Disclosure 413-1 Operations with local community engagement, impact assessment, and development programs

Clariant carries out Corporate Citizenship Activities (CCAs) with a regional and global approach. This makes it possible to consider the specific needs of the community and region Clariant is operating in and how to best deploy activities in light of specific business needs. All regional CCAs are executed according to well-developed and well-established objectives and strategies at the regional level. In 2014, Clariant started to implement an adaptation of the regional CCA approach into a Group-wide CCA governance and strategy framework. The implementation objective follows the principle of a central CCA governance and strategy with decentralized/regional execution of CCAs. It considers global, regional, and local outreaches.

Clariant does not focus company commitment on individual showcase projects, but is actively committed to the common good in each and every location in which the Group operates, acting with corporate responsibility in all its activities. Clariant supported numerous charity projects in 2017, especially in the vicinity of the various production sites.

Clariant established a globally binding policy for CAAs in 2014 to unify control of non-profit activities in order to centrally record all public interest expenditures. Clariant annually spends a single-digit-million amount for this type of expenditure, of which approximately half is used for sponsorships, and the remaining half is split nearly equally between charitable donations and local infrastructure. The CCA policy promotes Group-wide transparency with regard to donations (contributions, sponsorship, or other expenditures) to charitable causes. Simultaneously, compliance risks are systematically reviewed by an appropriate process step in the CCA approach.

In addition to Clariant’s commitments that aim to advance the sciences, voluntary services are also an important part of Clariant’s efforts to promote social cooperation. These activities are expanded with donations to charities with sustainable orientation, for example, in the areas of training, culture, or environment. Examples of local engagement include:

• In 2014, Clariant China launched a program to promote school education with the title HOPES (Healthy, Open-Minded, Positive, Explorative, and Sustainable). HOPES, which also has social objectives, focuses on cities where Clariant is located. The first partnership agreement was made with an elementary school in Zhenjiang. The HOPES program continued to be a success in 2017. In May, two guests were invited from the Basel Infrapark to give school children a lecture on Switzerland, while in June, a donation of 500 books was delivered to the school as part of a program to celebrate Children's Day with the students. Toward the end of the year, Clariant's diverse Asia HR team visited a primary school and gave a presentation on the different cultural elements in Asia.
• At the Suzano location in Brazil, since 2010, Clariant has supported the project “The Music Won” (A Música Venceu) for children’s musical education. The project was developed in cooperation with the Bachiana Foundation, an initiative of the well-known Brazilian conductor, João Carlos Martins. As part of the project, more than 100 children and adolescents have been trained in classical instruments like the violin, cello, viola, and percussion instruments, as well as in singing. The project is not only of great significance for students in their education, instilling them with cultural values and contributing to their personal development; it also has a positive influence on their families, classmates, and the immediate neighborhood. On November 11, Clariant marked the eighth year of this sponsorship with an enchanted concert near the Suzano site.

Other local engagement activities from 2017 include:

• In Thailand, the South East Asia & Pacific Regional Council Committee decided to support children in need through the Thai Red Cross. This was followed up by a visit to a Red Cross Children's Home from senior leaders to understand how Clariant can support. On the same occasion, Clariant had the opportunity to donate daily necessities to the children.
• Kicking off the winter holiday season, Clariant employees in North America collected food to help end hunger in their local communities. In a friendly wager, production sites for the BU Catalysts in Louisville competed to collect food and succeeded in collecting a total of 5.5 tons of food. Other production sites in North America also collected food.
• Fostering student's interests in science, technology, engineering, and math is a high priority for Clariant. This was also on the agenda last November in Switzerland, where "SimplyNano 2®," a chemistry teaching kit, was distributed to a group of teachers. The purpose of this kit is to show children how experiments in STEM subjects (science, technology, engineering, and math) can be fun.

Disclosure 413-2 Operations with significant actual and potential negative impacts on local communities

Clariant’s activities as an employer, as a consumer of local products and services, and as a payer of taxes and fees in the respective regions or countries support local economic development, especially in emerging economies. Clariant raises the living standards of the population, both directly and indirectly, by creating added value. The business principles of Clariant apply to all entities globally. Clariant is not aware of any significant negative effects on local communities as a result of its activities.