Sustainability Report Hochland Deutschland GmbH
Transcription
Sustainability Report Hochland Deutschland GmbH
20 14 SUSTAINABILITY REPORT Passionate about cheese. Dedicated to Sustainability. ABOUT THIS REPORT The Sustainability Report 2014 is the first document published by Hochland Deutschland GmbH to provide comprehensive information about the company’s targets, measures, and achievements to date with regard to responsible corporate governance. This report is aimed at our employees, business partners, all other stakeholders, and interested members of the public. It will appear every two years in the future, with the next report being published in 2017. Hochland Deutschland GmbH also issues regular environmental declarations containing details of its environmental, occupational safety, health, and energy management efforts. basis of our corporate strategy and industry-specific issues. C hallenges and measures are described in the c hapters “Company Management,” “Products,” “Environment,” “Employees,” and “Society.” The final chapter summarizes all the relevant key indicators. Reporting Period and Boundary The Hochland Sustainability Report covers the period from January 1 through December 31, 2014. Information about key activities which took place before the above-mentioned period and between year-end and the time of going to press in May 2015 is also included in the report. The key figures relate to the years 2012 through 2014. Data was collected using the existing management systems in the various company divisions. Format and Contact Details All interested parties can download this report from the Hochland website in German or English (www.hochland-group.com/responsibility). A printed version is also available. The report covers Hochland Deutschland GmbH with its production facilities in Heimenkirch (Allgäu region) and Schongau (Upper Bavaria). Hochland Deutschland GmbH was established on January 1, 2007, as a wholly owned subsidiary of Hochland SE. Within the Group, it is responsible for the branded goods and food service business in Germany. A number of social engagement activities in Germany are managed by Hochland SE; the report indicates which initiatives these are. Content and Reporting Standard The decision about which topics to include was based on the principle of materiality and our stakeholders’ key expectations. The content of the report is also weighted on the 02 | About this Report The Hochland Sustainability Report 2014 complies with version 3.1 of the Global Reporting Initiative guidelines and takes the Food Processing Sector Supplement (FPSS) into account. Based on a self-assessment, this report meets the requirements of Application Level B. Any queries or comments concerning the Hochland Sustainability Report should be sent to Petra Berners (Public Relations, petra.berners@hochland.com) or Karsten Roth (Sustainability Manager, karsten.roth@hochland.com). TABLE OF CONTENTS About this Report 02 Foreword04 Company Portrait 06 COMPANY MANAGEMENT Company Strategy | Sustainability Strategy | Implementing Sustainability | Acting with Integrity | Dialog with Stakeholders | Targets 08 PRODUCTS Quality and Product Safety | Raw Materials and Ingredients | Product Information | Supplier Management | Animal Welfare 18 ENVIRONMENT 28 Environmental Management | Energy | Water | Packaging | Waste | Logistics and Mobility EMPLOYEES38 Corporate Culture | Remuneration and Employee Benefits | Training and Professional Development | Career and Family | Health and Safety | Demographic Change SOCIETY Regional Engagement and Project Support | Staff and Shareholder Engagement 48 Key Figures GRI Index Awards and Memberships Imprint 54 57 60 61 Table of Contents | 03 Foreword Hochland Sustainability Report 2014 DEAR READER, As a family-owned company, we believe that operating sustainably means making decisions on the basis of whether they are right for future employees and shareholders, rather than just generating short-term profits. We think in terms of whole generations. That means we act responsibly and strive to use natural resources responsibly, rather than simply consume them, for example. This is the only way to ensure that these resources will still be available for our children and grandchildren. It is also important to consider that today’s consumers increasingly want products and brands which are manufactured in a transparent, ethical, and socially responsible way. In the past, it was enough for Hochland to be seen as a “hidden champion” and work successfully in the background. This unassuming approach no longer fits with consumers’ growing expectations. We still want to do the right thing well and keep improving, but we now want to communicate this approach honestly and unpretentiously as well. We have taken a wide range of steps to date and our achievements in saving and conserving natural resources and in providing a safe, healthy place to work confirm that we are on the right path. However, we also realize that we do not yet have answers to all the questions. Many of the challenges we face cannot be solved overnight and require a concerted, joint effort. What does Hochland stand for, what can consumers and customers expect, and what can we at Hochland be proud of? Our first Hochland Sustainability Report provides the answers to these questions. In addition to this, we want to engage in lively dialog with our stakeholders and other interested parties to find out how people view us and where we can make further changes and improvements. We will revise this report every two years and publish it both online and in a small print run. I hope you enjoy reading it, Your In spite of this, we promise to keep extending our influence and consistently use it constructively. That said, everything we do to achieve environmental and social improvements must also make good economic sense because commercial sustainability is c rucial in order for us to remain an independent company. Our customers, consumers, employees, and partners can always rely on us to make commercial decisions on the basis of a clear set of binding values. 04 | Foreword Josef Stitzl Heimenkirch, Germany, July 2015 Company Portrait Hochland Sustainability Report 2014 HOCHLAND DEUTSCHLAND GMBH IN SHORT Hochland Deutschland GmbH was established in 2007 as a wholly owned subsidiary of Hochland AG (since 2010: Hochland SE). Hochland SE is a family-owned company based in Heimenkirch in Germany’s Allgäu region. Ever since it was founded in 1927, the firm has focused solely on making, refining, and distributing cheese. It has more than 4,200 employees at eleven production plants, who generated revenues of approximately 1.28 billion euro in 2014. This makes the group of companies one of the largest manufacturers and refiners of cheese in Europe. The Hochland Group caters for all major segments of the cheese market, both nationally and internationally. In addition to two German plants, it has nine decentrally managed production facilities in France, Spain, Poland, Romania, and Russia. Cheese produced by Hochland is sold in some 30 different countries. Within the group of companies, Hochland Deutschland GmbH is responsible for the branded goods and food service business in Germany. More than 1,450 members of staff work at the two sites in Heimenkirch (Allgäu region) and Schongau (Upper Bavaria). Hochland Deutschland GmbH produced a total of 221,132 metric tons of finished product in 2014 – an increase of 4.3 percent on the previous year. The company distributes well-known cheese brands such as Hochland, Almette, Valbrie, Patros, Grünländer, and Gervais. Its range of products includes processed cheese, hard and sliced cheese, cream cheese, brined cheese, cottage cheese, and curd cheese with herbs. 06 | Company Portrait The Heimenkirch site is not a milk-processing plant in the traditional sense. Its raw materials are various varieties of cheese. These are processed and refined at the plant, primarily to make processed cheese, hard cheese, and sliced cheese. The Schongau facility is one of the biggest producers of white cheese and cream cheese in Europe. Its raw material, milk, is sourced exclusively from two cooperatives – Erstes Bayerisches Butterwerk Schongau and Milcherzeugergenossenschaft Pfaffenwinkel – and is produced within a 35-kilometer radius of the plant. Hochland Deutschland GmbH sells its branded products via the retail segment but also manufactures private-label products for other distributors. In addition to this, the company supplies businesses in the food and catering industries with specially developed, customized product concepts in whatever format they require. The name Hochland is synonymous with quality and constant product innovation. The plants in Heimenkirch and Schongau regularly receive awards for long-term product quality from the German Agricultural Society (DLG). Company Portrait | 07 Company Management Right from day one, the family-owned company Hochland has stood for responsible business, a company strategy with a long-term view, and a high level of transparency. Hochland has also embedded these principles of good corporate governance in its strategy, which is founded on economic, ecolog ical, and social values. The three managers Volker Büstrow (Head of Marketing), Maria Jacob (Head of Product Development at Heimenkirch), and Walter Hartmann (Head of Production Processed Cheese) in consultation. Company Management Hochland Sustainability Report 2014 DEVELOPING AND LIVING VALUES Hochland’s corporate strategy. Since it was established in 1927, the family-owned company Hochland has developed into one of Europe’s leading cheese manufacturers. Today, our name is synonymous with high-quality products, brands consumers trust, long-term customer relationships, bold corporate decisions, and motivated, capable staff. Our business success is due in part to the values that all of us – from the workforce to the management team and shareholders – live out with conviction. In addition to upholding high standards concerning our product quality, respecting every single person is at the heart of our ethos. We are well aware of our responsibility to our employees, business partners, and the society in which we all live and work. This also includes maintaining an environment for future generations to live in and enjoy. Top Priorities To this day, Hochland remains in the ownership of the founding families, with the third and fourth generations now holding the reins. The unique culture of this family-owned company is hallmarked by a strong sense of community, close ties with the firm, and long-term dedication. At Hochland, we think in terms of generations, not quarterly periods. This is also reflected in our three overarching strategic objectives. First, it is crucial for us to operate profitably and with a focus on growth. To achieve this, we need to keep improving. Above all, this means thinking and acting with the consumer as our focus. We will only succeed in maintaining our competitive position if we gear our activities towards the needs and expectations of our customers and consumers, manage and market existing products well, and remain innovative across the board. 10 | Company Management Our top priorities: customer orientation, profitable growth, and stability in our results Strategic Key Indicators To ensure that we achieve these objectives long-term, we align all our activities with six strategic key indicators. Expanding our business with branded products is crucial for our market position. Consumer-relevant innovations are essential in paving the way for this. In addition to this, we constantly have to compensate for rising costs – such as wages, salaries, and energy expenses – by enhancing productivity, as we operate in a largely saturated and highly competitive market. It is our employees who make this possible at all. That is why we want to emphasize our appeal as an employer and attract – then retain long-term – well-qualified professionals by highlighting our strengths as a medium-sized company, such as flat hierarchies and a broad spectrum of responsibilities. If we achieve that, liquidity and profitability will follow, enabling us to do business successfully over the long term. Safeguarding Our Future Hochland strives to take responsibility for people, animals, the environment, and society, and to take future generations into account in all its decision-making. Read on to find out why the various aspects of responsible business form an elementary part of our corporate strategy. A PLAN FOR THE FUTURE Why Hochland wants – and needs – to operate sustainably. As a food manufacturer, Hochland is particularly passionate about nature – our most important raw materials supplier. Hochland not only promises its customers and consumers maximum product safety, but also pledges to take r esponsibility for the consequences of its actions. Publishing our associated targets, measures, and achievements in this report is one way of putting this into practice. Changing Market and Customer Requirements Farmland is in increasingly short supply around the world, the global population is growing, and commodity prices are r ising. At the same time, there is increasing demand among many consumers for natural, regional, and affordable products. Food scandals and a lack of trust with respect to industrially manufactured food are also making customers more sensitive to the origins of raw materials and ingredients as well as the social and ecological conditions in which they are produced. As a result, more and more consumers are consciously choosing products and brands made by manufacturers who credibly deliver on their responsibility to nature and society. We are meeting these challenges with a strategy aimed at striking a balance between ecological, economic, and social considerations. In concrete terms, this centers on ensuring product transparency and taking responsibility for our environment, employees, and everyone we share this planet with. Instilling Trust, Safeguarding Our Future Our customers and consumers have the right to transparency. They want to know how safe our products are and what eco logical and social conditions apply at the point of manufacture. They are interested in where the raw materials come from and which additives we use. We want to impress consumers, for example by offering GM-free Grünländer cheese and Almette made from Alpine milk with 100 percent natural ingredients. Protecting Nature and the Environment As a company, we want to be measured based on how we safeguard Hochland’s commercial future without leaving future generations to deal with the ecological fallout. We are striving to use resources, rather than abuse them. As well as saving energy, we are looking into using renewable energies and ways to offset greenhouse gas emissions. Farmers can count on us as a strong, independent partner and safeguard the future of their farms with our help. Together, we will face up to our customers’ and consumers’ expectations regarding animal husbandry, feeding, and welfare. This serves to strengthen our brands and pave the way for the milk price to remain above average. Social Responsibility for Our Employees Our employees trust in Hochland as a reliable employer with a long-term focus who rewards their performance with fair, commensurate pay. We also earn this trust by challenging and encouraging our staff to take personal responsibility and keep developing their skills. Every employee should be able to see how they contribute toward our success and how they can make a difference – but also what action needs to be taken. Economic Operations Part of the Picture Profitability is an important aspect of sustainability for Hochland. By living up to our social and ecological responsibility, we also ensure that we remain successful in economic terms. At the same time, we see profitability as a basic prerequisite for doing business responsibly because firms must be financially viable in order to survive long-term and thereby fulfill their obligations to people, the environment, and society in the long run. Company Management | 11 Company Management Hochland Sustainability Report 2014 PULLING AS ONE Hochland systematically embeds sustainability within the company and its supply chain. All areas of our operations must be characterized by respon sible action. That is why implementing our sustainability strategy falls within the remit of Hochland Deutschland GmbH’s Managing Board. To execute the strategy, we have appointed a sustainability manager, who works with representatives of all company divisions to initiate and coordinate specific measures. In addition to this, we are taking steps to raise all employees’ awareness of this issue and encourage them to get involved. These activities include week-long sustainability drives every year at our sites in Heimenkirch and Schongau. Focus on the Value Chain However, we do not just want to make ongoing improvements in areas which we can directly control and use resources more efficiently during production, for example. It is also essential that we take responsibility for the environment, animal welfare, and social standards throughout the entire production and supply chain. In the future, we want to cater to consumers’ demands even more fully – for example, for greater transparency surrounding the raw materials we buy and process. We constantly examine which social and ecological aspects of our products and brands are critical and important, and where we need to focus our efforts over the next few years. To do this, we have to think and act interdepartmentally – from product development and procurement to marketing. We cannot do this on our own; we need to work hand in hand with our partners. We have already taken a number of initial steps. In c onjunction with the German Research Institute of Organic Agriculture (FiBL), Hochland has conducted sustainability analyses at partner firms, identified key action points in the field of primary production, and established a milk farmers task force in response (see page 26 f.). 12 | Company Management Cooperation with Center for Sustainable Corporate Management In 2012, we initiated a systematic development process – known as the “sustainability learning pathway” – in conjunction with the Center for Sustainable Corporate Management (ZNU) at Witten/Herdecke University. This helps us to structure and further develop our activities. As part of this, we produced environmental impact assessments for our Heimenkirch site and two Hochland products in 2012 (see page 32). In a further step, we completed an exercise to assess the company’s status quo during a series of workshops. Staff from a range of departments were involved in this process. Action plans were developed based on this analysis of our strengths and weaknesses. Sustainability Compasses for Products As well as examining measures at company level, we are taking an increasingly close look at our products. This means that experts from the marketing, product development, procurement, sales, and logistics departments are analyzing the relevant aspects of our brands from their specific viewpoints. Based on the results, we are identifying areas for action and objectives. We will regularly review the status of these and provide transparent information about the progress we have made in the future. As the first outcome of this program, we will define sustainability compasses for all our brands, starting with G rünländer and Almette. Sustainability compasses are defined to orient our brands more strongly toward sustainability FAIR PLAY Hochland stands for correct, transparent conduct – within and outside the company. Hochland’s success should be built solely on legally and ethically irreproachable conduct. The company shareholders, our management team, and employees all agree on this. We have therefore put our values into writing in a number of guidelines, such as the Guidelines for Managing and Working Together and the Code of Conduct. Compliance with these documents is compulsory for all companies in the Hochland Group. Every single employee has been given a personal copy of both manuals, which are also explained in detail in the staff magazine and can be accessed online. Guidance on Working Together Trust and mutual respect form the basis for our relationships at work. In addition to this, we at Hochland speak to one another clearly, openly, honestly, and courteously. With this in mind, the Hochland management team liaised with members of staff back in 2001 to jointly define the Guidelines for Managing and Working Together. These set out how we work with one another and apply to everyone from apprentices to the Managing Board. As well as informing their line managers or the employee repre sentatives, workers can report any violations of the Code of Conduct to two named members of staff at their site. They guarantee that all disclosures are treated confidentially. Information can also be submitted in writing. Proven violations are punished, regardless of the offender’s position in the company. Shared Values throughout the Supply Chain We also expect our service providers, our suppliers, and their upstream suppliers to conduct themselves in accordance with our values. They are required to comply with the social standards of the current BSCI Code of Conduct and provide proof that they do so, if necessary. We also insist that they uphold human rights and legislation as well as adopting a decisive stance against corruption. Transparency at Every Level Responsible, correct conduct has been a matter of course at Hochland for generations. To communicate this externally, we developed a “Code of Conduct” in 2011, which sums up how we treat coworkers, business partners, and competitors. In this document, we make an unconditional pledge to uphold the law and behave fairly in our dealings with competitors, coworkers, and unions. In order to be able to steer and control processes and make results understandable, we promote maximum transparency. We cultivate a clear culture of giving constructive feedback in which every employee can share their opinions openly and honestly. Company Management | 13 Company Management Hochland Sustainability Report 2014 MAINTAINING DIALOG Hochland liaises closely with all stakeholder groups. We want to continually improve and enhance our sustainability strategy. To achieve this, Hochland needs to maintain ongoing dialog with all its stakeholder groups – both within and outside the company. Incorporating our stakeholders at as many levels as possible enables us to understand their needs and expectations better, and gain – and retain – their trust at the same time. Talking to Staff Hochland shows its employees how important their opinions (including any criticisms) are to the company, not just by fostering a corporate culture centering on dialog. Our staff hold up a mirror to us at regular meetings, via notices, in the staff magazine, on the intranet, and at the dialog sessions held once or twice a year at both sites with the whole Managing Board. After all, they know best where and how Hochland can be improved. With this in mind, we encourage our employees to provide feedback via the company suggestions program and to help shape processes and workflows. Our staff members can also express their opinions anonymously in the questionnaires circulated as part of the “Great Place to Work” competition, which we regularly enter. Listening to Consumers Our relationship with the people our products are made for – the consumers – is no less important to us. We need their suggestions to feed into our product development, but we also want to know what they think about certain issues which are relevant to society, such as the use of genetic engineering. One way of maintaining contact with consumers is via our brand 14 | Company Management and company websites. We also reach more than a quarter of a million consumers (as of May 2015) via social media such as Facebook. No matter how questions are submitted to us – online or more traditionally by mail or telephone – we answer every one. In Touch with All Our Stakeholders We also maintain close dialog with our shareholders, suppliers, and business partners by meeting them regularly and working with them in numerous task forces. They also receive all the necessary information, as do other organizations from the wider public with an interest in our firm and members of the press, with whom we maintain a close relationship. Our neighbors in Heimenkirch in the Allgäu region and Schongau in Upper Bavaria are particularly important to us. We organize events locally and work closely with schools and community representatives to improve quality of life in the towns and thereby also enhance our attractiveness as an employer. Promoting Knowledge-sharing We are happy to share our expertise and liaise with a number of universities, vocational colleges, and research facilities with this aim in mind. In addition to this, we work with the German Federal Ministry of Education and Research to ensure that we are always up to date with the latest developments in food technology. Last but not least, Hochland is an active member of almost all the relevant industry associations and initiatives and also has seats on a number of these bodies’ boards. Overview of Our Most Important Stakeholder Groups Employees Shareholders Consumers and customers Local communities Dairy farmers The public Suppliers and business partners Associations and initiatives Government and public authorities Science Media Company Management | 15 Company Management Hochland Sustainability Report 2014 A FAR-SIGHTED PROGRAM Hochland’s sustainability targets. To keep improving our sustainability management performance, we set ourselves quantifiable targets and monitor our achievement of them. The table below shows some of our most important targets. For details of other measures and targets relating to the environment, occupational safety, and health management, please refer to the Environmental Declaration 2015 issued by Hochland Deutschland GmbH (www.hochland-group.com/responsibility). Target and Measure Deadline Company Management Setting up a sustainability team focusing on production, milk, raw materials procurement, brands, and communication. End of 2015 Establishing a risk radar to identify current and future risks, especially in relation to the market, society, environment, and food legislation. End of 2015 Products Making animal ingredients in cheese and processed cheese products (sub-ingredients) completely transparent and traceable to batch level. End of 2015 Introducing the quality management system “Milch für Hochland” for farms that supply the Schongau site (QM standard and sustainability survey). End of 2016 Completing a sustainability analysis of all our brands and defining sustainability compasses with measures and targets. 2016 Reducing packaging waste throughout the value chain to a maximum of 1 percent (medium-term target: 0.5 percent). 2016 Evaluating whether the use of bioplastic packaging made from renewable resources is ecologically and economically viable for our Almette and Grünländer brands. 2018 Environment Increasing the proportion of renewable energy we use by taking steps in the production of our own electricity and optimizing energy procurement. ongoing Reducing fresh-water consumption and wastewater by 1 percent a year and cutting the amount of disposal waste by 2 percent a year. 2018 Raising the proportion of recycled paper used for all secondary packaging at our Heimenkirch and Schongau sites to 90 percent. 2018 Reducing energy use per metric ton of finished product by 20 percent (base year: 2012). 2020 Employees Reducing staff absences by improving workstation ergonomics at the Heimenkirch and Schongau sites. 2016 Entering the “Great Place to Work” competition every three years. We will next take part in 2017, when the survey will cover 2016. 2017 16 | Company Management Products The quality of the food we produce is Hochland’s number one priority. This means providing transparent information about product origins, maintaining the highest standards for raw materials and ingredients, and enabling complete traceability. Close, trusting working relationships with our agricultural partners are particularly important to us: they are the ones who ensure the animals’ well-being and guarantee a consistently high quality of milk. Monika Huber (Product Development), Eva Mühldorfer (Quality Management Schongau), and Stefan Vogt (Quality Management Schongau) taste testing herbed white cheese cubes Patros Genießerwürfel. Products Hochland Sustainability Report 2014 CONSISTENTLY MAINTAINING TOP STANDARDS How Hochland sets quality benchmarks. Impeccable, high-quality products form the basis for the trust that resellers, food-service clients, and consumers rightly place in us. This makes it all the more important for us to monitor the entire production and supply process from raw material to consumer so that we can identify any potential health risks, for example. All quality assurance measures are completed on the basis of risk and conducted in a way that fulfills specified standards. We use various tools in this regard, such as the HACCP concept (hazard analysis and critical control points). This system helps us to identify risks that could jeopardize our product safety and manage them in the best possible way. In addition to this, a comprehensive SAP-based tracing system guarantees that we know exactly where our raw materials come from. This also applies to the processing history of semi-finished products at our plants, for instance, and the distribution and location of the product once it has left our premises. Extensive Certifications The Hochland Deutschland GmbH production facilities have been certified as per the globally recognized IFS (International Featured Standards) Food standard for many years – and have been rated as “higher level” since 2006. We have also been certified to the British Retail Consortium (BRC) Global Standard for Food Safety since 2006. External auditors now check the Hochland plants’ quality management system twice a year. These audits include voluntary inspections under the IFS Integrity Program, which involves hygiene and process monitoring. We have also been awarded McDonald’s Supplier Quality Management System (SQMS) certificate. We have been supplying the fast-food chain with cheese in Germany since as early as 1973. If we receive any queries, we can trace individual steps in the production process anytime with the aid of our standardized manufacturing management system. 20 | Products Food Safety Culture Hochland regularly trains its employees so that it can keep setting itself even higher quality and product safety targets. But that is not all: we are also strengthening our food safety culture by involving our entire workforce. This primarily means putting measures in place to prevent risks and constantly improve food safety. Our employees proactively make suggestions, which they put into practice themselves in conjunction with their line managers. Award-winning Product Quality Hochland Deutschland GmbH regularly receives awards from the German Agricultural Society (DLG) for its high quality standards. The company received the DLG’s PriMax prize a total of 14 times between 1998 and 2013. Both plants have already won the award for long-term product quality twice, an award which was only introduced in 2014. The Heimenkirch site was commended for 25 years of successfully participating in the DLG’s testing program and the Schongau facility was honored for its 19 years of involvement. Read on to find out how carefully we select raw ingredients, how we provide consumers with comprehensive information, how our supplier management system contributes toward quality assurance, and what responsible animal husbandry means to Hochland. Hochland products regularly receive awards for their quality Products Hochland Sustainability Report 2014 THE GOODNESS OF MILK Hochland is synonymous with carefully selected raw materials and strict quality criteria. Legal requirements for food labeling and traceability are growing ever more comprehensive. On top of this, many consumers increasingly want to buy natural and regional products. Hochland is happy to provide information about the safety of its products and the origins of the 330 or so different raw materials and ingredients it uses, which are sourced from over 130 suppliers. In addition to this, we disclose the social and environmental aspects of production conditions and the use of additives wherever possible. to guarantee consistent, high quality. However, we are gradually reducing the additives used for products of this kind as well thanks to new technologies and close working relationships with our suppliers. Premium Raw Ingredients Hochland believes that using carefully selected raw materials forms the basis for optimum quality and product safety. The use of recognized specifications for our raw materials helps us to exceed legal requirements and meet the high product standards we set ourselves. Carefully Considered Production Preventing food waste is another of our key objectives. We donate anything we overproduce to food banks or sell it at reduced prices as part of special campaigns. Even in the production phase, intelligent preventive systems help us to avoid or reduce waste. These include measures to counteract overproduction and constantly improve food safety. Locally Sourced Quality Sourcing as many ingredients as possible from our local region is another trademark of Hochland and our products – and this applies above all to the milk we use. For instance, the milk for our Schongau site comes from more than 1,000 farmers located within a radius of roughly 35 kilometers from our plant. We also work with long-standing suppliers whom we trust in the production of processed cheese and sliced cheese. Provided they can offer goods on competitive terms, we prefer to work with regional partners here as well. We also have control programs in place to stop allergens from entering our production facilities via compound ingredients. All raw materials can be traced quickly with the help of computer- aided systems. Finished Product Manufactured (in t) 250,000 200,538 211,916 221,132 200,000 150,000 Natural and Allergen-free Hochland primarily uses natural flavorings, and some of its brands, such as Grünländer and Almette, exclusively contain natural flavorings. We have also developed guidelines for the reduction of additives. Processed cheese products, for example, need certain additives – such as emulsifying salts – 22 | Products 100,000 50,000 (Metric tons) 2012 2013 2014 The Cheese That’s Green at Heart None of Hochland’s products contain genetically modified ingredients that are subject to EU labeling regulations, but we go even further than this with our Grünländer brand. We can evidence that the whole value chain for Grünländer complies with the strict requirements of the EC Genetic Engineering Implementation Act. It all starts with the milk, where we ensure that the cows are only given feed made without the use of genetic engineering. On top of this, all the ingredients and additives – such as rennin, herbs, and spices – are also GM-free. We go to great lengths and incur substantial costs to ensure that this is the case because very few producers exclusively supply GM-free ingredients that comply with the legal stipulations. Furthermore, the additional checks and genetic engineering analyses which we continually conduct for Grünländer are time-consuming and costly. However, going to this extra effort is the only way to ensure we deliver on the promise we make our customers and consumers that these products are “Checked and guaranteed GM-free.” Because Natural Tastes Better To meet the requirements of consumers who want to know exactly where their food comes from, we use 100% milk from the Alpine region for our Almette brand. This Alpine milk comes from farms in a precisely defined area which falls within the territory covered by the EU’s Alpine Convention and stretches from Landsberg to Füssen. Extensive technical adjustments had to be made to implement this regional concept. For instance, we changed the routes used for our milk collection runs and introduced strict separation for milk from the moment it arrives at our Schongau plant. In addition to this, all ingredients mentioned in the various Almette product names – e.g. herbs, chives, onions, or horseradish – are grown locally. Some of these ingre dients are grown specially for us in line with strict specifi cations. This means they come from our Alpine region or no more than 100 kilometers away from it, and from farmland within Bavaria. Wherever possible, we buy any ingredients which cannot be sourced regionally from EU countries. Last but not least, Almette does not contain any preservatives, flavor enhancers, yeast extract, or any artificial binders, colors, or flavorings. Products | 23 Products Hochland Sustainability Report 2014 STRAIGHT TALKING Hochland gives consumers comprehensive, transparent information about its products. Providing facts helps to ensure that consumers are as well informed as possible and fosters trust. That is why Hochland discloses precise details about its products and their ingredients. Even before the EU directive on the provision of food information came into force in December 2014, we made more details about many of our brand-name products available to our consumers than was required by law. We are aware of our responsibility as a manufacturer of basic foodstuffs, which is why, for example, we disclose comprehensive nutritional information – known as the “Big Seven.” This means listing the number of calories along with the amount of fat, saturated fat, carbohydrates, sugar, protein, and salt per 100 grams. Helping Consumers Decide By taking an open, transparent approach, we aim to help consumers make well-informed decisions about what they buy. As well as labeling products with details such as the “Big Seven,” this means we provide comprehensive information online. The FAQ sections of our brand websites contains details of our products, including the lactose content of various cheese varieties, the use of gelatin, and types of rennin. For health-conscious consumers, we also offer low-fat versions of some of our products. Approximately ten percent of the products we manufactured were classified as “low-fat” in 2014. Listening to Our Customers Should customers ever have reason to contact us, a team of specially trained employees is on hand to deal with complaints and questions. In 2014, they handled around 2,500 comments – both positive and critical feedback – received by email or via our brand websites. Our aim is to receive no more than four complaints for every million individual packs we sell. We achieved this in 2014. Personal contact is very important to us, and we 24 | Products are careful to ensure that we respond to every message from consumers. On average, queries are processed within 48 hours. Every time we receive a complaint, we analyze the cause precisely and initiate corresponding improvements. Trained Hochland staff field queries in direct dialog with consumers Data Management Ensures Maximum Clarity Hochland can call up complete information at the touch of a button thanks to a computerized product data management system. This provides access to a summary containing everything from the specifications of each raw material to the finished and packaged product. To manage all our product-related data, we had to spend several years redefining processes and completing time-consuming data processing tasks. This is the only way we can offer our customers and consumers enhanced transparency. PARTNERSHIPS BASED ON TRUST Hochland and its suppliers work together as partners and meet high standards. When it sources milk, raw materials, and ingredients, Hochland tries to establish direct contact with dairy farmers, producers’ associations, or manufacturers. We also purchase certain raw materials via dealers. Whatever the case, Hochland has high standards – and that goes for both suppliers and dealers. Maintaining trust-based partnerships with these long-standing suppliers is a means of safeguarding the quality of our products. Focus on Regional Milk Suppliers One of the targets we have set ourselves is to source 100 percent of the milk we use from our local region. To achieve this, Hochland is currently working with two cooperatives: Erstes Bayerisches Butterwerk Schongau eG has been a partner of ours since 1988 and Milcherzeugergemeinschaft Pfaffenwinkel eG was added in 2013. Our Schongau plant sourced 213,000 metric tons of milk from these two cooperatives in 2014. Strict Requirements for Suppliers Our suppliers have to be certified to the internationally recognized IFS Food and British BRC standards; regular audits are also compulsory. Alternatively, we conduct our own audits based on the ISO 22000 food safety management standard. We only buy palm oil – which we use to prepare processed cheese or for anticaking agents, for instance – from sources which fulfill the criteria and principles of the Roundtable on Sustainable Palm Oil (RSPO). Hochland itself was awarded an RSPO Supply Chain certificate in 2014. All suppliers are also obliged to comply with the requirements of the Business Social Compliance Initiative (BSCI) under our terms and conditions of purchase. Local procurement helps us to ensure security of supply for our customers and also offers farmers a long-term purchase guarantee at fair prices. In this way, Hochland gives hundreds of local, family-run farming businesses a secure income. High Quality Standard for Milk Our aim is for all of our suppliers to be audited in line with Germany’s uniform QM quality standard by the end of 2016. QM-Milch e. V. is a quality management initiative launched by the German Farmers’ Association (DBV), the German Raiff eisen Association (DRV), and the Association of the German Dairy Industry (MIV). In addition to animal health and welfare, the standard focuses on feed and, of course, the raw milk itself, which must meet certain criteria as regards its purity and bac teriological makeup, for instance. Compliance with the standard is verified by means of independent checks. Hochland assumes the costs for these checks, which are voluntary for suppliers. At present, 64 percent of our over 1,000 milk suppliers take part in the program. Optimizing the Supply Chain In spring 2014, we commissioned an external sustainability assessment of 17 suppliers based on spot checks. As well as looking into animal welfare (see page 26 f. for details), we conducted in-depth analyses of corporate governance, envi ronmental management, economic considerations, and social issues. We developed a strategy for bringing about improvements based on the results. In particular, we want to further enhance transparency in our supply chain and promote regional value creation. In addition to this, we are working with our milk suppliers to plan sustainability improvements to their businesses. To achieve this, we set up task forces which draft and implement corresponding measures. Products | 25 Products Hochland Sustainability Report 2014 RESPONSIBLE ANIMAL HUSBANDRY Hochland cares about animal welfare and is strengthening contact with its farmers as a result. Society is taking a growing interest in animal welfare and animal health. These two issues are also increasingly important aspects of our working relationship with our suppliers – especially as they are areas which we can only influence indirectly. Although the German Veterinary Authority monitors compliance with legal requirements, Hochland believes it shares the responsibility for ensuring humane treatment. As a result, we maintain a constant dialog with our producers’ associations and raise awareness of growing animal welfare expectations among our dairy farmers. Our engagement here is also a question of economic necessity. Only if we are able to quickly satisfy consumers’ and customers’ rising expectations regarding animal husbandry will we and our dairy farmers be able to derive a commercial benefit from our operations. Utilizing Internal Data As part of our efforts, we look at the situation among our dairy farmers by collecting our own data; this was most recently done in 2013. Our records showed that approximately 33 percent of the milk supplied to us then came from farms that tether their livestock. The majority of these are near the Alps and reflect the prevalence of small-scale farms in this region. Short-term prohibition of this method of keeping animals would significantly speed up structural change and jeopardize the ongoing existence of small family farms, which make a major contribution toward maintaining the agricultural landscape in the Alpine region. As there have been further increases in government investment grants for pens which give cattle freedom of movement and retailers are also exercising greater pressure in this regard, the proportion of farms that use tethering will continue to fall over the next few years, however. A Challenge for the Supply Chain Striking the right balance between animal husbandry, society’s demands, resource availability, and consumers’ or resellers’ expectations is a challenge for the whole dairy industry – and therefore also for Hochland. We still have a long way to go in this regard, but we will stay the course. New Platform In spring 2014, Hochland Deutschland GmbH commissioned the Research Institute of Organic Agriculture (FiBL) in Switzerland to complete an external sustainability assessment of 17 businesses as per the UN Food and Agriculture Organization (FAO) guidelines. The outcome of the FiBL study provided 26 | Products fundamental information for the dairy farmers task force established in December 2014. In addition to Hochland, represen tatives of the EBB (Erstes Bayerisches Butterwerk) Schongau and the dairy farmers’ associations Pfaffenwinkel and Bayern MEG belong to this group. The task force is an information and discussion platform which serves as an interface between milk suppliers and Hochland. It also defines objectives and strategy for making milk production more sustainable. One of the task force’s first actions was to introduce the “Milk for Hochland” quality management system on a voluntary basis. Hochland aims to roll out this QM system by the end of 2016 with the goal of enhancing sustainability and transparency in milk production. The program consists of QM-Milch – an a ccredited nationwide standard in Germany – and a sustainability survey. The questionnaire used was developed by the Thünen Institute, an independent research center that is part of the German Ministry of Food and Agriculture. The results of the survey are discussed within the task force, which then liaises with dairy farmers to decide what action should be taken. Participating in Dialog and Round-table Discussions Since 2013, Hochland has been attending the meetings of various task forces dedicated to sustainability and animal w elfare which were set up by the Association of the German Dairy Industry (MIV). In addition to this, Hochland took part in the round table for humane livestock husbandry established by the Bavarian state ministry for the first time in spring 2015. To promote sustainability and transparency in milk production, Hochland is implementing the “Milk for Hochland” QM system by the end of 2016 Products | 27 Environment Hochland has more than just a passing interest in protecting nature and the environment. As a company that processes a natural product – milk – maintaining an intact natural world is a fundamental part of our business. That is why we live up to our social responsibility. Hochland understands the importance of professional environmental management which conserves resources and does all it can to ensure that the direct and indirect consequences of its production activities do not damage the environment. Richard Schuster (Department Head, Treatment Plant) and Stefan Mayer (Schongau Plant Manager) in front of the biogas plant. Environment Hochland Sustainability Report 2014 ECO-FRIENDLINESS PAYS MULTIPLE RETURNS How Hochland takes an ecological approach to business. Generating less waste, wastewater, and CO2, reducing energy consumption, and conserving resources is not only gentle on the environment but saves money as well. In addition to this, more and more consumers are now looking at how c ompanies deliver on their responsibility to society. Eco-friendliness is also important for food manufacturers like Hochland for another reason: an intact environment is essential to providing raw materials of the standard we need for our high-quality products. This means that it is in Hochland’s own best interest to maintain an intact natural world and orient its business activities accordingly. Environmental protection and energy management are therefore a key part of our corporate strategy. Acting on this means involving employees at all levels of the organization in our efforts. A Pioneer in Environmental Management Hochland established an environmental management system as early as 1995 and has been further developing it ever since. Our Heimenkirch plant has been part of the EU’s eco-audit program, now known as EMAS, since 1996. In the same year, we became one of the first companies from the German dairy industry to complete this audit. The Schongau plant also joined the program in 2005. Both of our German sites are now certified in line with the relevant environmental management standards, ISO 14001 and EMAS III. They also comply with the requirements for system atic energy management laid out in ISO 50001. 30 | Environment There are management representatives responsible for all issues relating to the environment at our plants in Heimenkirch and Schongau. In addition to this, the company directors, plant managers, and specialist divisions define targets to c ontinually improve environmental protection and conserve resources. Teams of internal auditors regularly check whether, and how, we are meeting our goals during plant and Group audits. Hochland Deutschland GmbH also produces an annual manage ment assessment as an additional means of monitoring and documenting our progress. This includes comprehensive consumption data relating to energy, water, and raw materials and details of our environmental impact – such as emissions and waste – in the form of tables accompanied by comments. Responsibility Part of the Picture Hochland Deutschland GmbH publishes an environmental declaration every three years. We also restructured, summarized, and documented our approach to occupational safety, environmental protection, and health and energy management in 2013 by issuing our A.U.G.En management handbook. These guidelines contain compulsory method statements, working instructions, appendices, and forms for staff and external partners. We take matters relating to these areas into account during the product development phase and prior to making investment decisions for new processes. In recent years, we have succeeded in both systematically improving environmental protection at our sites and making production processes more efficient. The next few pages explain how we have reduced our energy consumption and carbon footprint and look at how we are conserving water, lowering our use of packaging and paper, decreasing our waste, and optimizing our logistics. Environment Hochland Sustainability Report 2014 DRIVING CLIMATE PROTECTION Hochland is using innovative technology, energy-saving measures, and renewables to optimize its energy usage. Reducing CO2 emissions is crucial for ecological reasons as well as with a view to economic considerations. For this reason, we examine the environmental friendliness and energy consumption of our products, processes, and systems at the earliest possible stage. To help with this, Hochland Deutschland GmbH implemented and certified an ISO 50001-compliant energy management system in 2013. Among other things, we use energy audits to develop concrete energy efficiency measures. Analyzing Greenhouse Gases via Environmental Impact Assessments In 2012, we produced sample environmental impact assessments to improve our energy management system, in conjunction with the Center for Sustainable Corporate Management at Witten/ Herdecke University. The environmental impact assessment for the Heimenkirch site was completed using the method defined in the Greenhouse Gas Protocol Corporate Standard. The two product-related assessments were based on the international standards for assessing environmen tal impact ISO 14040 and 14044 along with the Product Carbon Footprint Memorandum. The assessments show that the majority of greenhouse gases at the site result from the use of natural gas to generate steam and that for the products analyzed raw materials are responsible for the largest share of emissions. In concrete terms, this means we need to avoid raw material waste and improve energy efficiency in our use of natural gas. Saving and Producing Energy We have been taking steps to save energy at Hochland Deutschland GmbH for many years. We use the waste heat generated from refrigeration, energy production, and vacuum generation and energy-saving LED lamps. In addition to this, we are eliminating peaks in consumption and reducing so-called idle current, which arises during the use of alternating current and does not result in any actual power output. We are gradually replacing older motors and pumps with more efficient models. Generating a certain amount of the energy we need ourselves is a key component of our energy management strategy. With this aim in mind, we put a new block-type thermal power plant (BTTP) and a new photovoltaic system into operation in Heimenkirch in 2013. Just one year later, this supplied 230,063 kWh of electricity and 335,000 kWh of thermal energy for our own use. 32 | Environment Supporting Renewables Renewable energy is inexhaustible and environmentally friendly. At the Schongau plant, we substantially augmented the proportion of our total energy accounted for by renewables between 2013 (1.6 percent) and 2014 (7.7 percent), partly by changing the supplier we use for the 25 percent of our energy consumption covered via external procurement. We generate 75 percent of the electricity we need at the site using our own BTTP plant. Renewable energy accounted for a significant 46.4 percent of the electricity used at the Heimenkirch facility in 2014. We will continue to increase our use of self-generated and renewable energy. There are plans to expand the photovoltaic system and install a small combined heat, cooling, and power plant for the production of steam in Heimenkirch. A biogas plant went oper ational in Schongau in 2015. Thanks to this and other moves to optimize our systems and processes, in part already initiated, Hochland Deutschland GmbH is well on the way to achieving its strategic target of slashing its energy consumption per metric ton of finished product by 20 percent between 2012 and 2020. Energy Use per Metric Ton of Finished Product (in kWh) 550 500 450 400 350 504.01 477.48 453.94 300 250 200 150 100 50 (kWh) 2012 2013 2014 Environment | 33 Environment Hochland Sustainability Report 2014 A PRECIOUS RESOURCE Hochland uses water responsibly. Drinking water is the source of all life – and it is in increasingly short supply around the world. As a food processing company, Hochland’s water consumption is relatively high. For this reason, we have placed a special focus on efficient water management, even though our region has extensive resources. We need water for the generation of steam, our production processes, cleaning, and cooling. For hygiene reasons, food legis lation in Germany stipulates that all of the water used in most areas of our operations – such as cleaning or direct steam-heating – must be potable. We source this water from local water companies. In less sensitive areas – such as cooling and sanitation – we use water from wells at our plants. The Schongau site has two deep wells. The Heimenkirch facility also has its own well, which has been supplying around 12 percent of our water requirements (approximately 20,000 m3 ) for a number of years. Clean Disposal Both sites have full, separate sewage systems. We comply with the legal requirements for wastewater disposal. All of the places where wastewater is generated have been defined. Where necessary, measuring equipment has been installed at these points. While all wastewater at Heimenkirch is disposed of via the local sewage plant, Schongau only uses this option for wastewater from its sanitary facilities. We treat wastewater from the production processes there at the site’s own clarification plant. This biochemical plant has been in operation since 2000. We monitor its cleaning performance in an on-site laboratory. Water leaving the plant is so clean that it can be fed into the nearby River Lech. Optimized Technology In 2014, we made further improvements to our technical equipment and cleaning at the plants. At the same time, we trained our employees in using fresh water responsibly and implemented measures to prevent water pollution. In Heimenkirch, we succeeded in reducing our relative fresh-water consumption by two percent from 1.39 m³ to 1.36 m³ and our wastewater per metric ton of finished product from 0.98 m³ to 0.95 m³ thanks to these steps. We also cut our use of lye for cleaning by 13 percent compared with the 2011 figure. Ambitious Plans Hochland has set itself additional water management targets for the period through 2018. We want to reduce both our fresh- water consumption and the amount of wastewater generated per metric ton of finished product by one percent annually. To achieve this, we are continuing to work on improvements in local cleaning processes and plant technology. We are also looking into making greater use of well water and intend to use cleaning agents and disinfectants even more sparingly. Wastewater per Metric Ton of Finished Product (in m3) 3.0 2.53 2.5 2.42 2.32 2.0 1.5 1.0 0.5 (m3) 34 | Environment 2012 2013 2014 RESOURCEFUL PACKAGING Hochland is working on innovative packaging solutions. We at Hochland aim to package our products intelligently. Consequently, packaging has to fulfill the requirements of several functions. It should be durable and tough, guarantee product hygiene and protection, serve as a means of informing consumers, and look appealing. Second, it should have the smallest possible impact on the environment. Based on the principle of offering maximum quality with minimum materials usage, we are working on producing packaging which takes the latest ecological considerations and technologies into account. We also pay close attention to the quality of the materials: there are no contentious ingredients such as chlorine or heavy metals in the plastics we use. Materials – Less Is More In 2014, we once again succeeded in significantly reducing our use of recoverable materials thanks to innovative solutions. At the Schongau plant, we were able to reduce the thickness of various plastic films by five to seven percent and even cut the weight of a slip lid by ten percent. Switching from corrugated cardboard to non-slip paper – a process which only took a few months – enabled us to save eight metric tons of material for packaging interlays in Heimenkirch. Recycling – More Is More In addition to materials reduction, recycling plays a major role in our packaging concept. At the Schongau plant, we replaced corrugated cardboard with compact cardboard which contains a larger proportion of recycled material in 2014. This reduces our environmental impact twofold: by conserving resources and by making our use of pallets more efficient, as up to 40 percent fewer pallets and shuttle transport runs are needed. We use recyclable materials wherever this makes good sense. For instance, we are making greater use of them for label backing paper and slip lids. We no longer make the latter from polystyrene; PET is used instead as it is easier to recycle and contains some reground material. Downscaling materials usage and stepping up recycling are at the heart of our current international project to reduce the weight of the tubs for our Almette brand. With a production volume of 20,000 metric tons, an eight percent reduction in weight translates to around 130 metric tons less post-consumer and manufacturing waste. At the same time, we have increased the proportion of recycled material used in the tubs from zero to between 70 and 84 percent – without compromising on quality in terms of food safety. The Packaging of the Future By 2018, Hochland Deutschland GmbH aims to step up the proportion of recycled paper used for all its secondary packaging at both sites to 90 percent if possible and further optimize its use of plastic films. In addition to this, we have joined a consortium which supports the development of bioplastics. Compostable packaging based on renewable resources which do not compete with food production generate considerably fewer CO2 emissions and markedly reduce the amount of waste produced. Over the next three years, we intend to complete in-depth checks into whether biomaterials meet the requirements for food packaging and whether they can be manufactured at an acceptable price. Environment | 35 Environment Hochland Sustainability Report 2014 CLEAN AND GREEN How Hochland deals with production residues and waste. Minimizing waste and recovering leftover material whenever possible is an effective means of protecting the environment which also makes long-term economic sense. With this in mind, Hochland has set itself the goal of further cutting the volume of waste by means of consistent reduction and recovery strategies. Professional Disposal Hochland Deutschland GmbH produces waste statistics for its facilities in Heimenkirch and Schongau as part of its annual management assessment. These record the amount, origins, and type of waste. Both of the sites have their own waste management officers. Each waste category is separated, sorted, and prepared for collection. Disposal channels are clearly defined, documented, and checked at regular intervals by the environmental manage ment officer. We work closely and exclusively with certified, approved specialist companies for the recovery and disposal of our waste to ensure that we always find the best disposal option. The recovery rate has consistently been over 90 percent for ten years High Recovery Rate We aim to continue raising staff awareness by providing regular training. At Hochland, departmental managers and shift forepersons also have an obligation to further reduce the volume of waste in the area they are responsible for and to keep the waste recovery rate up long term. Thanks to extensive cooperation between the individual areas, the recovery rate has constantly stood at over 90 percent for ten years. In Heimenkirch, it even reached 94 percent in 2014. 36 | Environment Progress in 2014 Good internal communication and information-sharing with both suppliers and disposal companies have prompted countless innovations in recent years. In Heimenkirch, for example, we do not use thermal recovery for silicone-coated backing paper anymore. Instead, we make it available to the paper industry for recycling. In Schongau, we have substantially reduced the amount of cardboard packaging, plastic film, and rigid plastic waste by using recoverable materials or making the materials thinner. We have also set up new containers at the site which make recycling easier. Less Waste Thanks to all of these efforts, Hochland succeeded in reducing the total waste volume at both plants from 5,388 metric tons (2013) to 5,014 metric tons (2014). Even more important in our view is that we were able to cut the amount of waste per metric ton of finished product. Heimenkirch recorded a figure of 25.89 kg in 2014 (2013: 28.81 kg), while Schongau generated 19.29 kg (2013: 21.67 kg) of waste per metric ton of finished product. Ambitious Targets We want to build on this trend. Hochland intends to reduce the amount of disposal waste by two percent by 2018. To achieve this, we will continue to train and educate our staff, optimize the separation of waste, and monitor the disposal market closely. WELL ON OUR WAY Hochland also looks at the environmental impact of logistics and mobility. In addition to the actual production processes, our business activities result in other environmental impacts away from the sites themselves. Hochland keeps track of these indirect CO2 emissions caused by staff travel and company vehicles, monitors them regularly, and comes up with innovative ways of reducing greenhouse gas emissions. Wherever possible, Hochland uses electric forklifts and industrial trucks for transportation within its sites. A diesel-powered forklift is only used outside at the Heimenkirch and Schongau sites. Hochland Deutschland GmbH does not have its own fleet of road trucks. External haulage companies are used for all milk deliveries to the plants and to transport our finished products to the distribution center in Buxheim. Efficient Milk Collection Raw materials are also delivered to our facilities by external haulers. However, we are constantly working to optimize these bulk milk collection runs. In 2013, on average 4.93 km were traveled for each metric ton of milk delivered to Schongau. In 2014 the figure was 4.82 km. By improving route planning, we were also able to transport more raw materials (6,723 metric tons) using three fewer vehicles in 2014. Reducing the size of the fleet in this way means using less fuel, but it also decreased cleaning activities for the trucks at the company’s own cleaning point by 20 percent. Keeping an Eye on Commutes Every three years, we ask our workforce of almost 1,500 what means of transport they use to travel to work. The representative survey in 2012 showed that our employees release an average of 828 kg of CO2 every year on their daily route to work. With an average commute of 14.3 km, staff in Schongau travel 3.6 km further to work than their colleagues in Heimenkirch, who cover 10.7 km on average. This is because the plant in Schongau is located on an industrial estate on the edge of town but the Heimenkirch facility is in the town center. Due to the ever-growing need for well-qualified professionals, our employees now also travel to work from a wider area than was previously the case. The average commute has increased by approximately seven percent in the last ten years. Focus on Car Pooling and Business Travel Hochland has set up videoconferencing rooms at almost all of its offices in order to prevent unnecessary journeys between sites. We have instructed our travel office to use the most environmentally friendly modes of transport and connections when they arrange business trips. Our staff are asked to share transport whenever possible if the use of company vehicles is unavoidable. In addition to this, since 2012 we have been replacing our pool vehicles in Heimenkirch. This move alone enabled us to cut annual CO2 emissions resulting from the use of company cars by 30 percent. Environment | 37 Employees Hochland is dedicated to fostering a culture of belonging. We want to promote dedication among our staff with a r esponsible HR policy. Fair compensation and attractive, above-average employee benefits contribute towards staff satisfaction – as do tailored professional development and training opportunities. We place special emphasis on achieving a healthy work-life balance. In the light of demographic change, we also want to further improve the way in which we cater for older employees. Discussion between Simone Grunwald (Department Head, Food Law) and Johannes Ludwig (Key Account Manager) as well as Katrin Koch (Product Manager Almette) and Thomas Schlachter (Head of Recruiting). Employees Hochland Sustainability Report 2014 ACHIEVING SUCCESS TOGETHER The role values and a sense of belonging play every day at Hochland. As a family-owned company with a history spanning almost 90 years, Hochland has maintained a special corporate culture to this day. Our guiding principles also highlight a sense of responsibility for the company and each individual’s own work as well as a family-like feeling of belonging. To quote the foreword to the principles: “Working at Hochland is a part of our life which we want to make as fulfilling and satisfying as possible.” Trust-based Dialog Trust – paired with mutual respect and a clear focus on customer satisfaction and quality – forms the basis for the special working environment at Hochland. This also includes an active feedback culture at all levels, where both positive and negative comments are welcomed. At Hochland, weaknesses are accepted and mistakes are openly discussed. Structures for Successful Teamwork Hochland encourages its employees to take responsibility for their own ongoing development. Every individual can contribute his/her expertise and skills. They should be prepared to embrace change and are given the opportunity to help shape developments. As a medium-sized company, Hochland offers its staff flat hierarchies, swift decision-making processes, and a broad set of responsibilities. In addition to this, Hochland values the diversity of its workforce. We currently have employees from 18 different nations, whose different experiences and backgrounds guarantee a creative, inspired, and tolerant working environment. 40 | Employees Being an Attractive Place to Work Pays In 2014, Hochland was voted one of Germany’s 100 best employers for the third time in a row. Our members of staff were asked detailed questions about their employer as part of the “Great Place to Work” competition. 86 percent of them agreed with the statement that their workplace was overall “great.” The accolade also stands for credible management, fairness and respect, staff who identify closely with the company and their own work, and a strong team spirit. The anonymous survey also showed us areas where we have room for improvement, such as transparency in decision-making and work-life balance. In our initial response to the publication of the results, we wrote an open letter inviting our whole workforce to engage in a constructive dialog so that we can develop and implement improvements together. 86% 86 percent of Hochland employees agree with the statement that their workplace is overall great. Employee Representatives as Partners Maintaining an open, constructive working relationship with the Works Council and both youth and apprentice representatives makes a decisive contribution toward a good working environment. Hochland’s Works Council is involved in confidential meetings of the economic committee and also attends Supervisory Board meetings as a member. It is a peer-to-peer body and key point of contact for all members of staff, which always carefully weighs up the workers’ and employer’s interests – a crucial element of the trust-based environment at Hochland. Read on to find out how we reward our employees for good work, what we are doing to promote continuous professional development and a healthy work-life balance, how we safeguard our staff members’ health and occupational safety, and how we are responding to the consequences of demographic change. Employees Hochland Sustainability Report 2014 FAIR CONDITIONS Hochland offers commensurate pay and extensive employee benefits. Social responsibility, above-average employee benefits, and remuneration that reflects both individuals’ and the company’s performance are fixed parts of Hochland’s corporate culture. Our compensation package makes us an attractive employer – something our staff regularly confirm in surveys. Hochland also promotes fair pay as a member of the Bavarian food industry’s federation of employers and within the various joint collective bargaining committees. Good Work – Good Pay Our employees’ pay is based on collective agreements, some of which include vacation and Christmas bonuses. Staff also receive payments above and beyond the standard union wage rate, such as profit-sharing payouts and anniversary bonuses. Employees on individually negotiated salaries receive compensation in line with the market and their own performance. In addition to an attractive basic salary, these pay packages include a variable component based on the company’s performance. We only hire temporary workers to support our permanent staff during peak periods and vacation times to allow us to react flexibly to bottlenecks. Even before the statutory minimum wage was introduced, we paid this rate to our temporary workers. Hochland has entered into a voluntary obligation to limit the proportion of temporary staff in its production units to a maximum of ten percent on average per year. Many of these employees have used temporary work to gain a foothold at our company: over the last three years we have given more than 100 temporary members of staff permanent contracts at Hochland. 42 | Employees Proven Company Savings Plan Hochland has had a company savings plan consisting of an oldage pension, disability allowance, and a surviving dependents’ annuity for over 50 years. We have consistently improved this plan over the years. Each calendar year, we pay a company contribution of 1,000 euro into each full-time employee’s pension fund. Apprentices receive 500 euro per annum. Part-time staff receive corresponding pro-rata contributions. New employees are also immediately enrolled in the company pension plan. In addition to this, all members of staff have the option of signing up to attractive private savings plans, such as pension benefits based on deferred compensation. All new Hochland employees also have the advantage of automatically joining our collective accident insurance program. This provides professional and personal coverage. In the case of an accident, our employees are contractually entitled to lodge a claim directly with the insurer. 1,000 euro annually for the company pension plan Extraordinary Canteens Hochland’s popular canteens offer staff at our Heimenkirch and Schongau sites freshly prepared, varied meals every day – including vegetarian options. This high-quality food is h eavily subsidized by the company, which contributed 750,000 euro towards meals in 2014 alone. In addition to this, our employees can purchase an attractively priced family pack of cheese every weekend. We also offer staff with families the option of taking meals from the canteen home with them at lunchtime. EDUCATION: THE KEY TO SUCCESS Well-trained staff are more important for Hochland than ever. With Hochland’s certified company training program, the company actively provides training and continuous professional development with a focus on employees’ individual knowledge bases and skill sets. Lifelong learning and cross-generational knowledge sharing are also becoming more and more important in the context of demographic developments. Recognized Apprenticeship Program With 55 apprentices (as of May 2015), we have one of the largest certified in-house training programs of any company in the Allgäu region and Upper Bavaria. As well as learning information specific to their future careers, through a combination of independent work and work in a team our trainees acquire social skills and gain a better understanding of the overall processes within the company. Hochland was named “Certified In-house Training Provider of the Year” by the German dairy industry for its commitment and high-quality offering in 2014. Promoting Professional Diversity Hochland offers eight vocational training courses for acquiring dairy industry, technical, and commercial administration qualifications. In addition to this, apprentices can train as cooks at our company canteen. Four cooperative education programs in business management, business informatics, mechanical engineering, and electrical engineering/IT are also offered in conjunction with Baden-Württemberg Cooperative State University (DHBW) to round out our training program. We work closely with schools and support young people by providing short work-experience internships and helping them to apply for a job. Youngsters who successfully complete a vocational training course at Hochland are usually offered a permanent position. Special Mature Traineeship Program Since 2014, Hochland has been offering employees who do not have formal qualifications but are keen to develop their skills the opportunity to train as a dairy technologist. As well as some experience in production, candidates must be inquisitive, interested in technologies and modern production facilities, and demonstrate own initiative. All applicants are asked to complete an aptitude test. Since the program was launched, two employees at the Heimenkirch site have taken up this opportunity. Two other staff members will start their training in August 2015. Tailored Continuous Professional Development Hochland encourages its staff to keep developing their skills, even if they choose unusual development paths. This might mean moving from one department or site to another, or t aking part in an international exchange program. For instance, as part of the “Production and Technology Skill Transfer” project, 22 production workers attended a two-year international CPD course based on the proven model of cooperative education between 2013 and 2015. Hochland ensures that its skilled workers are well qualified by offering customized training – from funding programs to assistance with technical training or advanced trade qualification, and from language courses to professional seminars. With our grants for advanced trade qualification, for example, we help our employees to gain the qualifications needed for specialist or managerial roles. International programs such as management training courses, programs for junior and experienced managers, and development groups for professionals round out our varied offering. Employees | 43 Employees Hochland Sustainability Report 2014 RELIABLE SUPPORT Hochland promotes a healthy work-life balance. These days, more and more well-qualified professionals and managers are consciously choosing to work for a company that caters for their needs outside of the workplace. Employees with children or relatives in need of care in particular often look for an employer that makes it easier for them to reconcile their work and family commitments. With this in mind, it is important to Hochland to offer its staff individual solutions tailored to their needs. Working from Home Some of our employees – primarily those in commercial and managerial positions – also make use of the opportunity to work for Hochland from home. Hochland’s teleworking program is mainly aimed at staff who live a long way from their place of work. It allows them to save time which would otherwise be spent traveling on certain days by prior arrangement. Family-friendly Working Hours At the Heimenkirch site, for instance, our employees make use of a range of flexible working-time models. Some 20 percent of the staff there work part-time. Our flextime option also helps parents in particular to make seamless childcare arrangements. There is a separate internal agreement in place regarding flextime for staff on the standard union wage rate. This also caters for working parents while promoting a sense of responsibility and giving our employees more control over their time. On top of this, couples who work shifts can arrange to be allocated to different shifts. There are additional family-friendly working-time models for production staff, such as working morning-only shifts alternating with weeks off. Generous Provisions for Compensatory Time Although Hochland’s Schongau plant has to cope with a heavy workload because it is a seasonal facility, employees can still take time off over summer thanks to the use of temporary workers. An internal agreement ensures that social considerations are taken into account. Options like flexible working times and part-time work help employees achieve a better work-life balance 44 | Employees Staff with at least one school-age child have precedence when it comes to vacation planning. Employees who work at the weekend are paid higher rates in line with the company wage agreement signed in 2010. They can also choose to receive these bonuses as time credits. Parental Leave Remains Popular Utilization among Hochland’s employees of the option for parental leave is high. Staff can make flexible arrangements for periods of parental leave, with and without part-time work. The company’s provisions go far beyond the legal requirements. For example, our employees can return to work early or extend their leave. Use is also made of the options to take paternity leave or work part-time for up to 30 hours a week. This helps staff to maintain their professional knowledge and contribute towards the family’s income. Employees on parental leave are, of course, still welcome to take part in outings, celebrations, and other events. They also receive our regular staff magazine, “Wir von Hochland” (We at Hochland). This keeps them up to date and helps them stay in touch with their coworkers. Employees Hochland Sustainability Report 2014 CONSISTENT PROTECTION FOR EMPLOYEES A successful company needs healthy staff and safe workstations. The occupational safety and health of our employees is the focus of the Hochland A.U.G.En management system. Measures are recorded and constantly enhanced because the well-being of our workforce helps to guarantee our commercial success. This enables us to make direct comparisons, both internally and with other companies and industries. Any deficits can also be rectified faster because a distinction is made between different types of accidents. Certified Occupational Safety In 2008, Hochland’s occupational safety management system was certified as per the international OHSAS (Occupational Health and Safety Assessment Series) 18001 standard. We constantly identify hazards and risks in all departments, assess them, and minimize them wherever possible. Preventive occupational safety initiatives and regular checks by teams of auditors round out our systematic approach. Number of accidents at work resulting in at least one day off per 1 million hours worked 38 40 30 20 10 32 22 31 15 11 0 Schongau Heimenkirch 2012 2013 2014 Efficient Hearing Protection Hochland also constantly monitors and documents noise levels in its various production areas. We install noise absorbers wherever it is necessary and possible to do so. In areas where the noise level exceeds 80 dB, we provide suitable ear defenders. We also protect our staff by offering regular hearing tests and training courses on this topic. Rapid Emergency Assistance and Transparent Accident Management The large number of trained first-aid officers and emergency response officers on hand ensures that initial emergency assistance is provided quickly. Should an accident happen despite all our precautions, we immediately try to identify the cause. We promptly initiate any necessary technical improvements and corresponding training courses. Since 2010, we have been reporting accident statistics throughout the Hochland Group using the LTA (lost time accident) rate, which shows the number of accidents at work resulting in at least one day off per 1,000,000 hours worked. 46 | Employees Proactive Health Policy Hochland introduced a health management system and appointed health management officers over ten years ago. As well as running exercise, nutrition, and relaxation initiatives, we conduct medical checkups in conjunction with our company doctors. These include preventive examination, for example to protect workers’ skin and eye tests for staff who work at computer screens. These are complemented by other occupational health-related services, such as advice on ergonomic working and support for older employees. In addition to this, liaison officers maintain contact between the 50 or so severely disabled people who currently work for us (as of May 2015) and the management team, present their concerns, and organize workstation inspections by the company doctor, for instance. In 2014, we emphasized special training courses for line managers on the subject of occupational safety and mental health. On top of this, our emergency response officers and first-aid officers received further training in the use of defibrillators, which are available at both sites. Special attention was once again paid to appraising accidents and near accidents at work. THE FUTURE OF WORK Hochland is tackling the challenges posed by demographic change. With a forthcoming shortage of skilled workers and an aging pop ulation, catering for older employees is becoming more and more important for all companies, including Hochland. We cannot manage without our long-standing workers and their expertise. Minimizing Physical Demands Older members of staff in particular need ergonomically designed workstations so that they can keep performing their duties without endangering their health. Although a large number of processes at Hochland are automated, there are still some production jobs which make exacting physical demands of our employees. We are constantly scrutinizing these jobs to keep reducing the physical effort involved. Highlighting Potential for Improvement By way of example, we looked into these physical demands as part of two projects at the Heimenkirch site in 2014. In conjunction with the Institute for Machine Tools and Industrial Management (iwb) at Technische Universität München and the Fraunhofer Institute for Machine Tools and Forming Technology (IWU) in Augsburg, several jobs in the raw ingredients preparation unit and the hard/sliced cheese department were analyzed. Following an appraisal using a traffic-light system, the p roject team worked together to find ways of improving ergonomic aspects of the jobs rated as red or yellow. Similar assessments are planned at the Schongau facility for 2015. work. This awareness should help course participants when they develop equipment and draw up work schedules in the future. Demographic Report for Greater Transparency A project group consisting of staff from HR, production, and the Works Council also analyzed the overall demographic situation at Hochland last year and derived measures based on their findings. The result is a demographic report which gives all managers an overview of the situation in the areas they are responsible for. This provides information about the workforce age structure, illness rates, and forthcoming retirements, which makes forward-looking HR planning easier. We also organize special advice sessions on topics related to demographics, which have now been provided to almost all managers who head up teams of 15 or more people. The last few remaining sessions have been scheduled, and some managers are already moving onto the next stage. New Guidelines Planned As the baby boomers reach pensionable age over the next few years, Hochland will have to compensate for a higher number of staff retiring. With this in mind, the HR team will draw up guidelines on succession planning and (early) retirement by the end of 2015 to give our managers and staff pointers on coping with this transitional phase. To complement this initiative, we have introduced ergonomics seminars for all production and technology managers and for employees responsible for planning and setting up new production systems. The seminars make use of an Age Explorer simulator suit, which is a very effective tool. It helps younger employees in particular to experience how older coworkers with physically demanding jobs feel as they go about their day‑to‑day Employees | 47 Society For us, living up to our responsibility as a corporate citizen means supporting specific local social and cultural projects and actively contributing to the community as a good neighbor. The company, staff, and shareholders give both money and time to philan thropic initiatives. Our social engagement focuses primarily on children and young adults. Peter Jordan (Technical Controlling) and Herbert Weiher (Chief Fire Officer) in front of an emergency vehicle of the volunteer fire department. Society Hochland Sustainability Report 2014 TARGETED SUPPORT Hochland helps social and cultural projects in its region by providing financial assistance and gifts in kind. Hochland strives to actively help shape its social and community environment. The company feels a special obligation to the regions it operates in. For this reason, our philanthropic activities concentrate on our sites, Heimenkirch and Schongau. Supporting Youngsters There are many equally deserving organizations and charities in our local areas. Because of this, we prefer to donate to a large number of projects, rather than acting as a main sponsor for a handful of initiatives. Hochland supports social and cultural projects, most of which focus on children and young adults. We have made a conscious decision to support initiatives of this kind because nearby youngsters are particularly important to us as a family-owned company with strong local roots. For instance, we have been supporting the regional round of the “Jugend forscht” competition for young researchers at our Schongau site for five years. Schools and kindergartens also receive donations toward new play equipment or planting a school garden. Hochland is a major certified in-house training provider in the Allgäu region and Upper Bavaria. As a b y-product of our community involvement, young people also get to know who we are and what we do. This allows us to both make a positive difference and stimulate interest in an apprenticeship or a job at our company. In turn, this helps us to attract sufficient junior staff and professionals, as we too face stiff competition for motivated, well-qualified employees and apprentices. In addition to this, we support cultural events which could not take place without sponsorship by contributing toward the performer’s fee. We also made a substantial donation to the fire department in Heimenkirch in 2014, which enabled them to buy a defibrillator. Hochland as a Donor and Sponsor While monetary donations are made in the name of the p arent company (Hochland SE) for organizational reasons, gifts in kind – which largely consist of cheese – come from the wholly owned subsidiary Hochland Deutschland GmbH. One of the recipients is the McDonald’s Kinderhilfe Stiftung children’s charity. We have been helping the Ronald McDonald Houses in G ermany with gifts in kind for over ten years. Hochland also started sponsoring an apartment in the Ronald McDonald House in Munich-Großhadern in 2005. This means that the house, or more specifically “our” apartment, can count on a fixed monetary donation every year. There are now 16 Ronald McDonald Houses in Germany, which offer parents and siblings of seriously ill children a home away from home while their little patient is treated in a nearby clinic. Having the reassurance of their family close by helps youngsters to recover faster. Children and youths form the focus of our societal engagement 50 | Society Partnership with Food Banks As a food producer, we also sometimes manufacture excess stock that unfortunately cannot be sold through regular c hannels. We have a close, long-standing relationship with food bank organizations in Germany, which means that we do not have to destroy this perfectly edible food. Thanks to this partnership, our substantial gifts of cheese do not only go to local food banks. As there are very good links between the individual food banks, they contact one another when they receive large donations. Consequently, the food banks in Stuttgart and Vorarlberg, for example, also benefit from our products. In addition to this, we regularly donate cheese to other regional institutions, such as a daycare center and a school which regularly offer free breakfasts to their children. On request, we also donate cheese to charities for events. The total volume of our gifts is considerable, but we cannot systematically record the quantities or value of our many individual donations in kind, as the effort required would be incommensurately high. Society | 51 Society Hochland Sustainability Report 2014 PERSONAL INVOLVEMENT Hochland’s employees and owners also actively help to tackle social issues. The company is not alone in fulfilling its social responsibility – and that is something which makes us particularly proud. With their wide-ranging efforts, our staff and shareholders also show that they live by Hochland’s values as a matter of course. also involved in local politics and community life in their home towns and villages as councillors. Hochland supports this volunteer work whenever possible. For instance, we make it easy for members of the volunteer fire department to take time off for callouts. Everyone Does What They Can to Help For instance, our employees regularly organize their own in‑house fundraising drives for those in need of help. In 2014 alone, considerable amounts were donated to the children’s charity Kinderbrücke Allgäu, the children’s hospice in Bad Grönenbach, the aid organization Big Shoe, and the Radio 7 Drachenkinder initiative for children who urgently need help due to violent experiences, the death of a family member, or sickness. Fighting Leukemia In 2014, we offered tissue typing at our sites in Heimenkirch and Schongau in conjunction with the German Bone Marrow Donor Center (DKMS). This initiative was suggested and organized by the company health management officer. A total of 350 employees registered as potential stem-cell donors during this voluntary campaign. By doing so, they agree to donate stem cells from their blood if they are identified as a match for a leukemia patient. According to DKMS, the number of participants was much higher than the average for such corporate tissue typing initiatives. The management team spontaneously agreed to pay the laboratory costs of 50 euro per participant and transfer the funds to DKMS. On top of this, Hochland employees are actively involved in the schools/businesses task force, which brings together teachers from the administrative district of Lindau and business representatives. They support numerous initiatives at schools, provide vocational information, for example, and help teach young people how to apply for jobs. A large number of our staff also do volunteer work – training youngsters at sports clubs or as leaders or active members of music groups. Some of them are 52 | Society Ownership Comes with Responsibility Our company has a long tradition of fulfilling its social responsi bility, which has always been an important issue for Hochland shareholders also. With this in mind, the shareholders’ meeting resolved in December 2008 – based on the Hochland shareholders’ family charter – to support local projects with social, environmental, and conservation objectives. A large number of initiatives have been realized since then with the shareholders’ financial assistance. The focus is always on providing long-term assistance which has a lasting effect. This engagement centers on leveling the playing field for disadvantaged children and young adults. Behind this decision is the firm belief that Hochland has only been able to achieve its level of success with the help of well-trained, motivated employees. That is one reason why the shareholders invest in training young people and preparing them for apprenticeships. Since the program began, support has largely been given to projects lasting several years which were set up in conjunction with the region’s schools and primarily assist children from less educated backgrounds and those who are disadvantaged due to their personal circumstances. For example, the shareholders help to fund social education support at schools and joint projects at a music school which offers lessons for children with special needs. Assistance is also given to teachers who help school dropouts to gain a basic academic qualification and to a learning workshop dedicated to taking an appealing, hands-on approach to teaching math at elementary school. Financial assistance has also been provided to an initiative by the local child protection agency which teaches youths strategies for conflict resolution and social skills, and an environmental awareness project at a nature reserve. Society | 53 Key Figures Hochland Sustainability Report 2014 KEY FIGURES OF HOCHLAND DEUTSCHLAND GMBH Hochland uses key figures to make its sustainability achievements transparent and comprehensible. The table below lists the most important data from the various areas for the years 2012 through 2014. Unless stated otherwise, the figures pertain to Hochland Deutschland GmbH with its two plants in Heimenkirch and Schongau. Each of the figures has been rounded, which may result in minor discrepancies in the totals. The Environmental Declaration 2015 (see www.hochland-group.com/responsibility) contains additional detailed key figures for the Heimenkirch and Schongau sites for the period from 2010 through 2015. The staff figures relate to December 31 of the year in question. Finance Unit 2012 2013 2014 Total revenues EUR million 636.4 656.9 737.4 Germany EUR million 514.7 552.0 577.4 Abroad EUR million 121.7 104.9 160.0 Capital expenditure EUR million 14.3 12.0 9.6 Products Unit 2012 2013 2014 Finished product manufactured Metric ton 200,538 211,916 221,132 Amount of milk processed1 Metric ton 173,661 184,953 202,450 Environment Unit 2012 2013 2014 MWh 101,073 101,186 100,380 kWh/t of finished product 504.01 477.48 453.94 MWh 34,777 34,475 34,396 kWh/t of finished product 173.42 162.68 155.55 MWh 66,205 66,640 65,926 kWh/t of finished product 330.14 314.46 298.13 90 71 58 Energy Total energy consumption Electricity Natural gas Heating oil Share renewable energy 54 | Key Figures MWh kWh/t of finished product 0.45 0.34 0.26 Percent 15.33 15.37 20.21 Environment Unit 2012 2013 2014 Metric ton 18,852 18,814 15,728 kg/t of finished product 94.01 88.78 71.12 Metric ton –1,537 –1,638 –1,558 kg/t of finished product –7.66 –7.73 –7.05 Metric ton 17,315 17,175 14,170 kg/t of finished product 86.34 81.05 64.08 565,497 587,081 629,376 Carbon footprint CO2 emissions (direct) Carbon credits Total carbon footprint Water/wastewater Total water use m3 m /t of finished product 3 Fresh water m3 m3/t of finished product 2.82 2.77 2.85 438,585 455,416 485,049 2.19 2.15 2.19 126,912 131,665 144,327 0.63 0.62 0.65 506,360 512,351 512,830 2.53 2.42 2.32 Wastewater routed to on-site clarification plant m 3 386,572 399,830 402,197 Wastewater routed to municipal clarification plant m3 119,788 112,521 110,633 Metric ton 18,455 18,560 18,436 kg/t of finished product 92.03 87.58 83.37 Metric ton 5,239 5,388 5,014 kg/t of finished product 26.12 25.43 22.67 193 183 178 Well water m3 m3/t of finished product Wastewater m 3 m3/t of finished product 1 Packaging material Total packaging material Waste and recoverable materials Total amount of waste Non-recyclable waste for disposal2 Sewage sludge for disposal1 Non-hazardous waste Hazardous waste Metric ton kg/t of finished product 1.71 1.64 1.57 Metric ton 1,195 1,163 1,109 kg/t of finished product 13.63 11.57 10.29 Metric ton 3,823 4,022 3,705 kg/t of finished product 19.06 18.98 16.75 Metric ton 28.06 20.09 21.85 kg/t of finished product 0.140 0.095 0.099 Schongau site 2 Heimenkirch site 1 Key Figures | 55 Key Figures Hochland Sustainability Report 2014 Employees Unit 2012 2013 2014 Total workforce Number 1,398 1,469 1,454 Women Number 526 557 541 Men Number 872 912 913 Full time Number 1,190 1,237 1,208 Part time Number 208 232 246 Permanent Number 1,252 1,267 1,300 Temporary Number 146 202 154 Production Number 1,200 1,247 1,235 Administration Number 198 222 219 Apprentices Percent 3.58 3.54 3.78 < 30 years old Number 260 281 260 30 to 50 years old Number 763 783 755 > 50 years old Number 375 405 439 Average age Years 41.6 41.5 41.8 No. of staff by employment type No. of staff by field of activity Age breakdown Further key figures Women in managerial positions Percent 14.29 14.37 13.14 Length of service Years 14.4 14.2 14.6 Staff turnover rate Percent 4.11 3.32 3.37 Severely disabled employees Percent 4.08 4.08 4.13 Sickness rate (absent on sick pay) Percent 3.49 3.46 3.36 Accidents per 1 million hours worked Number 54 53 43 Attendances on general CPD courses Number 530 510 490 56 | Key Figures GRI Index Hochland Sustainability Report 2014 GRI INDEX The Hochland Sustainability Report complies with version 3.1 of the Global Reporting Initiative guidelines and takes the Food Processing Sector Supplement (FPSS) into account. Based on a self-assessment, this report meets the requirements of Application Level B. The table below provides information on the level of reporting for each indicator. Some indicators are covered in the Environmental Declaration 2015 (abbreviated to “ED2015”), which can be found at www.hochland-group.com/responsibility. Indicator Location of disclosure Level of reporting Strategy and Analysis 1.1 Statement from the CEO p. 4 Complete 1.2 Description of key impacts, risks, and opportunities p. 10 ff. Complete Organizational Profile 2.1 Name of the organization Hochland Deutschland GmbH Complete 2.2 Primary brands, products, and services p. 6 Complete 2.3 Operational structure of the organization p. 6 Complete 2.4 Location of organization’s headquarters Heimenkirch, Germany Complete 2.5 Countries where the organization operates p. 6 Complete 2.6 Nature of ownership and legal form p. 6 Complete 2.7 Markets served p. 6 Complete 2.8 Scale of the reporting organization p. 6, p. 54 Complete 2.9 Changes regarding size, structure, or ownership No significant changes during the reporting period. Complete 2.10 Awards received in the reporting period p. 60 Complete Report Parameters 3.1 Reporting period p. 2 Complete 3.2 Date of most recent previous report Not relevant as this is the first report. Complete 3.3 Reporting cycle p. 2 Complete 3.4 Contact point for questions regarding the report p. 2 Complete 3.5 Process for defining report content p. 2 Complete 3.6 Boundary of the report p. 2 Complete 3.7 Limitations on the scope of the report p. 2 Complete 3.8 Joint ventures, subsidiaries, outsourced operations p. 2 Complete 3.9 Data measurement p. 2 Complete 3.10 Re-statements of information provided in earlier reports Not relevant as this is the first report. Complete 3.11 Changes in the scope, boundary, or measurement methods Not relevant as this is the first report. Complete 3.12 GRI Content Index p. 57 ff. Complete 3.13 External assurance for the report None Complete GRI Index | 57 Indicator Location of disclosure Level of reporting Governance, Commitments, and Engagement 4.1 Governance structure of the organization p. 6, p. 12 Complete 4.2 Indicate whether the Chair of the highest governance body is also an executive officer Hochland Deutschland GmbH has a nine-person Supervisory Board chaired by Peter Stahl, CEO of Hochland SE. Complete 4.3 Members of the highest governance body that are independent Not relevant as the company has a supervisory board (see 4.2). Complete 4.4 Mechanisms for shareholders and employees to provide recommendations p. 41 Hochland Deutschland GmbH is a wholly owned subsidiary of Hochland SE, which in turn is owned indirectly by the three founding families. Complete 4.5 Linkage between compensation for members of the governance bodies and the organization’s performance In addition to basic salaries, there are bonus payments which depend solely on the company’s performance. The company’s performance is always examined with relation to the entire Hochland Group (based on earnings before taxes or EBT). Complete Processes in place to ensure conflicts of interest are avoided The directors disclose any potential conflicts of interest to the Supervisory Board without delay. Members of the Supervisory Board disclose any potential conflicts of interest arising from consultancy work or executive roles at other companies to the Chairman of the Supervisory Board. The Chairman of the Supervisory Board discloses personal conflicts of interest to the Supervisory Board. If a member of the Supervisory Board has substantial conflicts of interest which are not merely temporary, this should lead to the termination of his/her mandate. Complete 4.7 Senior managers’ economic, environmental, and social expertise The respective Division Managers are chosen by the Managing Director and members of the Managing Board based on their knowledge, skills, and professional experience relevant to the task at hand. The Managing Director is obliged to uphold the company’s interests by managing it in the interests of sustainable value creation. A sustainability management group is planned for 2015 with the aim of incorporating sustainability more strongly into operational execution by consistently linking it with sustainability management. Complete 4.8 Mission statements, codes of conduct, and principles relevant to sustainability p. 11 ff. Complete 4.9 Procedures of the highest governance body for overseeing the organization’s sustainability performance p. 12, p. 30, ED2015: p. 28 Complete 4.10 Processes for evaluating the highest governance body’s own sustainability performance The achievement of economic and social targets is taken into account during the quarterly appraisal of the company’s performance by the Supervisory Board. The achievement of ecological targets is assessed annually. The six key indicators laid out in the corporate strategy serve as benchmarks. Complete 4.11 Use of the precautionary principle p. 10 f., p. 13 Complete 4.12 External economic, environmental, and social activities supported by the organization p. 14, p. 27, p. 60 Complete 4.13 Memberships in associations and advocacy organizations p. 60 Complete 4.14 Stakeholder groups engaged by the organization p. 2, p. 14 f. Complete 4.15 Identification and selection of stakeholders p. 2, p. 14 f. Complete 4.16 Approaches to stakeholder engagement p. 14, p. 26 f., p. 40 Complete 4.17 Key topics and concerns raised by stakeholders p. 11, p. 14, p. 24, p. 40 Complete Complete 4.6 Economic Performance Indicators Management approach p. 8 ff., p. 18 ff. EC1 Direct economic value generated and distributed p. 6, p. 54 EC3 The organization’s defined benefit plans p. 42 Complete EC6 Policy, practices, and proportion of spending on locally based suppliers p. 25 Complete p. 28 ff., ED2015: p. 10–14 Complete Partial Environmental Performance Indicators Management approach EN1 Materials used p. 54 f., ED2015: p. 28, 32 Complete EN3 Direct energy consumption p. 54 f., ED2015: p. 28, 32 Complete Complete EN4 Indirect energy consumption p. 54 f., ED2015: p. 28, 32 EN8 Total water withdrawal p. 54 f., ED2015: p. 28, 32 Complete EN16 Direct and indirect greenhouse gas emissions p. 54 f., ED2015: p. 28, 32 Complete EN21 Water discharge p. 54 f., ED2015: p. 29, 33 Complete EN22 Waste by type and disposal method p. 54 f., ED2015: p. 29, 33 Complete 58 | GRI Index Social Performance Indicators Labor Practices and Decent Work Management approach p. 38 ff., ED2015: p. 39–46 Complete LA1 Total workforce by employment type, employment contract, and region p. 56 Complete LA2 Employee turnover p. 56 Partial LA4 Employees covered by collective bargaining agreements More than 90 percent of staff at Hochland Deutschland GmbH are covered by collective bargaining agreements. LA7 Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities p. 56, ED2015: p. 42 f. There were no fatalities during the reporting period. LA8 Education, training, counseling, prevention, and risk-control programs in place regarding serious diseases p. 46 f., ED2015: p. 44–46 LA10 Training and professional development p. 56 Partial Management approach p. 8 ff. Complete HR1 Investment agreements that incorporate human rights concerns p. 13 Complete HR4 Incidents of discrimination and corrective actions taken No relevant incidents of discrimination came to light in the reporting period. Complete HR5 Operations in which the right to exercise freedom of association and collective bargaining may be violated None Complete HR11 Number of grievances related to human rights filed, addressed, and resolved None Complete Complete Partial Complete Human Rights Society Management approach p. 8 ff., p. 48 ff. Complete SO1 Impact of operations on local communities p. 25, p. 48 ff. Complete SO4 Actions taken in response to incidents of corruption There were no incidents of corruption. Complete SO5 Public policy positions and participation in public policy development and lobbying p. 60 Partial SO8 Fines and non-monetary sanctions for noncompliance with laws None Complete Product Responsibility Management approach p. 18 ff. PR1 Life cycle stages in which health and product safety are assessed p. 20, p. 22 f. Complete PR2 Noncompliance with regulations concerning health and product safety None Complete PR3 Legally required product information p. 24 Complete PR9 Fines for noncompliance with laws None Complete Management approach – supply chain p. 25 Complete Management approach – animal welfare p. 26 f. Complete FP1 Volume purchased from suppliers compliant with company’s sourcing policy p. 25 Complete FP3 Working time lost due to industrial disputes, strikes, and/or lock-outs None Complete FP5 Production volume manufactured at independently certified sites (food safety) p. 20, p. 25 Complete FP8 Communication to consumers about ingredients and nutritional information beyond legal requirements p. 24 Complete FP9 Animals raised and/or processed Hochland Deutschland GmbH does not keep any animals itself. The company works closely with producers’ associations in the area of animal welfare. p. 26 f. Complete FP10 Physical alterations and the use of anesthetic See FP9. Complete FP11 Housing type used for animals raised and/or processed See FP9. Complete FP12 Antibiotic, anti-inflammatory, hormone, and/or growth promotion treatments See FP9. Complete FP13 Transportation, handling, and slaughter practices See FP9. Complete Additional Indicators for the Food Processing Sector GRI Index | 59 Awards and Memberships Hochland Sustainability Report 2014 AWARDS Hochland received the following product and employer awards in the 2014 reporting year: In August 2014, the German Agricultural Society (DLG) awarded Hochland Deutschland GmbH 58 gold and 14 silver medals for product quality as part of its dairy product quality tests. The food-industry magazine “Rundschau für den Lebensmittelhandel” presented its Innovation Award to Hochland Deutschland GmbH in October 2014 for its “constant innovativeness.” At the same time, two new products were named “best sellers.” In March 2014, Hochland Deutschland GmbH was named one of Germany’s 100 best employers for the third time in a row. Great Place to Work® Germany presents this award to companies which have a particularly attractive workplace culture built on trust. The Central Association of German Dairy Workers and the Association of the German Dairy Industry honored Hochland Deutschland GmbH for its commitment and high-quality training by naming it “C ertified In-house Training Provider of the Year 2014” in September 2014. 2014 In February 2014, the current-affairs magazine “Focus,” the social networking site for professionals Xing, and the ratings site kununu together identified Hochland Deutschland GmbH as a top employer. Hochland ranked 116th overall and took 12th place in the industry league table. A total of 2,000 companies were analyzed. The Hochland Deutschland GmbH sites – Heimenkirch and Schongau – were both named an “Award-winning Workplace 2014” by the German Association for the Food and Hospitality Industry (BGN) in June 2015. MEMBERSHIPS Hochland is active in a large number of initiatives and organizations. Werner Giselbrecht, Commercial Director of Hochland Deutschland GmbH, is personally involved as an officer and working group member on the company’s behalf. Key memberships include: •The Federation of Employers in the Bavarian Food Industry (abe) •The Bavarian Dairy Industry Employers’ Collective Bargaining Committee •The Bavarian Milk Board •The Association of the German Dairy Industry (MIV) 60 | Awards and Memberships •The Association of Private Bavarian Dairies •The Association of the Private Dairy Industry in Bavaria (VBPM) •The Association of Bavarian Milk Producers (VMB) •The German Center for Food and Packaging Technology (ZLV) IMPRINT Publisher Hochland Deutschland GmbH Kemptener Straße 17 88178 Heimenkirch/Allgäu, Germany Telephone: +49 (0)8381 502-0 Internet: www.hochland-group.com/responsibility Sustainability Contact at Hochland Deutschland GmbH Karsten Roth | Director of Quality Management and Sustainability Email: karsten.roth@hochland.com Telephone: +49 (0)8381 502-633 Press Contact Petra Berners | PR Manager Email: petra.berners@hochland.com Telephone: +49 (0)8381 502-692 Concept, Text, and Design Scholz & Friends Reputation, Berlin Information on cover image and introductory images for the five main chapters: Acting sustainably means acting in a responsible manner and is definitively shaped by the actions of a company’s staff. In particular, we would like to thank the Hochland staff members who helped to create the images by posing with great enjoyment and enthusiasm. In the cover image, from left to right: Norbert Holzer, Supplier Advisor Milk Lea Ganss, Apprentice Walter Morent, Heimenkirch Plant Manager Corinna Gerlich, Executive Assistant © 2015 Reproduction, including excerpts, only with authorization from Hochland Deutschland GmbH Imprint | 61