As a healthcare 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. The importance of modern and functional healthcare for society again became particularly clear in 2022. Our employees worldwide have continued to work tirelessly and under sometimes difficult pandemic conditions – in clinics, dialysisDialysisForm of renal replacement therapy where a semipermeable membrane – in peritoneal dialysis the peritoneum of the patient, in hemo dialysis the membrane of the dialyzer – is used to clean a patient’s blood. centers, factories, and logistics. In acute care, we have reduced the number of intensive care beds and ventilation stations to the pre-pandemic level. The dialysis centers also continued 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 contributing to 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 healthcare quality and efficiency. 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 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 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 Compliance and integrity chapter.
- 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 attractiv employer to acquire talent, retain employees, and allow them to further develop their skills.
- We think and act long-term in our business decisions. 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 United Nations’ 17 Sustainable Development Goals (SDGs). 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). We also 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
Fresenius is a global healthcare Group and one of the leaders in its respective markets. The Fresenius Group comprises four independently operating business segments managed by Fresenius SE & Co. KGaA: Fresenius Medical Care is the world’s leading provider of products and services for individuals with renal diseases based on publicly reported revenue and the number of patients. Fresenius Kabi provides lifesaving medicines, medical devices, and services for the critically and chronically ill. Fresenius Helios is Europe’s largest private hospital chain, with clinics in Germany, Spain, and Latin America. Fresenius Vamed specializes in healthcare facilities projects and service business. The Corporate segment comprises the holding functions of Fresenius SE & Co. KGaA as well as Fresenius Digital Technology GmbH, which provides services in the field of information technology. 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
Fresenius has an international distribution network and operates more than 90 production facilities. The largest of these are located in the United States, China, Japan, Germany, 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. They also coordinate global procurement for individual production sites or clinics and initiate quality and safety controls for raw materials and procurement goods. Supply reliability and quality of care play an important role in an environment characterized by ongoing cost-saving efforts by healthcare 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 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. Additional information can be found in the Group Management Report.
Sustainability risks
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. Sustainability risks are covered by the existing risk catalogs and risk reporting of the Fresenius Group. In the fiscal year 2022, sustainability risks were recorded and assessed in a harmonized approach with the financial, legal, and compliance risks across the Group in the risk management system. At least quarterly, potential sustainability risks are evaluated at Group level by the corporate functions Risk Management & Internal Control System, Business Integrity, and Investor Relations & Sustainability of Fresenius SE & Co. KGaA, and supplemented if necessary.
In 2022, Fresenius Medical Care mandated an independent external tax auditor to review the Tax Compliance Management System (Tax CMS) in Germany based on an auditing standard (IDW PS 980) and OECD standards. The audit report confirmed that the company appropriately mitigates tax-related risks.
In the reporting period, we reviewed potential sustainability risks in the areas of climate change and water scarcity based on the analysis from the 2021 reporting year. We did not identify any material risks to our business model in the past fiscal year in either area. Additional information can be found in the Environment chapter. Our human rights risk assessment is explained in the Human rights section. Overall, in the reporting period, 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 Group Management Report contains further information on opportunities and risks as well as a detailed presentation of risk management.
As part of our risk management, material aspects are also subject to regular audits, as described in the respective sections in our Fresenius Group Non-financial Report. Audits are conducted by external partners, regulatory authorities and internal audit experts. Audits are conducted at least every two years or more often. As outlined in the Fresenius Group Risk Report, no deviation to Group ethical standards occurred in 2022.
Due to the international nature of the Group and the broad spectrum of security-related tasks, the Group function Corporate Business Continuity is continuously being developed and assigned additional activities. Today, the function is responsible for corporate security, fire protection, corporate crisis management and travel security worldwide. In addition, those responsible deal with issues relating to maintaining or restarting business operations in or after crisis situations and also provide support in an operational context where necessary. Further information on business continuity is provided in the relevant chapters regarding the business segments.
Our sustainability goals and programs
We pursue specific sustainability approaches at the level of the four business segments and Fresenius SE & Co. KGaA. The business segments build their own sustainability programs within the framework provided by the Group Sustainability Management and regularly review how they can further develop and optimize them.
In May 2021, the Fresenius Annual General Meeting approved a new compensation system for the members of the Management Board of Fresenius Management SE. In the context of short-term variable compensation, ESG (Environmental, Social, and Governance) targets have an influence on compensation in this system, with a weighting of 15%. The focus of the ESG targets is on the key sustainability topics identified by Fresenius in the materiality analysis: quality / patient well-being, innovation and digital transformation, employees and diversity, environment, and compliance and integrity. With the identification of key performance indicators (KPIs) and the definition of comprehensive management concepts, the company will create a basis to make the sustainability performance of the business segments measurable. The identified KPIs are intended to facilitate target setting and measurement in the long term and a selection of these also to be incorporated into the variable compensation of the company’s executives. From 2023, quantitative ESG KPIs will be included in the short-term incentive (STI) of the Management Board, covering the key sustainability topics of medical quality / patient satisfaction, and employees. For the long-term incentive (LTI), the integration of a reduction target for CO2e emissions is planned.
In the reporting year, the members of the Executive Board achieved the ESG targets. A detailed presentation can be found in the Compensation Report of the Annual Report 2022.
The ESG methodology for determining target achievement is available on the website of Fresenius SE & Co. KGaA.
For Fresenius Medical Care, the success of global sustainability efforts depends on cooperation between all regions and global functions, and the exchange of best practices. The business segment strives to leverage scale and expertise and takes regional needs into account in its activities. In 2022, Fresenius Medical Care established 10 new global policies and other standards, for example in the areas of diversity, employee engagement, and data protection. It also defined new global performance indicators for various areas of the sustainability program, including a quality index for patient treatments. The success of the Global Sustainability Program was measured using a control and calculation model that evaluates more than 50 aspects. Throughout the duration of the program, progress was linked with Fresenius Medical Care’s Management Board compensation via a sustainability target.
Based on the results of the Global Sustainability Program, in 2022, the business segment developed a new set of global targets for the coming years. The Supervisory Board also decided on new sustainability goals for Management Board compensation in 2023. They are linked to progress of Fresenius Medical Care's sustainability targets in the areas of patient satisfactionPatient satisfactionFresenius Vamed measures the level of patient satisfaction in the VAMED healthcare facilities and the overall patient satisfaction with the services offered in the VAMED healthcare facilities. Each patient receives a questionnaire at or immediately after discharge, which contains 16 standardized questions that are evaluated for the patient satisfaction target. , employee satisfaction, and sustainable products and services.
In February 2022, the Management Board of Fresenius Management SE implemented a climate target, complementing the existing sustainability goals and programs for the Fresenius Group. The Fresenius Group aims to achieve climate neutrality by 2040 and to reduce 50% of absolute scope 1 and scope 2 emissions by 2030 compared to 2020. We will continuously assess scope 3 emission impacts for inclusion in our targets. Further information on our environmental management and emissions within our business segments and the Group are provided in the chapter Environment.
Our sustainability organization
GRI 2-9, 2-10, 2-11, 2-12, 2-13, 2-14, 2-16, 2-17
Sustainability at Fresenius is the responsibility of the Chief Executive Officer (CEO) of Fresenius Management SE, as shown in the overview below. 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. The Audit Committee has a special role in reviewing the Group Non-financial Report.
The Supervisory Board as a whole is responsible for monitoring the Company’s sustainability performance. Changes within the Boards are presented in the Corporate Governance Declaration as well as in the overview of our Boards in the Group Annual Report 2022.
Fresenius group sustainability organization
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. Business Integrity (formerly 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 at 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. Sustainability is also an integral part of the Management Board there. The highest governing body for sustainability activities at Fresenius Medical Care is the Sustainability Decision Board. 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.
Committees at business segment level are explained in the respective governance sections in this report.
The Group Sustainability Board
The Group Sustainability Board (GSB) 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 is chaired by the CEO. 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.
In 2022, four GSB meetings were held, thereof three under the leadership of the CEO. That year, the GSB focused on the implementation of the EU taxonomy, the exchange of best practices, and the implementation of the ESG targets of the Management Board of Fresenius Management SE. Further, the forthcoming regulatory provisions under the EU-CSRD (Corporate Sustainability Reporting Directive) were discussed, as was a review of the material topics for the Fresenius Group.