Covestro Group at a Glance

Employees

The multifaceted abilities and personal efforts of all employees contribute materially to Covestro’s success. All employees have both the freedom and the mandate to act and contribute in line with the company’s goals, values, and culture. Covestro thus promotes a working environment that is shaped by unconventional thinking, the effective exchange of knowledge, creative problem-solving, constructive feedback, and collegial cooperation. We aim to empower each of our employees to work to their full potential and expand their expertise. Our managers are responsible for facilitating and supporting these goals in close collaboration with our employees. In this way, we can work together to make an ongoing contribution to the company’s success. Our social responsibility as a company and an employer is based on our unreserved commitment to supporting and fostering human rights in our sphere of influence. In the interest of encouraging a transparent exchange of information within the company, e.g., employee questions and comments are collected – anonymous or not – and regularly addressed and answered by the Board of Management in video messages and virtual global meetings (e.g., WeAre1 talks and town halls meetings). Until June 2022, the questions were collated using the Slido software, which, from July 2022 onward, was replaced by the newly introduced Yammer networking platform.

Organizationally, the corporate Human Resources (HR) function reports to the Chief Executive Officer (CEO). All human resources activities are the responsibility of the management of the corporate HR function.

As of December 31, 2022, Covestro had 17,985 employees worldwide (previous year: 17,909). At the reporting date, the Group also had 575 employees in vocational training worldwide (previous year: 581), 566 of whom were based in Germany (previous year: 568).

• See note 9 “Personnel Expenses and Employee Numbers” in the Notes to the Consolidated Financial Statements.

Employees by division¹

Corporate Values and Corporate Culture

Covestro is proud of its corporate values, summarized as C³: curious, courageous, and colorful. Curiosity drives us to think beyond the horizon and allows us to create innovative and unexpected solutions for our customers. Courage helps us identify opportunities where others see limitations. Diversity promotes employee engagement and creativity; multiple viewpoints make us successful. These values guide all the Group’s employees and are reflected in their daily thoughts and actions.

Our corporate “We Are 1” culture is based on Covestro’s values and behaviors, and is an integral part of our strategy. Our employees influence and shape this corporate culture. A culture filled with life by our employees enables us to pursue our strategy and therefore contributes to Covestro’s success now and far into the future. Our corporate culture empowers all employees to always act responsibly, to strive for continual improvement, to nurture collaborative teamwork, and to be outstanding leaders.

• See “‘Proud to Belong’ Action Area.”

Human Resources Guiding Principles and Strategy

The major trends, such as digital transformation, demographic change, or continuous transformation in all areas of life and work, and the trend toward individualization – freedom of choice and self-determination – are changing our work and the ways we do it. The corporate HR function therefore focuses on the development and implementation of initiatives that sustainably support our business success in view of these changes, while at the same time encouraging professional development and engagement across the board. In keeping with a holistic people strategy, Covestro’s Board of Management is dedicated to promoting diversity, equity, and inclusion as well as ensuring our employees are appropriately qualified. Workplace health and safety is a fundamental requirement for our work.

These issues and the Group’s Sustainable Future strategy are reflected in our people strategy, which provides guidance for all activities and priorities of the corporate HR function. It breaks down into five action areas: “Place to be,” “committed to perform,” “ready to grow,” “enabled to perform,” and “proud to belong.”

Covestro’s People Strategy and its Action Areas

“Place to Be” Action Area

The “place to be” action area of Covestro’s people strategy guides the activities of the corporate HR function toward maintaining and enhancing Covestro’s attractiveness as an employer through various initiatives and making our current and future employees passionate about their work and our company.

Work-Life Balance

We support work-life balance for our employees. For instance, partnerships with daycare centers and financial support for vacation care for school-age children are among the solutions we offer to make combining work with family responsibilities easier. The programs offered can differ, depending on the particular Covestro site. Provided it is compatible with operational requirements, Covestro allows employees to take extended leave from work for personal projects such as scientific research, university studies, or other personal reasons. Employees around the world take advantage of this offer.

New, Flexible Working Environments for Improved Contact and Communication

Work environments, work content, and working methods are undergoing constant changes due to digital transformation and the increasing speed of change and complexity at our workplace. In order to meet these ever-changing requirements, Covestro provides a modern, stimulating working environment that promotes flexible ways of working.

Open-plan office environments combined with flexible work concepts encourage contact and the exchanges across team and departmental boundaries and thus encourage more communication and interdisciplinary cooperation. We call this work environment our C³ way of working based on our C³ values. At the heart of this philosophy is our conviction that all our employees, regardless of their status in the hierarchy, need working environments suitable to their duties to be able to work effectively. In this way, we want to enable changes in perspective and drive creativity in the company. Our philosophy applies particularly to cases such as moving into or creating new workspaces. An example of these new workspaces is the corporate headquarters in Leverkusen (Germany), which opened for business in the year 2020. Active change management prepared employees for and involved them in shaping new work environments. To achieve this, we provide not only the appropriate facilities, but also easy-to-use IT infrastructure and media technology. For the design of the corporate headquarters and the integration of our C³ values into an architectural concept, Covestro received a design award, the German Brand Award in gold. The award is presented by the German Design Council, a nonprofit foundation based in Frankfurt am Main (Germany), and the German Brand Institute.

The mobile working concept, which allows working from home and on the move, gives employees, teams, and our organization a wide variety of new options. However, we continue to believe that personal interaction on site is very important for ensuring lasting collaboration and maintaining our innovation capability in line with our “We Are 1” culture. We have developed different measures at our sites around the world to assist managers and employees in returning to the office and successfully manage the transition to a hybrid form of working, i.e., the collaboration of employees from different locations, such as home, production, or the office. Our managers play a special role in this system. In addition to implementing established leadership standards and modern work methods, they increasingly collaborate with their employees to develop agile and customized solutions to support Covestro’s efforts to exploit the potential of this new work environment.

Employer Attractiveness

Covestro aims to recruit qualified employees for the company, ensure their professional and personal development, and retain talent for the long term. We strive to be perceived as an attractive employer worldwide and to reinforce our employer brand, especially through diversity in the workforce, and raise awareness of our company among our target groups.

We take responsibility worldwide for students entering the workplace and maintain close contacts with leading universities like RWTH Aachen University (Germany), the University of Pittsburgh, Pennsylvania (United States), or Tongji University in Shanghai (China). We bring in university students to take part in professional internships worldwide each year. This gives them insight into our company’s operations as well as personal experience with Covestro as an attractive employer. In fiscal 2022, we offered 394 internships around the globe.

In addition to opportunities to join the company after studying, Covestro offers alternative routes into working life. In Germany, for example, 183 young people were able to start their careers with Covestro in the year 2022. We offer vocational training in a number of scientific and technical professions. If the vocational training is completed successfully, trainees are guaranteed a position with the company. Our particular interest in schools is aimed at raising awareness of STEM professions and making them more attractive to young people. The abbreviation STEM stands for science, technology, engineering, and mathematics in paths of study and careers. For example, in the year 2022, we presented career opportunities available at Covestro to a number of different (partner) schools in Germany and invited interested learners on tours of the plant.

To help meet our need for qualified personnel, we engage in HR marketing campaigns around the world, in particular by maintaining a social media presence. In the United States, we actively use the LinkedIn platform to mark events such as the International Day of Women and Girls in Science. In Belgium and the Netherlands, we post videos on Facebook to give an insight into our plants and the work of our employees in production, while in China we use virtual reality technology to show off the company’s premises in Shanghai (China). Alongside participation in traditional career fairs, the recruiting teams from Germany and China also explained our career opportunities at two trade fairs, the plastics trade fair K 2022 in Düsseldorf (Germany) and the China International Import Expo (CIIE) in Shanghai in the year 2022.

Covestro received several major employer awards and accreditations in the reporting period. The Top Employers Institute certified Covestro in Germany, the United States, and China. In Spain, the company received an award from Forbes Magazine, ranking us among the top 75 most attractive companies in the country. In Mexico, it was also ranked second among the country’s top 100 companies with fewer than 500 employees.

Employee Engagement

A key aspect of attaining our goal of becoming a place to be is to get a better understanding of the factors that our existing employees consider important to increase their engagement. To identify these factors and keep track of trends, we use the global ENGAGE survey to measure and improve employee engagement; the survey was continued in the year 2022. All employees worldwide can provide feedback several times a year by filling out a voluntary, anonymous online survey on key issues in their work environment. The results are then shared transparently with the employees and appropriate improvement measures are agreed jointly by employees and line managers. Three survey rounds were conducted in the year 2022, each with a participation rate of around 70%, similar to the previous year.

“Committed to Perform” Action Area

We offer competitive and fair working conditions, compensation, and additional benefits in accordance with market conditions and our social responsibility. This is an essential prerequisite for recruiting, retaining, and motivating qualified employees. This is what our people strategy efforts in the “committed to perform” action area are aimed at. Covestro combines a base salary reflecting the duties of a position with performance-related compensation components and extensive additional benefits to create an internationally competitive pay package, about which employees are informed transparently. Tasks and responsibilities are classified on the basis of a job evaluation conducted without considering the individuals in the positions. For management functions, a standardized evaluation method is used if the job evaluation has not already been stipulated by a local collective agreement. Based on this classification, the amount of the base salary in all countries is aligned with standard compensation levels in the respective region. Regular compensation benchmarking is conducted to ensure this is maintained for the long term.

In accordance with our corporate “We Are 1” culture, the compensation structure is standardized for all Covestro employees The variable compensation is based on a uniform system with identical criteria; differences exist only in the target percentages related to fixed compensation. The Covestro Profit Sharing Plan (Covestro PSP), a short-term variable compensation program in force throughout the Group, applies – with few exceptions, essentially due to collective bargaining arrangements – for all Covestro employees worldwide, including the Board of Management. It makes it possible for our employees to participate in the company’s performance each year with a uniformly calculated bonus payment. Since the year 2022, the four areas of profitability, liquidity, profitable growth, and sustainability have each accounted for one quarter of the calculation formula used to measure target attainment. In addition, employees in management functions, as well as members of the Board of Management, participate in Prisma, the global stock-based compensation program for long-term variable compensation. Payments are based on the Covestro share price, including comparisons with our competitors, and in this way the program rewards the long-term changes in the company’s share price. Since the tranche launched in the year 2021, this program has included a sustainability component comprising a reduction target for carbon emissions and other greenhouse gases such as nitrous oxide.

• See Compensation Report, section “Short-Term Variable Compensation.”
• See Compensation Report, section “Long-Term Variable Compensation.”

Furthermore, a global budget is available from which management-level staff can promptly grant individual performance awards to recognize outstanding conduct, commitment, and the performance of their employees in regard to our corporate values.

• See note 21 “Other Provisions” in the Notes to the Consolidated Financial Statements.

As in previous years, the Covestment share participation program was offered once again in fiscal 2022 and provided employees with the opportunity to purchase Covestro shares at a discount. In the year 2022, 99% of Covestro’s global workforce was thus able to purchase Covestro shares at discounted prices. Around 38% of all eligible employees worldwide took advantage of this offer.

• See note 21 “Other Provisions” in the Notes to the Consolidated Financial Statements.

“Ready to Grow” Action Area

Well educated and trained staff is crucial for our company’s continuing development and success. This is reflected in the “ready to grow” action area of Covestro’s people strategy. We want to promote talent and encourage employees to try out new possibilities for personal development.

We believe in lifelong learning and therefore continued to support in particular self-directed leaning in fiscal 2022. To this end, we expanded our digital content and optimized the personal and professional further training options for management, innovation, project management, and digitalization. A new program for learning languages was also introduced, which is available to employees wishing to develop their linguistic skills in nine languages. To assist our internal training staff, we have implemented a learning toolbox, which covers all key elements of the learning process, from analysis to quality control. For new internal training staff, this concept includes the appropriate qualifications for conceptualizing, designing, and implementing internal training. These measures are intended to provide optimal support to our employees for personal and professional development in all phases of their careers.

Our people development activities include working on an updated, more agile approach to performance, development, careers, and our talent portfolio. For instance, we intend to introduce new initiatives in line with our “We Are 1” culture that are streamlined, transparent, and intuitive. The aim is for management staff, other employees, and the company to grow, deliver high performance, develop, and be successful now and in the future. This requires all of our employees, especially our management staff, to approach their work from a development perspective and be ready to learn new skills and approaches.

“Enabled to Transform” Action Area

We continually lead, inspire, and train our employees to enable them to master future challenges.

In the year 2022, a new HR information portal (InfoHub) was created; it provides information on the return to the office following the pandemic and on hybrid working. Specific information events were held initially to support management staff in dealing with these new circumstances. The events addressed specific issues affecting shared understanding of the framework of mobile and hybrid working. Moreover, the corporate HR function collated information and developed training content to make the transition easier for employees. This was supplemented by training events, examples of best practice of how to deal with challenges, educational videos, and specific materials for managers. In addition, recommendations were given on IT and media issues and on how to choose and use the available technology and facilities most efficiently. All this is to harness the opportunities of a generally mobile and flexible way of working.

Digital inclusion and transparency in communications are critical success factors in the new normal of working. Regardless of whether or not they work simultaneously from the same location, all employees have to have the same information and possibilities available to them. This applies in particular to access to information and prompt exchanges with line managers and other team members. This is how we integrate Covestro’s “We Are 1” culture into the world of hybrid working.

“Proud to Belong” Action Area

The “proud to belong” action area of Covestro’s people strategy is centered around our corporate values and our corporate culture, with a focus on diversity, equity, and inclusion, as well as safe and healthy working conditions for our employees.

• See “Corporate Values and Corporate Culture.”

Constructive cooperation with the employee representative body on a basis of trust is an integral part of our corporate culture. It allows us jointly to come to important decisions, some of which can be difficult for the company, after considering all perspectives and to put them on a broad foundation. The interests of employees and the company can in this way be balanced, even in difficult situations. Employees at all sites around the world have the right to elect their own employee representatives. Matters affecting several European countries are dealt with in the Covestro European Forum.

Promoting Diversity, Equity, and Inclusion

We work to make the world a brighter place. Diversity, equity, and inclusion (DEI) are key components of our corporate culture. We advocate for an environment in which various skills, talents, experiences, and points of view are welcome, and everyone is treated with dignity and respect, both within and outside of our company. We also believe that a diverse workforce and inclusive environment are important drivers of innovation, sustainability, employee engagement, and business success. Our goal is to create an environment at Covestro in which all employees can give their best each and every day.

• More information can be found in our Diversity & Inclusion Report, which was published in 2021, at: www.covestro.com/en/company/strategy/people-and-culture

Covestro’s DEI strategy is derived from our values and based on three core principles: Colleagues, Company, and Community. These are three essential factors for building a strong, diverse, equitable, inclusive, and innovative work culture at our sites. Our corporate objectives and the culture we need for diversity, equity, and inclusion are driven by our employee networks and councils and supported by management and all members of Covestro’s Board of Management.

Our diversity, equity, and inclusion strategy

The first principle, “Colleagues – build, engage and develop a strong, diverse workforce” of our DEI strategy encompasses all activities that aim to make Covestro’s workforce more diverse. Employee networks are a key factor in involving our staff even more in driving diversity. We want to bring people together in these networks, and promote an exchange of inspiration and ideas. Covestro has many global and regional employee networks with different focus areas worldwide. The global UNITE network focuses on all issues of concern to the LGBTIQ (lesbian, gay, bi, trans, intersex, queer) community, and the Compass network is for employees interested in gender equity. These networks organized activities around the world in the year 2022. As part of a gender equity campaign in Germany, Compass discussed actions that each individual can establish under their own initiative to promote equity in day-to-day operations. During Pride Month, our LGBTIQ networks took part in Christopher Street Day Parades in Mexico City (Mexico), Houston, Texas (United States), and Pittsburgh, Pennsylvania (United States). In addition to the employee networks, some sites also have DEI Councils, which provide support for implementing the strategy and for the activities of the employee networks.

Under the “Company – establish an inclusive, supportive work environment and culture for everyone” principle, we have bundled all efforts and initiatives aimed at promoting inclusion. Covestro is aware that companies are more successful it they encourage diversity in their workforce. We strive to promote diversity and equity for all employees at all levels. For example, Covestro is committed to gender equity worldwide and the Board of Management has therefore undertaken to reach a proportion of 40% women in Covestro’s total workforce by the year 2029. At the end of the reporting year, women made up 23.4% of our worldwide headcount (previous year: 23.1%).

• See “Promotion of Equal Participation of Women and Men in Leadership Positions.”

To mark the 10th German Diversity Day, we addressed the issue of people with disabilities and presented our inclusion agreement, which was entered into with the Representative Body for Severely Disabled Employees in the year 2022. Moreover, our Chief Commercial Officer, Sucheta Govil, together with female Board members of other industrial companies, took part in a panel discussion on how employers can contribute to a supportive environment for women that offers equal opportunities and is free from prejudice. The first themed week was also held in the APAC region in June 2022 during which various events on diversity issues were presented.

As part of the “Menstruation is everyone’s issue” initiative in Mexico, Covestro provides female hygiene articles free of charge in restrooms in all plants and offices and grants paid leave in cases of severe menstrual pain. In an information campaign conducted alongside this initiative, Covestro provides guidance on when women with menstrual problems should consult the company doctor. 

In the United States, our CEO Dr. Markus Steilemann chaired an expert panel discussion organized by our employee network to mark Black History Month. Black History Month originated to recognize the contribution of people with Afro-American roots in the United States. It honors all people of color from all periods of US history, from the first slaves who arrived from Africa in the early 17th century to the people with Afro-American roots living in the United States today.

Our efforts are showing success: Particularly notable is our participation in the Disability Equality Index, a US benchmark supporting inclusion and equality for people with disabilities. Covestro was recognized as one of the best employers for people with disabilities in this rating. In Germany, Covestro was ranked 12th in the German Diversity Index in 2022, which measures the diversity commitment of DAX-listed companies. In China, we received the DEI Best Practice Award.

The “Community – achieving business objectives through community engagement, supplier diversity, and customer interaction” principle summarizes how we, together with our partners, intend to create the basis for greater diversity in society. Covestro actively promotes diversity, equity, and inclusion in pursuing its own activities and by working shoulder-to-shoulder with outside parties. This is the only way these objectives will be permanently integrated into the company as well as society. For this reason, we are further expanding our cooperation with various partners.

In a joint campaign with our logistics service provider Maersk during Pride Month in June 2022, we installed a rainbow container outside our corporate headquarters in Leverkusen (Germany) and started discussions on LGBTIQ issues with neighbors and employees. In the year 2022, Covestro entered into a partnership with the World Organization for Sustainability Leadership (WOSL) in China and launched the Covestro Cup 2022 “I Speak, I Act, I Impact – China Student Orator and Illustrator Contest.” Together with the WOSL, we focus on promoting the development of fair and inclusive quality education, raise awareness of goals and create a sense of responsibility among the young generation, and inspire young people to shape a sustainable future together.

Designing Healthy Working Conditions and Work Models

Covestro is aware that the company’s future depends on the health and performance of its employees. For this reason, preventive healthcare is a key component of our corporate “We Are 1” culture and also forms part of our people strategy. Workplace health management is primarily aimed at enabling health-appropriate and health-promoting working (environmental prevention) and at strengthening the health resources and potential of individuals (behavioral prevention). This is intended to improve the work environment and health and wellbeing in the workplace and to prevent risks to health at work.

Health objectives and actions are derived by identifying needs relevant to Covestro, at corporate or division level as well as for the employees. Concrete health objectives are formulated on the basis of information, obtained through health surveys, on the health situation relating to the requirements imposed on employees and their ability to meet them (resources). The focus here is on those indicators for which the analysis has identified a clear need for action. They relate for example to an improved ability to switch off, adequate support by managers, or a reduction in the perceived high workload and responsibility. Targeted measures are offered to improve the health situation, such as attending the “Healthy management” seminar for managers, workshops for analyzing the causes of high workloads, or stress management courses. All measures are therefore tailored to the prevention requirement identified on the basis of health data; they are organized holistically as required by environmental and behavioral prevention. Our basic principles include the constant improvement of working and organizational conditions and the identification of factors that either promote or are detrimental to health.

• See “Health and Safety.”

Our management staff has a significant influence on the performance and wellbeing of our employees. Against this backdrop, we ensure that our managers are qualified to the best possible extent for healthy management at Covestro and receive advice on how to discharge their duties.

The corporate HR function is aided in all its work by the corporate Group Health, Safety and Environment, Law, Intellectual Property & Compliance, and Corporate Audit functions. They ensure that all internal guidelines and all relevant standards and labor law requirements are met.

• See “Integrated Management System for Health, Safety, Environment, Energy, and Quality.”

We continually strive to create working conditions that take account of any burdens on individuals in a continually changing working environment. In many countries, we exceed our legal obligations, e.g., by offering solutions such as flexible working hours, part-time work, working from home, and remote work, if this is compatible with operational requirements. Direct dialogue with our employees is particularly important to us. In this regard, we take into account national and international notification duties. The nature and scope of our health promotion programs differ around the world with regard to the respective country-specific need for development and access to national health systems.

At Covestro, our social responsibility as a company and employer also includes creating fair working conditions that are based on mutual respect and appreciation among employees and particularly ensure safety, health, and wellbeing in the workplace. Our personnel policy also features a strong social safety net for our employees.

• See “Human Rights.”
• See “Compliance.”