Reporting principles

About this report

This is the thirteenth consecutive year of Sustainable Business reporting for Sandvik. We aim to continue reporting the same way on an annual basis. Sandvik’s most recent Sustainable Business Report was published in March 2018. The sustainability notes give the opportunity to present more detailed information on strategy, management approach, stakeholder dialogues, materiality analysis and sustainability data, as well as a more comprehensive description of our sustainability risks and targets.

Information meeting the Swedish legal requirements on sustainability reporting, the Statutory Sustainability report, and Sandvik’s Sustainable Business Report, is found in chapter Operations and the Sustainability notes. This report has been prepared in accordance with the GRI Standards: Core option, and has been reviewed by an external party. The assurance provider was engaged by the Board of Directors and the Managing Director of Sandvik to undertake a limited assurance engegement of Sandvik’s Sustainability Report for the year 2018. The assurance provider is independent to Sandvik. Sandvik is a signatory to the UN Global Compact (UNGC) and reports on the ten princples in accordance with the UNGC Advanced level criteria.

Report scope, boundary and calculation methods

The Group material aspects were decided in a materiality anaysis by Group Executive Management in 2016. In last year’s report, we stated that the materiality analysis applied for 2017-2018, but it has been extended to 2019 to fit the business cycle better. The material aspects are reported in accordance with GRI Standards. In addition, Sandvik reports on emissions and energy.

The sustainability information in the Annual Report refers to the 2018 fiscal year. See Note 14 for a list of entities included in the figures, unless otherwise stated.

Human Resources Data

Employee statistics regarding number of FTEs is derived from the financial reporting system (BPC). We have revised our figures for total number of employees (FTE) for the years 2014-2017 as we now report on continuous operations to be more aligned with financial reporting. All other employee statistics (age, turnover, new employees, part time/full time, gender etc) are derived from the Group’s common HR system (Workday), which covers 100 percent of Sandvik employees. These figures are compiled on a yearly basis. Data on percentage of employees participating in performance dialogues is not available for 2018 due to a change in HR systems. Sandvik does not have a significant portion of workers who are not employees.

Environment, Health and Satety (EHS) Data

EHS data is derived from our EHS reporting system in which reporting is conducted on a monthly basis for safety-related indicators and on a quarterly basis for the areas relating to environmental key figures. Supplementary data is collected and compiled outside of the EHS database once a year, and thus the quality of the data is subject to a higher level of uncertainty. These figures are rounded to a greater degree to manage this higher level of uncertainty. In the event of further limitations in the report, these are indicated in the text. The key figures compiled are based on information available at the date of the most recent year-end accounts, which may entail that historical figures have been adjusted. The Group’s results in relation to its objectives are measured using relevant performance indicators and key figures. The figures presented are the accumulated figures for 2018 for all active reporting units, unless otherwise stated. For the EHS data a control approach was used for consolidation. That means that all our locations are included in our numbers to 100 percent, also joint ventures where Sandvik has operational control. We are also present at some customer locations in our service-related business. In these cases we include data when data of our usage can be obtained.

The calculations of CO2 emissions do not include emissions from district heat, transport of raw materials and finished products or business travels. CO2 equivalents from other greenhouse gases is not included in the reported data. Calculations show that they constitute less than one percent of the total reported data. Emission factors used for calculating carbon emissions are primarily requested from the major production units. They are asked to find their specific emission factor directly from their electricity supplier. When these cannot be obtained, country specific factors from the International Energy Agency are used. Country-specific factors are also used for all other locations. The conversion factors are uploaded in our EHS Database where the calculation of all carbon emissions is performed. For the majority of the European sites, the emission factor is zero in the market-based approach, with reference to the purchase of certificates for carbon-free electricity.

Emissions to air is a combination of calculations of fossil fuel use and sample measurements from the mill where steel production is conducted. The amount from the fossil fuels are calculated using conversion factors from Swedish EPA (2009). The emissions based on sample measurements have been constant since 2012. If the samples would indicate a significant change of emissions, the constants would be amended based on the new results. For NOx, roughly a third of the reported volume comes from the steel production. For SO2, more than 80 percent derives from the steel mill.

The waste disposal methods have been designed and defined to meet the criteria of REGULATION (EC) No 1013/2006 on shipments of waste. Waste disposal is mainly managed in cooperation with a third-party service provider, and determination of disposal method relies on information from the service provider in most cases. No further breakdown than Waste to Recovery Operations or Waste to Other Disposal have been made.

In the data presented for Water Discharged, the split of data per GRI Standard 303-4 has been performed by applying allocation of the reported total water discharged. The allocation key was collected from major production sites constituting 86 percent of the total reported volume of discharged water. Each company has returned an estimated split of their discharge per the required split in the Standard. The remaining 14 percent of the reported discharged water was all included as fresh water to a third party. Furthermore, our definition of discharged water only includes such water that has passed through production processes. This means that the total volume of discharged water in the company is higher than what is specified in this report. No data is available on the total amount of water discharged in the year. This means that Standard 303-5 is non-meaningful. The reader should not assume that the residual between reported water withdrawal and water discharged correspond to a fair estimate of our water consumption. For inclusion in the water-stress category, the major production sites, constituting 86 percent of our total water use, have self-determined whether they are located in an area of water stress. They were asked to determine this in accordance with the definition as outlined in the GRI Standard 303. All water is deemed freshwater when drawn in to our production processes, which is why the category other water is not listed in the section for water withdrawal.

Worked hours is defined as exposure hours, which means all hours exposed to risk by employees, contractors and sub-contractors. The exposure hours are collected and entered into the EHS database on a monthly basis.

The reported data for occupational illnesses and frequency rates are part of our monthly reporting process. The term used in GRI called high-consequence injury/illness is incorporated in the key figures for Lost Time cases. In the past three years we have had one incident on record meeting the six months absence criteria. Our approach to mitigate these high severity incidents and illnesses is a key part of our management system and is handled within the processes for serious potential incidents, for example in our work with critical control management. The illness data is a more recent addition than the injury data in the reporting and therefore at a less mature stage. As a consequence, the level of uncertainty is deemed higher for the illness data. Illness is defined as an occurrence of physical or mental harm or disease that develops over time in the course of work not as the result of a single instantaneous event. Establishing that an illness is occupational can be a complicated process and could also span over a long period of time. An illness must meet the criteria of “under Sandvik Control” before it’s included in our data. The primary criterion for making this decision is: “could and/or should the Sandvik EHS Management System have realistically prevented this incident from occuring?”. Only if this is found to be the case, the incident will be considered under Sandvik control and recorded as such.

The percentage of sites certified according to ISO 14001 and ISO 45001 or equivalent standards is based on the status of our major production-related companies. At year-end, 109 locations were asked to provide their certification status. Seven of these were decided to be out of scope, based on being recently acquired and/or announced to be divested. Smaller locations can also choose to go for certification, but these are not included in the calculation. No previous certifications were abandoned compared to last year.