6 July 2022

"An ESG report should not be justified in itself"

Interview on the publication of BRAIN Biotech's first Sustainability Report

BRAIN Biotech AG published in mid-June its first sustainability report and initial ESG data. We asked our colleague Michael Schneiders, Head of IR and Sustainability, about the background, challenges and next steps in sustainability at BRAIN.

Michael, why is it important or necessary for BRAIN to publish a sustainability report including an ESG data sheet?

When the company was founded around 30 years ago, the guiding principles included the biologization of industrial processes and the entry into a circular economy. The issue of sustainability has been anchored in BRAIN's corporate DNA from day one, and many investors have been invested in the share for years for precisely this reason.

“With our ESG report, we want to proactively approach our most important stakeholder groups: shareholders, customers and employees.”

In recent years, the transparency requirements on non-financial reporting have also increased significantly, especially for listed companies. With our ESG report, we want to proactively approach our most important stakeholder groups: shareholders, customers and employees.

What was your role in creating this initial sustainability and ESG report and how did you go about it?

I was the operational project manager, so to speak, in the creation of our ESG report. This began with putting together a powerful team, creating a concept for the content and coordinating the report with the Supervisory Board and the Executive Board. Our CEO Adriaan Moelker supported the project from the very beginning.

Were there any surprises in the inventory?

The main problem, which by the way is also a problem for most companies, was that while we are traditionally masters of financial data collection and reporting, there was no uniform data set in the Group when it came to non-financial reporting. Here, we first had to create standards and initiate the data collection. There were no major surprises in the process, however the additional data clearly improves our insight into the Group and will also build an integral part of our future corporate planning and risk analysis.

BRAIN follows several established national and international guidelines in its strategy for sustainable corporate development and reporting. Why isn't one of these guidelines sufficient, and how do you manage to reconcile these many guidelines?

Non-financial reporting is still a relatively new requirement for companies. As a result, generally accepted national and international standards are only slowly emerging. Here, we have analyzed very closely which standards now seem to be establishing themselves and have also observed what major competitors in our sector do who have been publishing ESG reports for somewhat longer.

In addition, we expect the request for integrated reporting to increase significantly in the coming years; we have therefore opted for standards that are also recognized by auditors. Overall, there will most likely be a consolidation of generally accepted standards in the coming years.

The basis of the ESG data collection was the so-called materiality analysis. Why was this approach chosen?

An ESG report should not be justified in itself, but only makes sense if it focuses on the topics that affect the company in its core business activities and are crucial for the social responsibility of the BRAIN Group. The materiality analysis leads to precisely this focus: what is material for the Group with regard to the three ESG dimensions? Based on this analysis, we have aligned the focal points in our sustainability report.

“It is our deep conviction that only sustainable profitability and positive cash flow generation can ensure the long-term existence of the company.”

The ESG data is based on "ESG plus". What does that mean?

We have decided to also anchor economic and impact goals in our sustainability approach. It is our deep conviction that only sustainable profitability and positive cash flow generation can ensure the long-term existence of the company. Economic prosperity forms the basis for a successful working environment, for meeting our social responsibilities, and it builds the foundation for innovative research. Our biotech innovations then give rise to our impact products and services, which enable us to make a real difference in sustainability. Our focus here is on nutrition, health and the environment.

BRAIN's self-set targets for 2032 are ambitious! How does the company go about achieving them now?

The next step is to implement the individual measures. At the moment we are forming intra-group teams and will first start to collect ideas on how we can achieve our goals most efficiently. We will tackle the quickly achievable targets first and consider the medium- to long-term projects in our corporate planning and financing strategy. We are defining milestones on the way to 2032, which will also find their way into the Executive Board's non-financial targets. The Supervisory Board is already actively accompanying this process.

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