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

Clariant manages climate change to identify and mitigate physical, regulatory, and reputational risks, achieve cost reductions through the optimization of operational efficiency, and remain competitive on energy and material costs. In addition, in light of the increasing demand for climate-friendly products, Clariant’s climate strategy includes developing innovative products that enhance the company’s reputation and recognition and maintain or increase the customer base. Furthermore, as regulatory pressure to reduce greenhouse gases increases globally, Clariant must respond proactively to its investors’ increasing focus on climate risk management.

Climate change is relevant for Clariant’s own operations, its supply chains, and the entire life cycle of its products.

Disclosure 103-2 The management approach and its components

Responsibility for managing climate change lies with the Corporate Sustainability & Regulatory Affairs (CSRA) function, whose head directly reports to the Executive Committee. CSRA works closely with other relevant corporate functions such as Group Technology & Innovation and Group Procurement Services, as well as Business Units that are developing low-carbon and climate-friendly solutions to respond to societal challenges and customer needs.
To reduce its climate impacts, Clariant is pursuing its 2025 environmental targets. Compared to 2013, the company is aiming to reduce energy consumption and direct CO₂ emissions by 30 % and emissions from greenhouse gases by 35 %. These reduction targets are an integral part of Clariant’s planning and investment strategy.

Beyond Clariant’s commitment to emission reductions, the company is running successful initiatives related to energy management, such as Clariant Production System’s Yield, Energy, Environment (YEE) initiative and eWatch, the energy efficiency program that identifies savings potential through detailed analysis of energy consumption across operations.

Finally, Clariant actively contributes to the fight against climate change through its innovative and sustainable product offerings across all four business areas. Clariant’s Portfolio Value Program (PVP), a key initiative to make sustainability integral to the product portfolio, also features climate change-related criteria. Clariant’s EcoTain® label also takes current and future societal trends into account by identifying products that provide best-in-class solutions to address the challenges presented by sustainability themes such as climate change.

Disclosure 103-3 Evaluation of the management approach

To evaluate the effectiveness of its management approach, Clariant monitors the development of its climate impacts by collecting environmental key figures on energy consumption, carbon dioxide emissions, and direct and indirect greenhouse gas emissions across business units, thereby measuring the trajectory toward achieving the 2025 targets. Clariant is well on track to meet these ambitious objectives.

In light of the growing expectations of external stakeholders, Clariant wishes to further strengthen and develop a more holistic climate strategy to measure the impact of climate-specific risks, deploy additional mitigation measures, further reduce emissions in operations, explore cleaner energy alternatives, and foster collaboration opportunities in the value chain. In 2017, Clariant began renewing its climate change strategy in several key focus areas, including risk management and carbon pricing, operational efficiency, carbon-efficient energy supply, emissions in the value chain (Scope 3 emissions), innovative and low-carbon solutions, as well as communications and engagement strategies. Several activities will be completed in 2018 and lead to an enhanced management approach of the climate change topic.