Understanding customer needs is critically important to develop tailor-made value propositions. In 2020, Clariant focused on building strong relationships with customers and suppliers and engaged in dialogs with policymakers and other stakeholders. Clariant implemented measures to foster digitally enhanced customer relations, applied sustainability criteria to select and manage suppliers, and screened raw materials for green alternatives. Committed to high ethical standards, Clariant also further progressed in becoming a value-based organization by ensuring the implementation of its human rights commitments.

2.1. Customer Relationships

Engaging and understanding customers are key to developing the products and services the markets seek and to ensuring profitable growth. In 2020, Clariant continued to focus on strengthening the customer experience and developing tailor-made value propositions.

2.1.1. Engaging with customers and market experts

The significant number of customer interactions throughout the year reflects Clariant’s focus on customer experience. In 2020, Clariant conducted 132 customer interviews (2019: 404) and 75 industry-expert interviews (2019: 144) as part of marketing and strategy projects, yielding valuable feedback on how to further improve its offerings and the entire customer journey. The decline in conducted customer interviews mainly reflects the absence of follow-up interviews to the customer satisfaction survey, which is conducted biennially.

2.1.2. Insights from the 2020 customer satisfaction survey

The biennial comprehensive customer satisfaction survey was the most important source of customer feedback in 2020. It allowed Clariant to assess the success of programs implemented in response to the last survey conducted in 2018, which included a program for strategic key account management. The company had also addressed other areas for improvement, including complaint management and logistics. Customers of all Business Units in all regions were surveyed, with a total number of 1 735 responding. The reduced number of responents compared to 2018 was mainly due the COVID-19 pandemic and an overall shorter survey period.

The overall results show that the high level of customer satisfaction slightly increased, with the Customer Satisfaction Index at 79 points (2018: 77). In total, 84% of participants stated that Clariant is a reliable business partner and solutions Provider (2018: 78%), and 78% highlighted Clariant’s excellent customer-oriented approach (2018: 73%). As in 2018, respondents ranked »Technical Service« and »Products and Packaging« as the two most important buying criteria. In »Products and Packaging,« Clariant increased its competitive edge with a larger share of respondents rating Clariant’s products higher than those of the competitors. The competitive performance of »Technical Service« and »Product & Packaging« increased compared to 2018. »Carbon Footprint« was introduced as its own assessment criterion in the 2020 survey. It was ranked as the seventh highest buying criterion. 95% of respondents stated that sustainability was important for their operations and/or markets.

Customer loyalty was also found to be very high in 2020. The Customer Loyalty Index reached 85 points (2018: 81), and the Net Promoter Score (NPS) even increased from 29% to 42%. In the chemical industry, an NPS of 30% is considered the benchmark. 88% of respondents indicated they will continue doing business with Clariant in the future (2018: 86%), and 82% stated they are likely to intensify business with Clariant (2018: 79%). The results revealed that complaint management is still an area with room for improvement, while ratings for logistics improved. Since survey results differ considerably between regions and Business Units, future improvement efforts will target business-specific and regional challenges in order to further increase customer satisfaction and loyalty.

2.1.3. Making progress toward true customer-centricity

Ongoing dialog with customers enables Clariant to address their needs along the entire value chain. Clariant’s Commercial Excellence inspires Business Units to move toward true customer centricity by listening and considering diverse customer perspectives, and supports them with advanced marketing and sales trainings and digital tools to elevate the customer experience. In 2020, a new »Ease of Doing Business« program was designed to strengthen customer relationships by differentiating Clariant as a business partner and increasing convenience. The company also made progress in segmenting customers into profiles in order to provide them with a tailored value proposition, and advancing digital tools to support commercial decision-making. Read more in Market to Customer

2.1.4. Translating customer insights into profitable growth

In 2020, Clariant carried out 20 Commercial Excellence projects (2019: 33) to improve the ability to find, keep, and grow business opportunities with customers. The margin from these Commercial Excellence efforts was CHF 15.4 million in 2020.

Clariant’s Marketing Excellence initiatives capture growth opportunities. In 2020, Clariant carried out 20 Marketing Excellence projects (2019: 15) to identify subsegments of customers and gain in-depth knowledge of the customer decision journey.

2.1.5. Advancing commercial competences

To continuously strengthen internal marketing and sales capabilities across the organization, Clariant focuses on dedicated trainings from inside and outside experts. In 2020, Commercial Excellence conducted several training programs, such as trainings for the new CRM system and an advanced marketing program. Several employees completed the marketing training curriculum, which was developed in 2019 in collaboration with the renowned Kellogg School of Management at Northwestern University in the United States.

2.2. Ethics and Compliance

Clariant’s Strategic Integrity Roadmap lays the foundation for an ethical mindset and responsible behavior in the workforce. It is structured around the five pillars: leadership engagement, communication and training, risk assessment, standards and controls, and monitoring. By continuing to implement the measures outlined in this roadmap, Clariant made further progress in 2020 in its evolution from a principles-based organization to a value-based organization.

2.2.1. Monitoring compliance through accessible grievance mechanisms

Clariant tracks its ethics and compliance performance and its progress toward the objectives of the roadmap through a comprehensive set of indicators. Clariant’s Integrity Line, which can be used to anonymously report workplace-related issues and Code of Conduct violations, is a key measuring instrument. The line is hosted via an easy-to-use online portal that allows the company to evaluate potential misconduct and take preventative measures. In 2020, 64 cases and nine questions were received via the anonymous Integrity Line, of which 17 were fully or partially substantiated and pursued. The 2020 numbers thus reflect a descrease of 37% compared to the previous year, largely due to the divestment completed in June 2020 and employees working from home across the globe due to the pandemic. Clariant will increase its focus on ways to speak up in 2021 as part of the Code of Ethics launch campaign.

2.2.2. Launching Clariant’s revised Code of Ethics

Clariant’s Code of Conduct outlines the company’s ethical commitments and supports employees in reflecting on responsible actions and decisions. Over the last two years, the company has worked on revising the Code, first published in 2007, beginning with an extensive review of existing policies. As a result, Clariant developed more specific guidance on topics such as fraud, conflict of interest, and gifts and entertainment, and included further topics and commitments. The resulting new Clariant Code of Ethics is value-based and designed around Clariant’s eight guiding principles. Due to the COVID-19 pandemic, the company had to delay its rollout, which will now take place in 2021 with campaigns highlighting Clariant’s eight guiding principles and interactive activities to reach all employees, despite circumstances imposed by the COVID-19 pandemic.

2.2.3. Fostering ethics and compliance through trainings

To ensure awareness of the Code of Conduct, Clariant conducts mandatory e-learning and in-person compliance trainings for all employees. In 2020, 50% of Board members and 14% of employees received training on anti-corruption. Due to the delayed 2020 rollout of Clariant’s revised Code of Ethics, which was caused by the pandemic, leader-led Compliance Sessions had to be canceled. Only the compliance e-learnings, required of every new employee, were conducted during the reporting year. In Latin America, Clariant tested and accelerated a new training format, the »Ethics Dialogues.« During these calls, employees can ask questions about various Code of Conduct topics, which are answered directly by different leaders. Questions can also be submitted anonymously after the call. About 1 000 employees participated across the region.

2.2.4. Enhancing the Data Privacy Program

Clariant’s »Think Privacy« data privacy program was started in 2018 in response to the General Data Protection Regulation (GDPR) of the European Union. The program consists of a Data Privacy Policy; a general Directive on how to process personal data; standardized operating procedures (SOPs) on the subject of Data Breach and execution of privacy rights; a basic Data Privacy e-learning course to familiarize all employees with the principles of the data privacy policy; and dedicated deep-dive sessions for the more exposed functions like Human Resources, Marketing, and Sales. In 2020, Clariant continued to advance the six strategic pillars of the program: ensure compliance with regulation, documentation of systems where personal data is processed, foster a risk-based approach, create awareness, train relevant employees, and monitor program execution. To further fulfill GDPR requirements for the management of personal data, Clariant advanced the integration of the Information Lifecyle Management (ILM) concept into the company’s SAP system.

2.2.5. Responding to regulatory changes

The company monitors regulatory changes rigorously. For example, in 2020, when the Schrems II court decision invalidated the EU-US privacy shield and subsequently the Swiss-US privacy shield, Clariant immediately set up a project to swiftly address the required changes.

2.2.6. Greater transparency regarding human rights

Stakeholder-led regulatory proposals such as the Responsible Business Initiative in Switzerland are increasingly demanding greater transparency, particularly regarding the protection of human rights. In the coming years, Clariant will enhance existing activities that address this need. The new Code of Ethics reflects the company’s enhanced committment and focus on human rights both in its own operations and its supply chain.

2.3. Policy and Stakeholder Relations

Maintaining an open and trustworthy dialog with all stakeholders and participating in relevant public policy developments are both important aspects of Clariant’s corporate responsibility. Active engagement in platforms such as trade associations enables mutual learning and strategic alignment. It also amplifies Clariant’s views and positions on relevant public policy debates, particularly as they relate to sustainability.

2.3.1. Memberships and engagements

Clariant is a member of numerous interest groups and trade associations. At the international and regional level, these include the International Council of Chemical Associations (ICCA) and the European Chemical Industry Council (Cefic). At the national levels, Clariant is part of national business federations and chemical industry associations, such as the Associação Brasileira da Idústria Química (ABIQUIM) in Brazil, the China Petroleum Chemical Industry Federation (CPCIF) in China, the Verband der Chemischen Industrie (VCI) in Germany, and the American Chemistry Council (ACC) in the United States.

Clariant is also active in sectorial associations, such as in the bioeconomy field, and supports scientific and research associations, including SusChem, the European Technology Platform for Sustainable Chemistry.

As a responsible corporate actor that values transparency, Clariant publicly discloses its contributions to trade and business associations.

The top three contributions Clariant made in 2020 were all for Europe-based associations. Together, they represented more than 50% of Clariant’s total membership costs. These were:

1. Verband der Chemischen Industrie e.V. – VCI, the German national association of chemical producers;
2. Scienceindustries, the Swiss business association for the chemical, pharmaceutical, and biotech industries; and
3. Handelskammer beider Basel, the Basel Chamber of Commerce.

2.3.2. Policy areas of interest

Clariant works on a number of policy areas. In 2020, the company focused particularly on chemicals legislation, the circular economy, waste policies, sustainable mobility, the bioeconomy, energy and climate change, and innovation policy frameworks and R&D funding. Clariant is actively contributing to the public dialog in support of the transition to a less toxic, low-carbon, and more circular economy. Clariant believes that legal frameworks and policy incentives are needed to support the transition.

2.4. Sustainability Performance in the Supply Chain

Clariant’s sustainability leadership extends beyond the company’s operations to include the supply chain. Clariant spends more than CHF 2 billion, the largest share of its total expenditure, on more than 18 000 different raw materials from almost 6 500 suppliers. Thus, suppliers strongly influence the company’s overall sustainability performance. Clariant uses comprehensive criteria to select and manage suppliers, including sustainability considerations such as environmental and safety standards, social and governance aspects, complaint management, working conditions, and respect for human rights.

2.4.1. Conducting sustainable supply chain assessments

To evaluate and increase the sustainability of its supply chain, Clariant relies on assessments and audits conducted by Together for Sustainability (TfS), which uses the internationally recognized EcoVadis platform. In 2020, TfS members initiated 1 148 new supplier assessments and 3 527 suppliers were reassessed, of which 57% improved their score. A further 640 existing assessments were shared with TfS. All of these form the TfS pool of 10 069 actively managed supplier assessments. The number of new audits amounted to 258 in 2020, adding up to more than 2 000 audits conducted since 2012. Clariant correlates the supplier assessments against its own supplier base to determine the share of total spend covered by TfS assessments. Coverage reached 84% in 2020, surpassing the company’s goal of a direct spend coverage of 80% by 2020.

2.4.2. Taking corrective measures

To further decrease sustainability risks in its supply chain, Clariant develops Corrective Action Plans (CAPs) based on TfS assessments, which outline how affected suppliers can improve their sustainability performance. In 2020, Clariant developed a Supplier Sustainability Consequence Management Framework to assist buyers in evaluating, monitoring, and responding to TfS sustainability assessments of their suppliers. The framework provides systematic steps the buyers may take to engage with their suppliers and communicate Clariant’s expectations. They are accompanied by letters that are available in six languages.

2.4.3. Supporting suppliers to increase sustainability

In 2020, Clariant invited suppliers to participate in trainings and webinars facilitated by TfS. The events emphasized the importance of sustainable procurement and helped suppliers understand requirements and opportunities of the EcoVadis methodology and TfS. The trainings took place in the Asia-Pacific region and Latin America and were held in various languages.

2.4.4. Going beyond direct suppliers

Transparency and visibility of Clariant’s multi-tiered supply chain remains a challenge. To strengthen its sustainable procurement program, Clariant aims to extend its approach beyond its own suppliers to include tier 2 suppliers. In 2020, Clariant joined a pilot program on sub-tier supplier assessments with other TfS member companies. Based on their strategic relevance, a selection of traders Clariant purchases materials from will ask their tier 1 – that is, Clariant’s tier 2 – suppliers to disclose information via EcoVadis. Clariant will then receive aggregated information on the sustainability performance of its tier 2 suppliers.

2.4.5. Strengthening capabilities for a sustainable supply chain

Clariant organizes internal trainings to enhance its capability to evaluate sustainability performance in the supply chain every year. The trainings mainly target employees in Global Procurement Services (GPS) and Business Units to promote sustainable procurement initiatives throughout the company. Other opportunities for raising awareness include Lunch & Learn sessions, workshops, and exchange meetings.

2.4.6. Clearly defined requirements in Supplier Code of Conduct

Clariant’s Supplier Code of Conduct outlines strategy, scope, and expectations regarding the sustainability performance of suppliers. As part of the General Terms and Conditions of Purchase, the code is incorporated into every purchase order. Suppliers and their subsidiaries are required to agree and fully comply with the Code.

2.5. Human Rights

Protecting human rights during all phases of value creation is a prerequisite for sound business governance and a license-to-operate. Clariant is committed to upholding high standards across all Business Units, not only within its own operations, but also with regard to the entire supply chain and contracted workers.

2.5.1. Cultivating the appropriate policies

Over the years, Clariant has built a comprehensive framework of policies, guidelines, and processes to ensure the implementation of its human rights commitments. The framework is regularly updated in response to current developments. Areas that were identified as high-risk during the 2016 human rights due diligence review have been investigated thoroughly.

2.5.2. Global Employment Policy

The guidelines ensuring human rights protection within Clariant’s own operations are defined in Clariant’s global employment policy. Created in 2018, the policy addresses fair working conditions, discrimination, freedom of association, occupational health and safety, as well as child and forced labor. It has been translated into local languages and is part of the onboarding curriculum for all new employees.

2.5.3. Protecting human rights in the supply chain

Among other social, governance, and environmental topics, Clariant regularly assesses its suppliers in relation to child and forced labor. This occurs via the Together for Sustainability (TfS) platform and in cooperation with other companies.

In 2020, Clariant reviewed its conflict minerals approach to ensure compliance with the new EU Conflict Minerals Legislation. In addition, Clariant has also started a comprehensive analysis of its activities to ensure environmental and social sustainability with regard to palm-based raw materials.

2.5.4. Responsible Mica Initiative

Business Unit Masterbatches, which Clariant divested in mid-2020, was an active member of the Responsible Mica Initiative, a cross-industry association that collaborates with local governments, NGOs, and other stakeholders along the mica value chain. As no other Clariant business is a member of the Mica Initiative, the company will no longer report in this regard.

2.5.5. Upcoming priorities

Regulatory developments, such as the potential supply chain law in Germany or the consequences of the Responsible Business Initiative in Switzerland, will enhance supply chain sustainability industry-wide. Moving forward, ensuring human rights compliance in high-risk supply chains, such as for palm-based raw materials and other renewable-based materials, will remain a challenge and a priority.