Priority topic assessment

Sustainability Report 2017

Priority topic assessment

We engaged in a three-pronged qualitative assessment approach to identify our priority topics. The approach looked at:

  • mega-trends and regulatory developments,
  • corporate objectives and values and 
  • opportunities to support global sustainable development.

By looking at mega-trends and regulatory developments that might impact our business area, we identified future opportunities.

Examples of relevance to us include projections on access to water, water quality and treatment, refugee streams and geo-political developments. We also saw a trend in legislation on human rights issues (including modern slavery), chemicals, conflict minerals and transparency requirements that could lead to these issues being more closely integrated, especially as value chain transparency increases. This trend challenges what one could call the traditional triple bottom line approach to sustainability, with the three topics (people, planet, profit) often thought of and approached separately. Digitalisation plays a significant role in altering the way we work, live and relate to each other – from the way our customers shop to the way we manufacture, the solutions we offer and the impact we can have on “the triple bottom line”. 

We took a fresh look at our corporate objectives and values in this context to better understand how we are currently positioned and assess our impact now and in the future. This led to the identification of opportunities for Grundfos to support global sustainable development, which incorporated an analysis of SDG opportunities and gaps. We followed an impact-based approach to our business strengths within pumps, pump solutions, service and water technologies, always asking, 'How can we enhance our social value as a business?'

We engaged a wide range of stakeholders in a more traditional materiality survey, asking them to rank different topics. The survey was not as robust as we would have liked and we used the results with some caution, adding interviews as verification. 

The result was the identification of “future proof” material topics – those where we have an impact today and those that lie ahead. 

Theory of change

How we arrived at the material topics

For "Green at Heart" and "Passionate about Water", we holistically assessed these three areas:

  • (a) trends within water, energy and climate
  • (b) our mission to care for the planet
  • (c) key business strengths and potential impact areas within efficient pump solutions, service and water technology

"Green at Heart" focuses on reduced impact on resources (energy efficiency, product life-cycle and environmental footprint), while "Passionate about Water" focuses on helping with the world’s water challenges (water for all and partnerships for water). 

For "Responsible" and "Ethics and Integrity", we coupled:

  • (a) trends within regulation, societal expectations, and social contract issues
  • (b) our values and mission to improve the quality of life
  • (c) key business strengths within a diverse and inclusive workforce which conducts business in an ethical manner.

"Responsible" focuses on creating a diverse, inclusive and safe workplace (health and safety, employee satisfaction, diversity and inclusion, and local communities), while "Ethics and Integrity" focuses on social contract issues (anti-corruption, human rights and a sustainable supply chain). 

To place the findings in the context of the wider business, the topics are assessed in terms of “theory of change”, showing how we see the connection between them and the impact we aim for, as expressed in our purpose.

Outcomes are notoriously challenging to measure – they are often qualitative in nature and affected by numerous other elements in society. We attempt to report on the outcomes in the SDG (see the GRI Index) whilst a large part of the sustainability report is dedicated to the outputs – processes, standards and programmes that support the realisation of the intended impact. They should be seen together, because only together do they draw a picture of our intentions, efforts and in the end – outcomes and impact. 

We have used the same key indicators to track our performance for a decade, enabling transparent year-on-year comparisons.  To retain the benefit of this comparison capability we maintain the same key performance indicators, while performance on our material topics can be tracked in the GRI Index.

A “future proof” assessment?

We embarked on a process to “future proof” the materiality assessment. We did this by working with mega-trends, regulatory developments, and company purpose and values, building on assumptions about what the world is and may become. Consequently, it is not a list of sustainability issues, but elements on which to build the future of Grundfos from a “sustainability meets business” point of view. 

The mega-trends we continue to track include access to water, water quality, food security and urbanization. Then there are regulatory trends on energy efficiency, renewable energy, digitalisation, human rights and anti-corruption, and a range of other issues that are important to efficiently running and future-proofing our business and operations. The tricky part is making sense of it all; to do so we have used the three-pronged, impact approach.

This means the findings are subject to change; changes in assumptions and changes in our actual and intended impact. Hence, we commit to constantly improve our understanding of the time we live in, our role and how we as a business can contribute positively to global sustainability.