Impact, risk and opportunity management
E5-1 – Policies related to resource use and circular economy
The policies explained in connection with this disclosure requirement address issues in connection with the use of natural resources and the promotion of a circular economic system. These include, in particular, the minimized consumption of primary raw materials by way of more efficient processes and product design, the increased use of secondary raw materials, waste management, and the sustainable purchasing and use of renewable materials.
The group environmental and energy management policy defines requirements concerning the consideration of resource-related environmental aspects in connection with our own business activities. These relate to, for example, the use of materials in production, waste and the circularity of products, as well as the environmental impacts associated with the aforementioned aspects.
thyssenkrupp’s human rights and environmental due diligence obligations concern both its own operations and the upstream supply chain. The requirements they define for compliance with environmental standards therefore also apply to the company’s suppliers and their subcontractors, for example, in respect of resource-efficient production methods, the handling of waste and the avoidance or remediation of environmental and health impacts caused by the extraction of raw materials and waste disposal.
Aspects in connection with the increased use of secondary materials and the growing shift toward renewable resources are not yet governed by a separate group policy. Some of these aspects are included implicitly in the environmental and energy policy, especially where there is a focus on material efficiency and the reduction of environmental impacts.
Environmental and energy management
The responsible use of natural resources is anchored as a strategic principle in thyssenkrupp’s environmental and energy policy with the goal of cutting the use of natural raw materials, reducing the associated environmental impacts and thus preserving natural habitats.
Against this backdrop, the environmental and energy policy addresses the physical interventions in natural and social systems associated with the extraction of raw materials, especially primary raw materials. These interventions include the use of land, water withdrawals, pollution or increased waste, which not only impact the environment but may also have negative consequences for societies and future generations. They are countered by the potential to mitigate such impacts, for example, by way of resource efficiency or a product design that extends the service life and facilitates reusability or recyclability. Such approaches can reduce the need for primary materials and, as a result, the associated environmental and social impacts. In addition, resource efficiency may not only reduce environmental and social impacts but also provide economic opportunities associated with, for example, material savings and reputational effects in light of growing regulation and society’s expectations in relation to circular value creation.
The group environmental and energy policy governs the implementation of environmental and energy management. It requires group companies to establish management processes for environmental aspects such as the utilization of materials, resource use and waste if these aspects are identified as relevant for the respective company. In this way, the goals of the environmental and energy policy are incorporated into the internal structures and processes of the relevant organizational units.
In connection with resource use and circular economy, this means that if the utilization of materials, waste or the circularity of products are relevant aspects for a group company, these must be included in environmental and energy management and managed systematically. Among other things, it concerns potential negative impacts that may be caused by using raw materials in production processes or by generating and disposing of hazardous waste.
Material environmental aspects are not restricted to negative impacts but may also include positive effects or business opportunities. This is the case especially when resource-efficient products and processes reduce the use of materials. Resource efficiency in products and processes can have a positive effect outside the company’s own operations in the upstream or downstream value chain – for example, in the form of a longer product service life or improved reusability.
Further information on environmental and energy management can be found in subsection “E2-1.”
Human rights and environmental due diligence obligations
In connection with human rights and environmental due diligence obligations, thyssenkrupp considers both potential and actual impacts associated with the extraction, use and disposal of raw materials, both in the company’s own operations and in the upstream supply chain. The goal is to identify, prevent or effectively mitigate pollution caused by the extraction of raw materials and waste treatment and the resulting risks to society and the environment at an early stage.
One focus is on impacts that may be caused by the improper handling of hazardous waste or by inadequate disposal processes. Such practices harbor environmental risks – such as pollution of the air, soil or water – and may impair health as the result of, for example, contaminated water resources or residues in agricultural products. Comparable impacts may also occur in connection with the extraction of raw materials if this damages natural habitats, makes excessive use of water resources or breaches human rights standards.
In recognition of this responsibility, the principles on due diligence obligations formulate environmental expectations aimed at complying with statutory requirements and international environmental treaties. In thyssenkrupp’s own operations, this includes complying with the relevant environmental legislation and taking a responsible approach to handling hazardous substances and waste – especially in respect of their potential impacts on the environment and health. With its Supplier Code of Conduct, thyssenkrupp has given substance to its expectations in this regard vis-à-vis its direct suppliers and relevant business partners. The aim is to prevent or mitigate risks such as pollution, land degradation or exposure to persistent pollutants in the supply chain. Further information on the due diligence obligations can be found in subsection “E2-1.”
E5-2 – Actions and resources related to resource use and circular economy
The following disclosures describe the actions taken by thyssenkrupp and the resources made available to implement the policies described in subsection “E5-1” concerning sustainable resource use, the promotion of approaches that favor the circular economy, the proper handling of waste and the prevention and mitigation of the resulting environmental impacts.
Environmental and energy management
The group environmental and energy management policy requires thyssenkrupp group companies that are classified as environmentally relevant to implement systems for the systematic management of environmental aspects. As part of these systems, operational actions are deployed to manage the main impacts, risks and opportunities in the areas of resource use, circular economy and waste management. Here, the focus is on an efficient use of raw materials and on the avoidance and legally compliant treatment of waste. Operational actions in this connection include the optimization of material cutting to reduce offcuts, the return of production residues to internal recycling loops, the separate recording and recovery of reusable fractions and the monitoring and documentation of hazardous waste in line with statutory requirements.
Other actions to improve raw material efficiency and apply the principles of the circular economy in products and processes are described in subsection “E5-5” concerning the disclosures relating to ESRS E5-5, para. 35.
In the context of environmental management systems, processes are established and responsibilities defined with the aim of ensuring the proper and legally compliant treatment of waste – in accordance with the statutory requirements for waste that apply at each site. These include appointing a waste officer or disposal coordinator, collecting waste in suitably labeled containers and the separate storage of hazardous waste in containers approved for that purpose. In addition, some sites use an electronic verification process for hazardous waste such as oil filters or used oil in order to comply with statutory verification requirements. Other measures include the documentation of transfers to certified disposal companies, employee training in the proper handling of waste and internal audits to review waste separation and storage.
The examples outlined above are operational environmental and energy management actions that are implemented decentrally and adapted to the situation at the respective site. At the policy level, the central actions are the classification of thyssenkrupp companies as environmentally relevant or energy-relevant and the obligatory introduction of corresponding management systems. No further policy steps are planned at present. Further information on environmental and energy management can be found in subsection “E2-1.”
Human rights and environmental due diligence obligations
In implementing its human rights and environmental due diligence obligations, thyssenkrupp systematically identifies and assesses potential negative impacts on society and the environment, including those that may be caused by the consumption of resources or waste disposal in the company’s own operations and in the upstream supply chain. The assessment is based on defined risk criteria and risk identification processes.
If risks are identified, priority should be given to initiating preventive action. In the event of actual incidents with relevant impacts, mitigation and clean-up actions must be implemented. Depending on the type of impact, further suitable remedial action must be initiated. The appropriate action is selected from a groupwide catalog on the basis of risk or incident. The effectiveness of the actions must also be documented and reviewed regularly. Further information on human rights and environmental due diligence obligations can be found in subsection “E2-2.”