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

An open, transparent, and trustworthy dialog with all stakeholders is essential for Clariant to understand how industry regulations and markets develop. Building networks and relationships within the chemical industry, as well as with policymakers and other stakeholders such as non-governmental organizations (NGOs), helps Clariant anticipate and mitigate risks driven by regulatory or stakeholder pressure, identify business opportunities, and create competitive advantages.

Clariant believes that participating in policy dialog is an important element of corporate responsibility. Thus, in line with the company’s strategy and business objectives, Clariant contributes to policy development in relevant areas such as chemical management and substitution, climate change, energy, bio-economy, circular economy, competitiveness, trade, and innovation.

The topic is not only relevant for Clariant’s operations and value chains, but also impacts its public outreach, for example via trade associations, to position the company and the chemical industry on strategic policy areas.

Disclosure 103-2 The management approach and its components

The overall responsibility for policy and stakeholder relations is assigned to Corporate Sustainability & Regulatory Affairs (CSRA). At the local level and within certain sectors, the business units and regional organizations have a responsibility to maintain and engage in the policy dialog, as they are better positioned to understand the local and sector-specific challenges and stakeholder networks.

Clariant follows several avenues to contribute to public policy development. It periodically publishes position papers and responds to public stakeholder consultations and surveys. Clariant also anticipates and goes beyond regulatory requirements to abide by its ambitious sustainability commitments and promotes policy development and stakeholder relations accordingly.

The engagement of Clariant representatives in trade associations and other platforms supports strategic alignment across the industry, provides an opportunity for exchange on industry perspectives and best practices, and brings forward Clariant’s views and interests.

Clariant has implemented clear policies for engaging in public policy development, addressing the increasing attention stakeholders and the public pay to such activities. Clariant’s Anti-Bribery and Corruption Policy establishes detailed rules for employees’ interactions with public officials, political advisors, as well as on charitable contributions and political donations, and forbids any donations to political parties and related organizations. Clariant openly discloses information about its fields of interest and the scope of public affairs activities, for example, in the “Transparency Register” of the European Commission.

Other activities include the continuous active participation in associations such as the European Chemical Industry Council (Cefic), national chemical associations, sectorial business associations, and ad hoc collaborations with other stakeholders such as the International Chemical Secretariat (ChemSec). Specific advocacy activities were implemented on regulatory dossiers, for example, in the context of the revision of the EU Renewable Energy Directive. Clariant actively supported an ambitious blending target for second-generation biofuels.

Disclosure 103-3 Evaluation of the management approach

Clariant’s advocacy activities are strongly linked to the company’s growth and sustainability strategy. In the context of its advocacy strategy, which is currently under review, Clariant aims to further strengthen these ties by paying closer attention to topics such as bio-economy, circular economy, and chemical substitution.

Clariant supports the call for increased transparency regarding lobby activities and political contributions. Through its reporting on the Carbon Disclosure Project (CDP) and the Dow Jones Sustainability Index (DJSI), Clariant discloses the issues it has discussed with policymakers and trade associations that are likely to take a position on sustainability topics such as climate change. Moreover, Clariant performs an annual review of its membership costs and, since 2017, publicly discloses the top five membership contributions. Clariant currently reviews this approach and plans to report key membership contributions per type of policy issue as of 2018.

Clariant’s continuous dialog with policymakers, NGOs, and forward-looking industry associations further supports evaluating the effectiveness of its public policy management approach.