Sustainability > 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 operational management of the Group Executive Board (aspects economic performance, market presence, indirect economic effects).
A clear business strategy and its consistent implementation are crucial for sustainable success. 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 detailed explanations of the four strategic pillars, see → www.geberit.com > Company > Vision and Strategy.
For a discussion of the economic position of the Geberit Group, see → Business report > Business and financial review.
EC1 Economic performance
Significant indicators for the generation and distribution of value in accordance with the 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 commitment, 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. In 2010, the World Bank forecast that the adjustment to an increase in temperature of the global climate of two degrees Celsius between 2020 and 2050 would cost between USD 70 and 100 billion per year. 20 percent of this is attributable to water supply and flood protection measures. The fourth UN World Water Development Report published in 2012 underlines the necessity to integrate the topic of water more prominently into global governance in view of the global trends. Sustainable water use is essential for ensuring viable social and economic development around the world. Water is of central importance for nutrition, health, the environment, the economy and energy production. Sensible water management therefore calls for cross-sector solutions.
These trends will determine the sanitary technologies of the future. Water-saving, resource-efficient products will become increasingly important. Geberit is taking advantage of the opportunity to meet the growing worldwide demand for water-saving products and to contribute towards the diligent handling of water, thus making a name for itself as a leader in sustainability. Products classified as special water-saving products already make a substantial contribution to Group sales → Business report > Business and financial review > Sustainability
Compared to this relatively big opportunity, Geberit is exposed to an average risk of natural disasters triggered 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 materials prices and by generally increasing requirements in terms of energy management. With its internal energy master plan and the measures related to its CO2 strategy (see → EN18), Geberit is reacting proactively and is working continuously on saving energy, improving its energy efficiency and reducing its CO2 emissions. In this way, the company is saving on energy costs and reducing the risks associated with CO2 emissions.
As far as corporate risks are concerned, the Audit Committee of the Board of Directors introduced a comprehensive system for the monitoring and management of the risks associated with the company's business activities, including the risk category CO2 emissions, 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 Scope of the organization’s defined benefit plan obligations
The Geberit Group sponsors defined benefit plans for its employees in Switzerland, Germany, Austria and the US.
For more information, see
→ Financial report > Consolidated financial statements Geberit Group > Notes > Note 3 > Retirement benefit plans.
→ Financial report > Consolidated financial statements Geberit Group > Notes > Note 17.
EC4 Significant financial assistance received from government
Significant assistance received from the public sector includes:
- For information on income taxes, see → Financial report > Consolidated financial statements Geberit Group > Notes > Note 26.
- Because of new investments to promote the respective business location and secure jobs, Geberit received government investment subsidies totaling approximately CHF 2.15 million in the reporting year (Switzerland: CHF 0.65 million, Germany: CHF 1.5 million).
- Contributions received to support training and part-time employment prior to retirement amounted to CHF 0.34 million (Germany: CHF 0.07 million, Austria: CHF 0.2 million, US: CHF 0.07 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. Applicable local minimum wages are well met.
This information partially covers the requirements of the GRI indicator.
EC6 Selection of locally based suppliers
Geberit pursues a procurement policy that focuses 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 is carried out for every new supplier (see also → HR2). Taking account of all aspects relevant to purchasing (guidelines in the Geberit Group's purchasing manual), there are no directives concerning preferential treatment of local suppliers, especially from certain countries. However, Geberit supports regional organizations 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 the 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 3.1 million (previous year CHF 2.7 million) were made during the reporting year. In addition, Geberit employees contributed 1,340 hours of charitable work as part of social projects (previous year 2,335 hours). Geberit also supports facilities for disabled persons and long-term unemployed, where simple assembly and packaging work in the amount of around CHF 4.4 million was carried out in 2013 (previous year CHF 4.8 million). See also → Key figures sustainability > Employees and society.
Geberit aims to achieve sustained improvement in the quality of people’s lives through innovative solutions in sanitary technology. To this end, various social projects are supported on site with products, know-how 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 2013:
- Execution of a → social project in Bucharest in Romania: Installation of sanitary facilities in a hospice for seriously ill adults and children, plus the voluntary care of patients (social work).
- Continuation of → the partnership with Helvetas (renewal of contract for three years) on the topic of clean drinking water and sanitary facilities.
- Continuation of the partnership with the Swiss WaterKiosk Foundation to clean polluted drinking water using a solar pasteurization process.
- Support with products and know-how in rebuilding a sports facility for the rugby team in Villa Sant’Angelo (IT) destroyed by the earthquake in 2009.
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 making a significant contribution to their economic development.
Geberit sets important trends for the sanitary industry: With innovation and new products that are sold and implemented worldwide by wholesalers, plumbers and planners and make a contribution to economic development. This is supplemented by providing training, advice and intensive support to plumbers and planners, see → Business report > Business and financial review > Customers. For example, this includes the training of over 3,000 planners and plumbers in 2013 on the implementation of new drinking water directives in Switzerland. Furthermore, the education of students and research on sanitary technology and sustainable construction are supported by cooperation with institutions such as the Swiss Federal Institute of Technology (ETH) in Zurich (CH), the University of Applied Sciences Rapperswil (CH) and Tongji University (CN).
Geberit uses its know-how to set industry-wide standards for water conservation and the relief of water and waste water systems. For example, Geberit actively worked on adapting the applicable standard for the dimensioning of waste water piping to smaller diameters. This is important so that the full functionality of the piping system is ensured even with lower quantities of waste water. Geberit also supported the launch of WELL (Water Efficiency Label), a product classification system for water-saving and resource-efficient sanitary products that was introduced in 2011.
Also to be emphasized are the economic impacts on suppliers, transport companies and the local economic regions of the production sites. The Group’s cost of materials in 2013 was CHF 597.2 million (previous year CHF 590.7 million). Geberit has relations with a total of more than 1,200 suppliers. The company does not have its own transport fleet and contracts external transport companies for logistics services. Geberit places its faith in its 17 production plants in Europe, China, India and the US as well as in its Logistics Center in Pfullendorf (DE), in which it continuously invests.
This information partially covers the requirements of the GRI indicator.