Next Generation Evonik: Next Phase of the Strategic Transformation

Evonik is embarking on the next phase of its strategic transformation. Sustainability is being integrated fully and systematically into all elements of the strategy: portfolio management, innovation, corporate culture.

“Driven by our purpose, Leading Beyond Chemistry, in recent years we have made good progress both strategically and financially,” Christian Kullmann, chairman of Evonik’s executive board, told investors and analysts at the company’s Capital Markets Day. “In the next phase of our transformation, we are executing targeted and massive investments in green growth and making sustainability our central innovation driver.”

Evonik is aligning its portfolio completely to its three growth divisions: Specialty Additives, Nutrition & Care, and Smart Materials.

“The businesses we are withdrawing from on strategic grounds are being optimally set up to give them a responsible route to a good future,” said Kullmann.

Preparations are already under way for the exit of all three businesses of Performance Materials – Superabsorbents, Functional Solutions and Performance Intermediates. Evonik aims to find new owners or partners for each of these three businesses in the course of 2023.

The proceeds from the divestment of the Performance Materials businesses and the operating cash flow in the coming years will be channeled to the green transformation. By 2030, Evonik aims to invest more than €3 billion in Next Generation Solutions – products with superior sustainability benefits. That is approiximately 80% of annual growth investments.

In the same period, a further €700 million will be invested in Next Generation Technologies, i.e., the optimization of production processes and infrastructure to avoid CO2 emissions.

“We are greatly increasing our handprint and reducing our footprint at the same time,” said Thomas Wessel, the executive board member responsible for sustainability. “Translated into KPIs: We will substantially increase the sales share of our Next Generation Solutions from 37% at present to over 50% by 2030.”

Evonik aims to reduce its footprint by significantly cutting both direct and indirect greenhouse gas emissions from production and processing. With the support of Next Generation Technologies, Evonik will reduce its scope 1 and 2 emissions by 25%, from 6.5 million metric tons at present to 4.9 million metric tons by 2030. This goal is fully consistent with the requirements of the Science Based Targets (SBTi) initiative, which Evonik is committed to.

The repositioned Research, Development & Innovation unit is also fully integrating sustainability into the management of Evonik’s innovation activities. “Our RD&I targets are right on track to generate additional sales of more than €1 billion with our innovation growth fields by 2030,” said Harald Schwager, the executive board member responsible for innovation. “Our innovative capability is a key factor in leveraging green and profitable growth.”

Evonik’s aspirations are supported by its venture capital activities. A new Sustainability Tech Fund with a total investment volume of €150 million will strengthen the sustainability targets by investing into innovative technologies and business models. The focus is on new technologies that will reduce emissions as well as on innovations that have a high technological fit with the Next Generation Solutions.