ANNUAL REPORT 2011

In addition to further strengthening its operational and technological basis for profitable growth in business year 2011, Clariant also focused this base rigorously on sustainability aspects, thereby taking into account both its corporate and social responsibility. From the business point of view, this is critically important in two ways. First, particularly in challenging times, companies that are sustainably managed and act responsibly are proven to be more successful in the long term. In addition, the wide range of innovations developed on the basis of sustainability generates added sales and earnings potential.

Global population growth, increasing standards of living, and globalization have opened up many possibilities but at the same time, have brought many challenges: Ever scarcer raw materials and energy sources have to be spread over more and more people. Responsible and efficient use of the available resources is imperative for us, and all the more so for future generations. 

Sustainability-based management significantly increases the Group’s competitiveness, generating value, which also addresses the capital markets’ requirements. This is a further reason why sustainability is firmly anchored in Clariant’s corporate strategy. 

Long-term planning, not short-term thinking 

Clariant believes it has a duty to use resources sparingly and respect the environment, from a pure business point of view apart from anything else. This also includes ensuring a sound and performance-enhancing working environment, guaranteeing mutual respect, and – where appropriate – participating in campaigns to improve the social climate. 

Clariant has set itself the specific objectives of steadily reducing its relative consumption of water and energy, and generating less waste and pollutant emissions. In addition, plant safety is to be increased still further and products improved through ongoing research. By implementing its sustainability objectives, Clariant is assuming responsibility for the environment, its employees, its customers, and society, particularly through intensive and transparent communication with the relevant stakeholders. 

Clariant’s focus on innovation also strengthens the company’s future economic viability. The company’s main opportunities here lie in the development of innovative products, including those based on renewable raw materials. Innovative products should, furthermore, minimize risks and waste in production. The optimization of internal processes is also in the interest of our customers, who benefit from tailored solutions. 

Sustainability is very important at Clariant. This is demonstrated by the publication of the company’s detailed Sustainability Report, which received the GRI Level “A” for standards of reporting on sustainability from the Global Reporting Initiative (GRI) in 2010. Through its product innovations and commitment to sustainability, Clariant is also making a contribution to mastering the global challenges of our time in process management. These challenges include sufficient food, water, and energy; effective climate protection; and securing quality of life for an ever increasing global population. Newly launched products which help to save energy and resources, such as brands like EcoTain®, or the products made under the CleanTech® label by Süd-Chemie, highlight Clariant’s orientation toward sustainable markets of the future. 

You can find more detailed information on www.sustainability.clariant.com

Sustainability made systematic, with detailed rules 

Over the past years, Clariant has made considerable efforts to structure operational processes even more rigorously in line with sustainable management, align them with ambitious goals, and continuously optimize them. This is also reflected in the ESHA management system (Environmental, Safety, and Health Affairs), which forms part of our Group-wide process and strategy planning. 

The management system includes a periodic compliance test of actual business performance and ongoing goal reviews. Clariant has a global and local emergency management system and can react to incidents immediately and with a high degree of effectiveness. 

The Sustainability Council was implemented in business year 2011. It consists of representatives of the Business Units, Group functions, and business regions. The Council develops mid- to long-term goals and standards and evaluates the global challenges of sustainable development, in accordance with Clariant’s activities and product portfolio. This ensures that sustainability at Clariant is assessed and managed holistically. 

Increased sustainability through international standards 

As a leader in the specialty chemical industry, Clariant goes beyond legal requirements and participates in several voluntary sustainability programs, including voluntary commitments as part of Responsible Care® under the Global Responsible Care Charter and Global Product Strategy. 

The guiding principle of these programs is continuous improvement of health, safety, and environmental protection as well as product quality from the point of view of sustainability. Accordingly, Clariant is certified to ISO 9001, ISO 14001, and OHSAS 18001 all over the world. All production facilities have to adhere rigorously to the applicable rules on environmentally friendly and safe operations. 

Life cycle thinking delivers far-reaching sustainability 

To ensure sustainability from the initial product idea through production to the product’s application by the customer, Clariant has extended the life cycle concept to the entire process chain. At Clariant, environmental protection begins in product design and development. Taking both ecological and economic aspects into account, we examine raw materials and the manufacture, distribution, usage, and disposal of products, and take into account potential criteria for eco-efficiency. This aims to make the manufacture and application of products safer from the point of view of health and the environment – particularly by replacing scarce resources with bio-based, renewable raw materials. 

Clariant also pursues a clearly defined philosophy in resource management. In a subsequent stage, the energy required for production is determined by means of a detailed input-output analysis. In accordance with that analysis, operational excellence criteria, and optimization potential in the process or product itself, are established. 

The same procedure is applied to air emissions and water contamination. Production does not start until the optimum balance of requirements feasible according to the state of the art is found. This approach has helped Clariant make measurable improvements in virtually all environmental areas in past years. Risks inherent in production facilities are systematically ascertained and analyzed in order to determine and realize potential for improvement. 

Clariant works very closely with its customers to ensure safe and efficient product handling. Optimum applications and processes are discussed. Possible interactions with other chemicals used must be taken into account since life cycle thinking also includes dealing with the environmental impact of a product manufactured by Clariant after it is used. To this end, environmental compatibility and recyclability of residual materials are investigated; the aim is to eliminate negative effects or at least reduce them to the greatest extent possible. 

Respectable performance on environmental issues 

Clariant has made improvements according to key environmental indicators in the last few years, with the absolute consumption of energy, resources and emissions falling considerably in some areas. This can be attributed to Clariant’s deploying increasingly efficient production processes, but also to the fact that sales and therefore production fell sharply in 2008 and 2009. 

The recovery of the global economy in 2010 and the first half of 2011 has seen Clariant’s manufacturing output rise substantially again, a fact inevitably reflected in absolute terms in the relevant environmental indicators. However, relative consumption and relative pollution continued to fall. For example, carbon dioxide emissions per tonne of volume produced have fallen substantially – by approximately 50 percent – since 2005, to less than 120 kilograms in 2011. 

All these efforts are aimed at enabling Clariant to pay shareholders a reasonable return on their invested capital over the long term. The Sustainability Report 2011 contains a detailed overview with many facts, figures, and product examples. 

Additional sales and earnings potential from sustainability focus 

The strong commitment of everyone in the Clariant Group to manage sustainability and at the same time respond to customer needs generates a high level of additional sales and earnings potential. Many of the innovations the Group develops on the basis of sustainability address future megatrends such as environmental protection, energy efficiency, resource management and renewable energy sources.

Clariant Sustainability Policy

Commitment & Clariant Excellence 

Clariant commits itself to ethical and sustainable operation and development in all business activities according to Responsible Care® and Clariant’s own Code of Conduct. Clariant strives for a business culture of continuous improvement as well as for sustainable competitiveness and top performance in consideration of Clariant’s ethical standards. 

Responsibility 

Clariant bears an ethical responsibility for sustainable, economic and ecological, as well as fair, business practices. Corporate Social Responsibility is therefore an integral component of our company's philosophy. All Clariant employees are educated and trained to assume responsibility in line with their function, level of authority, and qualification. 

Clariant’s Management System 

Clariant’s certified Management System adheres to all internal and external standards to which Clariant subscribes and forms the company’s documented structural framework as the basis for objectives and programs. The system complies with ISO 9001, ISO 14001, OHSAS 18001, and Responsible Care®. Achieving and maintaining a high level of quality across all aspects of our businesses, our ESH related activities, Social Responsibility and Responsible Care®, is our understanding of Corporate Sustainability. 

Compliance 

Compliance with laws, international standards, internal regulations, and Clariant‘s Code of Conduct is a basic requirement for all our activities. Clariant appreciates voluntary initiatives and provides adequate support to develop effective and efficient safety, health and environmental regulations. 

Safety and Environment 

One of Clariant’s most important objectives is the safety of its worldwide activities and the protection of people and environment. We set protection goals which are valid throughout the entire group and monitor and evaluate all aspects of our activities. 

Risk and Emergency Management 

Comprehensive assessment of risks related to our operations and products are prerequisite to our business processes. Local and global emergency organization is in place to ensure comprehensive emergency management and response. 

Innovation and Product Stewardship 

We are convinced that it will be essential to understand our customers’ needs. Innovation and customer focus is the key to our business. We permanently develop better and new products and services to add value to our customers and to our environment. Concurrently we secure that our products can be used over their entire life cycle in a safe manner for employees, customers, the public and the environment. 

Sustainable Operation and Processes 

We take initiatives to reduce environmental, safety and health risks in production, storage, distribution and usage of our products and the disposal of waste. This includes the efficient use of energy and resources and the continuous improvement of our processes to minimize the impact of our activities on the environment. 

Third Party Management 

Our aim is to establish mutually beneficial relationships with our third party suppliers and contractors in order to support our services on the basis of our internal ESHQ standards, which include Corporate Social Responsibility and Responsible Care®. We encourage our suppliers and service providers to adopt standards comparable to Clariant’s policies. 

Communication 

Clariant fosters a culture of proactive and transparent communication as key to trusting and reliable relationships. All stakeholders are regularly informed about our activities, our targets and our ESHQ performance. We identify the concerns and expectations of our stakeholders systematically. 

Monitoring and Review 

We monitor and review all business aspects and processes including Responsible Care® issues at regular intervals. Observing our quality and performance is an integral component of our business processes, our top priorities and our strategic planning. 

Life Cycle Thinking on Product Level

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“Sustainability@Clariant underpins our constant efforts to ensure sustainable chemicals production.”

Interview with Joachim Krüger, Vice President Corporate ESHA

Joachim Krüger
Clariant pursues a strategy called Sustainability @clariant. What goals are you aiming for with this strategy? 

Joachim Krüger: Sustainability@Clariant underpins our constant efforts to ensure sustainable chemicals production. Our aim is to produce chemicals by minimizing undesirable effects on the environment. And we want to use as few materials and as little energy as possible in their production. Our main priority in doing so is finding the optimum balance in the triple-bottom-line approach for people, planet, and profitability, and to satisfy the customer needs. 

What areas does Sustainability @clariant cover? 

Joachim Krüger: All the relevant ones. That means we are not only dealing with environmental issues, but also with safety in the production, transportation, and use of the products. We are also overseeing aspects of health protection in both the production process and the handling by our customers. 

So sustainability @clariant also covers the area of product responsibility? 

Joachim Krüger: I would go so far as to say it is a specific focus. We want to handle chemicals and our products responsibly, on all levels: together with our suppliers, in our own production facilities, and with our customers. An intensive exchange of ideas and opinions takes place here regarding applications and possible risks; we will keep on reducing the latter. 

Does every department or production facility implement this program itself? 

Joachim Krüger: Naturally, our employees on site have to implement Sustainability@Clariant under their own authority. However, the guidelines and requirements, as well as the application rules, are standardized and trained throughout the Group. Our Sustainability Council sets rigorous specifications here and strictly monitors compliance. The Council works in this process with coordinators in the regions and countries, in the Business Units, and the various corporate functions. After all, Sustainability@Clariant is part of the global Clariant management system and the way we work. 

Exolit®, Advanced Denim & EasyWhite

Exolit® 

Exolit® OP is an innovative, patented organo-phosphorus (OP) flame retardant. It was developed by Clariant specifically for technical plastics in the electrical and electronics sector. It contains no halogen compounds, which have come under attack because of potential damage to the environment and health. In the event of a fire, Exolit® OP suppresses the chemical reactions in the flame and forms a stable protective coating of carbonized material which keeps out oxygen and insulates against heat. All products in the Exolit® OP line have an excellent environmental and health profile. 

Advanced Denim 

Traditionally, denim is dyed with indigo in huge production lines that not only require vast quantities of water for the rinsing and purification processes but also consume large amounts of electricity. Apart from this, many conventional processes generate massive volumes of cotton waste and involve the use of chemicals such as hydrosulfites during dyeing and hypochlorite in the post-treatment and wash-down stages. Now the new Diresul Indicolor dyes from Clariant set a new benchmark in denim production that unites technological and ecological advantages. 

EasyWhite Tan process with Granofin® Easy F-90 

Apart from Granofin® Easy F-90, no other tanning agents are needed. One third fewer chemicals are therefore used, and the environmental impact caused by the production and transportation of these chemicals is reduced accordingly. The volume of effluents is halved – even more water can be saved by optimization measures, and the remaining effluents are less polluted because chrome is completely eliminated. Salt pollution drops by 80 percent, which also benefits the environment. 

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