Customer to Cash

1.1. Progress toward environmental targets 2025

Clariant has set goals to achieve significant impact reductions in six crucial areas by 2025, as compared to 2013. In relation to produced goods (per ton), Clariant aims to reduce energy consumption and direct CO₂ emissions by 30%, greenhouse gas emissions, water consumption, and waste volume by 35%, and wastewater volume by 40%.

In 2018, energy consumption per ton of produced goods rose by 4.6%, from 706 kWh to 739 kWh. Direct CO₂ emissions (Scope 1) and greenhouse gas emissions, including from the production of electricity (Scope 1 & 2), followed this development, with increases from 95 to 97.5 kg (2.7%), and 211 to 215 kg (1.9%) per ton of production, respectively. The lower increase in emissions indicates Clariant’s shift to cleaner energy sources, such as natural gas.

Water consumption per ton of produced goods increased by 6.5%, from 10.6 m³ to 11.3 m³. This was mainly due to an extremely warm summer and, consequently, increased cooling demand. Wastewater generation per ton of production increased by 5.6%, from 2.8 m³ to 2.9 m³.

Waste generation increased by 23% in 2018, rising from 43.2 kg to 53.3 kg per ton of production. This significant increase is mainly due to different accounting, resulting from internal and regulatory changes. Figure 002

002 PROGRESS TOWARDS 2025 TARGETS

1.2. Environmental protection and resources

For Clariant, environmental protection and resources encompasses consumption of resources, such as energy and water, on one hand and preventing pollution and ecosystem effects on the other. To minimize the company’s impacts on the environment and safeguard natural resources, high-level management attention and a corporate culture that prioritizes environmental stewardship throughout the company is essential. To ensure this focus, Clariant uses comprehensive management tools and programs that combine technology, data, and behavioral guidelines.

GRI Online Report
Management Approach Environmental Protection and Resources

1.2.1. Energy

Clariant recognizes the critical role companies must play to reduce energy consumption and minimize energy-related greenhouse gas emissions. In 2018, energy consumption per ton of produced goods rose by 4.6%. The increase is mainly due to a reduction of the production volume. Clariant will continue to work toward its energy consumption reductions targeted for 2025 by further investing in and developing programs such as eWATCH™, Clariant Operational Excellence, and the Clariant Production System Yield, Energy, Environment (YEE) initiative.

Through eWATCH™, Clariant crafted a comprehensive energy efficiency program that analyzes energy consumption across operations and identifies potential cost-saving opportunities. Since 2013, a total of CHF 26.7 million was saved by implementing energy efficiency measures and energy-purchasing optimizations. In 2018, Clariant managed to save CHF 3.85 million.

eWATCH™ focuses on three pillars: operations and technology; awareness, mindset, and behavior; and energy management. In 2018, the eWATCH™ program was rolled out in Greater China, at two Business Unit Catalysts sites in South Africa and at all Clariant sites in Indonesia. Clariant globally passed the recertification of the energy management system according to ISO 50001. More than 40% of Clariant’s production volume was produced at ISO 50001-certified sites. Clariant also continued performing energy benchmarks of utility generation systems internally as well as against state-of-the-art installations. A guideline of best practice for utility engineering is in preparation and will be further developed in 2019.

With the »eWATCH™ goes digital« initiative, Clariant will identify additional energy saving and emission reduction opportunities by increasing transparency at the different levels of production and organization, and by exploiting suitable tools for data monitoring, analysis and interpretation. For example, real-time energy consumption data at equipment, plant, production, and product level is key to realizing further operational energy efficiency. The focus will be on identifying equipment that is mainly responsible for energy consumption in the utility and production areas.

The Production System Yield, Energy, Environment (YEE) initiative analyzes Clariant’s production processes and units to discover even more opportunities to increase yields, improve energy efficiency, and reduce waste streams. Since its inception in 2012, Clariant achieved savings with the YEE of more than CHF 50 million. In 2018 alone, savings amounted to CHF 6 million.

1.2.2. Water consumption and wastewater generation

Water is one of the most important auxiliary materials for the chemical industry. Clariant considers the entire volume of water withdrawn and used as its total water consumption. Cooling water returned to the source after being used in cooling cycles is not excluded from total consumption. Clariant uses about 70% of purchased water for cooling production plants, 20% for production processes, and 10% as a product component or for sanitary purposes. Conservation of water is mandated by local communities, customers, and regulators.

In 2018, water consumption per ton of produced goods increased by 6.5%, mainly caused by an extremely warm summer that led to a higher demand for cooling water. The reduced reporting scope also contributed to the increased water intensity, as the omitted sites are only responsible for a very small fraction of total water consumption. Similarly, wastewater generation per ton of produced goods increased by 5.6%.

Wastewater is closely managed at all Clariant production sites and local regulatory requirements regarding discharge limits are strictly followed. The company assesses wastewater quality by measuring heavy metals concentration, nitrogen and phosphorus compounds, as well as biological and chemical oxygen demands. Wastewater is often pretreated at Clariant’s sites before being transferred to dedicated industrial or municipal wastewater treatment plants for further treatment. The pretreatment mostly consists of a multi-stage chemical and physical treatment to ensure effluents do not impair the receiving water bodies. With this multistep treatment approach and constant monitoring, Clariant guarantees that discharged wastewater does not negatively impact ecosystems.

In 2017, Clariant undertook a Group-wide water risk assessment to understand which production sites are located in water-risk areas. First, the World Resources Institute’s (WRI) global risk assessment tool was utilized to prepare a short list of sites located in areas with water risks. Second, the short-listed sites were analyzed in an internal survey aiming to understand site-specific water risks and impacts. To further develop an in-depth understanding of risks, a pilot water risk management project was completed in Santa Clara, Mexico, in 2018. While at-risk sites comprise only a small percentage of Clariant’s total sites, the results of the pilot study will be used to develop goals to ensure all sites are equipped to responsibly manage water risks. Due to its engagement to reduce water-related risks, Clariant was recognized as the sector leader in the Dow Jones Sustainability Index (DJSI) for the second consecutive year.

Clariant is one of eleven partners in the European INSPIREWater project, which is exploring innovative solutions for industrial water management. The project includes developing a pilot wastewater treatment plant in the water-limited region of Tarragona, Spain, with the aim of achieving zero liquid discharge. Knowledge obtained from this project can be transferred to other Clariant sites, particularly those located in water-stressed areas.

1.2.3. Waste

Clariant is aware of the environmental harm associated with waste production and consequently follows a strict waste-management protocol. Clariant prioritizes waste prevention over recycling waste, as this approach minimizes resource consumption in addition to costs. During product development and manufacturing, Clariant aims to generate as little waste as possible, and any unavoidable waste is recycled or disposed of properly. Accumulated waste is documented in detail in order to enable proper classification and handling.

Per ton of production, generation of waste increased by 23% in 2018. The increase can only be observed in non-hazardous waste, which is 76% of Clariant’s total waste. Gypsum is a by-product of bentonite processing and represents 40% of the total non-hazardous waste. In 2018, two sites accumulated large amounts of gypsum. The sites are exploring different commercial avenues to convert gypsum into a viable product. In addition, changes in regulations and definitions led to changes in reporting and a further increase of non-hazardous waste.

1.2.4. Air pollution

In order to maintain healthy ecosystems, Clariant not only focuses on wastewater treatment, but also judiciously monitors and contains air emissions from operations. Clariant adheres to local regulations regarding air emission limits in all the countries in which it operates. Air pollutants tracked include volatile organic compounds (VOCs), sulfur oxides (SO_x’s), and nitrogen oxides (NO_x’s).

1.2.5. Ecosystem protection

Ecosystem services are vital for businesses and society. They include provision of fresh water, air purification, energy production, and protection against natural disasters, among many other critical benefits. Clariant strives to ensure its activities do not impede or degrade such services. Thus, Clariant does not operate production sites in biological reserves or areas with high biodiversity value. In addition, Clariant carefully addresses the environmental impacts of sourcing palm oil and mining bentonite, both of which are important raw materials for the company.

To protect rainforests and peatland and combat ecological degradation caused by clearing land for palm oil plantations, Clariant pursues certification of its palm oil derivatives supply. As member of the Roundtable on Sustainable Palm Oil (RSPO), Clariant achieved mass-balance certification for all of its sites in 2016 and has more than 250 products certified specifically. Clariant will continue to extend the certified product portfolio in order to help its customers meet demand for certified-palm ingredients.

When mining bentonite, Clariant follows several steps to exceed societal and community expectations regarding the conservation of the surrounding ecosystem. Before drilling begins, Clariant’s geologists craft a plan to minimize associated environmental impacts. This includes removing the topsoil and overburden to preserve the land for restoration, as well as reduce operating costs and fuel consumption. During mining, Clariant ensures that resident animals may easily move to adjacent areas. Before being transported, the bentonite is sun-dried, reducing its weight and thus emissions produced in shipping. Quarry closure is undertaken with local experts in order to restore the land for profitable use in forestry or agriculture. These efforts are crucial to maintain healthy relationships with local communities and protect local ecosystems.

1.3. Climate change

Mitigating and adapting to human-induced climate change is one of the world’s most pertinent challenges. The expectations and pressure for corporations to address climate change have risen considerably in recent years. Financial investors, customers, policy-makers, rating programs, and NGOs have set clear expectations regarding the need to properly identify and evaluate climate risks and opportunities, and to develop mitigation strategies.

Clariant’s overall objective is to address and promote the transition to a low-carbon economy and ultimately achieve climate resilience. Clariant also wants to capitalize on business opportunities such as reducing energy costs and developing low-carbon products, for which customer demand is rising.

In order to contribute to a sustainable economy, Clariant adopted environmental targets to be achieved by 2025. Clariant committed to reduce Scope 1 and 2 greenhouse gas emissions by 35%, and to reduce direct carbon dioxide emissions by 30%, both per metric ton of production, compared to the base year 2013. Clariant is well on track to reach these targets. Figure 002

GRI Online Report
Management Approach Climate Change

In 2018, direct CO₂ emissions (Scope 1) per ton of production rose by 2.7% and greenhouse gas emissions, including from the production of electricity (Scope 1 & 2), increased by 1.9%. The increase per ton is mainly due to the lower production volume.

To increase transparency about its carbon footprint, Clariant is moving beyond Scope 1 and 2 and reports further emissions that occur along its value chain, so-called Scope 3 emissions. The most relevant Scope 3 emission activities for Clariant are: purchase of raw materials, energy-related emissions, transportation and distribution of supplied materials and sold products, and the end-of-life treatment of its products. Scope 3 emissions are typically much larger than Scope 1 and 2 emissions, given the broader value chain and activity coverage. The increase of Scope 3 emissions between 2017 and 2018 was primarily driven by increased purchases of raw materials. A detailed breakdown of Clariant’s greenhouse gas emissions is available in the GRI report.

To support the agenda on climate change mitigation, Clariant focuses on low-carbon products that are also a promising growth market. Based on Clariant’s Portfolio Value Program, already more than 20% of sales are associated with products that help reduce carbon emissions. In the future, an increasing share of bio-based raw materials will replace fossil-based resources, leading to a reduced product carbon footprint. Examples of products contributing to emissions reduction are lightweight solutions for automotive applications, such as the foaming agent Hydrocerol^® or the catalyst EnviCat^®, which significantly reduces nitrogen oxide emissions.

Increasing pressure on natural resources, concerns on climate change, rising expectations about corporate performance, and higher availability and affordability of renewable energy are factors leading to their growing uptake. To increase the share of clean energy in the consumed energy mix, Clariant started developing a global renewable energy procurement strategy. More specifically, it investigates drivers, sourcing options, contractual instruments, and the feasibility of green energy solutions at the country level. The increase in renewable energy use will have a positive, direct effect on greenhouse gas emissions. Read more

In addition, Clariant is currently assessing how to further integrate a dedicated climate risks and opportunities management process at the Group level. This process would support the company to better identify mid- to long-term developments, address and enable the transition to a low-carbon economy, and ultimately secure climate resilience.