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2020 TCFD Index

Using the disclosure recommendations from the Task Force on Climate-related Financial Disclosures (TCFD), the table below provides information on climate-related risks and opportunities. The table is divided into four key areas in line with the four core categories governance, strategy, risk management, as well as metrics and targets.

Governance

Disclose the organization’s governance around climate-related risks and opportunities.
a) Describe the Board’s oversight of climate-related risks and opportunities. The highest governing body for sustainability, including climate-related issues, is our Sustainability Decision Board. Headed by CEO Rice Powell, it is responsible for integrating sustainability into our strategy and business. Together with the Sustainability Decision Board, the Management Board decides on strategic sustainability initiatives. The Management Board monitors the progress of our Global Sustainability Program, with one key focus area being the environment, including climate-related risks and opportunities. The Global Head of Sustainability informs the Management Board several times a year about the progress of the Global Sustainability Program.
 
  • For more information on the Global Sustainability Program, see our Non-Financial Report – Sustainability Management (pages 81 ff.).
  • For more information on our sustainability governance, please see our Non-Financial Report – Sustainability Governance (page 82).
b) Describe management’s role in assessing and managing climate-related risks and opportunities.

Sustainability, including climate-related risks, is monitored and assessed as part of our corporate risk management. Twice a year, risks are discussed in dedicated risk committees. Identified risks are compiled and communicated to the Management Board. The focus during this process is on significant risks, which are above a defined threshold.

As part of the Global Sustainability Program, the Global Sustainability department is responsible for analyzing and measuring our overall environmental impact, including our climate-related impact, to see how we can further improve our efforts. The progress of the Global Sustainability Program is incorporated in the Management Board’s compensation in the form of sustainability targets (20% variable component).

  • For more information on our corporate risk management, please see our Risk and Opportunities Report – Risk Management (pages 62 ff.).
  • For more information on our Global Sustainability Program, please see our Non-Financial Report – Sustainability Management (pages 81 ff.).
  • For more information on sustainability targets as part of the Management Board’s compensation, please see the Compensation Report (pages 124 ff.).

Strategy

Disclose the actual and potential impacts of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning.
a) Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term.

b) Describe the impact of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning.

c) Describe the resilience of the organization’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario.

For an overview of risks which could have an impact on our business operations, please see our Risks and Opportunities Report – Risk Management (page 64 ff.).

Physical risk: acute – Unpredictable events (low risk in the short and medium term1)

Transition risk: market – Procurement (medium risk in the short term; low risk in the medium term)

  • For information on our purchasing strategy and measures to mitigate procurement-related risks, see our Risks and Opportunities Report – Risk Management (page 69).
  • For further information on sustainable supply chain management, please see our Non-Financial Report – Sustainability in the Supply Chain (page 83).
     

For an overview about our opportunities management, please see our Risks and Opportunities Report – Opportunities Management (page 74 ff.).

Developing new, resource-friendly products and services through R&D and innovation

  • For information on the development of new, resource-friendly products and services, see our Non-Financial Report – Improving the Eco-Performance of Products and Services (page 99).
     

Improving the eco-performance of our products and services

  • For information on life-cycle assessments, see our Non-Financial Report – Improving the Eco-Performance of Products and Services (page 99).
     

Efficient operations

For information on environmental initiatives to promote the efficient use of natural resources, please see our Non-Financial Report – Reducing the Environmental Impact (pages 97 ff.) as well as our corporate website.

Risk Management

Disclose how the organization identifies, assesses, and manages climate-related risks.
a) Describe the organization’s processes for identifying and assessing climate-related risks.

Sustainability, including climate-related risks is monitored and assessed as part of our corporate risk management. The assessment is based on a list of potential sustainability risks, which is regularly reviewed. Risks are classified based on their potential impact and likelihood.

Regional risk coordinators assume the task of coordinating risk management activities within the operating segments. This is done with the help of risk management software. Risk management activities include actual and potential short-term and medium-term risks. Twice a year, identified risk information is discussed in regional and functional risk committees. Next, risks are compiled at corporate level and communicated to the Management Board. The focus during this process is on significant risks, which are above a defined threshold.

In addition to our corporate risk management, we perform global risk assessments on climate-related risks. Based on country indicators, we also use external databases such as Aqueduct and Maplecroft. These assessments include climate change vulnerability as well as vulnerability to natural hazards. Further topics included in the risk assessments are environmental laws and regulations as well as water-stressed areas. In 2020, we performed a water-stress assessment of our manufacturing sites using the TCFD methodology. We did this with the Aqueduct tool of the World Resources Institute. According to the assessment, 7 % of our sites are located in water-stressed areas. Next, we are planning to analyze water-stress risks for the locations of our clinics.
 
  • For further information on our processes to identify and assess risks, please see our Risks and Opportunities Report – Risk Management (pages 62 ff.).
  • For further information on environmental risk assessments, see our Non-Financial Report – Reducing the Environmental Impact (pages 97 ff.).
b) Describe the organization’s processes for managing climate-related risks

We see risk management including climate-related risks as an ongoing task of determining, analyzing and evaluating the spectrum of actual and potential risks arising from our operations in our business environment. This includes, where possible, taking pre-emptive and corrective measures. Our risk management system provides us with a basis for these activities. It allows us to identify risks that could jeopardize our growth or going concern and to take steps to minimize negative impacts. Accordingly, it is an important component of our management and governance.

As part of our Global Sustainability Program, we have increased our focus on climate-related risk and opportunity management. Strategic sustainability activities are driven by the Global Sustainability department, which manages the Global Sustainability Program in close cooperation with the regions and functions. One of the focus areas of the program is the environment, including a focus on climate-related risk and impact assessment. The Global Head of Sustainability regularly informs the Management Board about the progress of the program and the status of target achievement. 2021 priority topics include the definition of qualitative environmental goals as well as the development of quantitative reduction targets for greenhouse gas emissions.

  • For further information on our processes for managing climate-related risks, see our Risks and Opportunities Report – Risk Management (pages 62 ff.).
  • For more information on environmental activities as part of the Global Sustainability Program, see our Non-Financial Report – Environmental Management (pages 97 ff.).
     
c) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s overall risk management.

Sustainability risks, including climate-related risks are integrated into our company-wide risk management. The risk assessment is based on a list of potential risks, which is regularly reviewed. Twice a year, the Management Board is informed about identified risks. The focus is on significant risks, which are above a defined threshold.

  • For further information on our processes to identify, assess and manage risks, please see our Risks and Opportunities Report – Risk Management (pages 62 ff.).

Metrics and targets

Disclose how the organization identifies, assesses, and manages climate-related risks and opportunities.
a) Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk management process.

We measure and assess several key performance indicators as part of our environmental management. This includes water and energy consumption, facilities in water-stressed areas, Scope 1 and 2 greenhouse gas emissions, production sites with ISO 14001 as well as ISO 50001 certification, and resource-friendly dialysis machines produced. We calculate our Scope 1 and 2 greenhouse gas emissions following the methodology of the Greenhouse Gas Protocol, using the latest version of the UK Department for Environment, Food and Rural Affairs (DEFRA) as well as the emission factors of the International Energy Agency for electricity consumption.  

b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks.

We currently disclose Scope 1 and Scope 2 greenhouse gas emissions. As part of our Global Sustainability Program, we will also quantify and disclose Scope 3 emissions. Detailed emission reduction targets for the years to come will be developed in a next step.

Sustainability risks, including climate-related risks are integrated into our company-wide risk management. We are carefully monitoring regulatory developments and market trends. In 2020, we have not identified any significant risks related to our own operations, business relationships, products, or services that are very likely to have an adverse effect on material non-financial topics.

1 Time horizon for the short-term effect: one year, time horizon for the mid-term effect: five years.