Annual Report 2016
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Corporate Social Responsibility

Our stated goal is to do business sustainably and responsibly. We believe that in striving to achieve this goal, we can ­secure KSB’s long-term success while protecting the interests of people and the environment. This conviction was underlined in 2010 when KSB signed the UN Global Compact, committing itself to ten universal principles in the areas of human rights, labour standards, the environment and anti-­corruption.

The year under review saw us employ the materiality analysis process for the first time to analyse stakeholders’ interests and define the sustainability topics most important for KSB. The multi-stage process allowed us to identify priorities in the fields of business, environment and society

Key sustainability topics for KSB

As areas with a high or very high priority for both stakeholders and for KSB, these topics will represent the main focus of our corporate social responsibility initiatives over the next few years. In terms of business, the key focus is on compliance, i.e. the degree to which a company and its staff conform to applicable rules and regulations. Environmental topics such as resource efficiency and energy-efficient products also have an economic dimension. In the social context, our company remains traditionally committed to community issues and views education as a key priority for the future. KSB reports on the most important developments in this section.

BUSINESS

Customers and business partners alike expect KSB to act with integrity on the global market. As a company we view compliance with legal regulations and Group guidelines as inherent to our corporate identity. As the actions of a single individual can seriously compromise the reputation of an entire company, we have developed a system which supports employee compliance by defining a core set of binding standards. These standards have been formalised into a Group-wide KSB Code of Conduct, and relevant training has been provided.

2016 saw more than 5,000 members of staff complete training on cartel / anti-trust law and corruption prevention. Using a global matrix of requirements, we ensure all personnel with customer or supplier contact receive training on these topics. This helps participating staff to recognise and avoid risks and hazards in their day-to-day work. We repeat this training at three-year intervals, with interim ­demand being met via additional training sessions every six months.

In the event that employees become aware of infringements or are unsure of whether their actions are compliant, they can refer the matter to the compliance organisation, and specifically to the designated “Compliance Officer”. In ­addition, circumstances which give rise to legal or anti-trust concerns can be reported directly to an independent ombudsperson, who can process potential cases without naming informants. If reliable evidence is presented, then this is pursued.

Alongside a good reputation, a company’s future viability is of essential importance for long-term success. We thus continuously explore the potential impacts of new trends – currently additive manufacturing and digitalisation – on our business. In tackling these questions, we hope to exploit new markets and unlock potential business. Our ­Pegnitz factory currently employs specialised machinery to manufacture small components using selective laser melting. Production of larger components using this process is scheduled for 2018 at the latest. Further promising ­developments include connecting pumps, valves and other components to create integrated systems. Digitalisation promises to pave the way for new business models, and KSB fully intends to play a leading role as this field develops.

Our customers demand the utmost in reliability from our pumps and valves in order to avoid downtime and harm to individuals or the environment. KSB’s goal is thus to ­ensure the supply of reliable products in the long term. In striving to meet this goal, all of our locations consistently apply uniform quality standards.

Environment

Dealing responsibly with the natural environment is a key task for our company.

In 2016, our locations completed more than 400 audits. These confirm that KSB Group companies meet mandatory standards of environmental protection, quality, and occupational health and safety. We also have our factories regularly certified according to internationally recognised management systems. In the past financial year, this included implementing new provisions of the ISO 14001 environmental management system in 72 countries.

Our customers benefit from efficient products characterised by low energy consumption. The year under review saw us introduce numerous innovations, each contributing to our goal of adopting a responsible attitude to the use of natural resources.

In the case of many new products, our engineers have managed to achieve the best hydraulic efficiencies possible – for example in a vertical high-pressure pump primarily ­intended for industrial processes. Thanks to innovative energy-saving drive technology, our latest submersible borehole pumps for water extraction applications consume less electricity than conventional equipment.

We also continue to cut back on the amount of raw materials and energy required to manufacture our products, allowing us to reduce costs and limit our impact on the environment.

In order to define and assess our savings goals, we document the consumption levels of our ten largest Group com­panies. This supports us in meeting targets such as a 10 % reduction in our CO2 emissions by 2020 measured against their 2012 levels. We aim to reduce our consumption of fresh water by 4 % over the same period.

Europe-wide energy audits were carried out in 2015 to pinpoint potential energy savings. The findings of the 18 analyses completed so far have been incorporated into initial measures implemented in the year under review and set to continue into the future.

We have also reduced energy consumption by fitting out our buildings in Germany and France with external wall insu­lation, new windows and insulated roofs. High-efficiency bulbs requiring less energy than conventional lighting systems are used throughout the company, and we have retrofitted most of our factories, administration buildings and social facilities in Argentina, Germany, India and the USA with hi-tech LED lighting systems.

At KSB, close collaboration between different locations and countries is the norm. In order to keep travel costs down and minimise environmental impact, we continue to expand our international video conference system. 2016 saw us ­increase the number of available video rooms to 72. 58 locations in 25 countries can now benefit from these commu­nication facilities. 170 members of staff also make use of an individual video system. In total, some 16,000 screen conferences took place during the year under review.

In cases where business travel cannot be replaced with telephone and video conferences, we seek to use environmentally friendly travel options wherever possible. In 2016, our German staff alone travelled more than 500,000 kilometres by train.

Many of our locations use renewable energies. We endeavour to exploit wind and solar power, especially when it comes to the construction of new factories and buildings. In the year under review we completed a project in India which ­allows us to generate electricity for an administration building using a solar power system.

When modernising plants, we switch to machinery which meets the most stringent environmental standards. The new paint shop and spray booths which began operation in our French and South African factories in 2016 consume less energy and produce lower emissions.

Production processes generate waste – something we want to limit as far as possible. We thus endeavour to save packaging material wherever we can, or at least to use eco-friendly materials. Where waste cannot be avoided, we collect ­materials like paper and metals so that they can be recycled. We have already implemented a drastic cut in the use of substances such as oils and solvents, reducing this by 18.4 % between 2012 and 2015. This means that our goal of cutting consumption of these materials by 20 % by 2020 has almost been achieved already.

Our Goals

Society

We remain acutely aware of the social responsibility we bear as a globally operating company. KSB is therefore committed to supporting social initiatives, with education being a key focus. In Germany, we are one of the founding members of the Wissensfabrik – Unternehmen für Deutschland e.V. [Knowledge Factory – Companies for Germany] ini­tiative. Since 2005 we have agreed educational partnerships with schools and kindergartens which seek to instil in children a passion for science and technology from a young age. KSB provided support in the form of materials for ­experiments and practical work. Two new partnerships with schools were added in 2016.

For the fourth time, KSB hosted a regional competition in Frankenthal under the banner “Schüler experimentieren – Jugend forscht” [Pupils do experiments – Young people do research]. In Bayreuth we renewed our long-standing ­support for the event as a cooperation partner. As Europe’s largest competition for science and technology of this kind, it offers a platform for school pupils to present their research projects.

In Mexico, our staff taught children about environmental topics and recycling. The project saw participants build a composter for the environmentally sound disposal of organic waste at the Mexican location.

KSB also wishes to foster young people’s interest in business and entrepreneurship. In Spain we supported an education project in which our staff helped school pupils to implement their business ideas. At our Zarautz headquarters, the young “managers-to-be” had the chance to talk about their ambitions with local executives. And at our Halle factory, grammar school pupils learned about the daily working lives of KSB engineers as they implemented a logistics project supported by KSB staff.

We are also committed to long-term social developments in the communities where we are based. In India, we supported 15 charitable projects operating in the vicinity of our factories. These are mainly run by organisations seeking to provide aid for disabled, socially disadvantaged, sick and elderly people. Various social institutions were provided with urgently needed equipment including a water treatment system and a solar-powered water heating system. KSB also donated vehicles and a new kitchen, as well as building an entrance with disabled access and additional sanitary facilities.

In France we financed an aid project to set up a new classroom for local children in the Republic of Niger and supported the construction of a well close to a remote village.

At Christmas time, it is traditional for KSB AG to make donations to a number of charitable causes. One recipient in 2016 was an organisation which repairs deep well pumps in Ivory Coast. We also supported schools and social projects at our three largest German locations.

KSB’s company health management focuses not only on preventing occupational injuries and illness, but also on offering individually tailored preventive measures. In ­Germany, these included skin cancer screening and a test for detecting cardiovascular disease. Many staff also took advantage of free flu vaccinations provided by KSB.

Reducing the risk of occupational accidents is one of our ongoing tasks with a focus on measures implemented in production areas.

But ensuring a safe working environment is also important in other contexts. We therefore carry out an annual e-learning course in Germany on health and safety in the office. In the year under review, more than 2,000 members of staff took part in the course to develop their understanding of potential hazards and how these can be avoided.

As well as ensuring the safety of our staff, we also take into account the well-being of our suppliers. To ensure the sustainability of our supply chain, we require that our suppliers not only maintain stringent environmental standards, but also implement fair working conditions. In 2016 we assessed 28 % of our most important global suppliers with regard to environmental protection and occupational health and safety. This analysis will continue in 2017.

Diverse forms of engagement: KSB regularly organises the “Jugend forscht” [Young people do research] regional competition in Frankenthal, in which children and young adults present interesting projects (image above). In Niger we supported an aid project by building a well (image on the left). We have renovated our company buildings to reduce energy requirements, as pictured here in Halle (image on the right).

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