Responsibility

Integrated approach

In its business units, Conzzeta pursues strategies with a strong innovation focus that take both environmental and social aspects into account. The Code of Conduct, which was last updated in 2016, provides a specific framework for all employees. With the standards for compliant and responsible conduct in everyday business increasing markedly over the last few years and with increased transparency requirements, including at Group level, Conzzeta adopted an environmental, social and corporate governance (ESG) roadmap in 2016. The aim of this roadmap is to more clearly explain ongoing efforts in these areas and to proactively address new challenges such as climate change.

ESG roadmap

The ESG roadmap takes into account the expectations of customers, business partners, employees and investors. As part of a materiality assessment, an important element in 2018 was the determination of the key sustainability themes as well as the associated principle managerial approaches and general objectives.

Material sustainability topics for the Conzzeta Group

Taking into account also the potential impact on results, Conzzeta identified a total of nine key sustainability themes for the Group. For each of these, an objective, a target and specific indicators were also defined. In principle, Conzzeta strives for continuous improvement in all of these themes, with transparent annual reporting on progress.

ESG governance

As a medium-sized company, Conzzeta focuses on implementing the Code of Conduct throughout the Group and on the identified key sustainability themes. The business units engage in additional activities that in some cases are industry-specific and closely associated with business strategies as part of innovation management. As a broadly diversified corporate Group, Conzzeta has largely delegated strategy implementation to the business units based on the Articles of Association and the Organizational Regulations of Conzzeta AG. Conzzeta’s corporate governance is based on the principles of the Swiss Code of Best Practice for Corporate Governance (see the Corporate Governance section). The ESG Steering Committee, which includes representatives from all the business units, ensures that sustainability activities are coordinated throughout the Group. The ESG Steering Committee reports through the Group CEO to the Board of Directors, which sets the strategic targets for the Group and the business units and receives regular reports on the progress of implementation.

Conzzeta ESG Governance

Code of Conduct

The Code of Conduct, which was revised in 2016, defines the basic binding rules for day-to-day business to protect employees and the interests of the company. It also describes how the company and employees should behave towards customers, suppliers and investors, other employees and towards society and the state. It encourages employees to set an example and behave as “good citizens”, interpreting regional and local laws in favor of the weak and the environment, thus supporting positive change. The Code of Conduct also directs all employees to personally contribute to making their work environment a place of equal opportunity.

Developments in the 2020 financial year

Strategic reorientation and focus on Bystronic

In December 2019, Conzzeta decided to focus on the Bystronic business unit in future and to sell the other business units, subject to the market situation. Based on a comprehensive analysis of the strategic options, the Board of Directors came to the conclusion that the business units to be sold would be in a better position to develop their potential in the hands of new owners. Accordingly, it is extremely important to Conzzeta that the new owners have appropriate market access and can therefore develop the business units sustainably.

The sale of the Schmid Rhyner business unit could already be completed at the beginning of 2020. For the FoamPartner business unit, a binding sale agreement with the Belgian polyurethane specialist Recticel was signed in November 2020. The transaction is expected to be completed in the course of the first quarter of 2021. The Outdoor segment is currently expected to be sold towards the middle of 2021.

Implementing this strategic reorientation in the 2020 financial year required substantial effort in all business units and at Group level. With regard to the dissolution of the Corporate Office, Conzzeta supported the employees concerned with transparent communication and transitional assistance, such as coachings for professional reorientation.

Outbreak of the coronavirus pandemic

The outbreak of the coronavirus pandemic left its mark on the 2020 financial year. Extensive efforts were made during this challenging time to protect the health of both the company’s own employees and those of its business partners to the extent possible. Thanks to its solid capital position, Conzzeta was able to steadily continue with important Group and business unit projects and offer customers innovative products and solutions, despite the pandemic-related restrictions.

Nevertheless, extensive measures were necessary to contain the financial impact of the pandemic. These included taking advantage of the government support mechanisms made available and selective organizational measures to ensure business activities (see the Business Review section). The measures were implemented following careful consideration of the associated consequences for employees, suppliers and customers. In this context, the Mammut business unit’s WE CARE sustainability strategy (see below) in particular provided a solid basis for dealing fairly with suppliers that were hit particularly hard by the pandemic.

Sustainability at Group level

As a result of the strategic reorientation, the continuation of ESG activities in the business units was a priority in 2020. At Group level, a particular focus was answering ESG-related questions from predominantly institutional investors, prompted by the sustainability ratings. Bearing in mind the identified key theme of “climate change & energy”, Conzzeta participated again this year in the annual collection of data for the Carbon Disclosure Project (CDP). Thanks to improved input data in the business units, progress was made compared with the previous year.

Training courses on the Code of Conduct and compliance

Conzzeta regularly trains employees in all business units and the Corporate Office to ensure that the Code of Conduct and its implementation are firmly anchored in day-to-day business. In addition, online and face-to-face compliance courses are offered on issues such as combating corruption, antitrust and competition law as well as data protection.

In connection with the strategic reorientation of the Conzzeta Group and the adjustment of Group functions, the training courses provided by the Group were discontinued in September 2020 and transferred to the business units. In the course of 2021, the Bystronic business unit will review Conzzeta’s existing Code of Conduct on behalf of the Board of Directors and adapt it where necessary.

All employees are entitled and encouraged to report breaches of the Code of Conduct. Isolated reports of possible misconduct were received in 2020 through the reporting channels available throughout the Group (telephone and email). The majority of these reports could not be confirmed following internal investigations, which in some cases were conducted with external assistance. However, one case required disciplinary and legal action.

Equal Pay Analysis 2020

With the revision of the Swiss Federal Act on Gender Equality (GEA), companies in Switzerland are required to carry out an internal analysis of equal pay. Accordingly, in 2020, all business units carried out an internal equal pay analysis for defined reference months at their Swiss sites and engaged an independent body (KPMG) to audit the findings. Bystronic met all the statutory equal pay requirements and satisfied the requirements under Art. 13d GEA and Art. 7 of the Ordinance in all respects. Mammut and FoamPartner reported minor deviations from the benchmark (less than percentage point above the reference value in each case) and have put measures in place for 2021 to eliminate these. Both business units will monitor the effectiveness of these measures through another equal pay analysis within the specified period.

Sustainability in the business units

Bystronic business unit

Sustainability is an integral part of Bystronic’s “Strategy 2025”. In 2020, in light of the Group’s strategic reorientation and in preparation for a direct stock exchange listing without Conzzeta as its holding company, Bystronic continued to develop the Group’s materiality assessment described above. Based on international standards and frameworks, the potentially material themes were assessed in terms of their relevance for stakeholders and their impact on the environment, society and the economy. During this updating process, some of the key issues identified in 2018 for Conzzeta as a Group were confirmed and new aspects relating to data security and resource efficiency were added. The update was approved by Bystronic’s management and Conzzeta’s Board of Directors and published on Capital Markets Day on November 10, 2020.

Material sustainability topics for Bystronic

Based on the updated materiality assessment, initial preparations were also made in 2020 for Bystronic’s future integrated reporting.

In keeping with the classification of “Energy and climate change” as a material sustainability topic, Bystronic’s CO₂ footprint in 2019 at the Niederönz (Switzerland) site was calculated for the first time in 2020 (corporate carbon footprint). The calculations included the Bystronic Laser AG facility in Niederönz and the offices of Bystronic Sales AG in the same building. The greenhouse gas inventory was measured for the three scopes suggested in the greenhouse gas (GHG) protocol: scope 1 for emissions caused directly by the company, scope 2 for indirect emissions from purchased energy, and scope 3 for indirect emissions in the upstream and downstream value chain.

For the 2019 financial year, Bystronic’s CO₂ footprint in Niederönz was 212,042 t of CO₂ equivalents. Of that total, approximately 0.5% was attributable to direct emissions (scope 1) and 0.05% to purchased energy (scope 2). At 99.45%, the majority of emissions occur at the upstream and downstream stages (scope 3). The total footprint corresponds approximately to the distance of 1.6 billion kilometers (around 40,000 circumnavigation of the earth) covered by an average passenger car with an internal combustion engine, or the average direct and indirect greenhouse gas emissions of close to 15,000 Swiss people per year. A more detailed analysis shows that 76% of the emissions associated with the production of goods and services in Switzerland occur during the utilization phase of the machines sold. Bystronic can therefore make the greatest contribution to reducing the climate-damaging impact of its own activities by further increasing the energy efficiency of the products and solutions it offers, as well as by providing corresponding application support for its customers.

This greenhouse gas inventory provides the quantitative basis for the optimization of Bystronic’s CO₂ footprint and is thus a milestone in realizing the company’s objectives in the key sustainability theme of “Energy and climate change”. The successful data collection at the Niederönz site also provides a blueprint for extending the survey to the other Bystronic sites.

Modernization and overhaul of energy systems at Bystronic

The ongoing modernization and improvement of operational efficiency is a high priority for Bystronic. The complete replacement of the building shell of production hall 1 in Niederönz, Switzerland, was also carried out from an ecological and ergonomic point of view, thus achieving many goals with regard to the environment, energy and employees.

Multifunctional flat roof

The new insulated flat roof not only reduces energy consumption in winter, but also reduces heat input in the summer months. This effect is further enhanced by a green roof, which also serves as a habitat for insects. The flat roof is also designed so that rainwater runs off more slowly, which relieves the nearby watercourses in the event of heavy rain.

Improved ventilation and recycling center

A well-insulated and ventilated facade improves the climatic conditions for production in the summer months and massively reduces energy consumption in the heating period. Recirculating air filter units in the metalworking area as well as roof ventilation systems in the hall also dramatically improve interior air quality for employees. These units also enable air exchange with heat recovery, regardless of the weather. An in-house recycling center improves safety by preventing leakage of hazardous materials. In addition, the handling of all recyclable materials inside the building reduces external noise pollution.

FoamPartner business unit

In August 2020, FoamPartner published updated sustainability guidelines with a focus on “Planet, People & Performance”. These guidelines aim to promote responsible thought and action within the company as a pathway towards a sustainable future, with the help of innovative and industry-leading foam solutions. The sustainability strategy has been described in detail in a brochure and on the business unit’s website additional information – for example, on existing quality, environmental and product certifications – has been made available.

Conzzeta continued efforts to fundamentally modernize and improve the operational efficiency of the FoamPartner business unit in the extremely challenging financial year of 2020, which was affected by market developments, the pandemic and divestments. As part of these efforts, a highly modern foam processing center at the Duderstadt (Germany) site was put into operation in July 2020. The new plant enables energy and resource-efficient job planning, which minimizes waste and thus improves sustainability in the manufacturing process. The work environment also satisfies the latest ergonomic criteria to ensure the highest degree of occupational health and safety.

Innovation is a key priority at FoamPartner, and the business unit has anchored this in its sustainability strategy as part of sustainable product development, with a focus on the intelligent use of resources, low environmental impact and fair social conditions. In this context, products that meet eco-design standards and live up to the promise of “Best in Foam – Sustainable through Innovation” are awarded the “ecovative” label. For example, a new foam technology for vehicle interiors was developed in the 2020 financial year and launched under the brand name of OBoNature^™. In close collaboration with leading polymer manufacturer Covestro, cardyon^® is used as a raw material in the manufacture of foam technology – a much more environmentally friendly material since it is made with carbon dioxide instead of fossil fuels.

Mammut business unit

In 2020, Mammut’s WE CARE sustainability strategy provided an excellent framework for dealing responsibly with suppliers that were hit particularly hard by the coronavirus pandemic. By largely refraining from canceling orders and postponing product launches by mutual agreement, it was possible to protect these suppliers by keeping the cancellation rate to less than 5% of the average annual purchase value.

In 2008, Mammut was a founding member of the Fair Wear Foundation and has since then continued its efforts to integrate social responsibility and environmental sustainability in business processes (see diagram). As a founding signatory of the UN Fashion Industry Charter for Climate Action, Mammut has also actively engaged with the issue of climate change since the end of 2018: by 2030, it has set itself the target of reducing CO₂ emissions by 30% compared to 2018. In 2020, Mammut committed to the Science Based Targets initiative to ensure a scientific basis for CO₂ reduction and the associated reporting. This means that from 2021, the CO₂ reduction will be calculated in a manner consistent with the 1.5-degree target under the Paris Agreement. At the “Mammut Digital Brand Convention” in October 2020, Mammut presented its ongoing initiatives in the area of innovation and corporate responsibility. With its “Together for Glaciers” initiative, Mammut has also created a platform with a focus on climate change that mobilizes the outdoor industry to work together. Mammut is also continuing to work closely with the Swiss Glacier Initiative, which seeks to establish CO₂ reduction targets in the Swiss Federal Constitution.

Mammut regularly reports on its extensive activities in the area of sustainability. As part of the “WE CARE” sustainability strategy, the company also published comprehensive sustainability targets in the Target Report 2025. Implementation progress is reported regularly and systematically, most recently in the Social Report 2019 published in May 2020. 2020 was also the first time that Mammut submitted the “CDP (Carbon Disclosure Project) supply chain” survey (for 2019).

Sustainability-related agreements and commitments of the Mammut business unit

Outlook

The increasing importance of the topic of sustainability for the various stakeholders of listed companies, as well as the transformation of the Group with the focus on Bystronic, which is scheduled for completion in 2021, will bring additional material and formal requirements for Bystronic. Conzzeta has thus made initial preparations to anchor the topic of sustainability strategically and organizationally at Bystronic. The indirect counterproposal of the Swiss Federal Council to the Corporate Responsibility Initiative envisages for companies as Bystronic an obligation to disclose non-financial information in the near future.

It is planed that Bystronic, as an independent listed industrial company, will formally commit to the appropriate sustainability standards like other Swiss industrial companies, as well as systematically process the key sustainability themes defined in the materiality assessment (see above) and to report on their progress as part of an integrated reporting from the 2021 financial year onward.

With the systematic consideration of these themes in its day-to-day business, Bystronic will be able to further improve its own sustainability. As shown by the analysis of greenhouse gas emissions carried out for the Niederönz site in 2020, their consideration in product development is of even greater importance. Energy-efficient systems and solutions, for example, will enable Bystronic to make a significant contribution to making the production processes of customers not only more productive, but also more energy-efficient and sustainable.

Bystronic’s preparations also include updating the Conzzeta Group’s Code of Conduct with a renewed commitment to the responsibility of Bystronic and its employees toward the environment and society. The introduction is planned for mid-2021, as soon as the last business unit to be divested has left the scope of consolidation.