Disclosure 201-2 Financial implications and other risks and opportunities due to climate change

Clariant discloses details about the risks and opportunities posed by climate change through a number of sustainability programs such as the Carbon Disclosure Project. These include a detailed description of the risks and opportunities per type of impact (regulatory, reputational, and physical parameters) as well as the methods used to manage the risks.

Main risks driven by changes in regulation:

• Climate and energy policies leading to increased fuel/energy taxes and regulations (e.g.: cap and trade schemes and environmental taxation)

Main opportunities driven by changes in regulation:

• Innovation and R&D focus on low-carbon products and differentiation through a more sustainable product portfolio.
• Increased demand for solutions related to megatrends such as low-carbon mobility, recycling, food security, and urbanization.

Main risks driven by changes in physical climate parameters:

• Change in precipitation extremes and droughts (e.g.: water scarcity), induced changes in natural resources, tropical cyclones (hurricanes and typhoons), impact on infrastructures and/or impact in the supply chain.

Main risks driven by reputational considerations:

• Shift in consumer preferences and increasing customer demand for climate-friendly products, changing customer behavior and higher awareness of products with less impact on climate and other environmental aspects.
• Stigmatization of a sector or of a company related to brand image, community opposition, and negative media coverage.

Main opportunities driven by reputational considerations:

• Responsible behavior qualifies for investors that focus on sustainable investments.
• Customer engagement, stakeholder dialog, community initiatives, and overall positioning of Clariant as a credible sustainability leader.

Disclosure 201-3 Defined benefit plan obligations and other retirement plans

Pension and other employee benefit plans are monitored globally by Clariant for relevance, compliance, costs, and suitability as a valuable employee benefit. Clariant is aware of the significance of these pension and other benefit plans as a way of retaining staff. These plans are regularly matched with benefits in the respective countries in order to be in line with the current practice. Before every adjustment, Clariant carefully examines the impact the changes have on the employees and, if necessary, conducts direct consultations with them.

No intentional differentiation is made in the company benefits provided by Clariant according to the type of employment contract, but this does not exclude differences depending on the individual case and local circumstances. The deciding criterion in this case is the customary market standard, which is being reviewed within the scope of continuing benchmark surveys. However, a systematic survey has yet to be undertaken.