Strategy and management

GRI 102-8, -11, -16

As a health care Group with more than 300,000 employees, Fresenius plays an important role in society. For more than 100 years, our mission has been to preserve life, promote health and improve patients' quality of life – as defined in our company objective – better medicine for more people. The importance of modern and functional health care for society became particularly clear in 2020 as a result of the COVID-19 pandemic. Our employees worldwide have continued to work tirelessly and under sometimes difficult conditions – in clinics, dialysis centers, factories and logistics. In acute care, for example, we have significantly increased the number of intensive care beds and ventilation stations. In addition, the dialysis centers were able to continue to provide safe treatments, even for kidney patients infected with COVID-19. We have consistently ensured the supply of our vital medicines, medical devices and services for critically and chronically ill patients.

For Fresenius, economic success is not an end in itself, but a means of continuously investing in medical progress. The patient's well-being always comes first. It is our point of reference for all business decisions. The common goal of all business segments is to improve health care quality and efficiency. In line with our commitment to the future – forward thinking health care to improve the lives of patients – we aim to provide innovative solutions and work proactively to enable a growing number of people to have access to high-quality, affordable medicine. In conclusion, it is our goal to contribute to medical progress.

In our Code of Conduct, we commit to integrity in dealing with our business associates as well as to socially responsible behavior and transparent communication. The Fresenius Code of Conduct defines basic principles that apply to all employees, executives and the management of the Fresenius Group. It also sets out the framework for the relevant regulations of the individual business segments, and defines our respective activity areas. Further information can be found in the section Compliance and Integrity.

  • We take responsibility for our patients' well-being and are committed to the highest quality in our products, treatments and services.
  • We want to do the right thing and comply with all applicable rules and laws. In addition to legal requirements, we adhere to high ethical standards and rules of good corporate governance.
  • We largely owe our success and growth to the commitment of our more than 300,000 employees worldwide. Our aim is therefore to be perceived as an attractive employer to acquire talent, retain employees and allow them to develop their skills further in the long term.
  • We think and act long-term in our business decisions. It therefore goes without saying that we protect nature as the basis of life and treat resources with care.
  • We are committed to respecting human rights as defined by international standards, such as the Declaration of Human Rights of the United Nations.

We analyze the impact of our actions with the help of the 17 Sustainable Development Goals (SDGs) of the United Nations. A particular focus is on the goals of good health and well-being (SDG 3), high-quality education (SDG 4), and decent work and economic growth (SDG 8). In addition, we align our sustainable actions closely to the United Nations Global Compact and the sustainability requirements of the capital market. Further information is available on our website.

The business model

GRI 102-2

Fresenius is a global health care Group and one of the leaders in the respective markets. The Fresenius Group comprises four independently operating business segments: Fresenius Medical Care is a worldwide leader in the treatment of chronic kidney failure. Fresenius Helios is Europe’s largest private hospital chain with clinics in Germany, Spain, and Latin America. Fresenius Kabi provides lifesaving medicines, medical devices, and services for the critically and chronically ill. Fresenius Vamed specializes in health care facilities projects and service business. They are managed by Fresenius SE & Co. KGaA. The Group Management Report contains additional information on the Group’s business model and ownership structures, on legal and economic factors, as well as key sales markets and competitive positions.

Our value chain

GRI 102-4, -6, -9

Fresenius has an international distribution network and operates more than 90 production facilities. The largest of these are located in the United States, in China, Germany, Japan and Sweden. In the Fresenius Group, all purchasing processes are controlled by central coordination points in the business segments. Competence teams bundle the needs, conclude framework contracts, and continuously monitor current market and price trends. In addition, they coordinate global procurement for individual production sites or clinics and initiate quality and safety controls for raw materials and procurement goods (see Supply Chain). Supply reliability and quality of care play an important role in an environment characterized by ongoing cost-saving efforts by health care providers and by price pressure in the markets. We therefore constantly optimize our purchasing processes, standardize procurement materials, identify new sources of supply, and negotiate the best possible price deals. Maintaining high flexibility while at the same time meeting our strict quality and safety standards is crucial. A broad portfolio of suppliers reduces potential procurement or raw material shortages in both the product and service business (see Procurement management).

Sustainability risks

GRI 102-11

The identification and assessment of potential sustainability risks (non-financial risks) initially takes place at both the Group level and in the four business segments via the existing risk management system. For this purpose, sustainability risks are assessed that are already covered by the existing risk catalogs and risk reporting of the Fresenius Group. In an additional step, potential sustainability risks are discussed on a quarterly basis at Group level by the corporate functions Corporate Compliance, Group Controlling and Investor Relations & Sustainability of Fresenius SE & Co. KGaA and supplemented if necessary. In the reporting year, we identified potentially relevant sustainability risks that we would like to review regularly in the future, including climate change, water scarcity, and human rights violations, among other risks. In the future, we intend to record and assess sus­tainability risks across the Group in a more harmonized approach together with financial, legal and compliance risks. This will enable us to achieve an integrated view of our impact on the issues (inside-out perspective) on the one hand and the impact of the issues on Fresenius (outside-in) on the other. This allows us to assess their short-, medium- or long-term financial impact as well as their impact on society and the environment. In the area of human rights, we have already started to do this. Further details are provided in chapter Human Rights.

In 2020, we did not identify any material non-financial risks, taking into account risk mitigating measures (net risk assessment), related to our own business activities, business relationships, products or services that are very likely to have an adverse effect on the non-financial aspects mentioned above or on our business operations. The Opportunities and risk report contains further information on opportunities and risks as well as a detailed presentation of risk management.

Our sustainability goals

We pursue specific sustainability approaches at the level of the four business segments and Fresenius SE & Co. KGaA. To this end, the business segments each build their own sustainability programs and regularly review how they can further develop and optimize them.

Fresenius Medical Care’s Global Sustainability Program reflects the growing requirements for sustainability management and the company’s commitment to continuously improve its performance. It defines global targets for eight focus areas in the period from 2020 to 2022. These are derived from the results of a materiality analysis that Fresenius Medical Care carries out to identify the most relevant sustainability topics for its business. The eight focus areas are: patients, employees, anti-corruption and bribery, data protection and privacy, labor and human rights, sustainable supply, environment, and occupational health and safety. The overall objective of the program is to establish common global standards, goals, responsibilities, and key performance indicators for our sustainability performance.

Fresenius Helios, Fresenius Kabi and Fresenius Vamed are in the process of establishing and planning independent sustainability programs. Helios Germany developed its own sustainability initiatives in 2020 on the basis of material topics and requirements and followed a guiding principles process (see also Sustainability Report Helios Kliniken 2019). In the reporting year, Fresenius Kabi discussed on Management Board level how the company’s sustainability efforts can be further improved.

At Group level, we discussed in 2020 the extent to which we can integrate sustainability into our Management Board compensation system. Our approach provides for the incorporation of sustainability targets and key performance indicators into the short-term variable compensation of Management Board members from 2021 onwards. We aim to systematically drive forward the core activity areas across the Group.

Our sustainability organization

GRI 102-19, -20, -26, -27, -30, -32, -33

Sustainability at Fresenius is the responsibility of the CEO of Fresenius Management SE, as shown in the overview above. Fresenius Management SE is the general partner of Fresenius SE & Co. KGaA. The Group Management Board is regularly informed about sustainability issues by the Investor Relations & Sustainability department of Fresenius SE & Co. KGaA. The Management Board and the Supervisory Board review the progress and the results of the sustain­ability management, which are then published in the separate Group Non-financial Report. The Supervisory Board is supported in this process by the auditor's limited assurance engagement. Investor Relations & Sustainability coordinates the implementation of sustainability guidelines and standards at operational level and is responsible for the non-financial reporting of the Fresenius Group. Corporate Compliance is responsible for our Code of Conduct and manages issues relating to human rights, supply chain, and compliance. Data protection and cybersecurity are independent areas of responsibility. The departments and functions on Fresenius SE & Co. KGaA level support the business segments in the development of guidelines and management concepts relating to these sustainability topics. The business segments have also defined departments and responsible persons – often in the form of sustainability officers who coordinate all sustainability issues within the business segment. Fresenius Medical Care is itself a stock-listed company and has therefore established its own sustainability governance structure. The highest governing body for sustainability issues at Fresenius Medical Care is the Sustainability Decision Board. Co-headed by the CEO, it is responsible for integrating sustainability into the Company’s strategy and business. Together with the Sustainability Decision Board, the Management Board decides on strategic initiatives.

The Group Sustainability Board

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In 2020, the first two meetings of the Group Sustainability Board (GSB), which was introduced in 2020, were held under the leadership of CEO Stephan Sturm. The Group Sustainability Board is composed of those responsible for sustainability at Group level and in the business segments and is scheduled to meet every two months.

The Board discusses the future sustainability strategy of the Fresenius Group. The overall goal of the GSB is to identify the most important sustainability issues for the Group and to strengthen intra-Group cooperation.

Foreword

Our materiality analysis