Strategy
In 2025, the ESG strategy is reviewed, which is prepared in 2024 based on the DMA results and strategic sessions with all companies. Based on this review, the following circularity-related changes have been made:
Waste: the targets for both Industrial Systems and Hightech Components have been dropped, as waste management is no longer material.
Inflows: the targets for material inflows have been adjusted for Industrial Systems and Hightech Components:
Industrial Systems: the “Increase the proportion of recycled product in purchased materials and sustainable business models” target has been dropped. Discussions with the companies showed that information on the proportion of recycled material is currently limited or unavailable from suppliers. As a result, management information is unavailable, which is needed to effectively monitor and achieve this target. The companies remain committed to obtaining this information in the coming years. On that basis, it will be considered whether to formulate a suitable new objective and how.
Hightech Components: the target of “15% recycled content for selected purchased materials” has been refined in consultation with the companies. The scope of the target has been extended from “selected” purchased materials to “all” purchased materials.
Outflows: the targets for material outflows have been adjusted for Industrial Systems and Hightech Components:
Industrial Systems: the “Increase the number of circular principles per installation” target has been revised. From discussions with the companies, it was agreed that the focus should be on implementing five different circular principles rather than increasing the number of circular principles. The revised objective reads: “All installations are designed based on the following circular principles: service life, repairability, refurbishment, recycling and ease of disassembly.”
Hightech Components: the target of “50% recyclability of products sold” has been revised. The scope of the target has been extended from “selected” materials to “all” materials.
The material topics identified by the double materiality assessment (DMA) have both short-term and longer-term (financial) impact on our organisation and its value chain. The ESG strategy provides the framework to set concrete objectives and formulate the associated actions. It also provides a reliable basis for making decisions within the organisation.
Hydratec’s business model remains unchanged. The focus is on mitigating the negative impact within existing business operations. The outcomes of the DMA led to three strategic focus areas for sustainability: environmental, social and governance, each with its underlying priorities. These focus areas are interrelated and collectively address the main impacts and risks of our material sustainability matters. This relationship is shown in the figure below.
Policy adopted for managing material sustainability matters
Hydratec adopted an ESG policy that was approved in 2024 and communicated both internally and on the website in 2025. This policy is based on the results of the double materiality assessment (DMA) and the revised ESG strategy. It includes the most material impacts on people, the environment and society, within both our own business operations and the value chain. Our ESG policy focuses on preventing, mitigating and (where necessary) remedying current and potential impacts and risks, with specific attention to greenhouse gas emissions, circularity, diversity, equality and inclusion, and business integrity. The policy applies to Hydratec and its underlying companies, including all associated business activities. The focus within the value chain varies by topic and is aimed at those parts where the impact is greatest and where Hydratec can exert influence. Progress on the ESG strategy and related activities will be detailed in the sustainability statement in the coming years. The Hydratec Management Board and the management boards of the underlying companies are jointly responsible for implementing and applying the policy.
Monitoring policy and measure effectiveness against targets
Targets have been established for each sustainability topic, to be achieved by 2030. Where relevant, reference years have been determined and explicitly stated. The targets are aimed at managing and monitoring material impacts, risks and opportunities, in support of our ESG policy. They provide insight into how effective our policy and the associated actions are, which allows us to monitor progress systematically. Targets are reviewed on an annual basis. As these were established in 2024, there is currently limited information available on progress, therefore no changes have been implemented yet.
Metrics related to material sustainability matters
The metrics reported are based on the requirements of the CSRD. The names, definitions and associated methodologies of these metrics have been adopted accordingly. Where an additional explanation of definitions or methodology is deemed necessary, this has been included with the relevant measures.
Stakeholder interests and views
Long-term value can only be created if the corporate culture places transparency and trust at its core. By actively engaging in dialogue with stakeholders, Hydratec can gain insight into a variety of perspectives, which broadens our understanding of value creation. This helps us as an organisation to align our business strategy and decision-making with the needs, expectations and concerns of stakeholders, with the aim of making a positive and sustainable impact. Moreover, dialogue with stakeholders supports Hydratec in carefully balancing different interests. The topics covered in these discussions include but are not limited to environmental, social and governance-related themes.
Hydratec identifies its key stakeholders as parties directly or indirectly involved in our business, having a direct interest in or having an impact on our long-term business success. Our most impactful and/or influential stakeholders are our: (i) shareholders (ii) customers and (iii) employees. Furthermore, Hydratec is aware of different stakeholder groups that have a greater or lesser influence on Hydratec or are influenced by Hydratec. Examples include suppliers, governments and local communities.
Hydratec maintains a daily dialogue with its stakeholders to find out more about their interests and views. Interaction occurs with each category of stakeholders. The frequency, level and method of engagement is aligned with the purpose of the dialogue and the relationship with the stakeholder. Hydratec may decide to enter into a dialogue with stakeholders or not, and if so, under certain conditions.
The outcome of stakeholder engagement will be, in so far as appropriate: (i) communicated to and discussed by the Management Board and the Supervisory Board; (ii) used to identify potential impacts, risks and opportunities that may affect Hydratec’s ability to create and promptly respond to long-term value; (iii) used to determine the materiality of ESG topics for Hydratec’s corporate sustainability strategy and reporting, and (iv) used to perform and improve sustainability due diligence.
The management report as referred to in Part 9 of Book 2 of the Dutch Civil Code monitors the elements from the foreword to the historical summary inclusive. This version of the annual financial reporting of Hydratec Industries N.V. for the financial year ending on 31 December 2025 is not presented in the ESEF format as specified in the regulatory technical standards for ESEF (Delegated Regulation (EU) 2019/815). The set of ESEF reports can be downloaded at the download page.