Akzo Nobel N.V. · EURONEXT:AKZA
Akzo Nobel — ESG Presentation (May 2016)
43 slides from Akzo Nobel's sustainability presentation, May 19, 2016
Slide 1: Sustainability Update
Ton Büchner and Andre Veneman May 19, 2016 2016 Sustainability Update
Slide 2: We create everyday essentials to make people's lives more liveable and inspiring
WE CREATE EVERYDAY ESSENTIALS TO MAKE PEOPLE’S LIVES MORE LIVEABLE AND INSPIRING Sustainability Update 2
Slide 3: Global paints, coatings and specialty chemicals company
Global paints, coatings and specialty chemicals company €14.9 billion revenue (2015) €2.1 billion EBITDA (2015) 80+ countries 45,600 employees (2015) Leadership positions in many markets Revenue by Business Area Operating income by Business Area Revenue by geographic region North America 3% 17% Perf
Slide 4: Agenda
Agenda Integrated thinking Integrated strategy Integrated management cycle Integrated reporting Conclusion Questions Sustainability Update 4
Slide 5: Integrated thinking
Integrated thinking Integrated thinking Integrated strategy Integrated management cycle Integrated reporting Conclusion Questions Sustainability Update 5
Slide 6: The global urbanization challenge
The global urbanization 6.3 billion people will be challenge: living in cities by 2050 Over 65% of the World’s population 1 million move to cities globally every week Just one of the mega trends that we need to address Sustainability Update 6
Slide 7: Bringing energy and inspiration to urban areas
Bringing energy and inspiration to urban areas Global challenge is how to create human, sustainable urban environments for people to live and work in Human cities program channels our three key strengths : to help energize communities and make them more liveable and inspiring Sustainability Update 7
Slide 8: Creating more value from fewer resources
Creating more value from fewer resources Our ambition and imagination are unrestricted by limited world resources Radical resource efficiency enables us working with customers and suppliers to open up infinite possibilities in a finite world We are committed to finding opportunities even where there
Slide 9: Building and Infrastructure, Transportation
Building and Transportation Infrastructure 95% of new building stock using zero net energy Reductions in carbon emissions <6% buildings heated with fossil fuels 80% reduction light duty vehicles Customers expect long lasting, efficient products 4-10 fold improvement in eco-efficiency of Recycling is
Slide 10: Integrated strategy
Integrated strategy Integrated thinking Integrated strategy Integrated management cycle Integrated reporting Conclusion Questions Sustainability Update 10
Slide 11: Focus will shift towards continuous improvement and organic growth
Focus will shift towards continuous improvement and organic growth Hardwire Deliver Build further Drive organic Pursue value new continuous operational growth and generating organization improvement excellence innovation bolt-on model culture acquisitions Next steps Culture Core principles and value
Slide 12: Sustainability embedded into the company mindset and incentives
Sustainability embedded into the company mindset and incentives We build successful partnerships Customer Focus with our customers Core principles: Deliver on Commitments We do what we say we will do Safety We strive to be the best Integrity Passion for Excellence in everything we do, every day Sust
Slide 13: Our Planet Possible strategy
Our Planet Possible strategy Linear economy Circular economy Sustainable Resource Capable, business efficiency engaged people Sustainability Update 13
Slide 14: Strategy focuses on key financial and sustainability metrics
Strategy focuses on key financial and sustainability metrics Financial Guidance Sustainability Metrics of revenue by 2020 from products that are of return on sales more sustainable for our customers than the (EBIT/revenue) 2016-2018 products of our competitors of return on investment more efficient
Slide 15: Progress made towards the 2020 sustainability ambitions
Progress made towards the 2020 sustainability ambitions Eco-premium solutions Cradle-to-Grave REI with downstream benefits Carbon Footprint Resource Efficiency Index in % of revenue % reduction CO2(e) Gross margin/CO2(e) indexed per ton of sales from 2012 Ambition Ambition 113 25-30 100 95 94 98 96
Slide 16: Closing the carbon gap
Closing the carbon gap Own operations Carbon Footprint Up- and downstream Carbon Footprint Including VOC emissions 25 25 -10% 20 20 15 15 23,1 22,4 22,9 10 10 20,8 -19% 5 5 4,7 3,9 3,9 3,8 0 0 2012 2013 2014 2015 2012 2013 2014 2015 Sustainability Update 16
Slide 17: What does it mean to move to circular?
What does it mean to move to circular ? Product shipped to pulp customers Chemical Island Concept Packaging crushed/ sent to landfill Recycled metal/ plastic material in packaging Left over paint stored in cans then landfilled Left over paint reused Excess steam released into atmosphere Excess steam
Slide 18: Doing more with less
Doing more with less Material effectiveness Partnerships to develop renewable raw materials Partnerships to turn waste into energy/raw materials Renewable energy reducing fossil material use Material efficiency Thinner coatings with same properties/ protection Dulux ReColour – customer left over pai
Slide 19: We are leading in processes as well as circular partnerships
We are leading in processes as well as “circular” partnerships Taken steps to increase share of renewables in our energy supplies and decrease our carbon footprint Joined forces to invest in sustainable steam generation in Delfzijl, the Netherlands Production records set in all three of the Nordic V
Slide 20: Opportunities for growth and increased profitability from Eco-premium solutions
Opportunities for growth and increased profitability from Eco-premium solutions Deliver advantages to our direct customers or consumers Leading the market Assessment is always a comparison with other solutions – stretching us to go further than the competition 2/3rd of innovation spend is sustainabi
Slide 21: Dulux Charm waterborne woodcare
Dulux Charm waterborne woodcare Key features Customer benefits Financial benefits Indoor woodcare paint Improved wellbeing: low odor Affordable for mass market Improved flexibility Lower price Higher market share Balanced performance in Better in-can appearance chemical resistance and Longer lasting
Slide 22: Aquacote PP coil coating
Aquacote PP coil coating Key features Customer benefits Financial benefits Water-based primer Two-coats paint system in a Reduced conversion costs Eliminates need for single pass More cost competitive pre-treatment stage Doubles line capacity Cured at 80°C Reduced materials handling Less energy cons
Slide 23: Berol DR-B1 degreasing ingredient approved for direct release applications
Berol® DR-B1 degreasing ingredient approved for direct release applications Key features Customer benefits Financial benefits High performance degreasing High performing cleaner Price premium ingredient with low Approved for “direct release” environmental impact “Safer Choice” approval Specifically
Slide 24: Integrated management cycle
Integrated management cycle Integrated thinking Integrated strategy Integrated management cycle Integrated reporting Conclusion Questions Sustainability Update 24
Slide 25: Dashboards drive sustainable performance in businesses
Dashboards drive sustainable performance in businesses Baseline Results Results Milestone Target Status KPI Unit 2012 2014 2015 2015 2020 against 2020 We measure our progress on sustainability Sustainable KPI’s using standardized dashboards business KPI No. 1 GM/Kton 100 96 108 t.b.d t.b.d. Used in
Slide 26: Sustainability also integrated in all functional processes
Sustainability also integrated in all functional processes Finance Capital Expenditure, materiality assessment RD&I Funnel process R D and I Procurement Vendor policies, supplier visits Procurement Commercial Excellence Market segmentation Commercial Excellence HR Recruitment, training, remuneration
Slide 27: Progress on all key elements to safety
Progress on all key elements to safety People Product A common approach to behavior-based safety Identify, review and score hazardous substances implemented at all sites Higher score substances designated as priority Reached the 2015 target (<2) in total reportable injury rate Risk managed 100% prio
Slide 28: Engagement increased during ongoing change
Engagement increased during ongoing change Our people are the key to our success ViewPoint score employee engagement (1 to 5 scale) We aim for a high performance culture of engagement, feedback and trust Clear evidence that higher engagement drives business performance 4.03 3.97 3.88 3.8 2012 2013 2
Slide 29: Leadership changes providing clear direction and driving culture change
Leadership changes providing clear direction and driving culture change Diversity is an important factor Female executives in % Reflects the societies where we do business Ambition Better insights into our customer and employee base Objective is to create a high performing culture where 20 25 15 16
Slide 30: Integrated reporting
Integrated reporting Integrated thinking Integrated strategy Integrated management cycle Integrated reporting Conclusion Questions Sustainability Update 30
Slide 31: Our integrated reporting journey
Our integrated reporting journey The International Integrated Reporting Council (IIRC) framework: Non-financial topics increasingly determine firm’s value creation potential Integrated reporting requires “integrated thinking” an “integrated strategy” and an “integrated management cycle Implemented i
Slide 32: Sustainability opportunities and risks evaluated and measured
Sustainability opportunities and risks evaluated and measured Updated materiality to assess current and important topics Prioritized and plotted in a matrix Most important topics energy resource use carbon emissions throughout the value chain people and process safety Eco-premium solutions Most mate
Slide 33: Consulted key stakeholder groups to develop integrated materiality matrix
Consulted key stakeholder groups to develop integrated materiality matrix Financial and Sustainability Key opportunities, issues and risks material Regulatory opportunities opportunities to stakeholders grouped using bullets and risks and risk Items at centre are opportunities, issues and risks mate
Slide 34: Continued development of four-dimensional profit and loss
Continued development of four-dimensional profit and loss Methodology represents value creation in multiple dimensions: financial, natural, human and social capital 2014: piloted at Pulp and Performance Chemicals business in Brazil Actions implemented during 2015 to reduce negative aspects and build
Slide 35: Evaluation of results
Evaluation of results Financial and natural capital Social capital (risk in each part of the life cycle) Financial capital (positive) Natural capital (negative) Very high High Medium Low Very low No data Chemicals/ Energy Own Downstream Total salt operations Human capital Financial capital is positi
Slide 36: RobecoSAM / Dow Jones Sustainability Index is our primary external benchmark
RobecoSAM / Dow Jones Sustainability Index is our primary external benchmark Industry group leader for fourth consecutive year Top three for last ten years Opportunity to drive continuous improvement Develop and monitor improvement plans annually on focus areas Sustainability Update 36
Slide 37: Recognition and collaboration with other sustainability rating agencies
Recognition and collaboration with other sustainability rating agencies 100 percent disclosure score in 2015 Fourth year in a row, ranked among the industry leaders Oekom Prime status since 2012 In ESG leader group Included in all their ethical indices Sustainability Update 37
Slide 38: Conclusion
Conclusion Integrated thinking Integrated strategy Integrated management cycle Integrated reporting Conclusion Questions Sustainability Update 38
Slide 39: Only way to be successful is to care about the future
Only way to be successful is to care about the future Sustained performance in the Dow Jones Sustainability Index provides reinforcement for our belief that sustainability is fundamental to business strategy Shows value of Planet Possible approach to resource efficiency Human Cities initiative has e
Slide 40: Questions
Questions Integrated thinking Integrated strategy Integrated management cycle Integrated reporting Conclusion Questions Sustainability Update 40
Slide 41: Safe Harbor Statement
Safe Harbor Statement This presentation contains statements which address such key issues as AkzoNobel’s growth strategy, future financial results, market positions, product development, products in the pipeline, and product approvals. Such statements should be carefully considered, and it should be
Slide 42: Appendix
Appendix Sustainability Update 42
Slide 43: Eco-premium solutions - Definition
Eco-premium solutions - Definition A product qualifying for the list of AkzoNobel Eco-premium solutions must meet the following criteria when assessed against the competing mainstream products/solutions: 1. It provides the same or better functionality for the customer application. 2. When assessed a