Basis for preparation
In this section
BP-1 – General basis for preparation of the sustainability report
The sustainability report was prepared on a consolidated basis. The scope of consolidation of the sustainability report is identical with that of the consolidated financial statements and covers thyssenkrupp AG as the parent company and the company’s subsidiaries. As a joint operation, 50% of steel producer Hüttenwerke Krupp Mannesmann (HKM) is recognized in the consolidated financial statements – reflecting thyssenkrupp’s investment – and this same proportion is included in the environmental and other selected key indicators.
In addition to our own operations, this sustainability report also covers the upstream and downstream value chain. In performing the double materiality assessment (see “IRO-1 Description of the processes to identify and assess material impacts, risks and opportunities” later in this section), we considered both our own activities and those in the upstream and downstream value chain in order to identify material impacts, risks and opportunities. If necessary, we provide information on the upstream and downstream value chain in the topical sections.
In preparing the sustainability report, we have not made use of the option to omit certain information concerning intellectual property, know-how or the results of innovation. We have also not made use of the option to omit disclosures of impending developments or matters in the course of negotiation.
BP-2 – Disclosures in relation to specific circumstances
The recording of the metrics presented in the sustainability report is based on uniform definitions. Depending on data availability, the metrics are quantified by direct measurement, calculation, modeling or estimation. Detailed information can be found in the sections relating to the various topical standards. In the event of limited data availability or methodological challenges, we made estimates or assumptions. This may result in inaccuracies that we explain in the following paragraphs. We make every effort to continuously optimize the accuracy and reliability of the reported metrics and estimates within the framework of the applicable methodological and organizational requirements.
Individual pollutant emissions disclosed pursuant to ESRS E2-4 are model-based estimates because no direct measured data are available in certain cases. The uncertainty of these figures results mainly from the methodology chosen, the quality and availability of the input data and the representative nature of the underlying assumptions. Despite plausibility checks, the accuracy of individual emission data may be limited. However, we consider the impacts on the completeness and reliability of the overall results to be insignificant.
A model-based estimation factor is applied in disclosing the proportion of secondary reused or recycled materials in accordance with ESRS E5-4 AR 31(c) because no complete primary data for these materials are available from the procurement processes at this time. This factor is based on a global material flow balance which records annual raw material flows and only considers the proportion of recycled materials to be circular. As product service lives and inventories are not included, uncertainties exist as to the accuracy but these are considered to be acceptable overall.
At present, no aggregated primary data relating to the material composition of the products brought to the market are available at group level. For this reason, a model-based estimation is applied in disclosing the proportion of recyclable materials in accordance with ESRS E5-5 AR 36(c). The material composition was derived instead from the resource inflows recorded. Information on the potential recyclability of the main material flows obtained from external sources was used to estimate the proportion of recyclable materials. The methodology is based on simplifying assumptions and approximations that may result in accuracy uncertainties. Overall, these uncertainties are considered to be acceptable. Further information can be found in subsection “E5-5” in the section headed “ESRS E5 Resource use and circular economy.”
Quantification of the indirect GHG emissions along the upstream and downstream value chain (Scope 3) is based in part on estimates – especially for emission categories for which there are no primary data such as supplier-specific information. In such cases, secondary data were used, including emission factors from recognized databases such as the International Energy Agency (IEA) database and the commercial Sphera database, industry averages and other suitable emission factors. Although the use of indirect data may have a negative impact on the accuracy of individual Scope 3 categories, we consider the impacts on the completeness and reliability of the total greenhouse gas balance to be insignificant overall.
Forward-looking information and data, both the company’s own and from third parties, inherently involve uncertainties. Such disclosures are often based on assumptions, expectations or forecasts based on currently available knowledge. Changes in framework conditions, technological developments or regulatory requirements are among the factors that may cause actual developments to deviate from the expectations presented. Against this backdrop, we would point out that forward-looking statements about both financial and non-financial matters are no guarantee that expected results will actually occur. Various systemic uncertainties and external factors relating to the assessment of impacts, opportunities and risks may result in actual results or events deviating from the estimates presented in the sustainability report.
With the first set of the ESRS, the EU Commission has provided criteria for consideration in preparing sustainability reports in accordance with the CSRD. However, some of the terms and formulations remain subject to uncertainty because no authoritative interpretations have yet been published. In this sustainability report, we explain our interpretations of the criteria in the topical sections where necessary.