Responsibility built in

Sustainability is built into our Corporate Compass – our business strategy, which guides our business decisions at every level – as one of four key business priorities (see Our strategy).

The Way Beyond Good drives our progress on sustainability, as well as supporting our other three business priorities on growth, customer and people. It is also fundamental to our purpose – to partner with customers to bring food products to consumers around the world in a safe, sustainable and affordable way.

Governance

The Nomination & Governance Committee (NGC) oversees the Company’s strategy and governance on corporate responsibility for ESG matters, in particular regarding key issues that may affect the Company’s business and reputation. The NGC advises the Board of Directors (BoD) on such matters, and reviews and recommends to the BoD the Company’s public reporting on ESG. The Group CR Director provides to the Committee, and subsequently to the BoD, twice-yearly updates on ESG strategy and performance, as well as presenting to the BoD in its annual strategy meeting.

Ultimate accountability for our performance and progress on The Way Beyond Good lies with our CEO and Group Executive Board (GEB) – and this is built into their remuneration via our Short-Term Incentive Plan. Every GEB meeting includes standing items on responsibility topics. GEB members are part of our Responsibility Steering Group (RSG), which meets twice a year to review progress and ensure alignment across the business.

Each of the Way Beyond Good action areas and enablers is owned by a member of the RSG – which includes senior representatives of key functions and each region – who is accountable for setting stretching goals and delivering progress through targeted workstreams. Responsibility leaders from relevant functions and regions are responsible for implementing the Way Beyond Good targets, with support from relevant experts across the business.

Our network of local Way Beyond Good Champions gets employees involved through regular campaigns and local community engagement programmes (see Responsible culture: communities). In our latest employee survey, we achieved outstanding results on CR, significantly outperforming both industry and high-performance benchmarks.¹ Of the employees who participated, 82% are pleased with the contribution SIG is making towards community and society (Way Beyond Good) and 89% believe SIG does a good job promoting environmental responsibility (with our products) in the packaging industry.²

The SIG Way Beyond Good Foundation supports our ambitions through targeted charitable projects and partnerships that strengthen civil society and create positive impacts for the environment (see Responsible culture: communities). Members of our GEB and senior management sit on the Foundation’s Board of Trustees.

We also collaborate with partners, such as Forum for the Future and the Sustainability and Health Initiative for NetPositive Enterprise (SHINE), to drive the wider net positive agenda and catalyse transformative change – beyond our own business and value chain – to create wider benefits for society and the environment (see pages 373–375 in the Annual Report PDF).

Responsibility governance structure

Integrating external insight

Members of our C-suite meet twice a year with our independent Responsibility Advisory Group (RAG), a group of external experts who provide strategic input to our RSG and GEB and challenge us to improve. This year, we discussed opportunities for our business in the context of a rapidly evolving ESG environment and the integration of our newly acquired bag-in-box and spouted pouch business.

RAG members emphasised the importance of focusing on positive impact across our Way Beyond Good targets and communications, and supported our focus on increasing positive impact in the Food+ action area – by helping customers deliver more nutritious food to people who need it most around the world – as part of our net positive ambition.

All five RAG members, including new members from SATS and WWF, offer their below.

“Discussions at the RAG meetings remained strong this year and we welcomed two new members who bring really valuable NGO and food sector perspectives to the group.

I continue to be impressed by the level of participation from SIG’s CEO and other executives, and their genuine openness to critical challenge. The focus is very much on what we, as independent advisors, think they need to hear, not on what they might want to hear.

SIG’s aspiration to be net positive is highly ambitious. When combined with science-based footprint reduction targets, that’s really as ambitious as it gets. This powerful combination has already helped SIG gain significant momentum on climate action and offers great potential to help the company drive progress on forests and biodiversity.

The COP15 global biodiversity summit made clear that preserving natural habitats must be a top priority and SIG’s exciting new partnership with WWF Switzerland will support this. I also see an opportunity for SIG to build on its contributions to net positive and handprinting methodologies on climate by pioneering the development of state-of-the-art assessments on biodiversity that can help show companies the way to becoming truly regenerative.”

“SIG is deeply committed to its mission to offer the most sustainable packaging solution for liquid food. This mission is embedded in the purpose of the company and SIG’s executives are driving progress in their functions and regions.

The Way Beyond Good sets out ambitious targets to tackle major global challenges and the new WWF partnership raises SIG’s level of ambition further on forests. I believe SIG has the heart, commitment and resources to turn these commitments into action, and is nimble enough to disrupt the market and help shape the future of liquid food packaging.

Acquisitions this year offer great potential for SIG to expand its contribution to food availability by, for example, using bag-in-box solutions for bulk storage to avoid harvest food loss in emerging markets. A strong focus on innovation, in partnership with customers, will be vital for SIG to develop solutions that can be scaled up quickly to get more nutrition to the people who need it in a sustainable way and at an affordable price.

Going forward, I want to see SIG think deeply about what its ideal packaging portfolio would be in 20 years’ time in terms of its contribution to society, climate action, biodiversity and waste management – not only taking a global view, but also looking at specific local impacts in the places where the company operates, sources from and serves.”

“SIG’s Way Beyond Good targets are way beyond ambitious and, as they deliver, the company is continually moving the goalposts to go even further. A strong focus on ESG and exciting new acquisitions put SIG in a phenomenal position to grow its business and its positive impact on society.

On top of a great environmental track record, SIG has made impressive strides in its social responsibility by creating a great place to work for employees at all levels of the business through its focus on education, high quality working standards, inclusion and gender equality. This culture is supporting retention by empowering people to advance their careers at SIG and will help secure the buy-in needed for a smooth integration of newly acquired businesses.

The latest acquisitions make great business sense. Adding bag-in-box and pouch solutions to SIG’s portfolio will unlock value for shareholders by moving into new verticals where the company has the right intellectual capital, clients and consumers to accelerate revenue growth exponentially. It’s also a game-changer for the industry as SIG is miles ahead on sustainability. Improving recyclability of bag-in-box bags and pouches is a huge challenge and SIG is already getting ahead on this through innovation in mono-materials.”

“SIG’s targets offer the level of ambition that we need to meet global challenges, including science-based climate targets to achieve a 1.5°C scenario. The breadth of its ambition, integrating climate, forest, resource and food, really sets SIG apart from other companies.

SIG also has an impressive track record of putting its commitments into action. Sourcing 100% FSC™-certified liquid packaging board is a huge achievement in itself and the company is now going further on forest management and restoration to support biodiversity.

We are seeing growing interest in biodiversity, but SIG is one of very few companies that are taking large-scale action on this. Its commitment to restore, protect or improve the management of 650,000 hectares of forest by 2030, and its partnership with WWF Switzerland to drive progress on this, goes way beyond what others are doing. This is the kind of pioneering role SIG can play, setting the benchmark for what a credible commitment looks like.

Pioneers like SIG play an important role in showing that what many consider impossible is in fact possible and can be done profitably. The next big challenge – and opportunity – is to magnify SIG’s positive impact beyond its own business by engaging suppliers, customers and peers to deliver at scale across the sector as a whole.”

“SIG is clearly taking sustainability to heart by leveraging its relationships and know-how to be the best contributor to society in its field. The company is ambitious, but it is realistically ambitious with tangible plans to translate ambition into action. This is a vital distinction because good intentions alone cannot change the world.

Aseptic packaging plays a key role in protecting food, ensuring effective distribution and avoiding food waste through long-life ambient storage.

Simplifying packaging materials for its cartons through aluminium-free¹ solutions is SIG’s key achievement on The Way Beyond Good to date, made all the more impressive because this innovation has not been driven by regulations but by purpose. Now SIG has an opportunity to use its know-how to simplify materials and increase recyclability of its newly acquired bag-in-box packaging, which offers the ability to preserve food on a bigger scale.

It’s also important to remain vigilant on the social and governance aspects of ESG. SIG takes great pride in its commitment to diversity and inclusion, and there is an opportunity to look beyond aspects such as gender to lead on economic inclusion, through a focus on living wages not just for SIG employees but for workers in the packaging value chain, such as those who are involved in waste collection and recycling.”

1 With no aluminium layer.

Embedding corporate responsibility in core business processes

CR is built into the way we do all aspects of our business. For example:

• Solutions selling: Sustainability is a key value driver for our packaging solutions. Sales teams are trained to make this part of every conversation with customers. We include our SIGNATURE portfolio and other sustainable innovations in our marketing globally, and our Fill Beyond Good programme helps customers improve the sustainability of their factories.
• Product innovation: The Way Beyond Good ambitions are driving specific sustainable innovation workstreams, and environmental performance is one of the core value drivers for our product innovation, alongside product safety and commercial considerations.
• Manufacturing: The safety of our people and products is critical to our manufacturing operations and quality controls, as is managing environmental impacts from production.
• Procurement: Working with responsible suppliers and sourcing raw materials from responsibly managed resources is central to procurement at SIG and we train the teams involved.
• People and culture: Way Beyond Good goals on topics such as diversity, equity and inclusion, talent development and employee satisfaction support our people and culture strategy to foster a winning team.
• Remuneration: Our Short-Term Incentive Plan for members of our Group Executive Board, as well as managers and experts with a variable income component, includes a measure linked to a third-party assessment of our ESG performance by EcoVadis. For certain teams, such as procurement, we also link their remuneration to specific ESG performance indicators related to their roles.
• Investor relations: Interest in ESG topics continues to grow in the investment community. Our investor engagement includes dedicated ESG meetings and we publish detailed policies and commitments on our website. SIG has continued to score well in recognised ESG ratings (see The Way Beyond Good) and we have raised further finance based on ESG credentials this year (see box below).

Securing further ESG-linked finance

SIG issued a €650 million Schuldschein sustainability-linked loan in 2022. The high level of demand from a wide range of investors resulted in the transaction being upsized from a launch amount of €300 million.

The Schuldschein is linked to the Company’s ESG performance as assessed by EcoVadis, with the margins adjusted up or down accordingly. Achieving its target EcoVadis score therefore results in a reduction in overall funding costs.

This sustainability-linked Schuldschein adds to existing loan facilities that are linked to our EcoVadis score and to reductions in Scope 1 and 2 greenhouse gas emissions.

In line with our ambition to have a net positive impact on people and the planet, we track and report our progress through external assessments. Ecovadis is a global independent sustainability ratings provider that analyses our performance within the categories of environment, labour and human rights, ethics and sustainable procurement. This year, we were again awarded a Platinum rating, putting us, for the sixth consecutive year, in the top 1% of businesses participating in the assessment. SIG’s specific strengths include our purchase and generation of renewable energy, actions to promote gender inclusion in the workplace, and comprehensive reporting on sustainable procurement issues.

• Risk management: Our most material ESG risks – including climate-related risks (see Climate+) – are integrated into our annual enterprise risk management process, which assesses risks based on potential financial and reputational implications for the business. ESG topics are integral to several of the main business risks identified in our latest enterprise risk assessment (see below). See Enterprise risk management for more on our enterprise risk management. Each key ESG risk has an owner at executive management level who is responsible for the implementation of risk management measures in their area of responsibility, as well as a mitigation action owner within the relevant global function supported by regional teams to ensure local implementation.

Key business risks related to CR topics

• Environment – risks of environmental regulations on recycling of beverage cartons, aseptic carton packaging systems, closures, straws and raw materials; shift in public opinion regarding carton packaging.
• Supply – risks of disruptions in the supply chain, strikes or similar employee actions, resulting in the inability to supply our customers.
• Compliance – risks of non-compliance with applicable laws, regulations and internal policies in areas such as environment, health and safety, human rights, unfair competition, insider trading, tax, sanctions, fraud/embezzlement or money laundering.

• Information security – risks of cyber attacks and breach of data privacy.
• Quality – risks of supplying faulty products or non-compliance with product and safety regulations.
• Human resources – risks of loss of key personnel, inability to attract new talent and inability to drive diversity and inclusion.

Managing ESG through certification to recognised standards

We use independent third-party certifications to recognised external standards to demonstrate our robust management of ESG topics and support continuous improvement in line with best practice. These include:

• ASI (Aluminium Stewardship Initiative): ASI Performance Standard certification is in place for our aseptic carton business, all related SIG production plants have ASI Chain of Custody certification and, from January 2023, all aluminium foil for our aseptic cartons is purchased with ASI certification.
• BRCGS (Brand Reputation Compliance Global Standards) packaging standard (Issue 6): AA Grade certification maintained at all our aseptic carton production plants.
• FSC™ (Forest Stewardship Council™): Chain of Custody certification in place at all our carton production plants – including the three chilled carton production plants acquired in 2022 – and related sales offices (licence code FSC™ C020428). All our liquid packaging board is purchased with FSC™ certification.
• ISCC PLUS: Certification to control ISCC PLUS materials is in place at all our aseptic carton production plants and two bag-in-box production plants to handle polymers linked to renewable or recycled material via an independently certified mass balance system that we use in some of our packaging solutions.
• ISO 14001: Global certification for environmental management is in place for our aseptic carton business, with certification planned for SIG Group, including our newly acquired bag-in-box and spouted pouch business and chilled carton business, in 2023.
• ISO 14040 and ISO 14044: Independent experts use these standards to carry out ISO-conformant life-cycle assessments of our packaging solutions that are critically reviewed by an independent panel for additional verification.
• ISO 27001: Certification achieved for information security management at SIG IT in China, Germany and Romania.
• ISO 45001: Global certification achieved for health and safety management for our aseptic carton production plants, and at our chilled carton production plant in Taiwan.
• ISO 50001: Certification for energy management maintained at four of our aseptic carton sleeve production plants (all three plants in Europe and our plant in Rayong, Thailand).
• ISO 9001: Global certification for quality management is in place for our aseptic carton business.
• LEED: Platinum certification for sustainable buildings achieved at SIG’s Middle East and Africa headquarters in Dubai. Gold certification achieved at SIG’s second plant in Suzhou (China) and planned for the new SIG plant in Mexico.
• SEDEX Members Ethical Trade Audits (SMETA): Audits completed at all our aseptic carton production plants, as well as our office site in Mexico and several SIG legal entities in Germany and Switzerland, on a two-yearly cycle. The next scheduled audits in 2023 will also include the production plants we acquired this year.

Integrating new businesses

During 2022, we welcomed our new bag-in-box, spouted pouch and chilled beverage carton businesses to SIG Group through the acquisitions of Scholle IPN and Evergreen Asia’s chilled carton business. We are working to integrate these businesses into our established ESG governance, policies and processes – including relevant Way Beyond Good ambitions.

Completing this integration will take time and for this reason the newly acquired businesses are excluded from the scope of our CR reporting in 2022, except where otherwise stated. But we have already made progress in some areas.

In 2022, Ross Bushnell, President Scholle IPN, joined our GEB and RSG to represent our bag-in-box and spouted pouch business as complementary packaging solutions to SIG’s beverage cartons. The new chilled carton business – which includes three production plants in China, South Korea and Taiwan – is represented on both the GEB and RSG by SIG’s President & General Manager Asia Pacific North as part of our carton business in this region.

Our Code of Conduct was communicated from day one of the integrations and virtually all new colleagues have completed training on ethical compliance. We are working to fully integrate newly acquired operations into our established health and safety management systems, and we have already trained the approximately 2,100 employees joining us from Scholle IPN on our Life Saving Rules that form the cornerstone of our health and safety programme. We also invited colleagues joining us through the acquisitions to participate in our latest Group-wide employee survey.

We have incorporated the new businesses into our greenhouse gas emissions accounting and Net Zero pathway, and begun work to include them in our Group-wide ISO 14001 environmental management certification in 2023. The three new plants that use liquid packaging board have also achieved FSC™ Chain of Custody certification this year.

1 Industry benchmark defined as norms for manufacturing companies participating in the Willis Towers Watson employee engagement survey.

2 Includes employees joining SIG from Scholle IPN and Evergreen Asia.