Financial implications and other risks and opportunities due to climate change
We have established a Group-wide risk management system to identify the rewards and risks that are associated with our sustainability challenges. This covers sustainability-relevant issues as a subcategory of nearly all other risk categories – from environmental and industry risks via procurement and product risks to operating risks.
In the face of climate change, we feel obligated to create an increasingly efficient energy supply. This will continue minimizing risks associated with rising energy costs, reduce our CO2 emissions and avoid any climate-related risk to our reputation, especially given increasing shareholder expectations.
Having already reached our year 2020 goal of reducing our CO2 emissions relative to the value chain (Scope 1+2) by 33 % in 2016, we have adapted our climate strategy to the requirements of the Science Based Targets initiative (SBT). In June 2017, the Science Based Targets Committee recognized our adjusted climate strategy:
„Symrise commits to reduce abs. scope 1 and 2 GHG emissions by 18 % by 2030, using a 2016 base year. Symrise commits that 80 % of key suppliers will institute GHG reduction targets by 2020.” As of June 22, Symrise was among the first 61 companies in the world to have earned SBT approval.
In 2017, we participated in the CDP Supply Chain Program for the first time. It initially addressed the areas of climate and water. With this initiative, we are requiring our suppliers to set their own climate protection goals and to draw up a program for water conservation. Suppliers were selected that account for more than 50 % of the procured raw materials (relative to procurement volume in €).
In 2017, Symrise was awarded a Leadership Rating from the CDP in three categories for the first time. For the third time in a row, we earned a leadership A rating for our commitment to climate. The rating for our efforts in water conservation was raised from leadership A- to A. In the conservation of our forests, we have maintained the overall leadership A- rating held in the previous year.
In 2016, we invested about € 30 million in a new, more efficient power plant at our headquarters in Holzminden, which brings us annual savings of more than 30,000 tons of CO2. Nevertheless, we are working to continuously improve our energy management system at all of our locations. The truth is that changing environmental conditions and the concomitant fluctuations in the availability of raw materials have a direct impact on our supply chain and pose operational risks (quality of natural resources, supply bottlenecks) as well as a financial procurement risks (price increases and fluctuations).
Consequently, we have taken this risk into account and addressed it in our procurement strategy. Symrise has set clear goals for 2020 to ensure its continued sustainable supply of high-quality natural raw materials. We want to have assessed all our primary suppliers of natural raw materials on ethical and ecological criteria by 2020. We have also decided to reduce CO2 emissions significantly along our supply chain (Scope 3) as of 2017 by integrating our primary suppliers into our climate goals and by maintaining our own reduction measures as part of the CDP Supply Chain Program.