Sustainability reporting approach

Reporting policy and justification of choices made

This is DSM’s first Annual Report in which financial reporting and sustainability reporting are fully integrated. In the period from 1993 to 2001, in addition to financial reporting in the annual report and the financial statements, DSM also reported on safety, health and environment (SHE) in its Responsible Care Progress Report. From 2002 onwards, SHE reporting was integrated into DSM’s Triple P Report, which consolidated the company’s reporting on People, Planet and Profit.

The Triple P Report has now been integrated into this Integrated Annual Report as Sustainability is an integral part of DSM’s business and one of the key growth drivers in DSM’s new strategy DSM in motion: driving focused growth.

In the Sustainability part of this Integrated Annual Report, DSM explains its vision and policy with respect to sustainable enterprise and reports on its activities in this field during 2010. Besides presenting developments and data for the three categories of People, Planet and Profit, DSM reports on its sustainability strategy, its stakeholder engagement activities, and the organization of sustainability at DSM. Furthermore, DSM discusses the global trends that drive its sustainability strategy.

It is DSM’s policy to proactively canvas the views of its employees on issues of material importance to the company. The preparation of this report was facilitated by experts who were supported by a review group comprising employees selected from across the DSM organization.

Global Reporting Initiative (GRI)

DSM bases its sustainability reporting on the GRI guidelines. For this report, the company used the GRI matrix G3. DSM believes, as was verified by KPMG, that this report merits G3 level A+. For the GRI matrix for 2010, please see www.dsm.com.

Assurance

DSM asked KPMG Sustainability to provide limited assurance on the sustainability part of this Integrated Annual Report.

Selection of topics

The topics covered in this report were selected on the basis of the GRI guidelines, DSM’s own management systems and their relevance and impact for DSM and its various stakeholders. On the basis of the principle of materiality, DSM has attempted to make a distinction between topics whose importance warrants publication in the printed version (these are topics that are relevant to both DSM and its stakeholders), topics whose importance warrants publication on the Internet (these are topics that are important to either DSM or its stakeholders) and topics that are relevant neither to DSM nor to its stakeholders.

As in last year’s report, DSM groups relevant awards and external recognition received by DSM in a separate section. DSM also reports separately on its progress in implementing the principles of the UN Global Compact.

Scope

The People data in this report cover all entities that belong to the consolidation scope of the consolidated financial statements. The environmental information is collected from all production sites that are controlled by DSM.

Acquisitions and divestments

The personnel data for newly acquired companies are reported from the first full month after the acquisition date. Historical personnel data are not restated for divestments.

The safety, health and environmental data for newly acquired companies are reported in the year following the first full year after the acquisition. This is because these companies’ reporting procedures first have to be aligned with those of DSM.

Quality of data

The data for the sites are based on these sites’ own measurements and calculations, which are based on definitions, methods and procedures established at corporate level. The year-on-year comparability of the data can be affected by changes in the portfolio as well as by improvements that have been made in the measurement and recording systems at the various sites. Whenever this is the case, it is stated in the report.

Details for the individual sites are published on www.sustainability.dsm.com, together with an explanation of the definitions used. Whenever a restatement of data is required, DSM includes all relevant years in the restated data.

Manner of reporting

Quantitative data are reported per site. All data are consolidated at corporate level by the relevant departments. The qualitative reports on various subjects were provided by experts throughout the organization.