GRI content index

GRI 101: Foundation 2016

The reporting principles defined in GRI 101 were adhered to in the preparation of this report.

GRI 102: General disclosures 2016

1. Organizational profile

SFS Group AG (SFS)

SFS is a leading global provider of mechanical fastening systems and precision components. SFS Group AG is made up of the three segments Engineered Components, Fastening Systems and Distribution & Logistics, which represent the company’s corresponding business models. In the Engineered Components segment, SFS partners with customers to develop and manufacture customer-specific precision-molded parts, fastening solutions, and assemblies. Engineered Components comprises four divisions: Automotive, Electronics, Industrial and Medical. The Fastening Systems segment, which consists of the Construction and Riveting divisions, develops, manufactures and markets application-specific mechanical fastening systems. Both segments of SFS are attractively positioned and the Group is broad-based with respect to end markets and regions. Both segments generate their sales primarily in Switzerland, Europe, America and Asia (see Annual Report 2021, Markets). In the Distribution & Logistics segment, SFS is a leading partner for fasteners, tools, fittings, and innovative logistics solutions in Switzerland and Liechtenstein. The products and services are authorized without restrictions in their designated markets; they are not discussed or questioned by stakeholders.

Annual Report 2021, p. 17, “SFS in brief”

SFS Group AG
Rosenbergsaustrasse 8
9435 Heerbrugg
Switzerland

SFS Group is a global player with manufacturing sites and distribution companies at more than 100 locations in 26 countries around the world.

To the overview of locations

SFS Group AG is a stock corporation (AG) under Swiss law (see Annual Report 2021, Corporate Governance).

Engineered Components (EC) segment
The EC segment develops, manufactures and supplies customer-specific precision-molded parts, mechanical fastening solutions, and assemblies. As a specialist in the field of cold forming, deep drawing, injection molding, precision machining, and mechanical fastening, the segment provides its partners with advisory services on the development of customer-specific components, and assemblies. By focusing on selected customer groups, it ensures high application expertise in business units and key account structures. The segment is a global leader when it comes to its applied technologies and applications – in the automotive, electronics, medical and other industrial niche markets.

Fastening Systems (FS) segment
The FS segment comprises the mechanical fastening systems of threaded fastening and riveting technologies. Cold forming, and injection molding as well as the related secondary operations are applied in the production of application-optimized products. To achieve greater convenience in processing as well as safety and cost-effectiveness for customers, who primarily hail from the construction and automotive industries as well as industrial manufacturing, the broad product range also includes setting devices and tools. Thanks to an international network of local sales companies, the application-oriented products are swiftly transported to the processing locations.

Distribution & Logistics (D&L) segment
The D&L segment is a leading national supplier of screws, tools, architectural hardware and innovative logistics solutions in Switzerland and Liechtenstein. It supplies industrial customers, professional trade, specialist retailers as well as wholesale distributors and DIY stores. Through international alliances and sourcing, Distribution & Logistics serves its customers with fast and reliable processes and products at competitive cost levels. The segment provides bespoke logistics services, thereby increasing customers’ value added.

Corporate
The Corporate division comprises the Technology, Corporate Services and Corporate IT & Finance functions. These provide services for the EC, FS and D&L segments in an interdisciplinary function. Technology ensures the transfer of know-how among the segments and production sites. Methods, processes and best practices are exchanged and enhanced. Standardized investment policies and engineering processes improve the efficiency of the SFS Group further. The Corporate Services and Corporate IT & Finance divisions provide cross-segment services in the areas of information technology, finance, human resources, communications and other corporate functions.

For more information on sales distribution by region and end markets, see Annual Report 2021, Markets

i.
Total number of employees: 10,509 FTEs as of 31.12.2021, see also Annual Report 2021, Key takeaways

ii.
Total number of companies as of 31.12.2021: 117 manufacturing sites and distribution companies, see also To the overview of locations

iii./iv.
Net sales and total capital, divided into debt and equity: See financial overview from Annual Report 2021, pages 4 and 62

v.
Number of products or services offered.

The number of products indicated corresponds to the volume sold at the end of each calendar year.

2021 2020 2019
Segment Components (in millions) Components (in millions) Components (in millions)
Engineered Components 29,360.5 28,875.2 27,944.0
Fastening Systems 6,748.1 5,956.1 5,932.6
Distribution & Logistics 1,057.1 947.8 987.4
Total comprehensive income 37,165.6 35,779.1 34,864.0

The following tables show the employee structure by gender and employment type, by region and employment type, as well as by gender and level of employment. The figures are expressed in terms of full-time equivalents (FTEs).

Table a) Employee structure by gender and employment contract in FTE
Female Male Total
Permanent employment contract
(Previous year's value)
2,554.4
(2,530.0)
6,807.0
(6,863.9)
9,361.4
(9,393.9)
Temporary employment contract
(Previous year's value)
374.4
(488.5)
773.5
(809.7)
1,147.9
(1,298.2)
Total number of employees
(Previous year's value)
2,928.8
(3,018.5)
7,580.5
(7,673.6)
10,509.3
(10,692.1)
 
Table b) Employee structure by region and employment contract in FTE
America Asia Europe Switzerland Total
Permanent employment contract
(Previous year's value)
1,754.1
(1,762.6)
3,107.5
(1,170.5)
2,190.5
(2,193.4)
2,309.3
(2,267.4)
9,361.4
(9,393.9)
Temporary employment contract
(Previous year's value)
98.6
(103.2)
884.8
(1,066.8)
139.8
(103.2)
24.7
(25.0)
1,147.9
(1,298.2)
Total number of employees
(Previous year's value)
1,852.7
(1,865.8)
3,992.3
(4,237.3)
2,330.3
(2,296.6)
2,334.0
(2,292.4)
10,509.3
(10,682.1)
 
Table c) Employee structure by gender and employment type (full-time/part-time) in FTE
Female Male Total
Full-time employment
(Previous year's value)
2,728.0
(2,812.0)
7,356.0
(7,451.0)
10,084.0
(10,263.0)
Part-time employment
(Previous year's value)
200.8
(206.5)
224.5
(222.6)
425.3
(429.1)
Total number of employees
(Previous year's value)
2,928.8
(3,018.5)
7,580.5
(7,673.6)
10,509.3
(10,692.1)
 

Most of the activities performed for the SFS Group are performed by workers who are employed by the SFS Group.

Procurement within the SFS Group is organized on a decentralized basis and handled in the individual divisions. This makes it possible to optimally align it with the needs of the respective division. SFS maintains a global procurement network with a focus on Europe, Asia and America. The individual divisions procure materials and raw materials locally and globally. The decision as to where raw materials are sourced depends on criteria such as availability, transport routes, risk and cost-effectiveness, as well as on suppliers’ compliance with the guidelines of the UN Global Compact. For example, wires with special specifications can be imported if they are not available locally or if the procurement volume of a product can be spread out among two or more suppliers in order to reduce risk. Information regarding the purchasing activities of the various SFS Group divisions is shared in a peer group.

The SFS Group differentiates between seven main product groups:
WOM Wire and other materials
FC Finished components
OCE Oil, chemistry/energy
Tools Tools
ME Machinery and equipment
PACK Packing material
SP Service provider

The SFS Group selects its suppliers according to uniform standards, which are set down in the quality manual. These include qualitative requirements, the implementation of a Code of Conduct and supplier audits. In this case, the supplier either signs our Code of Conduct or confirms, by agreeing to the QMA (Quality Management Agreement), that it complies with the statutory provisions on how it interacts with employees, environmental protection and occupational health and safety, and is working to reduce its activities’ adverse effects on people and the environment. At our request, they must also demonstrate that their company has implemented a Code of Conduct that embraces the principles of the UN Global Compact.

In the case of small suppliers originating from non-risk countries and especially in the D&L segment, the Code of Conduct has not (yet) been implemented across the board.

Compliance with the Code of Conduct is checked and supplier audits are carried out at the start of the collaboration. Subsequently, depending on the risk assessment with regard to the respective supplier and its strategic significance, a new review or audit is carried out annually or every two years. These audits can also be unscheduled depending on the situation.

The entire supplier network comprises around 6,500 suppliers (PY 6,500). SFS purchased its goods and materials from the following countries in the year under review:

  • Europe 55% (PY 57%)
  • Asia 32% (PY 37%)
  • America 13% (PY 6%)

Global procurement amounted to over CHF 800 million as of 31.12.2021 (PY CHF 600 million).

The prevailing dynamic market environment was characterized by high demand, supply chain bottlenecks and the ongoing COVID-19 pandemic. Production slowdowns, yet another of the consequences of the COVID-19 pandemic, led to global supply chain disruptions that resulted in shortages of semiconductors and other materials as well as price hikes, which also had an impact on developments at SFS.

Cornerstones of corporate strategy confirmed by the COVID-19 pandemic
The COVID-19 pandemic has been putting the effectiveness of our business strategy to the test for nearly two years now. The strategic alignment has proven to be robust and correct:

  • For SFS, close customer relationships are essential for the successful realization of its value proposition. In keeping with our ‘local for local’ strategy, we are steadily building up our global development and production platform. SFS and its customers benefit from superior supply reliability thanks to short and robust supply chains.
  • Thanks to its balanced focus on different end markets, regions and sales channels, SFS is able to cushion the consequences of the decline in demand.
  • The focus on clearly defined, tool-based manufacturing technologies and relevant additional operations enables technology leadership in core processes. Standardized machinery reduces risks and increases flexibility.
  • Thanks to its good profitability and solid balance sheet, the company has the means and the ability to pursue its long-term strategy and to make the associated investments – even in a crisis.
  • The global megatrends relevant to SFS remain intact: digital revolution, economic globalization, growing demand in the areas of health and well-being, limited availability of resources, demographic asymmetries.

Based on these findings, SFS is encouraged to pursue the path it has chosen consistently.

Strong competitive position lays foundation for future growth
SFS focuses on innovation trends that once again proved robust in the 2021 financial year. The segments’ honed competitive edge enabled vital new project acquisitions and market share gains, which in turn lay the foundation for future growth. With respect to the manufacturing of assemblies for electric brake systems for the automotive industry, for example, a cooperative arrangement was intensified with leading Tier 1 suppliers in the US and the EU.

This growth was accompanied by investments in buildings, equipment, hardware and software. Major projects included the construction of the new production hall in Heerbrugg (Switzerland) for the Automotive division, ongoing efforts to switch to S/4HANA (the new generation of ERP systems), the strong commitment to cybersecurity and other project-specific investments. This additional production hall will offer capacity required for manufacturing assemblies for electric brake systems. The site expansion in Hallau (Switzerland) for the Industrial and Medical Divisions was completed on schedule and successfully put into operation. A production hall in the immediate vicinity of the existing Electronics division site in Johor Bahru (Malaysia) was purchased to facilitate the new projects expected in the areas of hard disk drives and medical devices.

Internationalizing the D&L segment with Hoffmann
The addition of Hoffmann in 2022 will give the D&L segment an internationally strong position in the attractive area of quality tools. Hoffmann is a leading international systems partner for quality tools that is well-known on European markets and serves more than 100,000 customers with a product range comprising around 500,000 items. Customers appreciate not only the company’s comprehensive range of products but also its high level of product and logistics expertise, which will be strengthened even further through the commissioning of the new LogisticCity in Nuremberg (Germany), Europe’s most high-performance logistics center for quality tools. The two companies have been collaborating successfully for many years and have a great deal of common ground with respect to their value proposition and values.

Changes to the Board of Directors and Group Executive Board
At the Annual General Meeting 2021, the Board of Directors of the SFS Group appointed Manuela Suter, currently CFO of Bucher Industries and a member of its Group Executive Board, to the Board of Directors. With her many years of experience in multi-divisional, international and listed industrial companies, she is a valuable addition to the Board. Similarly, at the Annual General Meeting 2021, Volker Dostmann took over as CFO of SFS from Rolf Frei, who will continue to serve the company in selected strategic projects until his retirement in 2023.

The Board of Directors of SFS Group AG requested to the Annual General Meeting 2022 that Thomas Oetterli, born 1969, be appointed to succeed Heinrich Spoerry as Chairman of the Board. Heinrich Spoerry will step down from the Board of Directors after reaching the age limit stipulated by law. Having joined SFS for the first time in 1981, Heinrich Spoerry helped shape SFS’s successful development, making key contributions toward setting the Group’s strategic course.

Thomas Oetterli has served as an independent member of the SFS Group’s Board of Directors since 2011 and has chaired the Audit Committee since 2014. Through his many years of service on the SFS Group’s Board of Directors, Thomas Oetterli has gained in-depth knowledge of the group of companies.

The Board of Directors also proposed that shareholders elect Dr. Peter Bauschatz, currently the chairman of the Supervisory Board of Hoffmann SE, to SFS’s Board of Directors. The election of Dr. Peter Bauschatz was subject to the condition that the acquisition of Hoffmann SE be completed first, which is now the case. Hoffmann’s current CEO, Martin Reichenecker, joined the Group Executive Board of SFS upon conclusion of the transaction. Hoffmann SE's inclusion at various levels of the SFS organization will create continuity and lay the foundation for the Group’s successful future development.

The Board of Directors is pleased that the motions were approved by a large majority of shareholders.

Today, SFS acts with foresight for the future and takes its economic, environmental and social responsibility seriously. In doing so, it not only increases the value of the company in the long term, but also contributes to sustainable development with its forward-looking solutions.

The precautionary approach or the precautionary principle plays an important role at SFS, which is why it is also enshrined in the Group’s Corporate Principles and Code of Conduct. SFS understands sustainability to be the right balance between economic success, environmental friendliness and social responsibility while respecting human rights (as defined by the European Commission, SME Guide) and taking the needs of current and future generations into account. This attitude is an expression of our partnership with the various stakeholder groups. However, the precautionary approach also serves to reduce or prevent negative impacts on society and the environment that have been or could be caused by the company. In addition to the principles of environmental management, SFS supports the goals of the Paris Agreement, such as limiting global warming to below 2 or 1.5 degrees Celsius. Specifically, SFS aims to reduce its CO2 emissions (Scope 1 and 2) by ≥90 % by 2030 (measured as tons of CO2 per franc of value added). By 2040, the aim is to reduce CO2 emissions throughout the entire supply chain (Scope 3) by ≥90 % (measured in tons of CO2 per franc of value added; see also the chart on the roadmap).

The Group Executive Board and the Board of Directors regularly assess the main business risks to which SFS Group is exposed. A comprehensive risk assessment is conducted at least once a year. In this assessment, the relevant risks are systematically classified according to the likelihood of occurrence and the severity of the potential consequences. Potential risks and actions to contain these risks were examined once again during the year under review. The focus was on the risks associated with data breaches and business interruptions due to cyber attacks, investment-related risks associated with major projects, delayed order fulfillment due to the pandemic, risks associated with acquired companies, warranty risks arising from product recalls, company exposure to the global economic environment, compliance and currency-related risks.

Through various internal audits and inspections of its own facilities as well as external audits of customers and certification organizations at the individual sites, SFS creates transparency, pursues a preventive approach and makes ongoing improvements.

This also includes regular supplier assessments in order to identify risks in the respective supply chain at an early stage and introduce suitable measures. This also includes compliance with the ISO 9001 standard and, where required, the ISO 14001 and ISO 45001 standards.

In the interest of promoting ongoing further development with respect to innovations, new business areas and the topic of sustainability, SFS also pursues a broad-based idea management system. Here, the company also focuses on supplementing internal ideas and findings by involving external specialists.

In the year under review, SFS Group AG supported, developed or joined the following initiatives:

  • GRI
  • UN Global Compact

As part of its commitment to corporate and social responsibility, SFS is also involved in various associations and interest groups. SFS is actively involved in the following:

  • Arbeitgeberverband Rheintal (Rheintal Employers’ Association)
  • Hans-Huber Stiftung (Hans-Huber Foundation)
  • Saint Gallen Appenzell Chamber of Commerce and Industry
  • Stiftung FH SCHWEIZ – zur Förderung des dualen Bildungswegs (Foundation of the University of Applied Sciences SWITZERLAND – for the promotion of the dual education system)
  • Swissavant
  • Swissmem

With the exception of Swissmem, SFS is an active member of the associations and interest groups listed above and supports the organizations both financially and through the provision of personnel.

2. Strategy
3. Ethics and integrity

SFS Code of Conduct

SFS Corporate Principles

The SFS Code of Conduct and the SFS Corporate Principles are broad-based and have been drafted by the Executive Board with the involvement of various stakeholders and approved by the Board of Directors. Both documents will be passed on to all new employees. In addition, all SFS employees receive training on the Code of Conduct every two years. The Corporate Principles and Code of Conduct are also firmly integrated into management workshops. The Code of Conduct, including an explanatory document, is published on the SFS Group website and therefore available to internal and external stakeholders in German and English. The Corporate Principles and Code of Conduct have also been translated into the twelve languages most commonly used by the company on the basis of its employees and business partners and are available to stakeholders in printed or digital form.

4. Governance

The Board of Directors and Group Executive Board attach very great importance to good Corporate Governance. In the interest of shareholders, customers, suppliers, other business partners and employees, the principles of Corporate Governance ensure the necessary transparency and a healthy balance of management and control.

Here, SFS follows the guidelines of SIX Swiss Exchange Ltd.

 

Responsibilities with respect to sustainability clearly defined
One key aspect of this is the sustainable development of SFS. The CEO, together with the full Group Executive Board, regularly examines the issue, sets priorities and monitors progress in the respective categories. On behalf of the Group Executive Board, an interdisciplinary team consisting of representatives from the Environment and Safety, Compliance, HR and Communications departments coordinates and consolidates the various sustainability-related activities. Due to their different characteristics and in the interest of maximizing their effectiveness, the divisions’ respective management teams are responsible for structuring the activities. Wherever possible, the topic of sustainability is integrated into regular management processes and reports using standardized metrics. The CEO approves the sustainability report in consultation with the Board of Directors.

5. Stakeholder engagement

The most important stakeholder groups at SFS are (alphabetical order):

  • Competitors
  • Customers
  • Financial analysts/investors
  • Financial and business media
  • Local communities
  • SFS Board of Directors
  • SFS employees
  • SFS Management
  • Shareholders
  • Universities/educational institutions
  • Suppliers

At the end of the year under review, around 20% of all employees were covered by collective bargaining agreements. This figure has remained stable year over year, taking into account the broader scope of data collection. No collective bargaining agreements apply in Switzerland and the USA.

The stakeholders listed under GRI 102-40 have been identified as important in the stakeholder dialog as they meet at least one of two criteria: Either the stakeholder group has a strong influence on the economic, environmental or social performance of SFS and/or the stakeholder group is strongly affected by the economic, environmental or social performance of SFS.

That makes the involvement of the most important stakeholders an essential part of sustainable business practices and the key to gathering opinions and insights from the entire company and its environment.

When surveying customers and suppliers, SFS focused on the Engineered Components segment as part of its 2016 materiality assessment. Customers and suppliers from the Distribution & Logistics segment were part of the stakeholder dialog in 2019. The most recent materiality assessment in 2021 therefore focused on the Fastening Systems segment. That means that customers and suppliers from all three segments have been included in the last three materiality assessments. In addition to these two stakeholder groups, the latest survey also included universities/educational institutions, financial analysts/investors and SFS Management.

In addition to the most recent materiality assessment carried out in 2021 (see GRI 102-42), SFS conducts an ongoing dialog with its stakeholder groups through the following channels:

Employees:

  • Regular employee surveys (e.g., through participation in the Swiss Employer Award)
  • Quarterly information
  • Management by Objectives (MbO)
  • CIP (Continuous Improvement Process) / ideas box
  • mySFS employee app

Customers:

  • SFS sales representatives, technical advisors and key account managers are in regular contact with our customers.
  • In the points of sale (e.g., HandwerkStadt branches in Switzerland or Triangle Fasteners offices in the US), our customers are advised by our professional sales teams and can provide their feedback directly.
  • Customer satisfaction analyses: Against the backdrop of the newly implemented Group Guidelines, each division has reviewed its existing approaches to measuring customer satisfaction and developed a corresponding concept. The division-specific concepts vary as a result of the different customer segments. The means used for measuring customer satisfaction range from a scorecard such as those used by the Automotive division to the online surveys used by the Electronics division.

Universities/educational institutions:

  • Collaborative arrangements with various universities and educational institutions with regard to innovations, technological developments, the promotion of the dual education system and hands-on projects with students/trainees.

Financial analysts/investors:

  • Regular conference calls, bilateral discussions, investor days (every two years), conferences and roadshows by the CEO, CFO, Head of Corporate Services and Head of Corporate Development, Investor Relations & Communications

Financial and business media:

  • Regular bilateral discussions and interviews as well as the annual media conference with the media relevant to SFS

Suppliers:

  • Initial contact as part of the assessment process and implementation of the Supplier Code of Conduct
  • Regular discussions between SFS buyers and suppliers
  • Regular audits (in terms of quality, the environment, occupational safety)

Local communities:

  • Open houses at various production facilities

In the year under review, the following key concerns and questions were raised by stakeholder groups:

  • Customers/analysts/investors: Enquiries regarding positioning and ESG measures
    During the year under review, SFS was contacted by customers on numerous occasions with self-disclosure requests as part of suppliers’ ESG assessments. Customers, analysts and investors alike also expressed an interest in sustainability ratings.
    → All requests were assessed and responded to individually. A future expansion of reporting through the inclusion of additional ratings is likely.
  • Media: Loss of earnings due to short-time working
    How high was the loss of earnings for SFS employees during short-time work in Switzerland?
    → In the reporting year, short-time work only had to be applied on a temporary basis in a few areas. The maximum loss of earnings for the affected employees was 4%. The other employees made solidarity contributions in the respective business units.
  • Media: Apprentices working from home
    What impact is the COVID-19 pandemic having on apprentice training?
    → In general, attempts were made to train apprentices in the company whenever possible. Where this was not possible, the situation required more supervision on the part of SFS and more self-organization on the part of the apprentices.
  • Media: COVID rules
    What rules apply at SFS with regard to testing and vaccination in connection with the COVID-19 pandemic?
    → Everything the Group did at all times was centered around the tenet of protecting the health of both employees and those around them. In principle, the safety plans implemented were based on the specifications of the respective authorities. In Switzerland, employees were able to test themselves on a weekly basis as part of a study conducted by the Cantonal Hospital of St. Gallen and supported by the local government. Participation in the study also made it possible to perform antigen pool tests quickly in case of suspected cases or before events such as meetings or training.
  • Media: Arms exports
    Why is SFS licensed to supply war material in the “ammunition” category and why is no information available on the SFS website?
    → The license related to the manufacture and supply of components for ignition triggering. This activity had been taken over as part of an acquisition focused on the automotive and industrial sectors and accounted for only around 0.003% of sales. SFS made a conscious decision to withdraw from this business in 2018.
  • Media: Institutional EU framework agreement
    Is the failed framework agreement with the EU creating uncertainty for SFS?
    → Yes. Around 25% of employees in Switzerland are cross-border commuters. More than 95% of the products manufactured in Switzerland are exported, most of them to the EU. Free access to European sales and labor markets is key to the successful development of SFS in Switzerland. We expect politicians to create stable and attractive framework conditions and to ensure free access to European sales and labor markets.
  • Media: Commitment to dual education
    SFS is a member of the new consortium to support the Stiftung FH SCHWEIZ (Foundation of the University of Applied Sciences SWITZERLAND). What is the significance of dual vocational training for SFS?
    → We are convinced of the strengths of the dual education system and the important role it plays for SFS and the Swiss economy as a whole. Because of that, we would like to promote the dual education system and underscore the importance of this successful system to industry and society. Only thanks to high-quality and practical training can companies like SFS maintain their competitiveness and safeguard jobs in the process.
  • Local communities/population: Purchase of land in Flawil
    → In order to expand its production capacity for deep-drawn components for the automotive industry, SFS plans to expand its location in Flawil (Switzerland) and has signed a purchase agreement with the municipality of Flawil for the acquisition of a plot of land measuring 5,522 m2. The land borders on the existing production buildings and is located in the commercial-industrial zone. It is currently being used for allotment gardens. A town hall meeting was held to decide whether to approve the sale. As part of the media coverage in the run-up to the meeting, various groups in the municipality of Flawil expressed their critical viewpoints on the project. While some attendees were reluctant to make the land available for industrial use, others were reluctant to sell the land, instead preferring to merely hand it over as a building under leasehold. The town hall meeting approved the sale of land at the end of November 2021 with a two-thirds majority.
    For SFS, the expansion of the plant in Flawil is an important step towards achieving the desired growth in the area of deep-drawn components for the automotive industry. The expansion will create around 40 additional jobs and positions for trainees. The special location in the center of town is reflected in the attractive design of the buildings and facade. The municipal council has promised that a substitute site would be found for the allotment gardens.
  • Investors/customers: Cyber risks
    What is SFS doing in the area of cybersecurity?
    → In the area of cybersecurity, SFS is working with great dedication to minimize both the risk of an attack and its consequences through the use of technical solutions, by increasing the number of staff within the organization and by implementing preventive measures such as regular employee training. In the year under review, around 2% of total investments at Group level for buildings, equipment, hardware and software were related to cybersecurity.
  • Local communities: Electricity supply in China
    How is SFS affected by the rationing of the energy supply in China?
    → One of SFS’s largest production platforms is located in Nantong (China). The platform, which was built from scratch and in accordance with the latest construction standards and occupied by SFS in 2019, was not affected by power supply failures during the year under review. Potential improvements for increasing efficiency and reducing energy consumption as a result are identified on an ongoing basis and implemented in order to minimize the risks of rationing to the greatest possible extent.

6. Reporting practice

The comprehensive scope of consolidation of the consolidated financial statements (see also Financial Report 2021, pp. 92-94) has not been applied to all sustainability indicators. A different degree of coverage is disclosed for the individual indicators in each case.

At SFS, a distinction is made between the group of consolidated companies used to collect key sustainability indicators and the group of consolidated companies used to determine the corresponding ISO certifications of the locations. In order to reconcile costs, performance and income, certification is performed for all material production sites with more than 50 employees, in which SFS holds a stake of ≥50%. “Non-production sites” such as the distribution and logistics centers are also included in the compilation of key sustainability figures (CO2 emissions, etc.). The goal is to include all material sites by 2025.

SFS has been following the guidelines of the Global Reporting Initiative (GRI) since 2016 and has complied with the GRI Standards (“Core” option) in its sustainability reporting since 2019. This all began with a comprehensive materiality assessment based on the procedure described in the GRI Standards and the topics addressed in the GRI Standards. Material sustainability topics and related measures were presented in a compact form in the Sustainability Report from 2016 to 2018, which was integrated into the Annual Report as one separate chapter.

The principles of the UN Global Compact, which SFS has made a commitment to uphold since 2010, are also material. Progress is presented annually in the current sustainability report (see also UN Global Compact). As a member of the UN Global Compact, SFS is committed to the Sustainable Development Goals (SDGs) and currently prioritizing four of those goals here: SDG 4 – Quality education, SDG 8 – Decent work and economic growth, SDG 12 – Responsible consumption and production, as well as SDG 13 – Climate action. This prioritization reflects the five material topics as determined in the materiality assessment conducted in 2021: economic performance, occupational health and safety, education and training, emission reduction and socioeconomic compliance. In doing so, SFS not only supports adherence to the principles of the UN Global Compact, but also makes a contribution toward ensuring the best-possible implementation of the SDGs by 2030.

In 2016, an initial materiality assessment was prepared and approved by the Group Executive Board during workshops with other internal and external stakeholder groups. The 2016 materiality matrix was then updated in accordance with the standards specified by the GRI during the switch to the GRI Standards (“Core” option) in 2019 and with the decision to publish the sustainability report separately from the annual report in the future. This has resulted in a combination of some of the material topics, the removal of others and yet other topics have shifted or been given higher/lower priority. Together with the material topics determined in the materiality matrix, the identified SDGs provide the primary focus for the sustainability strategy and as well as for the short- to medium-term corporate strategy of SFS as a result. Although all other topics listed in the matrix are considered important, they were not pursued in a more focused manner for reasons of priority. In this context, SFS aims to perform the materiality assessment every two years and to update the matrix accordingly.

  • GRI 201: Economic performance
  • GRI 305: Emissions
  • GRI 403: Occupational health and safety
  • GRI 404: Training and education
  • GRI 412: Human rights assessment
  • GRI 419: Socioeconomic compliance

Compared to the previous report, the following information from previous reports has been restated:

  • Throughout the entire report, the number of employees is now shown in terms of full-time equivalents (FTEs)
  • For GRI 305, various figures from previous years were adjusted due to a change in the scope of consolidation
  • For GRI 403-9, the number of hours worked in 2020 was corrected retrospectively due to an error

The figures in question also include a note referencing the adjustments.

As part of its materiality assessment, SFS conducted another round of extensive interviews with experts in 2021 as well as a corresponding analysis with the identified stakeholder groups. The expert interviews were designed based on the overview of 33 sustainability topics defined by GRI. A final consolidation of the results from the dialogs revealed that stakeholders continue to view the five material topics to date as material. The new topic of “ GRI 412: Human rights assessment” was also added. Through it, SFS addresses the following six material topics in its current sustainability report:

  • GRI 201: Economic performance
  • GRI 305: Emissions
  • GRI 403: Occupational health and safety
  • GRI 404: Training and education
  • GRI 412: Human rights assessment
  • GRI 419: Socioeconomic compliance

The reporting period is the calendar year in each case.

The most recent sustainability report in accordance with the GRI standards (“Core” option) was published on May 31, 2021.

SFS will report annually on the topic of sustainability.

If you have any questions about sustainability, please contact:

Claude Stadler
Head of Corporate Services, Member of the Group Executive Board

Lukas Graf
Head of Corporate and Marketing Communications

Yvonne Geiling
Lead Sustainability, Corporate Communications

SFS Group AG, Corporate Services
Rosenbergsaustrasse 8, CH-9435 Heerbrugg
T +41 71 72 75151
sustainability@sfs.com

This report has been prepared in accordance with the GRI Standards, “Core” option.

No external assurance was used for the sustainability report.

Material topics