Herrenknecht

The Corporate Sustainability Reporting Directive (CSRD) aims to expand, improve the quality and standardize sustainability reporting in the EU. The reportable sustainability topics are determined by the double materiality analysis, which defines the framework for further reporting and is one of the most important cornerstones of the CSRD, as all further steps are based on this analysis. It is important to emphasize that this analysis is mandatory and requires the collection and measurement of factors specified in the European Sustainability Reporting Standards (ESRS). Herrenknecht AG took up this challenge in good time and saw the CSRD and the associated double materiality analysis as an opportunity to continue to live ESG issues as an integral part of corporate activity. This makes Herrenknecht AG a pioneer in the field of double materiality.

The implementation of double materiality proved to be challenging, as the ESRS requirements, for example, often require interpretation. Together with Herrenknecht AG, however, it was possible to develop a process that complies with all ESRS requirements.

The data collection also required the involvement of all relevant internal experts from various areas of the company, such as Purchasing, Legal & Compliance, HR and many more. However, as some areas of the company had little contact with ESG issues in their day-to-day business, the challenge was to integrate the entire company into the double materiality and also to take it along on the further path towards a CSRD report. Particular emphasis was placed on the fact that double materiality is not merely a legal requirement, but rather paves the way for integrating ESG issues into the entire company and seeing them as an opportunity – for example for new business models, even more sustainable products and services or to increase employer attractiveness. Herrenknecht has therefore used double materiality in a unique way to raise awareness within the company by integrating all departments into the process and taking them along for the ride.

Added to this was the special business model of Herrenknecht AG. Herrenknecht AG’s product is unique in its current form, as no other provider has such a broad portfolio and comparable experience. This made a comparison with other companies difficult, especially as they are located in Asia, where sustainability aspects have so far only been considered in isolation. This challenge was also overcome, which is why Herrenknecht can be regarded as a pioneer in its industry.

Herrenknecht AG carried out the CSRD Readiness Project together with DFGE to prepare for CSRD and the double materiality analysis. Here, Herrenknecht’s status quo was evaluated, gaps identified and a roadmap defined in order to meet the challenges of CSRD in good time. This project therefore laid the foundation for the double materiality analysis.

The double materiality process follows various phases that cover the requirements of the ESRS.

In the end, the challenges were solved through close cooperation with DFGE and Herrenknecht AG for almost six months and the good preparatory work from the previous projects. In regular meetings and a cooperation characterized by trust, challenges were discussed openly and solutions were worked out together.

As double materiality is new for all companies covered by the CSRD, DFGE’s approach helped to implement it and bring it to a successful conclusion. In the process, new opportunities were identified that will make the client more resilient to ESG issues in the future. DFGE is a reliable partner that supports companies in the implementation of the numerous challenges.

At the end of the analysis, three key topics emerged for Herrenknecht AG. The results not only help to accelerate reporting under CSRD in further projects, but also help Herrenknecht AG, which has already taken very good measures in these three areas, to further expand them and to minimize existing risks in a more targeted manner and to exploit prospects for the company and its business model.

In a further step, DFGE is now working with Herrenknecht AG to develop a corresponding strategy based on the results of the double materiality analysis. Thus, reporting in accordance with the ESRS Topic Standards is being prepared and Herrenknecht AG is being fully supported by DFGE on the way to the first CSRD report.