Management Approach

103-1 Explanation of the material topic and its boundary

Reason for materiality

Increasing awareness of planetary resource limits has highlighted the circular economy as a necessary alternative to the current linear economic model. The circular economy is driven by policy objectives linked to climate change, environmental protection, and resource efficiency, as well as resource scarcity. Policy examples include the European Union Plastic Strategy and the waste ban in China, as well as a multitude of other plastic sustainability initiatives around the globe. In addition, the circular economy promotes the opportunity to reinvent today’s unsustainable take-make-dispose economy and its associated production and consumption patterns.

Contribution to value creation

Clariant is committed to supporting the transition toward a circular economy and is engaged in projects and activities that promote a more resource-efficient and sustainable society. Unnecessary material losses throughout the life cycle of products negatively impact business competitiveness and the environment. In contrast, ongoing circulation of materials and products benefits both business and the environment. A circular economy has the potential to support additional business opportunities and product or service developments, given emerging regulations and customer markets that are advancing on circular business models.

Boundary

Within Clariant’s operations, opportunities for advancing the circular economy include energy, materials, and other resources that affect operational efficiency and costs. Company efforts in the field are closely linked to its environmental-protection and resource-efficiency objectives. The circular economy goes beyond Clariant’s own operations, however, and includes analyzing the life cycle of products and business models to support a more circular society that uses less while reusing and recycling more. Supporting a circular economy thus has a strong value-chain orientation, seeking to connect waste-material loops and linking directly to innovations driven by sustainability considerations.

103-2 The management approach and its components

Responsibilities and resources

Opportunities offered by an increasingly circular economy are evaluated across several company functions. Among them are Corporate Sustainability and Regulatory Affairs (CSRA), Group Technology and Innovation (GTI)—especially the new Innovation Excellence & Business Incubator—as well as the different Business Units. Further, with EcoCircle and the associated Centers of Excellence, Clariant will establish dedicated sites for collaborative development of products for a circular plastics economy. Specialized teams and facilities will allow Clariant to channel expertise and develop specialty products for specific circular topics.

Goals and targets

Clariant established targets regarding resource efficiency and sustainable production with its 2025 environmental targets, which are being reported under the topic »Environmental Protection and Resources.«

Further components

Clariant’s contributions to a circular economy are manifold. They include continuously increasing eco-efficiency of production processes, choosing waste and renewable resources instead of virgin or fossil ones where suitable, process redesign, reducing water and energy use, closed-loop recycling on sites, industrial symbiosis, and value-chain clusters.

Promoting a circular economy is fueled by the development of new products and technologies. Clariant’s wide range of innovative detergents, stabilizers, pigments, and masterbatches supports obtaining higher-value plastics from recycling streams, while other products focus on increasing durability of materials.

In order to foster symbiosis and promote circularity along the whole value chain, Clariant is represented in the following organizations:

• Alliance to End Plastic Waste (Founding Member)
• Plastics Recyclers Europe (PRE)
• Petcore Europe (the association representing the PET value chain in Europe)
• Cefic’s Circular Economy Working Group
• Circular Economy Initiative Deutschland
• Numerous local associations

GRI 301:2016 Materials

301-1 Materials used by weight or volume

301-2 Recycled input materials used

Clariant tries to use recycled materials in production wherever possible. However, the percentage is low due to the nature of the production processes, as recycled raw materials often cannot be used due to purity or safety standard requirements.

301-3 Reclaimed products and their packaging materials

When supplying customers, Clariant provides mostly reusable packaging, which can be returned to Clariant for cleaning and reuse. Other products are shipped as bulk goods in tank trucks and rail tank cars or silo trucks. To the extent possible, non-reusable packaging is recycled for material purposes or, especially in the case of hazardous materials, used to generate energy.

Management Approach

103-1 Explanation of the material topic and its boundary

Reason for materiality

Customer engagement lies at the core of Clariant’s commercial strategy. Clariant is committed to creating added value for customers by delivering innovative, competitive, and sustainable solutions.

Contribution to value creation

Engaging with customers is essential to understand their needs and create continuous, profitable growth. After taking significant steps in recent years to turn Clariant from a product-driven into a customer-centric organization, Clariant aims to further strengthen the customer experience and increase interactions to uncover new business opportunities.

Boundary

All Business Units have installed a tailored marketing organization that focuses on strengthening relationship relationships with customers.

103-2 The management approach and its components

Responsibilities and resources

Clariant Commercial Excellence strengthens customer-centricity throughout the organization by continuously improving customer engagement and sales operations through ongoing dialogues with existing customers, new prospects, and other partners along the value chain. Commercial Excellence is part of Group Excellence Services, an integral element of Clariant’s Business Services units, which reports to the Executive Committee.

As part of the »Leading Marketing Organization« (LMO) initiative, each Business Unit focuses on enhancing Clariant’s customer-centricity through the tailored marketing organization structure. In every Business Unit, a global Head of Marketing now leads a dedicated team of marketing professionals. To identify and capture profitable growth opportunities, marketing teams work closely with technical sales functions.

To strengthen exchange between marketing professionals, Clariant established a Marketing Advisory Board in 2018. It consists of the Business Units’ Marketing Heads, the Head of Marketing Communication, the Head of Sustainability Strategy, and the Head of Commercial Excellence, who convene regularly to share best practices and drive further development of strategic marketing processes, tools, and capabilities, ensuring continuous improvement of the marketing organizations.

Further components

Clariant Commercial Excellence supports the Business Units in developing and implementing actionable commercial growth plans and accompanies a growing number of projects on customer segmentation, cost-to-serve analysis, customer engagement, and value-based pricing and selling initiatives. In addition, Commercial Excellence contributes to systematic capability building with a »Commercial Curriculum« for professionals in commercial and leadership functions.

After introducing a Marketing Essentials training in 2018, Clariant created a marketing training curriculum in collaboration with the renowned Kellogg School of Management at Northwestern University in the United States to foster commercial competencies across the organization in 2019. In 2019, Clariant piloted an advanced marketing program with MarketEdge, in which participants focused on further deepening their marketing plans in an interactive workshop environment.

In 2019, Clariant also updated its incumbent Customer Relationship Management in order to improve and intensify customer relationships.

Read more: Integrated Report, Core Processes for Value Creation

Read more: Integrated Report, Customer Relationships

103-3 Evaluation of the management approach and measurement

Evaluation and outcome

In addition to the feedback received from customer interactions throughout the year, Clariant conducts a biennial survey to monitor customer satisfaction. This survey is a critical opportunity to learn about customers’ perceptions of Clariant as a supplier and business partner, providing an invaluable outside-in perspective to improve touchpoints along the entire customer journey. Following the last survey in 2018, several measures were implemented in 2019. The next customer satisfaction survey will be conducted in 2020.

Indicators

Clariant tracks several indicators to monitor the success of its approach to marketing and customer engagement. One of the most important indicators is the additional margin generated from Commercial Excellence projects (in commercial margin), which gives a good indication of how well Clariant translates customer insights into profitable growth. Since 2014, this indicator has grown substantially from CHF 2 million to CHF 19 million in 2019, underscoring that Clariant is moving in the right direction toward true customer-centricity.

GRI 418:2016 Customer Privacy

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

In 2019, Clariant received no complaints from outside parties or regulatory bodies regarding data breaches of customer privacy or loss of customer data. Similarly, Clariant is not aware of any identified leaks, thefts, or losses of customer data.

Management Approach

103-1 Explanation of the material topic and its boundary

Reason for materiality

Digitalization is a megatrend that is reshaping many areas of the chemical industry. While some of the changes may only be visible in hindsight, Clariant is already adapting to gradual developments that could potentially impact the business.

Contribution to value creation

In the area of innovation and marketing, digitalization allows Clariant to anticipate and capitalize on market trends. Speed and quality of new product developments and related applications can be increased by using data science and High-Throughput Experimentation. This is particularly important for customers that are exposed to fast-changing demand due to the increase of online sales. Clariant also predicts an evolution in the buying behavior of demographically younger buyers who are accustomed to accessing information at any time. This could lead to a higher interest in buying and selling activities on transparent Internet platforms. Even though the benefit and impact of platform economics cannot yet be determined, Clariant closely monitors developments in this field and, through the launch of Chemberry™, helps shape the chemical platform landscape. Digitalization also creates an opportunity to enhance Clariant’s solution-centric go-to-market approach by offering additional digital insights and services to customers. In particular, the combination of chemical knowledge and data science enables Clariant to offer completely novel services. They can be provided to the market as stand-alone »software as a service« or as part of regular service packages.

Regarding production and supply chain management, the combination of traditional automation processes and data science is expected to have a considerable impact. Predictive process and quality control have the potential to increase yields, lower energy consumption, and avoid bottlenecks in production, leading to increased speed, higher quality, and reduced costs. In 2019, Clariant made significant progress in laying the technological foundations. For example, Clariant built a data lake—a central data repository that facilitates access to data and information across the organization to facilitate the automated application of data science tools and identify potential process improvements, particularly in production and supply chain operations.

In procurement, Clariant is observing promising impacts on price predictions and material flow planning. Data-driven tools are enabling exploitation of price advantages, and improved demand predictions and risk management are facilitating strategic buying. In addition, automated e-auctions are expected to lower raw material prices, as Clariant can easily compare a large number of offers from suppliers, making the selection process more competitive. Clariant believes that displaying digital material flows is an opportunity to increase supply stability and enhance monitoring of sustainability factors in the supply chain. By improving multilayer inventory, predictive planning tools are expected to lower net working capital and increase the On-Time, In-Full (OTIF) rate. In addition to these high-impact areas, digitalization may also further streamline services and digitize processes to improve efficiency and lower costs, for example, in finance or service organizations.

Boundary

Digitalization impacts all stages along the value chain, from the sourcing of raw materials to the delivery of finished products and the provision of services.

103-2 The management approach and its components

Responsibilities and resources

Clariant’s dedicated cross-functional digital program, »Digital4Clariant,« is supported by top management. All workstreams and projects under Digital4Clariant have steering committees, typically consisting of a member of the Executive Committee, the Head of the involved Business Unit, a member of the Business Unit’s Management Committee, the Chief Information Officer, and the Head of Digital4Clariant.

Goals and targets

Goals and targets in the area of digitalization are set individually for each Business Unit and functional level.

Further components

»Digital4Clariant« consists of three core workstreams that pursue the following objectives:

1. Develop and grow new business models around digital offerings.
2. Improve Clariant’s operations with digital means (Digital@Operations).
3. Utilize the potential of big data and advanced data analytics.

In close collaboration with Clariant Operational Excellence (COX), Digital@Operations systematically identifies improvement potential in the operational processes. It subsequently implements corresponding projects, particularly along six clusters considered relevant for Clariant: predictive process and quality control, predictive maintenance, digital material flow, connected workforce, retrofitting, and robotics. In 2019, this approach was embedded in the Clariant Production System (CPS).

Early involvement of security, legal, and tax experts is crucial to speed up digital projects. Consequently, Clariant instituted three supporting workstreams concerning cybersecurity, legal, and tax issues. The results of these workstreams were integrated into general working procedures of relevant functions.

Clariant’s digital innovation approach is inspired by rapid innovation methods widely used in the technology sector. It incorporates elements of design thinking, agile project management, and SCRUM. To make sure that new solutions satisfy customer needs, Clariant starts its innovation sprints with customer interviews and continuously refines ideas based on customer feedback. As a principle, ideas are also rigorously sorted, embracing the spirit of fail fast, fail early, and fail cheaply.

To exploit digitalization’s full potential, Clariant also plans to adjust its current IT and support functions and further develop internal digital skills beyond classical IT capabilities. Enhanced support services, which include legal advice on data protection and intellectual property, employer branding to attract digital talents, and capacity-building of digital skills among existing staff will help the businesses navigate in the digital world.

Read more: Integrated Report, Digitalization

103-3 Evaluation of the management approach and measurement

Evaluation and outcome

The steering committees meet regularly to assess the progress of each project and decide on its continuation using a set of digital key achievement and performance indicators. In addition, the Executive Committee and Board of Directors receive regular updates about the direction and progress of digitalization projects. Clariant is currently analyzing whether the existing governance and collaboration structure is still appropriate and will adapt it if the need arises.

As the biggest potential for growth and cost savings was identified in the field of data science, Clariant established a dedicated Competence Center for Data Science that focuses on data intelligence and process simulations as part of Group Process Technology. Data science tools were developed in cross-business teams following agile principles. The influx of new ways of working in digital and innovation teams has also impacted other areas. As expected, in 2019, agile work organization in sprints gained more importance throughout the company.

Experience shows that successful digital projects require alignment of digital initiatives and projects by sharing resources efficiently among Business and Service Units.

Indicators

Performance indicators vary depending on the type and maturity of each workstream or project. They range from standard financial KPIs to indicators that reveal the product/market fit, such as the number of returning/paying visitors to a platform or the customer lifetime value to customer acquisition cost ratio. They are complemented by indicators that reflect sound customer-centric project management, such as the number of customer and industry expert interviews conducted, the number of pilot customers in the incubation phase, and the number of full-time equivalents assigned to a sprint.

Management Approach

103-1 Explanation of the material topic and its boundary

Reason for materiality

Clariant's commitment to environmental sustainability and ethical practice is reflected in the company’s responsible approach to resources and the environment. Maintaining energy efficiency, optimizing operations, and reducing emissions through technology and behavioral changes help Clariant decrease its environmental impact.

Pollution Prevention

Clariant is fully committed to operating sustainably and decreasing pollution that results from its business activities. Its approach includes a clear goal of reducing air emissions and minimizing the discharge of harmful pollutants into water bodies. Decreasing pollution is not only a social mandate, but also part of global legislation with which Clariant fully complies.

Waste Management

As a highly regulated topic, waste management is critical for Clariant and the entire global chemical industry. Handling waste appropriately is not only a sustainability commitment for Clariant, as accumulating waste also results in higher costs. Optimizing production to reduce waste is beneficial for Clariant’s profitability, since increasing yield decreases the amount of waste generated.

Energy

To conserve resources and improve cost-efficiency, managing energy is paramount for Clariant. Clariant’s energy management aims to minimize emissions and greenhouse effects from energy use and acknowledge the development and implications of climate change.

Read more: GRI Report, Management Approach Climate Change

Water

Water management is a key topic for the chemical industry, as water is used in numerous production processes and as a product ingredient. Clariant uses water for a variety of purposes in the production of chemical products, resulting in the release of wastewater effluents.

Protection of Ecosystems

Ecosystems provide a variety of critical goods and services such as the provision of clean water, energy, recreational areas, and protection from flooding, all of which benefit society at large as well as companies like Clariant. Clariant takes care in monitoring and remedying impacts in order to maintain invaluable ecosystem services.

Contribution to value creation

Pollution Prevention

Pollution prevention adds value to the company by minimizing the risk of harming human health and the environment, while also reducing potential liabilities and negative impacts on the company’s brand image.

Waste Management

Clariant’s waste management approach adds value by reducing the risk of environmental harm as well as costs associated with waste treatment. These efforts are in line with Clariant’s commitment to sustainability and lend credibility to its operations around the world.

Energy

By reducing energy consumption, Clariant increases its profitability, safeguards natural resources, and enhances its brand reputation. Thanks to sustainable product developments, Clariant’s customers profit from solutions that enable them to significantly save energy in their production processes.

Water

Apart from protecting resources, efficient water management saves cost in wastewater treatment. Through collaborative and innovative initiatives, Clariant strives to develop efficient water use solutions that work in industrial settings across the globe.

Protection of Ecosystems

By protecting the surrounding ecosystems and fostering ecosystem services, Clariant guarantees the future availability of resources and helps conserve vital services for society at large.

Boundary

Clariant currently focuses on the impacts of its own operations, which can be controlled and monitored directly. Potential effects along supply chains are considered as well.

Pollution Prevention

Clariant strictly adheres to regulatory requirements regarding wastewater, air emissions, and waste management across all its operations.

Waste Management

Clariant makes every effort during the development and manufacture of products to ensure that as little waste as possible is generated. Clariant monitors closely which plant generated the waste, the amounts that accrued during which period, the properties of the waste components, whether the waste is classified as hazardous, and how it can be recycled or disposed of.

Energy

Clariant is continuously improving energy efficiency in its own operations, but also strives for high standards in its value chain by providing products that help customers reduce their energy consumption.

Water

Read more: GRI Report, Management Approach Disclosure 303-1 Interactions with water as a shared resource

Read more: GRI Report, Management Approach Disclosure 303-2 Management of water discharge-related impacts

Protection of Ecosystems

Since most of Clariant’s sites are located in industrial areas, vulnerable ecosystems are usually not impacted. Where possible, the monitoring is extended along the value chain, for example, by evaluating products with Clariant’s Portfolio Value Program (PVP). In addition, Clariant carefully addresses the impacts of sourcing raw materials, such as palm oil and bentonite.

Read more: Corporate Website: Portfolio Value Program (PVP)

103-2 The management approach and its components

Responsibilities and resources

At Clariant, the Corporate Sustainability & Regulatory Affairs (CSRA) department supports businesses with strategic and operational activities, for example, by providing input on product screenings and customer requests. The corporate Environmental Safety and Health Affairs (ESHA) unit, whose head reports to the Executive Committee (EC), is encompassed in CSRA. Its specialized teams within the different Business Units and country organizations are responsible for managing environmental protection and resources. While they set and monitor the standards, the full operational responsibility lies with each site, which also nominates a responsible person for day-to-day operational ESHA topics.

The total amount of ESH investments in 2019 was about CHF 35.3 million, including CHF 15.8 million for environmental protection. The expenditures for ESH protection in operative facilities amounted to over CHF 151.4 million in 2019, of which CHF 82.6 million were spent on environmental protection.

Goals and targets

By 2025, Clariant aims to achieve significant improvements on six major parameters compared to the base year 2013. With respect to metric ton of production, Clariant aims to reduce

• energy consumption by 30%
• direct CO₂ emissions by 30%
• greenhouse gas emissions by 35%
• water consumption by 35%
• waste volume by 35%
• wastewater volume by 40%

Further components

Clariant abides by the principles of the Responsible Care® Global Charter, which was initiated by the members of the International Council of Chemical Associations (ICCA) to create a global vision and highlight the commitment of the industry to continuous improvement in the environmental, health, and safety performance of chemical producers worldwide. Furthermore, Clariant adheres to its Sustainability Policy, Code of Conduct, Internal ESHA Management System, ESHA Guidelines and Guides, internal audits, and bylaws of the Executive Committee. The ESHA guidelines contain several common principles for environmental protection, including prioritizing measures that avoid or minimize negative environmental impacts over pollution control (end-of-pipe) measures.

Pollution Prevention

Clariant implemented several measures to improve its performance regarding pollution prevention. Air emissions and wastewater quality of all sites are monitored closely at the corporate level. All Clariant production sites strictly comply with local regulatory requirements regarding air and water emissions limits. In addition, Clariant uses its own standards and guidelines to ensure its operations are running in an environment-friendly manner all the time.

Waste Management

Clariant’s waste management performance has improved continuously over recent years thanks to global programs and ongoing efforts at individual sites. Wherever possible, Clariant recycles or reuses materials in order to avoid landfilling hazardous waste, and thus decreases adverse consequences for the environment. On the site level, waste generation is minimized by comprehensive planning and high-quality standards. Each type of waste is recorded and precisely analyzed. Proper disposal must be proven and documented in internal records.

Energy

The main governing programs at Clariant to minimize energy consumption and increase energy efficiency are eWATCH™, Clariant Operational Excellence (COX), and the YEE initiative.

The eWATCH™ program is a three-dimensional energy efficiency and management approach that combines an operating system, management system, and employee system to reduce operational costs at production sites. The Clariant Energy Intelligence Guide (CEIG), a component of the eWATCH™ Employee System, supports careful management of the company’s energy demand. This guide combines information, advice, best practices, and successful optimization projects, as well as key figures and tools that support energy efficiency, enabling users to systematically improve the energy efficiency of equipment.

An important component of the Operational Excellence program is the Clariant Production System (CPS). The goal of CPS is to achieve optimal productivity and financial performance in the production sites of all Business Units by identifying, developing, and implementing good practices across all production sites. Implementing the CPS leads to improvements in safety, productivity, conversion costs, energy consumption, and product quality.

The Clariant Production System’s Yield, Energy, Environment (YEE) initiative increases yields, improves energy efficiency, and reduces waste streams by analyzing specific production processes or production units to create a comprehensive picture of energy optimization.

Water

Read more: GRI Report, Management Approach Disclosure 303-1 Interactions with water as a shared resource

Read more: GRI Report, Management Approach Disclosure 303-2 Management of water discharge-related impacts

Protection of Ecosystems

To guarantee sustainable sourcing of palm oil-based oleo chemicals, Clariant pursues certification of its palm oil derivatives supply. Clariant is a member of the Roundtable on Sustainable Palm Oil (RSPO) and achieved mass-balance certification for all its sites in 2016. In 2019, Clariant continued working intensively to broaden its RSPO mass-balance–certified product portfolio for the personal and home care markets in Europe, Asia, North America, and Latin America. This helps Clariant’s customers comply with increasing demand for certified palm ingredients in the end-consumer markets.

As a member of the »Sustainable Palm Oil and Traceability in Sabah« (SPOTS) initiative, Clariant also implements specific action plans regarding the sustainability of the palm oil supply chain. These include working on the transparency of supply chains and providing support services to independent smallholders to improve their income and quality of life.

103-3 Evaluation of the management approach and measurement

Evaluation and outcome

Clariant established the Target 2025 Group to exchange knowledge between stakeholders in the Business and Service Units on projects undertaken to reduce environmental impacts. At the same time, Clariant instituted its Clariant Excellence program, which has clear targets for resource savings. Moreover, ideation workshops were coordinated by Corporate ESHA in collaboration with various Business Units to identify bottlenecks and generate new ideas to achieve the 2025 targets. The participants in these ideation workshops were the operations managers from the production sites, who are the main stakeholders in implementing the strategies at the site level.

Indicators

Clariant annually collects ESHA key figures to monitor the progress towards Clariant's 2025 environmental targets. The ESHA key figures are also used as a basis to improve performance and efficiency. Clariant's Project Tracking Tool (CPTT) tracks the progress of projects related to environmental performance.

Pollution Prevention

Parameters tracked for air emissions include volatile organic compounds (VOCs), sulfur oxides (SO_X’s), nitrogen oxides (NO_X’s), and particulate matter. For assessing wastewater quality, biological and chemical oxygen demands (BOD and COD, respectively), as well as organic content (TOC), suspended solids (TSS), heavy metals, nitrogen compounds, and phosphorus are recorded.

Waste Management

Indicators monitored include the weight of hazardous and nonhazardous waste by disposal method as well as the number and volume of significant spills.

Energy

Since its inception in 2012, YEE led to savings of almost CHF 80 million. In 2019 alone, YEE allowed cost savings of CHF 5.8 million.

Water

Clariant tracks several water-related indicators, such as the total volume withdrawn from different sources, the water consumption in relation to production, and the volume discharged to different water sources.

Protection of Ecosystems

Parameters tracked include the number chemical production sites that are located in biological reserves or in areas with a high biodiversity value.

GRI 302:2016 Energy

302-1 Energy consumption within the organization / 302-2 Energy consumption outside of the organization / 302-3 Energy intensity

Clariant’s plants primarily require energy in the form of steam, electricity, and heat. Electricity is mainly used for electric motor drives in mixers, pumps, and other process-engineering equipment. Measurement and control technology, as well as lighting, also require electricity. Clariant uses natural gas for heating dryers, firing furnaces, and generating electricity and steam in its own power plants. Clariant uses steam to heat reactors and separators, such as distillation columns. The resulting condensate is, whenever possible, used for heating purposes. Across the Group, Clariant records total energy consumption, regardless of whether it has been internally produced or externally procured. Small energy procurements, such as transport services during business trips, are not recorded, as they are insignificant in Clariant’s overall energy balance.

Direct energy consumption (i.e., the use of primary energy sources) occurs at Clariant’s sites, mainly for process heat- and steam-generation purposes. The primary energy source used most often is natural gas; coal is only used in very few locations, and Clariant is currently seeking alternatives where possible. Indirect use of energy stems from the consumption of electricity and steam from external sources in lieu of Clariant’s own energy generation. Electricity and steam procured from third parties are produced with a mix of different primary energy carriers. Clariant endeavors, however, to increase the share of energy obtained from renewable sources on an ongoing basis.

To estimate the relative energy consumption per ton of production, Clariant accounts for all the energy it consumes described above (Scope 1 and Scope 2).

Energy consumption outside of the organization is closely related to Scope 3 emissions. The most relevant Scope 3 emissions–related activities for Clariant are the purchase of raw materials, fuel- and energy-related activities, transportation and distribution of supplied materials and sold products, and the end-of-life treatment of its products.

Read more: GRI 305-3, Other indirect (Scope 3) GHG emissions

302-5 Reductions in energy requirements of products and services

Clariant evaluates the energy consumption of products through its Portfolio Value Program (PVP), which includes the innovation pipeline.

Read more: Corporate Website: Portfolio Value Program (PVP)

GRI 303:2018 Water and Effluents

303-1 Interactions with water as a shared resource

One of the main auxiliary materials for the chemical industry is water. Foremost, it is used as a coolant and as process water in production. Of the 44 million m³ of Clariant’s total water quantity purchased in 2019, about 70% was used for cooling production plants, 20% for production processes, and 10% as a product component or for steam/ice generation, irrigation, or sanitary purposes.

Clariant’s plants and office buildings are located almost exclusively in industrial parks or appropriate commercial districts, where the required infrastructure, including sufficient and stable water availability, already exists.

The water supplies, especially at large production sites, are primarily guaranteed with river water supplied via third parties. Before being discharged into the piping system at each site, the river water is cleaned using various filter systems. Remaining amounts are obtained from the respective local water grids, but not in volumes that would significantly impair the water system. For plants located next to rivers, Clariant implements strict environmental regulations so that its activities have no measurable impact on the surrounding flora and fauna. The wastewater produced by Clariant in the year under review had no measurable impact on biodiversity.

To ensure continuous operations in areas under water stress, reducing water consumption and increasing water reuse is essential. Clariant prioritizes actions that increase efficient water use, ensure proper water management, and address potential risks. Clariant systematically tracks water-related impacts and engages with stakeholders where necessary to deal with specific water-related impacts.

Clariant strengthened its water-risk management in 2017 by establishing an annual water-risk assessment for sites operating under high water stress. By systematically mapping water risks with a comprehensive tool, the Aqueduct Water Risk Map developed by the World Resources Institute, a facility’s overall water-risk score (a combination of quantity, quality, regulatory, and reputational risks) is calculated, and the facilities that rank as medium to high risk are short-listed. Based on this initial assessment, Clariant refined the Aqueduct analysis by performing a more detailed internal risk assessment. Relevant sites reported on impacts and emerging risks according to certain classifications and categories, allowing Clariant to identify sites with water risks that could have a substantial impact on operations, revenue, or expenditure.

Clariant is one of eleven partners in the European INSPIREWATER project, which explores 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. Furthermore, Clariant engaged in internal quality audits, which are a central element of the ESHA management system, supporting the external environmental management certification according to ISO 14001.

The importance of water management differs according to local conditions. Targets regarding water consumption are therefore set based on local water stress, and different regions and countries monitor their own regulatory developments.

303-2 Management of water discharge-related impacts

Clariant adheres to local regulatory requirements regarding discharge limits at all sites. Production wastewater is often subjected to multistage, chemical-physical pretreatment before being routed to biological wastewater treatment plants. This multistep treatment approach and constant monitoring guarantee that discharged wastewater does not negatively impact ecosystems. Water that is only used for cooling is monitored and directly released into rivers. To prevent pollution of the intake water through undetected leaks in the cooling system, the cooling water and rainwater are constantly analyzed at the individual sites as an additional safety measure. If contamination is discovered, discharge into rivers (or other receiving water bodies) is prevented by various on-site containment systems.

At some Clariant locations, cooling water is guided into circulatory systems, where the temperature is again lowered after use in recooling plants. This environmentally compatible cooling method is used in plants where technically possible. In 2019, it saved 113 million m³ of industrial water that would otherwise have been additionally procured.

303-3 Water withdrawal / 303-4 Water discharge / 303-5 Water consumption

The disclosures on fresh water based on Total Dissolved Solids are omitted until internal processes on the collection and reporting of such data have been completed.

Clariant is in the process of standardizing the water stress/water risk assessment disclosure in accordance with various sustainability reporting requirements. The respective disclosure is thus omitted until the process is complete.

In 2019, Clariant recorded two incidents of noncompliance with discharge limits of priority substances of concern. 

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. For Clariant, priority substances of concern are heavy metals, organic pollutant parameters such as biochemical oxygen demand (BOD) and chemical oxygen demand (COD), nitrogen and phosphorus compounds, soluble salts, and suspended solids. Clariant is compliant with regulatory requirements and treats the priority substances of concern as identified in the wastewater discharge permit. The substances of concern are defined based on the type of industrial operation and cannot be generalized at the Group level.

GRI 304:2016 Biodiversity

304-1 Operational sites owned, leased, managed in, or adjacent to protected areas and areas of high biodiversity value outside protected areas

Clariant does not operate chemical production sites in biological reserves or in areas with a high biodiversity value. The company’s sites are exclusively located in industrial parks or areas designated as industrial zones by local municipalities. If there are protected areas near Clariant’s sites, the company ensures local guidelines to prevent pollution in the protected areas are followed.

304-2 Significant impacts of activities, products, and services on biodiversity

If forests, which are generally unprotected areas, are located in the immediate vicinity of production sites, Clariant ensures the nature of the plant and activities carried out do not have an appreciable adverse effect on the surrounding flora and fauna. Clariant is also aware of the possible impact of certain raw materials and their cultivation on biodiversity, as in the case of palm oil. Clariant cooperates with customers to improve traceability of palm-based raw materials and is a member of RSPO, offering RSPO mass-balance-certified material.

304-3 Habitats protected or restored

In areas that were reclaimed by Clariant following bentonite extraction (such as Southern Bavaria), certain types of animals that are on the Red List of Threatened Species have repopulated. Clariant North America has long-standing relationships with two local NGOs in the Charlotte, North Carolina, area that focus on protecting water quality. Clariant makes an annual monetary donation to the Catawba Riverkeeper Foundation and the Catawba Land Conservancy, and Clariant employees actively volunteer in river cleanup and local awareness-raising events.

304-4 IUCN Red List species and national conservation list species with habitats in areas affected by operations

Because of the targeted locations of Clariant’s sites, animal and plant species included on the Red List of the IUCN (International Union for Conservation of Nature and Natural Resources) and on national protection lists are not visibly affected by Clariant’s business activities. In cases where Clariant’s operations could have an influence on biodiversity, the company is usually informed by the authorities and acts according to its high standards to ensure no negative effects on the fauna occur.

GRI 306:2016 Effluents and Waste

306-1 Water discharge by quality and destination

The absolute quantity of water discharged decreased by 5.7% in 2019. Water discharged in relation to production decreased from 2.9 m³ per ton of production to 2.8 m³ in the same time range.

Clariant has reduced the chemical oxygen demand (COD)—the indicator of the organic content in wastewater —in its wastewater discharged by ~25 % from 2014 to 2019. Consequently, fees and production costs were reduced.

Only small amounts of heavy metals remain in the wastewater discharged from Clariant’s individual sites. The values are partly based on concentrations that are at or below detection limits. The wastewater discharged by Clariant is largely cleaned and does not affect the quality of the receiving water bodies.

306-2 Waste by type and disposal method

306-3 Significant spills

In 2019, Clariant recorded two spills, which is considered significant under the definition of ICCA, category 2. The total volume of the spills amounted to 1 m³.

Guaranteeing safety of people and environment is Clariant’s highest priority. An effective safety management system that can identify, assess, and control risks in the production process and reduce or even entirely avoid these risks through appropriate measures is indispensable. For this reason, Clariant, in close cooperation with the European Process Safety Centre (EPSC), has actively supported the development of a simple and representative measurement system with the aim of establishing an industry-wide standard.

This system records and systematically assesses smaller substance and energy releases in order to avoid major incidents. These incidents, or Process Safety Events (PSEs), are categorized according to criteria stipulated by the European Chemical Industry Council (Conseil Européen des Fédérations de l’Industrie Chimique, Cefic) and the International Council of Chemical Associations (ICCA). They are a component of the ongoing improvement procedures for the process safety of the production systems.

In 2019, the process safety event rate in Clariant increased slightly from 0.46 to 0.48, according to ICCA criteria. Due to the change in PSE reporting criteria starting in 2018, many training sessions and webinars were conducted, which impacted in the reporting culture and increased the total number of reports in 2019.

306-4 Transport of hazardous waste

Hazardous waste transport is performed by certified companies fully compliant with all requirements of transport and waste legislation. It is important to know from which plant the waste originates, the amounts that accrue during which period, the properties of the waste components, whether the waste is classified as hazardous, and how it can be recycled or disposed of.

GRI 307:2016 Environmental Compliance

307-1 Noncompliance with environmental laws and regulations

Clariant’s operative business adheres strictly to the company’s internal control guidelines for the area of »Environment, Safety, and Health« (ESH). This directive aims to ensure that there are no breaches of internal and external regulations. Clariant is continuously improving when operations are not aligned with internal or external guidelines. As a result of these efforts and stringent voluntary commitments, Clariant did not have any cases in 2019 in which it was accused of not having acted essentially in compliance with laws, regulations, and voluntary codes of practice in connection with nature and environmental protection. Clariant did not pay any substantial fines or nonmonetary penalties for noncompliance with environmental laws and regulations.

Management Approach

103-1 Explanation of the material topic and its boundary

Reason for materiality

Clariant strives to provide innovative, differentiated, and customer-specific solutions while delivering a superior customer experience with fast and reliable fulfillment. The company’s ability to achieve this aspiration is based on above-industry growth, profitability, and Total Return to Shareholders (TRS). Thus, Clariant established growth and profitability as two of the five pillars of its Group strategy and set related financial goals.

Read more: Integrated Report, Becoming a More Focused Specialty Chemicals Company

Contribution to value creation

Clariant aspires to stand out through above-average value creation for all stakeholders—customers, employees, shareholders, suppliers, society, and the environment. By providing high-performing, innovative, and sustainable products and services, Clariant fulfills pressing customer needs safely, reliably, and efficiently. This ensures attractive jobs and fair salaries for employees, solid returns to shareholders, stable business relationships with suppliers, and a responsible management of natural resources.

Boundary

Clariant’s business activities impact the entire value chain, from the extraction of natural resources to suppliers, industry partners, customers, and end consumers.

103-2 The management approach and its components

Responsibilities and resources

Although achieving growth and profitability is a shared responsibility of all management functions, the overall direction of the Group is defined by Clariant’s Board of Directors. The Board reviews and further develops the company’s strategy once a year during a two-day Board of Directors meeting. The Board has delegated the executive management of the Clariant Group to the Executive Committee, which consists of the CEO, the CFO, and two other members. The Executive Committee is mainly responsible for implementing and monitoring the Group strategy for the financial and operational management of the Group, and for continuously improving the efficiency of the Group’s structure and organization.

Read more: Corporate Governance Report

Goals and targets

Strategic discussions with each Business Unit include growth and profitability targets at the segment level as well as for the whole Business Unit. From these discussions, Clariant derives growth and profitability objectives for its Business Areas. For Care Chemicals, Clariant expects an annual sales growth of 5–7% and aims to achieve an EBITDA margin of 19–21% by 2021. For Catalysis, the expected annual sales growth rate is 6–9%, and the EBITDA margin to be achieved by 2021 is 26–30%. The respective targets for Natural Resources are set at 5–7% and 18–20%.

Read more: Integrated Report, Becoming a More Focused Specialty Chemicals Company

Further components

Read more: Management Approach, Growth and Profitability

103-3 Evaluation of the management approach and measurement

Evaluation and outcome

Clariant’s Strategic Management Process (SMP) ensures that the Group strategy is executed within each Business Unit. As part of the SMP, each Business Unit reviews cross-Business Unit topics derived from market trends and the five pillars of the Group strategy. Each Business Unit selects specific topics for deep dives, which are integrated as core elements into their Business Plan, including must-win battles that support the Business Area’s growth and profitability targets.

As a result of a strategy update in 2018, Clariant intended to create a joint venture with majority shareholder SABIC. However, Clariant and SABIC decided to suspend negotiations due to current market conditions in order to safeguard the best interests of their respective shareholders. Clariant now focuses on its core Business Areas Care Chemicals, Catalysis, and Natural Resources. Since 2019, Business Unit Additives is part of Business Area Natural Resources. Clariant is continuing with the divestments of the Business Units Pigments and Masterbatches, which are expected to be concluded by the end of 2020.

Indicators

Read more: Integrated Report

Read more: Financial Report

GRI 201:2016 Economic Performance

201-1 Direct economic value generated and distributed

Read more: Financial Report

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 reporting programs, such as the Carbon Disclosure Project (CDP). The assessment includes a detailed description of the opportunities and risks per type of impact (transitional and physical parameters) as well as the methods used to manage the risks. In addition, Clariant is currently assessing how to integrate the recommendations of the »Task Force on Climate-related Financial Disclosures« (TCFD) at the Group level.

Main transition risks:

• Climate and energy policies leading to increased fuel/energy taxes and regulations (e.g., cap and trade schemes and environmental taxation).
• Stigmatization of a sector or company, which could lead to negative impacts on brand image, opposition from communities at the production sites, and unfavorable media coverage.
• Higher awareness for environmental impacts among customers and shifting preferences toward climate-friendly solutions.

Main physical risks:

• 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 impacts on the supply chain.

Main opportunities:

• Innovation and R&D activities focused on low-carbon products and differentiation through a more sustainable product portfolio, spurred by the shift in consumer preferences for climate-friendly solutions.
• Increased demand for solutions related to megatrends such as low-carbon mobility, recycling, and urbanization.

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 pension and other benefit plans as a lever for retaining staff. These plans are regularly evaluated against benefits in the respective countries in order to be in line with current practices. Before every adjustment, Clariant carefully examines the impact the changes have on the employees and, if necessary, directly consults with them.

Clariant offers retirement or pension plans as a benefit to protect employees after completing their active working life and to enable them to retire. Clariant aims to offer benefits that are competitive in the local markets; existence and type of retirement or pension plans differ widely from country to country based on local legislation, social security systems, and market practices.

Read more: Financial Report, Retirement benefit obligations

Management Approach

103-1 Explanation of the material topic and its boundary

Reason for materiality

A strong focus on innovation and Research & Development is the first of the five pillars of Clariant’s strategy to become a globally leading company for specialty chemicals. By leveraging technology and expertise, Clariant tackles emerging macrotrends to stay ahead in dynamic markets, creates high-performing solutions for rapidly changing customer needs, and drives profitable growth in all its businesses.

Contribution to value creation

Innovation also supports Clariant’s second strategic pillar—adding value with sustainability—by continuously improving the company’s sustainability performance, which enhances its ability to create long-term value for its stakeholders. Sustainability likewise promotes innovation by meeting the increasing demand for sustainable solutions while spurring growth and higher financial results.

Living a culture of innovation is also an increasingly important factor in creating a compelling working environment. It contributes to employee motivation and thus helps Clariant attract and retain people.

Boundary

Clariant’s innovation activities focus on products and processes, impacting the entire value chain from suppliers and internal operations to customers and end users.

103-2 The management approach and its components

Responsibilities and resources

As of 2019, a newly established Innovation Committee oversees all innovation activities at Clariant. Under the lead of the Chief Technology Officer, the Innovation Committee comprises representatives from the Business Units (Heads of Innovation, Heads of Marketing & Innovation, and Innovation Champions), key functions from Group Technology & Innovation, the Head of Innovation Excellence & Business Incubator, the Head of the Technology & Innovation Office, and a representative from Corporate Planning & Strategy.

The charter of the Innovation Committee outlines its focus: to review the innovation strategy at the corporate level and within each Business Unit; define corporate growth fields and technology focus fields; and coordinate innovation activities across Business Units. Moreover, the committee steers Clariant’s innovation portfolio to maximize the value of the projects in the innovation pipeline and increase the number of innovation projects that are successfully commercialized. The Innovation Committee is ultimately responsible for ensuring best practice application in innovation, intellectual property management, and adherence to Clariant’s technology & innovation governance. It is also tasked with fostering open innovation, which includes acquiring public funding and strengthening Clariant’s position as industry leader in R&D and innovation.

Research & Development activities are bundled in the department Group Technology & Innovation (GTI) and structured along four Technology Platforms: Chemistry & Materials, Biotechnology, Catalysis, and Process Technology. GTI collaborates closely with the Business Units to ensure that technology push and market pull go hand in hand. This setup is complemented by Innovation Excellence & Business Incubator (which provides leading innovation approaches, tools and capabilities, and the platform for incubating and accelerating businesses before they are integrated into a Business Unit), Group Engineering (which is responsible for the management and execution of capital investment projects), and Group Intellectual Property Management (which secures the generated value through intellectual property protection).

Goals and targets

Clariant strives to realize a local currency growth rate of 2–3% through innovation, with a target of 1–2% sales growth from top-line innovation alone.

Further components

Read more: Integrated Report: Core Processes for Value Creation

Read more: Integrated Report: Innovation and Technological Advances

103-3 Evaluation of the management approach and measurement

Evaluation and outcome

The innovation approach is regularly reviewed as part of the yearly Strategic Management Process. In 2018, Clariant identified untapped potential for its innovation portfolio management and stringent allocation of funds toward attractive business opportunities. Business Units thus further focused their resources and budgets on identified customer-centric and macrotrend-derived opportunities, raising innovation’s contribution to profitable growth and the return on technology and innovation spend. The innovation governance was also adjusted, and the Innovation Committee, with a new functional reporting structure, was introduced in 2019.

Indicators

After achieving the growth target in 2018, Clariant met the expectations again in 2019 and grew by almost 3% through innovation.

Management Approach

103-1 Explanation of the material topic and its boundary

Reason for materiality

As a global employer, Clariant is committed to promoting a healthy culture at the workplace. Processes regarding occupational safety are top priorities to ensure seamless manufacturing operations, protect the health and safety of Clariant’s employees, and meet legal and reputational requirements. Failing to meet requirements has a direct negative impact on staff morale, labor costs, and productivity, as well as on operational costs. Moreover, negative incidents of occupational health, safety, and well-being have a detrimental effect on the company’s brand image.

Contribution to value creation

Occupational health, safety, and well-being add value to Clariant by minimizing the risk of harm to both people and the environment and reducing potential liabilities for the company. Additionally, Clariant acknowledges the physical and mental well-being of its employees as a prerequisite for engagement and performance.

Boundary

Occupational health, safety, and well-being are relevant for all Clariant businesses, including management-controlled joint ventures. The impacts of this topic occur within Clariant’s own operations.

103-2 The management approach and its components

Responsibilities and resources

Clariant’s Corporate Environmental Safety and Health Affairs (ESHA) Department and ESHA experts in all regions, countries, Service Units, and Business Units are responsible for managing occupational health and safety. Managing the well-being of Clariant’s employees is a shared responsibility of the well-being experts, the Corporate Human Resources Department, and the regional and local human resources departments.

Goals and targets

Clariant is focused on its goal of zero accidents and its desire to embed process safety into the daily life of all operations. Milestones are defined on Group, Business Unit, and regional levels, and progress toward zero accidents is linked to top management bonuses. A zero-accident goal also reflects the company’s focus on the people dimension, one of Clariant’s brand values.

Further components

Read more: GRI Report, Management Approach Disclosure 403-1 Occupational health and safety management system

Read more: GRI Report, Management Approach Disclosure 403-2 Hazard identification, risk assessment, and incident investigation

Read more: GRI Report, Management Approach Disclosure 403-3 Occupational health services

Read more: GRI Report, Management Approach Disclosure 403-4 Worker participation, consultation, and communication on occupational health and safety

Read more: GRI Report, Management Approach Disclosure 403-5 Worker training on occupational health and safety

Read more: GRI Report, Management Approach Disclosure 403-6 Promotion of worker health

Read more: GRI Report, Management Approach Disclosure 403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships

103-3 Evaluation of the management approach and measurement

Evaluation and outcome

To protect employees from work-related hazards, every workplace at Clariant is subject to a systematic assessment that includes workplace ergonomics, illumination, noise, indoor air quality, humidity, and temperature. Clear minimum requirements are defined for each factor, and measures to redesign the workplace are taken if these requirements are not met.

The health of employees is regularly examined by Clariant. Depending on the workplace, extensive health checks are carried out in order to detect signs of illness as early as possible. For some activities, special health certificates and vaccinations are required, and special attention is paid to ensure that these are obtained and given. Medical health professionals anonymously report issues noticed through personal health checks of employees, for example, from blood or urine monitoring, to either the local ESHA organization or the area responsible depending on local laws. The reported information is used to review the mandatory workplace risk assessments required by »Protection from Hazards to Health.« Clariant ensures medical confidentiality. Initial workplace risk assessments define whether or not personal health monitoring is a necessary measure.

Indicators

Clariant monitors several key performance indicators on a regular basis: Lost-Time Accident Rate (LTAR) and Restricted Work cases are continuously and globally reported on a monthly basis. Recorded Injuries are reported quarterly, and Occupational Illnesses are tracked continuously and reported globally on an annual basis. Safety Deviations are continuously monitored at respective sites and quarterly on a global level.

Furthermore, Clariant monitors all Process Safety Events (PSEs). All reported PSEs are assessed quarterly and published in Corporate ESHA dashboards. When Clariant identifies a trend in Process Safety Events that must be corrected, the corresponding units are contacted and instructed to take corrective measures.

GRI 403:2016 Occupational health and safety management system

403-1 Occupational health and safety management system

To ensure operational health, safety, and well-being, Clariant has several policies and guidelines in place, including an Employment Standards Policy, which underscores Clariant’s commitment to global workplace rights and acknowledges its social responsibility toward all employees. Clariant’s Sustainability Policy also contains a section on the safety and security of employees and the environment. Several additional guidelines cover a large number of safety and security issues, such as fire and explosion precautions, the handling of hazardous substances, and the identification of risks associated with chemical production. In addition, Clariant adheres to the Precautionary Principle when dealing with risks where scientific understanding is incomplete.

Clariant has prepared the shift from the current OSHAS 18001 certification to ISO 45001 in 2020. A gap analysis was conducted to identify improvement potentials for our occupational health and safety management system, and actions were defined and implemented. The standard will apply to all employees and contractors where Clariant controls the workplace. For workplaces that Clariant does not control, the management system only applies to Clariant’s employees.

403-2 Hazard identification, risk assessment, and incident investigation

The internal Clariant guideline »Protection from Hazards to Health« serves to avoid work-related illnesses and regulates the identification of occupational health hazards for all workplaces. The guideline includes defined revision criteria and cycles. For the control measures, the STOP principle has to be applied, which defines the hierarchy of measures to be taken to avoid incidents. A comprehensive internal audit system ensures the quality and triggers continuous improvement.

To report work-related hazards or near-miss incidents, Clariant’s employees can either approach their supervisors directly, submit a report using »Safety Counts!« cards, or utilize an online system at some sites. If employees identify a hazardous situation, they are permitted and encouraged to stop the activity and report to their superior. The application of this rule is part of the »AvoidingAccidents@Clariant« training.

After a work-related incident, Clariant conducts an investigation to identify corrective actions and to avoid recurrence. Specific methodologies are provided and described in Clariant’s investigation guide. According to internal processes, Lost-Time Accident and Restricted Work case reports are only closed if an appropriate investigation report is available and filed. The decision to close a report is made on the Group level by an assigned member of Corporate ESHA.

As part of Clariant’s Audit Program, internal experts from Corporate ESHA and the Integrated Group System Management (IGSM) regularly visit sites to check process safety standards by assessing the facilities and establishing corrective measures to tackle the main risks. Process Hazard Analyses (PHAs) are conducted periodically by competent personnel at the sites. The PHAs are reviewed at least every five years and updated in the event of modifications. Whenever modifications are done in the facilities, management of change procedures is applied, ensuring that no new or additional risks are introduced without being assessed and controlled.

403-3 Occupational health services

The promotion of workplace health and well-being is a local responsibility that each Clariant region addresses with tailored programs. Exceptions are the company-wide family-friendly policy and standards that ensure a healthy and safe working environment for all employees. Further, Clariant’s Employee Assistance Program offers free counseling by external specialists in the event of stress (whether work-related or not), burnout, personal crisis, drug addiction, or other challenging circumstances. Certain locations implemented voluntary programs to support employees in quitting smoking. For drug addiction, Clariant established a procedure for treatment through medical plans and in-hospital care, if necessary. Flexible working arrangements can be made and apply to both work-related stress management and unrelated, extenuating circumstances. Clariant performs an assessment of health habits and special health issues of all employees and updates local programs based on these findings.

403-4 Worker participation, consultation, and communication on occupational health and safety

Ninety-four percent of staff employed per capita in production are represented by a safety committee. Taking the workforce as a whole (production, procurement, sales, and management), 85% of staff per capita are also represented. At Clariant, safety issues are also addressed in committees that do not primarily deal with this topic.

A working group is established if there is a need for new internal standards or to update existing ones. The resulting draft is sent to the different stakeholders in Clariant's Business Units and regions to solicit feedback. Feedback and requests for revisions are duly considered before the standard is finalized and approved. The relevant information is subsequently published in the Group Management System (GMS) database and on SharePoint.

Clariant’s »Safety Counts!« cards also play an important role in ensuring health and safety by providing employees with an opportunity to report critical safety situations and the circumstances that led to them. Employees can also submit their proposals to improve occupational health, safety, and well-being in suggestion boxes. Furthermore, they have access to an Integrity Line hosted by an external service provider, where they can raise their complaints anonymously and around the clock. The system guarantees that concerns are dealt with by representatives of Group Compliance.

403-5 Worker training on occupational health and safety

Since 2007, Clariant runs the AvoidingAccidents@Clariant program, underscoring its commitment to the occupational health, safety, and well-being of its employees. Under the umbrella of the program, Clariant rolled out multifaceted trainings and tools to achieve the zero-accidents objective. These include, for example, safe behavior trainings, safety leadership improvements, safety checks, safety days, and safety weeks. In addition, Clariant has a Learning Management System (LMS) that is used to provide, steer, and monitor various programs such as occupational health and safety-related e-Learnings, webinars, and workshops. Furthermore, according to the »Protection from Hazards to Health« guideline, the area responsible is tasked with informing workers and contractors about any specific hazard and training them on specific standard operating procedures and work instructions.

Additionally, there are special trainings regarding work-related hazards, hazardous activities, or potential hazardous situations provided by the respective plant and the building management. These trainings are customized and depend on the jobs to be performed.

403-6 Promotion of worker health

Since balance between work and family life significantly contributes to the well-being of employees, Clariant also offers a wide range of flexible working arrangements, such as flextime, part-time work, or working from home. Further benefits designed to enhance the work-life balance of its employees include healthy meals in the cafeterias, the provision of fitness facilities and contributions to external fitness programs, childcare facilities and contributions to external childcare, support for employees who care for elderly family members, as well as access to nutrition counseling and health checks.

To further support Clariant’s local activities and promote a shared culture of health and well-being, the company plans to initiate a global policy to provide a framework for new ways of working, including agile and mobile work.

403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships

Read more: GRI Report, Management Approach – Occupational Health, Safety, and Well-being

403-8 Workers covered by an occupational health and safety management system

403-9 Work-related injuries

Additional indicators:

403-10 Work-related illness

Management Approach

103-1 Explanation of the material topic and its boundary

Reason for materiality

Protecting customers, consumers, and the environment by providing safer and more sustainable solutions is one of Clariant’s top priorities.

Product stewardship is evolving from a primarily legal prerequisite for a chemicals company into a key enabler of regulatory market intelligence for Clariant’s businesses. Sustainability leadership goes even further, requiring a company to proactively pursue more sustainable and innovative solutions. Clariant steers its portfolio toward products that consider all three dimensions of sustainability: people, planet, and performance. For Clariant, embedding sustainability aspects in product development and other business processes is a must. Driven by societal demand and policy attention, customers and markets are increasingly aware of and sensitive to the sustainability features of products. By proactively screening its products and innovation projects against strict and forward-looking sustainability criteria, Clariant aims to develop more sustainable and innovative solutions that support long-term value creation.

Contribution to value creation

By providing the information required to ensure the safe use and handling of its products, as well as to comply with national and international regulations, Clariant adds value to its portfolio and prevents reputational or legal damages. In addition, product stewardship supports Clariant’s business through active communication with customers on product safety for their applications, thereby playing an important role in supporting business and environmental and health protection.

Boundary

Product stewardship and sustainable chemistry applies to all product cycles from cradle to grave, as impacts can result from all phases of product development, operations, and downstream value chains.

103-2 The management approach and its components

Responsibilities and resources

Clariant’s approach to product stewardship is globally oriented and ensures that local and regional product stewardship teams play an integral role in the Global Product Stewardship organization and support business and external customer communication on all regulatory issues regarding the management of chemicals.

Goals and targets

Clariant does not publish its goals regarding product stewardship and sustainable chemistry.

Further components

Clariant's product stewardship practices are embedded in the innovation process, guaranteeing that chemical safety is considered throughout the entire product life cycle. Regulatory compliance and communication to customers on the safe use and management of the products are thus ensured when placing products on the market.

Regulatory Compliance

Clariant monitors and assesses the impact of changes in chemical management regulations worldwide in order to be prepared for any shifts in the regulatory landscape. Proximity to regulatory bodies and participation in expert groups and associations support proactive management. Ensuring regulatory compliance also includes substance registration with relevant regional and national authorities and supply chain communication on product safety.

European Union Registration, Evaluation, Authorization, and Restriction of Chemicals (EU REACH) Targets

Clariant is fully committed to the REACH targets. After successfully registering all relevant chemicals in 2018, the company ensures that all product dossiers are kept up to date. Clariant maintains cooperation with regulatory bodies, such as the European Chemicals Agency (ECHA) and EU member states. Clariant is committed to the CEFIC / ECHA Cooperation Agreement on the Review/Improvement of REACH Registration Dossiers and is part of the »REACH Dossier Improvement Action Plan.«

Clariant goes beyond mere compliance: Its Global Toxicology & Ecotoxicology Group has initiated and codeveloped in a Cefic (European Chemical Industry Council) LRI (Long-Range Research Initiative) project the so-called AMBIT tool—an open IT-based system on a predictive toxicity model. AMBIT helps predict the properties of one chemical using the known properties of similar chemicals. The European Chemicals Agency (ECHA) supports this tool by giving access to nonconfidential registration data.

Policies and Guidelines

As a signatory to the Responsible Care® Declaration, Clariant supports the Responsible Care® Global Charter. Clariant embedded the Responsible Care® principles in its Sustainability Policy, underlining the company’s strong commitment and leadership in sustainable chemistry, and promoted the program in several countries. Reflecting a holistic approach to fulfilling the Responsible Care® principles, Clariant’s Global Product Stewardship Organization takes care of the health, safety, environmental, and other regulatory aspects of the company’s portfolio throughout product life cycles, following clear guidelines and process descriptions.

Product Portfolio Sustainability Screening

Beyond product safety, a sustainability screening is mandatory for all major product developments at Clariant. Under the Portfolio Value Program (PVP), Clariant systematically assesses its product portfolio for strengths and weaknesses in terms of sustainability, comparing its performance against alternatives on the market and against defined sustainability risks and benefits. The product portfolio, which includes all existing products and the innovation pipeline, is screened for sustainability performance based on 36 criteria that consider the entire life cycle and all three dimensions of sustainability: people, planet, and performance. Clariant awards products that show an excellent sustainability profile based on the PVP criteria with its EcoTain® label. These products are nominated by Business Units and undergo the scrutiny of an internal EcoTain® panel, comprised of Corporate Sustainability & Regulatory Affairs (which includes relevant product stewardship experts), Group Technology & Innovation, and Group Communications.

By participating in the development of a Product Portfolio Steering Framework of the World Business Council for Sustainable Development (WBCSD), Clariant supported the development of a set of sustainability indicators for evaluating product portfolios in the chemical industry. The initiative supported bringing best practice forward in evaluating product portfolios from a sustainability perspective and encourages companies to adopt methodologies for evaluating and steering their product portfolio toward increasing sustainability based on facts, market, and stakeholder expectations.

Animal Testing

Clariant engages in research on alternatives to animal testing. Recently, Clariant participated in a project led by the Leibniz Research Centre for Working Environment and Human Factors (IfADo) that was awarded the »Animal Welfare Research Prize 2019« by the German Federal Ministry of Food and Agriculture as it has the potential to reduce or replace animal experiments in the long term. The research team developed a new test to assess how well an in-vitro-system reflects processes in the human body, which could help better predict drug-induced liver injuries resulting from daily drug intake levels.

103-3 Evaluation of the management approach and measurement

Evaluation and outcome
The overall evaluation of the management approach includes internal controls, Portfolio Value Program progress-tracking dashboards, benchmarking against peers using external references, such as the Dow Jones Sustainability Index, as well as participation in external networks, discussions, and report reviews.

Clariant is a member of the World Business Council on Sustainable Development (WBCSD). In this forum, Clariant develops and discusses best practices in the chemicals industry. For example, Clariant contributed to the development of a sustainable portfolio assessment methodology for the chemical industry.

In the development of the Portfolio Value Program, external stakeholders such as customers, suppliers, scientists, non-governmental organizations, policymakers, and authorities were consulted. They commended the 36 criteria for being comprehensive and fit for purpose. In 2015, Clariant received an independent third-party assurance statement on the PVP/EcoTain® system from PricewaterhouseCoopers (PwC).

GRI 416:2016 Customer Health and Safety

416-1 Assessment of the health and safety impacts of product and service categories

Read more: Integrated Report, Product Stewardship/Sustainable Chemistry

416-2 Incidents of noncompliance concerning the health and safety impacts of products and services

In 2019, there were no fines, penalties, or warnings resulting from incidents of noncompliance with regulations or voluntary codes concerning the health and safety impacts of products and services.

GRI 417:2016 Marketing and Labeling

417-1 Requirements for product and service information and labeling

Clariant fosters permanent contact with customers, who are supported in the application and use of Clariant’s products. Laboratories are available to solve any specific problems. The service offering also features comprehensive product information, particularly in respect to optimum and safe application, health risks, waste disposal, and handling of packaging.

Safety data sheets containing the relevant substance data, information on safe handling and storage of products, and measures in the event of incidents such as product spillages/release and fire are provided by Clariant to all parties involved in the handling of the substances. Clariant has a close relationship with its customers and provides all REACH-relevant information about the supply chain through an IT tool. With this, every Clariant customer is able to securely receive REACH-relevant information on the specific products they have purchased. Comprehensive customer support services ensure compliance with the high communication requirements set by REACH regarding the use of products in the customer chain.

417-2 Incidents of noncompliance concerning product and service information and labeling

In 2019, there were no fines, penalties, or warnings resulting from incidents of noncompliance with regulations or voluntary codes concerning information and labeling of products and services.

417-3 Incidents of noncompliance concerning marketing communications

In 2019, Clariant had no incidences of noncompliance with regulations or voluntary codes concerning marketing communications.

Management Approach

103-1 Explanation of the material topic and its boundary

Reason for materiality

Empowered, motivated, and highly skilled employees who create value for the company and its stakeholders are essential to Clariant’s long-term success. Clariant is thus striving to build its reputation as a preferred employer in order to attract, engage, develop, and retain the right people with the right skills.

Contribution to value creation

Efficient recruitment and onboarding processes help new employees quickly contribute to the implementation of the Business Units’ strategies. Skills development is also imperative to remain agile and drive innovation in fast-evolving markets.

Boundary

Human resources management is central for all Business Areas and regions of Clariant.

103-2 The management approach and its components

Responsibilities and resources

Engaging and developing talent is a shared responsibility of all management functions. Clariant’s leaders are key in shaping a high-performance culture. They are supported by Group Human Resources, which has established strong processes for talent acquisition, onboarding, performance management, and talent management in all regions. Globally, Clariant’s operational and strategic Human Resources departments comprise 219 employees dedicated to Talent Attraction and Development.

Goals and targets

The objective of talent management is to have a consistent and structured talent pipeline for each management level and to ensure the best fit between role requirements and individual capabilities.

Further components

For the management of Talent Attraction and Development, Clariant abides by its Global Talent Acquisition Policies (Recruitment Policy, Global Recruitment Agency Policy, Onboarding Policy, and Employee Referral Policy). The policies clarify and specify the roles and responsibilities of the hiring manager, recruiter, and other Human Resources personnel to ensure an efficient, effective, and professional talent acquisition process. More specifically, highly trained talent acquisition teams partner with the Business Units to identify and select the best external talent. Employer branding programs create awareness in the job market and attract potential candidates. Moreover, line managers are trained in the »License to Hire« program to ensure they make the right hiring decisions.

Maintaining a structured talent pipeline entails systematically identifying, developing, and retaining internal talent. This ensures successful short-, mid-, and long-term succession planning and availability of candidates. For years, Clariant has filled at least 80% of open positions at the management level with internal candidates. Dedicated talent managers review potential talents, manage talent review sessions, create individual development plans, and participate in internal placement decisions. They also organize so-called »talent engagement sessions« to give internal talent visibility and exposure to senior managers and to receive feedback on corporate culture topics.

Clariant’s People Excellence strategy ensures that the different employee initiatives are closely linked to business needs and implemented effectively and efficiently. It specifies the people requirements needed for the successful execution of the corporate and the business strategy and breaks down business challenges into people-related measures that address existing shortcomings in a focused manner.

103-3 Evaluation of the management approach and measurement

Evaluation and outcome

The evaluation of the management approach regarding »Talent Attraction and Development« includes a structured analysis of the results and impact of diverse talent management initiatives. All trainings are carefully evaluated. The feedback collected after each training course is systematically reviewed, and required amendments are performed to ensure high-quality training courses. For Clariant’s Leadership trainings, for example, pre- and debriefing calls with participants are conducted. Also, a feedback survey containing quantitative and qualitative questions is sent out directly after the training, followed by a survey after three months to evaluate the impact of the training on daily work.

In 2019, the average feedback score for Clariant Academy trainings was 3.6 (with 3 meaning »expectations were met« and 4 meaning »expectations were exceeded«). For selected programs of the Clariant Academy, feedback on the mid-term impact is collected from participants.

Other evaluations include competency assessments for key position holders, management appraisals for external or internal placement of key positions as well as yearly performance evaluations. All evaluations are documented, transparently shared, and followed up on with individual development planning.

GRI 404:2018 Training and Education

404-1 Average hours of training per year per employee

404-2 Programs for upgrading employee skills and transition assistance programs

The Clariant Academy encompasses all global learning offerings designed to support Clariant’s strategy and promote common language and values across the organization. A global nomination process for the Clariant Academy programs ensures that all relevant people participate in the training programs. Besides the Clariant Academy programs, local trainings, social learnings such as learning communities, as well as mentoring, peer coaching, and on-the-job learning opportunities are offered.

The training offering is based on the 70:20:10 model from Lombardo and Eichinger, which corresponds to a proportional breakdown of effective learning. The Individual Development Plans for employees generally include 10% coursework and formal training, 20% interaction and peer exchange, and 70% challenging assignments to promote learning on the job. Overall, the training participation covers the areas of functional skills, safety and sustainability, personal development, leadership, legal / compliance as well as IT skills and general management skills.

Within the Clariant Academy, global trainings targeted at business, leadership, and functional skills offer a standard curriculum for each level in the organization. Furthermore, the annual training catalog with a focus on leadership skills and personal development extends the training offering with recommendations on external classes. Clariant’s support of its employees’ education is described in global and regional learning policies, which include budget frameworks and study assistance guidelines.

In 2019, 1 397 employees benefited from 13 Clariant Academy programs. Overall, the training participation covers the areas of functional skills (14%), safety and sustainability (43%), personal development (5%), leadership (2%), legal / compliance (23%) as well as IT skills (11%) and general management skills (2%). This includes training beyond Clariant Academy.

404-3 Percentage of employees receiving regular performance and career development reviews

One of the aims of the annual »performance dialogue« is to identify the ongoing development potential of all employees and to agree on appropriate development goals. Currently, the performance-management process comprises 58% of all employees.