The AMAG Sustainability Report
What ESG stands for and the topics we report on
How much energy does AMAG consume per year? How is AMAG contributing to achieve climate neutrality? What is sustainable procurement management? How is AMAG implementing it? And to what extent does AMAG engage with social issues?
These are questions that diverse stakeholders have posed with increasing frequency over the last decade. While companies were previously often perceived solely on the basis of financial metrics, this has changed completely. In addition to indicators such as turnover, EBITDA, cashflow and ROCE, there has been a marked increase in stakeholders’ interest in non-financial topics, such as CO2 emissions, social engagement and anti-corruption measures - to name but a few. In 2016, this stakeholder interest was cast into a statutory framework with introduction of the EU’s Non-Financial Reporting Directive (NFRD). The Austrian Sustainability and Diversity Improvement Act (Nachhaltigkeits- und Diversitätsverbesserungsgesetz - NaDiVeG) transposed the NFRD into national law. The NaDiVeG has since applied to companies of public interest, which are large corporations as defined by the Austrian Business Code (Unternehmensgesetzbuch - UGB) and have more than 500 employees. As a result, non-financial reporting - often referred to as sustainability reporting - has been part of AMAG’s annual report since 2017, including information on key issues in the fields of environmental, social and governance (ESG). The ESG paradigm has provided the broad framework for the content of our sustainability reporting.
The EU taxonomy and the ESRS: The (new) reporting standards
The detailed requirements that AMAG is required to consider and implement when producing its non-financial reports are defined in several laws and standards. In addition to the Austrian NaDiVeG, AMAG has also published information on sustainable business activities in accordance with the EU Taxonomy Regulation since 2022. The aim is to provide information about how environmentally sustainable a company is, above all from an investment perspective.The EU Corporate Sustainability Reporting Directive (CSRD) came into force in January 2023. The impacts on reporting have been profound: the CSRD prescribes a structure, standardizes and significantly expands reporting obligations and, by introducing a standardized format, aims to ensure that reports are equally readable for humans and machines in future. The CSRD sets out the required information on environmental, social and employee-related issues, upholding human rights or combating corruption in a lengthy annex that runs for over 200 pages, known as the European Sustainability Reporting Standards (ESRS).AMAG is required to implement the ESRS in its upcoming sustainability report for 2024. Such reforms and additions to existing legislation are a major challenge for companies. Even though AMAG has been well positioned in this respect for a number of years, implementing the latest standards requires a considerable investment of time and human resources.
Materiality analyses: The cornerstone of the report
AMAG integrates a non-financial statement into its annual report, which is published in February each year. Before publication, there is an intensive period of roughly five months in which AMAG identifies topics to include in the report, collects figures, sets targets, and evaluates and adapts its processes and measures. The Sustainability department at AMAG, which is organized under Management Systems, serves as the central interface. It coordinates individual steps and gathers relevant information from different departments, providing a solid base for the linchpin in the reporting process: the materiality analysis.
This analysis, which is roughly structured into four steps (see Figure 1), determines which topics are of material importance for AMAG and, therefore, for its reporting. It takes account of all sustainability aspects in which AMAG has a significant economic, environmental or social impact on its surroundings (inside-out perspective) and in which external factors impact AMAG’s business activities in the form of risks and opportunities (outside-in perspective).The first step examines the company’s own activities and business relationships along with new statutory requirements and industry standards. Furthermore, it identifies and updates the list of AMAG’s stakeholders and explores potentially relevant sustainability aspects. The result of this first step is a long list of topics, which are allocated to three areas: environmental, social and governance (ESG). In a second step, these topics are broken down into potential impacts of AMAG’s activities as well as risks and opportunities for AMAG. If no impacts, risks or opportunities (known collectively as “IROs”) are identified for a given topic, it is discounted from the final report at this stage. Topics for which an IRO is identified move onto the third stage: a qualitative and quantitative assessment to classify their degree of materiality. The Sustainability department conducts this assessment in conjunction with experts from specialist departments and produces a shortlist of topics for the report.The Management Board, which bears overall responsibility for sustainability targets and reporting, is informed of the shortlist along with the company’s general sustainability performance at the annual meeting of the Sustainability Committee in autumn each year. In addition to members of the Management Board, the Sustainability Committee includes the managing directors of AMAG subsidiaries and department heads. Based on this shortlist of topics and the Sustainability Committee’s deliberations, the sustainability program is determined for the following years ahead, including corresponding targets. It is then approved by the Management Board. This paves the way for the fourth and final step in a materiality analysis: disclosure. The fourth step fires the starting pistol for the Sustainability department to write the sustainability report.
Report topics
The sustainability report sets out strategies, measures, indicators and targets for the material topics. Figure 2 shows a selection of sustainability aspects of material importance to AMAG.
Sustainability report auditing
The first version of the sustainability report must be finished by the start of December, because external auditors must conduct an initial, preliminary examination before the end of the year. No data for the entire year is available at the time of this initial audit, so specialist departments compile indicators for the first three quarters of the reporting year, including comparisons with the previous year. During the audit, evidence must be provided to back up both the text and the figures in the sustainability report.Specialist departments must demonstrate the methodologies they used to collect their figures and explain the measures they have taken to achieve their targets. In addition to the Sustainability department, which brings together all activities relevant to the report, Group Controlling plays an important role at this stage.In January, the sustainability report is subjected to a further, main audit based on the data for the entire year.
Where does AMAG publish its sustainability reports?
AMAG publishes its sustainability reports on its website. Navigate to the Investor Relations section, then select Publications and choose the relevant year.
Intended audience of sustainability reports
The questions listed in the introduction to this article come from a wide variety of stakeholders. In principle, AMAG stakeholders include people and groups who have legitimate economic, environmental, social or societal concerns and interests that are directly or indirectly related to AMAG’s business activities. AMAG has specifically defined six groups whose perspectives and interests are of particular relevance:
- Shareholders & investors
- Business partners
- Internal stakeholders
- General public
- Social partners & state authorities
- ESG trendsetters
Stakeholders’ questions, concerns and perspectives are actively considered during the materiality analysis. Alongside a range of dialogue formats at local, national and international levels, all stakeholders can engage in the discussion of potentially relevant sustainability topics at any time via an online survey (see link) on the AMAG website.The sustainability report is a compilation of all key issues from the perspective of stakeholders and the company, and which therefore must be reported, structured into different areas of ESG.As a result, the non-financial statement is a transparent and comprehensive reference text on AMAG’s sustainability performance, offering in-depth reading for interested parties within the company and beyond.
