5. Responsibility

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

The highest-ranking decision-makers are the director of the institute and his deputy. In 2012, the institute’s management appointed a sustainability manager. He is a member of the network committee and has the right to speak at the monthly meetings of the steering committee.

6. Rules and Processes

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

For internal management the Sustainability Balanced Scorecard (SBSC) is applied. The targets of the institute are set by the directorate; the targets of the business units are agreed upon between the directorate and the heads of the business units (s. page 8 of the Fraunhofer UMSICHT Sustainability Report).

The Fraunhofer-Gesellschaft also reports its sustainability activities on the Internet. In October 2014 the Fraunhofer-Gesellschaft published its first Sustainability Report.

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.

The analysis of our main activities and the affiliated opportunities and risks with regard to sustainability is carried out by means of the Sustainability Balanced Scorecard (SBSC). Here, aspects of sustainability are integrated into the four following perspectives: economics and finances, employees and expertise, market and society, ecology and processes. This guarantees that sustainability aspects are taken into account in all operational activities, whether they are directed inwards or outwards.

Please find detailed information on page 8 of our Sustainability Report.
In addition to its mission, the Fraunhofer-Gesellschaft has published the Declaration to Third Parties relating to Project Business, which describes the essential principles of ensuring the quality of the cooperation and of dealing with business partners and employees, and contains basics of social responsibility. Please find more detailed information here.

Key Performance Indicators to criteria 5 to 7

Key Performance Indicator G4-56
The organisation’s values, principles, standards and norms of behaviour such as codes of conduct and codes of ethics.

As an expression of the corporation culture the Fraunhofer-Gesellschaft operates a Compliance Management System. Compliance requires adhering to the relevant legal requirements and internal regulations defined in the articles of the Fraunhofer-Gesellschaft. This forms an important basis for our corporate success. The goal of Compliance is to provide the transparent and responsible protection for our organization and its employees. The assurance of compliance with the legal directives and guidelines form the basis of our corporate activity.

In 2009 the German Federal Ministry of Finance released the "Principles of good corporate and investment management for the government sector", which set recommendations in the form of the Public Corporate Governance Code (PCGK) for companies with the participation of the government. In 2010 the Executive Board of the Fraunhofer-Gesellschaft decided to introduce the Fraunhofer Compliance Management System as part of the improvement of its controlling system. Compliance, understood as "regulatory compliance" in the traditional sense, means for the Fraunhofer-Gesellschaft to act responsibly and value-oriented when dealing with the employees as well as in cooperation with the business partners. By systematically considering the topic "Regulations and Compliance", the executive board fulfills its responsibility to ensure the working legal system.

The Compliance Office is the central point of contact within the Fraunhofer-Gesellschaft for questions concerning the Compliance Management System. It reports annually to the Executive Board about the relevant topics and planned measures on the issues of compliance. The Compliance Office is supported by the Compliance Committee, which consists of representatives of the institutes and the executive board as well as of other executives. (Source: Sustainability Report of the Fraunhofer-Gesellschaft 2013, p. 61)

In addition to its mission, the Fraunhofer-Gesellschaft has published the Declaration to Third Parties relating to Project Business, which describes the essential principles of ensuring the quality of the cooperation of dealing with business partners and staff, and contains basics of social responsibility. Please find detailed information here.

In addition to adhering to the basic principles for ensuring good scientific practice and the necessary standards, Fraunhofer UMSICHT is following its own guidelines along with the guidelines of the Fraunhofer-Gesellschaft, which provide ethical guidelines for our project work.

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).

The Sustainability Balanced Scorecard (SBSC) sets the individual sustainability targets for Fraunhofer UMSICHT’s business units. It is used as a means of assessment in the appraisal interviews with the heads of the business units. In comparison to the industry, Fraunhofer UMSICHT has only limited influence on the salary, because of existing collective agreements for the civil service. A variable performance-based remuneration is a component of the salary.

Key Performance Indicators to criteria 8

Key Performance Indicator G4-51a
Remuneration policies for the highest governance body and senior executives.

The annual compensation of the highest governance body and senior executives is not recorded and reported by Fraunhofer UMSICHT.

The remuneration policy is subject to the collective bargaining agreement for civil service employees (TVöD - Tarifvertrag des Öffentlichen Dienstes).

Key Performance Indicator G4-54
Ratio of the annual total compensation for the organisation’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.

All employees of Fraunhofer UMSICHT are covered by the collective bargaining agreement for civil service employees in Germany (TVöD - Tarifvertrag des Öffentlichen Dienstes).

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.

During the last years Fraunhoder UMSICHT has immersed itself deeper in the stakeholder dialog. Several workshops with internal and external stakeholders were conducted. Two of our most important stakeholder groups are the Board of Trustees of the institute and the UMSICHT Circle of Friends and Patrons. The members of the Board of Trustees actively contribute (e. g. in workshops) to important strategic questions. As an institute of the Fraunhofer-Gesellschaft, we cooperate in a spirit of partnership with the Board, the headquarters, and other institutes. They are equally a part of the scientific community that is interconnected with us such as universities, non-university research facilities, and industrial partners in the R&D environment.

Fraunhofer UMSICHT collected proposals for the stakeholders invited to the dialog event from the sustainability working group of the institute and coordinated them with the directorate. Particular attention was paid to taking into consideration all the relevant stakeholder groups (industry, science, politics, society).

Please find more detailed information on the stakeholder dialog in paragraph 2 “Materiality” of the section “Strategic Analysis” in this Declaration of Conformity.

Key Performance Indicators to criteria 9

Key Performance Indicator G4-27
Key topics and concerns that have been raised through stakeholder engagement, and how the organisation has responded to those key topics and concerns, including through its reporting. Report the stakeholder groups that raised each of the key topics and concerns.

Please find detailed information on the stakeholder dialog and the key topics in the paragraph 2 “Materiality” of the section “Strategic Analysis” in this Declaration of Conformity.

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.

The services of our institute include research services and product development on behalf of customers. Due to the individual nature of customers’ requirements, the processes have to be adjusted according to the needs of the customer. An integral part of our research services - especially with public contracts - are sustainability assessments, which, among others, go along with the LCAs, e.g. as a part of accompanying research.

Within the scope of our R&D-activities we use the following instruments: LCAs (e.g. Carbon Footprints), feasibility studies, sustainability management, strategy development, material flow analyses, recycling strategies, geographic information systems, flow simulations, IPR analyses, IPR strategies, market and trend surveys, SWOT analyses, portfolio and scenario planning, workshops, roadmaps, communication concepts and strategic action concepts.

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.

Fraunhofer UMSICHT has no assets subject to positive and negative environmental or social screening.