The Linde Group Corporate Responsibility Report 2011


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Corporate responsibility in the sense of ecological and social sustainability has been and will remain a top priority for Linde.

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The Linde Group Corporate Responsibility Report 2011

  1. 1. Corporate ResponsibilityReport 2011.
  2. 2. Corporate Responsibility Report 2011Contents03 About this report 60 Social engagement03 Reporting scope 61 Community involvement05 About Linde 62 Priorities08 Strategy and management 64 Performance09 Foreword 65 Financial data and governance10 Values and standards 66 Environment and safety12 Goals 70 Employees16 CR-organisation 72 GRI index17 CR-management 79 Application Level Check27 Stakeholder 80 Global Compact28 Cooperations29 Environment and safety 83 Assurance32 Energy34 Climate protection37 Water39 Resource efficiency40 Waste41 Other environmental impacts42 Safety priorities44 Product stewardship46 Employees48 Linde as an employer51 Winning talent52 Talent development54 Diversity and equal opportunities57 Labour and social standards58 Health and safety This is the PDF version of Linde‘s Corporate Responsibility Report 2011. The full report is available online. A summary of the report is also available in print. 2
  3. 3. Corporate Responsibility Report 2011Reporting scope About this report Reporting scope About Linde Strategy and management Environment and safety Employees Social commitment Performance Assurance Highest GRI level for sustainability reporting (A+) Scope of independent assurance expanded Integrated Global Compact Communication on ProgressThe Corporate Responsibility Report 2011 is Linde’s seventh sustainability report. In it, weprovide information on our sustainability performance, priorities and challenges. Currentprojects and initiatives show where we are concentrating our efforts. Global indicators allowreaders to compare our performance. This report is targeted at all stakeholders of The LindeGroup – employees, shareholders, neighbours, customers, partners, non-governmentalorganisations (NGOs), political circles, the research and scientific community, and the generalpublic.Issues and spotlight topicsOur CR reporting covers all main sustainability issues relevant to Linde. We followinternationally recognised standards on sustainability reporting, such as the Global ReportingInitiative (GRI) guidelines and the Global Compact principles published by the United Nations.Our choice of CR priorities is largely guided by the expectations of our customers,shareholders, employees and other stakeholders. We regularly assess the relevance of thesesustainability topics for both our business and our stakeholders. More information on ourmateriality analysis can be found under “Relevant topics”.We have largely maintained the structure of last year’s report. However, we have expanded on anumber of topics and added new indicators to reflect our progress in these areas. Examplesinclude measures to promote women within the company. Our aim is to give a transparentpicture of our CR performance and meet rising demands for information from our stakeholders. 3
  4. 4. Corporate Responsibility Report 2011Boundaries of this reportThis report refers to all consolidated Group companies in which Linde has at least a 50-percent About this reportstake. As in previous years, we publish the complete CR report online. The entire report or Reporting scopeindividual chapters can be downloaded as a PDF. In addition, we publish a brochure About Lindesummarising the main content of our CR report. Strategy and managementIn 2012, we pulled forward the publication date of our CR report, releasing it as early as May for Environment and safetythe first time. The reporting period for the indicators contained in this report is the 2011 financial Employeesyear. Relevant developments and events that took place in the 2012 financial year prior to the Social commitmenteditorial deadline in April 2012 are also covered in this report. The next report is scheduled for Performancespring 2013. We publish information on our sustainability performance through a variety of Assuranceother channels as well: The Management Report of The Linde Group’s annual report contains a chapter on corporate responsibility, various key non-financial indicators and updates on sustainable business practices at Linde. Also part of the annual report, the Linde Annual 2011 focuses on Linde’s products and technologies that contribute to the goals of environmental and climate protection. The Linde Group website contains detailed information on the subject of corporate responsibility. The websites of the Gases, Healthcare, Engineering and Gist divisions also report on corporate responsibility. In addition, some members of The Linde Group release publications that address sustainability issues. Available to the public, our investor relations expert presentations give detailed accounts of the market opportunities available to Linde in the areas of energy and environmental technologies.We refer to these other channels and sources where appropriate to avoid repetition and easereadability.> More on indicatorsReporting standards and assuranceSelected key performance indicators in this report were again independently reviewed andsubsequently assured by KPMG Sustainability. The audit was carried out in line with theInternational Standard for Assurance Engagements (ISAE) 3000.We used the latest version of GRI’s Sustainability Reporting Guidelines, G3.1, in this report.Once again, we applied the highest GRI standard application level (A+) for sustainabilityreporting, which was confirmed by GRI.This report also serves as a Communication on Progress within the framework of ourcommitment to the UN Global Compact. We explain how we integrate the ten Global Compactprinciples into our business activities. We use the Global Compact logo to identify contentrelevant to our Communication on Progress. A combined GRI and Global Compact Index tableprovides detailed information on all relevant topics. For the first time in 2012, our CR reportcomplies with the UN Global Compact „Advanced" level. 4
  5. 5. Corporate Responsibility Report 2011The Linde World About this report Reporting scopeThe Linde Group is a world-leading gases and engineering company with around 50,500 About Lindeemployees in more than 100 countries worldwide. The strategy of The Linde Group is geared Strategy and managementtowards long-term profitable growth and focuses on the expansion of its international business Environment and safetywith forward-looking products and services. The company’s headquarters are located in EmployeesMunich. The Group comprises three divisions: Gases and Engineering (the two core divisions) Social commitmentand Other Activities (Gist, the logistics service provider). Performance Assurance Region Am erika: 7,857 employees, EUR 2,636 million sales EMEA (Europe, Middle East and Africa): 29,654 employees, EUR 6,772 million sales Asia/Pacific: 12,906 employees, EUR 4,379 million salesStructureGases DivisionThe Linde Group is a world leader in the international gases market. The company offers awide range of compressed and liquefied gases as well as chemicals and is the partner ofchoice across a huge variety of industries. Linde gases are used, for example, in the energysector, steel production, chemical processing, environmental protection and welding, as wellas in food processing, glass production and electronics. The Group is also investing in theexpansion of its Healthcare business (medical gases) and is a leading global player in thedevelopment of environmentally friendly hydrogen technology.The Gases Division has three reportable segments: EMEA (Europe, Middle East and Africa),Asia/Pacific and the Americas, which are subdivided into eight Regional Business Units(RBUs). The Gases Division also includes the two Global Business Units (GBUs) Healthcare(medical gases and related maintenance and advisory services) and Tonnage (on-site supplyof gases to major customers), as well as the two Business Areas (BAs) Merchant & PackagedGases (liquefied and cylinder gases) and Electronics (electronic gases). 5
  6. 6. Corporate Responsibility Report 2011Engineering Division About this reportLinde Engineering is successful throughout the world, with its focus on promising marketsegments such as olefin plants, natural gas plants and air separation plants, as well as Reporting scope About Lindehydrogen and synthesis gas plants. In contrast to virtually all its competitors, the Group is ableto rely on its own process engineering know-how in the planning, project development and Strategy and managementconstruction of turnkey industrial plants. Linde plants are used in a wide variety of fields: in the Environment and safetypetrochemical and chemical industries, in refineries and fertiliser plants, to recover air gases, Employeesto produce hydrogen and synthesis gases, to treat natural gas and in the pharmaceutical Social commitmentindustry. Performance AssuranceOther activitiesOther activities of the Linde Group consist mainly of Gist, Linde’s logistics services.Customer segmentationThe Linde Group manufactures gases and engineers plants for customers in the food anddrinks, steel and automobile, healthcare, construction, electronics and solar industries. Abroad, well-balanced customer base ensures stability.Business reviewIn the 2011 financial year, Group sales rose by 7.1 percent to EUR 13.787 bn. After adjusting forexchange rate effects, the increase was 7.6 percent. Linde achieved a 9.7 percent increase inGroup operating profit (EBITDA) to EUR 3.210 bn. Profit again grew at a faster rate than sales. 6
  7. 7. Corporate Responsibility Report 2011Sales and operating profit by business segmentThe Linde Group About this reportin € million 2011 2010 Reporting scope About LindeGroupSales 13,787 12,868 Strategy and management Environment and safetyOperating profit 3,210 2,925 EmployeesGases Division Social commitmentSales 11,061 10,228 PerformanceOperating profit 3,041 2,766 AssuranceEngineering DivisionSales 2,531 2,461Operating profit 304 271Other activities*Sales 195 179Operating profit -135 -112* including reconciliationIn the 2011 financial year, Linde continued with the implementation of its HPO (HighPerformance Organisation) efficiency programme. HPO is a holistic concept for processoptimisation and productivity gains which should result in total gross savings in the financialyears from 2009 to 2012 of between EUR 650 m and EUR 800 m. It should also continue toreinforce the Group’s competitiveness irrespective of the economic climate. All the individualmeasures designed to increase efficiency are centrally monitored and reviewed to ensure thatthey achieve lasting success.> More on each divisions business performance as well as on the breakdown of division salesby operating segment (region) and business segment 7
  8. 8. Corporate Responsibility Report 2011Corporate responsibility at Linde About this report Strategy and management CEO statement Values and standards Goals CR organisation CR management Sustainability opportunities Risk management Compliance Capital markets Supply chain management Relevant topics Stakeholders Cooperations Environment and safety New sustainability goals Employees Incorporation of human rights issues in risk Social commitment management processes Performance Assurance Over 33,000 e-learning courses on code of ethicsCorporate responsibility (CR) represents Linde’s contribution to sustainable development. Inour corporate responsibility policy, we commit to treating people and the environment withrespect, protecting natural resources and developing sustainable technologies and products.Our corporate responsibility management enables us to anchor these objectives in our day-to-day business. Our sustainability activities are built on four cornerstones:Continuous improvement: We strive for high sustainability standards. We continually analysesustainability risks and opportunities for our company and develop strategic measures thatfurther improve our CR management and enable us to set goals.Analysis of the entire value chain: With our corporate responsibility activities we consider theentire lifecycle of our products and all key business processes. We help our customersimprove their sustainability performance and expect contractors and suppliers to follow ourcorporate responsibility goals.Stakeholder engagement: We also align our sustainability activities with changing socialneeds, incorporating stakeholder requirements into our CR strategy and measures.Transparency: We regularly report on our progress in the different core areas of our corporateresponsibility activities. Key performance indicators enable us to track our economic, ecologicaland social performance. 8
  9. 9. Corporate Responsibility Report 2011Letter from the CEO About this report Strategy and management"The journey to a cleaner energy CEO statementeconomy calls for a greater share Values and standards Goalsof renewable sources and for new, CR organisationsustainable technologies. With our CR managementClean Technology portfolio we are Sustainability opportunitieswell placed to help meet these Risk management Compliancechallenges worldwide." Capital markets Supply chain management Relevant topics Stakeholders Cooperations Environment and safety EmployeesOur success in 2011 has confirmed that we are on the right course. Our business model will Social commitmentremain focused on stability and sustainability. Moving forward, we will continue to concentrate Performanceon the long-term global megatrends – energy and the environment, healthcare and dynamic Assurancetrends in the emerging markets. We intend to further strengthen our position in all of theseareas.Already today, the majority of our research projects are geared towards improvingenvironmental performance and developing innovative processes that enable valuableresources to be used more efficiently. For us, these are sustainability opportunities that help usgrow as a business and benefit society as a whole. The journey to a cleaner energy economycalls for a greater share of renewable sources and for new, sustainable technologies. With ourClean Technology portfolio we are well placed to help meet these challenges worldwide.Our stakeholders’ trust is one of the key factors for our future success. Which is why wemaintain close dialogue with key stakeholder groups and listen carefully to what they say.Climate protection, for example, is a major issue for many of our customers and partners. Sofor some years now, we have been providing increasingly detailed information about how weare working on improving the environmental impact of our production processes. By endorsingthe United Nations Global Compact, we have committed to providing transparent reports onhow we are implementing the organisation’s core principles. We are continually expanding oursustainability reporting activities. In the year under review, additional non-financial indicatorswere independently audited and we have also changed our reporting cycle. For the first time, weare already publishing our Corporate Responsibility Report in May – to inform you even earlierabout our progress, challenges and future plans for sustainable and profitable growth.Professor Dr Wolfgang ReitzleChief Executive Officer of Linde AG 9
  10. 10. Corporate Responsibility Report 2011Values and standards About this report Strategy and managementOur values and principles form the basis for the way we do business. They are captured in the CEO statementLinde Spirit. Our four key corporate values define how we plan to move towards our goals. Our Values and standardsfundamental principles define issues of key importance in this context – both inside and Goalsoutside the company. CR organisation CR management Sustainability opportunitiesValues Risk management CompliancePassion to excel We have the commitment and drive to pursue ever higher Capital markets standards of excellence and we celebrate success. Supply chain managementInnovating for customers We relentlessly pursue new ways of adding value to Relevant topics external customers. StakeholdersEmpowering people People are given the space to contribute and grow. CooperationsThriving through diversity Diversity results in enriched collaboration and Environment and safety enhanced solutions. Employees Social commitmentOur principles Performance AssuranceSafety We do not want to harm people.Integrity Our actions are honest, fair and ethical.Sustainability We focus on today’s success and accept our responsibility for future generations.Respect Every human being deserves to be treated with respect.GuidelinesOur internal guidelines and standards define how we implement values and principlesthroughout the company. The Code of Ethics describes rules for a conduct that aligns with legaland internal corporate regulations. It defines clear standards that govern our relationships withour customers and suppliers, with authorities and other business partners, and with eachother. The Code of Ethics is binding for all employees of Linde AG and its affiliates worldwide.Linde also encourages business partners to apply the standards defined in the Code of Ethics.We have developed additional, internal guidelines and standards that further outline ourcommitment in core areas. Our corporate responsibility policy defines the key areas and fundamental principles that shape responsible business at Linde. In our global Group policy on safety, health, environment and quality, we set out our commitment to mitigating harm to people and the environment to the best of our ability. Our procurement principles provide a framework for our dealings with business partners and outline how we expect them to behave. Compliance guidelines help ensure compliance with laws. 10
  11. 11. Corporate Responsibility Report 2011International standardsWe also recognise and promote international standards and guidelines, and align our About this reportcorporate responsibility activities with these benchmarks. They include: Strategy and management CEO statement The United Nations Universal Declaration of Human Rights Values and standards OECD guidelines for multinational enterprises Goals CR organisation The principles set down in the conventions of International Labour Organisation (ILO) CR management The United Nations Guiding Principles on Business and Human Rights Sustainability opportunities Risk management The principles of the UN Global Compact Compliance Capital markets Supply chain management> More on the Global Compact Relevant topics Stakeholders Cooperations Environment and safety Employees Social commitment Performance Assurance 11
  12. 12. Corporate Responsibility Report 2011Goals About this report Status Strategy and management CEO statement Target reached Values and standards In progress Goals CR organisation New goal CR management Sustainability opportunitiesStrategy and management Risk managementStrategic goal Planned measures Timeline Progress during reporting period Status Compliance Capital marketsTransparency Supply chain managementExpansion of – Definition, collection and reporting Ongoing – Corporate citizenship indicators Relevant topicssustainability of additional sustainability included in reporting Stakeholdersperformance indicators indicators – Further environmental indicators Cooperations included in reporting – Further HR management Environment and safety indicators included in reporting Employees > More on key indicators Social commitmentIncreased transparency – Benchmarking of CR reporting 2012 – CR report includeson CR activities activities against established Communication on Progress Performance international sustainability according to UN Global Compact reporting standards “Advanced” level Assurance – CR report awarded highest level (A+) by the Global Reporting Initiative – Scope of independent assurance extended > More on Global Compact > More on GRI > More on assuranceComplianceExpansion of – Training on the Code of Ethics for Ongoing – Over 33,000 e-learning coursescompliance programme all employees on the Code of Ethics by the end of 2011 – Implementation of specific – Classroom-based training for preventative measures for over 4,500 employees between particularly sensitive business 2009 and 2011 activities – New online training courses on anti-trust law – Further language versions of Code of Ethics published > MoreSupply chainSustainability – Raising awareness of the 2014 – 250 engineering suppliersassessment along the importance of supply chain confirmed compliance withsupply chain sustainability among standard procurement managers and suppliers – Evaluation of company safety, – 30 supplier audits environmental protection, human rights and labour standards and – Low CO2 emissions introduced requirements among suppliers as criteria for selecting transport service providers > MoreCapital marketInclusion of Linde in the 2014 – Linde included in further indicesmost renowned in 2011sustainability indices > More 12
  13. 13. Corporate Responsibility Report 2011Strategy and managementStrategic goal Planned measures Timeline Progress during reporting period Status About this reportStakeholder engagement Strategy and managementInclusion of stakeholder – Alignment of stakeholder Annual – 1,400 sustainability inquiries fromrequirements in information requirements with stakeholders answered CEO statementsustainability CR topics covered in reportingmanagement activities Values and standards – Dialogue with stakeholders on – 550 individual meetings with key sustainability issues financial analysts and investors Goals – 34 conferences and roadshows CR organisation for investors CR management > More Sustainability opportunities Risk management – Regular materiality analyses Compliance Capital markets > More Supply chain managementProducts Relevant topicsDevelopment of Annual – Majority of R&D gases projectsproducts geared toward improving Stakeholdersand technologies that environmental performance Cooperationsunite the goals of – Creation of inter-disciplinarycustomer value andsustainable Clean Energy Group Environment and safetydevelopment – New collaborations that help Employees reduce emissions Social commitment > More Performance AssuranceEnvironment and safetyStrategic goal Planned measures Timeline Progress StatusSafetyReduction of serious – Review of all local and global 2012- – 10% of drivers completed trainingtransport incidents minimum standards for 2015 within the framework of the transport safety ActSafe programme – Integration of new standards in a – Transport safety auditors trained global database > More – Training on new standards for relevant employees – Audits to ensure compliance with new transport standards – Global implementation of new transport safety driver training programme (ActSafe for Drivers)Site risk review – Creation of a uniform framework Long- – 312 sites certified in line with to measure risks at all locations term MHRP by the end of 2011 and definition of control goal mechanisms to minimise these > More risks to the greatest possible extent (major hazards review programme, MHRP)Climate protection3% improvement in – Identification of potential energy 2013 – Energy intensity improved by 2.7%energy intensity in our savings at all airair separation plant separation plants > Moredesigns (relative to2008 baseline)Reduction of transport- – Evaluation of ways to reduce CO2 Ongoing – Low CO2 emissions included asrelated emissions emitted by transport service criterion for selection of providers (scope 3 emissions) transport suppliers – Evaluation of emissions released – Award in recognition of by company fleet in Germany sustainable company car strategy in Germany > MoreEvaluation of emissions – Assessment of emissions along Long- – Business processes assessedoutside of our the value chain in line with scope term in line with scope 3production processes 3 emissions criteria as defined by goal emissions criteria(scope 3) the Greenhouse Gas Protocol – Continued development of a – In-house training on product standardised, Group-wide carbon footprints method of calculating the carbon – Scope 3 emissions evaluated for footprint of our products business trips > More 13
  14. 14. Corporate Responsibility Report 2011Further key environmental areasDevelopment of – Evaluation of local environmental Long- – Regional waste reviewed toadditional quantitative goals at all sites term assess potential targets at About this reportenvironmental goal local levelprotection goals Strategy and management – Assessment of potential new – Cross-disciplinary workshops to global water, waste and develop additional global emissions goals environmental protection goals CEO statement – New goal for sustainable water Values and standards use Goals > More on climate protection CR organisation > More on water CR management > More on waste Sustainability opportunitiesDevelopment of a – Identification of sites in water- 2013 – Sites across the globe assessedstrategy for sustainable stressed areas to determine whether they are Risk managementwater use in water- – Analysis of water consumption at located in water-stressed areas Compliancestressed regions sites in water stress areas Capital markets > More – Development of a strategy plan for Supply chain management these sites for sustainable water Relevant topics use Stakeholders CooperationsEmployeesStrategic goal Planned measures Timeline Progress Status Environment and safety EmployeesEmployees Social commitmentReview of employee – Analysis of results from the first 2012 – First global employee surveysatisfaction global employee survey carried out (2010 target achieved) Performance – Evaluation of current status and – Following evaluation of the survey Assurance definition of improvement action results, team meetings in all lines plans of business – Follow-up survey to assess the – Over 70% of teams implemented impact of new measures the agreed measures – Follow-up survey planned for 2012 > MoreIncrease in the – Development of measures aimed 2018 – Percentage of women in seniorproportion of women in at promoting talented female management positions increasedmanagement positions employees – Percentage of women in our mostto between 13 and 15% important developmentby 2018 programmes increased > MoreExpansion of childcare – Assessment of support needs Long- – Number of daycare places at oursupport term headquarters in Munich – Increase in the number of daycare goal increased from 20 to 37 in 2011 places to match rise in demand > MoreEvaluation of – Evaluation of monitoring systems 2015 – Global survey of processes tocompliance with labour to ensure compliance with labour ensure compliance with socialand social standards and human rights standards standards and respect for human rights – Global survey of processes that – New indicator on maximum protect social standards working hours included in CR report – Definition of key performance > More indicators for this areaExpansion and – Harmonisation of occupational Ongoing – Seven global healthcareharmonisation of healthcare guidelines guidelines approved betweenhealthcare 2010 and 2012; during the same – Expert training on occupationalmanagement period, over 100 employees healthcare managementprogrammes completed occupational healthcare training > More 14
  15. 15. Corporate Responsibility Report 2011EmployeesStrategic goal Planned measures Timeline Progress Status About this reportOccupational health Strategy and managementReduction of health Ongoing – Occupational health and safetyrisks associated with audits carried out at 54.2% of CEO statementmanual tasks our sites Values and standards – Research collaboration on safe handling of small gas cylinders Goals – Number of work-related accidents CR organisation among employees fell to 1.4 per CR management million hours worked – Number of work-related accidents Sustainability opportunities among contractors fell to 1.9 per Risk management million hours worked Compliance Capital markets > More Supply chain managementReduction of potential – Development of preventative Long- – Subject of workload covered inrisks from measures for dealing with term global employee survey Relevant topicspsychological stress to psychological strain such as goal Stakeholdersa minimum stress Cooperations – Harmonisation of existing local – Stress management training for guidelines on 60 managers in the psychological health Engineering Division Environment and safety – Approval of a global guideline Employees > More Social commitmentSocial engagement PerformanceStrategic goal Planned measures Timeline Progress Status AssuranceSocial engagementEvaluation of corporate – Assessment of all corporate 2012 – Global survey of socialcitizenship strategy citizenship projects engagement projects – Development of a global strategy – New goal to benchmark the for corporate citizenship impact of social engagement and community involvement projects – Development of a global approach to corporate > More volunteeringDevelopment of a – Definition of corporate citizenship 2013 – Corporate citizenshipglobal strategy for key performance indicators (KPIs) KPIs definedmeasuring the impact – Collection and reporting of – Global pilot survey on corporateof projects corporate citizenship citizenship KPIs KPIs worldwide – Development of efficiency checks – New indicators on corporate for donation and sponsoring citizenship included in CR report projects > More – Identification of flagship projects More on f inancial targets and goals within the f ramework of our high perf ormance organisation (HPO) ef f iciency programme 15
  16. 16. Corporate Responsibility Report 2011Responsibilities for sustainability About this report Strategy and managementThe Corporate Responsibility Council has been the highest decision-making body for CEO statementsustainability issues since 2004. The decisions reached by the council are binding for the Values and standardsentire company. The Corporate Responsibility Council comprises the Chief Executive Officer of GoalsLinde AG, another member of the Executive Board, together with managers responsible for the CR organisationfollowing global and central functions: Communications and Investor Relations, Human CR managementResources, Internal Audit, Legal and SHEQ. In 2011, the Corporate Responsibility Council Sustainability opportunities Risk managementreceived a status update on our global energy efficiency and climate protection goal and Compliancediscussed the expansion of CR reporting activities. Capital markets Supply chain management Relevant topicsOrganisation Stakeholders Cooperations Corporate Responsibility Council Chief Executive Officer Professor Dr Wolfgang Reitzle Environment and safety Member of the Executive Board Professor Dr Aldo Belloni Employees Heads of global and central functions Communications & Investor Relations, Human Resources, Internal Audit, Legal, SHEQ Social commitment Performance Assurance Strategic decisions Definition of global goals Cornerstones of CR strategy Corporate Responsibility department Communications & Investor Relations Coordination of activities Reporting and communication Contact point for stakeholders Coordination and exchange of information Experts in divisions, departments, regions and business units Development of regional priorities Implementation of CR activitiesOur divisions and business units incorporate sustainability measures in their businessprocesses and regions. The Corporate Responsibility department coordinates the execution ofthe sustainability strategy with experts in each area. The CR department is also responsible forexternal sustainability reporting and is a contact partner at The Linde Group for stakeholdersinside and outside of the company. 16
  17. 17. Corporate Responsibility Report 2011Corporate responsibility management About this report Strategy and managementOur sustainability management activities are driven by two strategic goals – to reduce risks and CEO statementmaximise opportunities. This applies both within the company and in our relation with our Values and standardsstakeholders. We integrate our commitment to sustainability into our business processes Goalsworldwide via our global management systems. This enables us to implement our CR strategy CR organisationthroughout the company and promote sustainability, which is one of the four fundamental CR managementprinciples defined in the Linde Spirit – guidelines that define our values and fundamental Sustainability opportunities Risk managementprinciples. They apply to all employees worldwide. Compliance Capital markets Supply chain management Relevant topics Stakeholders Cooperations Environment and safety Employees Social commitment Performance Assurance 17
  18. 18. Corporate Responsibility Report 2011Sustainability opportunities About this report Strategy and managementThe world’s population is growing, fuelling demand for reliable, affordable and environmentally CEO statementsound energy. Our Clean Technology solutions focus on the opportunities of sustainability – Values and standardsdelivering the environmental and energy innovations to build a more sustainable future today. GoalsExperts predict that the global market for energy and environmental technologies – a market in CR organisationwhich Linde also plays an active role – will be worth between EUR 80 and 140 billion by 2030. CR managementLinde is in a strong position to capitalise on this growth. Sustainability opportunities Risk management ComplianceSustainable innovations Capital markets Supply chain managementIn 2011, we spent a total of EUR 98 million on research and development and filed 235 new Relevant topicspatents. Our research and development activities also focus on the environmental impact of our Stakeholdersproduction processes. Key priorities include the need to increase energy efficiency across Cooperationsprocesses and plants and cut the emissions released during production – by both Linde and Environment and safetyour customers. Employees Social commitmentExpenditure for research and development At Linde, we systematically promote a Performance culture of creativity and innovation. 2011 Assurance(in € million) was the sixth year in which weThe Linde Group recognised the best innovations across the Group. Awards are presented for the ten best patents registered during a calendar year in each of the following categories: technological invention, commercial invention and Group innovation. The award-winning patent applications are often directly linked to environmental and climate protection. Examples include innovations in thefield of renewable energy as well as new technologies to increase plant efficiency. The winnersjoin the Linde Innovators Club, which now numbers 130 members.> More on climate protectionProjects that reduce emissions Renewable energies – 45,000 t Renewable energy carriers are playing an increasingly important role in the world’s energy CO2 emissions supply. Our competence and product chain thanks to the use of biogas covers many sustainable power and fuel technologies, helping for instance to improve theCO2 balance in solar cell production. In California, leading waste disposal company WasteManagement has teamed up with Linde in a joint venture. The two companies have developeda system that captures gas from compostable waste (landfill gas) and turns it into fuel that canalso be used by Waste Management’s collection trucks. Converting the trucks to this climate-friendly fuel biogas will save 31 million litres of petrol or diesel each year. This corresponds tosavings of around 45,000 tonnes of CO2 emissions. 18
  19. 19. Corporate Responsibility Report 2011 Recycling CO2 350,000 t We have developed various processes to reduce About this report Strategy and management CO2 recylced greenhouse gas emissions or to recycle CO2 that would otherwise be released into the CEO statement each year by reusing carbon dioxide in Dutch greenhouses atmosphere – for example, in greenhouses. Each Values and standards Goals summer, 350,000 tonnes of carbon dioxide are CR organisation pumped from an oil refinery near Rotterdam into CR managementhundreds of greenhouses in the Netherlands. The amount of CO2 recycled in this project each Sustainability opportunitiesyear corresponds to the annual emissions of a city in Western Europe. Our technologies also Risk managementenable carbon dioxide to be recycled and used in the production of green fuels from renewable Complianceraw materials. One such project involves feeding recycled carbon dioxide to algae. Linde has Capital markets Supply chain managementjoined forces with algae specialists to develop a range of technologies that provide these cell Relevant topicsfactories with an optimum supply of CO2 . Special algae use CO2 to produce ethanol – a Stakeholdersclimate-neutral fuel for the vehicles of tomorrow. Cooperations Environment and safety Building a bridge to tomorrow’s energy supplies –700,000 t Employees Social commitment Our technologies enable fossil fuels to be Performance CO2 emissions recovered and used in the most efficient, Assurance by injecting captured carbon dioxide environmentally friendly way possible. Examples back into a gas field include processes for capturing CO2 released by power plants so it can be re-used. Natural gas is a more environmentally sound fossil fuel than oilor coal. Linde has developed technologies to liquefy and transport this low-emissions energycarrier. In May 2011, for example, we opened Sweden’s first terminal for liquefied natural gas –the largest of its kind in Europe. Europe’s largest natural gas liquefaction facility is located offthe coast of Norway, near the city of Hammerfest. Linde engineers were selected to build theplant and to also capture and compress the CO2 sequestered from the natural gas. Instead ofbeing left to escape into the atmosphere, the CO2 can then be fed back into the gas field.Around half of the CO2 contained in the natural gas – approximately 700,000 tonnes a year – isnow piped 2.6 kilometres below the ocean floor. 19
  20. 20. Corporate Responsibility Report 2011 New energy sources 20 Hydrogen (H 2 ) and fuel cell technology are About this report Strategy and management new H 2 fuelling stations opening up new environmentally friendly mobility choices. Our technologies cover the entire CEO statement for stustainable hydrogen hydrogen value chain and we are actively helping Values and standards Goals to promote the widespread commercialisation of CR organisationthis climate-friendly energy carrier. Concrete activities include the opening of 20 new hydrogen CR managementfuelling stations. Linde and car manufacturer Daimler are investing tens of millions of euros to Sustainability opportunitiesbuild the additional hydrogen fuelling stations in Germany over the next three years. The 20 new Risk managementH 2 stations will be supplied with sustainable hydrogen from Linde’s Leuna plant. Compliance Capital markets Supply chain management Green fuel Relevant topics –80% From regenerative raw materials through organic Stakeholders Cooperations CO2 emissions waste to electricity from renewable sources, we Environment and safety thanks to sustainably produced are testing and applying a wide range of process Employees hydrogen technologies to reduce or even eliminate Social commitment emissions during hydrogen production – at the Performance chemicals hub Leuna for example. In autumn Assurance2011, we started operations at a demo plant here that produces hydrogen from glycerine. Lindecalled in TÜV SÜD to analyse the carbon footprint of the entire production process – fromdelivery of the glycerine to Leuna right through to the electricity consumed to light the demoplant. Deployed on a major industrial scale, this H 2 process chain has the potential to reduceCO2 emissions during production by up to 80 percent in comparison with H 2 captured fromconventional natural gas steam reforming.> Information on our clean water solutions 20
  21. 21. Corporate Responsibility Report 2011Risk management About this report Strategy and managementAt Linde, we have implemented systems that enable us to identify, evaluate and minimise CEO statementbusiness, environmental and social risks in all of our central business processes. Values and standards GoalsOur Group risk management system covers sustainability risks. These include issues such as CR organisation CR managementenvironmental, safety, HR and legal risks, along with risks resulting from political, legal and Sustainability opportunitiessocial upheaval or from pandemics. In 2011, we further specified our risk categories relating to Risk managementhuman rights and social issues. Our SHEQ management systems enable us to identify and Complianceminimise safety, health, environment and quality risks. These management systems are Capital marketsclosely aligned with the individual workflows in the various business units. We involve Supply chain management Relevant topicscontractors and other suppliers in our activities here. Stakeholders CooperationsWe continue to expand our global compliance programme to ensure that legal regulations and Environment and safetyour voluntary commitments are upheld. In order to assess compliance with social standardsand human rights we performed a global survey to ascertain which processes have been Employeesimplemented. Moreover, we provide an external hotline for reporting suspected violations. Social commitment Performance AssuranceWe also hardwire safety, environmental and social aspects into our supply chain management.When selecting suppliers, for example, we use risk analyses and audits on the individual areasto assess supplier suitability. We maintain continuous dialog with stakeholders. This enablesus to identify new issues at an early stage and assess their relevance for our businessactivities.> More on our SHEQ management and on social standards 21
  22. 22. Corporate Responsibility Report 2011Sound corporate governance About this report Strategy and managementSound corporate governance is fundamental to Linde’s sustainable success. Linde AG follows CEO statementthe most recent version of the German Corporate Governance Code presented by the Values and standardsGovernment Commission as amended from time to time and complies with the Code’s Goalsguidelines to a large extent. Any deviations are explained in our annual report. CR organisation CR management Sustainability opportunities Global compliance programme Risk management 33,000 We continue to expand our global compliance programme to ensure that legal regulations and Compliance Capital markets Supply chain management training courses our voluntary commitments are upheld. Our most Relevant topics Over 33,000 e-learning courses on important goals here are preventing corruption Stakeholders our Code of Ethics – in 22 languages and anti-trust infringements, as well as identifying Cooperations – had been completed by the end of and resolving circumstances or events that 2011. Environment and safety require further investigation. Doing this requires Employees clear rules, informed employees and an Social commitmentinternational compliance system that enables us to identify and tackle suspected violations. PerformanceThe primary focus of our compliance programme is to prevent misconduct. At the same time, Assurancewe actively encourage our employees to report any suspected violations of our Code of Ethicsor other Group guidelines. We investigate every allegation.Since 2008, Linde’s Head of Compliance has been responsible for developing the complianceprogramme, coordinating its execution and assessing the various compliance measuresworldwide. The Head of Compliance is supported by compliance officers in the individualbusiness units and regions. The Head of the Legal Department and the Head of Complianceregularly inform the Executive Board and the audit committee of the Supervisory Board aboutactivities and progress within the compliance organisation.When expanding our compliance programme, we also follow the recommendations of theUnited Nation’s Global Compact as well as Transparency International’s Business Principlesfor Countering Bribery.In 2011, our compliance programme focused in particular on expanding the content anddeveloping the technology of our e-learning offering. In 2012, we are launching a new onlinecourse on anti-trust law. This specialist course is targeted at around 13,000 Group employees.In 2011, our compliance activities also saw us implement new guidelines definingcollaboration with business partners that act as mediators or representatives. Efforts in 2012will concentrate on drafting global anti-corruption guidelines and organising classroom-basedtraining courses on our Code of Ethics for employees who do not have access to computers.Preventing violationsWe inform employees about the legal regulations and other standards that apply to theirparticular areas of work. All employees receive a copy of the Code of Ethics when they startworking at the company and must confirm in writing that they have read and understood it. In2011, we arranged for our Code of Ethics to be translated into further languages.Through classroom-based courses and our Group-wide e-learning platform, we familiarise ouremployees with our Code of Ethics. By the end of 2011, over 33,000 e-learning courses hadbeen completed in 22 languages.Between 2009 and 2011, over 4,500 employees in high-exposure areas participated in face-to-face training sessions worldwide. These courses focused primarily on anti-trust law, theavoidance of corruption and dealings with business partners. 22
  23. 23. Corporate Responsibility Report 2011Identifying misconduct About this reportEmployees wishing to report suspected violations of our Code of Ethics or other Group Strategy and managementguidelines or make enquiries about these can contact their direct line manager or department CEO statementhead. Alternatively, they can contact a representative from the Internal Audit, Human Resources Values and standardsor Legal/Compliance departments. Goals CR organisationOur Integrity Line global reporting system is one of the key pillars of our compliance CR managementprogramme. It enables employees and external stakeholders to report doubts and suspected Sustainability opportunitiesviolations – by anonymously if desired – by e-mail, telephone or regular post. Risk management ComplianceEvery report is assessed by Linde’s Integrity Line Facilitator, who forwards allegations as Capital marketsappropriate to the Linde Integrity Committee. The committee comprises representatives from Supply chain managementInternal Audit, Legal/Compliance, Corporate Responsibility and Human Resources Relevant topics Stakeholdersdepartments. The committee examines the reports and determines further courses of action. CooperationsOur Integrity Line policy outlines the exact protocol to be followed and ensures that reportsremain confidential and data is protected. Reports of misconduct submitted via other channels Environment and safetyare forwarded to the Integrity Line system to ensure that all cases are investigated following the Employeessame protocol. Social commitment PerformanceIn 2011, our Integrity Line was contacted 430 times (2010: 334). Each one of these contacts Assurancewas assessed to determine whether it entailed a general enquiry or an allegation ofmisconduct. All concrete accusations were systematically investigated. Most of the reports wererelated to personnel topics (approximately 40 percent) and offences against property(approximately 30 percent). In additional to the regular consulting and auditing activities carriedout by our compliance organisation, Internal Audit and HR management, 54 audits wereinstigated worldwide in 2011 as a result of reports to the Integrity Line (2010: 54 audits).Consequence managementLinde employees who violate laws or regulations must be prepared to face sanctions.Repercussions for violations can range from dismissal to criminal prosecution or civil action. Ifan internal investigation reveals that a report is substantiated, we explore the measures thathave subsequently been implemented – following a set protocol and timeframe. Theresponsible line managers are involved in this process and provide their input on a case bycase basis.If our compliance systems uncover any circumstances or events that appear to breach criminalor anti-trust law, we work very closely with the authorities. In 2010, we actively contacted theMunich public prosecutor’s office to share Internal Audit findings that called for furtherclarification. The findings in question involved joint projects with other companies that wereinvestigated by the public prosecutor for suspected bribery. Linde was not found to be in breachof the law. The state prosecutor, however, did establish that external third parties actedunlawfully. Investigators estimated that Linde benefitted indirectly from these violations by asum of money in the amount of EUR 35 million over the years. In 2011, Linde made acompensatory payment in this amount to redress the situation.> More on legal proceedings in our annual report 23