Showing values through sustainability: Simone Bagel-Trah, Henkel

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Fritz Henkel was probably among the first sustainability entrepreneurs in history. After founding Henkel, now one of the world’s biggest industrial and consumer businesses, in 1876, he made sure the chimneys in his factory were built taller than what was legally required. He didn’t want ash falling on his neighbour’s fields and harming their crops.

“My great-great-grandfather was keen to build good and long-lasting relationships with his employees, business partners and neighbourhood,” says Dr. Simone Bagel-Trah, Chairwoman of Henkel’s Shareholders’ Committee and Supervisory Board. That visionary commitment to sustainability and social responsibility has been an overriding principle for Henkel since its earliest days.

In 2010, Henkel developed an ambitious sustainability strategy known as ‘Factor 3.’ It lays out the company’s goals for 2030: to create more value with a reduced ecological footprint and to become three times more efficient. It aims to do this either by creating three times the value created in 2010, while using the same amount of resources, or by producing the same value as in 2010 with only one-third of the resources. “Achieving more with less: this idea is at the heart of our strategy, because we need sustainable solutions that will allow future generations to live a good life, too,” says Bagel-Trah.

Henkel is collaborating with partners along the entire value chain to get this done. One example is its cooperation with Plastic Bank, a Canada-based social enterprise that collects plastic waste before it enters the ocean, while creating income-generating opportunities for people living in poverty. Henkel supports collection centres in Haiti, one of the poorest countries in the world and one with no recycling infrastructure. Local collectors pick up plastic they find in waterways or in the street, hand it in at a collection centre and, in return, get cash, cooking fuel or free charging for their mobile phones.

Henkel is also incorporating the plastic collected into its own product packaging, which  marks another step towards creating a ‘circular economy.’ This is just one of many sustainability initiatives that Henkel supports around the world, in addition to driving resource efficiency within its own operations and business. This commitment is regularly recognised in external ratings and rankings.

So, sustainability is a core value for both the company and its founding family – one of five company values inscribed on five pillars in the foyer of Henkel’s headquarters in Düsseldorf:

• We put our customers and consumers at the centre of what we do.
• We value, challenge and reward our people.
• We drive excellent, sustainable financial performance.
• We are committed to leadership in sustainability.
• We shape our future with a strong entrepreneurial spirit based on our family business tradition.

The five values were adapted in 2010 after a comprehensive consultation with different stakeholders. The company then held workshops with all of its 50,000 employees globally to integrate the values into the company. “The previous set of values wasn’t clear enough,” says Bagel-Trah. “And we had too many of them. Reducing their number from 10 to five allowed us to ensure that everyone remembers and understands them. It’s much easier to identify with a set of values and act on them when they are clearly laid out and are relevant to employees in their daily work.”

The company’s values also have implications for the way Henkel attracts and recruits new employees. “We want to make sure that they fit into our company culture, and vice versa,” says Bagel-Trah.

Fritz Henkel’s legacy is still alive through these values today. “He might have worded them a little differently back then, but they contain the essence of what was important to him in his time,” says Bagel-Trah. “A few years ago, I did some research in our archives. I read a lot about the era in which he lived, about what he did and said, the letters he wrote, what he said to his employees. I found all of our current values reflected in many of those documents.”

Henkel is a publicly-listed company, with a majority shareholding by the Henkel family. “However, we are not like many other family-run businesses where the business is entirely in the hands of its founding family,” Bagel-Trah says. “Henkel is more than 140 years old, but we have been a listed company for more than three decades. In essence, we are a ‘hybrid’ that combines the best of both worlds. The family is still the biggest shareholder, but we also have outside shareholders and fulfil all the requirements of a listed company in terms of transparency and governance.”

The Henkel family owners are spread out all over the world and include more than 150 members, including Christoph Henkel and Konstantin von Unger, who sit on the company’s Shareholders’ Committee with Bagel-Trah. Together, the family has put more than 60% of the ordinary shares in Henkel in a share-pooling agreement, which is the cornerstone of the family’s governance structure. Under the agreement, the family shareholders have committed not to sell their shares – at least not outside of the family.

Bagel-Trah says one of the ways the family reinforces its values to all of its members and passes them on to the next generation is through regular family events. “We organise many family meetings. We live our values without needing to constantly and explicitly refer to them,” she says. “Seeing how we interact makes it clear that they are important and highly relevant to us.”