The importance of ESG in addressing global challenges Our Sustainability Strategy
We recognize the vital importance of Environmental, Social, Governance (ESG) factors in addressing urgent global challenges. Our first and current materiality analysis in 2020 laid the groundwork for our ESG strategy, leading to a materiality matrix developed in three phases. This process helped us identify 11 priority actions and create a value creation model that guides our ESG efforts.
As the ESG landscape continues to evolve, along with emerging regulations such as the CSRD, we are currently engaged in conducting a new comprehensive materiality analysis, with a focus on double materiality. This approach considers both the financial materiality, assessing the sustainability and climate impact on our company, and the impact materiality, evaluating our company’s effect on people and planet. This dual perspective allows us to delve deeper into impacts, risks, and opportunities.
The first step in conducting the double materiality analysis involves identifying a broad range of potentially material topics. We will draw insights from various sources, including regulatory developments (CSRD), sustainability reports of peers, our initial materiality assessment, and external sustainability reporting standards like GRI, SASB, and TCFD. Subsequently, we will consult extensively with our stakeholders through surveys and focus groups to gather diverse perspectives.
In the second step, we prioritize these topics based on insights gained, analyzing the information to establish a threshold of materiality. The third and final step involves validation; the prioritized list of material topics is reviewed by our Steering Committee for feedback and approval. The outcomes of this process will be aligned with our existing ESG strategy, ensuring our approach remains dynamic and responsive to the changing ESG landscape.
While our first materiality analysis was a significant step, our ongoing double materiality analysis represents our commitment to continually refine and enhance our ESG strategy, ensuring it remains robust and aligned with the latest industry standards and stakeholder expectations.
Making an impact
11 strategic objectives Value Creation Model
Central to our current approach is our Value Creation Model, which serves as an extensive roadmap. Our connectivity matrix complements this model by translating strategic ambitions into tangible goals, KPIs, and actionable steps. While the position of the Value Creation Model is adapting to the evolving legal landscape, it continues to be a fundamental aspect of our strategy.
Building on this foundation, we are preparing for the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CS3D). In line with this, we are currently enhancing our internal reporting systems and conducting a comprehensive double materiality analysis—a crucial element of the CSRD—to gain a deeper understanding of the impacts, risks, and opportunities in our operations and activities.
Our ultimate goal is to streamline our reporting process to be fully compliant with the mandatory disclosures of the CSRD for the financial year (FY) 2025. In anticipation of this, we will prepare an internal test report over FY 2024 to ensure the data points are in order.
Also in response to the CSRD and the upcoming CS3D, we are carrying out a Value Chain Mapping to ensure due diligence across our operations. This process involves a detailed review of each step of our value chain to maintain high standards of sustainability and meet our due diligence obligations.
The execution of this strategy rests with our executive management team, supported by a specialized ESG team. This structure guarantees that sustainability initiatives are not peripheral but integral to our operations. Operational leaders are appointed for each initiative within our sustainability program, ensuring effective implementation and integration.
By following a structured and proactive approach, we hope to make a positive difference in society and the environment, aligned with evolving legal frameworks and our own commitment to sustainability.
- Our assets
- Our business model Results
- Outcome / effects
Our assets
- 900+ employees
- Performance culture
- European network of 15 production sites for pallets, 21 facilities for reconditioning services, 5 sawmills and own nail production site
- +50 sites in 10 countries
- Established value in European countries
- Diverse portfolio
- Wood and metal suppliers
- Customers
- Communities
- Fabrication/machines
- Logistics/IT
- Material natural sources
- 100% certified wood
- Green energy
- Metal
- Fuel
- Access to financial capital
- Capital and reserves
- Funds
- Equities
Our business model
Our strategy focuses on growing a sustainable business, leading the industry through innovation, and upholding our commitment to responsible business practices.
Our business faces risks, including high exposure to climatic hazards, ongoing trade tensions, and a shortage of skilled workforce.
Our group is defined by innovation, a sense of responsibility, an entrepreneurial spirit, high performance and a passion for our products.
We carry the business of our customers in a sustainable and reliable manner.
We are a major and credible actor of the pallet industry, serving our customers efficiently.
We want to create value for stakeholders by being a gamechanger in the (wood) packaging industry in Europe.
Outcome / effects
- Provide business continuity, efficient transportation and safe storage of their products
- Creation of innovative solutions while reducing costs and promoting sustainable goods and services
- Provide enhanced performance and reliability with our tailored made and standardized solutions
- Business continuity through predictability and warranty /steady and reliable purchase orders and information
- Encouragement on market adaptation (changing demands)
- Continuity of supply
- Be a reliable customer throughout the value chain, adding a trustworthy reputation to the negotiation
- Employer of choice that helps employees grow
- Build skills and expertise
- Enable a strong sense of purpose
- Effects of community investments
- Be a relevant engine of economic growth
- Contribution to low carbon society
- Leading the industry with circular energy solutions in own production sites and nearby communities
- Reduce waste impact and conserve biodiversity
- Trusted partner
- Return on investment
Environmental
It's imperative for companies to take an uncompromising approach to CO2 emissions. It is also our key focus: from minimizing our emissions to promoting product reuse. However, environmental responsibility is about more than that. It’s about ensuring our wood is sourced sustainably and lives a circular life.
At our organization, we are dedicated to providing eco-responsible products and services. Through product reuse practices like PGS Reverse, we offer a circular service for our wooden pallets and strive to extend it to all pallets we deliver. Furthermore, we collaborate closely with customers to convert existing products into eco-designed alternatives and actively propose sustainable solutions to new customers.
Watch the interview on this topic with Bart De Laender, our Chief Operational Officer below.
Goals
- Convert existing products with eco designed products where possible.
- Propose eco designed product when acquiring new business customers.
- Offer a returnable service for all pallets we deliver, not only the current ones.
- Recover one used pallet from the market for every new pallet we produce and reuse it.
Indicators
- Number of eco-design projects in the pipeline & number of achievements every 6 months
- Number of eco-design offers made to clients
Recognizing the urgency of combating global warming, we are actively transitioning towards renewable energy sources and reducing our internal fossil fuel consumption. A crucial part of our strategy involves a comprehensive assessment of our carbon footprint for the years 2021, 2022, and 2023, covering Scope 1, 2, and 3 emissions, to be completed by July 2024. In partnership with E-Luse, a third-party entity, and aligned with the GHG Protocol, we are focusing on rigorous monitoring as the foundational step. This initiative is significant in setting an ambitious and actionable CO2 target. Building on our ongoing efforts in efficiency and reduction, this detailed monitoring will further enhance our ability to reduce our environmental impact.
Watch the interview on this topic with Geert Devooght, our Manager Operational Excellence below.
Goals
- Mapping out our carbon footprint for the entire PGS Group for the years 2021, 2022 and 2023, encompassing our Scope 1, 2 and 3 emissions by July 2024
- Reduce our carbon footprint by decreasing our internal fossil energy consumption and transitioning to renewable energy sources
- Reduce heat energy consumption
- Maximize the use of Biomass for heating purposes
- Minimize the use of fossil fuel for internal transport
- Become self-sufficient in the consumption of our energy. Reduce the consumption from external electricity generated by fossil fuel:
- Maximize the use of on-site generated electricity
- Evaluate other sources of renewable energy procurement
- Evaluate investment projects on renewable energy
- Explore and evaluate innovative technologies on energy reduction
Indicators
- Baseline and targets for Scope 1,2, and 3 emissions in absolute, relative and intensity value
- Percentage of electrification internal forklift transport
- Reduction percentage in heat consumption
- Thermal footprint
- Percentage of on-site generated electricity
- Total energy consumption from renewable sources
Our Group collaborates exclusively with suppliers committed to sustainably sourced timber, in line with the latest EU environmental regulations on sustainable sourcing. We ensure our products come from entities certified under the new EU standards, adhering to established practices, and we maintain our commitment to not source any endangered species. In addition, we pursue PEFC multi-site certifications, aligning with EU's stringent requirements for sustainable forest management and deforestation-free sourcing.
Watch the interview on Sustainable sourcing with Charlin Decroos from the Procurement department below.
Goals
- Ensure the timber we source is sustainably and ethically sourced, adhering to EU standards against deforestation and protecting endangered species.
- Work together with long-term suppliers to uphold the same ethical standards as the PGS Group, including adherence to new EU regulatory requirements.
- Foster sustainable forest management compliant with EU regulations, through endorsements like multi-site PEFC (PEFC/07-32-193), FSC certifications, and CoC (Chain of Custody).
Indicators
- Percentage of response rate of suppliers on the Supplier Code of Conduct
- Percentage of Controlled Sources
- Percentage of CoC (Chain of Custody), purchases with claim
- Multi-Site PEFC Conformity on PGS Group level
- New mergers PEFC certified within 12 months from joining the group
Innovative ideas are an inherent part of our business model. Smart innovative choices create added value, leading to a more performant, green, and sustainable supply chain.
Watch the interview on this topic with Ruben Coene, the Technical Manager below.
Goals
- Have a healthy innovation road map in place, with well identified short, mid and long term projects supported by the Steering Committee.
- Have pro-active 6-monthly meetings in place with external bodies able of supporting the group with these developments.
Indicators
- Pipeline with x short term projects, y medium term projects, z long term projects
- Number of projects launched per fiscal year
- Number of meetings held with external bodies
We believe in IT as an essential factor in reducing our CO2 emissions. However, advanced IT solutions and better practices also contribute towards better data safety and protection.
Watch the interview on Green IT with Pieter Cloet, the IT Manager below.
Goals
- Protect data through cyber security audits, implement cyber security tools and focus on awareness training
- Monitor carbon footprint of IT environment
- Reduce on-premises servers
- Recycle hardware
- Less paper consumption
Indicators
- Cyber security audit every 2 years
- Kg of CO2e Carbon footprint of IT environment
- Total invoices downloaded from MyPGS vs. sent by mail
- Total of on-premises servers
- Total of IT devices that are not recycled
- Number of printed pages
- Number of prints per active user
Social
Employees are the backbone of our organization. Thus, prioritizing a robust and productive work environment is critical. Additionally, we commit to undertaking measures aimed at combating child poverty.
Our strategy is dedicated to fostering a great and stimulating workplace, with a strong focus on talent management and promoting equality and inclusion. We're committed to nurturing a diverse and dynamic environment, underpinned by advanced systems like a centralized ERP for efficiency and a robust reporting mechanism for transparency and accountability.
Watch the interview on this topic with Ann Castelyn, the Group HR Manager.
Goals
- Ensure equitable treatment of employees irrespective of gender, age, ethnic background
- Promote diversity within leadership roles
- Expand workforce inclusion by hiring individuals with labor market disadvantages
- Standardize the onboarding process to ensure seamless integration of new hires into the organization
- Develop a continuous training program that addresses both skill gaps and career development needs
- Develop a robust succession planning system to ensure leadership continuity
Indicators
- Total number of employees by headcount, with breakdowns by gender, age, ethnic background, and by country
- Percentage of gender diversity in leadership roles
- Age diversity ratio among the workforce and in hiring practices, particularly at the extremes of the age spectrum
- Number and percentage of employees hired through specialized employment firms aimed at labor market disadvantage
- Percentage of internal promotions versus external hires for leadership roles
- Average hours of training provided per employee per year
- Total annual training costs divided by the number of employees
- Percentage of employees who have received formal training in a given year
At our organization, we prioritize safety without compromise. Our goal is to achieve zero accidents, and we set strong targets to drive this commitment. Whenever feasible, we endeavor to obtain ISO certifications to uphold the highest standards. Another key focus area is alleviating physical labor in our production environment through the development of innovative automation solutions.
Watch the interview on this topic with Philippe Chevallier, the QSE Responsible below.
Goals
- Prioritize safety without compromise and take our responsibility to aim for zero workplace accidents
- Aim for zero cases of occupational illness at all times
- Strive for progressive ISO 45001 certifications on our different sites
- Extend the implementation of ISO 45001 standards to other sites
- Decrease labor intensive work and physical load of employees through robotization and automation in the workplace
Indicators
- Injury frequency rate
- Number of accidents with absenteeism
- Total of ISO 45001 certified sites
Our Group values social engagement and strives to create a positive impact in our communities. Through our program, employees can support local social projects and organizations aligned with specific causes. Whether through financial contributions, donation of goods, or leveraging our network and expertise, we actively seek opportunities to make a difference. Our future focus includes combating child poverty.
Watch the interview on Dedicated Community Investment below, with CEO Luc Grauwet.
Goals
- Needs-based engagement in local communities and charitable organizations with a future focus on child poverty, through promoting, sponsoring and participating.
- As a member of society, support organizations and activities that help to solve the global issues addressed by the SDGs and other initiatives.
Indicators
- Number of social projects carried out
- Total investment per type of support (financial, material…)
- Total projects per site within our group
Governance
Our organization is guided by robust corporate governance principles. We value integrity, expecting all associates to uphold ethical standards and comply with laws and regulations. We prioritize the delivery of high-quality and safe products, while maintaining a sustainable and responsible approach to financial and non-financial management. Transparency, resilience, and long-term viability are at the core of our operations.
We set high expectations for our associates. We believe in strong responsibility, fairness, and ethical standards, and we lead by example. Through institutionalized business ethics tools such as our code of conduct, whistleblower procedure, and risk management practices, we ensure ethical conduct is embedded in our culture.
Watch the interview on Business Ethics with Patricia Simoen, the CSR Manager below.
Goals
- By reflecting the main regulations and standards in force at national and international levels on Environmental Social and Governance, and by ensuring uniform application across all countries, the code of conduct is a fundamental and integral part of the organization's management and control cycle.
- Update the whistleblower procedure that includes regular testing and continuous improvement to ensure timely and effective responses to potential code of conduct violations in all countries within the next year.
- Establish a coordinated risk management system that identifies and assesses potential risks across all areas of the organization, including the code of conduct and whistleblower procedure, and implements appropriate measures to mitigate those risks
Indicators
1) Code of conduct
- Code of conduct in compliance with international standards
- Percentage of enforcement of code of conduct of employees in all countries
- Number of training related to code of conduct
- Number of persons trained
2) Metrics whistleblower procedure
- Set metrics on whistleblower procedure
- Number of material subjects concluded in code of conduct and whistleblower procedure
To ensure long-term viability and stability, we integrate sustainability into our core operations, upholding responsible management of both financial and non-financial resources. In response to evolving sustainability regulations, such as the Corporate Sustainability Reporting Directive (CSRD), we emphasize the intersection of financial stability and sustainable practices. Our approach is focused and pragmatic, prioritizing business continuity, resilience, and transparent reporting. We are committed to meeting the rising standards of sustainability reporting, providing clear and accurate information on our financial and sustainability performance.
Watch the interview on this topic below, with Alain Lauweryns, the Chief Strategy Officer.
Goals
- Allocate financial resources in a responsible and sustainable manner
- Business continuity & resilience
- Transparent, accurate and timely reporting (Financial: IFRS standards/Non-financial: ESRS standards)
Indicators
- Financial resources allocated to action plan (OpEx)
- Financial resources allocated to action plan (CapEx)
- Solvency level (consolidated)
- Working capital (consolidated)
- Manage Net debt/EBITDA ratio (consolidated)
- Total assets / consolidated turnover
- Return on equity
In our organization, customer satisfaction is a key priority. We maintain high standards through structured procedures, ensuring we meet legal requirements and carefully select our suppliers. We aim to achieve ISO certifications where it makes sense to do so. Our commitment to quality prompts us to invest in automation and innovation, allowing us to consistently provide good quality products and services.
Watch the interview on this topic with Philippe Chevallier, the QSE Responsible below.
Goals
- Monitor non-conformities and associated costs
- Reduction of quality and safety issues of our products
- Strive for progressive ISO 9001 certifications on our different sites
- Extend the implementation of ISO 9001 standards to other sites
Indicators
- Total of ISO 9001 certified sites
1) Clients:
- Number of complaints, by site and by category of cause
- Cost of non-conformities in EURO
2) Suppliers:
- Number of non-conformities
Stories
With these stories, we share insights from our journey towards a more sustainable future. These narratives delve into the strategic objectives we've highlighted earlier on this page, showing the continuous steps PGS Group is taking. Through these stories, we hope to offer a transparent view of our progress and the challenges we encounter along the way.
Offer eco-responsible products and services
We are dedicated to providing eco-responsible products and services. Through product reuse practices like PGS Reverse, we offer a circular service for our wooden pallets and strive to extend it to all pallets we deliver. Furthermore, we collaborate closely with customers to convert existing products into eco-designed alternatives and actively propose sustainable solutions to new customers.
Dedicated Community Investment
We believe in social engagement and making a positive impact in the communities where we operate. Whereas we have always invested and engaged in our local communities, we wanted to keep track of our positive contributions in a more structural and efficient way. In line with this, we have established the PGS Community Investment Program. This program offers all of our employees the opportunity to support social projects and organizations.
Business Ethics
Business ethics is an essential area of focus for our organization. Compliance with these standards is not a matter of choice but a fundamental necessity. Our approach is straightforward and committed, ensuring that we operate within the bounds of these important regulatory guidelines.
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About PGS Group
PGS Group is an industrial group with more than 50 sites in Europe and abroad, is a French leader within its field and specializes in the production, reconditioning and rental of pallets, as well as related services.