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.

Sustainability & Impact Strategy

At BRAIN we believe that we can contribute in addition to our ESG strategy and targets. After a careful analysis and discussion with our stakeholder groups we have decided to base our sustainability reporting on ESG Plus. Next to environmental, social and governance topics we incorporate in our responsible group management strategy economic and impact targets. Solid economic performance builds the base to achieve our other targets. Our BRAINimpact products & services can make a real positive impact for our B2B customers, for consumers and for patients. Our sustainability and impact strategy is based on five strategic pillars for long-term value creation:
  1. Economic Performance
  2. BRAINimpact
  3. Environmental Performance
  4. Social Performance
  5. Efficient Governance

Our ESG Plus and impact targets build an integral part of our corporate strategy, plannig and risk assessment. Our ESG targets are focussed to reduce the enviromental footprint of our operations, remain respected coprporate citizens and care for our employees.

Contributing to several of the United Nations SDGs

We develop products and services that change the way industrial production is done. Our natural and sustainable bio-based processes accelerate the economic transformation to a circular economy. With our current products and solutions, we already directly address at least five UN sustainability goals. SDG 2, Zero Hunger: alternative protein sources; natural compounds for food preservation; enzymes for more efficient and natural industrial food processing
SDG 3, Good Health & Well-Being: natural sugar replacement; salt replacement and salt taste enhancers; natural aromas, bioactive plant cosmetics; chronical wound treatment;  PHA121 as an active pharmaceutical compound to treat heriditary angioedema (HAE)
SDG 6, Clean Water & Sanitation: green mining solutions to replace chemical hazards
SDG 9, Industry, Innovation & Infrastructure: enzymes as natural catalysts; biotechnological production, improving production efficiencies for resource conservation; fermented food from side-streams; microbial CO2 usage
SDG 12, Responsible Consumption & Production: green and urban microbial mining (bio-based recycling)   In addition, we incorporate sustainability aspects and good corporate governance in the daily management of our operations.

Within our business and environmental initiatives we also address the following SDGs:
SDG 4, Quality Education: training of apprentices and students; lifelong learning is a key aspect in a knowledge driven company like BRAIN
SDG 8, Decent Work and Economic Growth: Growth and profitability build the foundation for #BRAINimpact. Our growth ambitions also consider health and safety of our employees and in our supply chain.
SDG 13, Climate Action: the environmental ESG targets aim to reduce our ecological footprint, preserve primary resources and prevent unnecessary pollution

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.

BRAIN Biotech AG  is a leading European industrial biotechnology specialist with a focus on nutrition, health and the environment. As a technology and solutions provider the company supports the biologization of industries with bio-based products and processes. From contract R&D with industrial partners to advancing own disruptive incubator projects and customized enzyme products. BRAIN operates at the heart of the Bio-Economy. Additional details about BRAIN you can find in our Inaugural Sustainability Report (Page 18 and following): https://www.brain-biotech.com/investors/esg.

We strongly believe that in order to strive for sustainability we have to start from a solid economic base. Hence, growing revenues, increasing our EBITDA margin and turn cash-flow positive is part of our journey to a responsible business. BRAIN promotes the concept of double materiality. We call this #BRAINeconomics and have set ambitious mid-term targets to double our revenues and reach a mid-point EBITDA margin of 15%.[1] This will enable us to:
#BRAINimpact incorporates our products and services which can enable a faster transition to a circular and sustainable overall economy. By creating a BiobasedFuture we focus on the areas of Nutrition, Health and the Environment.

Next to our identified material economic and impact topics, our ESG driven analysis has led to the following material themes with a high importance to our stakeholders as well a strong impact on our business:


[1] Capital Market guidance 09/20, mid-term target (4-5 years), base year FY ‘18/’19

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.

Sustainability Goals

The following goals are prioritised as a result of our materiality and stakeholder analysis:

A reduction in GHG emissions from our own operations, to support a higher share of women in management positions, complete compliance with statuary regulations and own values. In addition, we aim to increase the share of recurring income from royalty income and to successsfully lounge or impact products to the market which will allow for a stable economic basis to grow operations and support our ESG targets.     

Environmental
By 2032
, reduce Scope 1-2 GHG emissions by 30% in relation to current revenue base
By 2050, Scope 1-2 GHG emissions to net zero

Social
By 2032
, share of women in management positions above 30%
By 2032, Lost time injury frequency rate (LTIFR) per 1 Million hours worked < 3

Governance
By 2032
, Target zero fines from compliance & operational breaches
Ongoing, significantly increase share of license and royalty income in BioScience in relation to revenues

Impact Products & Services
By 2032
, successful market Introduction of impact products & services from today’s incubator
By 2050, launch additional incubator products with an impact

Monitoring of Sustainability Targets

The CEO of BRAIN Biotech AG, Adriaan Moelker, takes responsibility for the overall implementation of our sustainability strategy on the executive board level. In charge of the operational execution is Michael Schneiders, Head of Investor Relations & Sutainability. The entire supervisory board advises and monitors ESG implementation into business as well as strategic planning.

Non-financial KPIs which include sustainability targets are part of the variable executive compensation. As such the general compensation system is approved by the annual general meeting, monitored by the supervisory board and reported within the annual report. In addition, we will publish regular updates to our inaugural sustainability report and an annual UN Global Compact COP.

Supporting the UN-SDGs
SDG Mapping

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 BRAIN Group offers many different products and services reaching from contract research services over an own development incubator of impact products to finished products such as enzymes. This products and services are generated within different entities with their individual supply and value chains. 

We buy laboratory and raw materials, utilize these to create our services and manufacturing process up to the finished product.

In our science business we buy laboratory materials and sell scientific services as well as solutions to our customers. Here supply chain management only effects BRAIN directly. We try to employ multi-use products wherever possible and bundle purchasing for reduced logistics impacts.

In our products business we formulate, mix, blend and ferment at larger scale mostly unique enzyme formulations. Here our supplied products become also constituents of the supply chain of our customers. Delivery is focussed on multi-use containers wherever possible and legally allowed.

The material sourcing of the BRAIN group is mostly focussed on highly developed markets and established market players. Hence, while we have a close eye on our supply chain but do not consider supply chain monitoring as a very material topic for the group.

We aspire to build sustainable and stable relationships with our suppliers. We prefer partners and suppliers with high own environmental and social standards.

Information regarding specific supplier violations is reported and investigated directly. If confirmed, an action plan is prepared to mitigate the topics or to search for alternative sources.
Most purchasing decisions are done at the level of the individual operating unit but it is intended to increasingly centralize purchasing especially in the BioIndustrial segment. This will not only unify standards but also allow to increasingly harvest economies of scale.

Close to 90% of our BRAIN Group product sourcing is executed within the EU, UK, US and other developed countries with high labor and social standards. Most of this from large or multinational suppliers. Only around 10 % of our sourced products are originated from emerging markets (mostly China) with the relative share of these purchases decreasing during the last years.
Emerging market sources require our special attention when it comes to supply chain standards.

Biocatalysts utilizes a standardized Supplier Approval Questionnaire (SAQ) for all of its suppliers. The SAQ is also employed for SEDEX (Supplier Ethical Data Exchange) or equivalent certifications. In addition, Biocatalyst enforces supplier risk assessment, approval and monitoring procedures.

WeissBiotech utilizes the EcoVadis rating for its supply chain analysis and scorecard.

Within the framework of the NATRUE certification L.A. Schmitt checks for the sustainable supply of natural raw materials for the production of cosmetics.

In addition to single supplier dialogue we engange on general supply chain topics within our industry associations and industry business partners.

For additional information, please have a look at our sustainability report, page 29. https://www.brain-biotech.com/investors/esg

Key Performance Indicators to criteria 1 to 4

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