Built to last

Founded in 1756, Franz Haniel & Cie (Haniel) is a 100% family-owned company with a long-standing history and a track record of reinventing itself, managing a diversified portfolio of independent businesses. In 2019, Haniel embarked on a new strategic journey triggered by lagging performance over the last decades but also the urgent need to adapt to a new socioeconomic and investment environment.

With the survival instinct kicking in, the business wasted no time transforming into a sustainable organization. As a leading purpose-driven investor in Europe, Haniel wants to build sustainable companies that secure a future worth living. The company’s purpose is to become enkelfähig and create value for generations. “Enkelfähig” (grandchildable) unites two elements: financial performance and sustainability. Haniel’s ambition is to build and develop a balanced portfolio of truly enkelfähig businesses that meet both performance goals and sustainability requirements.

"The business and the family will only have a future if we generate value. For us, it's about being in business for a very long time – not just succeeding for the next five years. It's not a game about winning or losing. It's about staying in the game."

The need to change was clear to the company's management team. But in a large shareholder family, seeking agreement on a big transformation is never going to be easy: While some said, the company needs to be financially successful first, others believed chasing profits alone is a thing of the past.

"In our company, there's a clear separation between management and shareholding. Since the beginning of the 20th century, corporate management has been entrusted to external managers. Entrepreneurial decisions can thus be taken in order to achieve optimal business results. But of course, it is the management’s responsibility to show a credible path for the future and to convince the family which is represented in important governance bodies such as the supervisory and advisory boards.”

How would the management team persuade the family that sustainability was the right way to go?

The company needed a change – and not only Haniel, but the whole economy has to change to tackle the challenges of the climate change. The Haniel management team was sure that profit and sustainability aren't mutually exclusive. In fact, in a longer-term perspective you can't have one without the other: "The industries that are emerging to help solve the planet's problems will be the fastest-growing industries the world has ever seen. So it's clear where we needed to go."

Changing traditional profit-focused mindsets required strong conviction: "The CEO and management team stood up and said: We're asking for your support. And in turn, you can hold us accountable for delivering in a sustainable and profitable way." The management team closely aligned the strategy with the inner circle of the family: They discussed the most important cornerstones of the journey, defined the vision, the investment strategy and management approach. The next step was to communicate the new strategy to the other family members, which are spread across the world. The management team answered questions personally. "We've been trying to communicate our goals at every level of the business and family. That hasn't been easy, especially with the challenges of the pandemic. There's still a way to go – but communication will be key to our success." Moreover, they had the support of climate change experts within the family. It turned out that especially among the younger family members the sustainable strategy approach increased the interest in the company.

The whole transformation led to a cultural change within the Haniel group: “It is not about a just having sustainability strategy but to make sustainability the core of the strategy.” Every portfolio company has to develop enkelfähig products and services. The aim is to reach 40% of turnover in 2022 coming from enkelfähig solutions. “Because it is not about reporting but to convince the customer.”