Monitoring the supply chain

Stahl monitors and manages potential risks related to human rights and modern slavery through a combination of policies, training and strong governance. We require all employees  to be trained so that we can apply the policies throughout our organisation as well as the supply chain.

Building a responsible supply chain

As part of our commitment to responsible sourcing, Stahl is working on providing supply chain transparency for the renewable carbon feedstocks in our products. These materials must be sourced with care, to ensure that the land on which they are grown is not exposed to supply chain risks. ISCC PLUS certification is one way to ensure this.

Stahl has a dedicated Supply Chain Transparency Manager to oversee efforts to increase transparency in our supplier networks and support the drive toward a more responsible chemical value chain.

Building on our EcoVadis achievement

The EcoVadis process is a key marker on our ESG journey and our ambition to contribute to a more responsible value chain. As part of our ESG Roadmap to 2030, we have set a target for all of our EcoVadis-rated suppliers to achieve a minimum score of 47 out of 100. We are taking proactive steps to achieve this, including working with our suppliers to help them adopt more responsible and sustainable practices, such as the transition to renewable feedstocks. This goes hand in hand with our increased focus on supply chain transparency. 

At the same time, we are committed to maintaining the high standards we have set for ourselves in our EcoVadis assessment process and ranking. Our focus is on using the process to identify and address potential areas for improvement within Stahl, and to ensure that we make progress against the targets we have set for ourselves, such as our greenhouse gas emissions reduction target. We will also address new criteria as they are added to the EcoVadis assessment process, such as our impact on biodiversity. 

Maintaining our EcoVadis Platinum rating

In 2023, Stahl retained its EcoVadis Platinum rating, again placing us among the top 1% of companies assessed by EcoVadis worldwide. 

For the 2023 EcoVadis assessment, Stahl received an overall score of 80 out of 100, up from 77 in 2022. In particular, the assessment revealed our progress in the Labour & Human Rights category, where we scored 90 out of 100. This reflects the work done in 2023 to improve our health and safety management systems, as well as the steps taken to improve employee career development and well-being.

Stahl Campus®

In 2023, Stahl established a new position of Campus Manager for China, based at our new state-of-the-art Centre of Excellence in Foshan, Guangdong. There are now four Stahl Campus® locations with dedicated Campus Managers, who are focused on training and educating external stakeholders on the science and art of sustainable leather-making. The managers are based in the Netherlands, Mexico, India and China. 

In 2023, 1,453 professionals from 136 organisations, including customers, universities, brands and OEMs, attended Stahl Campus® training courses around the world. Approximately 50% of our visitors were from clients in the leather supply chain. The remaining 50% were visitors from brands and universities. Online sessions also continued in 2023, though at a much lower frequency than 2020-2022.

A flagship Stahl Campus® course is the Automotive Leather Finishing Postgraduate Certificate course. The six-week course, held at Stahl Campus® Netherlands in 2023, was the third of its kind that Stahl has delivered. It was developed in collaboration with the University of Northampton (UoN), with students receiving a postgraduate certificate from the UoN upon completion. Eleven students graduated from the 2023 programme. We are planning to run the next PG Certificate six-week course during the 2024-2025 academic year.

The company has already incorporated climate resilience into its strategy and operations. In 2023 we built a climate change matrix to assess climate-related risks, based on a range of studied scenarios, and calculated their potential financial impact.

Working with our partners to strengthen industry governance

Stahl’s industry collaborations and partnerships amplify our positive impact and allow us to touch more lives as part of a responsible value chain.

Stahl is a founding member of the Renewable Carbon Initiative (RCI), which aims to accelerate the transition to renewable feedstocks within the chemical value chain. In 2023, Stahl participated in several RCI Working Group activities, including those focused on renewable carbon content labelling and life cycle assessments. We also contributed to several published papers on renewable feedstocks.

Meanwhile, Stahl continued to contribute to ZDHC, a multi-stakeholder initiative to eliminate unwanted substances from the fashion and footwear supply chain. This follows the election of Stahl’s Group Director of ESG to the ZDHC Board of Directors in 2021. Stahl is one of two chemical industry representatives on the Board. 

Stahl is also an active member of the Leather Working Group (LWG), and served on the LWG Executive Committee as a board member from 2017 to 2021.

In December 2023, the European Commission, Parliament and Council reached a preliminary political agreement on the Corporate Sustainability Due Diligence Directive (CS3D), aimed at embedding human rights and environmental considerations in the operations and corporate governance of large European companies. 

The directive sets out the obligations for businesses regarding actual and potential adverse impacts on the environment and human rights for their business chain of activities. These requirements relate to companies’ upstream business partners as well as some downstream activities, such as distribution or recycling. 

We have set up a dedicated CS3D Working Group to understand the specific requirements for Stahl under the directive and how to address these.

CS3D

The EU Green taxonomy for sustainable activities is a classification system introduced in the context of the European Green Deal to clarify which investments are environmentally sustainable. The aim is to prevent greenwashing and to help investors make better choices about a company’s ESG credentials. The EU Taxonomy requires companies like Stahl to disclose whether their activities are eligible (may be sustainable) and aligned (are sustainable). In 2023, Stahl disclosed its eligibility and alignment with the EU Taxonomy based on the sales turnover of its water-based (low-carbon) products and capital expenditures linked to its sustainable activity. The alignment of these products is disclosed in the Stahl chapter of the 2023 Wendel Universal Registration Document.

EU green taxonomy

Strengthening our commitment to climate change mitigation

The French anti-corruption law, SAPIN II, requires certain companies to implement measures to prevent and detect corruption and influence-peddling offences committed in France and abroad. Stahl is subject to this law and has a compliance programme in place to implement the required measures. Stahl applies a zero-tolerance policy with regard to corruption.

French SAPIN II Law on corruption

Employee engagement is critical to compliance. Our 2030 goal is for 100% of Stahl employees to be trained in the elimination of corruption and bribery in all its forms. In 2023, 91.5% of all employees worldwide received anti-bribery and anti-corruption training.

In 2023, five whistleblowing cases were brought to light. These were promptly investigated and resolved.

More detailed information is available in the Stahl Compliance Report, which is available on our website. The report focuses on: a) Local laws and regulations b) SAPIN 2 (anti-corruption) legislation c) Sanctions and embargoes d) Safety, health, and environment (“SHE”) / Process safety e) Compliance policies / Whistleblower process f) Business Partner Compliance Procedure g) External business rating on sustainability and ethics h) Modern Slavery i) Diversity j) Compliance training, and k) Privacy rules.

Stahl Compliance Report 2023

Stahl’s strategic direction and supporting policies are influenced by and aligned with the UN Sustainable Development Goals (SDGs), the Ten Principles of the UN Global Compact and the OECD Guidelines for Multinational Enterprises. Our policies are designed to mitigate potential risks across a wide range of issues, including human and labour-related rights, the environment and anti-corruption. 

Stahl’s core policies related to ethics and compliance include:

The working groups are responsible for collecting relevant information (including ESG data, procurement data and R&D data) to build a business case to support the transition from specific raw materials to lower-impact feedstocks. The findings from the respective group members are discussed in regular working group meetings.

The groups also carry out impact assessments and procurement risk assessments to support the Steering Committee in its final decision-making.

The working groups are overseen by a Steering Committee comprising the directors of Stahl’s business units (Performance Coatings, Leather, Packaging Coatings), as well as the company’s Procurement Director and Group Director for ESG. The respective working groups are tasked with helping the Steering Committee decide which new raw materials Stahl should introduce based on their impact on our scope 3 emissions. The Working Groups are also asked to report on new proposals that could lead to scope 3 emission reductions.

Each working group comprises representatives from various parts of the Stahl organisation, who offer specific skills and competencies that support the group’s overall goals:

Stahl recently reassessed all 15 GHG scope 3 emissions categories with the help of an external consultant, providing an accurate understanding of how our scope 3 emissions are generated and formed the foundation for setting our scope 3 emissions reduction target. Following this, Stahl assigned dedicated Scope 3 Working Groups to help us make progress. The groups are responsible for reporting the impact of replacing specific categories of raw materials used in our processes with lower-carbon alternatives. They include: 

Ethics and compliance

Scope 3 Working Groups

Stahl's ESG team

Stahl’s ESG team actively engages with staff from finance, legal counsel, sales teams, product managers, researchers, product stewardship and operations to monitor the implementation of the company strategy and to discuss progress on new initiatives related to ESG performance and leadership. The team also meets with the Wendel Group ESG team on a quarterly basis to review progress against Stahl’s ESG Roadmap targets.

ESG GOVERNANCE AT STAHL

Reported scope 1 and 2 include emissions from Stahl’s 11 manufacturing sites, excluding the ICP Industrial Solutions Group locations acquired in 2023. 

Note: non-manufacturing Stahl locations, such as offices, labs and home offices, were excluded from the 2023 reported GHG emissions. 

We have a responsibility to our stakeholders to manage our business responsibly – as well as profitably – and to demonstrate business practices that are consistently ethical, transparent, and accountable. We believe this is the foundation of good governance.

Our approach to governance begins with listening to our stakeholders to understand their expectations of us and the issues that matter to them. From here, we can define the ESG topics that are material (significant) to our business and address them through our strategy and ESG approach. In 2023, we established a project team to prepare for the EU’s forthcoming Corporate Sustainability Reporting Directive (CSRD). The CSRD requires a double materiality assessment, which considers the impact of the company on society and the environment, as well as the impact of societal and environmental issues on the company. Stahl completed its first double materiality assessment in 2023 as part of its preparations for CSRD compliance. 

In addition to governing our own operations, we strive to ensure a transparent, well-governed supply chain. By participating in sustainability rating programmes, such as EcoVadis, and encouraging our suppliers to participate, we monitor our own ESG performance while ensuring that our partners follow similar standards on issues such as environmental impact, health and safety and human rights.

Stahl is also an active member of industry initiatives such as the Renewable Carbon Initiative (RCI), the ZDHC Foundation and the Leather Working Group. These collaborations provide a platform for us to support good governance in our value chains.