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 sustainability ambitions and policy objectives linked to climate change, environmental protection, and resource efficiency, as well as resource scarcity. Policy examples include the European Union Circular Economy Action Plan and Plastics Strategy, 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.

Impact in the value chain

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 Sustainability Transformation, Group Technology and Innovation (GTI) as well as the different Business Units. The future Group Innovation and Sustainability will lead the efforts on the circular economy. Further, with EcoCircle and the associated Centers of Excellence, Clariant has started to establish dedicated sites for development of products for a circular plastics economy. Specialized teams and facilities 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 at 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 stabilizers and pigments 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)
• Cefic’s Circular Economy Working Group
• Circular Economy Initiative Deutschland (CEID)
• WBCSD Factor 10 and Circular Electronics Partnership
• WEF Low Carbon-Emitting Technology initiative, with Clariant supporting especially the work streams Biomass Utilization and Waste Processing
• Numerous local associations

103-3 Evaluation of the management approach and measurement

Evaluation and outcome

Clariant reviews risks and opportunities associated with the circular economy as part of the corporate strategy management process. This structured approach further outlines, anchors, and advances the topic within Clariant’s Business Units. In 2020, a tangible outcome of this review was the inclusion of circularity as one of the four key pillars of Clariant’s sustainability focus areas.

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, nonreusable packaging is recycled for material purposes or, especially in the case of hazardous materials, used to generate energy.

103-1 Explanation of the material topic and its boundary

Reason for materiality

The discussion on how to halt and mitigate climate change is in full swing as its potential impacts, such as shifting weather and risk of flooding, are intensifying. If global warming cannot be contained to a safe level, society at large and thus Clariant’s business and its markets can be seriously impaired.

An increasing number of business stakeholders are focusing on the issue: customers are demanding low-carbon alternatives, while financial players show a growing interest in climate-resilient companies. In addition, more corporations are opting for renewable energy sources for business operations.

As the environmental performance of companies continues to gain importance, Clariant aims to actively contribute to a carbon-neutral economy, helping the company to maintain or increase its customer base and to enhance its reputation.

Contribution to value creation

Clariant contributes to avoiding greenhouse gas emissions with its numerous sustainable products, ranging from catalysts to second-generation bioethanol solutions. Clariant also reduces its own carbon emissions through the optimization of its operations. Decreasing materials and energy consumption reduces cost and further increases the company’s competitiveness.

Boundary

Climate change is relevant for Clariant’s own operations, its customers, its global supply chains, as well as the entire life cycle of its products.

Impact in the value chain

103-2 The management approach and its components

Responsibilities and resources

At Clariant, managing climate change is the responsibility of the new organization Group Innovation & Sustainability (GIS) and Group Operational Excellence (GOE). Within GIS, the topic is managed by the Sustainability Transformation teams, and within GOE, by the Corporate Environmental, Safety, and Health Affairs (ESHA) team. GIS and GOE are also working closely with other departments, such as Group Procurement Services, as well as different Business Units that develop low-carbon and climate-friendly solutions.

Goals and targets

To abate its climate impact, Clariant pursues ambitious environmental targets. These targets are an integral part of Clariant’s planning and investment strategy. The current targets are to be achieved by 2025. Compared to a 2013 baseline, Clariant aims to reduce energy consumption and direct CO₂ emissions by 30% and emissions from greenhouse gases (Scope 1 and 2) by 35%, each per metric ton of production.

In order to maintain a high level of ambition for the continuing operations, Clariant updated its environmental targets. To underscore its stance toward climate change, Clariant developed science-based greenhouse gas emissions targets. The targets and implementation measures have been developed by teams spanning different functions and Business Units. The project pipeline for Scope 1 and 2 emission reduction focuses on efficiency projects, the purchase of green electricity, and utilizing alternative, low-carbon fuels. To reduce Scope 3 emissions, Clariant focuses on replacing conventional raw materials with low-carbon alternatives.

The new targets set out ambitious absolute emission reductions in the company’s Scope 1, 2, and 3 emissions. Clariant commits to reduce absolute scope 1 and 2 GHG emissions by 40% and scope 3 GHG emissions from purchased goods and services by 14% until 2030, from a 2019 base year.

Read more: clariant.com/en/Sustainability/Sustainability-Targets

Further components

Beyond Clariant’s goals to reduce emissions, the company is running multiple initiatives related to energy management, such as Yield, Energy, Environment (YEE) and eWATCH™. eWATCH™ is a holistic energy efficiency program that identifies savings potential through detailed analyses of energy consumption across operations and energy purchases from utilities. With this program, Clariant focuses on utilities guaranteeing efficient and low-carbon energy supply, as well as efficient energy use in the entire production process.

Finally, Clariant and its Business Areas contribute to the fight against climate change with their sustainable offering. Climate change-related criteria, such as raw material sourcing, material efficiency, energy consumption, and greenhouse gas emissions, are part of Clariant’s Portfolio Value Program (PVP), which integrates sustainability into the product portfolio and the innovation pipeline. With its EcoTain® label, Clariant identifies best-in-class solutions that address sustainability challenges such as climate change.

103-3 Evaluation of the management approach and measurement

Evaluation and outcome

Clariant monitors its climate impact by collecting and analyzing data on energy consumption and greenhouse gas emissions across its Business Units. Thus, Clariant keeps track of the trajectory necessary to achieve its environmental targets.

The newly set science-based targets have a clear roadmap of projects, a designated investment for low-carbon projects, and are supported by Global Management Bonus Plans. Major investments will also be evaluated against an internal carbon price. These will ensure a continuous improvement of Clariant’s carbon footprint, limiting global warming in line with the Paris Climate Agreement.

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 relationships with customers.

Impact in the value chain

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 dialogue with existing customers, new prospects, and other partners along the value chain. In January of 2021, Commercial Excellence became part of Corporate Planning & Strategy, creating an even stronger bond between driving strategy and executing strategy. Corporate Planning & Strategy reports to the Executive Committee.

Each Business Unit focuses on enhancing Clariant’s customer-centricity through a tailored marketing organization. In every Business Unit, a global Head of Marketing 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 developed into a Commercial Advisory Board in 2019 and 2020 and included sales and pricing topics in addition to marketing since these topics are interconnected. It consists of the Business Units’ Marketing Heads, the Head of Marketing Communication, the Head of Sustainability Strategy (Head of Sustainability Transformation as of mid-2020), and the 2 Heads of Commercial Excellence, who convene regularly to share best practices and drive further development of strategic commercial processes, tools, and capabilities, ensuring continuous improvement of the commercial organizations.

Further components

Within Corporate Planning & Strategy, the pricing, sales, and digital commercial teams support the Business Units in developing and implementing actionable commercial growth plans. They also accompany a growing number of initiatives on customer segmentation, cost-to-serve analysis, customer engagement, and value-based pricing and selling. In addition, the teams contribute 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 2020, Clariant continued the advanced marketing program with MarketEdge, in which participants focused on further deepening their marketing plans in an interactive workshop environment.

Clariant installed a new version of its Customer Relationship Management system in 2020 in order to improve and intensify 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. The most recent customer satisfaction survey was 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 15.4 million in 2020, underscoring that Clariant is moving in the right direction toward true customer-centricity.

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

In 2020, 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.

103-1 Explanation of the material topic and its boundary

Reason for materiality

Digitalization is a megatrend that is reshaping the chemical industry. In response to the growing readiness of customers and suppliers to use digital tools, Clariant embarked on its transformation into a fully data-driven company to increase customer satisfaction, improve process performance, and lower costs. The company’s digital transformation impacts all aspects of its business activities, from innovation to marketing and operations.

Contribution to value creation

Digitalization allows Clariant to anticipate and capitalize on trends in marketing and innovation. By using data science and digital formulation, including high-throughput experimentation, speed and quality of new product developments and related applications can be increased. This is particularly important for customers that are experiencing fast-changing demand due to the increase in online sales.

Clariant predicts that the buying behavior of younger buyers, who are accustomed to accessing information at any time, will be changing. As this could lead to more activity on internet platforms, Clariant is closely monitoring developments in this field. It uses platforms selectively (e.g., Alibaba’s Chinese marketplace) and regularly reviews go-to-market approaches using platform channels.

Digitalization also enhances 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. For sales analytics, Clariant utilizes data science-driven dashboards, which can improve sales forecasts or help the company gain better insights regarding the future payment behavior of customers.

Regarding production and supply chain management, predictive process and quality control are expected to increase yields, lower energy consumption, and avoid bottlenecks in production, leading to increased speed, higher quality, and reduced costs. Clariant built a data lake—a central data repository that provides 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, digitalization allows Clariant to better predict prices and plan material flows. Data-driven tools help exploit price advantages, improve demand predictions and risk management, and facilitate strategic buying. Automated e-auctions allow Clariant to easily compare a large number of offers from suppliers, making the selection process more competitive and potentially lowering raw material prices. Tracking supplier performance helps increase supply stability and enhances 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, digital tools will be required to ensure transparency along the value chain about greenhouse gas emissions in order to comply with potential future regulation.

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.

Impact in the value chain

103-2 The management approach and its components

Responsibilities and resources

Digital4Clariant oversees and coordinates most of the novel digital activities at Clariant, namely the development of new digital business models, the transformation of existing business models, digitalizing operations, and enhancing data science. This cross-functional program is supported by top management and all of its workstreams and projects 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.

In 2020, when some of the early workstreams had achieved their purpose, the program was adapted. Dedicated teams that were embedded in the organization took over the former workstreams and integrated the relevant topics into their routine tasks. Most notably, the digital@operations team and projects became governed by the newly instituted Operations Council. Similarly, the strategic topic of digital formulation development was taken over by the Innovation Committee, and the different functions working in this field were bundled under the umbrella of the Digital Formulation Factory.

As Clariant’s biggest potential for growth and cost savings is in the field of data science, the dedicated Competence Center for Data Science, established in 2018, focuses on data intelligence and process simulations as part of Group Process Technology. It also institutionalizes the use of data science in formulation development via a Digital Formulation Factory.

Goals and targets

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

Further components

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 adjusts its IT and support functions and further develops 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, help the businesses navigate in the digital world. Clariant continues to strengthen its efforts for cybersecurity and information security, including privacy protection, by building up dedicated resources in IT and Group Compliance.

103-3 Evaluation of the management approach and measurement

Evaluation and outcome

The Operations Council manages the project pipeline for digital projects in the area of operations. The project 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. Agile work organization in sprints continued to gain more importance throughout the company. In 2020, data science tools were developed in cross-business teams following agile principles.

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.

Read more: Integrated Report, Digitalization

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.

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.

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. 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.

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.

Protection of Ecosystems

Ecosystems provide a variety of critical goods and services such as 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

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 or even enable water savings at end-consumer use.

Waste Management

Clariant’s waste management approach adds value by reducing the risk of environmental harm as well as costs associated with waste treatment. Increasingly, in a circular economy approach, waste will need to be considered or tested for being used as a raw material. These efforts are in line with Clariant’s commitment to sustainability and lend credibility to its operations around the world.

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. At the same time, Clariant’s product portfolio enables our customers to reduce pollution, for example, in the area of volatile organic compounds (VOCs).

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 the value chain are considered as well.

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

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.

Pollution Prevention

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

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)

Impact in the value chain

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. For 2021, a reorganization will put ESHA in Group Operational Excellence, which will increase synergies and ensure continuous focus and attention from the EC on the topic. Specialized ESHA 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 2020 was about CHF 31.7 million, including CHF 12.7 million for environmental protection. The expenditures for ESH protection in operative facilities amounted to over CHF 133.8 million in 2020, of which CHF 74.0 million were spent on environmental protection.

Goals and targets

By 2025, Clariant aims to achieve significant improvements in 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%

In addition, new ambitious science based targets were submitted to the Science-Based Target initiative at the end of 2020 and have been announced in February 2021. The new targets set out significant absolute reductions in greenhouse gas emissions.

Read more: GRI Report, Management Approach Climate Change

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.

Energy

The main governing programs at Clariant to minimize energy consumption and increase energy efficiency are eWATCH™, Clariant Operational Excellence (COX), and the Yield, Energy, Environment (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 at 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

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.

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 environmentally friendly manner all the time.

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. 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. In 2020, Clariant started to revise its palm-sourcing policies and targets to further ensure protection of ecosystems at the cultivation level.

103-3 Evaluation of the management approach and measurement

Evaluation and outcome

Clariant relies on a dedicated, internal group to exchange knowledge between stakeholders in the Business Units 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, regular 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 are the operations managers from the production sites, who are the main stakeholders in implementing the strategies at the site level. The collaboration between the newly established Sustainability Transformation Unit, ESHA, Operational Excellence, and experts from the Business Units also led to the development of a revised target set.

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.

Energy

Since its inception in 2012, YEE led to savings of more than CHF 86 million. In 2020 alone, YEE allowed for cost savings of CHF 6.1 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 of chemical production sites that are located in biological reserves or in areas with a high biodiversity value.

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.

Pollution Prevention

Parameters tracked for air emissions include volatile organic compounds (VOCs), sulfur oxides (SOXs), nitrogen oxides (NOXs), 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.

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. This will be particularly important for the implementation of Clariant’s new CO₂ reduction commitments, together with further decreasing energy consumption.

Read more: Climate Change

To estimate the relative energy consumption per ton of production, Clariant accounts for all the energy it consumes as described above. Energy consumption outside of the organization is accounted for through the CO₂ footprint of the raw materials Clariant purchases. Data are gathered as part of Scope 3 emissions.

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. While the PVP looks at energy consumption across the entire life cycle, a specific area of focus of Clariant’s innovation effort lies in the energy consumption in the use phase and how Clariant can help customers to reduce their energy consumption.

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

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 41 million m³ of Clariant’s total water quantity purchased in 2020, 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 are 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 shortlisted. 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. This detailed risk assessment process revealed that only a fraction of Clariant sites are situated in water-risk areas. For these sites, Clariant performed in-depth site-level water-risk assessments in 2019 to develop water management goals that ensure risks can be managed responsibly. The revised environmental targets, which Clariant will publish in early 2021, place additional emphasis on advanced and sustainable water management in areas of high water risk.

In 2020, Clariant continued to engage in the EU-funded INSPIREWater project to explore innovative solutions for industrial water management together with eleven other partners from the chemical industry. In the Clariant’s case study, water reuse and concentrate treatment towards ZLD for secondary effluent with high fouling potential was demonstrated. For this purpose, the project embraced the development of a pilot-scale wastewater treatment plant containing innovative technologies that were consequently operated under real conditions on the ICS production site in Tarragona. The project has shown that 85% of the effluent could be recovered and reused. The produced water quality was suitable for medium- and low-quality application. The LCA analysis has shown an environmental impact reduction by 60% for the concept tested. Knowledge obtained from this project can be transferred to other Clariant sites, particularly those located in areas with water scarcity. 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 project was finalized in 2020.

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

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

Clariant is using fresh water with a total dissolved solids (TDS) concentration of less than 1 000 mg/l for the majority of its operations. At only one Clariant site, seawater is withdrawn and treated before use because there is no access to fresh water.

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 2020, 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.

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 regulatory 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 continues to take care of reclamation of mines in other regions. Volunteering for river/beach cleanup, as well as tree-planting activities, have been carried out by Clariant employees in various regions in the past years.

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

306-1 Water discharge by quality and destination

The absolute quantity of water discharged decreased by 4.2% in 2020. Water discharged in relation to production remained stable at 2.8m³ per ton of production. Clariant has reduced the chemical oxygen demand (COD) — the indicator of organic content in wastewater — in its wastewater discharged by ~37% from 2013 to 2020. 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 2020, Clariant recorded 17 spills that are considered significant under the definition of ICCA. The total volume of the spill amounted to 78.7 m³. Due to the new definition of significant process safety events (PSEs) and spills based on the ICCA criteria, for Clariant all PSEs with a score of >=3 points are considered significant. With this new definition, the numbers reported this year are not comparable with previous years and the difference is higher.

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 2020, the process safety event rate in Clariant decreased from 0.48 to 0.36, according to ICCA criteria.

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.

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 only experienced one case in 2020 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. Thus, Clariant had to pay one substantial fine or non-monetary penalty for noncompliance with environmental laws and regulations.

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-average sales growth, profitability (EBITDA margin), and capital returns (Return on Invested Capital, ROIC). Thus, Clariant established growth and performance as two of the five pillars of its Group strategy and set related financial goals.

Read more: Strengthening the Core with a High-Value Portfolio and Refocused Organization

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.

Impact in the value chain

103-2 The management approach and its components

Responsibilities and resources

Although achieving growth and performance improvement 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%. For Catalysis, the expected annual sales growth rate is 6–9%, and the EBITDA margin ambition is 26–30%. The respective targets for Natural Resources are set at 5–7% and 18–20%.

Read more: Strengthening the Core with a High-Value Portfolio and Refocused Organization

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 that are integrated as core elements into their Business Plan, including must-win battles that support the Business Area’s growth and profitability targets.

In 2020, Clariant successfully completed the sale of its Masterbatches business and launched the divestment of the Pigments business, further supporting its transformation into a more focused specialty chemicals company. Clariant is adapting and refocusing its organization post divestments to allow its high-value specialty businesses to operate in an even more focused and agile manner. At the same time, it is maintaining a competitive cost structure by rightsizing service units and regional organizations.

Clariant delivered robust performance in 2020, successfully mitigating the negative impacts of the COVID-19 pandemic. In Care Chemicals, profitability improved due to growth in Consumer Care in tandem with stringent margin and cost management. The EBITDA margin in Catalysis declined as a result of the less favorable product mix, particularly in the first and fourth quarters, and the efficiency program provision. Natural Resources’ profitability also weakened due to the softer demand environment, although it was close to the prior year on an underlying basis.

Indicators

Read more: Integrated Report, Financial Capital

Read more: Financial Report

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 CDP (Carbon Disclosure Project). 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

103-1 Explanation of the material topic and its boundary

Reason for materiality

A strong focus on innovation and Research & Development is one of the five pillars of Clariant’s strategy to become a globally leading company for specialty chemicals. By leveraging its sound technology platforms and know-how, 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 through sustainability—by continuously improving the company’s sustainability performance, and thereby creating long-term value for its stakeholders. Sustainability likewise promotes innovation by seeking sustainable solutions that meet increasing demand, thereby spurring growth and higher financial results.

A culture of innovation is also an important factor in creating a compelling work environment, boosting employee motivation, and helping Clariant attract and retain talent.

Boundary

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

Impact in the value chain

103-2 The management approach and its components

Responsibilities and resources

Clariant’s Innovation Committee oversees all innovation activities. 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 the newly instituted Sustainability Transformation department, the Head of Digital4Clariant, 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 oversees Clariant’s corporate innovation portfolio to maximize the value of the projects in the innovation pipeline and increase the success rate of launched innovation projects. The Innovation Committee is ultimately responsible for ensuring best practice application in innovation, intellectual property management, and adherence to Clariant’s technology and innovation governance. It is also tasked with fostering open innovation, which includes acquiring public funding and strengthening Clariant’s position as an industry leader in R&D, innovation, and sustainability.

In 2020, Clariant announced the creation of Group Innovation & Sustainability (GIS), which will bundle innovation and sustainability competencies under one roof, effective January 2021. This new organization comprises the following units: Sustainability Transformation, Global Product Stewardship, Emerging Technologies, Biotechnology, and Global IP Management. It is complemented by a lean Program Management Office & Innovation Center Management function, which will ensure standardized processes, tools, and reporting, as well as manage Clariant’s Innovation Centers. The combination of these functions under the GIS umbrella will allow Clariant to enhance its transformation roadmap as it relates to innovation and sustainability.

Research & Development activities are structured along five Technology Platforms: Chemistry & Materials, Biotechnology, Catalysis, Process Technology, and Emerging Technologies, effective January 2021. The Technology Platforms collaborate closely with the Business Units to ensure that technology push and market pull go hand in hand.

In 2020, the former Business Incubator was dissolved since several strategic projects were stopped due to Clariant’s portfolio changes and divestments. Business incubation nevertheless remains an important element of Clariant’s innovation process. Incubation activities are driven by Clariant’s Technology Platforms or by the Business Units.

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.

Indicators

After achieving the growth target in 2019, Clariant’s innovation sales met the expectations again in 2020, despite the exceptionally difficult economic environment linked to the COVID-19 pandemic. While overall sales of the continuing businesses decreased by -4.7%, innovation sales of the continuing businesses grew by more than 2%, proving the remarkable resilience of Clariant’s innovation activities in such challenging times.

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 is relevant for all Clariant businesses, including management-controlled joint ventures. The impacts of this topic occur within Clariant’s own operations.

Impact in the value chain

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 403-1, Occupational health and safety management system
GRI 403-2, Hazard identification, risk assessment, and incident investigation
GRI 403-3, Occupational health services
GRI 403-4, Worker participation, consultation, and communication on occupational health and safety
GRI 403-5, Worker training on occupational health and safety
GRI 403-6, Promotion of worker health
GRI 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 tracked 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.

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 implemented 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, followed by adaptations of guidelines and procedures. Since the beginning of 2020, internal auditing has been conducted according to ISO 45001, and the certificate confirming compliance with the standard has been received.

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 workplace and 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 are 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

95.8% of staff per capita employed in production are represented by a safety committee. Considering the whole workforce (production, procurement, sales, and management), 85.9% of staff per capita are 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 has run 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

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 intelligence for Clariant’s businesses, in the best sense of gathering, analyzing, and assessing regulatory and emerging issues that are relevant to the marketing of Clariant’s portfolio.

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, Product Stewardship adds value to Clariant’s 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 cradle as impacts can result from all phases of product development, operations, and downstream value chains.

Impact in the value chain

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

Although Clariant does not publish its goals regarding product stewardship and sustainable chemistry, the company is committed to full regulatory compliance and continuous improvement and development of its product portfolio towards sustainability.

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 as well as emerging new chemicals management systems globally 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 Sustainability Transformation, Product Stewardship, Innovation, regional experts, 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.

In 2020, Clariant also started to revise the Portfolio Value Program to ensure that the latest sustainability trends and developments are well reflected in the evaluation of the innovation and product portfolio. The update is expected to be completed in 2021.

Animal Testing

Clariant is committed to research on alternatives to animal testing. Clariant recently participated in a project led by the Leibniz Research Center for Working Environment and Human Factors (IfADo), which was awarded the »Animal Welfare Research Prize 2019« by the German Federal Ministry of Food and Agriculture because of its potential to reduce or replace animal testing in the long term. The research team developed a new test to assess how well an in vitro system reflects the processes in the human body, which could help to better predict drug-induced liver damage resulting from daily drug use. As a result of ongoing efforts to contribute to the development of in vitro systems as alternatives to animal testing in 2020, Clariant Global Toxicology, in collaboration with the Leibnitz Research Center, was again able to report on the development of a hiPSC-based alternative in vitro test system that uses genome-wide analysis to assess developmental neurotoxicity (DNT).

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, nongovernmental 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).

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

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

In 2020, 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.

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 with 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 2020, 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 2020, Clariant had no incidences of noncompliance with regulations or voluntary codes concerning marketing communications.

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.

Impact in the value chain

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. The functional area »Senior Management & People Development« holds the main responsibility for attraction and development of talent. It comprises 39 people. Globally, Clariant’s operational and strategic Human Resources departments comprise 230 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 2020, the average feedback score for Clariant Academy trainings was 5.0 (with a maximum possible score of 6.0). This very high rating was in part influenced by the reduced number of trainings that could be conducted in the reporting year. For selected programs of the Clariant Academy, feedback on the medium-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.

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.

Clariant is increasingly adding multiple new offerings to enhance digital learning. A digital academy portfolio is now available to employees and leaders. New virtual learning elements include microlearning videos, a virtual self-learning hub with recommended content sorted by business type or skill, and guided learning nuggets on topics such as time management or resilience.

In 2020, 191 employees benefited from four Clariant Academy programs. Due to the pandemic and travel restrictions, about 80% of in-person trainings had to be canceled. New virtual sessions were introduced, with time invested to design and implement. Overall, the training participation covers the areas of safety and sustainability (32%), legal and compliance (26%), functional skills (20%), IT skills (11%), personal development (8%), leadership (2%), as well as general management skills (1%). 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 dialog« is to identify the ongoing development potential of all employees and to agree on appropriate development goals. Currently, the performance-management process comprises 55% of all employees.