Umicore strives to plan for the best possible future by remaining in a healthy and competitive position whilst considering global economic, social and environmental megatrends.
Our Vision 2015 strategy built on existing competencies, market positions and our long-standing expertise in metallurgy, materials science, application know-how and recycling, and combined them with our closed-loop business model to give us strong growth potential in clean air, clean energy, vehicle electrification and addressing resource scarcity.
Horizon 2020, launched in 2015, represents continuity in Umicore’s strategic choices over the past decade and sets out further economic, environmental, value chain and society challenges. The definition of the environmental, value chain and society objectives for the Horizon 2020 strategy involved a materiality assessment to identify areas with the potential to turn sustainability into a greater competitive edge.
VALIDATING GLOBAL MEGATRENDS & ASSESSING VISION 2015 ACHIEVEMENTS
In 2014-15, the executive committee scanned in detail the four megatrends that underpin Umicore’s growth ambitions. The results clearly showed that three of the four megatrends were strengthening: resource scarcity, the need for clean air and vehicle electrification (see pages 10-11 for more on these megatrends). The landscape had shifted significantly in photovoltaics, the fourth megatrend, where a combination of economic and technology choices led to a less favorable market for Umicore’s higher-end solutions. Based on the results, the executive committee elected to focus Umicore’s Horizon 2020 growth ambitions on activities that are linked to clean air (automotive catalysts), vehicle electrification (rechargeable battery materials) and resource efficiency, ensuring precious and specialty metals recycling through our closed-loop business model. These activities are therefore at the heart of our ambition to double Umicore earnings by 2020.
In terms of sustainability performance, Vision 2015 yielded positive results. On the environmental front, we achieved a significant reduction in CO2 and metal emissions to water and air, surpassing our targets in all three cases.
We also made strides in personnel development and stakeholder engagement. By 2015, the vast majority of Umicore employees had received an annual appraisal and development plan and we had further reduced exposure levels of our employees to various metals. Our last People Survey in 2018 confirmed that we had achieved several of our Horizon 2020 objectives.
In sustainable procurement, we built on our reputation as a pioneer in the field by deploying our Sustainable Procurement Charter and sought out conflict-free certifications for our smelters.
Safety was the sole area where performance was less than satisfactory. We set ourselves the target of becoming an accident-free company by 2015 and, while our safety performance improved, we fell short of this objective.
The challenge for Horizon 2020 is to maintain the progress made, continue focusing on topics such as safety where we fell short of our goals and to develop goals that enhance Umicore’s competitive positioning, as follows:
MAINTAIN ACHIEVEMENTS in carbon and metal emissions, preferred employer and stakeholder engagement. Although we will not set further objectives for these themes, we will continue to measure and report on the impact and performance when relevant from a materiality point of view.
IMPROVE safety and occupational exposure. We will continue to pursue the zero accident and zero excess readings goals.
SECURE COMPETITIVE ADVANTAGE through sustainable sourcing. Thanks to the implementation of the Umicore Sustainable Procurement Charter, we have developed a reputation for ethical sourcing. This approach is aligned with Umicore’s values and ethics but comes at a cost that is only gradually accepted by customers. Horizon 2020 seeks to leverage this sustainable sourcing approach to generate an enhanced competitive edge.
IDENTIFYING AND CHOOSING MATERIAL TOPICS FOR HORIZON 2020
With the activities linked to clean air, vehicle electrification and recycling defined as the main levers for Umicore’s growth, we screened for other topics of material importance to our business units and to our main stakeholder groups.
In addition to producing the initial list of material topics, based on the learning from Vision 2015, other potential topics were identified through direct feedback from stakeholders, including the findings of the annual internal business risk assessment, the results from the 2014 People Survey for all employees, the data from the implementation of Umicore’s APS (Assessment of Product and services Sustainability) tool from 2012 to 2015 and direct questions submitted to Umicore or its business units by customers.
At corporate level, we screened material issues at peer companies and customers, as well as potentially relevant topics discussed by international business groups, research groups and media.
All topics identified in the materiality screening phase were used to produce a draft materiality matrix. The relevance of these topics for Umicore was assessed by a project team and discussed with the Environment, Health and Safety (EHS) and Human Resources (HR) corporate teams. The starting matrix, containing about 65 topics, was submitted for further refining with the business unit management teams.
Based on the feedback received, a revised version of the Umicore Group materiality matrix was compiled consisting of top quartile topics. These 25 topics were the basis of the materiality testing and for ease of reference were clustered into five categories: Supply, Products, Operational Excellence, Human Resources, Health and Safety.
The list of material topics was then tested using an online survey that was sent to 48 stakeholders. These stakeholders – investors, customers and employees – ranked the topics.
DEFINITION OF OBJECTIVES AND REPORTING SCOPE
Based on the results of the first two phases, we established the scope of the objectives for Horizon 2020. We clustered our objectives in four main themes. Three of the Vision 2015 themes were kept – Economic Performance, Eco-Efficiency and Great Place to Work – but “Stakeholder Engagement” was replaced by “Value Chain and Society” to highlight our ambition of adopting a more holistic view of Umicore’s presence in and impact on the overall value chain. This constitutes Umicore’s main focus through 2020.
The process for defining the environmental, value chain and society objectives within Horizon 2020 involved a structured dialogue with the management of each business unit to determine the social and environmental topics that could generate a greater competitive edge.
To ensure a degree of alignment with external expectations, we also conducted an online stakeholder survey. The objectives were debated and ratified by the executive committee in February 2016.
We also identified a range of issues that Umicore and our stakeholders identified as important for management purposes, which should remain part of the report, albeit not part of any specific Horizon 2020 objective.
One example is CO2 emissions: in our Vision 2015 review, we assessed that the absolute level of our CO2 emissions was dependent on the energy mix of the countries in which we operate, a roadblock to pursuing a specific CO2 emission reduction objective. We therefore chose to pursue energy, operational and materials efficiency instead. However, many stakeholders expect Umicore to report CO2 emission and this data remains part of the reporting scope.
The matrix and its translation into specific environmental, value chain and society objectives were validated by the executive committee in February 2016. The economic objectives and growth ambitions had been previously validated in 2015.
As a result, we believe that our Horizon 2020 objectives and the information that we report in this document represent a balanced reflection of external requirements and our own internal needs, and enable a balanced appreciation of our performance.
You will find the strategic targets associated with this materiality assessment on the following page.
Following the 2020 review, the management board confirmed that Operational Excellence, Supply, Products, Human Resources and Health and Safety remain Umicore’s material issues. We continue to follow our Horizon 2020 objectives and the associated materiality in determining the content and disclosure in this report.
As part of preparations for the next strategic cycle, Umicore reviewed materiality in 2020. The findings will be used in reporting during the new strategic cycle, as of 2021.