Sustainability performance report
5. Economy (EC)
DMA-EC Management Approach Economy
As a key objective of the company, the economic performance of the Geberit Group is under the strategic control of the Board of Directors and the operative management of the Group Executive Board (aspects economic performance, market presence, indirect economic effects).
Crucial for sustainable success is a clear business strategy combined with its resolute and consistent implementation. The focused, tried-and-tested strategy rests on four strategic pillars:
- Focus on sanitary technology
- Commitment to innovation
- Selective geographic expansion
- Continuous optimization of business processes
For more detailed explanations of the four strategic pillars, see → www.geberit.com > Company > Vision and strategy.
For an explanation of the economic situation of the Geberit Group, see → Business Report > Business and financial review > Market environment.
EC1 Economic performance
Significant indicators for the generation and distribution of value in accordance with GRI requirements can be found in the financial report:
Direct economic value added
Sales and operating profit, see → Financial report > Consolidated financial statements Geberit Group > Income statements.
Economic values passed on
- Operating expenses excl. personnel expenses, see → Financial report > Consolidated financial statements Geberit Group > Income statements.
- Personnel expenses, see → Key figures sustainability > Employees and society.
- Payments to providers of capital, see → Financial report > Consolidated financial statements Geberit Group > Statements of cashflows.
- Social commitments, see → EC8.
Retained economic values
- Investments in and divestments of property, plant and equipment, see → Financial report > Consolidated financial statements Geberit Group > Statements of cashflows.
- Share buyback, see → Financial report > Consolidated financial statements Geberit Group > Notes > Note 22.
EC2 Financial implications of climate change
Climate change is influencing the availability of water resources throughout the world. A study published in 2010 by SAM, a global asset management company focused on sustainable asset management, names four main issues that will impact the topic of water in the future: the increase in world population, antiquated or lacking infrastructure for drinking water supply and wastewater disposal, increasing demands on water quality, and climate change leading to shifts in water balance. These trends influence the sanitary technology of tomorrow. Water-saving, resource-efficient products will therefore become increasingly important. Geberit takes advantage of these opportunities to profit from the increasing worldwide demand for water-saving products to contribute towards the diligent handling of water and thus to make a name for itself as a leader in sustainability.
Geberit is exposed to an average risk of natural disasters caused by climate change which can fundamentally affect production areas or transport areas. None of the production sites is particularly at risk in this respect. As Geberit does not operate in the classically energy-intensive industries, there are currently no special CO2 regulations such as statutory emission limitations, etc. On the other hand, Geberit is indirectly affected by higher energy or raw material prices or by generally increasing requirements in terms of energy management. Through the energy master plan as well as the measures as part of the CO2 strategy (see → EN18), Geberit is reacting proactively and is continuously working to improve energy efficiency and thus to reduce related risks. In terms of general risks, the Audit Committee of the Board of Directors has implemented an extensive system for monitoring and controlling the risks linked to the business activities, see → Financial report > Consolidated financial statements Geberit Group > Notes > Note 4.
There is no systematic, data-supported analysis of the financial consequences of climate change for Geberit.
EC3 Coverage of the organization’s benefit plan obligations
The Geberit Group sponsors defined benefit plans for its employees in Switzerland, Germany, Austria and the US. For further information, see → Financial report > Consolidated financial statements Geberit Group > Notes > Note 3 > Retirement benefit plans and → Financial report > Consolidated financial statements Geberit Group > Notes > Note 17.
EC4 Significant financial assistance received from government
Significant contributions from the public sector include:
- Statements with respect to income taxes, see → Financial report > Consolidated financial statements Geberit Group > Notes > Note 27.
- On the basis of new investments to promote the respective business location and secure jobs, Geberit received government investment subsidies totaling approximately CHF 2.4 million in the period under review (Switzerland: CHF 0.9 million, Germany: CHF 1.4 million, Austria: CHF 0.1 million).
- Contributions to support for training and part-time employment prior to retirement amounted to CHF 0.8 million (Germany: CHF 0.5 million, Austria: CHF 0.3 million).
EC5 Ratio of standard entry level wage compared to local minimum wage
Geberit pays market-rate wages, taking into account local circumstances and laws. When selecting employees and determining their assignment in the company, Geberit attaches great importance to qualifications appropriate to the task description. According to the annual binding survey of all companies, no employees are hired in the minimum-wage segment.
This information covers the requirements of the GRI indicator partially.
EC6 Selection of locally-based suppliers
Geberit pursues a procurement policy focusing on low costs, safety and independence. Before a collaboration agreement can be concluded, a multiple-stage risk analysis and assessment including environmental and social risks are carried out for every new supplier (see also → HR2). Taking account of all aspects relevant to purchasing (guidelines in the Geberit Group purchasing manual), there are no directives concerning preferential treatment of local suppliers, especially from certain countries. Nevertheless, Geberit supports regional institutions for disabled persons and the long-term unemployed (see → EC8).
EC7 Procedures for local hiring
Geberit has no personnel policy or employment practices providing for preferential treatment of persons from local vicinities in connection with the hiring of members of management boards for the respective country organizations.
EC8 Investments in infrastructure and services primarily for public benefit
Donations and financial contributions, including product donations totaling CHF 2.7 million (prior year: CHF 2.9 million), were made during the year under review. In addition, Geberit employees contributed approximately 2,390 hours of charitable work as part of social projects (prior year: 2,200 hours). Geberit also supports facilities for handicapped persons and the long-term unemployed, where simple installation and packaging work in the amount of around CHF 3.5 million was carried out in 2011 (prior year: 4.0 million). See also → Key figures sustainability > Employees and society .
As defined in its vision statement, Geberit desires to make a sustainable contribution to improving people's quality of life. To this end, various social-aid projects are supported on site with products, expertise and financial contributions. Care is taken to ensure that the topic of water plays a central role and that the projects exhibit a substantial relationship to Geberit’s core competencies and corporate culture. The focus was on the following projects and partnerships in 2011:
- → Project in the Serbian city of Kraljevo: Renovation of seven sanitary facilities at two schools. At the end of June, a Geberit team with eleven individuals (nine apprentices from Germany and Austria, a supervisor and a technical advisor) actively supported the renovation work for two weeks.
- Continuation of the partnership launched in 2008 with renowned adventurer Mike Horn.
- Long-term partnership with the Swiss development organization Helvetas
EC9 Indirect economic impacts
There is no systematic, data-supported analysis concerning indirect economic impacts. Geberit nevertheless pursues a long-term approach in dealings with its customers and stakeholders, thereby also making a significant contribution towards their economic development.
Geberit provides important impulses for the sanitary industry through innovation and new products, which are sold and implemented throughout the world by wholesalers, plumbers and sanitary engineers, and thus make significant contributions towards economic development. This is supplemented by the intensive support of plumbers and sanitary engineers through training and advising, see → Business Report > Business and financial review > Customers.
Also to be emphasized are the economic effects on suppliers, transport companies and the local economic regions of the production sites. In 2011 Geberit procured goods with a purchase value of approximately CHF 610 million (prior year: CHF 570 million). Geberit has relations with a total of more than 1,100 suppliers. Geberit does not have its own transport fleet and contracts external transport companies for logistics services. Geberit places its faith in its 16 production companies in Europe, China and the USA as well as in its Logistics Center in Pfullendorf (DE), and is continuously investing.
This information covers the requirements of the GRI indicator partially.