The Wider View: The challenges and opportunities of sustainable transformation

With a history reaching back to the early 19^th Century – the company celebrated its 200^th anniversary as a family-owned business in 2024 – and a global network of operations, the challenges Siegwerk has faced when it comes to implementing a truly sustainable culture are many and varied.

This is worth pointing out, because often in our past reporting we have focused more on the hurdles facing startups – lack of investment, difficulties with scaling, etc. – and this is not the case with established players. Yet in many ways the task is just as daunting: instilling the need for sustainable development and social responsibility across a large and complex organization, all while bringing the huge employee base along, and ensuring compliance with evolving and increasingly stringent regulations.

Sustainability challenges for established players

The specific issues facing companies such as Siegwerk – which many of our readers will no doubt recognize – include:

• Legacy systems and processes: According to Alina Marm, “Established companies often have entrenched systems and processes that are not easily adaptable to new sustainable practices. This can make the transition slower and more complex.”
  
  One of the ways in which Siegwerk has addressed this is to ensure the governance of its sustainability program is now ‘interwoven throughout the organization’ through: a) creating clear responsibilities throughout the organization; and b) piggy backing on existing processes to ensure sustainability is ‘not solely people-dependent’. Two examples Alina gives are the inclusion of a carbon price in investment decisions, and using existing business status reporting structures and include sustainability As part of this interweaving , Siegwerk has established key organizational units with different responsibilities. The CEO has overall accountability; then there is the Sustainability Council, which oversees HorizonNOW (the company’s sustainable business program launched in 2021), and the Sustainability Office which centrally coordinates sustainability transformation and is the first point of contact.

• Scale and variety of operations: A global operation inevitably means greater complexity when making company-wide changes. “The larger scale of operations in long-established businesses means that any change, especially towards sustainability, requires significant resources and coordination across multiple departments and locations,” says Alina. “Operations differ country by country as we have grown organically, but also through acquisitions in the past. Variety is cultural (including language) as well as technical (e.g. not all sites are on SAP which we have used for automation of our Product Carbon Footprint (PCF) data).”
  
  To give an example of how this works within Siegwerk, the Green-CAT (Green Change Agent Team) is an internal network of ‘sustainability ambassadors’ promoting the HorizonNOW program. According to the company, “The change agents have different roles, at different sites, and act as multipliers of our sustainability program.”
• Regulatory compliance: As Alina says, “Established businesses must navigate a complex web of existing regulations and ensure that new sustainable practices comply with these regulations, which can be a daunting task.”
  
  In addition to ensuring it remains up-to-date with new and ongoing regulations – for example the new PPWR or the Directive of Corporate Sustainability Reporting (CSRD) – Siegwerk now holds regular training sessions with employees to ensure everyone is aware of the obligations and their implications.

ESG successes

Given the above, what environmental and social successes has Siegwerk, as a company, achieved since the launch of HorizonNOW? To give just a few examples: the company now uses 100% renewable electricity and is scaling solar energy – both, as Alina points out, investments without economic return. Its EcoVadis points score is steadily increasing – the last rating was at 63 points in 2023 with a solid jump expected in 2025 for when recertification is planned.

Furthermore, Alina tells us that the company is particularly proud of its renewed focus on human rights issues and responsibilities. “It was identified as a topic and included in HorizonNOW through the requirement towards our suppliers to commit to the principles of United Nations Global Compact (UNGC), but we took the German Supply Chain Due Diligence Act (LkSG) [a law that requires companies with a German presence to protect the environment and human rights in their supply chains] as an opportunity to go back to the drawing board and reconsider if we are doing enough. We decided we needed to do more for social and economic reasons.”

Data and the need for transparency

When it comes to ESG, there is also of course a growing emphasis on the need for data sharing across the value chain, particularly in light of the new requirements such as the above-mentioned PPWR. It is no longer enough for a company to pay lip service to environmental goals – it must show how it is, or will be, achieving them.

Alina tells us that transparency has been a guiding principle for Siegwerk for decades. Indeed, the company shares Partial-Product Carbon Footprint (P-PCF) for every product it sells. This includes carbon emissions starting with the manufacturing of raw materials for inks and coatings, and carbon emissions during production of the inks and coatings up to transport to the customers.

“Siegwerk has been actively involved in initiatives that promote data sharing. For example, the company participates in various industry groups and standardization bodies, such as RecyClass and EuPIA, where it holds key roles in technical committees and communication working groups.”

Furthermore, she says, transparency must apply along the entire length of the supply chain. “We also ask for transparency for better decision making; Siegwerk’s supplier engagement program drives performance transparency and Scope 3 reduction by evaluating suppliers’ positions on GHG emissions and creating synergies for achieving sustainability targets. This program highlights the importance of data sharing in achieving sustainability goals while maintaining brand protection.”

But what of concerns around brand protection and data sharing? Can the two things exist in tandem? Yes, according to Alina: “Brand protection in many cases is easier than thought, and there is tendency towards overprotection.” Smart data delivery models, such as those embedded in the suite of digital services offered by Siegwerk (of which more below) can help mitigate any such concerns.

Product innovation and digital services

The focus of this article has been mainly on Siegwerk’s overall ESG strategy – and the ways in which learnings from this can be applied to other companies of a similar size and background. But it’s also important to acknowledge how Siegwerk continues to employ technological innovation across its product and service offering to help its clients, in turn, meet their own sustainability targets.

For Siegwerk, one crucial aspect of this is saving the amount of ink wasted or improving print machine set-up – which can have both cost and environmental benefits. Through its above-mentioned digital services offering that runs right the way from prepress through to the final product, clients can automatically manage their ink usage to prevent waste; use the assisted reality INKonnect tool that connects them with experts to receive real time assistance and guidance; stay up to date on Product Safety and Regulation (PSR) issues, and more.

When it comes to the inks and coatings themselves, says Alina, circularity is clearly the main concern. Effective deinking is one of the keys to improving recyclability of packaging, and “can take design for recycling a step further by not only enabling mono-structures, but also ensuring the ink can be removed in the recycling process, creating clear (and therefore high value) recyclate.”

This year, for example, Siegwerk partnered with label supplier and packaging producer Masterpress to launch its first full UV flexo deinking system for the European market: CIRKIT CLEARPRIME UV E02. While UV inks have certain environmental benefits, they can be difficult to remove and lead to contamination of the existing mechanical recycling stream; this new primer technology ‘offers a validated solution for safe and economic deinking of UV-printed self-adhesive labels (PSL)’.

‘A transformational journey’

In summary, learning from Siegwerk’s own approach, here are just some of the most important actions long-established companies can take moving forward as they begin their sustainable transformation journey:

• Integrate sustainability into existing processes:  According to Alina,“ Siegwerk’s sustainability strategy is deeply rooted in its business operations and culture. It is focused on integrating sustainability into existing processes, such as incorporating carbon pricing into investment decisions and prioritizing sites within its operational footprint.” This holistic approach ensures that sustainability is not treated as a separate initiative but as an integral part of the company’s overall strategy.
• Collaborate with all stakeholders: “ Siegwerk actively engages with stakeholders, including customers, partners, producer organizations and employees, to drive its sustainability agenda. This collaborative approach helps in gaining buy-in and support from all stakeholders, making the transformation smoother and more effective.”
• Commit to transparency:  We discussed the need for data-sharing above, but it’s worth restating as it’s going to be crucial for all companies moving forward if sustainability gains are to be disseminated across the entire value chain.
• Manage trade-offs:  There will be instances where sustainability goals may conflict with other important objectives, such as safety improvements or operational efficiency. Managing these trade-offs and making informed decisions will be crucial. “ Persistence is the name of the game,” says Alina. Many different topics compete against each other, and there will not always be a win-win. Sometimes you lose and resources are assigned to other areas (e.g. investment in a new production line versus solar panels). And sometimes even sustainability competes within (installing air conditioning for better working conditions in production with increasing temperatures versus reducing electricity consumption, for example).

In short, learn from any setbacks and challenges – and remember they do not ‘define your trajectory’ as a business. Not every decision will be the ‘right’ one, and as everybody knows, finding the balance between sustainability, technical performance and cost competitiveness is a continual balancing act.

As Alina says, the key is to “acknowledge it is a transformational journey.”

To learn more about the topics we have discussed in this article, take a look at Siegwerk’s recently published 2024 Sustainability Report.