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Understanding of
Sustainability

The H&R Group is well aware of its role in society and the responsibility it bears as a result. The company operates in an ever-growing regulatory framework yet always takes advantage of opportunities to evolve, to drive forward a balance between business, the environment and society.

Reporting Profile and Environment
of the H&R Group

Reporting Profile and Environment

This non-financial report (NFR) of the H&R Group contains disclosures in accordance with Section 289b–e of the German Commercial Code (HGB) in conjunction with 315b–c HGB and Article 8 of the EU Taxonomy for sustainable activities (2020/852) on material, non-financial aspects of our business activities in areas involving environmental, employee and social concerns, respect for human rights and the fight against corruption. The non-financial report was audited on a volun-tary basis with limited assurance in accordance with ISAE 3000 for the first time for 2021.

Legal Requirements and Framework

No international framework has been applied in preparing the NFR, as the H&R Group’s sustainability reporting process is still under development. It was therefore not yet possible for us to collect complete global key figures on all the mate-rial topics for the 2021 financial year. Nevertheless, the re-porting provides a representative overview of the Group. The inclusion of the two German refinery sites ensures that the main drivers of our key performance indicators, which are also relevant to our sustainability strategy, are taken into ac-count comprehensively.

Business Model and Strategy
der H&R KGaA

For a detailed presentation of the mission, the markets and corporate structure, please refer to the 2021 consolidated management report.
With the help of modern refineries and process technolo-gy, we use hydrocarbons to produce more than 800 chem-ical-pharmaceutical specialty products such as label-free process oils, white oils and paraffins. Precision plastic parts complete our portfolio. Our products are components in the processes and products of numerous industries, for example, in the automotive industry. Today, we manufacture and sell our products worldwide through an organically developed network. We rely on our own facilities and sales/distribution units, as well as on production partnerships.
In total, the Group consists of 47 subsidiaries. The ChemPharm Refining and ChemPharm Sales segments are subdivided into production sites (Germany), processing sites (UK, Nether-lands, Japan, Singapore, Malaysia, China, Thailand, Indonesia, South Africa) and sales sites (India, Vietnam, Australia, United States, Brazil). In the Plastics segment, we operate production sites in Germany, the Czech Republic and China.
As a Group with global operations, we not only compete with other market participants in general, but we also face a variety of global economic factors. These include various economic-political systems as well as cultural particularities and regional challenges that our activities and our products are met with and which the H&R Group must address in its strategic orientation. The German refinery sites form the core of these efforts. They are, on the one hand, the largest units in the H&R Group. The overwhelming majority of the core products sold in Germany through the ChemPharm Refining segment and globally through the ChemPharm Sales segment are produced at these two locations. They are therefore es-pecially important as suppliers for providing chemical-phar-maceutical raw materials for our Group-wide sales and processing networks. At the same time, they are also the primary cause of the Group’s energy needs and its emissions. The two production sites in Hamburg and Salzbergen are therefore at the forefront of the Group’s sustainability strategy.

EU Taxonomy Regulation and
Taxonomy-eligible Activities

Regulation (EU) 2020/852 of the European Parliament and the Council from June 2020 on the creation of a framework to simplify sustainable investments and amend Regulation (EU) 2019/2088, defines the requirements for sustainable invest-ments and also regulates their reporting. It contains criteria to determine whether a business activity can be classified as ecologically sustainable in order to assess the degree of ecological sustainability of an investment. The EU Taxonomy regulation requires financial market participants and groups who are obligated to publish non-financial reports to disclose how and to what extent the activities of the company are con-nected to ecologically sustainable business activity.

Understanding of Sustainability and Material Topics at the H&R Group
A Group Bearing Responsibility

As an owner-managed group of companies, a sustainability-oriented mindset forms the foundation of our corporate policy. We are convinced that the progress that the Group achieves in terms of quality management, safety, protection of the environment and human health, and compliance not only enhance the reputation of the Group, but also ensure the profitability and, as a result, the ability to sustainably increase the company’s value and guarantee future viability.
This belief is anchored in our motto “Oil is far too valuable to be burned!”, which highlights our conviction to utilizing finite resources sensibly. At the same time, we take our re-sponsibility as an employer seriously and place a high priority on employee safety and development. In accordance with a comprehensive approach, we also view the manpower and brainpower of our employees as a valuable resource.

As an owner-managed group of companies, a sustainabil-ity-oriented mindset forms the foundation of our corporate policy. We are convinced that the progress that the Group achieves in terms of quality management, safety, protection of the environment and human health, and compliance not only enhance the reputation of the Group, but also ensure the profitability and, as a result, the ability to sustainably increase the company’s value and guarantee future viability.
This belief is anchored in our motto “Oil is far too valuable to be burned!”, which highlights our conviction to utilizing finite resources sensibly. At the same time, we take our re-sponsibility as an employer seriously and place a high priority on employee safety and development. In accordance with a comprehensive approach, we also view the manpower and brainpower of our employees as a valuable resource.
We combine these aspects with our approach of flawlessly controlling and continuously improving production processes and associated services. This is anchored in our corporate policy, which can be viewed on our corporate website. Con-ceptually, we also utilize an integrated management system (IMS) that encompasses all Group processes and their associ-ated workflows. Employees of the H&R Group can access the full version of the handbook for the integrated management system on the intranet or excerpts from it in the training sys-tem. This allows us to ensure awareness for the importance of the impeccable quality of our products and thus meet our quality objective to provide consumers with high-quality and safe products.
The IMS also gives equal consideration to aspects such as occupational health and safety, environmental protection and quality requirements based on requirements for interna-tionally recognized certifications ISO 9001, ISO 14001, ISO 45001, ISO 50001, OHSAS 18001, ISO 17025, ISO 14067, ISO/TS 16949 and IATF 16949. The integrated management system as such is not specifically certified as the individual components are assessed by the IMS (internally and external-ly) and certified (externally) in accordance with the applicable ISO standards.
Not all of our Group companies are certified in accordance with all ISO standards. If a customer requires certification in accordance with a particular standard, this certification is carried out. All certifications held by the company are record-ed in one file. Should further or regularly occurring require-ments arise from this certification, these are recorded in a management review and reported to the Group management by the Executive Boards of the respective subsidiaries at reg-ular intervals.

Respect for
Human Rights

The H&R production and processing sites can call upon a flexible network of suppliers to secure their raw material re-quirements. These tend to be other refineries, some of which are operated by renowned oil companies operating in the fuel refining sector.
The goal of our supplier management is above all the safe and continual supply to our refineries, processing and sales locations with raw materials and products.
We share an H&R Group-wide Code of Conduct with our sup-pliers, expecting them to respect and adhere to the principles set out in the Code. The Code is based on the recognized principles of sustainability: economic growth with a view to the long term, respect for human rights and the environment, the careful use of resources, employee protection and the quest to improve quality of life for present and future gener-ations alike.

Compliance in accordance with our code of conduct involves observing recognized human rights at our locations and in our business relationships. Above all, this means protecting the personal dignity and privacy of each individual. In addition, we recognize employees’ and/or business partners’ rights to freedom of assembly and association. Compliance with human rights is enshrined both in our Code of Conduct and in our corporate policy. In order to ensure that human rights are also respected in our supply chain, both our cor-porate policy and a separate Supplier Code are integral parts of the contracts we conclude with our suppliers. If a supplier hires a subcontractor, they must ensure that the subcontrac-tor is aware of and complies with all the obligations that our supplier has entered into with us. These issues are not explic-itly reviewed, but general supplier audits are conducted by the departments and/or companies in charge.

Combating Corruption and
Bribery

We consider the most important measure in achieving our goals to be our Group-wide training system, which provides training for our employees on the issue of corruption. In addition, our employees know that in case of doubt they can contact the Compliance Manager, their superiors, or the Ex-ecutive Board at any time. Reports can be made directly or through an anonymous whistleblower system. There is also a quarterly assessment of the inventory of risks at all Group-wide sites, during which the managing directors must report on legal and compliance risks. No cases of corruption were reported during the past reporting year.

The H&R Group has set itself the goal of being seen as up-standing and incorruptible in its business dealings.
To achieve this, we place a great deal of emphasis on the correct dealing with business partners, customers and pub-lic authorities and therefore ascribe a core position in our compliance management system and our code of conduct to combating corruption and bribery. The latter clearly states that award decisions are based exclusively on a performance evaluation. Accordingly, we strive for success based on the quality of our performance and will not tolerate any kind of corruption or other unfair business practices that could help to obtain advantages. As a result, the Code of Conduct also contains unambiguous rules covering, among other things, the granting or acceptance of benefits or gifts and the partic-ipation in primarily non-commercial events, or sponsorships.

Social
Commitment

At its sites, the H&R Group is not only a company and employ-er, but also a neighbor. We consider ourselves to be part of the social structures around our corporate sites and aim to be seen as a responsible and engaged partner.

The H&R Group does not yet pursue an overriding, Group-wide policy regarding its social commitment as we believe that individual approaches are better suited to our interna-tionality and local needs. In keeping with this, we take our social responsibility seriously and utilize a variety of mea-sures to do so. Suggestions and complaints from the public are investigated accordingly; the remedy is usually direct and unbureaucratic. In addition, the H&R Group has set the goal of holding regular events at its sites such as its “Open House” or, specifically in Hamburg, an event as part of the “Lange Nacht der Industrie” (“long night of industry”), allowing us to engage in important dialogue with interested individuals. In 2021, such events had to be postponed as a result of the Covid-19 pandemic.

Our sites are responsible for their own social activities, which are adapted to the circumstances of the countries in question. In Germany, for example, we support the Landmann Founda-tion, which provides €12,000 of funding of between €3,000 and €4,000 each for students in our specialty areas (Chemis-try, Engineering Sciences).
The H&R Group also is involved with sporting events and youth programs and supports various institutions. We are es-pecially proud of our many dedicated employees who volun-teer with various religious, sociopolitical and community ac-tivities near our sites. Above all, they are making a difference in areas where what is needed is helping hands, not financial resources. H&R supports these employees by taking their plans into account in shift, workday and vacation planning.


Would you like to find out more? Then read the full article in our Sustainability Report 2021

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