Steering of Product Portfolio Based on Sustainability Performance

• Increase sales from Accelerator products

A significant steering tool for our product portfolio, based on the sustainability performance of our products, is the Sustainable Solution Steering method. By the end of the 2019 business year, we had conducted sustainability analyses and assessments for 96.3% of our relevant portfolio¹ of more than 50,000 specific product applications, accounting for €51.9 billion in sales.² These consider the products’ application in various markets and sectors. New market requirements arise as a result of the continuous development of new product solutions in the industry or changing regulatory frameworks. This has an effect on comparative assessments, which is why we regularly re-assess our product portfolio.

Classification of relevant portfolio^{1, 2} according to the Sustainable Solution Steering method

Transparently classifying our products on the basis of their contribution to sustainability enables us to systematically improve them. Accelerator products make a substantial sustainability contribution in the value chain. Based on our corporate strategy, we have therefore set ourselves a global target: We aim to make sustainability an even greater part of our innovation power and achieve €22 billion in Accelerator sales by 2025. In 2019, we achieved sales of €15.0 billion with Accelerator products (2018: €14.3 billion).² The construction chemicals activities, which are presented as discontinued operations, are no longer taken into account. The resulting decline in sales of Accelerator products was however offset by the first-time assessment of the strategically relevant trading business portfolio. At the same time, this first-time segmentation increased sales of Transitioner products.

If, during re-assessment of our portfolio, we identify products with substantial sustainability concerns, we classify these as “Challenged.” We develop and implement action plans for all products in this category. These action plans include research projects and reformulations to optimize products, or even replacing the product with an alternative.

To systematically align our portfolio with contributions to sustainability, as of 2018, we will phase out all Challenged products within five years of initial classification as such at the latest. We strive to offer products that make a greater contribution to sustainability in their area of application to live up to our own commitments and meet our customers’ demands. This is why our Sustainable Solution Steering method is used in areas such as our research and development pipeline, in business strategies as well as in merger and acquisition projects.