Moving on.
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Sustainability report
Business Transformation
04
The PE Business
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Our Strategy and Mission
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08 09
The PE Value Proposition
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Sustainable Development
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The Crucial Issues
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Responsible Business Operation
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It’s all about People!
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Moving on
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report’s scope and purpose This Report provides an overview of PE International AG and its majority controlled international offices. It reports on quantitative information for the period 1 January to 31 December 2010. For all other information, the period covered is from 1 January 2010 to 30 September 2011. Compared to our first report for the Year 2009, there has been a significant scope change, with the merger of PE INTERNATIONAL AG and Five Winds International Inc. The data in this report include the Five Winds organization where possible; with the scope indicated for each of the different graphs in the report. Another significant difference from the previous report is that PE International’s corporate structure has changed from a GmbH to an AG. This has necessitated changes to the governance and management structures, as well as to business strategy. The report is intended to inform our clients, employees, investors as well as other stakeholders on the sustainability performance of the organization. The report provides aggregated, summary information and is published separately from our financial statements.
Glossary
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sustainability at pe
» We encourage the adoption of sustainable
practices in business. We lead by example by practicing sustainability as individuals and as a company. We strive to incite a ripple effect creating an impact much larger than what we are capable of alone. We also encourage a healthy balance between all aspects of our lives for our sustainable happiness. PE Constitution, 2009
Welcome to Sustainable Growth Dear Reader! 20 years ago, we at PE felt that sustainability – at that time mainly environmental protection – was a growing trend. Well, the trend has taken many years to grow and prosper, but obviously, it has come a long way since then! It is now safe to say that sustainability is a megatrend, if not THE megatrend of the moment. This has consequences for any and all businesses. One of these consequences is that sustainability now must be addressed as a core topic in company strategy, in management processes or in the incentive system. Another consequence is that issues relevant to sustainability have begun to converge. Five years ago, the sustainability of product design, operational resources and energy excellence and the sustainability of the supply chain were completely separated. Nowadays, companies are realizing how it all integrates: the design of a product influences the supply chain footprint, the production process, the total cost of ownership for the client and so on. Therefore, organizations increasingly consider these different aspects concurrently in their sustainability approach. What does all of this mean for PE? Well, first of all we believe we are extremely well positioned. Some of the world’s biggest companies find that up to 98 % of their measurable environmental impact can be found in their supply chain and through the use and disposal of their products. As world class experts in the life cycle sustainability of products – from cradle (e. g. mining) to grave (e. g. disposal) and back to cradle (e.g. recycling) – we see ourselves as leaders when it comes to understanding how business supply chains, operations, product use and end-of-life influence each other when it comes to sustainability. With this know-how, we assist our clients to analyze
scenarios and options and take the right decisions to improve their sustainability and business performance at the corporate level as well as throughout the value chain. With business sustainability becoming such a major focus, it is important it is addressed in a strategic way and with senior management. This explains why we were so excited to merge PE INTERNATIONAL with Five Winds, to expand our experience and capacities in this important area. After so many years of working together, this felt like a very logical and natural step. The sustainability market for consulting, software and content is continuing to grow strongly. As a result of this, we have decided to bring in investor capital. Furthermore, we have changed our management and governance structure to that of an AG, a corporation under German law. Both measures will help us meet the challenges of a growing market. So we have experienced an outstanding twelve months period in the history of PE. Now, with an organizational arrangement in place to match the sustainability megatrend, we will have even more capability to help our clients manage and mitigate their sustainability risks and – even more importantly – grasp the increasing number of sustainability opportunities that are out there. That is one reason why, in our second sustainability report, we have placed a strong emphasis on how sustainability can help create business value. Enjoy reading about it! Michael Betz
CEO · PE International AG
Business Transformation.
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Business Transformation
05
04
The PE Business
06 05
Our Strategy and Mission
08
The PE Value Proposition
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Business Transformation. The PE Business.
pe at a glance PE remains the leading global sustainability services provider focusing on integrated software solutions and strategic consultancy. The Group originated from a spinoff of the University Stuttgart over 20 years ago, and recently merged with the globally recognized Strategic Sustainability Consulting company Five Winds International. Our technical base is built on Life Cycle Assessment (LCA), Corporate Sustainability Management and Strategic Consulting. Today, we are home to the largest group of recognized experts worldwide in the field of Product Sustainability. At the end of 2010, we were employing 134 permanent and 7 contract staff in our 20 offices throughout Europe, the Americas, Asia and in other global markets. This means that PE brings to our clients in-depth sustainability expertise drawn from many different market sectors across the world combined with an understanding of the local issues and concerns affecting our clients in their particular contexts. Our client base comprises around 1,200 clients operating in more than 100 countries for whom we have conducted more than 4,300 projects. Our clients include organizations from market sectors as diverse as: construction, automotive, consumer goods, electronics, food and beverage, chemicals, primary material producers (metals, plastics, etc.), trade associations, government bodies, and banking and insurance. Based on turnover, more than 80 % of the global car manufacturers rely on our services to help them deliver more sustainable cars to the marketplace.
Revenue share by region in 2010
Germany EMEA (excl. GER) Americas APAC
Revenue increase
Year 2009 to 2010: 33 %
21 % 29 %
35 % 15 %
By the same measure, more than 50 % of the worldwide steel production companies profit from our services and software products to understand, benchmark and improve energy efficiency and environmental impact of their processes.
Our very significant market position underlines the fact that our work creates shared value for our customers. This means that not only are our clients’ commercial and environmental sustainability enhanced, but this is often done in a way that enriches the communities around them. In addition to our work for clients, we bring our commitment to sustainability and “thought leadership” to forums including standardization bodies and other influential organizations (e. g. SETAC, WRI and the Carbon Council) to help shape the world’s sustainability agenda. Independent research confirms our positions as a market leader in sustainability software which is used by clients on all continents. The same is true for our LCA/product sustainability consulting, as well as for the Five Winds Strategic Consulting. We are continually seeking to extend our lead in the enterprise carbon accounting space and in value added services by continuously expanding our platform for business transformation which enables customers to innovate their operations, supply chain and products.
the year in review PE is used to a dynamic growth in business development having grown more than 35 % each year over the last 10 years. But even with this background, the past 12 months has been an outstanding period in the company history. First of all, PE changed its corporate structure from a GmbH to an AG (a corporation under German law). This required the creation of a new governance structure, including a Management Board and a Supervisory Board. Secondly, PE successfully arranged to integrate the investors Siemens Venture Capital and GIMV as minority participants to help further drive the development of our business in a robustly growing market. These initiatives have led to the recruitment into PE of some recognized business leaders such as Richard Seibt and Les Hayman, whose experience, networks and business acumen will contribute to the continued expansion of the business.
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A third milestone was the merger with Five Winds International, a world leader in Strategic Sustainability Consulting. After closely cooperating for 14 years, it was a logical step to combine the expertise of the two organizations to enable us to bring an even more comprehensive portfolio to the market, while reducing administrative overheads. The dedicated expertise of the Five Winds organization, and its excellent reputation in Strategic Sustainability Consulting further strengthens PE’s capability to support our clients’ senior leadership teams in organizations around the globe to transform their business into one with a sustainable business model. In terms of products and innovation, highlights have been the market entry of the GaBi reader web, which allows
Five Winds Boulder, Toronto, Ottawa (since 1998)
PE AMERICAS Boston, San Francisco (since 2006)
EMEA PE INTERNATIONAL (Switzerland) (since 2010)
EMEA PE North West Europe London, Copenhagen (since 2008)
managers and other non-expert users to understand the sustainability of their products and processes, and to take informed decisions with the help of powerful scenario analysis. The inclusion of best practice content in our SoFi software excited analysts and clients, as it enables them to move on from reporting to target actual improvement of their performance and cost profile. We also saw our software solutions receive the first accreditation by the Global Reporting Initiative (GRI) as well as by Carbon Disclosure Project (CDP). On the consulting side, the macro indicator study commissioned by the European Union was a highlight. It provides a methodology to assess the macro-economic effects combined with LCI Data for environmental decision making in the field of resource and private consumption as well as waste generation. It will help the forthcoming legislation in the EU-27 to pull the right triggers.
PE INTERNATIONAL Stuttgart (since 1991) EMEA PE Central & Eastern Europe Vienna (since 2006)
EMEA PE Office Turkey Istanbul (since 2009)
APAC PE Asia Tokyo (since 2007) APAC PE Office China Ningbo (since 2008)
APAC PE INTERNATIONAL (Malaysia) Petaling Jaya (since 2008)
EMEA PE INTERNATIONAL (South Africa) Johannesburg (since 2009) EMEA Staff # 20 PE AMERICAS Staff # 28
APAC PE Sustainable Solutions India Bhilai (since 2009)
PE INTERNATIONAL, Germany Staff # 81 APAC Staff # 12
APAC PE Australia/Australasia Perth, AUS/Wellington, NZ (since 2006/2009) PE Subsidiaries & Offices Software Sales Partners
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Business Transformation. Our Strategy and Mission.
our corporate sustainability strategy and mission Sustainability remains a megatrend that requires business to integrate sustainability considerations into their activities in order to ensure long-term competitiveness and success in the marketplace. Products, processes and business pursuits – all have to fulfill sustainability requirements and principles. In the end, this means not only a change in the way we think about business but also requires a transformation of existing business models. PE International’s own corporate sustainability strategy is built around our mission to help clients understand the impact of climate change and sustainability on their business, guide them to improve existing processes and help them innovate. We provide our clients with the tools and services for creating new products, business models and processes and empower them to transform their business to succeed in the marketplace in the long run.
Our sustainability strategy and mission continues to rely on the same three pillars: 1
Sustainable PE Continuously improving the sustainability of our own operations, to ensure our acceptance as operators in this business.
2
Business transformation Enabling transformation of our clients’ businesses, through the delivery of innovative products and services, facilitation of knowledge and best practice sharing. We rely on 2,000 person years of experience to chart our activities in this domain.
3
Engagement with sustainability stakeholders Continually seeking opportunities to engage with sustainability stakeholders who can drive transformation. This may be in the area of standards (e. g. the new WRI Carbon Standards) or with leading organizations and industry associations (e. g. ICA, Global GBCs). Furthermore, we partner with OEM software vendors such as Siemens PLM or Dassault Systèmes on the basis that software and content will play a major role in the coming years in driving the sustainability agenda.
Sustainability Solutions
b y p e i n t e r n at i o n a l
08 09
the pe solution portfolio PE International is one of the world’s most experienced sustainability software, content and strategic consulting firms. Our solutions are designed to integrate sustainability into the whole enterprise value chain covering products, operations, supply chains, marketing and strategy.
At the core of our product sustainability solutions are GaBi Software and GaBi Databases. With over 10,000 users worldwide, they deliver trusted LCA decision support for all, including leading sustainable brands such as Bayer, Interface and Unilever. GaBi solutions enable our customers to capture the value of Life Cycle Assessment including operational efficiency, eco-design and sustainable product communication with analysis and communication tools designed both for experts and beginners. GaBi Databases provide the most current and accurate LCA content and are maintained by PE INTERNATIONAL’s industry experts. Due to the newly introduced annual data refresh, LCA practitioners can be assured that they cover all the latest developments and new technologies in their life cycle assessment models.
SoFi Software is a powerful software platform for managing corporate sustainability and has 20 years of sustainability consulting experience across all industry sectors built into it. Sustainability leaders such as Deutsche Post DHL, Iberdrola and Siemens have chosen SoFi Software to manage their sustainable business planning process. Starting with the collection of data from plants and buildings, suppliers and products, the SoFi solution helps customers identify savings potentials, develop a sustainability program and report sustainability information to stakeholders. The supplier assessment and management capabilities of SoFi help our customers increase resource efficiency upstream by providing a window into suppliers’ sustainability performance.
Product Footprints
Product Compliance
Eco-Design & Sustainable Product Development
Product Stewardship
Energy Management
Carbon Management
Water Management
Environmental Management
supply chain
Supplier Assessment
Supply Chain Compliance
Supplier Management
marketing
Sustainable Brands
Eco-Labelling & Claims
Environmental Product Declarations (EPD)
Green Building Certification
Assessment & Benchmarking
Strategy Development
Sustainable Performance Management
Sustainable Product Portfolio
products operations
strategy
Real Estate Portfolio Management
Social Responsibility
Stakeholder Engagement
Sustainability Reporting
Business Transformation. The PE Value Proposition.
the business value of sustainability In today’s world, there are many drivers and stakeholders, such as clients, employees, authorities or local communities, which cause companies to consider more sustainable product offerings and business models. Additionally there is increasingly a common understanding that companies have a responsibility to balance economic or industrial activity with social and environmental concerns and avoid negative impacts such as pollution, resource depletion or poor working conditions. However, sustainable business is not just the right thing to do; it also pays off financially for a company. In 20 years of supporting clients, PE and Five Winds have seen many examples where sustainable business approaches and initiatives have led to very significant business value for the respective organizations. Over time, we have classified these benefits into four main categories:
» Improving the top line: revenue growth » Improving the bottom line: operational efficiency » Reducing risk » Strengthening brand and building customer preference In the following section we show how four sustainability leaders from our client base are capturing the business value of sustainability. 1
Improving the top line: Siemens expands its green product portfolio One way of creating value from sustainability is by developing a green product portfolio. An exemplar of this approach is Siemens, the global powerhouse in electronics and electrical engineering. Siemens is a client and partner of PE International and uses our GaBi and SoFi Software solutions. They have set a goal to grow revenue from their Environmental Portfolio from 27.6 billion in 2010 to 40 billion by 2014. Today, already more than one-third of their total revenue stems from green products and solutions. With Siemens’ Environmental Portfolio, the company aims to drive growth by helping customers to reduce
their carbon dioxide emissions, bring down their energy costs and enhance their business success through greater productivity. In practice, Siemens approaches sustainable Product Portfolio Management (PPM) and product development from several angles. The Sustainable Life Cycle Engineering Team developed a matrix that plots the environmental impact and the customer benefit from new solutions and products to guide decision-making within Siemens’s business units.
2 Improving the bottom line: Denver Airport brought down operational costs For many organizations the key driver to adopt sustainable management practices is the realization of substantial cost savings. Five Winds helped Denver International Airport (DIA) to develop a system atic approach and implement an ISO 14001 certified Environmental Management System across their entire operations. Through the implementation of their environmental programs, DIA was able to realize close to $10 million in cost savings since 2005. In part, the cost savings were directly related to the implementation of environmental measures. Some of the operational cost savings were part of overall air port design efforts that were streamlined within the new management system. In general, a sustain ability management system is a critical success factor in driving cost savings because it helps senior executives to make better-informed business decisions.
10
ÂťI recommend that you look for integrated offerings. Providers who are capable of delivering a wide set of solutions understand the true scope of sustainability.
This breadth of services puts clients on a firmer footing as they address their sustainability programs. David Metcalf, CEO and a founding director of Verdantix
3 Reducing risk: Risk management and leadership at Carnival Oil and gas, chemicals and other heavy industries are exposed to substantial risks from the environmental impacts of their operations. Potential impacts such as oil spills or water, soil and air pollution need to be carefully managed. Carnival, a global cruise ship company that deals with international authorities on a daily basis, has adopted a highly systematic approach to sustainability starting with compliance and risk management tied to sustainability reporting across all of its cruise ship lines. A long-term client of PE International and Five Winds, Carnival uses the SoFi platform to manage and report its sustain ability key performance indicators. Carnival integrates sustainability information in core risk management processes that are driven by targets and objectives and is recognized as a leader in sustainable business practices. 4
Strengthen brands: Unilever builds consumer preference For consumer goods the business case of sustainable brands is clear: the consumer wants it. Unilever, one of the leading sustainable consumer brand companies in the world, collaborates with retailers on sustainability, drives new products and new customer
benefits and targets growth markets. Of course, Unilever also aims to capture cost savings by using resources more efficiently. One of the ambitious goals in Unilever’s sustainable living plan is to reduce impacts across the whole life cycle of their products because the firm has re cognized that their impact goes beyond their factory gates. Innovation and technology are key to achieving these reductions. With the GaBi Software solution, Unilever has calculated the GHG emissions across the life cycle of more than 1,600 representative products in 14 countries. It identified the key areas for improvements and determined that the use of their products by the consumer contributes significantly to their overall environmental footprint. Now, Unilever is using these insights to inform consumers and to guide its sustainability efforts.
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Sustainable Development.
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Sustainable Development
13
12
The Crucial Issues
05 14
Responsible Business Operation
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It’s all about People!
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Sustainable Development. The Crucial Issues.
»What I am most impressed with is the
drive within this organization: highly committed to success, but combined with a unique camaraderie.
PE is an exciting opportunity for me, as the company leads in addressing a new and very critical business need. PE has great products and solutions and an impressive reference list, but the biggest asset of this organization is its people and the unrivalled 2,000 person years of expertise in sustainable business. Les Hayman, Co-Chair of the Supervisory Board, PE INTERNATIONAL
governance, compliance and risk management The ownership and governance structure of PE have seen a number of significant changes in the last 12 months: the change to an AG (a corporation under German law), the minority investment of Siemens Venture Capital and Gimv, and the merger with Five Winds. The new governance and management structure is now split into a supervisory board representing the owners of PE, and the management board. The PE supervisory board is led by Richard Seibt and cochaired by Les Hayman. Other supervisory board members are Detlef Pohl and Hansjörg Sage on behalf of the investors, and Hartmut Schöch and Martin Baitz on behalf of the group of the majority owners, who are either working at PE or are friends of the company. In addition, a large number of employees took part in a participation program in 2009. The PE International AG management board consists of Michael Betz (CEO) and Frank Lieding (CFO). The company is further organized into five departments, each led by a Vice President. These are Sales, Marketing, Business Development, Engineering and Service Delivery. In addition, there is an administrative team led by the CFO. PE INTERNATIONAL AG also owns the 14 global PE subsidiaries comprising 20 offices either at 100 % or
with a large majority. The Managing Directors of these subsidiaries are responsible for the business execution in their region and closely cooperate with the corporate expert teams. The Managing Directors report to the CEO Michael Betz. Risk management and compliance are increasingly under scrutiny in a strongly growing organization, even though PE has fortunately not had any issues so far. Having a CFO, we have a global risk and compliance responsibility, and we are continuously expanding our existing management structures and processes so that they are adequate for an organization of our size and in our type of business.
what makes pe a sustainable organization? As experts in sustainability, we actively engage and interact with our stakeholders on many levels, seeking lasting partnerships and acknowledging their importance not just in our own corporate sustainability, but also in measuring our business performance. Being truly engaged with our stakeholders provides us with the best possible knowledge and influencing network in terms of what we do, empowering our employees who are the foundation of our success. It enables us to deliver the most effective sustainability solutions to our clients. In order to align the relevant issues of PE as an organization and those of the broad range of PE stakeholders, we have made a point of speaking to selected and representative stakeholders and have listened carefully to what they had to say. We conducted interviews with representatives from four stakeholder groups (clients, strategic
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Materiality Matrix
6
Relevance for PE Stakeholders
5 4 3 2 1
0
1
2 3 4 Relevance for PE
5
6
partners, investors, employees). The conversations were based on 18 issues which we at PE International identified as relevant to the sustainability of our business. In addition to the really valuable comments that we received, our stakeholders also prioritized the issues at hand. As a result, we were able to create the matrix of relevance (“Materiality Matrix”). We find it remarkable that the relevance PE as an organization and PE stakeholders allocate to the different issues is closely aligned for nearly all topics. There are no directly conflicting issues apparent which we explain by the fact that sustainability is our business model, and that we have a partnership approach with all our stakeholders. The message from our clients was very clear: They wish to see us remain a strong and leading edge partner in sustainability matters. Great importance was placed on “thought leadership” and PE’s capacity to deliver outstanding products and advisory services. We were told that as experienced and often long term partners, PE helps facilitate projects and programs that strengthen the sustainability performance and management of our clients. While acknowledging the unique depth and breadth of the support PE offers, our clients also remarked that they would like to see PE becoming more flexible with regard to quick and packaged solutions. They see this as a key requirements for delivering expert solutions to a wider market and hence fostering the sustainability of business overall. This feedback is very much in line with
Customer Relationships Thought Leadership Products & Services Partnerships and Knowledge Sharing (business partners, NGOs, GOs,…) Corporate Governance Employee Satisfaction & Retention Quality Management Ethics Qualification & Training of Employees Compliance (legislation) Globalization of Business Carbon & Energy Supplier Relationships Diversity at the Workplace Waste & Recycling Social Investment Water Consumption
internal observations within PE, which have led to an increased focus on new, pre-defined tools with which PE can support clients in addressing their sustainability challenges and opportunities. The feedback from our employees mainly addressed the challenges associated with the recent changes within PE. While there is the feeling that our culture and working atmosphere is special and attractive, our employees communicated uncertainty about the direction of our business, and have asked for additional and clearer communication. The main impact of these changes lies behind us, but we acknowledge the need for even more involvement of our employees in this matter (see “It's all about People!”). Based on the results of our assessment of relevance and priority, we have defined the following focal points of PE’s sustainable management model:
» Customer Relationships » Employee Satisfaction » Products and Services » Partnerships and Knowledge Sharing » Thought Leadership » Energy and Carbon
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Sustainable Development. Responsible Business Operation.
2010 2009
500 450 400 350 300 250 200 150 100 50
Building on our 20-year track record in carbon management we continue to engage in initiatives aimed at setting and further developing standards in the areas of carbon accounting and reporting, both for product and corporate applications. Senior PE staff has contributed to the development of the two new standards in the Greenhouse Gas Protocol Initiative. We continue to be gold carbon calculation partners in the Carbon Disclosure Project (CDP). We further work with the CDP in the development of future CDP reporting requirements but are also active in a number of other carbon accounting and reporting initiatives on a regional and national level. We have adopted the “carbon management hierarchy” and focus on establishing policies, employee education and sharing best practices to avoid and reduce our GHG emissions. For many of our clients, carbon management is one of the pillars of their business strategy. We assist in the development and integration of product and
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Our carbon footprint is being monitored, analyzed and reported through our own sustainability software SoFi. The scope has changed from last year through the merger between PE International and Five Winds and additional significant growth. The emissions inventory of Five Winds resembles PE’s pattern in that the most significant Scope 3 categories are business travel, employee commuting and energy related activities not included in Scope 2. For comparison purposes, we have recalculated our base year emissions (2009) as required under the GHG Protocol Corporate Standard.
t CO2e
e1
PE International has been carbon neutral since 2006. This has been achieved by applying the “carbon management hierarchy” of avoidance, reduction and replacement prior to offsetting any remaining emissions with high quality certificates. This approach also complies with the principles of the carbon neutrality standard PAS 2060. We are strongly motivated to further reduce our carbon footprint.
Carbon Footprint by scope PE Group
op
PE International has tracked and evaluated its carbon footprint since 2004 complying with the GHG Protocol Corporate Standard and using the methodology as set out in the Greenhouse Gas Protocol Scope 3 Standard over the past two reporting years. Our Scope 1 and 2 emissions amount to 137 t CO2e. Scope 3 emissions amount to 758 t CO2e, or 85 % of the total annual carbon footprint of 895 t CO2e. As is common in the services sector, business travel and commuting are the biggest contributors to Scope 3, as well as to our overall emissions.
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carbon management: our corporate footprint
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Carbon Footprint per full-time equivalent (employees) PE Sites t CO2e / FTE
25 20 15 10 5
Scope 3 Scope 2
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corporate carbon accounting which assists in realizing business benefits in product and financial markets as well as identifying risks and opportunities e. g. in the supply chain.
We have committed ourselves to running all of our offices with more than three staff on 100 % renewable electricity by the end of 2011. At the end of 2010, we already had well over 50 % of offices fully serviced by renewable electricity.
The carbon footprints of individual PE offices are being internally benchmarked to stimulate reduction initiatives and share ideas on options for improvement. The figure above shows the results for 2010. It is noted that, apart from the differences in business travel and commuting activities (being the biggest contributors to scope 3 emissions), the emissions profiles are not only dependent on the efficiency of activities in various locations but also on different emission factors and the use of specific renewable energy.
Going forward we are exploring three areas in which we can make a further difference:
» Reductions in business travel and commuting related emissions, through increased use of webinars and net meetings
» Encouraging energy conservation and efficiency
measures in offices, including alteration of power settings of electrical and heating equipment
» Expanding our sustainable purchasing initiative to work with our suppliers to reduce their carbon footprint
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Sustainable Development. Responsible Business Operation.
reduction targets Our extended corporate carbon footprint (inclusive of Scope 3) is relatively small when compared to others with office based businesses e.g. from the finance industry, both on a per FTE and a per turnover basis (6.1 t CO2e/FTE; 51 kg CO2e/€ 1,000). We have recalculated our base year (2009) emissions to reflect our significant growth in various regions, in particular the merger with Five Winds. The year 2010 showed a minor (0.5 %) increase in emissions per employee (FTE) and a 15 % emissions reduction per unit of turnover. The merger and the different depth in emission accounting within the two merged entities also introduced a level of uncertainty which will be eliminated in next year’s report. The figures reflect the rapid change our company has undergone in the past year:
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Carbon Footprint per revenue PE Group kg CO2e/€ 1,000
2010
2009
50 40 30
We have committed to a 15 % reduction in overall carbon emissions per employee over five years from the recalculated 2009 base year. As we are starting from a relatively low emission intensity level, it will be difficult to achieve significant and constant emission reductions over the coming years. In addition, we expect that with our current dynamic business growth, the significant changes in the company management and governance structure, and the increasingly global build-up of capacity and delivery of services the need for business travel will be a challenge to reduce over the next years. We remain committed to the 15 % reduction goal but will monitor how these special effects impact our carbon performance. As we believe that carbon efficiency should also be measured against value creation, we have adopted an additional performance indicator by committing ourselves to achieve a 25 % reduction per turnover over 5 years (2009 being the base year). Beyond our own carbon performance, we always keep in mind the significant positive impact our solutions and services have on the sustainability performance of our many hundreds of clients. With every project and every piece of software sold, we contribute to a reduction in GHG emissions, leading to a carbon emissions avoidance that is many orders of magnitude beyond our own impact.
green procurement
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More administrative staff were engaged to support growth (causing a slight emission increase on a per employee basis), and more software was sold relative to consulting services (causing a decrease of emissions on a per turnover basis).
Another focus in the field of environmental sustainability is green procurement. While PE was in the process of setting this up, Five Winds had already articulated a sustainable purchasing policy in effect since 2006. We are currently in the process of adapting and rolling out this Five Winds initiative into the broader PE organization. Our sustainable purchasing initiative (which consists of a policy, implementation guidelines and targets) helps us advance our commitment to sustainable development, strengthening our bottom line performance and demonstrating our commitment to sustainability to our clients and stakeholders. Next to the targets for green electricity procurement and overall carbon emission reduction, we are committing to the following additional targets for office electronics, paper use and carbon footprint assessment of procured goods. These targets will be applied over the next twelve months, in a first round, to PE offices in Europe and North America.
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measures to meet our targets 6,40 6,20
t CO2e / FTE
6,00 5,80 5,60 5,40 5,20 5,00 4,80
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realized value forecasted value Target value Business travel and commuting [PE INTERNATIONAL] Energy Conservation Measurement [PE INTERNATIONAL] Sustainable Purchasing [PE INTERNATIONAL]
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Target achievement
Screenshot SoFi Software Office Electronics Our staff members will ensure that all office electronic equipment purchases (i. e. displays, integrated desktop computers, workstation desktops/notebooks) meet as a minimum, EPEAT Silver registration or comparable standards. All printers, photocopiers and other relevant imaging equipment shall be supplied to PE with a default duplex setting as well as default printer configuration settings to print in black and white and at a “low quality” or “draft” or "ink saver" option and when possible, at a resolution setting of 300 dpi or lower. Where possible, Ecofonts shall be installed with printing equipment in order to further reduce consumption of printing toner and ink.
Office Paper All paper purchased by PE staff must meet the Forest Stewardship Council (FSC) Chain of Custody standard or similar forest certification system requirements. Paper should also contain a minimum of 30 percent post consumer recycled material content. The remaining fibre must be controlled (i.e. it shall not be sourced from any of the following: areas of social conflict and illegal logging; genetically modified trees; high-conservation value forests; large scale conversions which replace native tree species with faster growing non-native species). Staff will also ensure that printing service providers, for marketing materials and client publications, are FSCcertified (or meet the requirements of an equivalent certification system). Carbon Footprint of Suppliers and Products Through the adoption and introduction of the PE Procurement Policy, we will implement a process that incorporates the GHG performance of suppliers and their products into our major purchasing decisions.
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Sustainable Development. It’s all about People!
»It was encouraging to see that the
“PE Constitution” and the “Five Winds Values” – and the way that they are lived – were as similar as they were. the essence of pe Our people remain the essence of our success. We recognize that software and content are increasingly important in the sustainability marketplace, and they are a central part of what we do. But it is our people who develop this software and content. It is our knowledgeable consultants that help our clients meet requirements that go beyond the software dimension. And it is our sustainability experts that make the difference in the successful implementation of projects. When people are asked why they enjoy working at PE, common responses are: the sense of “team” when working together to find the best solutions for our clients, the diversity of people and responsibilities, the room for creativity and the ability to make a difference. Many of these views and values are addressed and reflected in our PE Constitution. During the peak of the changes in early 2011, it was challenging for PE to ensure that corporate communications kept up with the pace of development. There was very significant transformation occurring including the shift
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Employees (FTE) 2005–2010
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PE INTERNATIONAL Germany
Subsidiaries
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28
Five Winds strategic Consulting
to more process driven procedures to manage the growing structures, the merger of Five Winds and PE Americas into the new organization PE International, Inc., and changing roles and responsibilities for many of our staff. These changes required a lot of flexibility, openness and understanding on everyone’s part, which affected employee satisfaction. A PE Guiding Coalition of staff members was assigned to work on the issues associated with the transition, together with our Global Director of Human Resources, Ute Pfäffle. The Guiding Coalition was enlarged by the inclusion of Les Hayman, representing the new PE supervisory board, thereby involving all relevant stakeholders. With the major changes behind us, the transition is now proceeding smoothly. This is underlined by the fact that the number of people choosing to leave PE remains at a very low level. In the meantime, the PE Guiding Coalition has created a Change Manifesto. As we go forward, the Change Manifesto has the role to ensure that any gaps between our constitution and daily reality are closed over time. This has resulted in a number of internal projects that are currently being implemented, such as speeding up and facilitating the integration process of new colleagues and creating a career-path model.
3
06
20
05
23
31
20
23
70
I think employees in PE and Five Winds were both apprehensive about the changes associated with the merger. The merger makes a great deal of business sense, but would the ethics and passion driving each business be aligned? The answer is yes, both organizations are committed to operating with high standards of professionalism, honesty and integrity and both want to be recognized by customers and employees for their ability to support the sustainability journey. Jennifer Clipsham, Senior Consultant,
20
thought leadership and networks PE INTERNATIONAL is engaged in developing cutting edge solutions through its participation in leading forums such as the International Organization for Standardization (ISO), the Carbon Disclosure Project, the Water Footprint
Network, the UN Environmental Program, the Society of Environmental Toxicology and Chemistry, and many others. We are also involved with the World Green Building Council and many of the national councils in Europe and North America.
Our international experts helped draft the ISO 14040 series of standards on environmental management and life cycle assessment and continue to contribute to the development of new methodologies such as the new Scope 3 Carbon Standard. We work collaboratively to drive innovation through membership in initiatives such as the Sustainability Consortium, the Green Products Roundtable and WRI/GHG Greenhouse Gas Protocol working groups. We also convene our own leading forum – the annual Sustainability Symposium – where sustainability professionals meet to share best practices, perspectives on current trends and market opportunities. Another thought leader initiative is the Five Winds Product Sustainability Round Table, where we have been bringing together sustainability leaders for over a decade.
»PE is the partner of choice for enter-
prise software providers aiming to dig deeper into the sustainability dimension of business.
Their long-term experience and dedication to true business solutions make them an ideal partner to integrate sustainability into standard processes and systems of record. We are pleased to work with PE for the benefit of our customer base. Raj Khoshoo, Vice President Strategic Initiatives, Siemens PLM
the pe guiding coalition The PE Guiding Coalition (GC) represents the employee stakeholders of PE, encourages buy-in, and promotes integration and communication between all stakeholders. The main purpose of the GC is to create and preserve a common understanding of our values. Facilitating and building teams and initiating change projects are the current tasks of the GC in a dynamic PE organization.
Partnerships that help us shape the market have been established with software companies such as Siemens PLM and Dassault Systèmes focusing on the integration of product sustainability into product design and life cycle management. Other partnerships that we rely on are with consulting companies like Tata Consultancy Services, and with many other regional partners around the globe. Because PE is influential in establishing sustainability industry rules and best practices, we are in the unique position to help our clients navigate the transition from “reacting to market pressures” to “shaping the market”. We are committed to strengthening this position in 2012 and beyond.
07 21
PE INTERNATIONAL Moving on.
At PE, we believe that sustainability management – like any other activity – should support the mission of a company, and that it must create value. Sustainability value for the company stakeholders, by definition, but also financial value in the traditional sense. Any activity that creates value in both dimensions will greatly impact an organization and create a lot more dynamism, accelerating change in the right, more sustainable direction. What does this mean for the sustainability management of PE? Well, we will maintain our carbon reduction and carbon neutrality approach, our community investment initiatives, our support of university education and our Guiding Coalition work.
But into the future, we will look for additional activities that support our PE core mission: to help companies walk a more sustainable path:
» Where do our sustainability solutions and services
create business value, how can this value be measured, and how can we communicate this to the market place and to all stakeholders in order to motivate them to grasp the opportunities?
» What are the most innovative and efficient ways to
achieve sustainability and business goals? How can these new approaches developed by thought leaders and industry leaders be promoted to the broader market so that others are encouraged to take them up?
It is a hugely challenging task to drive a market, and PE has only 200 people today. However, we feel that by finding answers to these questions together with our growth strategy, we can help make an even bigger difference. This is part of our sustainability mission at PE.
»Sustainability Management
delivers its real value when it effectively supports the company mission and contributes to the strategic and operational goals.
dr. robert Gabriel, Executive Director
Corporate Sustainability & strategy, pe international
We look forward to receiving your feedback: r.gabriel @ pe-international.com
glossary glossary € AG
APAC
CDP CEO CFO
CO2
CO2e dpi
ECA
EMEA EPD EU
FSC
FTE GJ
GHG
GmbH
GO
GRI
ISO kg
LCA
NGO PAS
PE
Scope 1 Scope 2 Scope 3 SETAC t
UN GC WRI
FSC certified paper (www.fsc.org)
Euro Aktiengesellschaft (Corporation under German law) Asia Pacific (East Asia, Southeast Asia, Oceania) Carbon Disclosure Project Chief Executive Officer Chief Financial Officer Carbon dioxide Carbon dioxide equivalent Dots per inch Eastern Europe and Central Asia Europe, Middle East, Africa Environmental Product Declaration European Union Forest Stewardship Council Full-time equivalent Gigajoule Greenhouse gas Gesellschaft mit beschränkter Haftung (Limited Liability Company) Governmental Organization Global Reporting Initiative International Organization for Standardization Kilogram Life Cycle Assessment Non-Governmental Organization Publicly Available Specification PE INTERNATIONAL GHG emissions from sources that are owned or controlled by the company GHG emissions from the generation of purchased electricity Indirect GHG emissions from sources not owned or controlled by the company Society of Environmental Toxicology and Chemistry ton United Nations Global Compact World Resources Institute
Profile
Moving on. Sustainability Report ’10/11
Information in brief
Further Information
Letter from CEO, Michael Betz
See p. 3
Strategy and Analysis 1.1
CEO statement
Organizational Profile 2.1
Name of the organization
PE INTERNATIONAL AG
2.2
Primary brands, products, and/or services
Sustainability consulting services, GaBi Software, SoFi Software
See p. 8/9
2.3
Operational structure of the organization
Management Board supported by VPs for expert teams and Managing Directors for PE subsidiaries
See p. 15
2.4
Location of organization’s headquarters
Leinfelden-Echterdingen, Germany
2.5
Countries of operation
Headquarters/subsidiaries/offices in 14 countries
2.6
Nature of ownership and legal form
Corporation under German law (AG)-privately owned
2.7
Markets served
World-wide operations in almost all sectors
See p. 6
2.8
Scale of the reporting organization
SME, 141 employees
See p. 6/ 7
2.9
Significant changes during the reporting period
Change in corporate structure from a GmbH to an AG, Merger with Five Winds International, Investment round completed
See p. 3 and p. 6/7
2.10
Awards received in the reporting period
None
See p. 7
Report Parameters 3.1
Reporting period
1 Jan 2010-31 Dez 2010; non-quantitative information included until 30 Sep 2011
3.2
Date of most recent previous report
2009 report, available on PE website
3.3
Reporting cycle
Annual; next report planned for May 2013
3.4
Contact point
Dr. Robert Gabriel
See p. 22
3.5
Process for defining report content
Materiality assessment included interviews with representatives of four key stakeholder groups
See p. 14/15
3.6
Boundary of the report
PE INTERNATIONAL Group (PE INTERNATIONAL AG and majority controlled worldwide offices)
3.7
Specific limitations on the scope or boundary of the report
None
3.8
Basis for reporting on entities that can significantly affect comparability from period to period and/or between organizations
None
3.10
Re-statements of information provided in earlier reports
None
3.11
Significant changes from previous reporting periods
Merger with Five Winds International
3.12
GRI content index
foldout page
See p. 7
Governance, Commitments and Engagement 4.1
Governance structure of the organization
Change of legal form to a corporation under German law (AG)
See p. 14/15
4.2
Is the Chair of the highest governance body also an executive officer?
No
4.3
Number of members of the highest governance body that are independent and/or nonexecutive members
Two independent members and four non-executive members
4.4
Shareholders’ and employees’ mechanisms to provide recommendations or direction to the highest governance body
Regular shareholder meetings, employees can approach management via the Guiding Coalition
See p. 20/21
4.14
List of stakeholder groups engaged by the organization
Clients, strategic partners, investors and employees
See p. 14/15
4.15
Identification and selection of stakeholders with whom to engage
Ongoing engagement with clients, strategic partners, employees and investors
See p. 14/15, 16, 20/21
Performance Indicators
Indicators GRI
Information in brief
UN GC
CDP
Further Information
Environmental Energy
EN3
P8
12.3
Direct energy consumption by primary energy source
515 GJ
EN4
P8
13.6
Indirect energy consumption by primary energy source
2329 GJ
Emissions, Effluents and Waste EN16
P8
11, 12, 13
Total direct and indirect GHG emissions by weight
137 t CO2e
See p. 16/17
EN17
P8
15.1
Other relevant indirect GHG emissions by weight
758 t CO2e
See p. 16/17
EN18
P7, P8, P9
9.7
Initiatives to reduce GHG emissions/reductions achieved
Recorded a slight increase in emissions per employee (0.5 %) and significant reduction per unit of turnover (15 %)
See p. 18/19
Compliance EN28
3
Fines and number of sanctions for noncompliance with environmental laws and regulations
0 €, 0 cases
Labor Practices and decent Work Employment LA1 LA2
P6
LA7
P1
Total workforce
141 employees (126 FTE)
See p. 20
Employee turnover
2,3 %
See p. 20/21
Occupational Health and Safety Rates of injury, occupational diseases, lost days, and absenteism, and number of workrelated fatalities by region
0
Product Responsibility Customer Privacy PR8
Complaints regarding breaches of customer privacy/losses of customer data
0 complaints
Society Public Policy SO5
all
Public policy positions and participation in public policy development and lobbying
Memberships in standardization and sector organizations
See p. 16 and 21
Compliance SO8
Fines and total number of sanctions for noncompliance with laws and regulations
0 €, 0 cases
Economic Economic Performance EC2
P7
Financial implications/risks and opportunities for activities due to climate change
Approx. € 10,000 to be paid for CO2 certificates to achieve carbon neutral operations
Risks and opportunities p. 13, 16
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