Our strategy and sustainability approach

TRANSPARENT AND CONSISTENT SUSTAINABILITY.

OUR STRATEGY
Digitization and automation, aspiring new markets, and ongoing globalization present us and our customers in the aerospace sector, the automotive and construction industries, and other branches of industrial technology with entirely new challenges. We recognized the various opportunities this offers and are systematically working on making the most of them. As such, we are methodically and responsibly heeding the words spoken by our founder’s descendant in the 1960s: “The future will be what we make it.”

Our Aerospace and Automotive divisions are therefore strategically readying themselves to play a part in shaping tomorrow’s world. We are pursuing three primary objectives in our core markets in this regard.

Firstly, we are seeking to be the “best in class” with our products, services, and processes, in order to always be in a position to provide our customers with first-class customized products and solutions. To achieve this, our second objective is to build up and expand our expertise by means of various initiatives. As an economically driven company, it is also important to us that we remain competitive, in other words that we work efficiently and on the basis of cost-effective structures. Above all, there is the expectation that we consistently have of ourselves, namely that “If we can’t do it, it’s impossible.” This is the motto by which we are judged when we ensure technological progress around the world in our fields of activity with our products and solutions. Our expertise in lightweight construction is becoming more and more significant with regard to the conservation of resources. The focus here is on safety-related applications within the Aerospace and Automotive divisions.

In order to be able to implement this ambitious business model sustainably, we are pursuing a systematic approach in all areas of the company. Internally, we attach great importance to treating our employees fairly and responsibly and to train and develop them further to meet constantly increasing requirements. The continuous improvement of our processes and extensive investments are mainly channelled into our own research and development, as well as into renewing and expanding our business locations worldwide. Our investment ratio was 13 percent in the reporting period, well above the industry average. In total, OTTO FUCHS has invested 850 million euros in the last 5 years. Externally, we maintain cooperative and inclusive partnerships with our customers, suppliers, independent research institutes, and other partners. As a result, we are familiar with the specific needs within our business fields and can respond agilely and flexibly to changes in the market. This makes us a preferred business partner around the world. Our employees play an important part in this, as they embody our company’s expertise and apply it in the interests of our customers and the company. They therefore make an indispensable contribution to the company’s ongoing development and to safeguarding the OTTO FUCHS Group’s leading position in the long term.

OUR SUSTAINABILITY APROACH
Sustainability in all areas is very important to OTTO FUCHS. As a family-owned enterprise, we feel we have an obligation to do business sustainably for the generations to come and to act environmentally and in a socially acceptable way in the interests of our surroundings. Our business activities and the complexity of our processes have necessitated high standards from the outset. Focal issues such as occupational safety, the environment, and how we treat our employees have been top priorities for us for generations. And above all, there is the high expectation we have of ourselves that we will continuously make our systems and practices more efficient and more effective on the basis of our certified ongoing improvement programs.

In order to meet the diverse and increasing internal and external sustainability requirements, we as a group of companies want to actively shape the future. The steps we are currently taking in this direction include the further systemization, consolidation, coordination, and communication of OTTO FUCHS’ sustainability activities. In this context, we developed the above process which is applicable across all our sites and departments, to continuously improve our sustainability record. A key part of the sustainability strategy process is dialog with important interested parties. We maintain dialog with the various contacts in order to note their requirements, discuss challenges, and present to them what we realize. We then systemize the input we receive and analyze the most important issues. Identifying the crucial issues plays an important part in making our sustainability strategy a success. This holistic view and the resultant focusing allow us to pursue social, environmental, and economic goals and synchronize the individual objectives. Thanks to this systematic approach, we are then able to develop and implement a precise strategy which meets our stakeholders’ requirements and satisfies the expectations we have of ourselves.

OUR SUSTAINABILITY MANAGEMENT
We at OTTO FUCHS consider sustainability to be our top managerial priority. Responsibility for sustainability issues therefore lies with the CEO. We have also established structures that enable us to efficiently expedite the aspects of primary importance to us and our stakeholders. The main steering body for sustainable development at OTTO FUCHS is the Sustainability Committee, which handles all the sustainability issues and the relevant management processes and responsibilities.

The Sustainability Board has overall responsibility for the overarching sustainability organization tasks, such as coordination of the regular reporting process and communication with the external stakeholders. The Sustainability Committee is managed by the Sustainability manager, who presents the issues relevant to sustainability to the internal and external stakeholders, and aligns the goals of the various departments. The Head of Sustainability is also responsible for developing the sustainability strategy, standards, and processes, and for coordinating and managing the initiatives which are jointly adopted.

STAKEHOLDER DIALOG

STAKEHOLDER ENGAGEMENT
We see sustainability and responsible conduct as being an ongoing cooperative process rather than a static state. We firmly believe that this process can only be successful and productive if we develop, monitor, and expedite it together with our employees, customers, business partners, and other OTTO FUCHS stakeholders. We therefore do not focus solely on our internal perspective when defining the key topics and strategic goals. Rather, it is important to us that we also involve the Group’s external stakeholders, listen to their opinions, and engage in regular and frank dialog with them. We consider this dialog to be a fundamental prerequisite for our sustainable corporate governance.

STAKEHOLDERS AND DIALOG FORMATS
Our key stakeholders include our customers, suppliers, representatives from the fields of science and politics, trade unions, associations, nongovernmental organizations (NGOs), and the OTTO FUCHS employees and management. We use various dialog formats and activities to record the expectations that these stakeholders have of our company regarding social, environmental, and economic issues and to adequately take these into account. These include:

• Constructive and frank dialog with customers and suppliers, for example at the International Motor Show (IAA) in Frankfurt, Germany, or the International Paris Air Show (SIAE) in Le Bourget, France, by means of regular customer satisfaction surveys, and through our customer magazine „inForm“
   
• Direct and regular contact with external experts, development partners, and research communities, among other things in specialist workshops, specialist work groups, and partnerships
   
• Cooperations with research institutes and universities. One example is our long-standing partnership with RWTH Aachen University, on the basis of which OTTO FUCHS sponsored a lecture hall at the technical university in 2017, among other activities
   
• Active involvement in associations such as the German Aluminum Association (GDA), Germany’s massive forming association Industrieverband Massivumformung, and the initiatives Metalle pro Klima (Metals pro Climate) and Foundation 2° – German Businesses for Climate Protection (see box)
   
• Our internal communication on the intranet, publications such as the „Fuchsbau“ magazine for OTTO FUCHS KG employees, feedback talks with our employees, and employee surveys
   
• Ad hoc and project-based talks with policymakers and nongovernmental organizations at the local, regional, state, and national levels

Associations, Initiatives and Cooperations

OTTO FUCHS is committed to social issues through its membership in clubs and associations. 

 
A complete list of all associations, initiatives and cooperations can be found here (content only in German). 

MATERIALITY

2017 MATERIALITY ANALYSIS
To identify the key issues of particular relevance to us and our stakeholders and to prioritize the primary areas of action and concrete measures, we conducted our first materiality analysis in 2017, which involved a stakeholder survey. The key criterion for stakeholder selection was their particular relevance with regard to sustainability issues. The groups incorporated into the survey included customers, suppliers, research and teaching representatives, trade unions, authorities, nongovernmental organizations, and the OTTO FUCHS employees and management.

The OTTO FUCHS material issues were identified in a multistage process. The first step involved an internal questionnaire being circulated in order to identify sustainability issues and develop a set of questions. These then served as the basis for a global, anonymized online survey, which was conducted between August 21, 2017, and September 15, 2017. Of the approximately 700 stakeholders approached, more than 220 completed the survey and rated the issues that mattered to them.

In the second step, the survey results were evaluated, analyzed in an internal workshop, and put into a materiality matrix depicting the arrangement of the sustainability issues. An issue is classified as material if it is rated as relevant from the perspective of OTTO FUCHS and/or our external stakeholders. The majority of the issues considered were rated as relevant or highly relevant. The analysis did not identify any pronounced preference for internal issues. The stakeholders surveyed attached particular importance to production-based – and therefore directly environmental – aspects like climate emissions, effluents, sustainable materials, a sustainable supply chain, and the consumption of resources.

MATERIAL ISSUES AND AREAS OF ACTION
To arrive at a structured overview of the material issues identified, we assigned them to the following areas of action: sustainable products, resource-conserving processes, motivated employees, safe labor conditions, partnership within the supply chain, and social responsibility. The corresponding chapters of this publication outline our management approach with regard to these issues and report on the targets, selected measures, and the results thus far.