Pestel and Swot

7/30/2019 Pestel and Swot

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PESTEL ANALYSIS:

A) SOCIAL:

Human rights and social standards at Henkel

One foundation of our corporate culture is our commitment to respect the personal

dignity and privacy rights of all employees and adhere to the principles of equality and

fairness. As long ago as 1994, in our corporate mission and principles, we declared ourcommitment to incorporate social values in a responsible manner in our corporate policy

and to "respect the social values and standards of the countries where we operate." We

thus also assumed responsibility to protect and promote human rights within our sphereof influence. We further emphasized this commitment when we introduced our Code ofConduct in 2000 and when we joined the United Nations Global Compact in 2003. Our

Social Standards, which we introduced in 2006, express in concrete terms what we stand

for. They are derived from the following internationally accepted guidelines:

10 principles of the UN Global Compact

8 core labor standards of the International Labor Organization (ILO)


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ILO Declaration of Principles Concerning Multinational Enterprises and Social

Policy (MNE Declaration)

OECD Guidelines for Multinational Enterprises, and

Social Accountability Standard (SA 8000).

In 2010, we revised our Social Standards. Our objective was to make them more preciseand thus more easily applicable for our employees as they should be used for daily

guidance. Moreover, we wanted to ensure that they are up-to-date, in view of the furtherdevelopment in international standards.

We use these Standards as a framework for decision-making and constructive

engagement within our sphere of influence, while respecting local legal requirements as

well as the responsibility of governments to protect and promote human rights. OurSocial Standards also apply to our suppliers, who are assessed through our five-step

"Responsible Supply Chain Process." This covers results and risks in regard to human

rights as well as key commercial and operating indicators.

Working conditions

We provide working conditions for our employees that reflect both our own and globally

recognized standards.

The health and safety of our employees and business partners are top priorities for us. We

also respect the right to rest and recuperation and offer our employees fair compensationand benefits in keeping with local standards.

Regarding child labor and forced labor, Henkel resolutely follows a clear policy of "zero

tolerance." Nor do we tolerate any form of discrimination.

We respect the rights of employees and freedom of association and are committed to anopen and constructive dialogue with our employees and their representatives. At locations

where there are no representatives, or the employees' right to elect employee

representatives is restricted by law, we ensure an appropriate social dialogue between

employees and management.

Communication and implementation

Through presentations, training and e-Learning modules, we ensure that our social

standards are firmly anchored throughout the company. We place special emphasis ontraining the managing directors and human resources officers of our companies in eachcountry, so that they can act as "local ambassadors" in raising awareness of the

importance of our social standards. The Social Standards are made available to all

employees, including those at the production level, in the form of bulletins, posters orbrochures.


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Cooperation and knowledge transfer with our partners throughout the value chain are

decisive for the successful implementation of social standards. This is why we engage in

international initiatives such as the Global Compact of the United Nations, the WorldBusiness Council for Sustainable Development, as well as different workshops, expert

groups, and governmental initiatives. The exchange allows us to learn from others and

share our own experience with our partners.

B) ECONOMIC :

Sustainability: Henkel a leader among internationalcorporations

Achievements internationally recognized

Combining economic success with corporate social responsibility (CSR) has been a

constant feature of Henkels business philosophy for over 130 years now. And in

international terms, too, Henkel counts among the leading companies in this

domain. So when it came to conferral of the first ever European Corporate

Responsibility Award in Prague on February 5 this year, Henkel was once again

among the finalists.

For Henkel, sustainability means ensuring that the company meets the needs of society

and the requirements of its stakeholders without jeopardizing the developmentopportunities of future generations both through its brands and technologies and in its

role as an employer. After winning the German Sustainability Award in December 2008,

Henkel has now impressed another high-caliber jury with its firmly established

sustainability strategy, taking its place among the 22 finalists from throughout Europe inthe first ever competition for the European Corporate Sustainability Award.

The company regards reaching the final as an important acknowledgment of itscommitment in the sustainability field. We are delighted at this international affirmation

of our strategy particularly given that this is the first pan-European sustainability award

of its kind, said Christian-Andr Weinberger, Corporate Senior Vice President undGlobal Chief Marketing Officer at Henkels Laundry & Home Care business sector. We

have no doubts that this issue is more important today than it has ever been. We see

enormous potential here for driving innovation toward combining product performance

and quality with responsibility for people and the environment, he added.

The award recognizes innovative strategies that both promote business success and

anchor sustainability and corporate social responsibility as factors for progress within thecompanies concerned. The competition was organized by the European Independent

Consulting Group (E-I), a network of independent strategy and management consultants.

The jury is comprised of representatives from the EU Commission and renowned nationalpersonalities from the fields of politics, business and society. The German jury member is

Professor Dr. Klaus Tpfer, a former Minister for the Environment in Germany and


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erstwhile Executive Director of the United Nations Environmental Program (UNEP).

Chair of the Czech-based jury is the Minister for Human Rights and National Minorities,

Dzamila Stehlikova.

In putting itself forward as a candidate, Henkel was able once again to underline its

credentials as a leader in this field. Examples of its activities and commitment tosustainability and CSR include the following:

Active engagement in promoting the recognition of certificates for sustainable palmkernel oil, a raw material used in the production of wash-active substances (surfactants),

through membership of the Roundtable for Sustainable Palm Oil (RSPO).

Participation in Germanys Product Carbon Footprint pilot project with the aim ofdriving forward the development of reliable methods capable of generating transparent

and comparable results for determining the full gamut of climate-relevant emissions.

The Quality and Responsibility strategy aimed at combining product performancewith the best possible degree of environmental protection in all the companys laundry

and home care products.

Extensive use of renewable raw materials, of recycled residues for product packaging,

not to mention the introduction of accurate dosing aids.

Henkels record on sustainability and corporate social responsibility has gained an

excellent standing in various national and international rankings and ratings. For

example, in December 2008 the company was recognized as Germanys MostSustainable Brand at the first ever German Sustainability Congress. And in September

2008, Henkel was the only company in the FMCG (fast moving consumer goods) market

segment to be included in the Dow Jones Sustainability World Index (DJSI World). Only10 percent of the worlds 2,500 largest companies make the grade for inclusion in the

DJSI World. In March of this year, moreover, Henkel also garnered the 2008 ESG

Award in the DAX corporations category. This accolade recognizes companies listed inthe German stock index (DAX) for their performance in the fields of environmental

protection, social responsibility and corporate governance (ESG = Environment, Social,

Governance).

C) ENVIRONMENT:

Henkel Chile was visited by the health Secretary of Chile and received Public

Support for the Initiative. The Health Ministry prepared a national law to Prohibit the

production and marketing of adhesive Containing Toluene. The Chilean Minister ofHealth awarded the Company with the national wealth award in recognition of its

pioneering role in banning toluene.


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Henkel focused on Eco-leader ship and sustainable development. Henkels market

Success and its ability to strengthen Co-operation between various stake holders lead to

multiple environmental and social benefits.

Ecological responsibility:

Henkel develops, manufactures, and markets products and systems which according toacknowledged scientific criteria are compatible with the environment. The environmental

compatibility of production processes and products is continuously undergoing improvement

Henkel's principles of environmental protection

In 1991, the until then most important international environmental conference of industrytook place in Rotterdam - the Second World Industry Conference on Environmental

Management (WICEM II).

The central purpose of WICEM II was to formulate and adopt principles of environmentalmanagement. The outcome was a Business Charter for Sustainable Development, designed to

provide comprehensive guidelines for a wide variety of industries throughout the world.

Henkel is committed to the principle of sustainable development, of environmentally

compatible corporate, product and research policies.


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Eco-Audit

Environmental management at Henkel is based on the Group's owncriteria, which go beyond statutory and voluntary obligations. The aim isto cement these criteria in uniform, Group-wide safety and environmentalstandards. For this purpose, the Management Board decided in November

1988 that an ecological audit should be carried out to provide asystematic and comprehensive overview of the actual environmentalsituation at all the Henkel Group's production sites, and with respect to allproducts. Audited were more than 140 production sites in 53 countries.The intent was to look beyond statutory obligations and to find outwhether production processes exhibited weak points from the point ofview of industrial safety and ecology, and whether environmental hazardswere linked with Group products, and if so, to take corrective action.A standard procedure was applied to obtain specific information from allcompanies in the Henkel Group. Documented at Group headquarters in an'Eco Register,' the findings were analysed and appraised by a group of

experts, in some instances after obtaining specific additional data.

Eco audit - products

Altogether 116 substances were listed as a basis for the product audit.These were classified into the following groups:

substances very dangerous for aquatic organisms;

chlorofluorocarbons (CFCs);


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carcinogenic substances.

The eco audit looked at all Henkel products in the light of these criteria. Itfound that, for Henkel's more than 10,000 products, almost no action wasneeded with regard to especially hazardous substances. Only in about ten

cases did production sites report the use of hazardous ingredients, and inall these cases the substances concerned complied with local regulations.Meanwhile, these substances are no longer used in the manufacture ofHenkel products. They were either replaced by harmless substitutes, orproduction was stopped. An example: in South Africa it was found that asubstance used to impregnate wooden fence posts was manufacturedfrom coal-tar oil (a carcinogenic substance). Henkel immediately withdrewthis product from the market, without providing a substitute. The ecoaudit also revealed that throughout the world Henkel no longer uses CFCsas propellants.Still, the Group does not intend to relax its efforts and does not regard the

current state of affairs as final. A gradual study will be carried out intoproducts based on less hazardous substances.

Eco-audit production

The eco audit of production processes is based on the hazardoussubstances listed in the German regulations regarding environmentalhazards ('Strfallverordnung'). The following substance groups were ofrelevance in the context of the Henkel study:

substances very dangerous for aquatic organisms;

highly toxic substances;

flammable gases;

liquids with very low flash points.

The list includes 130 substances and substance groups. The questionswere formulated according to three main criteria:

annual consumption;

emission and waste disposal situation;

average inventories


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A first important finding of this global audit is that the Henkel Group'sproduction facilities maintain high safety standards. It also showed that atcertain production sites, especially of acquired companies, some effortsare needed to raise safety levels. Initial steps have been taken in thisdirection.Group-wide Henkel safety and environmental standards will also bedrafted to cover the use of a range of other substances employed inproduction processes.Everywhere the same basics principles of environmental and consumerprotection: Henkel Corporation's Charlotte works in North Carolina, USA.

Eco program

An eco program at the headquarters then followed up on the eco audit.This provides for a greater emphasis to be placed on pro-environmentresearch and development activities. Chemists and engineers fromResearch and Process Development have cooperated with their

colleagues in Application Technology and Production to draft projectproposals. From this pool, projects at a cost of some DM 23 million startedin 1991. The most important were:

the development of new compounds to replace substances verydangerous for aquatic organisms;

the development of new, low-waste technologies that cause aminimum of atmospheric and wastewater pollution;

a search for possible methods of reducing energy consumption andconserving resources.

The experience gained will gradually be applied to our subsidiariesabroad.

Waste management(Metal Chemicals)Unlike raw materials production, the manufacture of consumer goods isusually associated with only low levels of waste. This is why Henkelproduces relatively little solid waste. Residual substances that cannot beexploited in the same production plant are not automatically classified aswaste but are often recyclable. For instance,

residues from oil and fat processing can be used by the Holthausen

power station as special fuels; scrap wood, from pallets for instance, is used to make chipboards;

melting chamber granulates from the power plant are used as roadconstruction and drainage material.

Solid waste material is collected, segregated and recycled.


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Classical recoverable materials such as scrap metal, wood, paper andplastic sheet and film are recycled. Metal and plastic drums and barrelsare either reconditioned and refilled or exploited in some other way.Metals from catalysts (copper, nickel) are reworked. For some time now,building rubble has also been reprocessed. In 1991,


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the parent plant in Dsseldorf produced some 67,600 metric tons ofresidual material. 50,400 metric tons of this was reused and 17,200metric tons was waste. Some 74,5 percent of residual materials wastherefore recycled. Henkel is currently constructing a disposal center in itsparent plant in Dsseldorf. In line with the latest technology, residues andwaste will be stored safely before being treated and prepared for disposal.The first section of the plant has been in operation since early 1992.

Wastewater treatment

(Phosphate-free powdered detergents)The parent plant in Dsseldorf produces about 20,000 cubic meters ofwastewater each day - as much as a town a population of 100,000 people.Henkel is an 'indirect discharger'; this means that the wastewater isdischarged into the municipal sewage treatment works in the south ofDsseldorf.Before Henkel's wastewater leaves the parent plant it passes through acentral wastewater treatment facility, where water-insoluble substances

such as fats and oils are removed. In a neutralization stage thewastewater is given a preliminary treatment to ensure that the biologicalpurification stage in the municipal sewage works is not overloaded. Theindividual wastewater streams flowing into the central facility arecontinuously monitored. For this purpose, automatically functioningcontrol and sampling stations have been installed at five important pointsalong the 40-kilometer drainage system in the plant. Temperature,conductivity, acidity (pH) and organic carbon content are measured atthese stations, stored in a central computer system and the resultsdisplayed. Deviations from standard values are immediately detected, sothat counter-measures can be taken promptly. Wastewater can be

retained for specific treatment if necessary.Water that has been contaminated as a result of fire-fighting activities canalso be collected and treated in the central wastewater treatment facility.

Environmental protection by the works fire department

Nowadays, environmental protection is an increasingly important part ofthe work of the fire department, alongside its traditional task of providingfire protection in preventive and defensive form. Great priority is nowgiven to protecting air, water and


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soil against the hazards to which they may be exposed when productsaccidentally escape. Emergency plans specify all the necessary steps tobe taken if an accident does occur, from sounding the alarm and takingcounter-measures to eliminating the effects of the damage.As a hazard prevention measure in the event of gaseous productsescaping, fixed and mobile sprayers have been installed, which cangenerate an extensive cloud of water droplets to blanked and smotherpossible emissions. Mobile and stationary covers and barriers areavailable to prevent any substances from entering the drainage system orcontaminating the groundwater.The range of potential incidents requiring counter-measures to avoidenvironmental damage stretches from a 'small acid leak' to an accidentinvolving hazardous bulk substances. Within the framework of TUIS (atransport accident information and aid system), Henkel's fire departmentalso provides help in accidents involving hazardous substances outside ofthe parent plant.Henkel's safety principles for protecting the environment, as exemplified

at the parent plant in Dsseldorf, apply analogously to all the other Groupcompanies throughout the world.

Wastepaper recycling

There is a long tradition of processing wastepaper into recycled paper andcardboard. The first Henkel patent for such a process dates from 1908.In West Germany, one quarter of all wastepaper is deinked, i.e. theprinting ink is removed, and the paper is then recycled; the rest is usedfor packaging material. Although packaging material and some tabulationpaper can now be manufactured completely from wastepaper, newsprint

can only tolerate 50 to 60 percent and high-quality paper may not containmore than 5 percent. In Japan and Europe, printing inks are usuallyremoved by means of flotation processes, and this type of process issteadily gaining in popularity on a global scale. Henkel has a major shareof the market in flotation deinking chemicals. By developing new productsand better processes for removing water-soluble flexographic printinginks, Henkel has made


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another important contribution to relieving the burden on theenvironment. These developments even enable the deinking of paper thathas been printed with modern solvent-free inks and its reuse in anenvironmentally responsible manner.Current development work is being carried out in close cooperation withthe printing ink industry and a number of research institutes. The GermanFederal Research Ministry is supporting this project.

D) LEGAL:

Henkel had wide Customer base and Customer Loyalty. False Practices like bribery andCorruption were strictly rejected. Henkel always believed in attaining their goals byfollowing ethical practices and maintaining the product Quality and standards.

E) TECHNICAL:Achieves full business potential by Streamline product Portfolio,Strengthen Top Brands.

Focus more on customers by offering right solution to their problems and

consistently satisfying their needs. Henkels Mission is to become the trend setter in the

market by creating and sustaining Competitive advantages by Development of premiumbrand, anticipation of customer needs, Professionalism and Competence, Product and

service innovation.


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F) LEGAL:

Respect and comply with applicable laws. Conduct political dialogue incompliance with Henkels Corporate Values and Standards. Work within the rules ofthe political institutions at both national and international level (for the EU, pleasealso refer to the new Code of Conduct for Members of the European Parliament with

respect to financial interests and conflicts ofinterest.

No conflict of interests or corruption Obtain information or decisions in an honestand respectful way. Behave with integrity. Never induce staff or public authorities to


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contravene rules and standards of behaviorapplicable to them. Any business activities with and paymentsor other commitments to members of theEuropean Parliament and other local orinternational politicians are prohibited unless

prior written approval by the InternationalGovernmental Relations & Public Affairsdepartment, Henkels Compliance and RiskCommittee and/or its Chief Compliance

Officer has been obtained.


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