How do you reflect on SGS’s performance in 2023?
2023 marked the end of our current strategic cycle. We have made considerable progress in all key strategic areas, strengthening our Health & Nutrition service offering with the acquisition of Nutrasource in North America, and growing our market shares in Connectivity & Products and Business Assurance (previously Knowledge) through focused resource and capital allocation. With the digital laboratories program and improved customer relations management for salespeople, we are also making significant advances in our goal of becoming the most digital company in the TIC industry. This progress has only been possible through agile thinking and the efforts of our colleagues across the network.
What challenges did SGS face in 2023?
Our challenges were the same as for everyone – rising costs, global instability, the climate crisis and shifting consumer demand. As a company, we responded in multiple ways.
Firstly, by taking care of our people. We foster employee engagement by providing motivating career paths as well as training initiatives on key topics such as employee well-being, health & safety, integrity and information security.
Secondly, we focused on productivity and process optimization with our world class services (WCS) program. In fact, we have become the first in our industry to obtain the bronze level for two of our laboratories located in Shanghai and Bangkok.
This is an exceptional accomplishment, and I am very proud of the way this methodology is being adopted by the network, with seven laboratories joining the program in 2023.
Digitalization is central to our culture of efficiency. I am pleased to report that over 30% of laboratories are now digital, our global server network is migrated to a single cloud-based solution and through applications such as Windgo, a wind farm quality control solution, we are digitalizing our fieldwork. The ability to harness the vast amounts of data in our systems means we are also now developing better value propositions for our customers.
Thirdly, our strength lies in our geographic and service diversity. In a volatile and uncertain world, we can maintain growth trajectories by shifting our focus to different industries, services and/or geographies. For example, as growth in Asia and Europe slows, we have increased our North American footprint.
Finally, SGS continues to invest and innovate in new areas of growth, such as the implementation of global solutions relating to sustainability, health and safety, PFAS1 and microplastics.
How is SGS responding to climate crisis?
Sustainability is the foundation of our business strategy, as demonstrated by our commitment to 1.5oC and net-zero targets approved by the Science Based Targets initiative. Our targets are ambitious, but this is only right because, as market leader and a global company, we must push the envelope of what is achievable or we will fail to be a part of the companies supporting a healthy planet, society and business.
We have strengthened our focus on four key areas to support our customers in their sustainability journeys: carbon, biodiversity, plastic and ESG assurance. By developing industry-leading solutions, we are helping our customers achieve their own sustainability goals, improving efficiency and accelerating growth.
Internally, we are making great progress in our decarbonization strategy, with a special focus on employee awareness through campaigns such as Spot the Orange Dot.
While turning off one computer might seem inconsequential, the benefits for the environment are significant in a business with 99 600 employees. We are also focused on reducing emissions from our owned and leased properties and our vehicle fleet to reduce scope 1 and 2 emissions, and our supply chain through procurement to address scope 3.
Now you are handing over your CEO responsibility?
It has been an extraordinary journey for me over the past 30 years during which I have seen the Group transform into the company it is today. Therefore, I am excited to handover the reins to Géraldine Picaud, whose energy and passion will no doubt lead SGS to new heights.
Frankie Ng
Chief Executive Officer