Note 3: Stakeholder engagement

Our approach

The aim of our ongoing stakeholder engagement is to learn from key economic, environmental and social stakeholder groups and, in collaboration, to develop innovative and sustainable solutions to address some of the world’s most pressing challenges. Our Planet Possible agenda is not only designed to help drive innovation and enable us to become radically resource efficient, it’s also intended to inspire employees, customers, suppliers and other key stakeholders to work together with us in achieving this.

Reaching out to all our stakeholders in ongoing conversations is vital to achieving our goals and to further developing our long-term vision and strategy in all areas of sustainability. Our key stakeholders are employees, suppliers, customers, investors, shareholder representative groups, NGOs and international organizations, governments, industry associations, sustainability rating agencies and communities. Based on the company strategy, emerging societal and business issues, and the outcomes of our materiality analysis, we identify the key topics and levels of engagement per stakeholder group, which can vary from pro-active engagement to providing information upon request.

This section includes several 2016 highlights. More details can be found on our website, in the Strategic performance section, and other chapters of this Report 2016:

• Customers: Business performance section and Note 6
• Investors: Governance and compliance section and Note 3
• Specific sustainability/research organizations and NGOs: Note 3
• Employees: Note 11
• Suppliers: Note 7
• Communities: Note 17

Stakeholder engagement in 2016

Our commitment and primary partners

We support a number of charters and external organizations to demonstrate our commitment to sustainability issues. We have been a signatory of the UN Global Compact (UNGC) since 2004. We are a partner of the Caring for Climate platform and an active member of the UN Global Compact Netherlands Network.

We have participated in a human rights program led by the UNGC Netherlands Network in partnership with Shift, a non-profit center for business and human rights practice, with Oxfam affiliates and other Global Compact local networks (see Note 16). In addition, we subscribe to the UN Universal Declaration of Human Rights, the key conventions of the International Labor Organization and the OECD Guidelines for Multinational Enterprises, and we are a signatory to the Responsible Care^® Global Charter and the CEO Water Mandate.

In order to contribute to, and keep up-to-date with, important developments in sustainability, we participate in meetings and task forces as a member of organizations such as the World Business Council for Sustainable Development (WBCSD), Forum for the Future, True Price and the Dutch Sustainable Growth Coalition. Since 2010, we have been a member of Worldconnectors, a Dutch-based initiative working to broaden the discussion on international issues by incorporating perspectives from a cross-generational network.

Customers and products

Our customers are increasingly looking for products and solutions that will help make their business more sustainable. In order to continuously improve our product offering, we encourage customers to challenge us and work together with us. This includes joint research and development projects. For example, our aerospace coatings made a substantial contribution to the outstanding sustainability performance of KLM’s new Dreamliner aircraft. The base coat/clear coat system supplied by AkzoNobel is typically lighter than conventional systems, while its smoother surface means there is less dirt adhesion. The gleaming finish required 15 percent less paint than previously used systems and, together with other improvements, it means KLM’s Dreamliner fleet can fly further, faster, cleaner, quieter and more efficiently than comparable aircraft.

More specific examples can be found in Note 4, the various case studies and the Business performance section of this Report 2016. In addition, we are in the process of improving our methods to monitor customer engagement and customer satisfaction. See Note 6.

One of our focus areas is to support legislation, standards and initiatives that promote and support the use of safer and more sustainable products in our industry. In 2015, we became a partner in the Global Alliance to Eliminate Lead Paint (GAELP) to promote the phase-out of all lead-based paints and eliminate the risks these products cause. We are continuing the work of the alliance by sharing experiences of conversion from lead to lead-free paints, providing technical advice, and by supporting the development of legislation to phase out the use of lead compounds from all paints. See Note 14.

AkzoNobel’s Ferrazone iron fortificant continues to make an important contribution in the fight against iron deficiency anemia, a major global health issue, affecting around two billion people. It causes a loss of physical endurance due to reduced levels of haemoglobin and tissue iron. It is linked with increased risk of maternal mortality during pregnancy; while in infancy and childhood it can cause significant loss of cognitive abilities and decreased resistance to infections.

The most efficient way of combating the condition in developing countries is by fortifying staple foods, such as flour, with a form of iron that is readily absorbed by the body. AkzoNobel’s Ferric Sodium EDTA, Ferrazone, has been demonstrated to be both safe and effective in reducing iron deficiency, even in inhibitory diets lacking bioavailable iron. The use of Ferrazone also avoids undesirable color and flavor changes in the fortified food, as well as teeth staining. We are working closely with NGOs, governments and leading producers of so-called pre-mixes (a mix of vitamins and minerals used to fortify food) to provide the highest quality product and the know-how needed for successful application. Increasingly, countries in Africa are adopting NaFeEDTA in their fortification standards (most recently Zimbabwe and Nigeria, while Namibia and South Africa are expected to follow soon). This should have a positive effect on the sales of Ferrazone. In 2016, we started a project to assess the potential for Ferrazone in the food and beverages market.

Suppliers and sourcing

We continue to engage with Together for Sustainability (TfS), the chemical sector initiative to create more sustainable supply chains. The initiative now has 19 partners across three continents and is making good progress towards building the industry’s standard for sustainable supply chains. The TfS program uses high quality third party sustainability assessments and audits to measure the supplier’s sustainability performance against a pre-defined set of industry best practice criteria. A single assessment is then shared across the partners. It also provides a platform for monitoring improvement actions. See Note 7.

Engaging employees

During 2016, we continued to engage employees from around the world on the theme of sustainability through our Planet Possible activities. See the Social value creation section.

The UN Sustainable Development Goals (SDGs)

The SDGs form the global sustainable development agenda for the next 15 years. We are a signatory to the Post-2015 charter, committing to the achievement of the 17 goals. In line with guidance such as the SDG Compass, we have reviewed these goals against our company strategy and identified priority areas. For more details of our commitment to the SDGs, see Sustainable Development Goals. Information on how our performance relates to all SDGs can be found in the GRI table on our website. The table on the left gives an overview of our contribution.

Human Cities Coalition

In 2016, we brought together a unique coalition of global and local partners from business, governments, academia and civil society to help make cities in the emerging world more liveable and prosperous places for all – with a specific focus on Goal 11 of the UN Sustainable Development Goals. Set up to build on the work of our Human Cities initiative, each partner organization uses its expertise to improve the economic, environmental and social development of large urban areas and help them meet the many planning challenges they face. For more details, see Sustainable Development Goals.

Partnerships on energy and climate

Our aim is to achieve cost-effective energy sources and maximize sustainability impact while being prepared for future developments. For our energy-intensive production processes, we actively engage in diversifying the energy mix. This helps to lower risks and improve our sustainability performance by reducing our carbon footprint and increasing the use of renewable energy. Information on various new energy partnerships – for example the Krammer wind park and bio-based raw materials partnerships – are included in the case study, the Business performance section and Note 8 of this section.

Another example is BICEPS. Co-founded by AkzoNobel, the partnership now includes ten members. BICEPS stands for Boosting Initiative for Collaborative Emission reduction by Power of demand of Shippers. It aims to realize sustainable shipping with a rating system that provides insights into the sustainability activities of shipping lines and by stimulating the sustainability dialog between carriers, shippers and solution providers. Our Marine Coatings business can help carriers to achieve a higher rating with our low carbon solutions.

We also co-chaired the WBCSD Chemicals Sector Reaching Full Potential working group. This was finalized in 2016, along with an Energy Efficiency in Buildings (EEB) project. The focus of this assignment was to collect and disseminate the learnings of all the regional EEB projects organized during the last three years. This knowledge was then shared through our networks and via our partners to support and speed up the realization of more energy efficient buildings.

Developing good practice

As part of our efforts for continuous improvement and the development of good practice, we participate in a range of activities that offer the opportunity to learn from and engage with a broad group of stakeholders. For instance, we actively support CEPE – the European Paint Association – in the pilot project for decorative paints as part of the development of the EU Product Environmental Footprint (PEF). We are incorporating natural capital thinking to ensure our business is sustainable as it grows. During 2016, we continued to expand the scope of our four-dimensional profit and loss (4D P&L) pilot, and developed our first company-wide 3D P&L, as described in Creating shared value across three dimensions.

Our product portfolio includes solutions that deliver both environmental and social benefits to our customers and wider society. While processes for measuring environmental benefit are well advanced, social impact measurement is less well developed. Therefore, we contributed to the Roundtable for Social Metrics and the WBCSD social metrics working group, working together with leaders in the industry to develop ways of quantifying the social challenges we are facing. We use the resulting Social Capital Protocol as the basis of our 3D P&L social assessment.

To help us in further developing integrated reporting and transparency, AkzoNobel was one of the pilot companies for the International Integrated Reporting Council program to create a forward-looking company reporting framework, and provided company input to the working group. We continue as a member of the International Integrated Reporting Council business network, made up of companies committed to making the integrated reporting framework a practical reality. Our Report 2015 was ranked first in the ReportWatch top 400 of annual reports.

Shareholders, analysts and indices

Following 2016 reviews, AkzoNobel is included in a number of leading sustainability indices. An overview (not intended as an exhaustive list) is provided on this page. For more details about how we engage with the social responsible investor community, see AkzoNobel on the capital markets chapter in the Governance and compliance section.