5. Responsibility

Accountability within the company’s management with regard to sustainability is disclosed.

ESG/Sustainability Task Force

We have formed a group-wide ESG/Sustainability Task Force consisting of employees across different functions and representing all group company members. There has been a strong commitment by our employees to participate and it has been great to see that many volunteered to be part on our journey to publish our inaugural sustainability report. The overall sustainability effort is headed by our CEO, Adriaan Moelker, and in the operational lead is Michael Schneiders, Head of Investor Relations and Sustainability.

Non-financial KPIs build part of the variable executive compensation.

6. Rules and Processes

The company discloses how the sustainability strategy is implemented in the operational business by way of rules and processes.

Our requirements for sustainable corporate management are derived on the one hand from legal and external requirements, and on the other hand, as a biotechnology company that focuses on white biotechnology, we have a particular desire to design as many areas as possible in terms of sustainability.
Within the BRAIN Group, we have numerous certifications regarding sustainable production and corporate management, which are listed below:

7. Control

The company states how and what performance indicators related to sustainability are used in its regular internal planning and control processes. It discloses how suitable processes ensure reliability, comparability and consistency of the data used for internal management and external communication.

We have chosen the following KPIs to measure and monitor our sustainability targets:

1) Realized decarbonization effects until 2032
2) Employee satisfaction and retention
3) Share of women in management positions
4) Lost time injury frequency rate (LTIFR) per 1 Million hours worked
5) Fines for compliance & operational breaches, target zero
6) Share of License & royalty income


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.

Our supervisory board advises and monitors our sustainability processes as part of the business and strategic planning.

Key Performance Indicators to criteria 5 to 7

Key Performance Indicator GRI SRS-102-16: Values
The reporting organization shall report the following information:

a. A description of the organization’s values, principles, standards, and norms of behavior.

The entire BRAIN Group subscribes to the following values:
Our values are part of our corporate codex which is enforced by the supervisory board, our executive management, the operational management team and compliance. The BRAIN Sustainability report builds an integral supplement which dives deeply in our five key focal points for long-term value creation:
  1. Profitable top-line growth to support and sustain our operations
  2. Successfully launching our Impact Products & Services, targeting 5 SDGs directly
  3. Minimizing the ecological footprint of our organization
  4. Strong social performance (occupational health & safety, employee development, promoting women in management)
  5. Efficient corporate governance 

8. Incentive Systems

The company discloses how target agreements and remuneration schemes for executives and employees are also geared towards the achievement of sustainability goals and how they are aligned with long-term value creation. It discloses the extent to which the achievement of these goals forms part of the evaluation of the top managerial level (board/managing directors) conducted by the monitoring body (supervisory board/advisory board).

On the executive board level non-financial targets are remunerated within the non-financial KPIs of the variable compensation. BRAIN's supervisory board is currently re-designing the executive compensation scheme for approval at the next AGM 21/22 to stronger incorporate sustainability targets. The milestones and targets will be aligned with the targets of our inaugural ESG and Sustainability Report.

It is planned to organize a competition in the next business year in which employees can submit ideas on how the company can become more environmentally aware. These include suggestions for the code of conduct, but also remediation work.  Furthermore, employees are generally encouraged and supported to organize their workplace and everyday working life in such a way that their health and well-being are in the focus. For this purpose, options are offered such as the extension to a standing workstation, ergonomic mice and keyboards, flexible working hours, remote working and a membership in the fitness studio.

A group wide sustainability task force which is lead by the Head of Sustainability and directly reports to the CEO defines, implements and monitors the milestones on the way to reach our sustainability goals. We report on the progress annually within our updated Sustainability Data Sheet and the UN COP.

No financial targets including our ESG targets and the milestones on the way to reach these targets are build into the rivised executive board renumeration system which we aim to get approved by our shareholders at the next AGM in March 2022.

Key Performance Indicators to criteria 8

Key Performance Indicator GRI SRS-102-35: Renumeration policies
The reporting organization shall report the following information:

a. Remuneration policies for the highest governance body and senior executives for the following types of remuneration:
i. Fixed pay and variable pay, including performance-based pay, equity-based pay, bonuses, and deferred or vested shares;
ii. Sign-on bonuses or recruitment incentive payments;
iii. Termination payments;
iv. Clawbacks;
v. Retirement benefits, including the difference between benefit schemes and contribution rates for the highest governance body, senior executives, and all other employees.

b. How performance criteria in the remuneration policies relate to the highest governance body’s and senior executives’ objectives for economic, environmental, and social topics.

The detailed compensation report for BRAIN's ececutive management and supervisory board is published within our corporate annual report on pages 91ff
https://www.brain-biotech.com/content/files/financial_publications/2021-22/BRAIN_Biotech_AG_Annual_Report_2020-21_EN.pdf

We pay all of our employees industry standard salaries.

Key Performance Indicator GRI SRS-102-38: Annual total compensation ratio
The reporting organization shall report the following information:

a. Ratio of the annual total compensation for the organization’s highest-paid individual in each country of significant operations to the median annual total compensation for all employees (excluding the highest-paid individual) in the same country.

The BRAIN group tries to balance industry level and fair compensation with its ambition to stay competitive on the level of personnel costs. 

The average monthly compensation in the AG for executive board members excluding variable compensation has been factor 4.8 compared to the average employee salary. Including variable compensation factor 7.2.

9. Stakeholder Engagement

The company discloses how the socially and economically relevant stakeholders are identified and integrated into the sustainability process. It states whether and how an ongoing dialogue takes place with them and how the results are integrated into the sustainability process.

Our Materiality Analysis begins by first identifying our key stakeholders. We have conducted an internal analysis and cross referenced it with our equity analysts analyzing which stakeholders have at the same time a high interest in BRAIN and can exercise high influence on the company.

We have identified employees, customers and shareholders as our most important stakeholders.

Employees
Many of our employees are scientists and contribute daily to a more sustainable economy by the products and services they develop. BRAIN has been founded on the believe that the biologization of industrial processes and the creation of a circular economy are prerequisites for sustainable living. Our employees employ biotechnology as the primary tool to achieve these targets.

Customers
We enable many of our customers to create more sustainable processes and products. With our scientific services and largely enzyme based products we replace chemical processes and contribute to more sustainable customer products with a focus on health, nutrition and environment.

Shareholders
The equity market has been the main source of financing for BRAIN since the IPO in 2016. Many of our shareholders already share our vision of a more sustainable economy. We are in a constant dialogue with our main shareholders and by publishing our inaugural ESG and Sustainability Report in 2022 we are providing ESG and Impact investors with the relevant information.

Key Performance Indicators to criteria 9

Key Performance Indicator GRI SRS-102-44: Key topics and concerns
The reporting organization shall report the following information:

a. Key topics and concerns that have been raised through stakeholder engagement, including:
i. how the organization has responded to those key topics and concerns, including through its reporting;
ii. the stakeholder groups that raised each of the key topics and concerns.

Our main stakeholders are customers and employees and shareholders. Within our matriality analysis we have analyzed which are the most material topics for our main stakeholders:
  1. Secure & grow employment
  2. Successfully launch our impact products
  3. Strong corporate governance & business ethics
  4. Workplace health & safety
  5. IP Protection
  6. Talent management
  7. Supply chain management
  8. Product safety
We are in constant dialogue with our main stakeholder groups:
The topics within our materiality analysis are all addressed in detail within our inaugural ESG & Sustainability Report 2022. https://www.brain-biotech.com/investors/esg

10. Innovation and Product Management

The company discloses how innovations in products and services are enhanced through suitable processes which improve sustainability with respect to the company’s utilisation of resources and with regard to users. Likewise, a further statement is made with regard to if and how the current and future impact of the key products and services in the value chain and in the product life cycle are assessed.

Our product innovations are targeted to improve life on the aspects of nutrition, health and environment.

Enzymes are nature’s catalysts, serving a sustainable future

Enzymes will play a key role on the way to more sustainable industrial processes. At BRAIN we see it as our task to take the evolution of enzymes in nature as a starting point and adapt them for industrial purposes. Enzymes are proteins produced by all living organisms for their metabolic processes, for example for respiration or for the breakdown of fatty acids. The greatest advantage of these enzymatically acting proteins is that they represent organic material derived from renewable sources and are therefore biodegradable. In addition, due to these properties a lot of energy and water is saved in all enzyme-based processes, as proteins do not have to be elaborately purified from reaction vessels or containers. Identifying and developing novel enzymes is one of the BRAIN Group´s contribution to our sustainability efforts. Our vision is to use our innovative strengths to develop tailored enzyme solutions that enable our industrial customers to make their processes and products more sustainable. 

Positive Impact Products & Services
How can we as the BRAIN Group contribute to a more sustainable living? Where can we make a real positive impact on society? Already today we contribute with our technologies, solutions and products making industrial processes and products more sustainable. We learn from nature and apply biology to industrial processes. This applies to application fields in nutrition, health and the environment. BRAIN Group’s business is based on enzymes, microorganisms and bioactive natural compounds. Each of these can help drive the move toward more bio-based products and processes, but enzymes are by far the most important product within our toolset for a biobased future.

SDG 2,  Zero Hunger: alternative protein sources, natural compounds for food preservation, enzymes for more efficient and more natural industrial food processing.

SDG 3, Good Health & Well-Being: natural sugar replacement, salt replacement and salt taste enhancers, natural aromas, bioactive plant cosmetic, chronical wound treatment and PHA121 an active pharmaceutical compound to treat HAE

SDG 6, Clean Water & Sanitation are green mining solutions to replace chemical hazards.

SDG 12, Responsible Consumption & Production: green and urban microbial mining (bio-based recycling); enzymes for efficient food processing and enzymes for reuse of side-/waste streams.

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 for chemical building blocks.

For a deeper dive into our Impact Products please review the Impact Chapter of our Sustainability Report at: https://www.brain-biotech.com/investors/esg.

Key Performance Indicators to criteria 10

Key Performance Indicator G4-FS11
(report also in accordance with GRI SRS): Percentage of assets subject to positive and negative environmental or social screening.(Note: the indicator should also be reported when reporting to GRI SRS)

BRAIN Biotech AG is a research and industrial company. We invest all of our financial resources into the development of our own group 

G4-FS11 is of no relevance to BRAIN as we do not invest into external financial assets.