Circular Economy

Disclosure 103-1 Explanation of the material topic and its Boundary

In a world of limited resources, the circular economy model is increasingly seen as an alternative to the current unsustainable and linear economic model of take-make-dispose. It is an opportunity to reinvent today’s economy and its production and consumption patterns.

Clariant is fully committed to supporting the transition towards a circular economy and is engaged via projects and activities that support a more resource-efficient and sustainable society. Unnecessary material losses throughout the life cycle of products negatively impact business competitiveness and the environment. In return, materials and products circulating in loops benefit both business and the environment. A circular economy has the potential to support additional business opportunities and product or service developments, given emerging regulations and customer markets advancing on circular business models.

Within Clariant’s own operations, circular economy opportunities include energy, materials, and other resources that affect operational efficiency and thus have a positive effect on costs. Company efforts in this field are also closely linked to its environmental-protection and resource-efficiency objectives. However, circular economy goes beyond Clariant’s own operations and includes products and business models that support a more circular society by using less, reusing, or recycling. A circular economy thus also has a strong value chain orientation, seeking to connect waste-material loops.

Disclosure 103-2 The management approach and its components

The opportunities offered by an increasingly circular economy are being considered across several company functions, such as Corporate Sustainability and Regulatory Affairs (CSRA), Group Technology and Innovation and in particular its New Business Development function (NBD), as well as business units.

Clariant contributes to a more circular economy in many ways. This includes continuously increasing eco-efficiency of production processes, choosing waste and renewable resources instead of virgin or fossil resources, process design, reducing water and energy use, closed-loop recycling on sites, industrial symbiosis, and value-chain clusters. This type of optimization is driven also by the environmental 2025 targets, which are being reported under the topic Environment Protection and Resources.

Importantly, the promotion of an increasingly circular economy is supported by the development of new products and technology. Best practice examples are numerous across Clariant’s businesses. An example of new technology development that also ties into the promotion of a bio-based and circular economy is Clariant’s sunliquid® technology. It uses agricultural residues to produce bioethanol, thereby reducing dependency on fossil fuels. In addition, Clariant’s wide range of innovative detergents, stabilizers, pigments, and masterbatches supports obtaining higher-value plastics from recycling streams, while other products are focused on increasing durability of materials.

During 2017, New Business Development has focused on targeted value chain outreaches in order to create circular economy business opportunities. For example, Clariant has addressed customer concerns regarding the odor and color of recycled plastics to increase their usability in particular market applications. In addition, NBD has set up a dedicated work stream on plastic recycling in order to capture new business opportunities driven by circular economy policies and trends. The impact and opportunities of circular economy on Clariant business and operations and how to manage these are going to be assessed continuously during 2018.

Disclosure 103-3 Evaluation of the management approach

During the reporting period, Clariant performed a workshop with an initial review of potential circular economy opportunities for its business. Currently, Clariant is developing a structured management approach to further outline, anchor, and advance the topic in the future.