Sustainable.
Viable.
Responsible.
2018 Sustainability Report

CONTENTS

FOREWORDABOUT THIS REPORT
4

About this report

17
17
18
19
20

About Heraeus
Global Business Units
New markets and business models

23
24
26
27

RESPONSIBILITY MANAGEMENT
10
10
11
14
15
15

Sustainability and Guiding Principles
Responsibility governance
Sustainability Roadmap
Framework and complianceIntegrating sustainability into business processes
Stakeholder dialogue

2018 Heraeus Sustainability Report

A sustainable approach to our business activities
Quality management and product responsibility
Value creation at Heraeus
Heraeus areas of activity
Promoting innovation

36
37
40

Sustainable procurement and responsibility when
trading in precious metals
Ensuring due diligence
Recycling at Heraeus
Conducting our own mine audits to ensure thatstandards are met

ENVIRONMENT AND OCCUPATIONAL HEALTH AND SAFETY
30
31

Sustainability in production and beyond
Environmental and safety aspects

The employer’s responsibility
Strengthening corporate culture through employee
and leadership development
Employee health

LOCATIONS AND FOUNDATIONSPROCUREMENT AND SUPPLY CHAINCOMPANY PROFILE
67
8EMPLOYEES AND CORPORATE CULTURE

PRODUCTS AND SOLUTIONS

42
42
44

A broad-based commitment to society
Working for the common good at every location
Heraeus foundations help to improve educationand promote social cohesion

FACTS AND FIGURES
46
47
50

Key figures
Index
Publication credits

2

FOREWORD

Dear readers,
As a family-owned company with a long-term orientation, we havenaturally focused on sustainability in our business activities for generations. Those who aim to succeed in the long term must responsibly manage all the resources involved in the value creation chain.
This includes the employees, and particularly the raw materials. Therefore, sustainability is an important corporate principle for Heraeus.
With our Sustainability Report, we document the action areas that
underpin our sustainable conduct and the goals we have set for the
future. The Sustainability Roadmap serves as our guide on the pathfrom varying regional activities to uniform company-wide action, which
will continue to take into account a variety of national standards.
In order to embed sustainability even more firmly in our company,
we are currently working on a strategy that will extend throughout
the company. We are developing a framework within which our business groups will play a key role as operational units. Using their own
Sustainability Roadmaps, the business groups will take on even more
responsibility for achieving their sustainability goals.

In light of demographic change, the topic of health is also increasingly
important. Here, product developments by Heraeus are helping to improve the quality of life, for example by providing cements for hip andknee joint prosthesis, fighting cancer, or opening new possibilities intreating heart and neurological diseases.
We are also helping to shape the future of mobility. Products from
Heraeus are invisible aids in a wide variety of mobility support devices. These products ensure that electronics, engines, lighting, andsecurity systems function seamlessly, contribute to environmental
protection, and make electromobility possible.

Maintaining sustainable business relationships in order to work together on products for a better future is an important goal for us.
Therefore, we have initiated a broad, systematic customer survey inindividual business groups. The resulting insights give valuable indications of how the business groups can offer their customers evenbetter performance. You will find the results of this survey in the Products and Solutions chapter.
I hope you will enjoy reading this Sustainability Report.

Jan Rinnert
Chairman of the Board of Management, CEO
of Heraeus Holding GmbHOur economic success largely stems from business activities that pursue the goals of sustainability. We focus on businesses in the areasof the environment, health care, and mobility. In times of growing
environmental problems and resource scarcity, Heraeus is contributing to new solutions that are more environmentally friendly as well as
effective, in areas such as exhaust gas cleaning and water treatment.

2018 Heraeus Sustainability Report

3

ABOUT THIS REPORT

About this report
The second Heraeus Sustainability Report describes our understanding of sustainable economic activity and corporate responsibility. It
delineates how Heraeus contributes to sustainable development. The
report thus provides new impetus for dialogue with our employees,
business partners, additional stakeholders and the interested public.
During the reporting period, the strategic goals associated with our
Sustainability Guidelines were operationalized in a roadmap. A crucial component for reaching our goals is to make our sustainability
performance measurable, transparent and readily understandable.
Therefore, in the Heraeus Sustainability Report we describe the status of implementation and highlight outstanding measures and the
involvement of various locations.

Reporting period and scopeThis 2018 Sustainability Report covers the period from January 1,
2017 to December 31, 2018. The report also provides information
about important activities that took place either before or after that
period, up until the editorial deadline in August 2019. The indicators
across a broad international reporting framework are based primarilyon the year 2018, with a three-year comparison for selected indicators.

The data were compiled via the established management systems ineach area of the company. The scope consists of the Heraeus Holding
GmbH with its eleven operational business groups (Global Business
Units) in 40 countries. It includes examples of sustainability efforts at
the local level. In some cases, the scope is limited due to the current
availability of data. These instances are noted. We plan to gradually
integrate all the locations of our business groups into the report andare now working to expand the relevant database.

This report is available on our website in German and English for
download by anyone interested atwww.herae.us/responsibility.
Contact for questions and comments on the Heraeus Sustainability
Report:Heraeus publishes sustainability reports every two years. The next report is expected to appear in 2021 and cover the years 2019 and2020.

Contents and reporting standard
We selected the topics according to their significance and the key
expectations of our stakeholders. The contents were then weighted
based on the corporate strategy and industry-specific topics. In eachchapter, the relevant challenges and measures are described. The
overview of our roadmap and the final chapter summarize all the important data and facts.
Our reporting already follows the guidelines of the GRI (Global Reporting Initiative) and should be further developed in the coming years toyield a GRI-compliant report.

2018 Heraeus Sustainability Report

Format and contacts

Bernhard Reckmann
Heraeus Holding
Responsibility Management
bernhard.reckmann@heraeus.com

4

COMPANY PROFILE

A family-owned portfolio company

2018 Heraeus Sustainability Report

5

COMPANY PROFILE

About Heraeus

7%

Heraeus, the technology group headquartered in Hanau, Germany, isa leading international family-owned portfolio company. The company’s roots go back to a pharmacy operated by the family since 1660.
Today, Heraeus combines businesses in the environmental, energy,
electronics, health, mobility and industrial applications sectors.
In the 2018 financial year, Heraeus generated total revenues of€20.3 billion, with approximately 15,000 employees in 40 countries.
Heraeus is now one of the top 10 family-owned companies in Germany and holds a leading position in its global markets.
With technical expertise, a commitment to excellence, a focus on
innovation and entrepreneurial leadership, we are constantly striving
to improve our performance. We create high-quality solutions for ourclients and strengthen their long-term competitiveness by combining
unique material expertise with leadership in technology.
High tech from Heraeus sailed into outer space 50 years ago, as partof the first moon landing: Triple prisms made of quartz glass still
make it possible to reliably measure the exact distance from Earth tothe moon. In addition, cubes made by Heraeus with a gold-platinum
alloy will soon penetrate even farther into space to detect gravitational
waves whose existence Albert Einstein described in theory more than
100 years ago.

15,000

Expenditure for researchand development measured
in terms of revenue notincluding precious metals.

EMPLOYEESPRODUCTREVENUES EXCL.
PRECIOUS METALS
by region

Africa/Australia 2%

Asia
43%

Germany
11%
OthersEurope19%

America25%2018 Heraeus Sustainability Report

IN 40 COUNTRIES€20.3

BILLIONTOTAL REVENUES

TOP 10FAMILY-OWNED COMPANY

in Germany with leading
position in its global markets

As of: Dec. 31, 2018
6

COMPANY PROFILE

Global Business Units
The Heraeus Group is organized under the umbrella of Heraeus Holding
in eleven market-oriented operational units called Global Business
Units (GBUs).

Heraeus Precious Metals is a world leader in precious metals services
and products as well as in trading precious metals used in industrial
processes. This unit brings together all the activities in the precious
metals cycle, from trading to precious metals production to recycling.
In addition, Heraeus Precious Metals ranks among the world’s largest
refiners of platinum group metals (PGM).

Heraeus Electronics is one of the leading manufacturers of materials for assembly and integrated circuits in the electronics industry.
The company develops sophisticated materials solutions for consumer
electronics and computing, the automotive industry, LED technology,
power electronics and communications. Its core competencies include bonding wires, assembly materials, thick film pastes, roll-cladbands and substrates, as well as their integration in well-coordinatedsystems.

Heraeus Epurio is the technology leader in essential materials for

Heraeus Comvance is the world’s largest manufacturer of synthetic

capacitor, display and photoresist applications. Its ultrapure special
chemicals are a critical component in the semiconductor, electronics
and aerospace industries. Heraeus Epurio is active globally, with research, innovation and production sites in Germany, the United Statesand Asia.

quartz glass for telecommunications. The product portfolio includes
high-purity quartz glass tubes for rod manufacturing, large RIC
cylinders as cladding material, and preform service for telecommunications fibers.

Heraeus Medical is a leader in the field of bone cements and bioma-

worldwide for special lamps and modules with wavelengths from ultraviolet to infrared. Applications range from analytical measurement
technology, infrared emitters for industrial heating processes and arc
and flash lamps, to water disinfection, air treatment and sun simulation.

terials for orthopedic surgery and traumatology. In the biomaterials
sector, Heraeus Medical focuses on products used in bone and joint
surgery. As the industry leader for bone cements, the company hasreceived numerous TOP 100 Awards for ranking among the most innovative of German SMEs.

Heraeus Medical Components offers the entire spectrum of products,

Heraeus Noblelight ranks among the market and technology leaders

Heraeus Electro-Nite has been the global leader in the field of mea-

from components to modules to complete solutions for the medical
technology industry. This includes electrodes for cardiac pacemakers
as well as markers for minimally invasive surgery or components forthe treatment of vascular diseases.

surement technology in molten metals for nearly 50 years, offering
a wide range of measurement probes, samplers and instruments formetal smelting. The metallurgical industry benefits from complete
measurement systems as well as customer-specific samplers for a
multitude of analytical tasks.

Heraeus Nexensos ranks among the worldwide market and technology

Heraeus Conamic, with locations in Germany and the United States,

Heraeus Photovoltaics is a leading developer and manufacturer ofleaders for platinum thin film technologies and the production ofplatinum temperature sensors and heaters. The possible applications
for precise temperature measurement extend from the automotive industry, household appliances, process technology, energy supply andmanagement to the life sciences, e-mobility and electronics.

is the world’s largest manufacturer of synthetic quartz glass for thesemiconductor industry and photonics. In addition to its portfolio
business with quartz glass, Heraeus Conamic focuses on high-performance materials such as ceramics and innovative composites.

silver-based electroplating pastes for the photovoltaics industry. The
Heraeus SOL Series of silver pastes for solar cell applications was
specially formulated for higher efficiencies and wider processing windows.

2018 Heraeus Sustainability Report

7

COMPANY PROFILE

New markets and business models
Heraeus is active in new markets and business models, maintaining
several units organized as startups for that purpose. To improve its
ability to benefit from agility and integrated thinking as well as interdisciplinary research and development, Heraeus fosters these business ideas separately from its business units.

Heraeus Amloy specializes in the development and processing of

Heraeus Printed Electronics works on developing digital printing

amorphous metals. With their unique material properties, combining
hardness with high elasticity as well as corrosion resistance and biocompatibility, amorphous metals are opening completely new hightech applications. The near-net-shape process solutions from Heraeus
AMLOY are optimally suited for industrial manufacturing.

processes that enable metallically conductive systems to print efficiently. This innovation, for example, is the basis for the electromagnetic shielding of components in 5G mobile phones.

Heraeus Additive Manufacturing develops and tests metal powders
and related processes for 3D printing. These applications are increasingly important, especially in the era of the digital transformation andIndustry 4.0. With a combined expertise in materials, manufacturing
processes and printing technologies, Heraeus Additive Manufacturingprovides the highest possible process reliability and efficiency for thecustomer.

Heraeus Battery Technology focuses on the optimization of batteries
for applications in the automotive sector, in industry and in consumer
applications. The company is developing Porocarb, the porous carbon
powder that enhances the transport processes in lithium ion batteries,
a key component for e-mobility.

2018 Heraeus Sustainability Report

8

RESPONSIBILITY MANAGEMENT

Conducting business responsibly2018 Heraeus Sustainability Report

9

RESPONSIBILITY MANAGEMENT

Sustainability and Guiding Principles
Maintaining the long-term independence of Heraeus as a family-owned company is paramount at all times and in every corporate
policy decision. This basic principle requires us to prioritize long-term
economic success over short-term maximization of profits. Therefore,
the activities of the business groups at Heraeus locations worldwide
are grounded in responsible treatment of financial and natural resources, our social environment, our business partners and our employees. These elements inspire our goal of dedicating our innovation,
our products, and our expertise to contributing to a better and moresustainable world.
In our Corporate Guiding Principles, we have set forth the core values
that should guide our daily behavior at all Heraeus locations worldwide. Based on these values, in 2016 we established Sustainability
Guidelines for our central, interdivisional action areas.

Responsibility governanceThe defined action areas for this report on the topic ofsustainability:
PRODUCTS AND SOLUTIONSPROCUREMENT AND SUPPLY CHAINENVIRONMENT AND OCCUPATIONAL HEALTH AND SAFETYEMPLOYEES AND CORPORATE CULTURE
LOCATIONS AND FOUNDATIONS

Embedding responsibility within the company
At Heraeus, the translation of responsibility as a corporate principle
into concrete measures for sustainable practice is primarily managed
by the individual business groups and their operational units. Here,the management systems constitute the framework for defining operational objectives, selecting measures and reviewing results based on
key indicators. The goal is to develop a uniform group-wide structure
for the compliance management systems and facilitate the ongoing
optimization of collaboration on sustainability issues.
The Group Responsibility Committee is located at the Group level. Together with the Heraeus Holding Board of Management, this committee will meet regularly to ensure that all Group functions are closely
coordinated in this process. Established in 2016, the Responsibility
Office under Legal & Responsibility supports the operational establishment and expansion of reliable, efficient processes and structures
for exercising corporate responsibility worldwide.
Based on the Sustainability Guidelines, the Group Sustainability
Board is defining goals and further developing the sustainability
strategy. As summarized in the Roadmap, each of the business groups
is using the framework at the Holding level to prepare its own sustainability roadmap.

Self-initiative and responsibility
Honesty, reliability and predictability
Creativity and enthusiasm for innovation
Conscientious treatment of employees
Responsible handling of financial and natural resources

2018 Heraeus Sustainability Report

10

RESPONSIBILITY MANAGEMENT

Sustainability Roadmap
Essential topics

Goal

KPI

Development of a uniform structure for existing compliance management
systems for ongoing optimization of cooperation and integration of
responsibility management at the Holding level.

No quantitative measurements

Value (2018)

Target date

Responsibility Management
Integration

2020

The business groups integrate sustainability aspects into their businessprocesses in regard to Mergers & Acquisition (M&A), investments and thearea of Supply Chain Excellence.
Operationalizing

Heraeus develops a framework at the Holding level.

2020

No quantitative measurements

2021

The business groups prepare their own Sustainability Roadmaps based on
the framework.

2021

Products and solutions
Innovative capacity

The business groups pursue technology leadership in their businesssegments through innovative solutions.

Group-wide expenditures for R&D as share of total revenues
excluding precious metals

6.8%

ongoing

Customer satisfaction

The business groups evaluate their performance in terms of customer
satisfaction.To do so, they measure customer satisfaction. A growing numberof business groups are using the Net Promoter Score as a metric.

Two thirds of the business groups that have already determined
their Net Promoter Score attain Excellence status based on therecommendation rate (>50 points).

Comparability
to previous
measurements not
given.

2021

First results for the2019 reportingyear.

ongoing

The performance score as the mean level of satisfaction acrossall performances achieves an overall value of at least 4.0.
Sustainability assessments
by customers

2018 Heraeus Sustainability Report

The business groups pursue the goal of achieving good to very good ratings
for the locations evaluated by the EcoVadis sustainability agencies and the
Responsible Business Alliance (RBA).

Share of reviews/audits completed with a good or very goodevaluation. (Achieving Silver/Gold status at EcoVadis or a scoreof at least 85 percent at the RBA).

2021

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RESPONSIBILITY MANAGEMENT

Sustainability Roadmap
Goal

KPI

Value (2018)

Target date

The business groups procure only from suppliers that have been tested andapproved. High-risk suppliers sign the Code of Conduct for Suppliers orprovide an equivalent declaration.

Share of high-risk suppliers that have signed the Heraeus Codeof Conduct for Suppliers or an equivalent declaration.

First results for the2019 reporting
year.

2025

High-risk suppliers are tested on a random basis by an audit on site.

Number of audits for high-risk suppliers.

Ensuring due diligence –precious metal trading andrecycling

Heraeus Precious Metals implements risk-appropriate processes for thepurchase and sale of precious metals as well as for the acceptance of
precious metals for recycling.

Number of suspicious transaction reports for money launderingin the areas of precious metals trading and recycling.

3

ongoing

Ensuring due diligence –procurement from precious
metals suppliers

Heraeus sources its precious metals exclusively from mines, which have been
audited on-site to ensure that they comply with the Code of Conduct.

Audit rate for mines

100%

ongoing

Essential topics
Procurement and supply chain
Ensuring due diligence –procurement from high-risk
suppliers2018 Heraeus Sustainability Report

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RESPONSIBILITY MANAGEMENT

Sustainability Roadmap
Essential topics

Goal

KPI

Value (2018)

Target date

Environment and occupational safety
Prevention of workplace
accidents

The business groups strive to reduce workplace accidents.
Safety campaigns and action days are held to promote prevention.

Percentage change from previous year

Decline by 34%

2025

Systematic EHS
Management

For each production site, the business groups establish an integrated EHS
management system based on international standards (ISO 14001, ISO
45001).

Share of locations with an ISO 14001 management system

49%

2025

Share of locations with an ISO 45001 management system

33%

Share of locations with an integrated management system

20%

Compliance with statutory
and internal EHS standards

The business groups describe the effectiveness of EHS compliancemanagement for each production site in terms of its participation in the
Compliance Audit Program.

Share of production sites that have participated in the
Compliance Audit Program.

30%

2025

Continuous improvement in
EHS performance

The business groups develop and implement ongoing projects for eachproduction site, in order to minimize environmental and health risks and/or
reduce consumption costs.

Number of projects implemented to minimize risk.

21 projects

ongoing

Number of environmental projects implemented to minimize
consumption costs.

8 projects

Heraeus develops digital information and training offerings. The businessgroups ensure that by 2020, at least 80 percent of employees worldwide will
have direct personal access to the offerings.

Share of employees with direct personal access to digitalofferings.

65%

2020

The business groups ensure that by 2020, structured interviews have been
conducted by uniform Group-wide standards for 90 percent of registeredusers.

Share of registered employees who have received a standardized
annual interview via the tool.

First results for the2019 reporting
year.

2020

Each GBU fosters its promising employees and strives to ensure that 50
percent of the identified talented people occupy a position with opportunity
for advancement.

Share of identified promising employees in talent programs
across all GBUs.

First results for the2020 reporting
year.

2022

Employees and Corporate Culture
Training and continuing
education

Development of promising
employees

2018 Heraeus Sustainability Report

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RESPONSIBILITY MANAGEMENT

Framework and complianceGroup-wide compliance management
As part of the Compliance Management System, processes are defined to ensure that statutory obligations and voluntary guidelines areobserved Group-wide. At the Group level, the Heraeus Compliance
Officer (Responsibility Office) is responsible for the management system. The operational implementation of and adherence to the Heraeus
Group’s and the respective business group’s compliance regulations
are the responsibility of the managing directors, who are supported by
the respective Compliance Officers.
The Heraeus Code of Conduct constitutes the central and globally
applicable framework for the business groups, as well as one of thefundamental elements for ensuring the company’s long-term success.
It contains binding regulations that are spelled out in eight guidelines that apply Group-wide. The third edition of the Code of Conduct,
which took effect in 2018, underscores the importance of sustainablebusiness activity and the personal responsibility of each individual
employee.
To ensure that compliance management operates efficiently and in accordance with the standards at alllevels of the company, it is reviewed
and improved at regular intervals. To
that end, the Compliance Officers
conduct annual interviews that provide information about training sessions and further implementation ofcompliance management on site. They also prepare an in-house reportabout the hierarchical levels of the management system, up to andincluding the company and Group management.

Standard

An important component for improving the entire Compliance Systemis the harmonization of the various compliance management systems
and internal control systems based on the IDW PS 980 standard. In
particular, the harmonization is intended to help identify and makeuse of synergies, as well as to develop uniform documentation.

Relevant training of employees
A worldwide training concept serves to ensure that employees are informed about new regulations in their areas of responsibility and thatthey know and understand the requirements of the Heraeus Compliance System. In addition, workshops are held in the United States
and China with the Compliance Officers for the locations in each region every two years, promoting discussion among them about interdivisional topics and best practices.

Guidelines applicable Group-wide› Human Rights Policy› Guidelines for the Procurement of Products and Services› Sustainable Sourcing Guideline› Guidelines for the Prevention of Bribery (Entertainment & Gifts)› Guidelines for the Conclusion of Consultancy Agreements› Guidelines for the Prevention of Money Laundering› Guidelines for the Prevention of Antitrust Violations› Guidelines for Public Relations and for the Use of the Intranet

Reporting of tips and violations
Any employee who suspects a compliance violation can contact theirsupervisor or local Compliance Officer.It is also possible to contact
the Heraeus Compliance Officer directly by telephone or email in theemployee’s own native language. In addition, an external independent
ombudsman has been appointed, to whom tips and violations can bereported. The Code of Conduct prohibits imposing sanctions or punishment on employees who have reported in good faith a violation orsuspected violation of the Code of Conduct.

IDW PS 980

2018 Heraeus Sustainability Report

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RESPONSIBILITY MANAGEMENT

Integrating sustainability intobusiness processes

Stakeholder dialogue

Monitoring and controlling risks

In the cooperative dialogue with our stakeholders

Heraeus gives high priority to identifying risks in a timely manner andtaking them into account in advance of important decisions. Under
the Group-wide Risk Management System, a group of experts identifies potential risks that threaten the Group’s existence as well as othersignificant risks and categorizes them in regard to how they should becontrolled. All significant risks that can be influenced are documented
in a catalog with the corresponding strategies for managing them andmeasures to control them, as well as an assignment of responsibilities. Human rights-related risks in the supply chain are identified
and evaluated once a year in collaboration with the Purchasing andResponsibility Office.

To ensure that we identify significant challenges for our company earlyon and are able to meet them successfully, we maintain an ongoing
dialogue with our stakeholders. Chief among these are our customers,
our employees, suppliers and experts from the scientific community,
as well as associations, societal interest groups and the shareholdersof our family-owned company. In addition, we conduct our own media
and field analyses to identify the most important demands placed on
Heraeus by the public and policymakers.

Making sustainable investment decisions
Heraeus intends to add sustainability criteria to the existing risk
analysis in the process of mergers with and/or acquisitions of othercompanies. Also, in the future, above a certain threshold, the risk
assessment of projects with a high investment volume (CapEx projects),
such as new buildings, new facilities, or relatively large service contracts, will include sustainability criteria as part of the decision for oragainst a provider.

Excellence through sustainability in production
Sustainability criteria should also be given greater weight in the evaluation of our own processes and locations. The Heraeus Production
System (HPS) sets global standards and guidelines along the entire
value added chain, in order to ensure a safe, efficient, and high-quality production process. In the future, sustainability aspects should beeven more strongly embedded in the HPS maturity assessments andincluded in the questions in the relevant evaluation sheets during
HPS audits.
2018 Heraeus Sustainability ReportNGO

We take advantage of various communication formats and channels
to better understand the needs and expectations of our stakeholders.
Our goal is to maintain and strengthen their trust in Heraeus. What welearn from this dialogue with our stakeholders routinely flows into thefurther development of our corporate strategy and our Responsibility
Management.

In particular, our business segments that are
involved in the purchase and sale of high-risk
raw materials such as precious metals maintain a continual dialogue with the public, forexample with nongovernmental organizations(NGOs) regarding the environment and human rights. We take theiradvice and comments seriously and ensure that we respond to all
requests for information.

...

Our customers’ satisfaction determines the competitiveness and theeconomic success of our company. With rankings and ratings such as
EcoVadis and the Responsible Business Alliance (RBA), we inform ourcustomers about how we at Heraeus conduct our business sustainably
and responsibly.
We have intensified the dialogue with our employees. Starting thisyear, our internal digital portal is accessible on company smartphones
and, with selected content, on private smartphones. When we use theportal to inform our employees about Group-wide and site-specificnews, they can interact using options such as a comment function.

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PRODUCTS AND SOLUTIONS

Sustainability in our core business2018 Heraeus Sustainability Report

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PRODUCTS AND SOLUTIONS

A sustainable approach to our business activities

Quality management and product responsibility

As a family-owned company with a long-term orientation, we havenaturally focused on sustainability in our business activities for generations. Sustainability is therefore one of the core elements of the
Heraeus Corporate Guiding Principles, along with business performance, a customer orientation, innovation, excellence and internationality.

Focus on product quality and customer satisfaction

These elements inspire our goal of dedicating our products and solutions to contributing to a better and more sustainable world. Moreover,
we believe that ensuring that our products are safe, of high qualityand durable is an essential part of our responsibility. In so doing, we
also strive to offer our customers a competitive edge. Our individual
business groups are in constant conversation with their clients. Theyfrequently include clients in the product development process.
Our innovative capacity is central to our strong market position as atechnology group. We invest in research and development, and wesystematically promote startup projects in order to realize attractive
business ideas. In this context, we are particularly active in the areas of medicine and health technology, environmental technology andmobility. These solutions are characterized by attractive growth potential as well as their contribution to quality of life and the environment.

2018 Heraeus Sustainability Report

We offer our customers high-quality solutions, tailored to their requirements, that are distinguished not only by their technologicalquality and innovative potential, but particularly by their reliability and long service life. Other essential quality features include
design and related services and information. It goes without saying that Heraeus meets its obligations with respect to documentation and due diligence. We do so through our compliance management system(see the chapter on Compliance Management).

Quality management
Quality management is of the utmost importance for product quality
and customer satisfaction. To ensure that our high standards are met
across all sites, our quality management is based on requirementsthat are uniform throughout the Group and that conform to international norms.
At the Group level, the Group Quality Management Board is responsible for addressing current quality management topics. The Board reviews and improves existing processes, as well as directing initiatives
designed to improve the company’s quality culture. This also includes
designing IT solutions for quality management and for interfaces within the company.

In order to identify and remedy deviations from our commitment toquality, we have implemented a number of processes within the areaof quality management. For example, we record and process customer
complaints in a Group-wide, uniform process across business units,
which allows us to share insights and find the best solutions for ourcustomers.
Our quality management systems are regularly evaluated in the courseof internal management reviews. Here, too, feedback from our customers and external certification audits are of particular importanceand play an essential role in the development of these systems.

Survey of customer satisfaction.
Heraeus takes pride in creating high-quality solutions for the company’s customers, thereby strengthening their competitive position forthe long term. In order to identify areas for improvement, a harmonized, business-wide monitoring tool was added in 2019 to the mostrecent online survey of customer satisfaction, with a total of sevenbusiness groups participating.
Overall satisfaction of Heraeus customers was found to be consistently “good” to “very good.” Particular mention was made of productquality as well as the competent consulting process. At the sametime, certain areas were identified in which we could be more successful at meeting customers’ needs – in the area of logistics, forexample, with respect to access to order and delivery tracking.

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PRODUCTS AND SOLUTIONS

Value creation at Heraeus
The examples here help to illustrate value creation at Heraeus. The path leads fromthe raw materials we primarily use to our products and solutions, which our customers
employ in various fields of application. With a combination of materials and technological expertise, we develop solutions that strengthen our customers’ market position
for the long term and create added value.

MEDICAL TECHNOLOGY AND
PHARMACEUTICAL PRODUCTS
Antibiotic bone cement
CerMet implants
Pharmaceutical active ingredients
Components for medical applications

CATALYSTSCatalytic converters
Catalytic gauzes
Chemical catalysts

Gold
SilverPlatinum

SPECIALTY LIGHT SOURCES
Analytical lamps for measuringgases, liquids and solids
Specialty lamps from
infrared to ultraviolet

SENSORS

CopperSensors for the
steel industry
Temperature sensors

Palladium
Rhodium

Ruthenium

POWER ELECTRONICS
Metal-ceramic substrates
Materials for assembly andjoining technology
Bonding wires

Iridium

FUEL CELLS

Applications in
manufacturing,storage and transport

Silicon oxide

Carbon compounds
Animated graphic, activated by mouseover, showing the pathway from precious metal to the respective product.

2018 Heraeus Sustainability Report

CONDUCTIVE MATERIALS

Silver pastes for silicon solar cells
Optical fibers made of quartz glass
Conductive polymers for displays
and condensers
Porocarb for lithium batteries
Bonding wires

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PRODUCTS AND SOLUTIONS

Heraeus areas of activity
In the global markets, we focus on businesses related to the environment, health care, electronics, communications, mobility, industrial
applications and energy. We create high-quality solutions for our clients, contributing significantly to their value creation and strengthening their competitiveness.

ENERGY
Efficiency enhancements andaccurate methods
Energy savings

HEALTHMOBILITY

INDUSTRIAL APPLICATIONSPreventing infections in
endoprosthetics

Contributing to the electrificationof mobility

Accurate, efficient methods

Life-prolonging implants
Helping to cure cancers

Equipment for efficient motor vehicle
production

Energy savings

Minimally invasive surgery

Emissions control

COMMUNICATIONSENVIRONMENTELECTRONICS

Further development oftouchscreens
Higher speeds in message
transmission

Air and water purification
Reducing greenhouse gas emissions
Measuring soil quality
Conserving resources (recycling)

Contributing to efficientelectrification in industry
and society

Improved performance of
microchips

Cleaning ballast water in the
shipping industry

2018 Heraeus Sustainability Report

Process optimization

Greater efficiency andminiaturization of
consumer electronics
19

PRODUCTS AND SOLUTIONS

Promoting innovation
Product development in the service of society
The position of Heraeus as a technology leader in the relevant coremarkets of our global business groups is based on our innovative capacity. In our strategic planning, we concentrate on areas of importance for the future, such as health, electromobility and demographic
change. We systematically develop innovative products and solutions
to shape trends in these areas. We have identified three importantdrivers of healthy and organic growth in our business groups: early
identification of trends, the development of new business ideas and the expansion of our product portfolio.
The innovation landscape has changed dramaticallyover the past few years. Innovation processes haveaccelerated. To succeed in this environment, Heraeus
is focusing on agile processes, openness and an interdisciplinary approach. Urgent challenges in the areas of health and environmental
protection are important factors driving our research and development(R&D). Heraeus is working hard to contribute to appropriate solutions.
For example, we are not only assisting our customers in meeting arising number of legal requirements; we are also helping them dobusiness in a sustainable and effective way.

An important management function at the Group level is performedby the Group Innovation Board, which evaluates our business groups’
innovation strategies and performance. We have introduced a uniform
innovation process for the entire Group, which is intended to maintain and boost our innovation capacity as the key to our businesssuccess. In addition, workshops and coaching are designed to makeagile methods a more integral part of this process. Heraeus is also
opening up its innovation process to external partners. During thereporting period, we continued our efforts to move toward
a culture that places more emphasis on open innovation.
At the heart of these efforts are innovation partnerships
with research networks, universities, startups and othercompanies. The development and design of these partnerships are among the most important duties of the Head of Corporate Innovation, who was first appointed in April 2018. In the courseof active startup scouting, we are looking for new ideas and technologies that might be especially relevant to individual business groups.
Through its Group Innovation Board, Heraeus is constantly identifying
and evaluating innovation projects in every business group that are capable of significantly reducing the time required to bring strategically
relevant projects to market. Each quarter, the Board of Management
and the leadership of the business groups collaborate with the headsof innovation and marketing in reviewing the current state of affairs
and determining what investments are needed.

Making room for innovations
The fiftyONE innovation and communication center at Holding headquarters in Hanau, which opened in the spring of 2018, provides
room for a new, agile and dynamic approach to work. The goal is
to cooperate on innovation projects across areas and functions. Approximately 300 employees are currently working at the center. Its

700 R&DOver
EMPLOYEESWORLDWIDE

Research and development
More than 700 Heraeus employees worldwide are involved in researchand development. First, we rely on the individual business groups,
80 percent of which have their own R&D units. Second, we combine
innovation capacities throughout the Group.

Measures for promoting innovation
At the Group level, Heraeus provides systematic support for projects
designed to strengthen the innovative capacity of the business groups.
These include the fiftyONE innovation and communication center in
Hanau, Germany, as well as support for startups, digitalization as afunding priority and recognition for outstanding projects.

2018 Heraeus Sustainability Reportarchitecture facilitates professional exchanges. The architects weredirected that transparency, openness and ample opportunities to meetand communicate with others were Heraeus’s core requirements. The
new center is divided into areas of expertise as a way of consolidating
the skills that are distributed throughout the Group and bringing together innovators across various functions.

20PRODUCTS AND SOLUTIONSCreating startup structures within the GroupThrough a corporate incubator initiative, Heraeus is encouraging thedevelopment of new business models and technology platforms within
the company. Four startup initiatives are already off to a successful
start: Heraeus Battery Technology, Additive Manufacturing (H3D),
AMLOY and Printed Electronics.
Processes that are specifically tailored to the needs of the corporate
startups are crucial for the growth and development of corporate
startups. To facilitate rapid decision making, Heraeus has createdlean structures and provides corporate startups with easy access tofinancial resources. The startups are under the direct authority of theBoard of Management and submit a quarterly report to the Board on
their financial situation, progress in product development and othercommercial activities.
In addition, as part of its active scouting activities, Heraeus looks for
new ideas and technologies that might be relevant to the individual
business areas. With the help of the Heraeus Accelerator, the company is seeking to intensify its cooperation with external startups while
placing more emphasis on open innovation. Preparations began in
2018, and the Accelerator has been in operation since mid-2019.
Suitable startups were selected by means of a pitch procedure. Overa limited period of time, these startups have the opportunity to workwith Heraeus to develop their projects, taking advantage of the company’s expertise and infrastructure.

2018 Heraeus Sustainability Report

In June 2018, Heraeus expanded its access to startups by investing in
Emerald Technology Ventures’ Industrial Innovation Fund. Emerald isa globally recognized investment firm that is active in the areas of energy, water, advanced materials and industrial IT. Here, too, Heraeus
can benefit from the advantages of an open approach to innovation
as it works with other multinational industrial companies in Europe,
North America and Asia.

Shaping digital change
One of the main tasks of Research and Development is to take advantage of the potential of digitalization to benefit Heraeus. In our
newly created Digital Factory, specialists, digital consultants, softwaredevelopers and data scientists are engaged in Heraeus’s digital transformation. The task of the IoT Center that was established there is todevelop the area known as the Internet of Things (IoT), which will play
an important role in the future. Since February 2018, IoT specialists
have been working with production and logistics experts to develop
new approaches to digitalization for the Group.

Outstanding ideas
In 2018, the award in the Innovation category went to Heraeus Medical Components, which developed an innovation to benefit patients
whose right and left ventricles no longer pump synchronously. To treat
this condition, the Heraeus Medical Components project team developed a special quadripolar lead called AXONE – the world’s smallest.
The jury singled out close cooperation with customers and partners
on this innovation for special praise. Heraeus Precious Metals won
in the Digitalization category. The project team created a platformthat allows customers to conduct their precious metal transactions
completely digitally – from trading to recycling. The jury particularly
appreciated the team’s consistent focus on benefits for the customer.

Recognizing outstanding innovation projects
Since 2003, Heraeus has paid tribute to in-house researchers anddevelopers with an innovation award honoring their outstanding ideas
and achievements. This award has been presented as part of the
Heraeus Awards since 2016. It recognizes Heraeus’s most successfulprojects in the categories of Innovation, Supply Chain, Commercial,
Responsibility, Digital Transformation and Leadership. More than 150
applications from nearly every business segment were submitted in
2018.

21

PROCUREMENT AND
SUPPLY CHAIN

Sourcing and responsibility

2018 Heraeus Sustainability Report

22PROCUREMENT AND SUPPLY CHAIN

Sustainable procurement and responsibilities
when trading in precious metals
Heraeus’s business success depends in large measure on the company’s suppliers, and Heraeus strives to maintain long-term business
relationships with them. Since a shared commitment is necessary forsustainable value creation, Heraeus involves suppliers in the formulation of its strategy for sustainable action.

These include abiding by laws and international standards as well as
ensuring fair, safe working conditions and environmental protection
within the company. Heraeus reserves the right to terminate contracts
without notice in the event that suppliers fail to meet these obligations.

Procurement at Heraeus is aligned with the requirements of the various business groups, and to that end we maintain numerous supplier relationships. The purchasing and sale of precious metals are
particularly important in this context. Precious metals are traded,made into products and recycled as valuable raw materials by the
Heraeus Precious Metals business group. Along with platinum groupmetals, gold and silver are becoming increasingly important to theGroup, following the conclusion of the acquisition of Argor-Heraeus(see also the separate Sustainability Report from Argor-Heraeus).

It is incumbent upon Heraeus to exercise a high level of due diligence, which we underscore in our Supply Chain Due Diligence Policy. Accordingly, our company-wide Sustainable Sourcing Guideline
provides general as well as precious metals-specific procedural instructions for the selection and regular evaluation of suppliers. The
guidelines specify the evidence of business integrity that our business
partners are required to provide, particularly in the areas of precious
metals trading and recycling. All new precious metals suppliers arealso required to sign our Code of Conduct for Suppliers of Precious
Metals prior to signing a contract.

Heraeus is conscious of the special responsibilities that are associated with doing business with precious and other high-risk metals.
In certain mining regions, there is an increased risk that sales of raw
materials will be used to fund civil wars and armed conflicts. In certain countries, moreover, precious metals are traded that have been
mined illegally and without taking measures to protect people and theenvironment. Our management approach focuses on the procurementof and trade in precious and other high-risk metals, owing to the value
and importance of these raw materials.

Management of suppliers
Heraeus’s business groups are committed to ensuring that value
chains are sustainable. To that end, suppliers are expected to comply
with the requirements for suppliers listed in the Code of Conduct.

2018 Heraeus Sustainability ReportManagement and responsibilities:
Central procurement is charged with conducting general risk assessments and audits on site. In separate processes, the Heraeus Precious Metals business group checks to make sure that the precious
metals come from ethical sources. Requirements differ by the sourceof the raw materials. Precious metals come to Heraeus as primary
raw materials from mines, as industrial secondary raw materials fromour customers, or as products of foundries. Heraeus Precious Metals
requires foundries to provide evidence of certification in accordancewith internationally recognized standards.It establishes direct business relationships with mines only if it is possible to review and document compliance with our requirements through an audit.

Compliance Management assesses compliance with legal requirements and guidelines in all business areas(see also the chapter
on Responsibility Management). Special review processes have been
established for precious metals and high-risk raw materials. Heraeus
offers regular training sessions for employees on the trading and recycling of precious metals to promote adherence to our complianceguidelines.
Since 2012, Heraeus has regularly arranged for an independent third
party to audit its due diligence processes in accordance with thestandard of the highly regarded London Bullion Market Association(LBMA). We follow all of the auditors’ recommendations in the interest of the continual improvement of our processes. In this connection,
we engage in dialogue with partners in business, government and civilsociety. As a member of a number of precious metals associations at
the national, European and international levels, for example, we arecommitted to the continual improvement of review standards, particularly with regard to gold, silver, platinum, palladium, tin, tantalum
and tungsten. These organizations include the International Platinum
Group Metals Federation (IPA) and the German Precious Metals Association (FVEM).
The auditor’s report is available to the public. Each year since ourfirst LBMA certification in 2012, an independent third party has confirmed that our processes and systems meet the requirements of the
LBMA Guidances.

23

PROCUREMENT AND SUPPLY CHAIN

Ensuring due diligence
LBMA Guidances
The London Bullion Market Association(LBMA) is an international organizationthat coordinates trade on the London
Bullion Market, one of the most important international off-exchange trading
centers for raw materials. The main mission of the LBMA is to ensure the quality of the fine gold and silver that aretraded. For that purpose, it publishes aGood Delivery List that is limited to companies whose fine gold and silver bars
meet a certain standard for size and purity. Since the beginning of 2012, refineries that trade fine gold or
silver on the London Bullion Market are required to implement its
Responsible Guidances. These are closely aligned with the OECD
Due Diligence Guidelines and apply not only to gold and silver, butalso to other metals that carry risks. Refineries document the origin of traded metals so that they can be traced from the mines tothe London Bullion Market. Reciprocal recognition by other standards, such as those of the World Gold Council (WGC) and the
Responsible Jewellery Council (RJC), is harmonizing audit and monitoring procedures and promoting traceability throughout the value
chain. Furthermore, the Responsible Guidances are intended to makeit easier for companies to implement Section 1502 of the Dodd-FrankAct (DFA). The review reports are available to the public. Consistent
implementation is reviewed by third-party auditors and monitored by
the LBMA.
See audit report from Heraeus

2018 Heraeus Sustainability Report

Identifying high-risk suppliers
To identify significant risks, our Procurement department regularly
conducts a systematic risk analysis of suppliers. This allows us to
identify high-risk suppliers and subject them to special scrutiny.
At regular intervals, we conduct a site-specific risk assessment of allorders, taking into account such criteria as the location of the suppliers, with a view to Transparency International’s Corruption Perception
Index. Along with specific places of origin, certain raw materials are
assigned to the risk group. Among them are only precious metals, butalso cobalt, tin, tantalum and tungsten. We conduct a separate review
and audit procedure in response to risks posed by precious metals
suppliers.
Our goal is to receive confirmation by no later than 2025 from all
high-risk suppliers that they are in compliance with the requirements
outlined in our Code of Conduct for suppliers. The audit procedure,
which is becoming increasingly digital and automated, takes place on
the HeraPro supplier portal and is based on a comprehensive self-assessment. As part of the quality audit, we have also been evaluating
suppliers with respect to social and environmental issues since 2016.
If there is any doubt about the accuracy of the information provided,
we request documentation. Suppliers of high-risk raw materials are aparticular focus of Heraeus’s efforts to ensure due diligence. Since
2018, Heraeus has therefore been conducting on-site audits of a random sample of high-risk suppliers to determine whether they are incompliance with the Code of Conduct for suppliers.

The quality audit takes into account the following social andenvironmental concerns:› Ensuring occupational health and safety› Compliance with laws against child labor› Proscription of forced labor› Payment of a living wage
› Freedom of association› Sustainable use of resources› Compliance with environmental regulations
Compliance check in the purchase and sale of precious metals
Because of the elevated risk associated with mining and trading precious metals, we have created a database containing the risk profile
of each of our precious metals suppliers. Using an IT-supported, standardized review process, we analyze and assess the risk variables atfixed intervals. Our high standards for selecting and evaluating precious metals suppliers reflect our desire to do our part to ensure thatprecious metals come from sources that meet Heraeus’s standards.
Suppliers are therefore required to respect human rights and comply with applicable standards for workplace safety and environmental
protection as well as the laws of the respective countries. The compliance review and additional safeguards are also designed to ensurethat business relationships cannot be indirectly abused for purposesof organized criminality, such as money laundering, corruption or VAT
fraud. For precious metals suppliers, listing requires a positive compliance check.
24

PROCUREMENT AND SUPPLY CHAIN

Selected criteria for the compliance check, which
are reviewed based on documentation:

Enhanced requirements for direct purchases from precious
metals mines› Review of the location of a business partner’s headquarters

Direct purchases from mines require a review of compliance with theCode of Conduct for precious metals suppliers, in the form of an onsite audit. As a rule, Heraeus requires an audit by a respected independent organization. If no audit has been completed, a Heraeus
expert conducts an independent review of the mines using a list of
criteria based on the LBMA’s Questionnaires for Mined Materials. If
any reasonable doubts remain after that review, we require our partners to submit additional documentation. If there are still doubts, we
refrain from entering into a business relationship or terminate any
existing relationship.

and type of company› Review of the industry› Online screening, in some cases conducted by commercial
database suppliers› Verification of bank information› Review of senior management and the beneficial owner› Review of the material’s origin and composition
All of Heraeus’s precious metals suppliers undergo a compliancecheck every one to three years, based on the respective risk assessment. If there is cause for suspicion, an investigation is carried out. In
keeping with the prevailing legal requirements, allegations of money
laundering related to the trading and recycling of precious metals arereported to the responsible authorities.

With respect to its suppliers, Heraeus recognizes the following
memberships and standards for a conflict-free value chain:› London Bullion Market Association (LBMA)› London Platinum and Palladium Market (LPPM)

Certification of the ethical production of gold, silver, platinum
and palladium.

› Responsible Jewellery Council (RJC)

Certification of ethical and conflict-free gold production andprocurement practices.

› World Gold Council (WGC)

Standard for gold-mining companies that are active in conflictregions. WGC supports the LBMA standard.

› Conflict-Free Sourcing Initiative (CFSI)

Support for companies in various industries whose supply chains
include conflict minerals.

› Fairtrade Sourcing Program

Introduced by Fairtrade to help small farmers increase theirrevenues and secure a sustainable future.

› Fairtrade Standard

Certification of gold from craft workshops and smaller mining
companies that meet the highest standards for ethical, responsible action.

2018 Heraeus Sustainability Report25

PROCUREMENT AND SUPPLY CHAIN

Recycling at Heraeus
C

al
tic

in

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die
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PRECIOUS
METAL
PRODUCTS

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Pr

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Precious metals are an indispensable raw material for many production processes and products. Owing to their special properties andhigh value, they are in great demand. Seamless transparency regarding the source of precious metals is of crucial importance for all concerned.

l
ica
em
ch

Phys
ical
del
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ry

tals

Up to 30 percent of the global supply of platinum metals and gold isalready derived from the recycling of precious metals – a significant
contribution to environmental protection and sustainability. Heraeus
will continue to expand its own recycling capacities in the future.

KEY MARKETS
tal
s

e
us
p,
cra

ci
ou
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Me

,s
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Wa

Gold

d

Silver

-

m

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als

,e

us
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Pre

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PRECIOUSMETALSRECYCLING

Platinum
Palladium

PRECIOUS METALSTRADING AND
PROCESSORS

We have core expertise in processing materials containing
precious metals: thermal pretreatment of materials andcatalysts containing precious
metals, sampling and analysis,
precious metals recycling processes as well as logistics andwaste management.

Rhodium

et
M

s
al

Precious metals are found in electronic products, vehicles, medical applications and environmental technologies.
They are also used in production processes, forexample as catalysts in the chemical and petrochemical industries.

Ruthenium
Iridium
OsmiumRhenium2018 Heraeus Sustainability Report

MINES

FOUNDRY
With our trade locations, we have a presence in the world’s major time zones
and are able to keep an eye on the global precious metals markets. Heraeus is atrustworthy and competent business partner for precious metals processors.
26

PROCUREMENT AND SUPPLY CHAIN

Conducting our own mine audits to ensure that standards are met
Dr. Müller-Schäfer, how long have you been carrying out
mine audits for Heraeus?
I completed my first mine audit in October 2012. We are oneof only a few companies in the global precious metals sector
that have developed their own mine audits and personallyconduct those audits on site.

What are the most important criteria when you carry out an
on-site audit of a mine?
Our audit encompasses a variety of areas. The most important are workplace safety, environmental protection and fairtreatment of employees.

Which mines need to be audited?
Audits are necessary for essentially all precious metals. Our
Sustainable Sourcing Guideline contains an internal requirement that gold, silver and platinum metal mines be audited,and in this context we make no distinction between thevarious precious metals.
Do you conduct audits of all mines from which Heraeus
purchases these precious metals?
No, we audit only those mines for which no recognizedindependent audit report is available. These are often medium-sized mines. In many cases, large mines have alreadybeen certified by independent auditors, or they may evenhave published their own sustainability reports. Such mines
are not audited again unless a compliance check identifies
anomalies that require us to conduct an additional audit.

2018 Heraeus Sustainability Report

As head of precious metals security, Dr. Jürgen Müller-Schäfer is responsible for mine audits, among other things. Heraeus is one of only
a few companies in the global precious metals sector that have developed their own mine audits and conduct their own on-site audits.

What does that mean, in concrete terms?
To evaluate workplace safety, for example, we look at therelevant training materials and work records as well as
emergency plans. For instance, emergency telephones
must be accessible even at a depth of 3,000 meters, and a
rescue team must be on standby in case of emergency. With
respect to environmental protection, we request information
on waste water and documentation of the frequency withwhich this information is reviewed by the authorities, as wellas information on any complaints. We also monitor whether
employees are treated fairly. We regard freedom of association as an important right, and it is also included in the
Heraeus Supplier Code of Conduct and our Human Rights
Policy. Mine workers must be paid considerably more than
the respective country’s minimum wage. We ask for payroll
information from on-site human resources departments andcheck that information by holding private conversations withmine workers.
When were you last involved in an audit, and are there plans
to conduct additional audits?
The last time was in 2018, when I was in Laos. This year,
another mine in Laos will be audited, and a repeat audit isplanned in the Philippines. As a rule, follow-up audits arescheduled every five years.

27

PROCUREMENT AND SUPPLY CHAIN

How costly is it for Heraeus to conduct its own audits?
It is very costly, in terms of both time and money. Most of
the mines are located in very remote areas and are difficult
to reach. Each visit to a mine takes up to a week, including
travel time to and from the mine and the audit itself. That
does not include is the time needed for preparation andresearch, or the follow-up work after every audit.
What is done with the audit reports after you visit a mine?
First of all, we use them internally as a basis for deciding
whether or not to enter into a business relationship with themine. Reports also go to the mine operators, and our auditor
sees these reports in connection with our LBMA certification.
Has a decision ever been reached not to work with a mineafter an audit was conducted?
Since we do meticulous research in advance, some mines
have been rejected as suppliers even before an on-site audit
has taken place. In many cases, however, this was because
the mine’s output was so small that it wasn’t worthwhile
to conduct our own audit – we wouldn’t have been able toguarantee compliance with our standards. So far, we haven’t
rejected any mines after an audit was completed. But we
imposed certain conditions on one mine following an audit;
they involved workplace safety. We will visit this mine again
next year and conduct a repeat audit to review the improvements that have been made. In many cases, however, thestandards on site are higher than we had anticipated.

2018 Heraeus Sustainability Report

Mine audit in the Philippines in March 201528

ENVIRONMENT AND
OCCUPATIONAL HEALTHAND SAFETY

Sustainability in production2018 Heraeus Sustainability Report29

ENVIRONMENT AND OCCUPATIONAL SAFETY

Sustainability in production and beyond
We bear responsibility for ensuring safe working conditions, protecting the environment and conserving natural resources at our sites.
Our actions are guided by the precautionary principle, in the interestof proactively preventing damage to the environment and health, or
keeping such damage to a minimum. This is also reflected in our safety culture, which embraces the vision of an accident-free workplace.
Supported by a continual process of improvement, we strive in our
production facilities not only to use energy more efficiently, but also
to further optimize our recycling process and thereby conserve natural
resources while also reducing the amount of waste.

EHS Management
Our principles of environmental and health protection and workplacesafety are described in an EHS Framework, which contains Groupwide guidelines for 12 action areas along with our ambitious EHS
targets.

Responsibilities and management
Responsibility for environmental and health protection and workplacesafety (EHS) lies with the business units and their production sites.
Accordingly, the EHS Group function determines Group-wide standards and procedures, strategic goals and key performance indicators,
in close cooperation with the responsible coordinators in the business
units and regions. At the individual sites, operational responsibility forenvironmental and occupational safety lies with the respective local
EHS managers.
We make special efforts to raise our employees’ awareness of the importance of each individual’s contribution to health, environmental
protection and safety. At Heraeus, the guiding principle that “I am
responsible for EHS” is reflected in a variety of day-to-day measures.
2018 Heraeus Sustainability Report

We offer regular training for our employees, internally and externally,
as well as practical exercises that enable them to work proactively andindependently. One focus is on providing basic and further training
for safety officers, who serve as multipliers at various levels. In 2018,
for example, 107 employees received advanced training at all of ourGerman sites, which included workshops in which the participants
engaged in role-playing related to dangerous company-specific situations.

Group-wide standardization
The main tasks of the Group function are to create a global EHS
process landscape and to harmonize and document the relevant processes. As part of the Group-wide initiative to promote excellence, we
are assisting the production sites in creating integrated EHS management systems in a step-by-step process. To achieve this objective, we
defined a standardized framework based on internationally recognizednorms: ISO 45001 for workplace safety and ISO 14001 for environmental management. At the Group level, the effectiveness of theindividual EHS management systems is determined by means of thefollowing:› Reporting on key performance indicators to monitor theachievement of goals› Documentation of compliance with locally applicablelegal requirements by means of an index of legal provisions› Environmental and safety aspects of operationaltarget, revenue and cost planning

To ensure that all production sites are aligned with the defined systemstandards, the Operations Excellence Group function assesses theirimplementation, assigning them grades for maturity ranging from “basic” to “advanced” to “expert.” Requirements are defined for eachmaturity level, and the degree to which they are met is determined in
an internal audit. As each audit is conducted, agreement is reachedon the next steps to improve the management system and increase its
effectiveness. By the end of 2018, 20 percent of production locations
had already established a management system that meets the highest
standard. In addition, 49 percent had created an environmental management system in accordance with ISO 14001, and 33 percent had
established a management system for workplace safety in accordancewith ISO 45001.
Heraeus is required to comply with the applicable regulatory requirements for health and environmental protection and workplace safety,
which are defined by numerous administrative provisions as well as
technical policies and authorizations. Together with our Heraeus EHS
guidelines, these form the basis for everything we do.
EHS compliance management is designed to ensure compliance withlegal requirements and internal guidelines. This is monitored by compliance audits at regular intervals and by the sites’ EHS managers. An
IT-supported standardized procedure ensures that the obligations of
the individual areas are always kept up to date. By the end of 2018,
approximately 30 percent of production sites were participating in
the compliance audit program and were able to document the performance of their EHS compliance management.

30

ENVIRONMENT AND OCCUPATIONAL SAFETY

Environmental and safety aspects
Sustainability and environmental protection in production
At our production sites, we identify important environmental and safety concerns and formulate appropriate goals and measures.

Energy and resource efficiency
Throughout the Group, we seek to increase energy and resource efficiency in production. The individual business groups define relevant
operational objectives and devise measures for achieving them. In addition to optimizing existing production sites and procedures, we areinvesting in energy efficiency when building structures at new sites.

Innovative products in an innovative building
A new Heraeus Medical production building at the Wehrheim site is
creating room for further innovations in the field of specialized medical products – in a building that is pointing the way to the future. Shorttransit routes and cutting-edge climate control technology, which recaptures up to 70 percent of the heat expended, protect the environment, while an open floor plan allows employees to work in bright, open
surroundings.
One of the
products manufactured here
is bone cement, which is
helping many
peoplewithdegenerative
joint disease tomaintain a highquality of life.

The energy-intensive processes involved in producing quartz glass
and precious metals are particularly relevant for the company’s energybalance. At every production site, we determine what measures canbe taken to conserve energy and resources. Overall, in reporting year2018 our production sites were involved in 29 projects designed tominimize environmental and safety risks and/or to lower consumption
costs. In the future, we will document the energy intensity of selectedbusiness groups to demonstrate the effectiveness of these measures.
Furthermore, the frame of reference for the environmental indicators
will be continually expanded in coming reports.

Improving company performance with integrated management
systems
Through the introduction of integrated management systems for occupational safety and environmental protection, Heraeus is reinforcing its processes, allowing information to flow more quickly and making work processes more efficient. A pioneer in this context is Heraeus
Electro-Nite’s Diadema site in Brazil, which put in place an integrated
management system as early as 2008. The advantages are obvious: It
avoids duplication of effort and reduces costs. KPIs make it possible
to monitor processes more effectively and formulate recommendations for action. This has a positive effect on company performance.

Focus on precious metals recycling
Today roughly 30 percent of the precious metals traded worldwide
come from secondary sources. This reduces the burden on the environment and conserves resources. Energy requirements are 70 to
100 times lower, and the carbon footprint is approximately 200 to
300 times smaller, than when these metals are extracted from mines.
As a recycler of precious metals, we are thereby improving the environmental balance of the precious metal processing industry, closing

an important supply gap and reducing the dependence on imports ofcountries with few natural resources.
Our capacities for precious metals recycling have been expanded
since the 1950s. Today Heraeus is one of the world’s largest precious
metals service provider and the only one that recycles all precious
metals. Recycling sites can be found in the United States, Germany,
Switzerland, South Africa, India and China. The processes we havedeveloped also make it possible to recycle materials with low concentrations of precious metals – such as catalytic converters – economically and in an environmentally friendly manner. When precious
metals are recycled for industrial chemical processes, a very large
percentage of the precious metals remains in circulation. The energythat Heraeus saves each year by recycling precious metals is enoughto heat a small city.
Heraeus focuses particularly on the recovery of platinum metals. In
2018, approximately 140 tons of platinum and palladium were recycled. Precious metals in industrial catalysts – such as platinum
gauzes for the fertilizer industry and bulk-material catalysts for industrial chemical processes – are the primary sources of raw materials
for this purpose. The recovery rates in these processes far exceed
90 percent. We are continually developing new recycling procedures
aimed at recovering as much precious metal as possible from a variety
of products.

Energy consumption in MWh 1
2017

2018

Change in %481,303519,312+ 7.9This figure represents the aggregated energy consumption of 14 production sites, from various
energy sources (cf. table with key figures).
1

2018 Heraeus Sustainability Report

31

ENVIRONMENT AND OCCUPATIONAL SAFETY

Precious metal produced in 2018
Gold

SilverPlatinum

Palladium

467 tons

1,116 tons

60 tons

77 tons

Chemicals safety
Our production involves the processing of more than 70,000 chemicals. Human and environmental safety are our top priority in all production processes. We therefore make available safety data sheets on
all of the chemicals we use and on our products, which list essential
properties of the materials and outline measures that are necessary
for health and environmental protection, as well as for workplace safety. These data sheets are centrally recorded using database-supported
software, and they are regularly updated.

A new warehouse to reduce distances traveled
The logistics areas for scraps containing precious metals and hazardous materials, which were previously distributed throughout the site,
have now been combined under one roof in Hanau, in a new scrap
and hazardous substances warehouse that is the size of 10 basketballcourts. This has significantly reduced the distances traveled whenmoving these materials by forklift, thereby minimizing the danger ofaccidents. By using electric rather than diesel-powered forklifts, wehave also been able to reduce noise and pollutant emissions.

At the same time, we are seeking to eliminate or minimize the use of
dangerous substances in the production process.

Safety through new solutions
To ensure that UV lamps function flawlessly, the quartz glass tubes
used in production must be absolutely clean. A new, environmentallyfriendly process using ultrasound is replacing the use of hydrofluoric
acid to clean these tubes. In addition, thanks to a new procedure,
Heraeus Noblelight no longer needs to use radioactive thorium paste
in the production of UV lamps.

Heraeus has a special responsibility for evaluating and registering thematerials we produce in accordance with REACH, the European regulation on chemicals. These include precious metal-based materials in
the respective tonnage levels and other, mostly carbon-based, materials. With the support of various consortia, Heraeus has so far registered more than 100 materials. We keep the registration dossiers up
to date. We track the materials using a substance volume tracking system, thereby ensuring that they can be used safely by our customers.

2018 Heraeus Sustainability Report32

ENVIRONMENT AND OCCUPATIONAL SAFETY

Workplace and equipment safety
Heraeus attaches great importance to the safety of our employees
and protecting them against work-related accidents, injuries and illnesses. The business groups are therefore responsible for establishingmanagement systems to ensure workplace and equipment safety attheir sites. We issue additional internal guidelines, beyond the legal
requirements, when necessary to ensure the safety of our employees,
the employees of other companies and visitors.
Safety requirements differ significantly by business segment and areaof application. These differences are taken into account when drawing
up specific strategies. The production of precious metals and quartz
glass is a particular focus, since high pressure and temperatures of up
to 5,000 degrees Celsius pose increased safety risks. We also focus
on production processes that involve the use of hazardous materials.

Number of work-related accidents in the Group
Work-related accidents resulting in loss of work

2017

2018

Change in %

165

109

-34

Group-wide, we have been able to reduce workplace accidents by 34
percent relative to the previous year. As in earlier years, no injuries
have resulted in death during the reporting year. The slogan “Vision ofZero” underscores our conviction that any accident at Heraeus is one

2018 Heraeus Sustainability Report

too many. Prevention is critical, so that dangers can be recognized inadvance and avoided. We systematically review and document risks
in each working environment by carrying out risk assessments andregular inspections. We also analyze the causes of every accident. The
results of these analyses allow us to implement targeted countermeasures. For example, in recent years Heraeus has invested in structural
shielding measures and better personal safety equipment to protect
against toxicological and allergenic substances. We test the effectiveness of these measures by means of regular safety inspections andcheckups performed by the company physician.

As a member of several associations, Heraeus promotes active communication between industry and the public. Here too, the focus ison topics such as the environment, safety and health. As part of this
dialogue, the IPA is engaged in fighting work-related allergies caused
by certain platinum salts, for example. Heraeus supports this engagement by actively participating in the respective association committees. This work focuses on diagnostics and the global standardizationof specific measures to promote work safety.

By establishing a Group-wide culture of safety, we are supporting oursites all over the world. The Task Force Safety project group, which
was created at the beginning of 2018, consolidates measures aimed
at promoting occupational health and safety in all areas of the company. The emphasis is on education and communication in an effort toraise employees’ awareness of safety risks and preventive measures.
Key topics, which change from time to time, address risks and approaches to prevention. During the reporting period, a variety of sites
once again conducted campaigns to educate employees about safety
risks and protective measures. Safety Flashes, which simulate accident situations, are also published. Every location practices proper
behavior in emergencies specific to that area, for example by conducting fire extinguisher training or safety alarm drills. Sites located inresidential and urban areas are subject to stricter safety requirements.

› International PLATINUM Group Metals Association (IPA)› German Precious Metals Association (FVEM):

EHS engagement in associations

Chairmanship of the environmental committee› European Precious Metal Federation (EPMF):

Member of various subcommittees, for example in REACH› Federation of German Industries (BDI):

Committee on the environment, technology and sustainability

33

ENVIRONMENT AND OCCUPATIONAL SAFETY

AY
D
Y
T
E
F
SITE SA									

					Work safety
worldwideWork safety should be an integral part of the everyday work lives ofall Heraeus employees – all over the world. This is why special Safety
Days were held in 2018 at nearly all of our global sites. At the individual locations, presentations and practical exercises raised employees’
awareness of safety issues. Activities included information stands,
live presentations involving practice in extinguishing fires, a collision
simulator and other safety-related events.

2018 Heraeus Sustainability Report

34

EMPLOYEES ANDCORPORATE CULTURE

The employer’s responsibility

2018 Heraeus Sustainability Report

35

EMPLOYEES AND CORPORATE CULTURE

The employer’s responsibility
The success of Heraeus lies in the hands of our workforce of approximately 15,000 employees. Their competence, motivation andcommitment to innovation are crucial factors in global competition.

Human Resources Management
With the attractive working conditions and diverse career opportunities we offer, Heraeus occupies a favorable position in the labormarket. Our appeal as an employer is crucial for the recruitment andretention of motivated and committed talent. In this connection, wetalk openly with our employees about what an ideal workplace shouldlook like.
We expect and encourage respectful interactions as the basis for fruitful cooperation. In our human resources strategy, we recognize thatleadership and excellence are crucial strategic levers for achieving ourgoals and moving the organization forward. We train our employees toprepare them for the demands of the future, including digitalization.
We also encourage entrepreneurial thinking.
Naturally, we provide a healthy, safe work environment for our workforce. In addition, we make systematic efforts to improve preventive
health care and promote a work/life balance.

2018 Heraeus Sustainability Report

Responsibilities and management
Our human resources management principles, guidelines and programs are defined at corporate headquarters in Hanau and apply
throughout the Group. Based on those principles and guidelines,
HR representatives at the individual sites draw up supplementary arrangements relating to old-age and health benefits and a work/lifebalance, coordinating with other local companies or with the help of
external service providers.

Our corporate culture is characterized by cooperation between employer and employee representatives, based on mutual trust, and open
dialogue in employee meetings and performance reviews. In Germany,
the fundamental participatory rights of our employees and their representatives are also regulated by legal provisions such as the Works
Constitution Act. Employees at all German sites have elected employee representatives.

Our corporate values and the Heraeus Code of Conduct, which applies
throughout the Group, form the basis for respectful interactions with
one another. The Code of Conduct was revised in 2018, and it now
places more emphasis on appealing to employees’ sense of responsibility for complying with laws and internal regulations. Heraeus iscommitted to respecting and protecting universally recognized humanrights and abiding by the ILO’s labor and social standards. These
include a ban on child labor, forced labor and any kind of discrimination, as well as ensuring a safe working environment To underscore
this commitment, Heraeus approved a Group-wide Human Rights Policy to supplement the Code of Code of Conduct in 2018. This policy
defines not only the relevant principles, but also minimum standards
for such matters as age of entry into the company and permissible
work hours, along with wages and social benefits. Every employee is
expected to report any violations of the Code of Conduct. In addition
to the internal contact persons in Compliance Management, an external ombudsman is available(see also the chapter on ComplianceManagement).

36

EMPLOYEES AND CORPORATE CULTURE

Strengthening corporate culture throughemployee and leadership development
Responsibility, performance, integrity, respect and the willingness tochange are integral components of our corporate culture. Our leadership model, which has established a uniform leadership culture allover the world, is a pillar of that culture.

ENSURING OUR
BUSINESS SUCCESSLEADINGMYSELF

CREATING A
HIGH-PERFORMANCEORGANIZATIONLEADINGPEOPLE

Heraeus Leadership Model

Leadership training
We believe that leadership excellence is the key factor in making ourvalues part of everyday life in our company and achieving our strategic
goals for growth. The role of a leader requires training and continualreflection about one’s own behavior. Leadership quality is therefore
evaluated in the course of annual employee performance reviews,
based on qualitative criteria. Leadership qualities have a direct impact on bonuses. Over the past few years, employees and executives
throughout the company have engaged in regular discussions of this
topic, with the support of human resources management. Throughleadership training, we promote our corporate culture and make our
executives better leaders.

2018 Heraeus Sustainability Report

New ideas in production
In the Outstanding Leadership in Production training program, production managers learn to work with their employees to improve work
processes, recognizing that an excellent production landscape is an
important factor in boosting our long-term competitiveness. A totalof 300 managers successfully participated in this program. Most recently, optimized production processes have increased productivity at
Heraeus Conamic and Heraeus Noblelight.

Percentage of women in the Global Talents program
2016

2017

2018

17%

20%

40%

Distribution by countries and regions Global Talents program
Asia

21%

18%

Talent management and succession planning

Germany

60%

59%

In the light of demographic change, succession planning for strategically relevant positions is very important. Through our talent management, we seek to identify talent across the entire Group at an earlystage, to nurture these talented individuals and to prepare them totake on new responsibilities. This enables us to fill some executive
positions and key functions internally, and at the same time to encourage an exchange of knowledge and promote cooperation among
the Business Groups and sites.

United States

16%

17%

Other

3%

6%

Our talent initiatives help us cultivate high-potential individuals in
the company. Since the program was launched in 2015, we haveidentified and supported 170 such high-potential employees in theirdevelopment. As many as 80 percent of participants in the programat the Group level (global talents) have advanced to senior positions.
A well-founded selection process is crucial for hiring the right employees to fill these positions. We are therefore continuing to fine-tune ourselection criteria and decision-making processes. The talented individuals who have been selected are increasingly reflecting the diversity of our company, and this strengthens the entire company’s ability
to innovate and solve problems.

Employee development and continuing education
We believe that leadership includes promoting the entrepreneurial
thinking and responsibility of all employees. We therefore support ouremployees as they move forward on their individual pathways andprepare them to meet new challenges.
One requirement in this context is regular, individualized feedback
from the supervisor as part of the annual employee performance
review. During this review, the employee’s development potential is
discussed and follow-up measures are identified, such as seminars,
training sessions and workshops. To ensure a globally uniform standard for these reviews, a new format was introduced in 2018; reviews
are now documented digitally in accordance with standardized guidelines. By the end of 2020, it is expected that 90 percent of employees
who have registered online will have participated in a standardized
annual performance review.

37

EMPLOYEES AND CORPORATE CULTURE

Digital access for all

HAIN
SUPPLY CENCE
L
L
E
C
X
E

TRAINING
FACTORY
Mobile training factories travel around the world
In an effort to modernize global production, three mobile training factories that can be deployed to sites worldwide were launched in May
2017. Employees are trained by participating in the optimization ofa simulated cylinder production facility over the course of a day. The
mobile training factories are smaller and more flexible than regularfactories, so they can be transported more easily from one location ina region to another.

2018 Heraeus Sustainability Report

Digitalization will fundamentally change the workplace in the areasof production and management at Heraeus. The resulting increase inefficiency and flexibility are a competitive advantage and make our
employees’ work easier. Expertise and a willingness to change are
essential for promptly unlocking the opportunities that digitalization
provides. As part of the further training we offer, we therefore prepare
all employees for the digital future and support them on the path tothat future.
This begins with providing access to digital opportunities on a common platform: the Heraeus touch app for employees. This is used toprovide information, encourage dialogue and simplify certain processes, such as the submission of applications. We are continually improving Heraeus touch in order to expand services for our employees
and create added value, while also making the app easier to use. In
our mission of offering digital access for all, we are taking gradual steps to provide personal access to the app for employees who,
because of the nature of their jobs, are not yet digitally connected.
This applies particularly to production employees whose workplaces
do not include a computer. Sixty percent of employees were digitallyconnected in 2018. By 2020, 80 percent will have gained personal
access. With Heraeus touch, employees can access information at any
time, including while traveling or on personal devices, and they cancommunicate with colleagues and participate inlearning opportunities. In 2018, the Heraeus
touch app was tested by employees at selected locations in Germany, the United States andChina. The Group-wide rollout began in 2019and is expected to be completed in most business units by 2020.

We are continually creating new digital opportunities for our employees’ professional development. To that end, since 2018 we havebeen introducing our electronic learning management system, which
provides employees with information about opportunities and allows
them to take courses.

Everyone benefits: Knowledge transfer at Heraeus
The distinguished jury at the 2018 Corporate Culture Awards was
impressed: Heraeus Comvance received the model corporate culture
award for its Train the Team digital learning platform. Train the Team
presents the world of Heraeus Quarzglas in Bitterfeld. It offers a great
deal of information on that business unit and the entire Group, as wellas information about products and processes. It also promotes ongoing learning in the workplace and a new culture of communication.

38

EMPLOYEES AND CORPORATE CULTURE

Training skilled workers

Fair compensation and company benefits

Work/life balance

Our training programs are designed to attract talented young people
and prepare them for positions with our company. At our sites, we cooperate closely with educational institutions and systematically seek
to recruit their graduates.

Heraeus pays attractive, competitive wages, in keeping with the location as well as the requirements of the position and the candidate’s qualifications. Employees also receive company social benefits. Whenever possible, we agree on a uniform salary scale in eachcountry through local collective bargaining agreements. In Germany,
compensation is governed by collective agreements in the chemicalindustry and also includes a share in the company’s success. For employees who are not covered by collective agreements, we provide
performance-oriented compensation, in line with market conditions,through the use of a recognized job evaluation system with definedbonuses. Through our International Assignment Guideline, we ensurethat all of the Group’s employees working abroad receive appropriate
support and compensation commensurate with the kind of work they
are doing.

We want to support our employees as they seek to balance the demands of their professional and personal lives. Small children require
special attention and care. Accordingly, wherever possible we offer
flexible work schedules and provide information about local child care
options as well as short-term solutions for cases when the regularcaregiver is unavailable.

In Germany, we have long relied on the country’s successful dual education program. More than 40 training and university study programs
providing training for careers ranging from machine and equipment
operator, skilled chemical production worker and electronics technician to industrial manager and skilled warehouse logistics worker, as
well as a dual master’s program for holders of bachelor’s degrees. A
new feature is a dual course of study in the field of computer engineering, reflecting Heraeus’s effort to focus more attention on the
topics of the future. In addition, we have been supporting three PhD
candidates in our doctoral training program since 2017.
During reporting year 2018, 177 people successfully completed a
training or dual studies program at Heraeus. They were offered a job
with the company or, given the relevant qualifications, the opportunity
to continue their studies. At the end of the fiscal year, there were 324
apprentices and dual program students at Heraeus in Germany, an
above-average training ratioof six percent. Wheneverpossible, we hire graduatesof our in-house training
programs to meet our needfor qualified employees.

324

APPRENTICES AND
DUAL-PROGRAM STUDENTS

2018 Heraeus Sustainability Report

In addition to their salaries, employees may also receive such additional financial benefits as the public-transportation allowance thatis provided in many locations. At sites where there is no statutory
pension insurance, we make every effort to ensure our employees’ financial security in retirement through company-based solutions suchas contributing to a pension plan. In the United States, for example,
all employees are eligible to participate in a savings plan that wehave established with a leading pension insurance provider. We seek
to keep our employees as well informed as possible about their eligibility for additional benefits. One good example is the overview that
we provide for our employees in Singapore. It outlines the benefits towhich they are entitled, such as time off to care for a child or financial
support in the event of the birth of a child, their wedding or the deathof a close relative.

We also support our employees when they are caring for family members and work with them to find the right solution for their situation.
Our locations are continually reviewing the needs of our employees
and looking for ways to assist them. To that end, we encourage an
exchange of information about useful options, across all of our sites.
In the United States, for example, we have put in place a comprehensive advisory system. Through Cigna’s Employee Assistance Program(EAP), we help our employees in that country to deal with their personal issues. Employees and their family members can use a 24-hour
hotline to establish confidential contact with experienced experts,
who can help them directly or put them in touch with a local contact
person.
In 2014, we opened an office at the Hanau site that provides advice
on issues relating to care for a loved one. It assists approximately 75
employees every year. In addition, the experts at the Heraeus employee assistance service provide help for employees at locations acrossGermany who are facing unusually stressful situations in their personal and professional lives – in a confidential setting and with absolute
discretion, of course.

39

EMPLOYEES AND CORPORATE CULTURE

Employee health
Promoting the health of our employees.
Heraeus cares about the health of all our employees. This is why weoften go beyond our legal obligations in our activities aimed at promoting health. We have introduced a company health management
program; in Germany, for example, this program is part of a binding
works agreement.

OVER

Relative to other countries, German law provides
for a high level of insurance coverage in the eventof illness and also regulates employer contributions. We review the level of protection provided atother locations and contribute financially as needed
to ensure that our employees enjoy good health care.
For example, we support our employees in the UnitedStates and South Africa by contributing financially tothe cost of health insurance, which includes special
benefits and bonuses in addition to medical coverage.

In Singapore, we offer our employees a comprehensive package that
includes a variety of health care benefits such as an annual checkup.
In Germany, company doctors are responsible for responding to medical emergencies and providing preventive care. If possible, we alsooffer our employees annual health screenings that include consultations about individual risks. The results of the screenings and any
recommendations are recorded in a special health passport. Over thelast five years, more than 2,700 employees in Germany have taken
part in this program.

2,700
EMPLOYEESHAVE PARTICIPATED IN
THE HEALTH PASSPORT
IN THE LAST

When it comes to issues of health, we want to provide a point ofcontact for our employees, a partner they can turn to with confidence.
Specific benefits vary by location. In the United States, our employees and their family members are able to consult professional healthexperts at any time.

2018 Heraeus Sustainability Report

Two factors are critical for our employees’ performance: anergonomically optimized workplace and opportunities for physical activity. We therefore pay
attention to opportunities to promote health as
we structure our work organization and the workplace environment. Furthermore, we encourage
employees to acquire skills that are conducive to health, for example through stressmanagement or ergonomic training in
the workplace. In Singapore, healthambassadors offer a group workout in the form of weekly power-up
sessions. Employees also have the opportunity to be active during
breaks; they might play tennis or practice yoga, for instance.

Recognition for excellent preventive health care
The German union for the mining, chemical and energy industries (IGBergbau, Chemie, Energie) has awarded its health prize to Heraeus
Comvance in recognition of the company’s outstanding achievements
in promoting the health of employees at the Bitterfeld site. Amongother things, the jury was impressed by the company’s exemplary workin the field of company health management and its Health working
group, which is in charge of the site’s preventive measures. Other
important factors in the decision to award this prize to Heraeus Comvance were the company’s establishment of sheltered workplaces for
employees with physical limitations and its collaboration with a daycare center.

5YEARS

40

LOCATIONS AND FOUNDATIONS

Civic engagement

2018 Heraeus Sustainability Report41LOCATIONS AND FOUNDATIONS

A broad-based commitment to society

Working for the common good at every location

Civic engagement is an integral part of Heraeus’s self-concept andcorporate culture. As an employer, business partner and neighbor, wecultivate good relationships with our surroundings and help to create
value in the region.

The Heraeus locations are responsible for their own civic engagement
and tailor it to meet local needs. We present positive examples in ourcompany’s media and honor the initiators. The following projects areexamples of our commitment:

In keeping with the principle of “thinking globally, acting locally,”
our sites are also involved in charitable causes that address local
social and environmental challenges. Suggestions for engagement
often come directly from our employees, many of whom are active
volunteers. Their volunteer work is frequently closely aligned with ourbusiness activities.

Testing the car of the future – and being part of the process

Civic engagement in the Heraeus employment contract“Heraeus welcomes and supports employees who volunteer in their
free time, thereby helping to shape and improve the community. Suchefforts are also in the interest of the company, which assumes social
responsibility in a variety of ways as an organization and through its
employees.”

Seven hydrogen-powered delivery vehicles have been in operation in
Hanau since 2017 as part of a groundbreaking pilot project. Heraeus
is a partner in this process, along with Umicore, Evonik, the Fraunhofer project group IWKS, the Chamber of Industry and Commerce
and the Hanau public utility company. One of these vehicles is traveling from one part of the Heraeus plant in Hanau to another, gaining
practical experience in the use of hydrogen-powered vehicles acrosssites. Heraeus innovations and technologies are playing a role in the development of the fuel cell as a drive technology for the future. Here the focus is on
the heart of the fuel cell: the catalyst.
The aim is to improve the performance,
lifespan and quality of these core components – thereby contributing to environmentally friendly mobility. The emissions produced byhydrogen-powered vehicles are merely a few drops of water on theasphalt.

Don’t forget the older generation
Since 2017, Heraeus employees in Shanghai have been looking after
older people on a regular basis as part of the 1+1+1 project.Currently,
15 volunteers are spending some of their free time reaching out to2018 Heraeus Sustainability Report

three families. Once a month they visit these seniors, keep them company and help in their everyday challenges. One family was finding it
difficult to lift their disabled son out of bed. The Heraeus volunteers,
who were visiting the family, helped them by obtaining the equipment
they needed. On traditional Chinese holidays such as the Spring Festival and the Mid-Autumn Festival, the volunteers celebrate with theseniors, making them feel less lonely.

Fundraising for employees in Puerto Rico
When Hurricane Maria swept across the Caribbean in September
2017, with wind gusts of up to 280 kilometers per hour, the islandstate of Puerto Rico was particularly hard-hit. Large areas were flooded, much of the island’s infrastructure was destroyed, and numerous
houses were in ruins. Many Heraeus employees in Puerto Rico wereaffected, too. The Heraeus Board of Management provided 100,000
euros in emergency aid – and that amount was doubled by donations
from throughout the company. Heraeus subsidiaries all over the world
got involved, making direct donations and participating in creative
campaigns, such as a flip cup tournament and a chili benefit.

Fundraising for HMC employees in

PUERTO RICO
Please donate to help rebuild.

42

LOCATIONS AND FOUNDATIONS

Going the extra mile for a good cause

Collaborating with a workshop for the blind in Leverkusen

At Heraeus Electro-Nite in Houthalen (Belgium), sports competitions
are linked to support for charitable organizations. In 2018, seven intrepid employees took part in an event called Climbing for Life, which
involved riding bicycles through the Vosges Mountains. They weresponsored by other employees, and Heraeus doubled their contributions. The money was donated to an organization that fights diabetes.

When selecting suppliers, Heraeus also considers opportunities to collaborate with severely disabled people. Heraeus Epurio in Leverkusen,
for instance, has been regularly ordering goods from a workshop forthe blind for several years. These products are used to keep the company’s premises clean. Heraeus Epurio purchases as much as several
thousand euros in products annually from the workshop, including
brooms, whisk brushes, cloths for cleaning and other equipment, depending on the needs at the time.

Three other employees set off on Belgium’s Dodentocht (“march of
the dead”), a 100-kilometer hike that had to be completed within
24 hours. Once again, employees in Houthalen sponsored their colleagues. The donations went to a variety of charitable organizations
whose causes include fighting cancer.

2018 Heraeus Sustainability Report43LOCATIONS AND FOUNDATIONS

Heraeus foundations help to improveeducation and promote social cohesion
In launching its first foundation in 1897, the Heraeus family laid thecornerstone for broad-based civic engagement. Descendants of company founder Wilhelm Carl Heraeus have continued this tradition by
establishing additional foundations, each with a unique focus, which
complement one another. Every year a portion of the company’s profits
flows into the foundations, which are also Heraeus shareholders.

The Kathinka Platzhoff Foundation is devoted to providing systematic
support for children and young people and their education, and to offering active support to seniors. The Foundation’s Family Academy organizes workshops designed to foster understanding between parents
and children and to support seniors, thereby strengthening the family.
The foundation also includes a senior living facility, a mobile nursing
service, a children’s daycare center and a family center.
www.kp-stiftung.de

2018 Heraeus Sustainability Report

The Heraeus Education Foundation focuses on providing continuing
education for educators, with special emphasis on further training forteachers and administrators. In keeping with its motto “Making connections to improve schools,” the foundation reaches approximately
2,000 educators every year with its seminars on personality development and school management. Its goal is to prepare teachers for thechallenges of teaching.
www.heraeus-bildungsstiftung.de

The Wilhelm and Else Heraeus Foundation promotes research andtraining in the natural sciences, and particularly physics. It facilitates
the sharing of scientific ideas, organizes international symposiums
and seminars, supports talented students and is helping to improve
how the natural sciences are taught in schools The foundation’s work
is recognized all over the world.
www.we-heraeus-stiftung.de

44

FACTS AND FIGURES

2018 Heraeus Sustainability Report45

FACTS AND FIGURES

Key figures
Employees
Total

Employees by region (in percent)

2016

2017

2018

13,24814,09814,903

2016

2017

2018

Germany

37

37

38

Asia

32

30

28

America

18

18

18

Europe excluding Germany

12

14

15

Africa/Australia

1

1

1

2016

2017

2018

Number of workplace accidents (LTI)

-

165

109

Number of fatal workplace accidents

0

0

0

Occupational health and safety

EHS Management

Energy consumption in megawatt hours [MWh]Electricity
Electricity
Gaseous fossil fuels
Natural gas
PropaneHydrogen
Steam
Liquid fossil fuels
DieselOther energy
District heating
Total energy consumption **

2016

2017

2018

235,806

259,889

290,801

159,304 *-112,109
8,114
78,391
3,702

114,134
12,184
77,923
5,671

-

660

639

395,110

18,438481,303

17,961
519,312Waste in tons [t]

2016

2017

2018

Nonhazardous waste from production
Hazardous waste from production
Nonhazardous construction and demolition waste
Hazardous construction and demolition waste

9,738
2,641
-

10,182
6,829
3,277
8

11,630
5,944
9,387
0.2

2016

2017

2018

Percentage of production sites with
EHS management system
based on ISO 14001

45

45

45

Air emissions in tons [t]

2016

2017

2018

Percentage of production sites with
EHS management system
based on ISO 45001-

9

Nitrogen oxide emissions (NOX) from production
Sulfur oxide emissions (SOX) from production
VOC emissions from production

844.5
3.8
44.6*

845.3
1.8
44.5

863.0
7.0
45.9

-

The numbers in the table at right (energy consumption, waste, air emissions) are captured from 14 production locations and apply within a limited framework due to data availability. Data collection is being further systematized in order to report on key figures
and indicators company-wide in the future. The numbers for the fields marked “-” were not included in the 2016 Sustainability Report. They are being reported for the first time in the current reporting cycle.* As part of the ongoing development of our EHS
reporting system, the 2016 reported values for natural gas and VOCs were retroactively corrected.**We are continuing to develop our EHS reporting system. The expanded scope of reporting for the energy consumption data results in the rise in the reported
values along the time axis.
2018 Heraeus Sustainability Report46

FACTS AND FIGURES

Index
I. Responsibility Management
Specific description

Reference/information

Specific description

Reference/information

Name of the organization

Heraeus Holding GmbH

Statement by the top decision-makerp. 3

Company profile

p. 6

Risk management

p. 15

Headquarters

Heraeusstrasse 12–14,
63450 Hanau, Germany

Values, principles as well as standards
and norms

Business Groups and operational facilities

Heraeus Online Portrait

Ownership structure and legal form

Family-owned company

Business groups and markets served

p. 7

Employees and their regional distribution

p. 6

Supply chain

Suppliers and partners

Important changes during the reporting periodwith regard to size, structure and ownership
structure of the organization or its supply chain

No significant changes during the reporting year

Attention to the precautionary principle

p. 30

Obligations to outside initiatives; memberships inassociations

p. 15, p. 33

2018 Heraeus Sustainability ReportCompliance management, training and reporting
process
Structure and composition of corporate
management

Sustainability guiding principles
p. 14
Corporate Boards

Responsibilities within the company forsustainability issues

p. 14

Approaches for involving stakeholders

p. 15

Process for defining reportcontent and limits

p. 4

Report details

p. 50

47

FACTS AND FIGURES

Index
II. Products and solutions

IV. Environment and occupational safety

Specific description

Reference/information

Specific description

Reference/information

Key product and services categories

p. 18, p. 19

EHS Managementp. 30

Quality management

p. 17

Energy and resource efficiency

p. 31

Customer satisfaction survey

p. 17

p. 26, p. 31

Innovation management and approaches

p. 20

Resource cycle management with focus on
precious metals recycling
Chemicals safety

p. 32

Workplace and equipment safetyp. 33

III. Procurement and supply chain

V. Employees and corporate culture

Specific description

Reference/information

Specific description

Reference/information

Management of suppliersp. 23

Human Resources Management

p. 36

Risk analysis and identified risks

p. 24

p. 37

Requirements for suppliers in regard to the
procurement and trading of precious metals

p. 24

Leadership culture, succession planning andtalent management
Training and continuing educationp. 39

Company benefitsp. 39

Work/life balance promoted

p. 39

Health promotion

p. 40

2018 Heraeus Sustainability Report48

FACTS AND FIGURES

Index
VI. Locations and foundations
Specific description

Reference/information

Principles for civic engagement

p. 42

Engagement at Heraeus locations

p. 42

Engagement of the foundations

p. 44

2018 Heraeus Sustainability Report

49

FACTS AND FIGURES

Publication Credits
Publisher
Heraeus Holding GmbH
Communications & Marketing
Heraeusstrasse 12–14
63450 Hanau, Germany
Telephone +49 6181 35-5100
pr@heraeus.com
www.heraeus.com
Editors
Markus Gögele, Communications, Heraeus
Justus Fischer, Communications, Heraeus
Scholz & Friends Reputation, Berlin
Concept/DesignDavid Leister, Communications, Heraeus
Philip Hartmann, Communications, Heraeus
Graphics
Heraeus Holding GmbH, Wolfgang Hartmann, Heraeus (p. 1, 4, 8, 16,
18, 20, 32); Wonge Bergmann (p. 3); ©mooshny – stock.adobe.com(p. 9); Herbert Naujoks (p. 8, 32); Andreas Liebschner (p. 21),
©Iaroslav Neliubov – stock.adobe.com (p. 22); Philip Hartmann,
Heraeus (p. 27); Dr. Jürgen Müller-Schäfer (p. 28); ©Dmytro Tolokonov,©hiphoto39, ©island26 – stock.adobe.com (p. 29); Martin Joppen(p. 31), Heraeus Holding GmbH (p. 34, 40); kasto – stock.adobe.com(p. 35); Andreas Henn (p. 38); Rawpixel.com – stock.adobe.com(p. 41); Rawpixel Ltd. – stock.adobe.com (p. 45)
Reproduction, including excerpts,
permitted only with reference to the source.
2018 Heraeus Sustainability Report50