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2021 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 our sustainability activities, 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 regularly informs the Management Board about the progress of the Global Sustainability Program and the status of target achievement. In 2021, a member of the Supervisory Board was appointed to the position of Lead Independent Director. Her responsibilities include addressing matters relating to ESG aspects of the Company, including climate-related matters.

  • For more information on the Global Sustainability Program, see our Non-Financial Group Report – Sustainability Management (pages 85 ff.).
  • For more information on our sustainability governance, see our Non-Financial Group Report – Sustainability Governance (page 87).
  • For more information on our Lead Independent Director, see the Declaration on Corporate Governance – Lead Independent Director (page 126).
     
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 enterprise risk management. Twice a year, identified risks are discussed in dedicated risk committees. Reviewed 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, see our Risks and Opportunities Report – Risk Management (pages 62 ff.).
  • For more information on our Global Sustainability Program, see our Non-Financial Group Report – Sustainability Management (pages 85 ff.).
  • For more information on sustainability targets as part of the Management Board’s compensation, see the Compensation Report – Sustainability Target (pages 148 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, see our Risks and Opportunities Report – Risk Management (pages 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 70).
  • For further information on sustainable supply chain management, see our Non-Financial Group Report – Supplier Management (page 104).

 

Rise in prices for carbon emissions rights (low risk in the medium term)

  • For information on the impact of the European Climate Law on our business, see our Risks and Opportunities Report – ESG Requirements (pages 75 f.).
  • For further information on carbon emissions, see our Non-Financial Group Report – Energy and Climate Protection (pages 107 f.).

 

For an overview about our opportunities management, see our Risks and Opportunities Report – Opportunities Management (pages 76 ff.).

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

 

Eco-performance of our products and services

 

Efficient operations

  • For information on environmental initiatives to promote the efficient use of natural resources, see our Non-Financial Group Report – Environment (pages 106 ff.) as well as our corporate website.

 

Market opportunities

  • By enhancing the consistency and comparability of our sustainability and climate-related information, we help our customers, investors, and financial analysts to better evaluate our sustainability performance and carbon footprint. This, in turn, can be beneficial for our business as tenders are often awarded to companies able to demonstrate climate change management plans.

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 enterprise risk management. Our assessment is based on a list of potential sustainability risks, which is reviewed regularly. Risks are classified based on their potential impact and likelihood.

As part of the risk management, regional risk coordinators assume the task of coordinating risk management activities within our operating segments. This is done with the help of risk management software. These activities relate to existing and potential emerging short-term as well as mid-term risks. Semi-annually, identified risk information is processed by the risk coordinators, reviewed by the respective corporate functions, and discussed in regional / functional risk committees. Subsequently, the central risk management function gathers the risks and risk responses from regions and functions, analyzes and discusses them in the corporate risk committee and communicates the compiled results to the Management Board. The focus during this process is on significant risks, which are above a defined threshold.

In addition to the regular corporate risk management assessments, we analyze potential climate change risks in line with TCFD recommendations. 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 2021, we extended our enterprise risk management system to include a new risk perspective. We now additionally assess the impact of our business activities on affected rightsholder groups. Currently, we are reviewing the impact of our operations on the environment.

 
  • For further information on our processes to identify and assess risks, see our Risks and Opportunities Report – Risk Management (pages 62 ff.)
  • For further information on environmental risk assessments, see our Non-Financial Group Report – Risk Management (pages 87 f.) as well as Environment (pages 106 ff.).
b) Describe the organization’s processes for managing climate-related risks.

We see risk management, including the management of climate-related risks, as the ongoing task of determining, analyzing, and evaluating the spectrum of actual and potential risks arising from our business operations in our environment. This includes, where possible, taking pre-emptive and corrective measures. Our risk management system provides us with a basis for these activities. It enables management to identify risks that could jeopardize our growth or going concern and to take steps to minimize any negative impact. 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. The Global Sustainability department drives our strategic sustainability activities. It manages the Global Sustainability Program in close cooperation with the relevant teams across our regions and other 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 program’s progress and the status of target achievement. 2022 priority topics include working towards achieving our new climate targets, as well as the development of other environment targets such as those related to waste and water.

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 Group Report – Environment (pages 106 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 reviewed regularly. 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, see our Risks and Opportunities Report – Risk Management (pages 62 ff.).

Metrics and targets

Disclose the metrics and targets used to assess and manage relevant 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 withdrawal 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 UK Department for Environment, Food and Rural Affairs’ latest version of this guidance. We use International Energy Agency (IEA) emission factors for electricity consumption to calculate indirect emissions from electricity.  

  • For more information on the environmental metrics used, see our Non-Financial Group Report – Environment (pages 106 ff.) as well as our ESG Performance Data (pages 9 ff.).
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 plan to also quantify and disclose Scope 3 emissions. We are currently assessing Scope 3 emissions that arise from activities or assets that we do not own or control along our value chain.

Sustainability risks, including climate-related risks, are integrated into our company-wide risk management. We are carefully monitoring regulatory developments and market trends. In 2021, we did not identify any significant risks related to our own operations, business relationships, products, or services that are very likely to have an adverse effect on material sustainability-related topics.

  • For disclosure of our Scope 1 and Scope 2 greenhouse gas emissions, see our Non-Financial Group Report – Energy and Climate Protection (pages 107 f.).
  • For more information on our corporate risk management, see our Risks and Opportunities Report – Risk Management (pages 62 ff.). For non-financial risks, see our Non-Financial Group Report – Risk Management (pages 87 f.).
c) Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets.

In January 2022, the Management Board approved new climate targets. We plan to be climate neutral by 2040. By 2030, we aim to reduce Scope 1 and Scope 2 emissions by 50% compared with 2020. In addition, we will assess the impact of Scope 3 emissions in the future so that they can be included in our targets. 

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