Covestro Group at a Glance

Health and Safety

For Covestro, safety is an essential foundation of our business activities. The continuous improvement of a safe work environment is a key component of our corporate responsibility and a topical focus of our human rights due diligence activities. Covestro adheres to the applicable standards, domestic regulations, and laws. These regulations aim to prevent injuries, equipment breakdowns, and transportation incidents, as well as preserve the health of our employees in the workplace and during work-related activities. This also applies to partner companies (contractors) who work for our company within the scope of operational activities. Detailed rules and regular checks are instrumental in meeting these goals, as are safe production processes, plants, and transportation.

Safety incidents that – under other circumstances – could have led to a High Potential Event (HPE) are examined using a set of criteria we have defined that includes their potential effects. Events classified as HPEs are treated similarly to events that have actually occurred and require detailed root cause analysis and communication. Promoting safety awareness among employees is essential for minimizing dangerous situations during day-to-day operations. For this reason, Team Resource Management training to further increase safety awareness and safe conduct among our staff continued in the year 2022.

In the year under review, our employees were encouraged for the 14th time to take part in the CEO Safety & Health Award and submit suggestions for improving occupational health and safety. Due to a serious workplace accident at our site in Shanghai (China), the Board of Management decided not to make an award this year.

Occupational Health and Safety

Our safety management activities take into account requirements and standards applicable around the world. We continually update our safety management system in line with our corporate culture. In support of our Toward Zero goal, the health and safety of our employees in their day-to-day work are the focus of our safety management system, This also includes potential effects on the environment and harmful health effects caused by leaks at production facilities, or accidents involving hazardous goods and other transportation accidents. Our integrated Health, Safety, Environment, Energy, and Quality (HSEQ) management system is a major contributor to fulfilling this vision.

• See “Safety and Accident Prevention.”

An integrated information management system (IIMS) implemented throughout the Group exists for reporting and processing work-related accidents and incidents, as well as potential hazards. The IIMS makes it possible to identify trends in a timely manner so that corresponding short-term corrective and long-term improvement measures can be implemented if necessary. The company’s safety experts, supported by external expertise if needed, analyze the background circumstances and the impact. The results of the root cause analysis conducted after an incident occurs and the corrective measures taken are published throughout the Group in order to raise employees’ safety awareness. As a result, everybody can better assess comparable hazards and situations and proactively remedy them. The health and safety challenges arising from the coronavirus pandemic in the year under review were significantly less impactful than in previous years. Given the lower infection rates, many sites were able to hold the global Safety & Health Day again as a physical event in September 2022.

Safety and Accident Prevention

Over the long term, we want to prevent all workplace accidents and work-related occupational diseases. For this reason, we regularly analyze the accident rate by site as well as by region and type of accident. The fluctuations observed indicate to us the structural differences that are discussed in analyzing and determining measures to be taken with the sites and segments, and adapted to local requirements.  

In the year 2022, one third of all recordable accidents were attributable to movement. Another high-incidence type of accident in the year 2022 was mechanical work, especially accidents involving the hands. To counter this trend, we rolled out “hand safety” throughout the Group as a particular focus area during an HSE campaign in the third quarter of 2022.

We classify accidents at Covestro according to the American Society for Testing and Materials (ASTM) standard E2920-14 to devote particular attention to the life-threatening or life-changing accidents among the entirety of the accident data. In the year 2022, seven contacts with chemicals, four mechanical work injuries, two burn incidents, and one traffic accident were classified as serious. In one of the mechanical work accidents, one employee was injured so seriously that he subsequently died in hospital. Five of the seven contacts with chemicals reported were caused by an incident outside our direct control. At one of our sites, a cloud of cleaning steam containing hazardous substances was released during cleaning work performed by a company based in the Chemical Park. The five employees received paramedical treatment as a precaution and were admitted to the local hospital for one night for observation.

We process recordable workplace accidents and illnesses involving employees and contractors as part of the recordable incident rate (RIR) and lost time recordable incident rate (LTRIR), as per Standard 1904 issued by the U.S. Occupational Safety and Health Administration (OSHA). The RIR is calculated as a ratio of the total number of recordable workplace accidents and illnesses to hours worked (standardized to 200,000 working hours per year). The LTRIR is calculated as a ratio of lost time in days to the same hours worked figure. We calculate the number of hours worked by our employees based on the number of employees in the Group and multiply this figure at country level by the average working hours in the member states of the Organisation for Economic Co-operation and Development (OECD) or the International Labour Organization (ILO). If no OECD or ILO data is available, then we use the average number of hours worked at Group level.

The number of hours worked by our contractors’ employees is calculated using a methodology that includes various categories for recording working hours, broken down by electronic or manual timekeeping or obtained using supplier invoices. The figure can also be calculated based on valid assumptions (estimates). At sites with fewer than 50 Covestro employees, no contractor working hours are counted, so these are not included in the incident rates calculation. We apply controls and other measures at the global level as well as individual site level to prevent possible errors in calculating contractor working hours.

In the fiscal 2022, we documented 33.1 million total hours worked (THW) for our employees (previous year: 31.8 million THW). For contractors, 17.5 million THW (previous year: 15.6 million THW) were reported. This results in the following data according to OSHA:

In the reporting year, the number of workplace accidents involving our employees went up by 16 to 69 (previous year: 53), increasing our employees’ RIR by 0.09 points. The number of accidents involving employees of our contractors increased by 15 to 36 (previous year: 21), raising the RIR of our contractors’ employees by 0.14 points.  

The increase in manual work also led to a rise in the number of workplace accidents in the year 2022. A risk in this context is posed by the human factors of “skills” and “decisions.” Based on analysis of the accidents, they contributed more than 70% to the rise in accident rates.

Hazard Avoidance

Repairs, inspections, and technical modifications frequently require work that is potentially hazardous. Such jobs are performed individually or pooled and performed at one time during plant downtimes, which are planned well in advance. A work permit process is applied here. In addition to a precise description of the work to be performed, this includes a hazard assessment and a determination of the required safety and protective measures. All individuals involved in the work are informed of these parameters and must confirm receipt of this information with a signature. The responsible facility, participating technical crews, and, if necessary, additional safety officers monitor adherence to the measures and safe work performance.

Environmental and Transportation Safety

We work continually toward maximum safety during transportation of our products. We report all incidents at all sites operated by Covestro worldwide in line with our internal directives. These are documented according to defined criteria such as quantity of loss of containment, material hazard class, degree of personal injury, and blocked transportation routes. In the case of certain hazardous materials, we record and categorize all leaks starting with as little as five kilograms, according to our Corporate Commitment. Global events on transportation safety are held at regular intervals. Here, corrective measures are developed and implemented based on actual incidents, and information is exchanged on tried-and-tested approaches.

Process and Plant Safety

We aim to ensure the safety of processes and plants in a way that avoids unacceptable risks to our employees, our neighbors, and the environment. We therefore conduct extensive, systematic safety assessments at regular intervals. Loss of Primary Containment (LoPC) is an early indicator for all Covestro plants, which is reported consistently throughout the world and is integrated into the Group’s safety reporting.

Covestro applies the German Chemical Industry Association’s (Verband der Chemischen Industrie, VCI) guidelines on documenting plant safety performance indicators. The reporting criteria are thus aligned with the updated and globally harmonized definition by the International Council of Chemical Associations (ICCA). An LoPC event comprises

• the release of chemicals classified according to the Globally Harmonized System of Classification and Labeling of Chemicals (GHS) exceeding the defined volume thresholds within one hour,
• a reportable injury according to OSHA criteria to a Covestro employee or a contractor employee as a result of product release or the release of energy,
• the release of energy (e.g., fire, explosion) that leads to damage with direct costs totaling more than €2,500,
• an evacuation officially declared outside the plant.

We use the LoPC incident rate (LoPC IR) to determine the number of LoPC incidents per 200,000 TWH per year by Covestro employees and contractors. The volume thresholds defined by the ICCA for recording incidents are binding on its members and are therefore also applied at Covestro. We applied these volume thresholds at Covestro so that our statistics would be comparable within the chemical industry and the benchmark. Very low volume thresholds mean that seven less significant incidents are systematically documented and investigated as LoPC events. For instance, the volume threshold for chlorine is one kilogram. In the reporting year, our LoPC IR was 0.57 (previous year: 0.69).

Every LoPC incident as well as minor and near-miss incidents are carefully analyzed to determine their causes, and the results and corrective actions taken are publicized throughout the Group. The criteria (e.g., lower thresholds or nonhazardous substance releases) were selected so that even releases of substances or energy that have no impact on employees, neighbors, or the environment are systematically recorded. This contributes to maintaining the integrity of our facilities. The global exchange of experiences relevant to safety is intended to help maintain the existing high standard of procedural and plant safety within the company. Globally binding standard processes and their uniform implementation also contribute to this effort.

Information Security

In addition to the safety and security of employees and plants, information security and uninterrupted workflows and processes are particularly important to Covestro. This is why our safety strategy systematically focuses on meeting these targets. Covestro has established a central information security committee to ensure close consultation among the relevant departments (Corporate Security, Information & Operational Technology Security, including Cyber Security) and production. Security is already taken into account during system and software development (security by design) and Covestro’s security requirements are based on international standards such as ISO 27001 and IEC 62443.

We use modern IT tools in continuous security monitoring processes to detect any attempts to attack our IT systems, and continually improve these tools. Monitoring is carried out by an internal team of security experts in our Security Operation Center (SOC) with the aim of detecting in real time any irregularities and suspicious events in our IT infrastructure that could also point to cyberattacks. We carefully analyze and assess such indications and, if necessary, appropriate countermeasures are taken promptly.

Further decision-making and management bodies focusing on risk, compliance, and crisis management as well as on information security management are firmly established at Covestro. A central anchor point of our security architecture is to raise awareness among employees and train them by conducting global campaigns and compulsory web-based training on topics such as phishing or the secure use of web browsers. In the context of migrating to a cloud environment, the underlying system design was audited by a recognized external consulting firm. Other risk-based security tests are carried out on a continual basis, as are unannounced security gap reviews (using techniques such as red teaming).

Covestro gets information on the general security situation, e.g., from security experts and by using the consultancy services of appropriate external providers, for example with regard to potential cyber threats (threat intelligence).

Data protection is a topic of key importance for Covestro; it is coordinated throughout the Group under the responsibility of the corporate Law, Intellectual Property & Compliance function.

• See “Compliance Management System.”