1. Strategic Analysis and Action

The company declares whether or not it pursues a sustainability strategy. It explains what concrete measures it is undertaking to operate in compliance with key recognised sector-specific, national and international standards.

We are aware of our responsibilities in the context of sustainability and align our business activities with them socially, ecologically, and economically through provisions in our contracts. Therefore we breed, produce, trade, advise, and research holistically and take a long-term view. Sustainable company activities can be divided into four areas of action: market, environment, employees, and society. We have already implemented many Corporate Social Responsibility (CSR) measures in these areas. More details about the measures and topics can be found in Criterion 2: Materiality. The topics are continuously reviewed and updated based on a solid, defined business concept (see Criterion 3: Objectives). The federal German legislation relating to the United Nations (UN) Global Compact and the International Labour Organization (ILO) are important in these considerations. SHS and HHV are certified in accordance with standard ISO 9001:2015 Quality Management System (QMS). Certification of HHV also takes into consideration the provisions of standard ISO 50001 Energy Management. Furthermore, we reference our sustainability goals in particular to the UN Sustainable Development Goals (SDG) 6 “Clean water and sanitation,” 7 “Affordable and clean energy,” 12 “Responsible consumption and production,” 13 “Climate action,” and 15 “Life on land.” We intend to develop our own sustainability strategy within the next reporting period.

2. Materiality

The company discloses the aspects of its business operations that have a significant impact on sustainability issues and what material impact sustainability issues have on its operations. It analyses the positive and negative effects and provides information as to how these insights are integrated into the company’s processes.

Over the past 175 years, Simon H. Steiner, Hopfen, GmbH, now led by the sixth family generation, has developed into one of the world’s leading hop trading businesses. The company is part of a comparatively small community, which includes not only the suppliers and their growing regions but also customers, who are mainly in the global brewing industry. The general framework of regulations in the agricultural products sector is defined by the agricultural policies of national governments, the legal requirements and standards of the World Trade Organization (WTO), the United Nations, and the European Union. On the European level this includes the Common Agricultural Policy (CAP), the Green Deal relating to the EU Farm-to-Fork Strategy, and the regulations relevant to pesticides.  

The HOPSTEINER sustainability topics were identified in a joint workshop with the company’s sustainability team, which altogether consists of ten employees and the executive management. These topics were clustered according to the four areas of action: market, employees, environment, and society, and then prioritized. Following this, the total of 32 topics were classified as material and positioned in a materiality matrix.    
Market Environment Employees Society
Hop breeding
 Energy savings Training of specialist employees Regional contract award
Sustainable relationships with customers Use of renewable energy Working hours regulations (home-office, flexible working hours, part-time, family and career balance) Many employees’ personal voluntary engagements
Product quality assurance Integrated crop protection Workflows / optimized work practices Regional sponsoring
Food safety Recyclable packaging (except films) Interdepartmental understanding  
Dialog with growers Use of environmentally compatible materials / resource conservation Working hours regulations in production  
Storage (raw materials and finished products) In-house wastewater treatment Employee satisfaction  
Sustainable relationships with banks   Succession planning  
Digitalization / DM      
Product innovations (F&E)      
Market security (raw material availability)      
Customer information (customer portal)      
Supplier information (grower portal)      
Hops quality assurance      
Financial and logistics functions      
Irrigation requirement      
Support of small-scale farming structures      

Market
Our company philosophy is firmly based on commitment and service to our customers. This is recognized in our claim “Committed to the customer.” Our goal is to supply hops and hop products of the highest quality to breweries and customers from other sectors all over the world. Quality assurance and food safety are therefore material topics for our customers and our company.  

We also place great value on reliable and individualized advice. Regular satisfaction surveys help to ensure we have sustainable relationships with our customers. Their analyses lead to important knowledge about our strengths and potentials. This mutual exchange of information creates trust and an improved understanding of the market for the customer.  

Delivery on schedule is essential for the security of supply of resources. The procurement of raw hops depends greatly on climatic conditions and is affected by the degree to which our suppliers fulfill their contracts. Therefore we always seek to establish long-term partnerships and conclude multi-year advance contracts with our customers and suppliers. In the interests of promoting regional agriculture, we also support small-scale farming structures among our growers. Procurement risk can be mitigated by in-house product development and hop breeding. The logic here is that new varieties can expand market share in the long term.  

Extending and increasing digitalization (see Criterion 3), in particular in relation to digital document management, contributes to savings in personnel costs, improved workflows, the avoidance of mistakes and duplication, and reduced complexity for customers and suppliers through offering them a simplified means of accessing information. Digitalization also positively reinforces our self-image as a forward-looking company. We intend to avoid any loss of personal contact as a secondary effect of digitalization, for example, in the case of electronic grower contracts where we will be continuing our visits to our growers as normal in the future.  

Environment
Only through holistically responsible actions, sustainable management, and careful use of resources can we continue to offer a natural product such as hops in a consistently high standard of quality. Therefore, we place particular emphasis on energy savings and the use of renewable energy. Both these measures make a positive contribution to protecting the environment, reducing costs and emissions, and the strengthening of regional structures through local procurement of woodchips for our company heating system.  

Our business activities are affected to a crucial degree by climate change. Rising average temperatures increase the water requirement in hop growing and worsen the problem of strict legal restraints on our irrigation options. To secure the required stable yields and quality for the future, we intensively research new breeding varieties that can cope with less water. In addition, we are working with others on the development of new, innovative irrigation concepts (see Criterion 12). The monoculture approach associated with hop growing harbors risks for the environment. One such risk is loss of yield through pests and diseases. We combat this with intensive growing and crop protection advice, our own hop breeding program, and investment in research. In the course of our successful hop breeding program, we have introduced more resistant, tolerant varieties to the market. These varieties can be cultivated with much less pesticide (see Criterion 4).  

Employees
Employees are our most important resource. Mutual trust and the technical and personal competence of all employees are the basis of success. Particularly relevant topics in this area are employee satisfaction, optimized workflows, and the training of specialists. Opportunities and risks relating to the employee area of action are described in Criteria 14 to 16.  

Society
Material topics in the field of society include local sponsoring, the regional award of contracts, and the support of our employees’ voluntary engagements. Opportunities and risks relating to the society field of action are described in Criterion 18.

3. Objectives

The company discloses what qualitative and/or quantitative as well as temporally defined sustainability goals have been set and operationalised and how their level of achievement is monitored.

In a joint workshop in September 2020, the sustainability core team determined concrete goals and the associated medium- and long-term measures to achieve them. Assigning priority to these goals is derived directly from the materiality matrix.

 Market area of action  

Breeding own varieties  
Goal Measure(s) By Progress
1. Replacement of the general market varieties by our own varieties, selectively bred for resistance and drought stress tolerance. 1.1. Goal-focused, marker-assisted breeding of aroma and high-alpha varieties 2030 Two aroma varieties are already approved and introduced to the market.

Sustainable relationships with customers  
Goal Measure(s) By Progress
1. Building up trust, improved access to decision-makers, increased market share. Better information, better understanding of the market for customers. 1.2. Continual training of sales personnel On-going Regular sales personnel meetings, backed-up by individual coaching
1.3. Benchmark through customer satisfaction surveys (every 10-15 years) 2025 Last customer satisfaction survey: 2015
1.4. Expansion of digital consultant concept (use of video conferences, webinars, etc.) On-going Since 2020: Webinars and regular video conferences held

Digitalization  
Goal Measure(s) By Progress
1. Improved workflows, reduction of analog processes, optimum degree of complexity 1.1 Introduction of a document management system (DMS) Mid-2021 Provider selected, implementation “in progress,” first departmental tests carried out
1.2. Optimization of the inventory management system On-going Update to inventory management system 2020 / 2021, departmental process analysis performed
2. Modern, efficient communications with growers / suppliers and customers 2.1. Further development of the grower portal On-going Step 1 was completed in 2018. Introduction of digitally concluded contracts planned for the 1st half of 2021
2.2. Setting up a customer portal End 2021 Finalization planned for end 2021
 

Environment area of action

Energy savings  
Goal Measure(s) By Progress
1. Energy efficiency improvement 1.1. Replacement water storage tank for steam generator 2020 Installation complete, operational in October 2020
1.2. Replacement of steam distribution pipework End 2021 Some steam pipes replaced in 2020, further replacements in 2021
1.3. Cooling tower energy optimization End 2020 Mechanical installation done, optimization completed end 2020

Use of renewable energy
 
Goal Measure(s) By Progress
1. Increased proportion of renewable energy 1.1. Extension of photovoltaic systems on operational building roofs On-going In operation. Further installations planned.

The appropriate department in the relevant division is responsible for monitoring and controlling the goals.

The goals are also checked by the CSR core team for the annual preparation and publishing of the Sustainability Code declaration.  

The sustainability goals relate in particular to the following UN Sustainable Development Goals (SDG):
 
UN Sustainable Development Goals Company goal topics
6. Clean water and sanitation In-house wastewater treatment
7. Affordable and clean energy Energy savings, use of renewable energy
12. Responsible consumption and production Recyclable packaging (cans), environmentally compatible materials, resource conservation
13. Climate action Energy savings, use of renewable energy
15. Life on land Breeding own varieties, integrated crop protection

4. Depth of the Value Chain

The company states what significance aspects of sustainability have for added value and how deep in the value chain the sustainability criteria are verified.

The company’s business activities can be divided along the value chain into the following individual steps:  
1. Raw material procurement
2. Manufacture and refining
3. Logistics and sales
4. Disposal  
Sustainability is particularly relevant for HOPSTEINER in the processes involved in raw material procurement, logistics, and sales.  

Raw material procurement  
Europe must be made fit for the future in the medium and long term as a major hop production area. The large-scale reform of the Common Agricultural Policy (CAP) launched by the European Union has influenced agriculture for some time and will have been implemented in national legislation by 2023. The objectives for the agricultural sector are set out in the EU’s Farm-to-Fork Strategy guidelines. They envisage a 50% reduction in use of chemical pesticides by 2030, the use of 20% less fertilizers by the same date and a significant expansion of the proportion of ecologically grown crops. Although the measures are not yet defined in detail and have still to be formally adopted, this transformation will present challenges to the hop sector. However, there will also be opportunities with respect to new breeding technologies and a changed variety portfolio. HOPSTEINER is responding to this with intensive growing and crop protection advice, its own hop breeding program, and investment in research, including alternative forms of irrigation and water conservation. The small-scale farming structure of some of our suppliers faces further challenges. Meeting these challenges will require pragmatic action, a spirit of partnership, and individualized solutions from us in cooperation with our contract partners.  

All stakeholders are involved in the decision-making process in good time. In the event of major crop deviations, solutions are always worked out jointly with suppliers and customers.

Manufacture  

The topics of energy consumption, wastewater, and disposal play a large role during the manufacturing stage. We seek to reduce our energy consumption by the use of renewable energy, for example from photovoltaic systems or heat recovery in our own heating systems.  

 Logistics and sales

Product storage (cold storage service)
Sales
In the field of logistics, we commission service providers with climate-neutral transport options, and logistics companies that work in accordance with AEO requirements and comply with safety standards.  
Here as well, our company philosophy is to work in partnership with others to find solutions to any problems, should they occur.

Key Performance Indicators to criteria 1 to 4