Climate Protection
Climate change has been widely recognized as one of the greatest challenges of our time. Shifting weather, increased risk of flooding, and global warming might seriously impair society at large and, thus, Clariant’s business and its markets. Clariant strives to be part of the solution by reducing greenhouse gas emissions and increasing efficiency. The company is fully committed to operating sustainably and decreasing pollution from its business activities. Therefore, it has a vision for net zero operations and transition to green energy by 2050.
Decreasing pollution is not only a social mandate, but also part of global legislation. Currently, legislators around the world implement measures to mitigate the adverse impacts of climate change. The first binding global step took place at the United Nations (UN) Climate Change Conference near Paris, France, in 2015. Subsequently, nearly 190 states signed the Paris Agreement, which sets out a global framework to limit global warming to below 2 °C, and to pursue efforts to limit it to 1.5 °C.
The European Union (EU) issued its European Green Deal in 2020, setting the aim to become climate-neutral by 2050. The first intermediate step is the EU 2030 Climate Target Plan, which provides for a reduction of greenhouse gas emissions by at least 55 % by 2030, compared to 1990. Likewise, in 2021, China announced its plans to achieve carbon neutrality by 2060. Clariant monitors and controls air emissions of all sites rigorously and strictly complies with all regulations that result from global legislation.
A growing number of business stakeholders also focus on the issue. Customers demand low-carbon alternatives and renewable energy sources, while financial players show an increasing interest in climate-resilient companies. Climate protection often goes hand in hand with energy savings that reduce costs, strengthen competitiveness, and trigger business opportunities. Pollution prevention also adds value to the company by minimizing the risk of harming human health and the environment, thus reducing potential liabilities and negative impacts on the company’s brand image.
Clariant constantly optimizes its own operations with regard to carbon and greenhouse gas emissions and pays attention to climate issues along its entire value chainValue chainThe value chain describes the series of steps in the production process, from raw materials through the various intermediate stages to the finished end product. and the life cycle of its products. It offers numerous sustainable products, ranging from catalysts and low-carbon glucamides to second-generation bioethanol. By actively contributing to a carbon-neutral economy, the company also helps its customers to foster climate protection through innovative products and solutions.
Management approach
Climate change management is the responsibility of Group Innovation & Sustainability (GIS) and Group Operational Excellence (GOE). Within GIS, the Sustainability Transformation team manages the topic. Within GOE, the Corporate Environmental, Safety, and Health Affairs (ESHA) team is responsible. GIS and GOE work closely together with the business units and with other departments such as Group Procurement Services to reduce Clariant’s operations and supply chain impacts, delivering low-carbon solutions.
Climate policies
Clariant is on the path to net zero operations. It pursues ambitious environmental goals and uses its own standards and guidelines for sustainable operations. In 2021, the company introduced science-based climate targets approved by the Science-Based Targets initiative (SBTiSBTiThe Science Based Targets Initiative is a partnership between CDP, the United Nations Global Compact, World Resources Institute (WRI), and the World Wide Fund for Nature (WWF). The SBTi is the lead partner of the Business Ambition for 1.5°C campaign - an urgent call to action from a global coalition of UN agencies, business and industry leaders, mobilizing companies to set net-zero science-based targets in line with a 1.5°C future. More information: https://sciencebasedtargets.org). These targets mark a significant step forward in Clariant’s sustainability transformation journey. Read more in Resource Efficiency
In 2021, the company also started to implement a roadmap as a way to achieve its defined climate targets by delivering emission reduction projects. Clariant coupled the roadmap with additional measures, for example, an internal carbon-pricing system to improve its carbon footprint. The scheme applies a monetary value of CHF 50 per ton of CO2 equivalents for all major capital expenditures, mergers, and acquisitions.
Furthermore, Clariant introduced a Group Management Bonus Plan (GMBP) with carbon emissions reduction as the top priority. Since 2021, the company has calculated management bonuses in relation to the implementation of emission-reduction projects.
Clariant continuously collects and analyzes data on energy consumption and greenhouse gas emissions in its business units. For example, it runs energy management initiatives like eWATCH™ and the Yield, Energy, Environment (YEE) initiative. The company also runs the Portfolio Value Program (PVP), which integrates sustainability into the product portfolio and innovation pipeline. With the EcoTain® label, Clariant identifies best-in-class solutions resulting from the PVP, which enables customers to make informed purchasing decisions that protect the climate. Read more in Resource Efficiency
Reduction of Scope 1, 2, and 3 emissions
Clariant’s ambitious climate targets provide for absolute reductions of its Scope 1, 2, and 3 emissions. With 2019 as the base year, the company aims to reduce Scope 1 and 2 emissions by 40 % and Scope 3 emissions from purchased goods and services by 14 % by 2030. These targets are approved by the Science-Based Target initiative (SBTiSBTiThe Science Based Targets Initiative is a partnership between CDP, the United Nations Global Compact, World Resources Institute (WRI), and the World Wide Fund for Nature (WWF). The SBTi is the lead partner of the Business Ambition for 1.5°C campaign - an urgent call to action from a global coalition of UN agencies, business and industry leaders, mobilizing companies to set net-zero science-based targets in line with a 1.5°C future. More information: https://sciencebasedtargets.org). Clariant’s Scope 1, 2, and 3 emissions are calculated following the GHG Protocol standard, the »Guidance for Accounting & Reporting Corporate GHG Emissions in the Chemical Sector Value ChainValue chainThe value chain describes the series of steps in the production process, from raw materials through the various intermediate stages to the finished end product.,« issued by the World Business Council for Sustainable Development (WBCSD), and follows the financial approach. See the bar chart with current status of targets.
Scope 1 and 2 emissions
Clariant’s direct greenhouse gas emissions (Scope 1) result mostly from combustion processes. They are proportional to the amount of carbon in the combusted fuels. To calculate them, the company uses the standard emission factors of the primary fuels defined by the Greenhouse Gas Protocol. Greenhouse gases, like methane (CH4) and nitrous oxide (N2O), are measured locally and included in the consolidated calculation.
Clariant’s indirect emissions (Scope 2) are due to external energy purchases, primarily in the form of electricity and steam. They correlate to the type of production and the quantity produced. Scope 2 emissions are calculated using either specific emissions factors of local suppliers or country grid factors published according to the standards of the Greenhouse Gas Protocol.
For internal and ISO 50001 reporting purposes, Clariant’s eWATCH™ team works closely with site energy managers to calculate site-specific conversion factors. They help benchmark the carbon intensity of different energy sources and utilities and the efficiency of individual utility plants. Against this background, the company identifies opportunities for operational improvement toward the theoretical limit. To reduce Scope 1 and 2 emissions, it focuses on efficiency projects, purchases green electricity, and uses alternative, low-carbon fuels. Read more in Resource Efficiency
Since 2019, Clariant’s direct and indirect emissions (Scope 1 and 2) from continuing business increased by 3 % while the production volume increased by 7 %. Accordingly, the Scope 1 and 2 emissions per ton of production decreased by 5 %. In 2021, Scope 1 and 2 emissions increased by 3 % year-on-year, while the production volume increased by 12 %. The Scope 1 and 2 emissions per ton of production decreased by 8 %. This reduction was driven by an accelerated transition to renewables, specifically from coal to biofuel at some sites, and a higher share of green electricity purchased.
Emissions
| Continuing operations | Discontinued operations | Total 2021 1 | Continuing operations 2020 | Total 2020 | Continuing operations 2019 | 2019 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total emissions (in m tCO2e) | 0.71 | 0.11 | 0.82 | 0.69 | 0.83 | 0.69 | 0.86 | |||||||
| in kg/t production | 164 | 1 100 | 185 | 178 | 205 | 172 | 202 | |||||||
| Gross direct (Scope 1) GHG emissions (in m tCO2e) | 0.37 | 0.02 | 0.40 | 0.36 | 0.39 | 0.37 | 0.40 | |||||||
| Direct emissions (Scope 1) in kg/t production | 85 | 200 | 90 | 94 | 96 | 93 | 93 | |||||||
| Gross market-based energy indirect (Scope 2) GHG emissions (in m tCO2e) | 0.34 | 0.09 | 0.42 | 0.31 | 0.41 | 0.32 | 0.46 | |||||||
| Indirect emissions (Scope 2) in kg/t production | 79 | 900 | 95 | 79 | 108 | 79 | 109 | |||||||
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1 Every three years, Clariant validates environmental data from all production sites. The last full reporting campaign was in 2020, including estimated discontinued data for Business Unit MasterbatchesMasterbatchesThese are plastic additives in the form of granules with dyestuffs or other additives used to dye or alter the properties of natural plastic. for first half-year. In interim years, including 2021, the reduced reporting scope comprises the larger sites responsible for at least 95 % of production.
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Emissions of ozone-depleting substances (ODS), nitrogen oxides (NOX), sulfur oxides (SOX), and significant others
At the Group level, air pollutants tracked include volatile organic compounds (VOCs), sulfur oxides (SOX), particulates, and nitrogen oxides (NOX). NOX emissions from process and combustion sources are included as a KPI for the Clariant’s sustainability 2030 targets. The company no longer uses ozone-depleting substances. If relevant, it reports cooling agents under the category »greenhouse gases.«
Nitrogen oxides (NOX), sulfur oxides (SOX), and other significant air emissions
| Significant air emissions in tons, for each of the following: | Continuing operations | Discontinued operations | Total 2021 1 | 2020 | 2019 | 2018 | 2017 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total inorganic emissions | 900 | 95 | 995 | 915 | 839 | 847 | 930 | |||||||
| NOx | 510 | 56 | 566 | 540 | 613 | 618 | 634 | |||||||
| SOx | 286 | 37 | 323 | 248 | 172 | 180 | 241 | |||||||
| Hydrogen chloride HCI | 33 | 2 | 35 | 45 | 33 | 33 | 40 | |||||||
| Ammonia NH3 | 71 | 0 | 71 | 82 | 21 | 16 | 14 | |||||||
| Total organic emissions (VOCs) | 307 | 67 | 374 | 413 | 543 | 439 | 208 | |||||||
| Particle emissions (fine particles) (in t) | 289 | 3 383 | 3 671 | 293 | 201 | 294 | 380 | |||||||
| Particle emissions (fine particles) (in g/t production) | 67 | 33 825 | 834 | 71 | 47 | 68 | 83 | |||||||
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1 Every three years, Clariant validates environmental data from all production sites. The last full reporting campaign was in 2020, including estimated discontinued data for Business Unit MasterbatchesMasterbatchesThese are plastic additives in the form of granules with dyestuffs or other additives used to dye or alter the properties of natural plastic. for first half-year. In interim years, including 2021, the reduced reporting scope comprises the larger sites responsible for at least 95 % of production.
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Scope 3 emissions
The majority of greenhouse gas emissions at Clariant fall under »Scope 3« emissions. In the context of the Group climate strategy, Clariant aims to reduce these emissions and has approved science-based targets for purchased goods and services (Category 1). In 2020, Clariant analyzed the carbon footprint of purchased raw materials. In 2021, the company focused on priority suppliers, created supplier engagement resources, collected supplier-specific emission factors, and developed reduction plans. Together with other members of the Together for Sustainability (TfS) initiative, Clariant formed a work stream focused on increasing transparency and enabling emission reductions in the value chainValue chainThe value chain describes the series of steps in the production process, from raw materials through the various intermediate stages to the finished end product.. Read more about TFS
In 2021, Clariant undertook several steps to replace conventional raw materials with low-carbon alternatives. This includes the development of ethylene oxide derivatives from renewable sources in the joint ventureJoint ventureJoint ventures are all activities in which Clariant is involved with another partner. The accounting method applied for joint ventures depends on the specific conditions of the participation. with India Glycols.
Clariant uses standard emission factors based on industry average databases to calculate its Scope 3, Category 1 emissions. If available from suppliers, it also considers supplier-specific emission factors after going through an internal validation process. This monitoring allows the company to generate transparency, identify hotspots and reduction opportunities in its value chainValue chainThe value chain describes the series of steps in the production process, from raw materials through the various intermediate stages to the finished end product., influence suppliers, and induce innovation. Between 2020 and 2021, Clariant’s Scope 3 emissions from continuing business increased by 8 %, primarily due to increased emissions from purchased goods by 10 %. Compared to 2019, the Scope 3 emissions of the continuing business have decreased by 3 %, while the purchased goods and services emissions have decreased by 1 %. In relation to sales, the emission intensity of Clariant 2021 continuing business has decreased by 5 % compared to 2020 and by 3 % compared to 2019. This reflects the improvement projects executed during the year, while the remaining strategic roadmap will be the continuously implemented in the upcoming years.
To provide extensive reporting for the Dow Jones Sustainability Index (DJSI) and the Carbon Disclosure Project (CDP), Clariant voluntarily reports on its Scope 3 emissions. It focuses on the categories deemed most relevant for its business: the greenhouse gas emissions from purchased raw materials, fuel- and energy-related activities (not included in Scope 1 or 2), upstream and downstream transportation and distribution, and end-of-life treatment of sold products.
Indirect (Scope 3) GHG emissions
| Continuing operations | Discontinued operations | Total 2021 2 | 2020 continuing operations | Total 2020 | 2019 continuing operations 1 | Total 2019 1 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross indirect (Scope 3) GHG emissions (in m t CO2e) | 3.61 | 0.69 | 4.31 3 | 3.34 | 4.20 | 3.73 | 4.78 | |||||||
| Gross indirect (Scope 3) GHG emissions (in kg CO2e/CHF sales) | 0.83 | 0.76 | 0.82 | 0.87 | 0.81 | 0.85 | 0.73 | |||||||
| Purchased goods and services | 2.70 | 0.50 | 3.19 3 | 2.46 | 3.12 | 2.72 | 3.44 | |||||||
| Fuel- and energy-related activities (not included in Scope 1 or Scope 2) | 0.16 | 0.16 | 0.32 | 0.13 | 0.27 | 0.14 | 0.29 | |||||||
| Upstream transportation and distribution | 0.11 | 0.01 | 0.12 | 0.11 | 0.12 | 0.12 | 0.17 | |||||||
| Downstream transportation and distribution | 0.14 | 0.00 | 0.15 3 | 0.12 | 0.12 | 0.13 | 0.14 | |||||||
| End-of-life treatment of sold products | 0.50 | 0.02 | 0.52 | 0.52 | 0.56 | 0.62 | 0.76 | |||||||
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1 The data has been restated in consideration of changes in estimates or discovery of errors in previous years’ data as part of the 2030 sustainability target-setting activities (with 2019 baseline).
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2 The Scope 3 data does not include all related Süd-Chemie India Pvt. Ltd. emissions.
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3 All figures are rounded, resulting in discrepancies between the total emissions and the breakdown figures.
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Task Force on Climate-Related Financial Disclosures
The framework developed by the Task Force on Climate-Related Financial Disclosures (TCFDTCFDThe Task Force on Climate-related Financial Disclosures (TCFD) was created by the Financial Stablity Board to improve and increase reporting of climate-related financial information. The Task Force developed recommendations for more effective climate-related disclosures that promote more informed investment, credit, and insurance underwriting decisions and, in turn, enable stakeholders to understand better the concentrations of carbon-related assets in the financial sector and the financial system´s exposures to climate-related risks. More information: www.fsb-tcfd.org) makes it possible to systematically manage and report on the risks, mitigations, and governance resulting from the threats of a changing climate. The Task Force recommends four core elements: governance, strategy, risk management, and metrics and targets.
Clariant recognizes that climate change has an impact on its operations and markets, and vice versa. Since the beginning of 2021, the company has been a supporter of TCFD. In the coming years, it will report on risks and opportunities according to TCFDTCFDThe Task Force on Climate-related Financial Disclosures (TCFD) was created by the Financial Stablity Board to improve and increase reporting of climate-related financial information. The Task Force developed recommendations for more effective climate-related disclosures that promote more informed investment, credit, and insurance underwriting decisions and, in turn, enable stakeholders to understand better the concentrations of carbon-related assets in the financial sector and the financial system´s exposures to climate-related risks. More information: www.fsb-tcfd.org with increasing granularity as it develops deeper insights.
Clariant’s approach for the first TCFDTCFDThe Task Force on Climate-related Financial Disclosures (TCFD) was created by the Financial Stablity Board to improve and increase reporting of climate-related financial information. The Task Force developed recommendations for more effective climate-related disclosures that promote more informed investment, credit, and insurance underwriting decisions and, in turn, enable stakeholders to understand better the concentrations of carbon-related assets in the financial sector and the financial system´s exposures to climate-related risks. More information: www.fsb-tcfd.org reporting year was driven by the Sustainability Transformation team, together with the business units and departments such as Enterprise Risk Management, Communications, Operations, Environmental Safety and Health Affairs (ESHA), and Procurement. Risk and opportunity assessment workshops were complemented by a gap analysis and an alignment of governance and reporting.
In the coming years, Clariant envisions a deep-dive into the risks and opportunities assessment, an enhanced scenario analysis considering different climate scenarios, and a more detailed development of corresponding strategies.
Governance
Clariant is committed to reducing its footprint and helping customers and downstream users improve their sustainability performance.
The governance structure reflects Clariant’s responsibility for a sustainable future: At the beginning of 2021, Clariant changed its organizational structure to improve the integration of sustainability and innovation. The new Group Innovation & Sustainability (GIS) unit and the Innovation & Sustainability Committee and Council set sustainability and climate targets as well all strategies, while also ensuring their execution.
The highest governance level for climate-related risks and opportunities is the Board of Directors’ Innovation & Sustainability Committee. The committee meets at least four times a year. It monitors and assesses sustainability policies and strategies, including climate risk management. It also monitors sustainability KPIs, including Scope 1, 2, and 3 emissions reductions. It is chaired by a designated member of the Board and is composed of four members of the Board, including the Chairman of the Board as well as the CEO and Chief Technology Officer (CTO) ex officio.
The Innovation & Sustainability Council ensures that climate-related aspects are considered in the company’s strategy and operations. The Council meets quarterly and reports relevant climate-related outcomes, including risks and opportunities, to the Board of Directors’ Innovation & Sustainability Committee. It is chaired by the Chief Transformation Officer, who is a member of the Executive CommitteeExecutive CommitteeManagement body of joint stock companies; at Clariant the Executive Committee currently comprises four members., as well as the Chief Technology Officer as co-chair, and includes all EC members, the head of Sustainability Transformation, the innovation heads of the business units, and the head of the GIS Program Management Office as permanent members.
At an operational level, two core teams led by the Sustainability Transformation group steer the Scope 1, 2, and 3 purchased goods and services emissions. These teams include business unit representatives and relevant functions. Their mission is to support the development of concrete roadmaps for progressing in Clariant’s climate targets, and to identify investment needs, risks, and mitigation activities. The teams periodically report progress as well as risks and proposed mitigations to the Innovation & Sustainability Council and Committee for guidance. Risk mitigation proposals are reported by the teams to the Executive CommitteeExecutive CommitteeManagement body of joint stock companies; at Clariant the Executive Committee currently comprises four members. for approval.
Strategy
Clariant has conducted an initial qualitative assessment of its climate-related transition, physical risks, and opportunities. To this end, Clariant considered the climate change mitigation scenario that includes an increase in global temperature by less than 2°C above preindustrial levels (the »well below 2°C scenario«). Additionally, the assessed risks and opportunities were assigned to three time horizons (short-term: 1–3 years, medium-term: 3–10 years, and long-term: 10–25 years). Main mitigation strategies were described as well. From 2022 onwards, this analysis will be further developed to include a scenario analysis and quantitative assessments.
In 2021, workshops were carried out to review all relevant TCFDTCFDThe Task Force on Climate-related Financial Disclosures (TCFD) was created by the Financial Stablity Board to improve and increase reporting of climate-related financial information. The Task Force developed recommendations for more effective climate-related disclosures that promote more informed investment, credit, and insurance underwriting decisions and, in turn, enable stakeholders to understand better the concentrations of carbon-related assets in the financial sector and the financial system´s exposures to climate-related risks. More information: www.fsb-tcfd.org recommended risks and opportunities, including specific impacts for Clariant, potential financial impacts, the likelihood and size of impact to determine materiality, and the identification of main initiatives that address the identified material risks and opportunities. The result of the analysis, i.e., Clariant’s material risks and opportunities, is described in the climate-related risks and climate-related opportunities tables.
Clariant’s corporate carbon intensity is relatively low. Considering that the initiatives listed in the tables are already in place, Clariant’s strategy is well set up to overcome the climate challenges ahead.
Climate-Related Risks
Well below 2°C scenario
Policy and legal
Emergence of minimum requirements or performance standards tied to energy consumption or GHG emissions control, carbon taxes, and carbon pricing mechanisms, leading to increased energy and raw material costs
Short to long term
Science-based targets 40 % absolute emission reduction in own operations by means of efficiency and use of renewable and low-carbon energy sources; and 14 % from purchased goods and services
Energy efficiency projects (e.g., eWATCH and YEE and other digitalization efforts linked to improved operations)
GHG impact assessment and internal carbon pricing for M&As and CAPEX investments above CHF 1 million ensure identification of best ROIC for carbon reduction
Consistent monitoring of policy developments, enabling quick action to address or reduce exposure
Technology
Cost to transition to low-carbon emitting technologies regarding production and innovation, delay in getting new low-carbon products to market, market shift to competitor’s low-carbon technology products
Medium to long term
GHG impact assessment and internal carbon pricing, as described in category: Policy and legal
Portfolio Value Program (PVP) (R&D) screenings for products in development ensure early identification of substitution threat or particularly high climate pressure. Idea to Market process ensures customer voice in product design, lowering likelihood of developing low-carbon products missing market needs
Strategic roadmap for emission reductions in Scopes 1 and 2, increased sustainable low-carbon feedstocks uptake supporting our Scope 3 target achievement, and innovative product offering supporting a low-carbon economy (e.g., catalysis, sunliquid, etc.)
Procurement scouting of renewable and low-carbon technologies for potentially new solutions in APAC
Market
Substitution of existing products and services with lower emissions options; changing customer behavior; uncertainty in market signals
Medium to long term
Science-based targets, GHG impact assessment, and internal carbon pricing, as described in category: Policy and legal
PVP (R&D) screenings, Idea to MarketIdea to MarketCore business activities that create additional value are structured into three value creation phases at Clariant. Idea to Market encompasses scouting global trends and ideas, scoping out customer needs, executing product development and commercializing, and monitoring product performance. process, and strategic roadmap for emission reductions in Scopes 1 and 2, as described in category: Technology
Use of GHG-related policy and market pressures as key criteria for prioritizing segment product portfolio strategy to ensure competitiveness in low-carbon technologies
Automated product carbon footprint calculation tool for Clariant’s portfolio
Reputation
Stigmatization of sector, increased stakeholderStakeholderStakeholders are people or groups whose interests are linked in various ways with those of a company. They include shareholders, business partners, employees, neighbors, and the community. concern or negative stakeholderStakeholderStakeholders are people or groups whose interests are linked in various ways with those of a company. They include shareholders, business partners, employees, neighbors, and the community. feedback
Medium to long term
Science-based targets, as described in category: Policy and legal
Climate net zero operations by 2050 at the latest under consideration
Strategic roadmap for emission reductions in Scopes 1 and 2, as described in category: Technology
Use of GHG-related policy and market pressures as key criteria for prioritizing segment product portfolio strategy to ensure competitiveness in low-carbon technologies, specifically supporting the transition of markets under pressure via innovation (e.g., Blue hydrogen project, adsorbents to biofuels, EV-based projects, e.g., flame retardants, etc.)
Climate-related opportunities
Well below 2°C scenario
Products/services and markets
Increased corporate value and revenue from products with innovative technology that can contribute to mitigation and adaptation of climate change
Short to long term
Clariant has a portfolio of leading industrial catalysts, as well as low-carbon intensity and circular products, which help our customers achieve their climate targets. Such products may experience increased demand.
Automated calculation and disclosure of product carbon footprints
Execution of BU strategies for low-carbon products, also via PVP (R&D) screenings for all products in development, ensures early identification of substitution threat or particularly high climate pressure. Idea to Market process ensures customer voice in product design, lowering the likelihood of developing low-carbon products missing market needs.
GHG impact as key criteria for segment product portfolio strategy to ensure portfolio competitiveness in low-carbon technologies
Consistent monitoring of policy developments (e.g., Advocacy forum as a place to discuss policy developments and their impact on the company)
Use of GHG-related policy and market pressures as key criteria for prioritizing segment product portfolio strategy to ensure competitiveness in low-carbon technologies
Risk management
Clariant evaluates and monitors the company’s risks, including climate-related ones, in accordance with the Enterprise Risk Management (ERM) process. Clariant continuously analyzes the potential impact on financial performance, the potentially affected products, and suitable strategic steps to seize opportunities and minimize risks. Measures are reported annually to the Board of Directors based on threat and opportunities to the business.
To further improve Clariant’s climate-related risk and opportunity assessment, multiple scenarios for physical and transition risks will be used in the coming years. This approach will be integrated into the ERM process, enabling an improvement of our disclosure.
Metrics and targets
Clariant’s climate-related metrics and targets are available in the chapter »Environmental protection and resource efficiency« as well as in »Climate protection,« in the CDP questionnaire, and on thecompany’s website.
Since the 2021 financial year, Clariant’s emissions reductions have been part of short-term incentive remuneration for members of the Executive CommitteeExecutive CommitteeManagement body of joint stock companies; at Clariant the Executive Committee currently comprises four members. and Global Management.
To integrate emissions in Clariant’s investment decisions, the company has developed a carbon pricing scheme that applies a monetary value on greenhouse gas emissions for all major capital expenditures and mergers and acquisitions.
In 2021, Clariant has also developed internal dashboards, the so-called »Sustainable Operations Cockpit« (SOC), allowing for a monthly update and monitoring of the emissions associated with own operations, as well as the Scope 3 dashboard for purchased goods.