CREATING VALUE FOR THE FUTURE ACHIEVEMENTS, CHALLENGES, AND FUTURE ENDEAVORS

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1 CREATING VALUE FOR THE FUTURE ACHIEVEMENTS, CHALLENGES, AND FUTURE ENDEAVORS Joachim Krüger Head of Corporate Sustainability & Regulatory Affairs Clariant

2 2 Sustainability as a value driver MANAGING RISKS & CAPITALIZING ON OPPORTUNITIES The world is changing. Future economic success implies sustainability and social responsibility. Customers and markets are increasingly aware and sensitive to sustainability. Governments and Regulators require or rate ESG aspects (Environment Social Governance) of companies. Understanding where and how sustainability plays a role in our markets is key. Thereby, sustainability is built in Clariant s value proposition and customer engagement. Embedding sustainability in Clariant s processes is happening in many ways. The company has already received recognition for its efforts.

3 3 Milestones of Clariant s commitment to Sustainability RESPONSIBLE CARE GLOBAL CHARTER signed FIRST SUSTAIN- ABILITY REPORT published ENVIROMENTAL TARGETS 2020 established SUSTAINABILITY REPORT rated at GRI A+ UN GLOBAL COMPACT signed DJSI INDEX EUROPE entered DJSI INDEX WORLD AND EUROPE top ranking SUSTAINABILITY anchored in Corporate Strategy FIRST RSPO CERTIFICATION received TOGETHER FOR SUSTAINABILITY (TFS) membership GRI4 REPORTING STANDARD applied

4 4 Five-Pillar-Strategy Achieving financial targets and sustainable success Corporate strategy: The sustainability strategy pillar has been added in the second half of 2014,»Add value with sustainability« Increase Profitability Reposition Portfolio Add Value with Sustainability Foster Innovation and R&D Intensify Growth STRATEGY TO INCREASE PERFORMANCE

5 5 A key role in the group s growth objectives For Clariant, sustainable economic practices mean the creation of long term added value and benefits for all interested groups in economical, ecological and social respects PEOPLE: How Clariant takes care of his people and engages with communities and society. PLANET: How Clariant operates its facilities and handles its products. PERFORMANCE: How Clariant steers the portfolio and product development.

6 6 People RECRUITING DEVELOPING BUSINESS STRATEGY PEOPLE PERFORMANCE BUSINESS SUCCESS Safety Counts OCCUPATIONAL SAFETY Clariant is an industry leader in occupational safety and is dedicated to reducing accidents to the minimum. RETAINING HIGH-PERFORMANCE CULTURE Clariant is setting out to establish and sustain a high performance culture which reflects our vision of becoming the world s leading specialty chemicals company. CCA Projects CORPORATE CITIZENSHIP Clariant is determined to be a model corporate citizen, and actively supports various community and societal initiatives in all regions it operates in.

7 7 Planet Operational efficiency protecting the environment, reducing costs OPERATIONAL EXCELLENCE CLARIANT S ENERGY SAVING PROGRAM CERTIFIED MANAGEMENT SYSTEM

8 8 Performance Focus on product portfolio: combining benefits and impact The approach to sustainable value goes beyond the reduction of negative impacts of products (»footprint«). It also comprises the delivery of and increase of social and environmental benefits (»handprint«). COMMUNITY USAGE BENEFITS SOCIAL PROGRESS INDIVIDUAL WELL-BEING ECOSYSTEM PROTECTION INCREASING THE BENEFITS REDUCING THE IMPACTS HARMFUL SUBSTANCES LAND DEPLETION ENERGY CO2 SOCIAL IMPACTS WATER & WASTE HOW EFFICIENTLY AND SUSTAINABLY PERFORMANCE IS DELIVERED TO SOCIETY Source: CSCP

9 9 The Portfolio Value Program: the home for discovering EcoTain products The Portfolio Value Program implements tools and processes to screen and move Clariant s product portfolio towards increased sustainability performance. With a focus on holistic and life cycle thinking and through its innovative processes, criteria and screening, it supports: the continuous improvement of the full product portfolio, and the identification of EcoTain products and solutions with credible claims and proof points The PVP is developed with the Collaborating Centre on Sustainable Consumption and Production (CSCP), a renowned»think and do tank«founded by the UNEP and the Wuppertal Institute.

10 10 The PVP criteria and screening: three brand values, six categories, numerous criteria Using criteria that cover a comprehensive set of sustainability topics, our products and solutions are measured across the Triple Bottom Line perspective that reflects the three brand values: People, Planet and Performance.

11 11 Two-sided look at product sustainability ASSESSMENT AGAINST SUSTAINABILITY PERFORMANCE AGAINST THE MARKET How sustainable is the product compared to the market standard? Is the sustainability performance of the products helping to raise the market standard? SUSTAINABILITY RISKS & BENEFITS How sustainable is the product in absolute terms? Assessing direct and indirect added value and impact specific to each criterion

12 12 The EcoTain Label our approach to sustainability EcoTain is our flagship label for sustainability excellence products and solutions. It highlights solutions offering outstanding sustainability advantages and add value to customers and the society as a whole. Each product and solution carrying the EcoTain label has undergone a systematic, in-depth screening process using 36 criteria in all three sustainability dimensions: social, environmental and economic. Its ambitious benchmark distinguishes products that significantly exceed market standards in general, have best-in-class performance in one or several criteria, and make overall sustainability contributions. EcoTain products support actively the sustainability efforts of our customers, without compromising on performance.

13 13 Portfolio screening transparency for further improvement 84 % of turn-over of portfolio screened CLARIANT PORTFOLIO EVALUATION 76 % of screened product portfolio already fulfil Clariant s sustainability definition Over 60 products excelled with the EcoTain label for their best-in-class sustainability performance and sustainability benefits across the value chain Innovation and value chain collaboration for continuous improvement of product portfolio. 76 % > 60 EcoTain Products Sustainability Roadmap to address portfolio hotspots Meeting Clariant's Sustainability Definition Not meeting Clariant's Sustainability Definition

14 14 Product Portfolio Improvement Roadmap Ensuring a continuous improvement of a product portfolio with a Sustainability Roadmap EXAMPLE 1: Heavy metal based pigments in masterbatches Customer/product identification Heavy-metal based pigments in masterbatches Customer interaction Active recommendation of alternative masterbatches/ product phase-out From several months to years: phasing out roadmap products

15 15 Product Portfolio Improvement Roadmap Ensuring a continuous improvement of a product portfolio with a Sustainability Roadmap EXAMPLE 2: Catalysts containing chromium VI (CrVI) CrVI Catalysts CRVI-FREE ALTERNATIVE Innovation project Product development Registration & Qualification Product launch From several months to years: developing alternatives for roadmap products

16 16 EcoTain example: Invoque TM Sediment Management Clariant s sustainable sediment management solution INVOQUE provides an innovative approach to deal with stressed waterways and water bodies, mining runoffs and tailings, and civil engineering mud recovery. Non-toxic, mineral-based technology Acrylamid-free, no environmental or regulatory risk Improved energy consumption in filtration process leading to reduced costs High purity water runoff, meeting highest regulatory standards Improved de-watering rates and operational costs Reduces sediment volume by delivering higher solids sediment within a shorter time

17 17 EcoTain example: Quinacridone Hostaperm Pink E One of the intermediates to produce Quinacridone pigments is succinic acid. As one of the first pigments producers Clariant uses bio-based succinic acid that is derived form renewable sources. High tinctorial strength and outstanding fastness properties. No hazard labeling required Suitable for water-based colorants enabling eco-labels Product based on renewable raw materials (succinic acid) Lower greenhouse gas emissions due to up to 90% lower energy consumption No performance drop-off (identical product specification as standard product) Intensive collaboration with raw-material supplier and customers for development

18 18 Stakeholder involvement and communication Active involvement of and dialogue with internal and external stakeholders was key for the development of the PVP screening criteria and EcoTain. Roll-out internally with global communication activities and externally through marketing measures and case study. EXTERNAL Stakeholder survey (Customers, Policy Makers, NGOs) Accompanied by NGO Marketing activities and feedback from customers INTERNAL Internal Visioning Workshop EcoTain Review Panel Internal Communication Global Roadshow

19 19 Anchoring sustainability in business processes Internal Sustainability Campaign &»Discover Value«Roadshow

20 20 Sustainability fuels Innovation CSIR&D PVP screening SUSTAINABILITY IN INNOVATION CHAIN Sustainability tool (CSIR&D) for assessment of major innovation projects. VALUE CHAIN COLLABORATION Through customer innovation workshops, sustainability value-add can be captured. Proprietary index that indicates relative sustainability of products.

21 21 CREATING VALUE FOR THE FUTURE