanzania). Initial projects were launched in Ethiopia as well. As part of the develoPPP program of the Federal Ministry for Economic Cooperation and Development (BMZ), Covestro signed a contract with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, Bonn (Germany). The three-year project is scheduled to roll out in fiscal 2022. After initial drying systems are successfully deployed in various regions of Ethiopia, this program will support craft-based businesses with technology transfer so that they can manufacture dryers themselves. The use of imported equipment is not just for demonstration purposes: It is intended to help coffee growers demonstrably improve their harvest by increasing the quality of the coffee beans. Training of the local population in production and use of the systems is part of the project.
In the reporting year, our inclusive business activities on the Indian subcontinent primarily targeted drinking water and sanitary facilities as well as food security and affordable housing. We continued to participate in the Fecal Sludge Management & Toilet Program, for instance. Using solar dryers in Khammam (Telangana, India) and Unnao (Uttar Pradesh, India), we successfully demonstrated the advantages of polycarbonate-based drying equipment for drying fecal sludge. Our planned direct participation in public tenders in fiscal 2022, particularly in the area of drying fecal sludge, will enable us to seamlessly connect the organic waste management and food security value chains with the aim of protecting public health in the region.
In the year under review, the regional Inclusive Business team reacted to the global coronavirus pandemic and its impact on the Indian subcontinent by focusing in particular on setting up health centers and school buildings in India as well as marketing innovative solar water supply units in Bangladesh. We worked with Engineering Projects India to submit an application to build a health center to the government of the Indian state of Karnataka.
From the beginning of our activities there, the use of our solutions on the Indian subcontinent was recognized and recommended by various organizations such as the United Nations Department of Economic and Social Affairs (UN DESA), the Solar Impulse Foundation, KfW DEG, and NABARD (National Bank for Agriculture and Rural Development) Consultancy Services. These developments have led the regional team to concentrate on projects such as the water supply in Khulna and Bagerhat (Bangladesh) and various categories of solutions, including food security, in India.
Our inclusive business activities also continued in Southeast Asia in the reporting year. Specifically, our initiative in Vietnam launched in the year 2020 under the GREAT program by the Australian Department of Foreign Affairs and Trade remained active. By the end of the year 2021, this had benefited more than 2,000 women, most of whom belong to ethnic minorities.
Joint work on the Coffee Innovation Fund project by GIZ on the solar drying of coffee beans in fiscal 2020 helped Covestro’s Southeast Asia team obtain financing for additional projects for our project partners from the Agri Innovation Fund in Laos and Cambodia in the reporting year. With the help of solar greenhouse dryers, the coffee farmers there were able to reduce coffee bean loss and cut drying times while increasing drying efficiency.