Materiality matrix

The focus of GF activities during 2017 was based on the measures defined as part of the GF Strategy 2020 and the Sustainability Targets 2020. As part of the process to derive this report, as well as to go one step further and define the reference points for a comprehensive sustainability strategy, in March 2018, we conducted a materiality assessment workshop, bringing together the internal company perspective with that of GF’s broad range of external stakeholders.

In this session, we held a discussion on which topics carried highest relevance for GF at that point in time and the topics set to gain importance in the foreseeable future. The structured workshop included specialists from HR, the three divisions, and the Procurement, Logistics, Risk, Compliance, Investor Relations, Communications, and Sustainability departments. Input and feedback received throughout 2017 in various interactions with customers, employees, investors, regulators, and other external stakeholders was incorporated into the discussion. The outcome was summarized, verified with senior management, and fed into the resulting materiality matrix. The comprehensive sustainability strategy definition will be initiated in the second half of 2018.

The details behind each category in the matrix, as well as the reasoning behind their placement, are described below (see graphic and tables).

Topics of high relevance

Topic

 

Aspects included

 

Explanation for high materiality

 

 

 

 

 

Customer relationship management

 

– Customer relations – Customer satisfaction

 

Customers are one of our most important stakeholder groups, and it is crucial for us to maintain an ongoing positive interaction with them to understand their needs and thus provide best-fitting solutions for them. Only with our customers as partners can we create a sustainable impact across the three divisions. This is a key element of GF’s business case and our strategic intentions.

Sustainable products and solutions

 

– Sustainable products – Innovation – Circular economy

 

Customer behavior is changing, and resources are becoming scarcer. Therefore, we regard the topic of circular economy as an important consideration for responsible product innovation & development. Gradually, GF is incorporating the questions of how the procurement, production, and use of materials can move away from the “take-make-dispose” model to a circular approach, addressing within its R&D process the considerations of a product’s life cycle and whether the materials/components can be re-, up-, and down-cycled.

Business ethics and integrity

 

– Corporate governance – Business ethics & compliance – Human rights

 

A well- and responsibly-managed Corporate organization is key for almost all internal and external stakeholders and is ultimately aligned to their interests. It ensures rule-based decisions, clear checks and balances and sets objectives that are aligned to the social, regulatory, and market environment.

Risk and opportunity management

 

– Risk management – Agility of business

 

An effective risk management framework is an important internal task of the company to ensure that the negative or positive future/potential impact on and by our business is recognized, assessed, managed and/or mitigated. We see the significance of this topic for GF first of all on account of its necessity, but even more so due to the strategic implication resulting, for example, from harmful events, missed opportunities, etc.

Industrial ecology

 

– Greenhouse gas (GHG) emissions – Energy usage in GF operations – Water management – Circular economy in the use of materials at GF operations – Resource scarcity

 

External stakeholders and regulators position climate change and energy-related matters as being of the highest concern, and the international community is committed to tackling the challenges that come along. As a global company, as part of the precautionary principle, GF also attaches high relevance to this topic. While production and other activities of GF itself are not water intensive, sustainable water management is a topic that is of high relevance for society at large (e.g. access to clean water and leak-free water transport) and for the business of GF Piping Systems. As a responsible industrial company (both from a financial and environmental perspective), circular approaches are on the agenda of each division, both in terms of how we use materials within our operations and also how to incorporate it into the R&D process.

Employee diversity & well-being

 

– Employee diversity & inclusion – Employee work-life balance – Employee health and well-being

 

Policy and public-related discussions and involved stakeholders position diversity as being of the highest concern. For GF, the issue is an important element in ensuring its continuing future success by retaining its existing talents and positioning itself as an attractive employer. Demand for flexible working models is growing, especially in the context of a good work-life balance, among the new generation of employees.

Employee safety

 

– Safety at work

 

Safety at work is a strategic aspiration of the highest fundamental relevance to GF, with a significant impact on employees, contractors, and their families. It is key to GF’s success to care about those people who work for the company and to avoid any risk impacting their health, well-being, and physical integrity by ensuring a culture of safety.

Employee management

 

– Employee relations and management – Talent attraction – Employee training & development

 

The broad spectrum of functions and roles within the GF business requires development and maintenance of state-of-the-art human resource management processes and the possibility to engage, develop, and retain employees, while attracting new talent.

Responsible procurement

 

– Supply chain management – Integration of social & environmental topics into procurement processes

 

The focus in relation to sourcing and supply chain matters is heavily linked to the upstream-related steps of our value chain. Prudent management of suppliers, while integrating social and environmental topics into the supplier management process, is gaining in relevance. We see this as part of our responsibility for the impact generated by our operations. It is also of interest to our customers, regulators, local communities, and other external stakeholder groups.

Cyber security

 

– Data protection – IT security / system availability

 

Data protection is an important topic for GF, also in view of the new EU directive regarding GDPR. GF has appointed a Data Protection Officer to ensure compliance. While GF does not collect sensitive customer data, personal data of employees is stored and saved as required by the legal authorities. Given the increasing digitalization trend, the availability, integrity, and security of data are key for our IT infrastructure and business systems. We ensure adequate IT service levels through an external provider with state-of-the-art IT / cyber security measures. In addition, we have IT security-related training in place.

The following topics were identified as being relevant for the business of GF, but carrying lower materiality weight. We therefore keep them on our radar for future development, while at the same time ensuring that GF leaves a positive impact in these fields with regard to the affected stakeholders.

Topic

 

Aspects included

 

Explanation for lower materiality

 

 

 

 

 

Local community impact

 

– Consultation and recognition of local communities’ needs in order to minimize possible negative effects of our operations and ensure their positive impact.

 

GF’s production sites do not carry material risks for, or have adverse effects on, local communities, and the direct impact is low. Nevertheless, good relations with our neighbors and cooperation with them on a local level to achieve common goals are of great importance for GF.

Air emissions (non-GHG pollutants)

 

– Non-GHG emissions (e.g. NO X , SO X , dust, and VOC) as part of production processes

 

While this topic is of high importance for the environment and local communities in general, the production facilities of GF do not release high quantities of non-GHG pollutants into the atmosphere. For this reason, we assess GF’s impact on air emissions as rather low. Nevertheless, ensuring compliance with any regulatory requirements is key for our operations as part of the precautionary principle.

Tax contribution

 

– Tax transparency of the organization and its contribution to the local economy wherever it operates.

 

GF’s businesses have a strong focus on Corporate responsibility, which includes the administration and payment of taxes. The Group is committed to following all applicable laws and regulations related to its tax activities and maintaining an open and honest relationship with the tax authorities based on collaboration and integrity. Keeping this in mind, the overall tax strategy is of lower relevance for the organization when it comes to its sustainability-relevant footprint.