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Combined Annual Report and Sustainability Report 2018

Management

Implementing sustainability is a cross-departmental task at DMK, involving a number of different specialist departments such as Procurement, Agricultural Affairs, Occupational Health & Safety/Environmental Protection, Energy Management and Quality Management. These departments work autonomously on sustainability tasks, because the topics concerned are embedded in their processes and are therefore part of the departments’ day-to-day operations. The Management Team coordinates regularly with the cooperative’s executive bodies and takes its decisions on the basis of this close community relationship.

Sustainability is changing framework conditions

DMK has seen itself confronted with growing demands on sustainability from the market for some years now. Topics such as animal welfare - specifically, tie-stall housing, calf rearing and the use of antibiotics - GMO-free feeding, organic agriculture, regionality, meadow milk, the reduction of CO2, as well as lactose-free and vegan products are cited more and more often, particularly by customers from retailing and the food industry.

As a result of the heightened requirements, farms often incur higher production costs. Furthermore, the product flows often have to be separated from the place of origin to the packaging process. Some requirements, such as pasture grazing, cannot be implemented in full because of different conditions at various locations. Not least, the new requirements also lead to goal conflicts within the issue of sustainability. For example, if different milk collections are required, additional tours are needed, and separate product flows call for extra, resource-intensive cleaning in the factories.

These consequences highlight the fact that the changes demanded by the market are only economically feasible with the right level of demand and appropriate rewards. Further essential prerequisites are the market availability of products such as sustainable feed or certified GMO-free stabilisers. Changes of this nature demand a high degree of entrepreneurial flexibility from the dairy farmers. This can only be developed with appropriate lead times, and not within the environment of rapid change often expected by consumers and retailers.

DMK manufactures high-quality products and commits to the industry’s shared concern for n strengthening the home dairy industry and realising the market’s requirements in a way that is cost-effective for the dairy farmers

Strategic sustainability management

Against this backdrop, DMK has been pursuing a holistic approach to improving sustainability in dairy farming since the year 2013 with the sustainability strategy DMK 2020 and the Milkmaster Programme. DMK focuses here on cost-efficient entrepreneurship that harmonises the requirements of customers and consumers with the business needs of the dairy farmers. Its strategy therefore concentrates not only on individual aspects such as pasture grazing or GMO-free milk, but also on the comprehensive and multi-layered integration of aspects like animal welfare, environmental protection and the dairy farmers’ economic prospects.

Dialogue with stakeholders

Intensive dialogue with its various stakeholders has traditionally played in important role for DMK. In connection with the DMK 2020 strategy, the company conducted a systematic analysis of stakeholders and their concerns in 2015 and has reviewed it regularly since then with up-to-date studies and conversations.

The DMK Group’s most important stakeholders include:

  • Dairy farmers
  • Employees
  • Business partners
  • Consumers/the public
  • Political sphere/public agencies
  • Associations/NGOs
  • Media
  • Science/academia

According to an up-to-date review, DMK is a member of more than 100 national and international organisations and associations. An overview of its important memberships can be found here.

DMK is in regular contact with a large number of stakeholders, in discussions, events, working groups and by other means. The table shows a selection from the period under review:

DMK in dialogue Selected events and activities
DMK representatives at events  
  • Participation at agricultural shows
  • Ingo Müller at the International Green Week
 
DMK as host  
  • Almost 300 visits to Milkmaster Farms
  • Dialogue with around vets
 
DMK representatives in specialist and working groups  
  • AG Umwelt (enviroment working group) with the Association of the German Dairy Industry MIV) and the Federation of German Food and Drink Industry (BVE)
  • Cooperative diary industry interest group (IGM)"
  • Advisory committee member at the "Verband Lebensmittel ohne Gentechnik e.V." VLOG)"
 

Stakeholder involvement

DMK performed the analysis in 2015. A full update is planned for the current fiscal year. In a separate process, DMK constantly picks up on the latest topics by means of dialogues with stakeholders. The specialist departments take a precautionary approach to handling potential negative effects – for example, by using the Milkmaster Programme and management systems such as DIN EN ISO 14001 or 50001.

 

GRI materiality analysis

The GRI materiality analysis maps stakeholders’ central concerns. The company has defined topics that take a high priority for stakeholders and DMK alike in a detailed process as the “most material topics”. These serve DMK’s long-term orientation and are managed systematically.

Key topics Within Outside Management approach
  the company  
Milk price Business strategy
Animal welfare Milkmaster
Feed cultivation   Milkmaster
Transparency in the supply chain   Supplier Management
Product quality and safety IFS, BRC, DIN EN ISO 22000, Integrated Management System (IMS)
Eco- balance DIN EN ISO 14044
Energy1   DIN EN ISO 14001, DIN EN ISO 50001, Integrated Management System (IMS), others e.g. product-integrated enviromental protection
Water1   DIN EN ISO 14001, Integrated Management System (IMS), others e.g. product- integrated environmental protection
Occupational healt and safety1   Occupational Safety Management, Integrated Management System (IMS)
Atractiveness as employer Corporate vision, business strategy, HR strategy
1 Including compliance with laws and regulations

More chapter topics

Sustainability