Current status at INDUS
Sustainable practices are deeply entrenched in INDUS’ DNA and are firmly rooted in its corporate strategy. The company incorporated the assessment of target companies’ sustainability performance into its M&A due diligence process years ago. INDUS has drawn on the successful innovation development bank model and created a sustainability development bank. This sustainability development bank will support projects that further improve the sustainability performance of our portfolio companies. Our ISS rating enabled us to issue an ESG-linked promissory note for the first time in 2020. The Board of Management compensation system was also expanded to conform to ARUG II sustainability components.
Key figures at a glance
Further key figures can be found in the nonfinancial report starting on page 45.
Recognition of our sustainability performance
INDUS was audited by renowned rating agencies. In the independent sustainability rating by Institutional Shareholder Services Inc., INDUS Holding AG achieved prime status in 2022 for the sixth time in a row In the international comparison group “Multi-Sector Holdings”, INDUS achieved the transparency level “Very High” and the overall rating “C+”. The assessment of “Corporate ESG Performance” is based on around 100 sustainability criteria from the areas of environment, social affairs and governance, which are specifically adapted to the starting position of the respective comparative industry.
Always one step ahead
Voluntary submission of first non-financial declaration & materiality analysis for the Group.
More in-depth data in the non-financial declaration, external stakeholder dialogue.
Qualitative consequences of climate-related effects according to TCFD (internal stakeholder perspective, managing directors surveyed).
Group-wide energy audit carried out again, suppliers and customers of the portfolio companies surveyed by TU Dortmund.
First ESG-linked promissory note, capital market sustainability survey sent out, change to accounting approach for Scope 1 and Scope 2 emissions with inclusion of portfolio companies.
SUSTA[IN] is the first sustainability magazine to appear online.
INDUS action areas
In the 2020 financial year, the sustainability strategy was made an independent component of the PARKOUR strategy program, with the aim of bringing new knowledge and approaches into the Group and complying with new legal and regulatory requirements. The Ten Principles of the United Nations Global Compact (UNGC) form the basis of the fundamental principles of the company’s strategic focus. INDUS has pooled these into five principles and used them to put together six action areas.
- Environmental Issues | Protecting the Environment
INDUS is working full steam ahead to reduce its carbon footprint. The company is also monitoring its energy and waste intensity, recycling rate and total water withdrawal.
Target: Reduction in (net) GHG emissions to zero in 2050, 35% reduction in emission intensity by 2025 compared to 2018 base year.*
*(including emissions of all 48 portfolio companies through financial control approach)
- Employee Issues | Fair Work
INDUS constantly works to maintain its position as an attractive employer.
For INDUS, protecting the health of its employees has top priority.
INDUS actively supports training and education for its employees.
Target for 2040: Less than 3 work accidents per 100 employees per year. No fatal work accidents.
- Social Issues | Social Justice
For INDUS, avoiding disturbances in the surrounding area has top priority. This includes things like noise disturbance. INDUS encourages its employees to put forward suggestions for suitable charitable partnerships in the local area.
Target for 2040: No legitimate local complaints.
- Respect for Human Rights | Human Rights
INDUS is committed to complying with the principles set out in the INDUS Code of Conduct, which voluntarily goes beyond legal requirements. INDUS expects its employees to behave in a legally and ethically impeccable manner toward fellow humans and the environment.
Target for 2040: All employees given a copy of the INDUS Code of Conduct.
- Combating Corruption and Bribery | Honest Business
For INDUS, compliance with legal requirements is second nature (see INDUS Code of Conduct). INDUS is continuously refining its compliance management system.
Target for 2040: No significant fines, no non-monetary penalties, no payments to political parties.
- Shareholder Support
INDUS Holding AG is available to the portfolio companies as a strategic sparring partner with various support options such as defining and achieving sustainability targets. Information on the topic of sustainability is regularly discussed at the annual Entrepreneurs’ Conference.
Value drivers of the ESG initiatives
Four value drivers of ESG initiatives that are of particular significance for the INDUS Group are addressed in particular in strategic meetings between the managing directors of the portfolio companies and the INDUS Board of Management. INDUS offers methodological and financial support to the portfolio companies for all four value drivers.
- Sales opportunities
An increase in sales can be achieved through new “green” products. A differentiating feature could, for example, be the use of renewable raw materials in the current product range or the use of a new technology that minimizes resource consumption during the product’s service life. INDUS expects this value driver to further increase in importance in connection with a progressive increase in public awareness and thus generate additional sales via relevant differentiating features. The company also expects this to be able to compensate for the reduction in existing sales. The portfolio companies are provided support through the activities of the PARKOUR strategy program’s strategic initiative, “driving innovation.”
- Efficiency increases
Careful use of staff and resources can increase the organization’s efficiency and thus generate a positive cost-saving effect or offset cost increases. This can help to improve the operating margin or can also be passed on to the customer as a price adjustment, as a result of which additional unit sales can be achieved. INDUS supports increases in efficiency in production in the PARKOUR strategy program’s “improving performance” strategic initiative. INDUS also supports the portfolio companies with efficiency-increasing investments and in the innovation process.
On the personnel side, the promotion of employee training improves staff performance and also increases loyalty to the Group. The Group’s clear commitment to sustainability in connection with the appropriate implementation of sustainability initiatives additionally increases many employees’ personal attachment to the INDUS Group.
- Entrepreneurial vision
Our precautionary and careful approach to the environment and employees drastically reduces the risk that regulatory changes will result in a negative impact for which the Group is not prepared. Compliance with high environmental and employee safety standards consequently also serves to limit potential future additional burdens as a result of legal and regulatory changes. The INDUS Code of Conduct, which the portfolio companies take from the holding company, is central to this.
- Optimized investment decisions
Taking environmental aspects into account in investment decisions makes it possible to better assess the costs over the total life of an investment. One example of this is the forecast of the expected price rise in fossil fuels in mobile combustion or the possible further significant increase in the price of electricity. In order to support the portfolio companies, INDUS has developed the concept of the sustainability development bank, which will start operation from the 2022 financial year. INDUS will use it to subsidize the portfolio companies’ investments with effect on net income with up to 80% of the total amount of the investment. The key criterion for the decision is whether greenhouse gas emissions (GHG-e) will be effectively reduced as a result of the subsidized investment. In addition, INDUS factors in possible sustainability risks when assessing potential acquisition targets. Significant sustainability risks or important negative sustainability criteria are potential criteria for exclusion.
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