Corporate Responsibility Strategy and Status 2007 Evonik’s understanding of corporate responsibility | We define corporate responsibility as how we conduct our business and how we live up to our values. The overriding principles are reliability and credibility. Because: Evonik lives up to its promises. By integrating corporate responsibility into our business activities and creating innovative solutions, we make a contribution to sustainable development. Evonik demonstrates fairness and responsibility towards its employees, customers, owners, investors, suppliers, politicians, local communities and the general public. Evonik lives up to its promises. 1 Foreword 2 Who is Evonik? Strategy—Where Evonik wants to be 5 Responding to future needs 6 Background to Evonik’s CR strategy 8 Evonik’s CR strategy Status—Where Evonik stands today 11 Contribution to the business 16 Focus on employees 20 Best-in-class processes 25 Credits Dr. Werner Müller Chairman of the Executive Board Ladies and gentlemen: Evonik’s Executive Board has defi ned Because that’s what others do? Evonik In 2008 we did a good deal of ground­ clear goals for Evonik. These are: growth is in good company: Many other inter­ work to show how important this issue and value creation. We aim to be one of national companies highlight their com­ is to us. We developed a Corporate the most creative industrial groups in the mitment to responsible and sustainable Responsibility strategy as an integral part world, make a mark with our brand and business practices. Yet our ambitions of our corporate strategy. Our CR strategy instill it with life. go a good deal further. shows that we support economic mega­ Evonik’s commercial success is clear. trends, respond to ecological and social As planned we have now made our Because that’s what others expect us challenges and foster the development of entrance on the capital markets. Gaining to do? Corporate responsibility already new business activities. It is closely aligned CVC Capital Partners as an investor was a occupies a key position in the business to our core business and builds on our key step in the evolution of the company. community and investors and analysts are corporate values and core competencies. Now we are taking the next step: We are increasingly using corporate responsibility I am confident that corporate respon­ preparing to float Evonik on the capital reports as a basis for their assessment sibility will give us additional strength to market in three to five years time. of companies. Customers specifi cally ask address new challenges and give us a I am therefore proud to say that Evonik about our responsible management place at the forefront of people’s hearts can look forward to a very good future. standards and 80 percent of prospective and minds. A future in which we will be utilizing employees faced with a choice of jobs opportunities, but one in which we also on comparable terms opt for an employer have to address challenges and act that has a social conscience. responsibly. That is what we mean by corporate responsibility—and that is Because that’s what we want to do! what we do! That is Evonik’s response. I am convinced that a responsible attitude towards our Dr. Werner Müller business activities, our employees and all other stakeholders is essential for our long-term success. Because it is vital if we are to create trust and establish Evonik throughout the world as a fair partner committed to sustainable development. Corporate Responsibility 2007 1 Who is Evonik? Evonik Industries is the creative industrial A leading specialty chemicals group from Germany focused on three corporation profitable business areas: chemicals, The Chemicals Business Area ranks among energy and real estate. Evonik is one of the global leaders in specialty chemicals. the world’s leading specialty chemicals More than 80 percent of its sales come companies, an expert in power generation from activities where it is positioned from hard coal and renewable energies among the market leaders and it is sys­ and one of Germany’s largest private­ tematically increasing this position. Most sector housing companies. Moreover, it is of the products manufactured by the m For further information see Evonik’s systematically strengthening its market Technology Specialties segment are sold Annual Report 2007 leadership in all these areas. In 2007 to companies in the chemicals, plastics, Evonik had over 43,000 employees in rubber and paper industries for further more than 100 countries and generated processing into top-of-the-range end­ sales of around €14.4 billion and an oper­ applications. These include organic and ating profit (EBITDA) of over €2.2 billion. inorganic specialties, which are used as Our operations are grouped in eight key inputs in the agrochemicals and business units which are assigned to plastics sectors and in the manufacture of five reporting segments: Technology solar silicon. Hydrogen peroxide is a Specialties, Consumer Solutions, Specialty major bleaching and oxidation agent for Materials, Energy and Real Estate. The the paper and pulp industry. Particles and business units act as entrepreneurs within filler systems based on carbon blacks and the enterprise and report directly to the fumed silicas are mainly used to reinforce Executive Board. The Corporate Center rubber in the tire industry. in Essen (Germany) is responsible for The Consumer Solutions segment’s strategic management of the Group. The main customers are manufacturers of business units and Corporate Center are consumer goods, especially personal care, supported by a Shared Service Center, hygiene, pharmaceutical and nutrition which provides group-wide services such products. Its products include superabsor­ as procurement and payroll accounting. bent polymers for diapers. This segment’s Initially the RAG Foundation (RAG- extensive knowledge of applied interfacial Stiftung) was our sole shareholder. In chemistry enables it to develop solutions June 2008 it reduced its stake to for products ranging from personal care 74.99 percent by selling 25.01 percent to industrial applications such as the stabi­ of its shares to a fi nancial investor, lization of polyurethane foam. Ingredients CVC Capital Partners. for fabric softeners round out the product A clear structure Evonik Industries Chemicals Energy Real Estate Business areas Industrial Consumer Coatings & Energy Real Estate Business units Chemicals Specialties Additives Inorganic Health & Performance Materials Nutrition Polymers Technology Consumer Specialty Energy Real Estate Segments Specialties Solutions Materials 2 Evonik Industries Innovation | Research and development and innovative strength are key elements in Evonik’s corporate strategy. Products, processes and applications developed in the past fi ve years generate over 20 percent of sales in the Chemicals Business Area. Evonik invested €307 million in research and development in 2007. The creative industrial group portfolio. Evonik is the only supplier stations in Columbia, Turkey and the in the world from which customers can Philippines. In each of these countries it source four essential amino acids for works closely with local partners. Total animal feeds: DL-methionine, L-lysine, rated capacity is over 9,500 Megawatts L-threonine and L-tryptophan. Catalysts, (MW), including around 7,900 MW in custom-tailored substances and active Germany. Long-term supply and take-off ingredients are also used in key starting agreements with major customers products for the pharmaceuticals and life ensure stable cash flows. Evonik is well­ U For further information visit science industries. positioned in the fast-growing future www.evonik.com The products manufactured by the market for renewable energy sources and Specialty Products segment are used in is one of the German market leaders in consumer durables and industrial prod­ mine gas, biomass and geothermal ucts. Its operations are focused mainly on energy. More than 90 percent of district the automotive, coating and colorants heating supplied by Evonik comes from and construction sectors and a wide range co-generation plants. Evonik also ranks at of other high-end applications in fi elds the forefront of the German market in such as aviation engineering, displays, the disposal and reprocessing of power pharmaceuticals and lifestyle articles. Its plant residues. high-quality polymers are used as trans­ parent plastics for semi-fi nished products, High standards of housing high-performance lubricants for hydraulic The Real Estate Business Area manages systems and engines, lightweight struc­ a portfolio of around 60,000 company­ tural components and resins and coatings owned residential units concentrated in additives for the colorants industry. This the federal state of North Rhine- segment also markets specialty monomers Westphalia and has a 50 percent stake in as starting products for polymers. Formu­ THS GmbH, which owns more than lations are often customized to meet 75,000 residential units. The business specifi c requirements. focuses on letting to private households. Evonik comes out above the sector An international power supplier average on the key quality indicators in The core competencies of the Energy this market: vacancy rates and tenant Business Area are planning, fi nancing, fluctuation. Smart concepts are used to building and operating highly effi cient address the entire lifecycle of a property. fossil-fuel power plants. As a grid­ These include, for example, moderniza­ independent power generator, Evonik tion to create energy-saving buildings. operates nine coal-fired power stations Together with carefully planned, cost­ and two refinery power stations in saving running cost strategies, this mini­ Germany. The company’s international mizes the utility charges paid by tenants. successes comprise coal-fi red power Corporate Responsibility 2007 3 Strategy Where Evonik wants to be Responding to future needs Background to Evonik’s CR strategy Evonik’s CR strategy Evonik’s goal is to respond to the central challenges arising from social change and trends, enabling it to increase its business and play a role in the sustained development of society.