5. Responsibility

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

In 2018, the INPACS shareholders and members defined Sustainability as one of five strategic pillars (cf. criterion 1). This means first and foremost, that sustainability constitutes a guiding principle for all INPACS employees, processes and activities.

To further put this strategic pillar into concrete terms, a Strategic Working Committee Sustainability was established. Members of this committee are the Chairman of the Board and the CEO of INPACS, as well as owners and top managers of INPACS members from seven countries. The high-level composition of the committee illustrates the strategic relevance of sustainability for the entire network. The committee members currently convene four times per year.

In addition, a central sustainability management team has been formed at the INPACS head office in 2019, including the recruitment of two Sustainable Development Managers reporting to the Head of Sustainability. The Head of Sustainability is part of the general management team and directly reporting to the INPACS Supervisory Board and CEO. The sustainability department is responsible for supervising the implementation of the sustainability strategy within the network in the daily business, including the following primary responsibilities:
  • Coordination of the Working Committee Sustainability
  • Support and monitoring of the operational implementation of the strategic measures in various departments
  • Internal and external sustainability Stakeholder Dialogue
  • Performance and progress report to the Strategic Working Committee Sustainability, to the INPACS management as well as to the INPACS Supervisory Board 
Also, the Strategic Working Committee Sustainability has appointed one ambassador for each strategic goal, personified by an executive body of an INPACS member. The ambassadors are actively engaging for the pursuit of their respective UN Sustainable Development Goal within the network.

It is important to stress that the implementation of the sustainability strategy directly influences all activities and operational processes of the INPACS network as well as the entire stakeholder dialogue. Therefore, INPACS employees, members, customers and suppliers are actors in the design of the strategy and at the same time those affected.

6. Rules and Processes

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

To implement the goals set in the sustainability strategy (cf. criterion 1 and 3), INPACS has introduced suitable guidelines and processes:

The Ten Principles of the UN Global Compact on Human Rights, Labour, Environment and Anti-Corruption form a guiding star in implementing our strategy, living our culture and operating our day-to-day business. The according Rules of Ethical Conduct are formulated in the Codes of Conduct for all suppliers and employees.

Procedural Instructions according to the DIN norms EN ISO 9001 and 14001 document the processes and determine the responsibilities in the fields of quality, environment and occupational safety. If necessary, these processes are adjusted by identified improvement potential from internal and external stakeholder feedback.

Sustainability Measures and Projects on group as well as head office level are also conducted to operationally work towards the strategic goals. They are gradually transferred to the respective departments, for eg. the supplier CSR evaluation is now supervised by the sustainability department, but will be in the long term in the responsibility of the procurement team; the monitoring of sustainability KPIs is now separately conducted by the sustainability department, but will in the long term be integrated into the overall business intelligence management of the business development team.

In 2019, this operationalization has been awarded a second time from the CSR rating platform EcoVadis with the gold medal, recognising the advanced level of the INPACS sustainability management system. With 75 out of 100 possible points - performing an improvement by 5 points compared to 2017 - INPACS is among the top 1 percent of all EcoVadis rated companies worldwide.

Also in 2019, the INPACS executive management initiated a leadership coaching for the management employees, in order to enable the revision of INPACS' practiced corporate culture and communication in a participative way.

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.

At INPACS head office, performance indicators for environmental as well as health and safety aspects are part of the Environmental and Quality Management System certified according to ISO 14001 and ISO 9001. In the reporting period 2019, INPACS' environmental performance indicator system has been revised and a greenhouse gas report following the GHG Protocol Corporate Accounting and Reporting Standard has been created for the first time (cf. criterion 13). Thereby, the INPACS head office is acting as a central role model in implementing the networks' climate management objectives.

For the INPACS network, an action programme for the recently adopted Sustainability Strategy including a progress and performance measurement is continually put into concrete terms. The following qualitative and quantitative indicators have been defined for the monitoring of the pursuit of each strategic goal:

SDG 5: Promotion of Equal Opportunities for all Genders in Leadership
Global Gender Balance Survey 2019 (cf. criterion 15):
  • Total number of women/men in leadership positions
  • Female/Male Management Ratio (% female/male managers of overall management)
  • Female/Male Management Ratio - Overall Workforce (% female/male managers of overall workforce)
SDG 8: Protect Labour Rights and Safe and Secure Working Environments
Within our Operations: Sustainability performance monitoring of INPACS members via independent EcoVadis platform:
  • Number of evaluated members
  • Overall score 
  • Theme performance scores environment, labour and human rights (special focus), ethics and sustainable procurement
  • Reported accident rates as an indicator for safety measures on local level
Along the Supply Chain: CSR risk analysis of INPACS suppliers via EcoVadis:
  • Number of evaluated suppliers/ number of those who declined
  • Overall score (will be integrated in overall Procurement Risk Evaluation; risk thresholds to be defined in 2020)
  • Theme performance scores environment, labour and human rights, ethics and sustainable procurement
SDG 12: Make a Contribution to the Reduction of Waste Generation; Create Awareness and Inform as well as Encourage all Relevant Actors along the Supply Chain from Product Selection to Disposal
Within the Customer Sustainability Program (Version 1.0 by 2020, cf. criterion 10) the following indicators are investigated:
  • Assessment of the customers' product consumption/ procurement portfolio on the basis of sustainability attributes 
  • Usage of electronic ordering and invoicing
  • CO2 emissions per delivery
  • Waste amount per waste category
SDG 13: Reduce Greenhouse Gas Emissions (in the pipeline)
In 2020, these indicators will be integrated in the members' scorecard which is designed to measure INPACS members’ performance on a regular basis across all strategic pillars and which forms an integral part of regular review sessions.  
Through this procedure, INPACS is able to ensure its strategic core values will be both, respected but also considered as a continuous path to a more sustainable business setup.

(will be integrated in overall Procurement Risk Evaluation; risk thresholds to be defined in 2020)

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 group-wide sustainability strategy of INPACS, which was introduced in 2019 (cf. criterion 1), is underpinned by the official framework of the United Nations Sustainable Development Goals. In consequence, all operational processes and measures are expected to support the effective pursuit of these goals. 

As also in 2019 officially committed, the INPACS values and norms of behaviour follow the ten principles of the UN Global Compact, including:
  • the protection of human rights;
  • the fundamental principles and rights at work;
  • the protection of the environment;
  • the prohibition of corruption and bribery;
  • regulatory compliance.
These principles are stated in the following INPACS documents that are of international validity:
  • Company Policy
  • Code of Ethics
  • Supplier Code of Conduct
These documents are also the formal basis for the cooperation within the network, since the internal Basics of Cooperation are obliging all members to adhere to the corresponding rules.
Furthermore, the Guideline for Accepting and Providing Grants applies to all employees at INPACS head office.

The above mentioned set of principles and rules has been included into the integrated management system certified according to ISO 14001 as well as ISO 9001, in order to challenge the management, instruct employees and to consistently evaluate suppliers.

Furthermore, these principles are included into individual joint business plans with members and suppliers, in order to implement them on operational level in each country. Within the Customer Sustainability Program (cf. criterion 10), the pursuit of the networks' sustainability goals is also integrated into the customer relationships.

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 achievement of sustainability goals by managers or employees, except our global corporate account managers (GCAM), is not yet systematically evaluated, rewarded or promoted by incentive or remuneration systems. 
In line with our strategy, the commission agreements with our GCAM already include an incentive bonus for the successful implementation of sustainable concepts at customers.

Anyway, since sustainability is a core part of the overall corporate strategy of INPACS, it constitutes a guiding principle to every member and employee. During the INPACS Annual Conference 2019 in Naples (Italy), the commitment and performance of the INPACS members according to the strategic pillar of sustainability has been officially awarded for the first time, in order to enable healthy competition and best practice sharing within the Network. 

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.

INPACS offers to all its employees - including the general management - a comprehensive and competitive remuneration which consists of salary above minimum wage, retirement pension and, if applicable, additional contributions in order to achieve a fair, reliable and competitive compensation. 

The basis of the salary and, if applicable, variables is based on the criteria of performance, complexity of tasks, responsibility, importance of the function for the company as well as qualification and experience of the employee, regardless of gender.
This is mentioned accordingly in our internal Personnel Policy at head office.

Further details of the remuneration policy are not systematically gathered.

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.

Renouncement on reporting for headquarters due to confidentiality. 
No central data collection of members' remuneration policies installed. 

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.

When INPACS was founded, the most relevant stakeholders, namely the international customers and suppliers as well as the network members were clearly defined as our target stakeholders with respect to our business model. Further methods for systematically identifying stakeholders have not been applicated.
The target stakeholders were authoritative for structuring the central organization, the INPACS head office. In consequence, the procurement, sales and
business development departments have been established as the key service departments of the organization.

The original relationship to our suppliers primarily focused on building up a wide-ranging product portfolio securing fair prices and security of supply, globally. Today, we are exchanging sustainability information via EcoVadis and thereby foster transparency within the wholesale market. By regularly organizing interdisciplinary meetings with our suppliers, we additionally pave the way for common sustainability standards and develop closed-loop concepts for our customers.

The members, who are supplying the international customers locally on site, represent the heart of the global INPACS network. Especially the business development team is in close cooperation with the members working towards the creation of common global quality standards. Furthermore, by the communication and cooperation within the shareholder committee, group-wide expert steering groups, special strategic working committees and the yearly annual conference, the global implementation of INPACS‘ strategic pillars is accelerated.
For the strategic pillar of sustainability a Strategic Working Committee Sustainability was established in order to derive strategic goals and measures for this area. Members of this committee are the Chairman of the Board and the CEO of INPACS, as well as owners and top managers of INPACS members from seven countries (cf. criterion 5).

As INPACS is a sales driven organisation there is a proactive dialogue taking place with our International Customers via regular personal contacts, trade fairs, customer conventions as well as associations, memberships and cooperations, such as WFBSC (World Federation of Building Service Contractors), ISSA (International Sanitary Supply Association) and EcoVadis. The strategic course on sustainability shapes the dialogue with the customers more and more. The customer consultancy has now been supplemented by recommendations on product substitutions for more ecological alternatives, order bundling for more greenhouse gas-efficient delivery and waste management in the sense of promoting circular economy. 

Furthermore, central to INPACS‘ sustainability strategy is to build partnerships that support our engagement for the SDGs (SDG 17). To effectively pursue this goal, we have started a dialogue with Actors and Experts in our target markets, for eg. with waste management companies, in order to develop effective sustainability concepts for our customers. This also includes our engagement within the UN Global Compact, in which course we have gained a new forum for dialogue with other businesses and sustainability experts.

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.

In the last years, there has been a steady increase in the requirements for commitment and traceable supply chains with respect to CSR practices from our customers as part of the personal dialogue, international tenders or their Supplier Codes of Conduct. This is a result of the increasing consumer pressure in the market towards sustainability, societal pressure due to movements like Fridays for Future and substantial corporate risks on account of global warming. At the same time, there is a considerable uncertainty due to a vast labyrinth of product certifications, misleading media information and greenwashing.

Starting as a reaction to these customer concerns, we have created the needed transparency regarding the CSR performance within the network by conducting member as well as head office CSR assessments in cooperation with EcoVadis. The Customer Sustainability Program (cf. criterion 10) and the Sustainability School (cf. criterion 12) aim to provide reliable guidance for our customers' sustainable purchase decisions. The supplier risk analysis (cf. criterion 17) is a relevant factor for ensuring sustainable supply chains. 

In this course, our suppliers, too, face the market transition towards sustainability and digitalization. They are central to creating transparency for our customers by providing the relevant product data. Additionally, we cooperatively develop approaches for the implementation of circular solutions at our customers' site, and they are taking a crucial role in enabling the Customer Sustainability Program by providing innovative sustainable solutions.

To strengthen the INPACS members to this regard, we have implemented the group-wide sustainability strategy and programme (cf. criterion 1). The digital transformation processes, the sustainability school and the worldwide know-how exchange aim to enable every member to benefit on local, national and international level.

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.

Within the global INPACS network, product, process or business model innovations are continuously driven by systematic knowledge transfer coordinated by the central business development team. Regular surveys and analyses enable a group-wide sharing and upscaling of innovative local business practices. 

Furthermore, as key player and multiplier within global supply chains, our greatest levers for sustainable development are the design of our product range and the consulting of our customers along their value chain. Here is also our innovation focus: 

Due to the intense exchange with experts from the waste disposal industry, we have learned to include end-of-life consideration in our decision-making and service portfolio. Therefore, in order to reduce waste at our customers' sites and to promote circular economy, we analyse our product portfolio accordingly and question or test products and materials with regard to their recyclability or biodegradability. On this basis, we replace conventional products with innovative sustainable alternatives where appropriate. Furthermore, we make customers aware of innovative sustainable waste concepts so that they can achieve a higher recycling rate through consistent waste separation and usage of recyclable products.

Another important topic is the increasing number of small and repeat customer orders our members are struggling with, causing a great increase of climate-damaging greenhouse gas emissions, which many customers are not even aware of. For this reason, an interdisciplinary team was established, that developed a business intelligence solution within few months enabling us now to digitally provide our customers with their order structure and the associated CO2 emissions. The innovative approach of simulating how bundled orders lead to reduced transport emissions facilitates the cooperative reduction of climate impact on a global scale. 

The development team took this tool as kick-off for developing more innovative instruments that further accelerate sustainable consumption in terms of SDG 12 (cf. criterion 12) through data visualisation such as
  • customers' product consumption/ procurement portfolio on the basis of sustainability attributes,
  • usage of electronic ordering and invoicing in order to avoid office paper usage and
  • amount of waste per waste category and quotation of recycling.
Building on this, we can work with our customers on procurement optimisation in order to achieve a positive environmental effect. 
 
 
Furthermore, many of our international customers are currently undergoing a digital transformation process and expect support and impulses from INPACS. For this, INPACS is proactively investing in its business transformation from being a hub of products to also become a hub of data which is of high value for its customers' operations as well as for its suppliers' product development.

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. Link (Page 38)(Note: the indicator should also be reported when reporting to GRI SRS)

Not applicable, because no asset management operations on INPACS head office' own behalf.