GRI Content Index

GRI 101: Foundation 2016

In preparing this report, the reporting principles defined in GRI 101 were observed.

GRI 102: General Disclosures 2016

The list of general disclosures made, based on whether the report has been prepared in accordance with the "Core" option.

1. Organizational profile

SFS Group AG

SFS is a leading global provider of mechanical fastening systems and precision components. SFS Group AG operates in the three segments Engineered Components, Fastening Systems and Distribution & Logistics, which reflects the respective business models. In the Engineered Components segment, SFS partners with customers to develop and manufacture customized precision components, fastening solutions and assemblies. The Engineered Components segment has four divisions: Automotive, Electronics, Industrial and Medical. In the Fastening Systems segment, which consists of the Construction and Riveting divisions, SFS develops, assembles, manufactures and markets optimized mechanical fastening systems. SFS is attractively positioned in both segments and has a wide range of activities in terms of end markets and regional presence. The two segments generate sales primarily in the following regions: Switzerland, Europe, Americas and Asia ( see Annual Report 2019, Markets). In the Distribution & Logistics segment, SFS is a leading provider of fasteners, tools and architectural hardware, and innovative logistics solutions in Switzerland and neighbouring countries. The products and services are authorized for sale in the markets where they are sold without any restrictions; they are not controversial or called into question by stakeholders.

Annual Report 2019, p. 11, "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 worldwide.

Overview of locations

SFS Group AG is a listed public company incorporated under the laws of Switzerland.

see Annual Report 2019, Corporate governance

Engineered Components (EC)

The EC segment is a global developer, manufacturer and supplier of precision formed components, engineered fasteners and assemblies. As a specialist in the field of cold forming, deep drawing, injection molding, precision machining and mechanical fastening, it aims to be the preferred development partner for customer-specific components and assemblies. By focusing on selected customer groups, it ensures high application expertise in business units and key account structures. EC has a leadership position in the technologies it uses, in the industries it is active in – Automotive, Industrial, Electronics and Medical – and in the regional markets where its customers are – Europe, Asia and the Americas.

Fastening Systems (FS)

The Fastening Systems segment combines the principles of threaded fastening and riveting technologies. Cold forming and injection molding, and the related secondary operations, are applied in the production of application-optimized products. FS offers a broad range of rivet setting devices and tools that enhance application comfort and convenience, safety and cost-effectiveness for its customers, most of whom are active in the construction and automotive industries. With a worldwide network of sales locations, customer demands can be met through local consulting and delivery services, mainly in Europe and the Americas.

Distribution & Logistics (D&L)

The Distribution & Logistics segment is a leading national supply partner for fasteners, tools, architectural hardware and related products to industrial customers, the professional trade, wholesalers and DIY centres. Through international alliances and sourcing, D&L serves its customers with fast and reliable processes and products at competitive cost levels. Furthermore, value is added by providing tailor-made supply chain solutions, which employ state-of-the-art e-business, warehouse and IT technology.

Corporate

The Corporate segment consists of the Technology, Corporate Services and Corporate IT & Finance functions. Technology ensures the transfer of knowledge 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. Corporate Services und Corporate IT & Finance provides added value across the Group in the fields of information technology, finance, controlling, human resources, communication and other business functions.

Further information on the sales mix by region and end market can be found in the Annual Report 2019, Markets

i.
Total number of employees: 10,571 FTE at the end of 2019; compare key takeaways Annual Report 2019
Annual Report 2019, Key Takeaway

ii.
Total number of operations: 116 manufacturing site and distribution companies

iii./iv.
Net sales and total capitalization broken down in terms of debt and equity
compare financial overview Annual Report 2019and Financial Report 2019

v.
Quantity of products or services provided

The number of products shown in the table below corresponds to the sales volume at the end of the calendar year.

calendar year 2018 2019
segment components (in millions) components (in millions)
Engineered Components third party 28'594.6 27'944.0
Fastening Systems third party 5'202.3 5'932.6
Distribution & Logistics third party 1'037.7 987.4
total result third party 34'834.6 34'855.0
Headcount 2019/2018 in brackets
Total Headcount In GRI reported Female In a dual education Part-Time Fixed-Term
Americas 1'648/(1'326) 691/(488) 174/(129) 19 /(21) 11/(7) 0/(0)
Asia 3'244/(3'295) 3'200/(3'252) 1'017/(1'025) 273/(319) 0/(0) 1'890/(1'232)
Europe 2'407/(2'431) 2'195/(2'238) 581/(560) 101/(70) 131/(123) 302/(362)
Switzerland 2'491/(2'498) 2'491/(2'498) 479/(473) 152/(146) 264/(246) 43/(41)
Total Group SFS 9'790/(9'550) 8'577/(8'476) 2'251/(2'187) 545/(556) 406/(376) 2'235/(1'635)
Share in relation to “In GRI reported” 26.4%/(25.8%) 6.4%/(6.6%) 4.7%/(4.4%) 26.1%/(19.3%)

The “Total headcount” corresponds to the number of employees as published in the financial report. The column “In GRI reported” corresponds to 88% of the “Total headcount” (2018: 89%). The scope of the report is currently limited to 43 legal entities since acquisitions have not been taken into account in the past three years. On 31.12.2019 the SFS Group comprised a total of 53 legal entities

It is currently not possible to present the employees by type of employment contract and by gender, as required by the GRI standard, since reporting systems for the HR area have not yet been uniformly introduced at all locations. A standardization is planned within the next three years.

SFS Group’s procurement organization, or supply chain management, is divided into seven divisions with technical responsibility for the procurement operations of their particular area.

SFS Group has a decentralized procurement organization across the seven divisions, which ensures that the specific needs of each division are optimally addressed. SFS has a global supply network based largely in Europe, Asia and North America. The various divisions purchase the raw and semi-finished materials they need from local and international sources. Decisions on where raw and semi-finished materials are purchased are based on criteria such as availability, transport routes, risks, cost-effectiveness and supplier compliance with the principles of the UN Global Compact (see UN Global Compact). For example, wire made to customized specifications will be imported if it is unavailable from a local supplier, or the required procurement volume of a particular product may be divided among two or more suppliers to reduce risk. Group-level purchasing activities are coordinated by the relevant peer group and the supplier relationsship management system.

SFS Group has defined seven main procurement categories:
WOM Wire and other materials
FC Finished components
OCE Oil, chemistry/energy
Tools Tools
ME Machinery and equipment
PACK Packing material
SP Service provider

SFS Group selects its suppliers based on uniform standards as defined in its supplier quality manual. These standards prescribe, inter alia, minimum quality requirements, the implementation of a code of conduct (or adherence to the SFS Code of Conduct) and supplier audits. Suppliers must agree to the Code of Conduct or sign a QMA (Quality Management Agreement, BMS --> G177, Section 12) confirming that they comply with all applicable legal requirements, or supply proof that their organization has implemented a code of conduct.

The SFS Code of Conduct is not (yet) applied collectively to small suppliers based in non-risk countries, most of whom are suppliers to the D&L segment.

Compliance with the Code of Conduct must be verified or a supplier inspection successfully passed before a business relationship with a supplier is established. Depending on assessment of the supplier risk and the supplier’s strategic importance, compliance will be verified or an audit conducted either annually or every two years. Audits can also be conducted outside the routine audit cycle, depending on the situation.

SFS Group’s supplier network comprises about 6,500 suppliers. SFS purchased raw materials, goods and semi-finished materials from the following countries during the year under review:

  • Europe 58%
  • Asia 35%
  • Americas 7%

Its global procurement volume amounted to more than CHF 600 million in 2019.

The following significant changes occurred at SFS in the period under review:

Global production and distribution platform expanded

In 2019 the new production platform in Nantong, north of Shanghai (China) successfully commenced operations. Well over 1,000 employees and just as many manufacturing ma- chines from the four former nearby production sites were transferred to the new site in Nantong in record time, all the while avoiding any bottlenecks in the processing of customer orders. The financial year was also highlighted by two acqui-sitions. With the acquisition of TFC (Triangle Fastener Corpo-ration), a leading supplier of fasteners and other products for the commercial construction industry, SFS strengthened its market position in the US and obtained direct access to some 6,000 active customers. At the end of 2019, SFS signed a purchasing agreement with mbe (Moderne Befestigungs-elemente GmbH) to acquire the company as per 1 January 2020. mbe is a specialist in painted fasteners for high-per-formance façade systems. With this acquisition, SFS is expanding its offering of fastening systems for façade sys-tems and its market reach, as well as its customer base in the European construction market. These two companies strengthen SFS’s market position in the Construction divi-sion and enhance its established technology and product portfolio.

Composition of Group Executive Board modified and expanded

The Board of Directors made a decision to strengthen the company’s management structures and integrate Corporate Services, which includes Human Resources, Business De-velopment and Marketing & Communications, directly into the Group Executive Board. Claude Stadler, Head of Corpo-rate Services, has therefore been a member of SFS Group’s Group Executive Board since 1 January 2019.

Effective 1 July 2019, the Board of Directors appointed Urs Langenauer, Head of the Riveting division, as member of the Group Executive Board. He assumed responsibility for the division from Thomas Bamberger. The Board of Directors and the Group Executive Board thank Mr. Bamberger for his many years of service at the Riveting division.

Effective 1 January 2020, Iso Raunjak assumed responsibil-ity as announced for the Distribution & Logistics segment from Josef Zünd, who will retire in March 2020 after a suc-cessful 49-year career at SFS. The Board of Directors and Group Executive Board thank Josef Zünd for his valued ser-vice to SFS Group over so many years.

No significant changes in the supply chain

There have been no significant changes to the supply chain.

SFS acts with foresight and prudence and assumes its responsibilities with respect to economic, environmental and social issues. Doing so increases the value of the company over the long term and enables it to contribute to sustainable development by providing future-oriented solutions.

A precautionary approach or the precautionary principle plays an important role at SFS and is therefore enshrined in its Corporate Principles and Code of Conduct. Sustainability at SFS means maintenance of a healthy balance between business performance, environmental stewardship and social responsibility that takes the needs of present and future generations into consideration. This attitude also reflects the spirit of partnership that characterizes SFS’ relationship with its various stakeholder groups. The application of a precautionary approach also serves to reduce or avoid any negative effects on society and the environment that arise or could arise as a result of the company’s activities.

The Group Executive Board and the Board of Directors regularly assess SFS Group’s main business risks to safeguard the company’s future. A comprehensive risk assessment is conducted at least once a year. During this assessment, the relevant risks are systematically classified according to the likelihood of occurrence and the severity of the potential consequences. Potential risks and action to contain these risks were examined once again during the year under review with a focus on cybersecurity risk, investment-related risk associated with major projects, risk associated with acquired companies, warranty risk arising from product recalls, company exposure to the global economic environment, compliance and currency-related risk. Other important topics were changes in customs duties and tariffs, constraints on the movement of goods and geopolitical risk.

SFS creates transparency, applies a preventive approach and pursues continuous improvement through internal audits and inspections of its own operations, external audits of its customers and certification programs at individual company sites.

It also reviews its supply chain on a regular basis, which enables it to identify risk at an early stage and take appropriate action. It is certified to ISO 9001 and ISO 14001, and where required to ISO 45001.

SFS has a broadly anchored idea management concept to ensure the steady ongoing development of innovation, new business fields and sustainability practices. The company also makes targeted use of external specialists to augment its internal ideas and insights.

SFS Group AG supported, continued to pursue or joined the following initiatives during the period under review.

  • UN Global Compact
  • amfori, RBA
  • AEO Certificate
  • Known Consignor Certificate
  • ISO 9001
  • ISO 13485
  • ISO 14001
  • ISO 17025
  • IATF 16949
  • ISO 45001/OHSAS 18001

SFS also assumes corporate and social responsibility through its engagement in various associations and interest groups. Globally, SFS is active in the following associations and interest groups:

2. Strategy
3. Ethics and integrity
 

SFS Code of Conduct

SFS Corporate Principles

The SFS Code of Conduct and the SFS Corporate Principles cover a wide range of issues and were formulated by the Group Executive Board in consultation with the various stakeholders and approved by the Board of Directors. Both documents are distributed to all new employees on recruitment. Furthermore, all SFS employees receive training on the SFS Code of Conduct every two years. The SFS Corporate Principles and the SFS Code of Conduct are also part of the company’s leadership workshops. The Code of Conduct and a supplementary document are available in German and English on SFS Group's website for internal and external stakeholders. The SFS Corporate Principles and the SFS Code of Conduct have been translated into the 12 languages that the company uses most often with its employees and business partners, and are available to these stakeholders in print or digital format.

4. Governance

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

SFS follows the SIX Swiss Exchange Guideline.

 

Responsibilities in the area of ​​sustainability clearly defined

SFS’ sustainable development is very important. The CEO and the entire Group Executive Board devote their attention to the issue of sustainable development on a regular basis, set priorities and review the progress made. On behalf of the Group Executive Board, an interdisciplinary team of environment and safety, compliance, HR and communications representatives coordinates and consolidates the various sustainability activities. To address the diverse factors involved and maximize effectiveness, the job of implementing the activities falls to the respective divisional management teams. Wherever possible, sustainability is integrated into the regular management processes and reports using standardized performance indicators.

5. Stakeholder engagement

SFS’ most relevant stakeholder groups are (in alphabetical order):

  • Academia
  • Competitors
  • Customers
  • Employees
  • Financial analysts/financial and economic media
  • Investors
  • Local communities
  • SFS Board of Directors
  • SFS management
  • Sponsorship partners
  • Suppliers

At the end of the reporting year, 10.3% of employees were covered by collective bargaining agreements. In Switzerland, the United States and the large locations in Asia there are no bargaining agreements.

The stakeholders listed under GRI 102-40 have been identified as key stakeholders within the scope of stakeholder dialogue because they meet at least one of two criteria: the stakeholder group has a material effect on the economic, environmental or social performance of SFS, and/or the stakeholder group is significantly affected by the economic, environmental or social performance of SFS.

The inclusion of key stakeholders is therefore an important element of sustainable business practices and of vital importance when gathering opinions and insights from across the company and its surrounding environment. In the previous materiality analysis conducted in 2016, SFS focused on the Engineered Components segment’s customers and suppliers. In the year under review, SFS surveyed the following stakeholder groups in its materiality analysis and focused on the D&L segment:

  • Customers from the D&L segment
  • Suppliers from the D&L segment
  • SFS Works Council in Switzerland (as the employee representative)
  • SFS management
  • Financial analysts and investors
  • Independent sustainability experts

In order to ensure the best possible engagement with the stakeholders identified, SFS plans to focus on the following stakeholder groups in its next materiality analysis in 2022:

  • Customers and suppliers from the Fastening Systems segment
  • Universities/educational institutions
  • Business and financial media
  • Local governments

During the year under review, SFS conducted an extensive survey, expert interviews and a corresponding analysis with the identified stakeholder groups (see → GRI 102-40 & GRI 102-42). The survey structure reflected the 33 sustainable criteria defined by the GRI grouped into six focus areas. The stakeholders and stakeholder groups consulted were first asked to select the issues among the 33 sustainable criteria that were most relevant to them – with respect to the economic, environmental or social performance of SFS – or, if not applicable, to present their own key issues. In a second step, the issues selected by these stakeholders were weighted according to their impact (low, medium or high). A final consolidation, analysis and prioritization of the results led to the new materiality matrix.

In addition to the materiality analysis, SFS was engaged in a constant dialogue with its stakeholder groups through the following:

Employees:

  • Routine employee surveys (e.g. Swiss Employer Award)
  • Quarterly information
  • MbO
  • Idea box

Customers:

  • SFS sales representatives, technical advisors and key account managers who are in touch with our customers every day.
  • At the 29 HandwerkStadt locations, our customers throughout Switzerland receive direct service from our professional sales staff and can give us direct feedback.
  • Customer satisfaction analyses: In conjunction with the introduction of a new Group policy, every division reviewed its existing policies and practices for measuring customer satisfaction and issued a corresponding new concept. In view of the different target customer groups, the divisional concepts vary. Methods of measuring customer satisfaction range from a scorecard, which is used in the Automotive division, to online surveys, which the Electronics division uses.

Universities / educational institutions:

  • Collaboration with various universities and educational institutions on innovation and technology development

Financial analysts / investors:

  • Routine conference calls, bilateral talks, conferences and roadshows by CEO, CFO, Head of Corporate Services and Head of Investor Relations.

Business and financial media:

  • Routine bilateral talks and interviews and an annual media conference for the media relevant for SFS.

Suppliers:

  • Initial contact in compliance with the supplier assessment guidelines and the Code of Conduct for suppliers
  • Ongoing discussions between SFS procurement staff and suppliers
  • Audits at regular intervals (quality, environment, workplace safety)

Local governments:

  • Open door day at several production sites
  • Invitation to Annual General Meeting

Apart from the key topics (see Materiality Matrix), no other important concerns were expressed by the stakeholder groups in the period under review.

6. Reporting practice

The full scope of consolidation as presented in the consolidated financial statements (see Financial Report 2019, p. 86-87) was not always applicable in the reporting of the company’s sustainability performance. A disclosure has been made wherever this was the case.

SFS’ sustainability reporting had been based on the guidelines of the Global Reporting Initiative (GRI) since 2016. In this Sustainability Report, SFS applied the GRI Standards (Core option) for the first time. The starting point was a comprehensive materiality analysis based on the methodology described in the GRI Standards and the issues covered by the GRI Standards. Material sustainability topics and corresponding measures had already been covered in brief in the sustainability sections of the annual reports published in preceding years (see Sustainability Report 2018).

SFS has also pledged to support the principles of the UN Global Compact. Progress in implementation of these principles has also been reported in this Sustainability Report.

As part of a workshop with the Group Executive Board and other internal and external stakeholder groups in 2016, an initial materiality analysis was developed and approved by the Group Executive Board. After adoption of the GRI Standards (Core option) in 2019 and the decision to publish the Sustainability Report separately from the annual report, the materiality matrix was reviewed and updated based on the standards prescribed by the GRI. Some of the previous material topics were combined, some were removed and others were rearranged. The revised materiality matrix and the new material topics determine the primary focus of the company’s sustainability strategy and its business strategy. All other topics listed in the matrix are important, but are not the focus of attention due to reasons of prioritization.

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

No disclosures from the previous year have been restated in the current Sustainability Report.

As reported under GRI 102-46, the previous materiality matrix was created in 2016. The material topics in the previous matrix, ‘Economic performance’, ‘Training and education’ and ‘Occupational health and safety’, are similarly material topics in the new materiality matrix created in 2019. In the wake of intense dialogue with stakeholder groups, two new material topics, ‘Emissions’ and ‘Socioeconomic Compliance’, were added to the matrix in 2019. ‘Customer satisfaction’, ‘Regular performance and career development reviews’ and ‘Programs for skill management and lifelong learning’ are no longer part of the current matrix. Nevertheless, they are still important topics for SFS and are constantly being developed and pursued. SFS will continue to report on any innovations and progress, but the objectives associated with the current material topics as depicted in the matrix have been prioritized in the current and coming year.

The reporting period is the calendar year.

This is the first Sustainability Report published in accordance with the GRI Standards (Core option). Previous sustainability reports (most recently for calendar year 2018) were a part of SFS’ Annual Report and were based on GRI’s G4 guidelines.

SFS will report on its sustainability performance on an annual basis.

In case of any questions regarding sustainability please contact:

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

Yvonne Geiling
Lead Sustainability, Corporate Communications

SFS Group AG, Corporate Services
Rosenbergsaustrasse 8, CH-9435 Heerbrugg
T +41 71 72 75185
sustainability@sfs.biz

This report has been prepared in accordance with the GRI Standards: Core option.

There is currently no external review of the Sustainability Report.

Material topics