Firmenich’s ESG FY22 shows accelerated progress “despite the challenging economic climate”

12 Sep 2022 | By Venya Patel

12 Sep 2022 --- Firmenich has released its annual Environmental, Social and Governance (ESG) Report for fiscal year 2022, with “strong sustainability performance” tied to the company’s main pillars – climate, nature and people. Sustainalytics, Ecovadis and Ethisphere – independent bodies – validate Firmenich’s ethical and sustainability progress.

“Our Pathways to Positive sustainability strategy, and our clear 2025 – 2030 objectives, are our north star,” Ingvild Van Lysebetten,VP corporate communications at Firmenich, tells PersonalCareInsights.

“We continued to accelerate our ESG actions despite the challenging economic climate and kept making measurable progress toward our 2025 targets, even exceeding them for renewable ingredients and living wage,” adds Gilbert Ghostine, CEO at Firmenich.

Thomas Andro, senior director of corporate sustainability at Firmenich says Firmenich’s ESG strategy keeps progressing across its operations and supply chain. He explains that consumer demand for sustainable products is a structural growth trend in the industry.

“Firmenich ESG strategy keeps progressing across our operations and supply chain,” adds Thomas Andro, senior director of corporate sustainability at Firmenich. He explains that consumer demand for sustainable products is a structural growth trend in the industry.

The company notably focuses on strengthening its food profile by enhancing nutrition without sacrificing taste. It also shows ingredients used across its product offering, including perfumery, lean toward biodegradability and are sourced ethically.

Independent evaluations
Overall, Firmenich achieved a score of 7.5 (low ESG risk) by Sustainalytics, falling in the global top 50 out of approximately 15,000 companies. “A strong ESG rating indicates that a company manages its ESG risks well in comparison to its peers,” explains Lysebetten.

“Sustainalytics evaluates companies against sustainability risks, which can have material consequences for businesses. Sustainalytics works with hundreds of the world’s leading asset managers and pension funds who incorporate ESG and corporate governance information and assessments into their investment processes.”

Firmenich also achieved its second consecutive Platinum rating by Ecovadis with a score of 88%, placing Firmenich in the top 1% of all companies assessed worldwide. Moreover, Ethisphere rated Firmenich as “2022 World’s Most Ethical Companies.”

“Ethics is a critical component of our values and our leading ESG performance. We hold ourselves accountable to the highest standards of ethical behavior every day, within the company and in our business relationships,” states Lysebetten.

Overall, Firmenich achieved a score of 7.5 (low ESG risk) by Sustainalytics, falling in the global top 50 out of approximately 15,000 companies. It also achieved its second consecutive Platinum rating by Ecovadis with a score of 88%, placing Firmenich in the top 1% of all companies assessed worldwide. Moreover, Ethisphere rated Firmenich as “2022 World’s Most Ethical Companies.”Firmenich expanded the proportion of fully or partially biodegradable ingredients in its fragrances up to 96.6% on average – surpassing its 95% target one year earlier than planned.

Biodegradable fragrance
Firmenich followed its biodiversity strategy, validated by the Union for Ethical Biotrade, to restore 15% of its sites with biodiversity risk.

Moreover, the company expanded the proportion of fully or partially biodegradable ingredients in its fragrances up to 96.6% on average – surpassing its 95% target one year earlier than planned. Firmenich also uses 33% of renewable or upcycled carbon content in its fragrance portfolio.

Financially, perfumery and ingredients delivered a double-digit revenue growth driven by “record results” in fine fragrance and ingredients, while consumer fragrances delivered “resilient performance despite industry-wide softness.”

In June 2022, the company launched the Circular Fragrance Collection, created with upcycled ingredients – unsold jasmine flowers and damaged cardamom pods, musks and marine molecules.

By applying International Fragrance Association’s standards, the company ensures that its fragrances are created according to the highest safety standards.

Greater health and better taste
Firmenich has also committed to accelerating the global Diet Transformation via environmentally sustainable and responsible healthier and better tasting foods. Its contribution to this project includes better nutrition through its “state-of-the-art innovation and creation expertise” that provides solutions for healthier food with great taste.

Nutritional solutions enable less sugar and salt and support the immune system to sustain inner well-being and microbiome balance.

A team of researchers previously found that sugar alters the gut microbiota, which in turn causes weight gain and, potentially, pre-diabetes in mice. Additionally, another study revealed that reducing salt intake by 1 g a day could prevent over nine million heart attacks and strokes in China – the country with the highest salt intake in the world.

“Therefore, we are expanding the nature-based ingredients within our portfolio, along with strict sustainable sourcing standards and strong involvement in ‘projects at source’ with our suppliers,” the report outlines.

The company says it uses digital tools such as EcoFood Compass to achieve transparency and traceability. Firmenich’s nutritional solutions enable less sugar and salt and support the immune system to sustain inner well-being and microbiome balance.

In May, DSM was set to merge with Firmenich to boost annual sales by €500 million (US$537 million), particularly by combining DSM’s Food & Beverage and Firmenich’s Taste & Beyond businesses.

Actions against climate change
Firmenich’s FY2022 ESG performance in climate change highlights that it was one of two companies to receive a fourth CDP (non-profit organization) Triple A rating for climate, water and forests.

Additionally, three manufacturing sites in Norway, Singapore and South Africa were carbon neutral and operated without using (carbon) offsets. The company has maintained 100% renewable electricity in its operations, including its acquisitions.

Scope 1 and 2 emissions were reduced by 36.1% when comparing 2017 and FY22. The new ingredients sites also reduced Scope 2 and 2 emissions by 12.2% when comparing 2020 and FY22.

“Our Firmenich Inclusive Capitalism business model is gaining more traction and proving more relevant in today’s world. Every year, new climate extremes have a growing global impact: Firmenich’s environmental ambition is a vital business investment today and for the future,” shares Ghostine.

Moreover, the company aims to reach carbon neutrality in its direct operations by 2025 and then absolute carbon emissions reduction by 2030. This is in line with limiting the global temperature rise to 1.5˚C.

Firmenich is targeting net-zero emissions by 2039 across its direct operations and value chain (Scopes 1, 2, and 3) – which has been validated by the Science-Based Targets initiative (SBTi) in August 2022– making it the first company in the industry to receive SBTi approval.

Clean industry efforts
Amyris also published its second annual impact report on ESG, spotlighting developments in greening up the production of its chemistry solutions for the beauty and fragrances sector. These include producing squalene – an anti-inflammatory compound for skincare products – from sugarcane, rather than sourcing it from sharks.

In other industry developments, Kimberly-Clark, manufacturer of personal hygiene products including Andrex, Kleenex and Huggies, recently joined forces with Carlton Power, who will supply hydrogen to the company’s manufacturing facility at Barrow-in-Furness in the UK. The global energy crisis is a blaring example of the susceptibility of relying on fossil fuels

“The initiative will enable Kimberly-Clark to source locally produced hydrogen and might help mitigate some of the uncertainties where the energy crisis is linked to the supply of natural gas,” Oriol Margo, sustainability transformation leader EMEA at Kimberly-Clark, previously told PersonalCareInsights.

By Venya Patel