IROs underpinning the material topics

Negative impact

Climate change mitigation

Operations across the value chain are highly energy-intensive and predominantly reliant on fossil fuels. Activities such as chemical synthesis, heating, cooling, drying, refrigeration, and transport demand substantial thermal and electrical energy, contributing significantly to both direct and indirect greenhouse gas emissions. The use of petrochemical-based inputs and combustion heating further amplifies the sector’s carbon footprint and environmental pressure.

Positive impact

Climate change mitigation

Engagement across the value chain can support increased renewable energy use and bio-based ingredient sourcing, enabling climate change mitigation through the reduced reliance on fossil fuels and lowered life-cycle emissions, within and beyond the value chain. Benefits are maximized when production processes are powered by renewable energy.

Risk

Climate change adaptation

Climate-related physical risk. Acute and chronic physical hazards (e.g., droughts, flooding, extreme heat, and precipitation) and related changes in biodiversity may impact our supply chain (supplier locations, natural raw materials) or our own operations leading to higher operational costs or business interruption.

Risk

Climate change mitigation

Climate-related transition risk. Failure to align with net-zero targets (on GHG emissions) may lead to rising costs from carbon pricing, regulatory penalties, and stranded assets. As stakeholders demand low-carbon strategies, companies risk losing market access, investor confidence, and competitiveness in key regions such as the EU and China, which may lead to financial loss or reputational damage.

Opportunity

Climate change mitigation

dsm-firmenich’s products and services can help reduce the carbon footprint of our customers and downstream partners and therefore avoid GHG emissions in the broader value chain, resulting in increased sales and added value for our customers.

Negative
impact

Product quality, safety, and impact

Substances are classified according to the UN Globally Harmonized System based on their intrinsic properties. Some of these hazards define a substance as a ‘substance of concern’. A subset of these, defined under EU REACH, are ‘Substances of Very High Concern’ and are subject to authorization or restriction procedures within the EU. These substances of concern may be present in both inputs and outputs of the production process and may pose occupational as well as environmental risks

Risk

Product quality, safety, and impact

Upcoming EU Green Deal regulations on substances of (very) high concern may affect sales and increase costs for compliance, require R&D investment in alternative substances, and restrict market access. Failure to adapt could impact results by missed sales opportunities, potential fines and/or reputational damage.

Negative
impact

Water management

Agricultural and industrial production processes, such as essential oil extraction, chemical synthesis, and ingredient mixing, require substantial water withdrawals. In water-scarce regions, this can lower groundwater reserves and reduce freshwater availability for surrounding communities and ecosystems.

Risk

Water management

Stricter regulations on water extraction permits, especially in water-stressed areas, may limit withdrawal rights or require costly efficiency upgrades, impacting the company’s ability to operate consistently.

Negative
impact

Biodiversity and nature

GHG emissions from across the value chain contribute to climate change. This accelerates biodiversity loss by disrupting habitats, altering species migration patterns, and increasing extinction risks across ecosystems.

Negative
impact

Biodiversity and nature

Unsustainable sourcing of wild-growing and high-demand botanical species can lead to population declines and extinction risks, threatening plant biodiversity and dependent animal species. While synthetic and biotech production avoids direct habitat exploitation, large-scale manufacturing may still disturb local ecosystems if not properly managed.

Negative
impact

Biodiversity and nature

Intensive agricultural practices and chemical manufacturing can degrade soil health through erosion, contamination, and loss of organic matter. These impacts reduce the land’s ability to support ecosystems, disrupt regeneration, and threaten long-term biodiversity and productivity.

Negative
impact

Biodiversity and nature

Raw material sourcing and production are deeply reliant on ecosystem services, such as pollination, water regulation, and soil fertility, which underpin supply chain resilience. However, unsustainable practices such as deforestation, pollution, and land conversion degrade these natural systems, triggering biodiversity loss and feedback loops that weaken long-term viability.

Risk

Biodiversity and nature

Risk derived from climate change and biodiversity loss, potentially affecting agricultural raw materials such as molasses, glucose, citrus, vanilla, and botanicals. This could result in increased raw material prices, driven by supply and demand dynamics, leading to higher costs of goods and possible shortages of essential inputs.

Negative
impact

Occupational health and safety

Workers across production and lab environments may be exposed to hazardous substances, physical strain, and unsafe conditions. Risks include chemical exposure, skin and respiratory issues, repetitive strain injuries, noise, heat, and allergens. Inadequate safety culture, outdated equipment, or lack of protective measures can lead to occupational illnesses, accidents, and forced-labor-like conditions in high-risk settings.

Negative
impact

Labor conditions and human rights

Workers across production, R&D, and subcontracted environments may face long, irregular, or excessive working hours, including night and weekend shifts, often without adequate rest. These conditions can lead to fatigue, poor work-life balance, and increased risk of burnout. In certain settings, limited access to social dialogue, constrained freedom of association, and weak grievance mechanisms may prevent workers from voicing concerns or improving working conditions.

Positive impact

Labor conditions and human rights

Flexible work arrangements, remote work policies, and access to family leave help integrate personal and professional responsibilities, enhancing overall well-being.

Negative
impact

Inclusion and belonging

Women are typically overrepresented in lower-paid roles and underrepresented in technical or leadership positions within production and research environments, contributing to gender pay gaps and limited career progression. In hierarchical or male-dominated settings, risks of workplace bullying, gender-based harassment, and discrimination may be heightened, especially where formal reporting channels and social dialogue mechanisms are lacking.

Positive impact

Inclusion and belonging

Efforts to promote inclusion and diversity are progressing through transparent pay practices, inclusive recruitment, and access to training. Structured inclusion and belonging policies, global collaboration, and multicultural teams support fair representation and professional development across roles and levels.

Opportunity

Inclusion and belonging

If inclusion and belonging is seen as a shared responsibility, we create an inspiring place to work that will not only benefit our people, customers, and communities but also drive business value

Negative
impact

Occupational health and safety

Workers in agricultural production face risks from agrochemical exposure, extreme heat, and physically demanding tasks, often without adequate protection. In chemical manufacturing, hazards include toxic substances, flammable materials, and high-pressure systems. Both sectors present elevated risks of injury and chronic illness, particularly where protective practices and training are insufficient.

Negative
impact

Labor conditions and human rights

Workers in agricultural and chemical supply chains, particularly in seasonal, informal, and small-scale operations, often face low and unstable wages, limited access to representation, and undervalued manual labor despite health and safety demands. Child labor may occur in smallholder farming due to economic hardship and limited education access. Migrant and informal workers may be exposed to forced labor conditions, including debt bondage, withheld wages, and restricted movement, especially in subcontracted or high-demand roles.

Risk

Labor conditions and human rights

If child labor occurs within the company’s value chain, this results in non-compliance with international human rights standards, which could result in reputational harm or financial losses for the company.

Risk

Labor conditions and human rights

Potential forced labor and unsafe working conditions in a company’s value chain pose significant financial risks, including public backlash and loss of consumer trust, ultimately jeopardizing the company’s commitment to ethical practices and social responsibility, which can severely damage its reputation.

Positive impact

Access to health and nutrition solutions

Affordable and widely accessible nutritional products are vital to meet essential consumer needs across diverse geographies and income levels, fostering health and well-being in broader segments of society.

Opportunity

Access to health and nutrition solutions

Offering food products with less sugar and salt represents a strategic lever to address public health challenges such as obesity, while proactively aligning with evolving consumer preferences and regulatory frameworks. This approach reinforces the company’s leadership in nutritional solutions and strengthens its market differentiation.

Positive impact

Corporate culture

Corporate culture promotes shared values that drive ethical behavior, innovation, and teamwork. In both production and research settings, corporate culture enables accountability, innovation, and performance across a diverse, global, and purpose-driven organization, supporting strong performance and engagement in a complex global environment.

Negative impact

Corporate culture

If companies do not have established whistleblowing systems, employees and value chain workers could hesitate to report concerns, reducing visibility into safety and compliance risks. Such gaps could potentially amplify negative impacts and weaken accountability.