EU Taxonomy Reporting

Since the EU Taxonomy Regulation came into force, Beiersdorf has been required to provide information on sales, capital expenditures (CapEx), and operating expenses (OpEx) associated with environmentally sustainable economic activities. The EU Taxonomy Regulation contains criteria for determining whether an economic activity qualifies as sustainable with respect to various environmental objectives. The overarching goal is to create a more sustainable financial sector and channel investments into green and sustainable projects, thereby contributing to the European Green Deal.

The following information applies only to the environmental goals “climate change mitigation” and “climate change adaptation,” as the EU Commission once again failed to publish any technical screening criteria for the other four environmental objectives in the reporting year.

Taxonomy Impact Analysis Procedure¹

To determine its overall taxonomy capability, Beiersdorf assembled a cross-functional team in spring 2021 consisting of employees from the tesa and Consumer Sustainability Departments, Group Accounting and Consolidation (Consumer), and Corporate Controlling (tesa). In addition, further departments including IT Controlling, Manufacturing Controlling, and Facility Management were brought on board in order to integrate their expertise on individual business activities.

Initially, the team identified the taxonomy-eligible activities at Beiersdorf by referencing the activity descriptions and the referenced NACE codes in Annexes 1 and 2 of the EU Taxonomy Climate Delegated Act on climate change mitigation and climate change adaptation. In this context, the team also made use of the “Taxonomy Compass” provided by the EU Commission. At the same time, the team analyzed the definitions of the OpEx, CapEx, and sales revenue figures set out in Annex 1 of the Climate Delegated Act relating to Article 8 of Regulation (EU) 2020/852 and collected the data for the respective benchmarks (denominator of the key figures) based on our financial controlling systems. This particularly involved identifying the relevant cost types relating to OpEx. For the activities identified as taxonomy eligible, approaches were then defined for estimating and gathering data on the corresponding OpEx, CapEx, and sales revenue.

Identified Taxonomy-eligible Economic Activities

The following economic activities have been identified as taxonomy eligible:

Information and Communication

• Since the Consumer Business Segment operates a data center and provides these services to tesa, Activity 8.1 “Data processing, hosting, and related activities” was identified as relevant. Similarly, Activity 8.2. “Data-driven solutions for GHG emissions reductions” is relevant because we use GaBi and SoFi emissions management software and energy management systems.

Construction and Real Estate

• Activity 7.4 “Installation, maintenance, and repair of charging stations for electric vehicles in buildings (and parking spaces attached to buildings)” was identified as relevant, as we have vehicle-charging stations on our premises that are operated by a third party.
• Activities 7.3 “Installation, maintenance, and repair of energy efficiency equipment”, 7.5 “Installation, maintenance and repair of instruments and devices for measuring, regulation, and controlling energy performance of buildings” and 7.6 “Installation, maintenance, and repair of renewable energy technologies” are part of our building management; they also include the installation, maintenance, and repair of photovoltaic systems as well as measuring systems and energy-efficiency control units.
• We have classified the activities under 7.1 “Construction of new buildings” as not applicable to Beiersdorf. This is because the factory and office buildings we have had constructed on our behalf are not new buildings for the purpose of resale, but are used for our ongoing business operations.
• We have also classified Activity 7.7. “Acquisition and ownership of buildings” as not relevant, as we do not purchase the office buildings we use, but lease them on a medium-term or long-term basis.

Energy

• In this area, Activity 4.25. “Production of heat/cool using waste heat” and Activity 4.30. “High-efficiency co-generation of heat/cool and power from fossil gaseous fuels” were identified as taxonomy-eligible, since we use waste heat for internal heating processes. We have recorded other activities from this area, e.g., with respect to the production of renewable energy, under “Construction and Real Estate” in accordance with the EU Taxonomy Regulation.

Transport

• All of our transport activities are outsourced to service providers, meaning we do not conduct any taxonomy eligible activities in this area either. Only our own fleet of company cars falls under Activity 6.5 “Transport by motorbikes, passenger cars and light commercial vehicles.”

Manufacturing Industry/Goods Manufacturing

• The manufacture and sale of products from the Consumer Business Segment do not fall within the scope of taxonomy eligibility. For the tesa Business Segment, only the production of subcomponents for batteries is taxonomy eligible (Activity 3.4. “Production of batteries”). Sales revenue from other categories is not taxonomy eligible; for example, tesa does not manufacture plastics in primary form, but sources them from suppliers.

Turnover Analysis and Calculation

On the basis of our analysis, we have come to the conclusion that only economic activity 3.4. “Manufacture of batteries” at tesa should be included as taxonomy-eligible turnover in the turnover category. This sales revenue amounts to € 16.1 million and thus represents less than 0.2% of total consolidated sales revenue of € 8,798.6 million (see Notes to the Consolidated Financial Statements, Income Statement, Note 01).

CapEx Calculation

With respect to CapEx, we have identified the investments and long-term leases related to the activities identified as taxonomy eligible; these are reported for both business segments. In addition to the investments in intangible assets (€ 5.2 million; see Note 11 to the consolidated financial statements) and property, plant and equipment (€ 542.6 million; see Note 12 to the consolidated financial statements) reported in the annual report, the reference figure of € 617.8 million for CapEx also includes property, plant, and equipment with long-term rights of use (“right of use assets”) amounting to € 70.0 million (see Note 12 to the consolidated financial statements). A total of 2.7% of this reference value (€ 617.8 million) was identified as taxonomy eligible.

OpEx Analysis and Calculation

The key financial figures for the full year 2022 from Beiersdorf’s financial controlling systems were used as the basis for calculating the reference figure for OpEx (denominator). At the same time, detailed queries of the respective Controlling Functions were carried out to ensure data quality. The following were included in the reference value:

• R&D costs
• Costs in connection with short-term leases
• Maintenance and repair costs, including all direct expenses in connection with the day-to-day maintenance of property, plant, and equipment by the company or third parties

To calculate the percentage shares of taxonomy-eligible items in the total reference value (numerator), data was gathered directly from our financial systems as far as possible. In cases where it was not possible to directly allocate percentage shares, these shares were broken down and, if necessary, allocated using appropriate keys (e.g., personnel keys). A total of 4.2% of this reference value (€ 445.0 million) applies to the activities described above as taxonomy eligible.

Approach and Results of the Alignment Analysis

In addition to the impact analysis, as of 2022 reporting companies are also required to determine the taxonomy alignment of the identified taxonomy-eligible economic activities. This involves assessing whether an economic activity makes a significant contribution to at least one of the six environmental objectives (“substantial contribution” criterion), does not cause significant harm to any of the environmental objectives (“do no significant harm [DNSH]” criterion) and meets minimum social standards (“minimum safeguards” criterion).

The project team analyzed the technical screening criteria outlined in Annex 1 and 2 of the Delegated Act on climate change mitigation and adaptation supplementing Regulation (EU) 2020/852 and compared them to the activities identified above.

The majority of Beiersdorf’s taxonomy-eligible activities are products and services purchased from suppliers and service providers. The assessment of the taxonomy alignment of these activities must therefore take place at the level of the partner company. To date, it has not been possible to obtain sufficient information on taxonomy alignment with the significant contribution criteria, the DNSH criteria, and the minimum safeguards criteria to report a taxonomy-aligned share of economic activities for fiscal year 2022.

With respect to Activity 3.4. “Manufacture of batteries”, sufficient documentation of a climate risk analysis does not exist to date, meaning that this cannot be classified as taxonomy aligned either.

Beiersdorf will use the findings from the analyses it has performed to prepare and improve individual reporting processes of taxonomy-aligned activities for the coming reporting year.

¹ Given the ongoing, dynamic development of the formulations contained within the EU Taxonomy Regulation, uncertainties persist regarding the interpretation of its wording and terms. As a result, we may make changes to our Taxonomy Impact Analysis in the future.

Key figures EU Taxonomy Reporting