61
Clariant Sustainability Report 2010

Clariant Sustainability Report 2010

Embed Size (px)

Citation preview

Page 1: Clariant Sustainability Report 2010

Clariant Sustainability Report 2010

SAP-

Nr.

1099

792

Page 2: Clariant Sustainability Report 2010

Clariant FiguresKey FIguReS 2010 2009

CHF mn CHF mn

Sales 7 120 6 614

Operating income before restructuring, impairment and disposals 696 270

Net income/loss 191 – 194

Operating cash flow 642 757

Total assets 5 921 6 092

Total equity (including non-controlling interests) 1 806 1 896

Investment in property, plant and equipment 224 135

Staff costs1, 2 1 479 1 555

R&D costs 135 150

Basic earnings per share CHF 0.81 – 0.911 Staff number: 16 176 (2010) 2 Excluding exceptional personnel costs

SaLeS by buSIneSS unItS

CHF mn

Total 2010: 7 120

Industrial & Consumer Specialties 1 526 21 %

Masterbatches 1 260 18 %

Pigments 1 168 16 %

Textile Chemicals 821 12 %

Oil & Mining Services 604 8 %

Leather Services 326 5 %

Performance Chemicals* 1 415 20 %

* Performance Chemicals includes the BUs Additives, D & I, Emulsions, Paper Specialties

SaLeS by RegIonS

CHF mn

Total 2010: 7 120

Europe 2 977 42 %

MEA* 552 8 %

North America 860 12 %

Latin America 1 199 17 %

Asia/Pacific 1 532 21 %

* Middle East and Africa

Page 3: Clariant Sustainability Report 2010

Index

Foreword Page 4

01 Sustainability as a corporate objective Page 6

Social responsibility of a globally active chemical company p. 7, Strategic implementation with efficient management systems p. 7, Voluntary action is essential for lasting success p. 8

02 Corporate Governance Page 12

Company organization p. 13, Management of the Group p. 13, Compensation policy p. 14, Code of Conduct p. 14, Compliance with legal requirements p. 15, Responsibility p. 15, Risk measurement and risk control p. 15

03 Safety system for sustainable management Page 18

Procurement and production p. 19, Storage and transport p. 20, Customer orientation p. 21, Qualified employees p. 21, Emergency management p. 22, Communications p. 22, Performance review and improvement p. 22, Polluted areas and soil decontamination p. 23, Site security p. 23

04 Sustainability in business operations Page 24

Responsibility in respect of suppliers and service providers p. 25, Responsibility for customers p. 27, Responsibility for employees p. 27, AvoidingAccidents @ Clariant p. 29, Energy 2010 project p. 30, Product Stewardship p. 32, REACH p. 35, Globally Harmonized System p. 36

05 Sustainability in detail Page 38

Energy p. 39, Water p. 40, Effluents p. 42, Waste p. 42, Air emissions p. 43, Noise emissions p. 44, Occupational health and safety p. 46, Plant safety p. 47, Economic performance and employee structure p. 47

06 The Clariant Group Page 50

GRI Content Index Page 56

Publication details Page 60

3

Page 4: Clariant Sustainability Report 2010

Dear Readers,

In the past, we have always informed you of our initiatives regarding sustainable management and responsible action in our annual report. This is the first separate Sustainability Report by the Clariant Group. After 15 years, Clariant can look back on a brief but successful company history. The recent past has been turbulent, marked by the financial crisis and a far-reaching reorientation of our Group. The aim of the measures associated with these changes, which are now largely complete, was to create a sound operational and technological basis for future profitable growth. However, they were also intended to realign our company according to the criteria of sustainability and corporate and social responsibility. These aims are intrinsically linked. In difficult times in particular, companies that are sustainably managed and that act responsibly are proven to be more successful in the long term.

Our focus on innovation and environmental protection strengthens our financial sustainability. It also contributes to increasingly efficient use of raw materials and energy. Our internal processes are thus being optimized, while at the same time our customers are benefiting from tailored solutions in the Business Units. In this way, Clariant is helping to find solutions to the global challenges of our time, such as food, water, energy, climate protection and, finally, quality of life for an ever increasing global population.

In this report you will find a wide variety of data and facts as well as examples of products – ranging from ingredients for completely biodegradable cleaning products, new directions in leather processing to toxicologically safe flame retardants for smartphones.

The issue of sustainability is firmly anchored in our corporate strategy. Sustainability-based management improves our performance and our competitiveness at international level considerably. At the same time, it strictly limits the burden on people, the environment and resources. The value that we generate through this also benefits our shareholders and meets the needs and requirements of the capital markets – which is truly a win-win situation for us all.

Foreword

4 Sustainability Report 2010

Page 5: Clariant Sustainability Report 2010

Hariolf KottmannChief Executive Officer

We are at the beginning of a process that will have an appreciable influence on our operations and activities. Clariant is aware of its responsibility to society, its employees and the environment and has been operating sustainably for a number of years. In the future, we will increasingly address the communication of these processes and provide transparent reports on the issue of sustainability in the Clariant Group.

We have already achieved a great deal and will make many further improvements. We will continue our committed efforts to this end in the business year 2011.

5

Page 6: Clariant Sustainability Report 2010

6 Sustainability Report 2010

Page 7: Clariant Sustainability Report 2010

Population growth, increasing standards of living and globalization have opened up many possibilities, but have also set us new challenges. More and more people are depending on declining quantities of raw materials. If future generations are to have the same room for maneuver as exists today, we must use the available resources considerably more efficiently and thus more responsibly. Moreover, increasing globalization also calls for people to be more committed and efficient. This brings with it massive social changes that must be taken into consideration.

Social responsibility of a globally active chemical companyIn light of these challenges, Clariant has a duty not only to act in the economic interests of its shareholders, but to use resources sparingly and respect the environment, to ensure a sound and performance-enhancing working environment, to guarantee mutual respect and – where appropriate – to participate in campaigns to improve the social climate.

With this knowledge and the willingness to implement sustainability objectives, Clariant assumes responsibility for the environment, its employees, its customers and society. Its objectives are to steadily reduce specific consumption of water and energy, generate less waste and pollutant emissions, further increase plant safety, improve products through ongoing research and step up communications with interest groups.

Clariant’s business opportunities lie in the development of innovative products whose composition, for example, is being reduced to ever fewer and increasingly renewable raw materials, with their production harboring less and less risk and generating an ever decreasing amount of waste. Their potential impact on people and the environment in further use is also being consistently reduced. Together, this is what sustainability means for us.

Nevertheless, there are also risks that need to be minimized and controlled. Risks exist, for example, in accidents that cannot be ruled out even with extreme precautions and in the possibility that the market will not reward the company’s degree of caution and effort and will consequently turn to cheaper products. However, Clariant can tackle this last point by convincing its customers of the advantages of its products and production processes – thus helping the environment and securing its financial future.

Strategic implementation with efficient management systemsClariant has developed guidelines to ensure product and production safety, and to limit the impact on the environment, health and safety (EHS). The key corporate objective of its activities is protecting people and the environment. To this end, the Group has drawn up a comprehensive list of rules and measures within EHS management, and implemented a Group-wide risk assessment. Employee training in this regard takes place regularly, and processes, procedures and measures are continually monitored both internally and by means of external audits.

Each of the some 120 Clariant plants worldwide is examined for potential risks and possibilities for optimization. The findings of these assessments are recorded in the Group-wide risk management system analyzed according to urgency and relevance, and subsequently implemented as far as possible. Furthermore, EHS criteria represent an element of Clariant’s business relationships. Suppliers, contractors and service providers are therefore inspected on a random basis. A careful selection takes place as part of procurement management, taking into account financial considerations and according to their purchasing and production processes as well as supply routes and supply systems in terms of sustainability. Together with customers, Clariant is working to make improvements throughout the process chain.

Sustainability as a corporate objective

7SuStainability aS a corporate objective

Page 8: Clariant Sustainability Report 2010

Clariant has therefore developed the EHS management system, which forms part of our Group-wide process and strategy planning. It comprises a continuous review of compliance, comparing regulations with actual business performance. All employees thus assume responsibility for the efficacy of EHS management, depending of their respective function, position and qualifications. Recurrent training sessions ensure that employees have the necessary practical knowledge. Open dialog boosts awareness and motivation. Clariant is able to react to incidents immediately and with a high degree of effectiveness thanks to its emergency management system and comprehensive catalog of measures.

For Clariant, however, sustainability is primarily about developing ever better products, processes and services. Customers should receive effective and cost-efficient products that enable sustainable management on their part. Clariant makes one of the most considerable contributions to sustainability through its innovations: as minimal an impact as possible and a high degree of effectiveness result in environmental sustainability, minimum waste and falling production costs. All of this is part of ongoing optimization of the process chain.

Clariant offers its employees the best possible working conditions. Compensation is in line with the market, performance-related and based on the success of the company. Clariant supports its employees and provides young people with thorough training. The aim is also for shareholders to receive a risk-appropriate return on their invested capital, and to increase positive effects and exclude negative effects as far as possible for all other persons associated with the company.

Clariant naturally respects human rights and opposes any form of forced or child labor. Freedom to form trade unions is explicitly respected and the rights to strike and to collective bargaining are also supported. Respect for employees and business partners in this context are just as important as a distinct culture of open communication.

Voluntary action is essential for lasting successClariant is firmly committed to the principle of sustainable business development, whether in production, transport and distribution, or the use of products and services. As a leading company 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 Charter Responsible Care and Global Product Strategy. These programs aim to continuously improve company performance in terms of safety, health, environmental protection and product quality with regards to sustainability. The objectives of these initiatives are the enhanced safety and environmental friendliness of products, and improved communication with customers and other stakeholders.

Clariant is deeply committed to environmental protection and safety in all of its activities and signed the Charter for Sustainable Development of the International Chamber of Commerce. The Group’s own Environment, Health and Safety (EHS) policy is based on the aims of this charter. Clariant has also been awarded global ISO 9001, ISO 14011 and OHSAS ISO 18001 certification. Each of the worldwide facilities is required to adhere strictly to the principles of clean and safe operations outlined by the corporate EHS department. Clariant also operates a global incident reporting and emergency management system.

Respecting customers, employees, neighbors and the environment strengthens Clariant’s partnership with groups upon whom its success in the current economic climate and in the future ultimately depends. Finally, through special HR programs, Clariant provides employees with the skill sets and resources necessary to conduct their work in an even more efficient and innovative manner. The company is making a major commitment to selecting, training and empowering the right people in its organization to drive continuous improvement.

8 Sustainability Report 2010

Page 9: Clariant Sustainability Report 2010

Grease stains on kitchen units, grime on baking trays, the most stubborn dirt. Every consumer needs effective cleaning products, but – and herein lies the problem – would like to protect the environment at the same time.

Resolving this apparent conflict was a major objective of Clariant’s ICS Business Unit. A long time was spent on intensive research, with grease and grime stains first being produced in the laboratory only to test thereafter how they could be removed in an environmentally friendly manner. Ultimately with great success: these efforts resulted in the product Genaminox® CHE – a liquid containing a biologically based amine oxide. “It forms the basis for cleaning products that are both highly effective and completely biodegradable,” explains Cesar Saez, Head of Sales & Application for Clariant’s Industrial & Home Care EMEA Business Line. “And that is precisely what we wanted: to benefit the environment and the customer equally.”

The secret of Genaminox® CHE is that the amine oxide enables the proportion of active ingredients required in cleaning products to be reduced considerably, thereby reducing the quantity of cleaning products used and helping to protect the environment. The raw materials used to manufacture the product also benefit the environment, as they are primarily plant-based and obtained from sustainable sources. A holistic approach – from the raw materials through transport to waste water.

The product has now been launched on the market – with promising results. “We hope that consumers soon find cleaning products in their supermarkets and drugstores that are based on Genaminox CHE,” says Cesar Saez. And that they finally manage to remove all those stubborn stains – with an easy conscience.

Not only clean, but… – Genaminox®CHE - based cleaning products

9SuStainability aS a corporate objective

Page 10: Clariant Sustainability Report 2010

› All measures are carefully assessed in order to achieve the best possible cost-benefit ratio

› These measures are implemented by all employees according to their function, competence, specialist knowledge and training. A positive attitude toward sustainability is promoted through open dialog

› Continuous improvements are achieved by commercially justifiable use of the best available technology. This applies in particular to the development of new and optimized products, processes and services

In order to achieve its goals, meet standards and minimize risks, Clariant has introduced a range of corresponding regulations within the Group:› Comprehensive risk assessment and evaluation is a prerequisite

for all Clariant sustainability activities. When evaluating risks that may arise during manufacture, storage and transport of products, human health and environmental protection have absolute priority

› Risk mitigation and prevention is carried out through specialized management approaches depending on segment

1. Safety of plants, processes and products, and the protection of people and the environment are Clariant’s highest priorities. The principles of Responsible Care® are therefore followed at all of its sites. Furthermore, protective measures have been drawn up that apply throughout the entire Group.

2. Clariant’s EHS management system (Environment, Health, Safety) is an integral part of all business processes and strategic planning.

3. Local laws, rules, regulations and international agreements and conventions are binding on all Clariant Group companies. If these are deemed inadequate, Clariant guidelines based on established industry practice are applied.

4. Comprehensive risk identification and assessment for all activities and products is a prerequisite for optimizing business processes. Appropriate measures are taken to control, minimize, eliminate and communicate such risks. This process is supported by regular reviews and audits. EHS projects and measures are carefully evaluated in order to achieve the best possible cost-benefit ratio.

5. Responsibility for EHS is assumed by all employees according to their function, position and qualifications. Managers are expected to set a good example in this respect. A positive

attitude toward EHS is promoted through open dialog. Expertise and competence are ensured through EHS-related training and knowledge transfer.

6. The EHS performance of suppliers, contractors and service providers plays a key role in their selection. Just like Clariant customers, they all receive support in their efforts to improve.

7. Clariant strives for continuous improvement in EHS performance by developing new and optimized products, procedures and services, using energy and resources efficiently, minimizing environmental impact and the generation of waste products and disposing of residual waste in a safe manner. These efforts are supported by efficient procurement management.

8. Clariant makes appropriate emergency provisions to control and limit the impact of incidents. Clariant has an effective emergency management system and carries out qualified training and regular exercises throughout the Group.

9. Employees, the authorities, customers, shareholders and the general public are regularly informed about Clariant’s performance and aims in the area of EHS.

CoMpany pRInCIpLeS RegaRdIng the envIRonMent, heaLth and SaFety

10 Sustainability Report 2010

Page 11: Clariant Sustainability Report 2010

› Conservation of resources and minimization of environmental impact are achieved in particular through the manufacture of more environmentally friendly, effective products, lower use of energy, reduced waste and lower emissions

› Clariant has an emergency management system which, in collaboration with the responsible authorities, aims to control and limit the impact of exceptional incidents

› Employees, the authorities, customers, shareholders and the general public are regularly informed about Clariant’s sustainability performance

› Compliance with the principles and guidelines on sustainable and responsible action is checked with the help of a recurring audit program, which also includes the specific measures and their success

By means of all of these regulations and measures, Clariant aims to make fulfillment of its responsibility for people and the environment and the company’s success permanent.

Use of renewable materials in the chemical industry is becoming ever more important, both in terms of long-term costs and as regards environmental protection and sustainability. Clariant is working intensively to identify, develop and use renewable raw materials as part of its own research and innovation efforts and in various programs with project partners. This should save energy, reduce waste and lower costs. Clariant is already using several such raw materials in production. The main focus is on replacing materials derived from crude oil with renewable raw materials.

Functional chemicals from renewable synthetic building blocks are used in mining and oil production to achieve better environmental sustainability. By comparison, deicing fluids for airplanes are now glycerine-based, replacing older products that were based on polyglycols produced from petrochemicals. Glycerine is completely renewable as it comes from biodiesel and soap production.

Glyoxal is an important intermediate with considerable growth potential. It is used to improve the tear-resistance of paper and in the manufacture of crease-resistant textiles. Itaconic acid,

which is produced through fermentation, is used in novel copolymers, where it replaces petrochemical acrylic acid. Novel surfactants, lubricant additives, corrosion inhibitors and emulsifiers are also derived from it.

Clariant is working with partners on using lignocellulose from previously unused timber waste, with the aim of obtaining new sustainable products to replace existing petrochemical substances. Possible applications include adhesives, waxes and carbohydrate derivatives (surfactants, emulsifiers).

Fatty acids produced from renewable raw materials and the fatty alcohols and fatty amines obtained from them form the basis of a development project for new stabilizers for plastics. Clariant is also developing enzyme additives for the detergent industry to replace organic substances. In the field of cosmetics, fully bio-based emulsifiers, surfactants and rheology modifiers are increasingly being developed to meet customer demands for natural products.

In SeaRCh oF RenewabLe Raw MateRIaLS

“ Clariant does not just pay lip service to the topic of sustainability – it is a key element of our corporate strategy.”CHRiStiAN KOHlPAiNtNER, MEMbER OF tHE ExECutiVE COMMittEE

11SuStainability aS a corporate objective

Page 12: Clariant Sustainability Report 2010

12 Sustainability Report 2010

Page 13: Clariant Sustainability Report 2010

In defining the management structure, organization and processes of the Clariant Group, the corporate governance principles aim to provide stakeholder value and transparency to promote sustainable long-term success. The Group is committed to Swiss and international standards of corporate governance and follows the rules set out in the Swiss Code of Best Practice for Corporate Governance and those of the SIX Swiss Exchange. Clariant operates in full compliance with the applicable legislation, acts according to the rules of free competition and opposes any form of corruption. Clariant avoids conflicts of interest and protects company property against abuse and misuse. Clariant strives for sustainability in all areas and at every process stage. The Articles of Association, Bylaws of the Board of Directors and the Clariant Code of Conduct can be viewed on the Internet at www.governance.clariant.com.

Company organizationThe Board of Directors is the highest management body at Clariant Ltd. It comprises at least six and no more than ten members, consisting of one Chairman, one or more Vice Chairmen and the other members. The members of the Board of Directors constitute the following Committees: Chairman’s Committee, Audit Committee, Technology and Innovation Committee and Compensation Committee.

Each committee has a written charter outlining its duties and responsibilities. The committees’ charters are published on Clariant’s website (www.clariant.com). The committees report on their activities and results to the Board of Directors. They prepare the business of the Board of Directors in their respective areas.

The Audit Committee comprises three members of the Board of Directors. The Chairman must be an independent, non-executive member of the Board of Directors. The Audit Committee reviews the activities of the external auditors, their collaboration with the internal auditors and their organizational adequacy. It also reviews the performance, compensation and independence of the external auditors as well as the performance of the internal auditors and reports back to the Board of Directors.

Furthermore, the Audit Committee reviews the company’s internal control and risk management systems and reviews compliance with the law and internal regulations – in particular, with the Code of Conduct. The Audit Committee meets at least six times a year.

The Technology and Innovation Committee comprises three members of the Board of Directors with experience in research, innovation management and technology. The tasks of this Committee include assessing the company’s innovative activities on behalf of the Board of Directors. The Committee also reviews measures to stimulate research and development and optimize innovative potential. The Technology and Innovation Committee meets at least twice a year.

Management of the GroupIn accordance with the law and the Articles of Association, the Board of Directors is the decision-making authority for Clariant Ltd. in all matters except those decisions reserved by law or the Articles of Association for the shareholders. The Board of Directors has sole authority in particular for the following:› Providing the strategic direction of the Group› Approving the basic outline of the Group’s organization and its

governance› Supervising the overall business operations› Appointing, dismissing and evaluating the performance of the

Chief Executive Officer (CEO) and the members of the Executive Committee

› Approving the Group’s annual budget› Approving major M&A transactions and financial transactions of

considerable scope or involving special risks› Ensuring a management and corporate culture that is appropriate

for the company’s objectives› Ensuring an internal control system and adequate risk and

compliance management, in particular on financial matters, corporate governance and citizenship, personnel and environmental matters

Corporate Governance

13corporate Governance

Page 14: Clariant Sustainability Report 2010

The Board of Directors has delegated the executive management of the Clariant Group to the CEO and the other members of the Executive Committee. The Executive Committee is mainly responsible for implementing and monitoring the Group strategy, for the financial and operational management of the Group and for the efficiency of the Group’s structure and organization. The CEO and, under his supervision, the Executive Committee are in principle primarily responsible for:› Drawing up strategic plans and policies for approval by the Board

of Directors› Implementing Group strategies and policies as well as strategies

and action programs for individual businesses and subsidiaries› Managing the Business Units and functions to ensure efficient

operations, including regularly assessing the achievement of goals› Ensuring compliance with legal requirements and internal

regulations› Establishing a management and corporate culture in line with the

company’s objectives› Promoting an active internal and external communications policy› Appointing and dismissing senior management, including

appropriate succession planning

Compensation policyThe figures relating to the compensation of the Board of Directors and the members of the Executive Committee are presented in detail in the Notes to the Financial Statements of Clariant Ltd. In particular, Clariant’s compensation policy for management is based on the following three principles:› The level of the total compensation should be competitive and

in line with market conditions and enable Clariant to acquire experienced management and experts from Switzerland and abroad and secure their long-standing commitment to the Group

› The structure of the total remuneration should be highly performance and success oriented in order to ensure that shareholder and management interests are aligned

› The compensation components should be straightforward, transparent and focused, to guarantee all participants (shareholders, members of the Board of Directors, the CEO and members of the Executive Committee) the highest degree of clarity and goal-orientation

In order to uphold these principles, the Compensation Committee analyzes and discusses market developments at regular intervals and considers the implications of these developments for Clariant. Detailed information can be found in Clariant's Annual Report 2010.

Code of ConductThe Clariant Code of Conduct defines responsible behavior and applies equally to all employees. According to the Code, their behavior should always be to the benefit of Clariant and as a result the entire workforce and all interest groups. This primarily concerns avoiding conflicts of interest, and includes prohibiting active or passive corruption. Financial donations to political parties, associations and organizations must comply with the applicable laws and also be approved and recorded by the Board of Directors. Money laundering, insider trading and discriminatory trading and business practices are not permitted. Commercial confidentiality prevails at Clariant. Protection of intellectual property is a matter of course. Comprehensive, objective, up-to-date reports are regularly produced on these issues.

The Clariant Code of Conduct, which is available on the Group website (www.clariant.com), defines responsible behavior, protecting the reputation of the company and reducing risks for shareholders. It requires both Clariant as well as each employee to fully abide by a comprehensive set of rules, ensuring fair competition, freedom of association and the right to collective bargaining. It strictly prohibits corruption, discrimination and child or forced labor.

14 Sustainability Report 2010

Page 15: Clariant Sustainability Report 2010

All employees are trained in this Code. Clariant’s General Counsel is the ultimate contact point for compliance questions, a responsibility that involves tracking of all notifications of Code breaches as well as all legal issues. In the year under review, no instances of non-compliance with rules and regulations concerning corruption, unfair competition or discrimination that could have a material impact on the Clariant Group were recorded.

Compliance with legal requirementsClariant is committed to treating all competitors, suppliers and customers fairly. There were therefore no complaints regarding anti-competitive behavior, or formation of cartels or monopolies. The Legal department and, if necessary, the Compliance Officer review documents and promotional materials – and all communications content – scheduled for publication for compliance with legal requirements (unfair competition) and conformity with the Clariant Code of Conduct. Consequently, there have been no cases to date in which Clariant has been accused of breaching regulations and voluntary codes of conduct with regard to advertising (including advertisements, sales promotions and sponsorship). This also applies to protection of customer data; no complaints have been raised regarding breaches of customer data protection.

ResponsibilityClariant places a high value on being a responsible and supportive corporate citizen wherever it does business. For example, in 2010, partnerships with neighboring communities again included coaching provided by Clariant staff in science, modern languages and IT. The company was also involved in charitable and other projects with a social background (see pages 26 and 52).

Responsibility also refers in particular to Clariant’s responsibility to its employees. Through the People Excellence program, Clariant ensures that the right employees are available at the right time for the right position. The program focuses on improving how the company develops people, by providing them with the necessary

degrees of freedom as well as the skill sets and resources required. To ensure these improvements are enduring, Clariant also places a strong emphasis on succession planning and talent management.

Clariant is fully compliant with the principles of the International Labour Organization (ILO). This includes full compliance with regulations concerning freedom of association. Discrimination on the grounds of race, ethnic origin, gender, religion, beliefs, disability, age or sexual orientation is not tolerated.

Approximately half of all employees are covered by collective bargaining agreements. Clariant works closely with employee representatives and staff when operational changes arise (e.g. plant closures). Clariant wages and salaries are in line with the market and as a result, the company is able to attract the strongest candidates and retain a loyal workforce. The company of course also adheres to all local rules relating to the treatment of temporary and part-time employees.

Risk measurement and risk controlClariant Enterprise Risk Management clarifies risk levels and encourages entrepreneurial behavior throughout the Group. The process considers all opportunities and risks to short- and medium-term objectives as defined by the Board of Directors. Risk Management reviews these analyses for relevance, consistency and accuracy, for the purpose of subsequently deciding on potential optimization measures. The risk assessment is repeated annually with quarterly updates and interim reporting as necessary. It also ensures that the Executive Committee and the Board of Directors are informed of all significant risks and aims to inform, train and motivate staff.

15corporate Governance

Page 16: Clariant Sustainability Report 2010

For this task, Clariant has developed an effective tool for risk assessment and quantification that also allows rapid specification of countermeasures and allocation of responsibilities. The corresponding regulations are based upon the standard of the Institute of Risk Management and benchmarked to the Enterprise Risk Management – Integrated Framework of the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The results of the risk assessments are consolidated and the risk exposures are assessed by the Executive Committee and the Board of Directors via the Audit Committee.

Financial risks are monitored through a comprehensive analysis and evaluation system. Clariant hedges payment stream imbalances between various currencies via options, spot transactions or forward transactions. The exposure of assets and liabilities is addressed by means of corresponding opposing positions (natural hedging). Risks associated with interest rate changes are managed primarily by maintaining the right balance between fixed and variable rates, and credit facility maturity.

Clariant mitigates risks arising from public and product liability by concluding insurance policies and booking provisions. Risks from liabilities arising from acquisitions or disposals are limited contractually according to the applicable legislation. Appropriate provisions are booked where possible for non-insured litigation including tax law, patent law, product liability, competition law and environmental protection.

Clariant operates business-critical software from a centralized computer center with physically separated server parks. The system’s parallel architecture overcomes failures and breakdowns. Reliable and continuously updated tools guard against virus attacks. Clariant also regularly simulates emergencies in software processes and improves procedures accordingly. The process control systems to manage production at the sites are also separate from the outside world and have no direct access to global networks in order to reduce vulnerability to external attempts at manipulation.

buSIneSS unItS oveRvIew

additives A leading provider of flame retardants, waxes and polymer additives for effects in plastics, coatings and other applications

detergents & Intermediates

A leading supplier of key raw materials and intermedi-ates to the detergents, agro and pharmaceutical industries

emulsions A supplier of water-based emulsions/polymer disper-sions for paints, coatings, adhesives, construction, seal-ants and for the textile, leather and paper industries

Industrial & Con-sumer Specialties

A leading provider of specialty chemicals and applica-tion solutions for consumer care and industrial markets

Leather Services A leading supplier of chemicals and services to the leather industry

Masterbatches A leading provider of coloration and functionality of plastics, supplying the packaging, consumer goods, medical, textile and automotive sectors

oil & Mining Services

A leading provider of products and services to the oil, refinery and mining industries

paper Specialties A leading provider of optical brighteners, colorants and functional chemicals for paper and packaging applications

pigments A leading global provider of organic pigments and dyes for coatings, paints, printing, plastics and special applications

textile Chemicals A leading producer of dyes and chemicals for the textile industry including apparel, upholstery, fabrics and carpets

16 Sustainability Report 2010

Page 17: Clariant Sustainability Report 2010

A washing machine, a smartphone, an airplane, a plug – all have something in common: they all contain flame retardants to prevent the plastic from catching fire immediately in the event of overheating or an electrical defect. However, not all flame retardants are equal. And – above all – not all are equally environmentally compatible. From this perspective, Exolit ® from Clariant is one of the best currently available on the market. The product’s success can be attributed primarily to this environmentally compatible feature – as Kay Kutschbach, Head of the Flame Retardants Business Line at Clariant, explains.

What makes Exolit ® environmentally compatible? Exolit® is non-halogenated, which means that the compound contains no bromine or chlorine atoms. Extensive tests have demonstrated the toxicological safety of Exolit® in plastics, throughout their lifecycle. The product is thus highly environmentally sound – and this is what makes Exolit® so popular with customers. In contrast to other non-halogenated flame retardants, Exolit® was developed specifically for technical plastics such as polyamide and polyester, and offers particular benefits in these applications. For example, Exolit® is white and can be dyed any color, an important feature for the

electrical industry, where terminal strips in control cabinets must be identifiable by color. Furthermore, Exolit® has little impact on the outstanding insulating properties of plastics, making it the product of choice for many customers.

How important is the environmental aspect for your customers? It is becoming increasingly important. Looking ahead, when developing new products such as smartphones or electric cars, manufacturers will be asking themselves: How can I make them as sustainable as possible? Naturally, they do not want to get into environmental discussion whenever it comes to new guidelines and regulations. With Exolit®, they know they are on the safe side.

How have sales of Exolit ® developed in recent years? They have exploded! Growth is being measured not in percent but in multiples, which is why we are working on increasing capacity by mid-2011 by continuously optimizing our production process. Over the coming year, in order to keep up with sharply rising demand we will be commissioning a second facility with the same capacity as the existing one. Exolit® is not only ecologically sustainable but also economically so – creating many new jobs and providing staff with security.

On fire for sustainable fire protection – Exolit® non-halogenated flame retardants

17corporate Governance

Page 18: Clariant Sustainability Report 2010

18 Sustainability Report 2010

Page 19: Clariant Sustainability Report 2010

Clariant defines its own comprehensive standards and guidelines relating to the safety of products, manufacturing and processes, which extend beyond national provisions and apply to all Group units around the world. The “Safety Management System”, for example, comprises 26 extensive guidelines on environmental and health protection as well as internal safety – half of which are devoted exclusively to plant safety. The system guarantees a high level of safety in procurement, processing and storage operations, as well as in the distribution of raw materials and products.

The management system is designed to identify and record risks on an ongoing basis, and serves to control the potential for risk in areas ranging from goods receipt via the manufacturing process all the way to dispatch of goods and waste disposal. All the identified and assessed risks are documented in a risk portfolio with a view to identifying and controlling the potential for risk. This forms the basis for the development of measures for improvement and the commensurate investment requirements. The relevant information, rated according to significance and urgency, is then submitted to Group management. Should an accident occur, an emergency management system (see also chapter “Emergency management”, p. 22) takes effect.

Industrial premises are audited at regular intervals, depending on the potential for risk and changes made on site (at least every three years in units with chemical processes). All Clariant units – building, inventory, production, power supply – are inspected for the implementation, observance and effectiveness of guidelines. The auditors involved will vary. Audits focus on compliance with relevant ISO standards and compliance with the Clariant risk management system guidelines. Depending on the audit type, audits are carried out by internal experts and external auditors and insurance company specialists.

Procurement and productionWhen selecting suppliers and partner companies, Clariant pays particular attention to the high quality and reliability of deliveries and on safe and environmentally sound production. In procuring materials and selecting service providers, Clariant prefers to work

with companies that operate an environmental management policy consistent with the international standards of ISO 14001 or which follow a comparable approach. The relevant evidence is obtained and the interested companies assessed before orders are placed. Suppliers and service providers are visited on a random basis and their environmental management inspected on site.

Clariant’s safety management involves performing the relevant risk analyses on all processes. This includes the intensive analysis of all plant, apparatus and machinery in respect of possible malfunctions, faults or operating errors. The inspections are performed by the respective site in collaboration with the EHS officers and, where appropriate, with representatives from other specialist departments. The entire manufacturing process is analyzed in detail, including the receipt of raw materials and initial use of all plants, equipment and machinery.

Plants currently in operation are monitored constantly and adjusted to target levels where required. The analyses are documented and identify potential risks and hazards as well as specifying technical and organizational preventive measures. The safety of processes and plants is inspected regularly through internal audits.

All operational incidents are analyzed with a view to pinpointing their causes and putting in place appropriate measures to prevent them from happening again. The responsible process safety experts are involved in this procedure in order to provide a comprehensive safety assessment of events. Incidents are extremely rare at Clariant. This is thanks to the sustained and ongoing efforts of all those involved, and in particular of plant managers, plant engineers and safety experts.

Employees are informed of the risks associated with their work in respect of health and safety issues. They receive regular training in the safe handling of chemicals and in the use of their personal protective equipment. Workplaces at which hazardous substances are handled are subject to systematic monitoring.

Safety system for sustainable management

19Safety SyStem for SuStainable manaGement

Page 20: Clariant Sustainability Report 2010

Systematic analysis of material balances and power consumption forms the basis for optimizing chemical processes. The ecological impact and potential for risk to which man and the environment are exposed are also investigated. Each site captures a range of relevant environmental key indicators on a regular basis.

Clariant observes and analyzes all areas that could have a negative impact on the environment and where resources could be used more efficiently. These include:› Consumption of raw materials in relation to the respective

manufactured products› Handling of hazardous substances › Energy and water consumption› Polluted effluents› Emission of air pollutants› Waste for disposal› Substances intended for internal or external recycling› Noise emissions, polluted areas and soil contamination› Accidents, incidents and complaints by residents, and › Potential environmental impacts of planned activities

Storage and transportAt Clariant, raw materials and products are stored in accordance with the stringent internal guidelines in force around the world, with a view to minimizing the likelihood and possible impact of a fire or uncontrolled escape of chemicals. The Clariant storage guidelines are now regarded as a benchmark even by insurance companies. Stringent guidelines also apply to the transport of hazardous goods, with Clariant naturally also monitoring compliance with national and international provisions alike.

Clariant packs and loads substances intended for transport on the respective premises in accordance with statutory requirements, in particular those related to hazardous goods. Service providers responsible for the onward transport arrangements – such as Infraserv Logistics GmbH at Clariant’s German sites – are subject to the same regulations. In any case safety always comes first. Clariant would prefer to destroy defectively packaged goods on its own account rather than return such goods to the supplier. Reusable packaging is utilized wherever possible with a view to minimizing the environmental impact of packaging in which products are supplied to the customer. Such packaging is returned for refilling once it has been emptied by the customer. Some other used packaging materials are also taken back and recycled systematically.

1. In accordance with statutory requirements, Clariant stores the key data on each product, such as its classification and labeling, on a database in its electronic order and dispatch system. All those involved in the transport chain are then notified and the transport documents containing the statutory data on hazardous goods created automatically. The selection and specification of suitable packaging for the hazardous goods is integrated into this IT solution.

2. Only experienced and reliable companies are involved in goods storage, picking, scheduling and transport in order to ensure that manpower, organization and equipment comply with statutory requirements. The necessary groundwork is laid, among other things, by the Clariant carrier requirements profile, which defines the requirements for reliable partnerships with carriers.

3. The skills of and care taken by the people involved are crucial to the safety of any hazardous goods transport. Task-specific training and further education courses for Clariant employees, held on a regular basis, make a significant contribution to safety.

4. The hazardous goods officers conduct regular inspections of filling facilities and dispatch points. In addition, thorough random checks are performed on road vehicles and tank wagons containing hazardous goods before they leave the respective premises.

5. Transport safety is a central factor when creating and implementing product-specific logistics concepts, such as bundling traffic flows and selecting means of travel and transport.

RuLeS deSIgned to enSuRe SaFety duRIng tRanSpoRt

20 Sustainability Report 2010

Page 21: Clariant Sustainability Report 2010

The packaging used by Clariant meets both customer and statutory requirements and ensures that product quality is maintained. Packaging is reused or recycled wherever possible. Clariant participates in programs involving the return of packaging for its safe incineration or disposal. All new packaging products are analyzed to determine their potential risk. European Union regulations are deemed to be the standard. Various internationally approved methods are used to evaluate existing products.

Customer orientationClariant maintains ongoing contact with its customers, who are supported in their application and use of Clariant products. Laboratories are available to deal with special problems. The service offering includes comprehensive product information, particularly with regard to optimum and safe application, health hazards, waste treatment and the handling of packaging.

Safety data sheets containing the relevant data on substances and information on safe product handling and storage, as well as measures to be taken in the event of product release or fire, are made available by Clariant to all those involved in the further handling of the substances.

In order to ensure that Clariant products do not “fall into the wrong hands” and are not used for the manufacture of chemical weapons, for example, they are subject to stringent controls in this regard. The factory inspection officer (pursuant to the United Nations Chemical Weapons Convention) and the export control officer ensure that the factories only supply Clariant products to permitted states for the purpose of further civilian use.

Qualified employeesClariant Group management, site management and ultimately each individual employee is involved in a continuous improvement process. Clariant ensures that its employees are able to master their work on the basis of regulations, processes, rules and instructions contained in the management system and by means of training courses and qualification measures. Employees are thus able to review their actions and the respective outcomes themselves and to recognize potential. In this way, risks and opportunities can be identified and appropriate measures implemented.

pRoduCt and tRanSpoRt paCKagIng

Clariant generally supplies processing companies rather than end customers. This means that many products can be dispatched as bulk goods by road and rail. Packaging will be cleaned and reused – as long as this is both possible and accepted by the customer. However, in many cases customer requirements or other factors dictate the utilization of packaging that cannot be reused directly.

Experience has shown that non-reusable steel and plastic packaging is handled quite differently in different countries. In Germany, for example, products are largely transported in silos or tank trucks and in reusable packaging. The majority of products in non-reusable packaging are destined for export, including to other European countries. Nevertheless, such packaging is recycled or, especially in the case of packaging containing hazardous substances, recovered for its energy value wherever possible.

Clariant prefers to cooperate with international packaging manufacturers within the framework of its global purchasing process, with a view to implementing these measures as consistently as possible. Promotion of the international standardization process is boosted further by these partners and their networks. In addition to the measures described above, reuse and recycling are also supported and now implemented in non-European countries around the world as part of both established closed-loop systems and those that are currently under development.

Environmental protection and safety are an integral part of the responsibility borne by Group management, site managers, department and plant managers and by all employees. Every employee is obliged to observe regulations, develop procedures and working methods and ensure that important information is passed on and the necessary documentation provided in his/her area of responsibility.

21Safety SyStem for SuStainable manaGement

Page 22: Clariant Sustainability Report 2010

Superiors encourage a sense of responsibility and commitment to improvements. Employees are familiar with the tasks to be performed and their relation to corporate policy, strategy and objectives. All participants are involved in project identification and performance-related teamwork is consciously promoted. A comprehensive employee suggestion scheme also supports this process.

Specially trained experts in water pollution control, emission control and radiation protection, specialists in occupational health and safety, fire prevention and safety experts and specialists in the fields of waste and hazardous goods advise Clariant plants and management and work towards the implementation of environmental protection and safety measures. They also control compliance with statutory and internal provisions and act as the central contact persons for the respective authorities.

What’s more, Clariant maintains contact with external specialists, associations and authorities with a view to setting priorities for environmental protection and safety programs. Priorities and programs designed to minimize emissions, to ensure plant safety or to improve occupational safety and further education measures are drawn up in working groups and environmental protection committees.

Emergency managementDespite all precautions, faults in the operation of production and infrastructure facilities cannot be entirely avoided. Clariant’s emergency system provides for a range of reactions and measures, depending on the severity of the respective incident. Accordingly, either Local Emergency Management (LEM), Country Emergency Management (CEM) or Global Emergency Management (GEM) takes effect. A guideline defines the specific tasks and roles to be performed by employees, and regulates the required communication and information at all corporate levels. These workflows and actions are documented in the respective emergency plans and are practiced in regular training courses and exercises, thereby minimizing the impact of any accident. Emergency management operates according to identical principles at all Clariant locations.

Workflows, responsibilities and information pathways are clearly defined. If incidents occur, the prevention and minimization of hazards for man and the environment are accorded top priority. As long as emissions into soil, air or water cannot be definitively excluded, employees of all plants at the respective location are obliged to inform the defined reporting office. Each report is forwarded immediately to the hazard prevention center, which coordinates the activities of the emergency management units, such as the fire department and security and environmental experts.

CommunicationsPublic acceptance of a chemical company depends to a large extent on open and credible communications with members of the public, the media, interested groups, authorities, politicians and the company’s own employees. Only an open policy of information on the activities at the respective locations serves to build confidence among the above groups. Clariant engages in intensive dialog, including on environmental and safety issues, with all the interested parties.

It takes an active stance on special sustainability issues, including the topics of climate protection and greenhouse gases. Under the Carbon Disclosure Project (see https://www.cdproject.net/en-US/Pages/HomePage.aspx) specific information on the emission of greenhouse gases is provided on a regular basis.

Performance review and improvementClariant runs a number of audits, investigations and checks to ensure the efficiency of its safety measures and their continuous improvement. These cover production plants and other technical facilities, inventories and laboratories at all locations. The reviews/audits place the implemented safety concepts under close scrutiny. Should deviations from the standard emerge, the auditors bring in their experience to eliminate any weak points. Any amendments required are agreed with those in charge and their implementation is checked periodically thereafter.

Regular inspections by occupational safety experts constitute a vital tool in the field of accident prevention. Potential for improvement is identified and subsequently implemented wherever possible. Regular EHS (Environment, Health, Safety) audits comprise another

22 Sustainability Report 2010

Page 23: Clariant Sustainability Report 2010

aspect of Clariant’s efforts to optimize occupational and plant safety. Any deviations are dealt with by the respective plants in a timely fashion, according to their significance in terms of occupational and plant safety.

Clariant emphasizes good eco-efficiency and therefore accords priority to measures with the most favorable cost-benefit ratio. Clariant’s EHS network supports the Business Units, companies and locations in identifying such measures. The recording and assessment of environmental impact and aspects serves to determine the environmental performance of the locations and Business Units.

A total of some 40 relevant key environmental, health and safety performance indicators are captured at the locations and then consolidated and analyzed on an annual basis for the Business Units and the Group as a whole. These figures highlight performance and progress made, as well as any areas of weakness. They serve to determine which measures should be accorded priority in an effort to improve EHS performance.

Finally, management assessments serve to establish the suitability and effectiveness of the management system in performing tasks, implementing strategies and achieving corporate policy objectives. Each unit with its own management system conducts an assessment based on its processes and key performance indicators or assessment criteria. Environmental protection, safety, cost-effectiveness, customer orientation, health protection, personnel management and dealings with authorities and the public are all taken into consideration.

Polluted areas and soil decontaminationMany Clariant locations have a long history of dealing with chemicals. In some cases, soil was contaminated in the past as a result of former chemical handling. These polluted locations are systematically inspected and rehabilitation or protective measures are designed, which are then coordinated with the authorities in the respective countries and implemented. Thanks to its EHS organization and collaboration with renowned experts, the Group is able to ensure that all the available expertise is incorporated into an efficient clean-up strategy and that international standards are observed.

CLaRIant exCeLLenCe aS an InItIatIve FoR ContInuouS IMpRoveMent

In an effort to translate the corporate objectives into a sustainable increase in value, Clariant launched the Group-wide Clariant Excellence initiative in 2009 and subsequently introduced it in all Business Units in 2010. Clariant Excellence is the core initiative for continuous improvement and comprises four pillars: Operational Excellence, Commercial Excellence, Innovation Excellence and People Excellence. More than 1 000 projects have already generated savings of more than CHF 13 million in 2009 and approximately CHF 50 million in 2010. Group-wide expansion of the projects will be continued in 2011, and is expected to result in further substantial savings. The major focus in implementing the initiative to date has been on optimizing the production processes, supply chain and cost structures and on taking measures designed to increase profitability by clearly focusing on margin, price and cash requirements. The initiative will set a further key focus in 2011 under Innovation Excellence to gradually boost Clariant’s innovation efforts in the long term. The decisive factors here are a permanent improvement in competitiveness and consistent implementation of Clariant’s strategy of profitable, and above all sustainable growth.

Site SecurityThe importance of security measures has increased considerably in the wake of the terror attacks on 11 September 2001 in New York. Clariant’s reaction has been to tighten its own property security. All locations are only accessible via specifically designated access points. Access is only permitted following stringent checks – as was often previously already the case. Independently of the above, Clariant has a uniform security concept agreed with the responsible site operators. This ensures that measures of comparable effectiveness are applied at all locations and that only authorized persons have access to the Clariant sites and plants.

23Safety SyStem for SuStainable manaGement

Page 24: Clariant Sustainability Report 2010

24 Sustainability Report 2010

Page 25: Clariant Sustainability Report 2010

Clariant is an international player in the specialty chemical industry with strong customer orientation and innovative products. It is one of the leading global suppliers of chemical products for the automotive, electronics, cosmetics, plastics, crop protection, textiles, detergents, paints, coatings and oil and mining industries. Clariant’s corporate policy acts as a model for the development of individual Business Unit strategies.

An important feature of Clariant’s strategy implementation is a management concept that incorporates the principles of social responsibility in decision making and decision implementation. These principles are accountability, transparency, ethical conduct, observance of stakeholder interests, observance of the rule of law and international standards of conduct and observance of human rights. Clariant’s market share, value creation and the quality and safety of processes, products and performance constitute the benchmarks for the success of this concept. Another important corporate objective – alongside the continuous improvement of environmental protection, safety and health protection – is the long-term return on assets, combined with sustained corporate growth.

Clariant manufactures products that meet people’s basic needs in a variety of application areas, improve their quality of life and secure and increase their standard of living. Research, development and production constantly strive to meet and exceed expectations in terms of the quality and safety of Clariant’s products. An equally important aim here is to reduce or prevent negative environmental impact.

Against this backdrop, Clariant’s corporate policy and the aims and programs derived from it support the implementation of the principles of Sustainable Development and the global Responsible Care initiative® of the chemical industry. Implementation of this policy boosts both corporate culture and society’s acceptance of specialty chemicals in equal measure, and is crucial to Clariant’s sustained success. The corresponding principles of action are binding for all employees.

Responsibility in respect of suppliers and service providersWith a view to adopting a holistic approach, Clariant requires that its suppliers and service providers comply with the contractually agreed service features and observe safety and environmental aspects that are equivalent to those of Clariant in their respective applicability. The supplier selection, review and assessment process is designed to ensure that the procured goods and services satisfy these requirements. Clariant has stipulated procurement guidelines for the entire Group, and these take statutory requirements and industry standards into account as well as Clariant’s own understanding of sustainability. Suppliers are accordingly checked in terms of their reliability, quality, price-performance ratio, social aspects and environmental awareness, as well as service and communication.

As an international chemical company with high standards and a high level of social responsibility, Clariant demonstrates its reputation by means of a continuous improvement in product quality. With this in mind, Clariant ensures that their own high standards are also maintained by its suppliers. Already in procurement stage, attention is paid to important sustainability issues, such as energy consumption and CO2 emissions. In the course of market analysis and supplier selection, as for example in a supplier audit, Clariant conducts tests in accordance with relevant sustainability criteria such as ISO standards, which will later be a part of the terms for the order.

Sustainability in business operations

25SuStainability in buSineSS operationS

Page 26: Clariant Sustainability Report 2010

Clariant Chemical India’s (Kanchipuram) cooperative project with the high school at Singadiwakkam in south-eastern India is one our oldest local initiatives. Clariant employees regularly give pupils English lessons as well as holding basic IT courses. A first-aid course takes place once a year at the school and the fundamentals of occupational health and safety even feature on the curriculum. Clariant feels especially responsible for the areas in the immediate vicinity of its sites. We want the locals to experience personally and at first hand how the Group is not only creating jobs in the area but also taking their concerns seriously. “Our association with the school began around ten years ago and aims to impart knowledge in the young minds and upgrade their knowledge on a par with urban students,” explains Thiagaraja Manimaran, Clariant Site Manager in Kanchipuram. He is proud of his staff‘s involvement in this project. Clariant is also frequently on hand to provide basic classroom provisions whenever necessary.

Clariant’s social commitment is evident at other locations, too. In the Indonesian region of Tangerang, not far from the Clariant site, orphaned children are being given the opportunity of a new start in life through a good education in a partnership scheme with the Sampoerna Foundation which provides scholarships to more than two dozen students.

Numerous small projects are in progress around the world which Clariant organizes itself or supports. Clariant prides itself on being close to its customers and also the local communities in which its factories are located. Thiagaraja Manimaran is convinced that it is this closeness that makes all the difference: “The people in our neighborhood are proud that we’re here. They firmly believe that we operate in an ethically correct manner in all we do – and that, in turn, is all the incentive we need to continue providing this assistance in the future.”

Acting globally, helping locally – Social projects in india and indonesia

26 Sustainability Report 2010

Page 27: Clariant Sustainability Report 2010

When contracts are concluded, the requirements are expressly included in Clariant’s General Terms and Conditions of Business. These refer explicitly to environmental protection, process safety, accident prevention, sustainability aspects and occupational safety. Supplied goods and services are assessed by Clariant using the Complaint Management Tool. Once the procurement process has been completed, supplier performance is measured using the Supplier Evaluation System.

Responsibility for customersIn line with the corporate objective of being one of the world’s most attractive suppliers of specialty chemicals, Clariant is constantly developing enhanced products and services – not least with sustainability in mind. Quality is primarily defined by assessment criteria laid down for Clariant by its customers, which must be satisfied as cost-effectively and completely as possible. Above all, Clariant focuses on:› Excellent and reproducible product characteristics› Reliability of supply› Attractive price-performance ratio› Specific support in terms of business and application technology,› High product safety (see also chapter “Product Stewardship”, p. 32)› Development of products and services that open up new options

for customers

Through its product quality and performance, Clariant helps its customers achieve sales success in their markets, thus laying the foundations for Clariant’s own success. This is why Clariant strives for collaboration in a spirit of partnership with current and potential future customers alike. Such cooperation enables both a comprehensive understanding of the relevant markets and the early identification of new product and process requirements, which in turn provides significant targets for research and development. Clariant is subsequently able to furnish customers and consumers with important information and, where required, support in respect of safe and environmentally sound processing, storage, transport and disposal of chemical products.

Responsibility for employeesClariant sets great store by providing its employees with a professional working atmosphere, with a view to boosting their health as well as the performance capability of the company as a whole. The principles of corporate policy are explained in detail to the workforce to this end. The knowledge and willingness of each individual employee, the effort made to carry out good quality work, and compliance with environmental protection, safety and health protection considerations are promoted at both individual and team level. Clariant makes every effort to provide its employees with support in this respect. It is not least for this reason that importance is also attached to broad and informed employee participation in the continuous improvement process.

A positive attitude on the part of employees is promoted through the following measures:› Open dialog between all company employees› Appropriate remuneration, recognition, training, further education› An attractive company suggestion scheme› A modern company pension scheme› Benefits beyond those stipulated by statutory requirements, such

as an extended child-rearing period following parental leave or company nursing leave for those with relatives in need of a high level of care

Quality, environmental protection, safety and health protection demand that employees seize the initiative and take responsibility; this is reflected in:› Consistent compliance with regulations› Safety-conscious and environmentally aware actions› Participation in the ongoing improvement process

The following are indicators of the understanding and implementation of the mission statement and principles:› Intensity of communication in the teams, at plants and locations› Quality of suggestions for improvement› Extent and quality of target-oriented and profitable goods and

services› Safety and environmental standards

27SuStainability in buSineSS operationS

Page 28: Clariant Sustainability Report 2010

Fashion and quality-conscious individuals value leather as a classy material, and accessorize with the best bags and belts. And shoes, of course. Leather car seats are the epitome of the luxury lifestyle. At the same time, however, genuine leather is also said to have another side, particularly from an environmental perspective. This downside relates to the high water and energy consumption, chemicals, use of chromium VI, and contaminated waste water and associated complex water purification.

There is also good news, however, to sustainably ease the environmental conscience of consumers: EasyWhite Tan, a new tanning process developed by Clariant, should make leather production considerably more environmentally friendly in future. “Yes, it’s truly revolutionary,” says Claus Reineking who, as Head Product Manager for Wet End Chemicals of the Clariant Leather Services Business Unit, was responsible for the application and process development of EasyWhite Tan. This process involves the use of Granofin Easy F-90, a thick white liquid that is completely free of chromium, aldehyde, formaldehyde, and phenol. If a tannery switches its tanning process over to EasyWhite Tan, two to three production steps are eliminated completely – including pickling. The environmentally detrimental

use of salt is then no longer necessary. This saves not only time, but also, and in particular, a significant amount of energy. Not to mention water – which in turn results in considerably less waste water.

EasyWhite is currently still in the test phase with selected renowned leather manufacturers. Some have already commented enthusiastically that while having been skeptical initially, they were extremely positively surprised by the significant process simplification. This is particularly good news for one specific individual: Roberta Gamarino. She is Head of Application Development Wet End Chemicals and knows EasyWhite Tan best – naturally, because she invented it! She tried and tested, scrapped some ideas and then came up with new ones. “Initially all we wanted was to develop a chromium-free tanning agent,” she explains. “But as time went on a completely new process arose, which is amazingly easy to work with.” She now hopes that EasyWhite Tan will quickly become established in the leather-making world – and that the label “Tanned with EasyWhite Tan” will perhaps in future even become a requirement demanded by environmentally conscious consumers.

Revolution in white – leather tanning with EasyWhite tan

28 Sustainability Report 2010

Page 29: Clariant Sustainability Report 2010

The health of Clariant’s employees is checked on a regular basis. Depending on where they work, some of these check-ups may be extensive, and are conducted with a view to detecting any symptoms of illness as early as possible (see also the chapters entitled “AvoidingAccidents@Clariant” and “Occupational safety”). Some activities require special health certificates and vaccinations, and great store is set by proper compliance with and application of such measures.

AvoidingAccidents@ClariantOne of Clariant’s objectives is an ongoing and sustained reduction in the number of work-related accidents – ideally to zero worldwide. The AvoidingAccidents@Clariant initiative was launched in the spring of 2007 to this end. The aim was to cut the lost time accident rate (LTAR), i.e. the number of accidents (resulting in at least one day’s loss of work) per 200 000 working hours, to under 0.8 in the entire Group by 2010. Not only was this objective attained, but it was clearly exceeded: the LTAR dropped to 0.45 in the reporting year (see also the chapter entitled “Occupational safety”).

“AvoidingAccidents@Clariant” is based on a comprehensive analysis of the causes of work-related accidents at Clariant. This study initially confirmed facts that were already well known. Only 5 percent of all accidents can be attributed to technical problems. The most common cause of accidents, accounting for 75 percent of the total, is due to deliberate and accidental inappropriate behavior by employees and management. The study also sheds light on the lesser known fact that in around 20 percent of cases accidents are caused by lacking or inadequate organizational precautions or by the absence of exemplary conduct on the part of line managers.

Thus the line managers are largely responsible for dictating the level of occupational safety, as they are in charge of training employees in safety aspects and their own behavior determines the extent to

which the topic of safety is accepted in their departments. Against this backdrop, AvoidingAccidents@Clariant also intends executives and management in particular to play an active role.

The program is structured identically at all locations. It starts with an extensive survey to determine the exact situation at each site. The support provided to the operating unit is planned on this basis according to specific individual requirements. The results are discussed with the responsible managers at the location in question and specific implementation plans are agreed. In addition to the above, site management also undertakes to implement the objectives of AvoidingAccidents@Clariant. Corresponding training courses, known as Awareness Workshops, then prepare the managers for the necessary changes.

Implementation of these training courses is moreover intended as a clear signal to site management that safety must be improved. Finally, targeted training courses teach the employees to change their behavior with regard to safety and to prevent accidents – with the involvement of management. The significance of “leading by example” is emphasized in this context. Safety is first and foremost a question of awareness of one’s own job and the related hazards. Exemplary conduct and regular training courses are thus essential for managers and all employees alike. Plants that operate safely produce higher-quality products and make better use of resources.

A striking result of this program is the guideline in force throughout the Group since 1 June 2008, stipulating that all employees in Clariant production plants around the world must wear safety shoes, hard hats and safety glasses in addition to work clothes.

“ Our AvoidingAccidents@Clariant initiative is a success story, because every accident is one accident too many!”JOACHiM F. KRüGER, ViCE PRESidENt CORPORAtE ESHA

29SuStainability in buSineSS operationS

Page 30: Clariant Sustainability Report 2010

Clariant has not yet attained its ultimate objective of an LTAR of zero. Nevertheless, AvoidingAccidents@Clariant has already brought about a significant improvement in accident figures and some of the injuries incurred were less serious, too. Now every effort must be made to reduce work-related accidents even further. In order to ensure that management is committed to taking on this challenge, the LTAR key indicator is a bonus-relevant factor at Clariant. Safety has been a standard item in the performance reports of the Business Units since the new organization was launched on 1 January 2010. Energy 2010 projectIn 2006, Clariant launched the Energy 2010 project, aimed at reducing energy consumption by up to 15 percent from the reference year of 2005 by the year 2010. This was done with the objectives of saving costs and reducing greenhouse gases. One of the auxiliary conditions stated that the required investments must be amortized within five years. These objectives were achieved.

Energy 2010 resulted in the comprehensive and detailed recording and analysis of energy consumption at the 20 largest production sites. The savings potential and investment required to achieve it were subsequently calculated. More than 400 individual projects were identified. This process also saw the creation of the Clariant Energy Intelligence Guide, a compendium of energy efficiency in terms of both infrastructure and production plants at Clariant sites. The aim was to identify efficiency potentials in energy generation, distribution and consumption. All the relevant facility data relating to condition, technology and efficiency was recorded. Energy-saving measures conceived as a result included a reduction in the pressure of compressed air in production processes, optimization of the efficiency of motors in pumps and improvements in the manufacture of industrial gases.

The Clariant Energy Intelligence Guide, which covers all the Group’s plants and systems, has also resulted in a guideline on the reduction of energy consumption. It provides reference values as well as almost

400 guiding instructions for concrete energy saving measures. This guideline is introduced and explained to employees at internal events and training courses. As a result of these measures, energy consumption at Clariant has been reduced by around 10 percent in relation to the quantity of goods produced over the above-mentioned period.

MeaSuReS and MethodS deSIgned to IMpRove oCCupatIonaL SaFety

› Analysis of accidents and near accidents and drafting of measures aimed at preventing such accidents in the future

› Regular inspections of organizational units by EHS officers, sometimes with representatives of the chemical industry professional association (Berufsgenossenschaft Chemie) and the authorities

› Consulting of plants in all matters of occupational health and safety by occupational safety experts

› Instructions in occupational health and safety for all employees by their superiors

› Conducting of safety talks

› Drafting of threat analyses pursuant to the German Occupational Health and Safety Act

› Comissioning of machines and new plants with occupational health and safety requirements in mind

› Taking of measurements at the workplace and preparing of workplace analyses

› Regular internal and external training courses for employees held by the plants and specialist departments

30 Sustainability Report 2010

Page 31: Clariant Sustainability Report 2010

SpeCIFIC eneRgy MeaSuReS wIthIn the FRaMewoRK oF eneRgy 2010

At the Brazilian location of Suzano, the old steam generation plant was replaced by a new, state-of-the-art facility. Fired by natural gas, it operates 15 percent more efficiently than its predecessor. Production was also analyzed for its steam-saving potential in the course of the conversion process. It was found that the steam pressure could be significantly reduced while maintaining production output and quality levels, thus allowing energy to be saved. Suzano now uses more than 1.5 million cubic meters of gas less than before, saving 3 500 tonnes of CO2 emissions per year. This is equivalent to the average consumption of some 900 European households.

Steam generation efficiency was also significantly enhanced at the Chinese location in tianjin. The addition of a liquid chemical improves combustion and utilization of coal, which acts as the energy source. China boasts very extensive coal deposits, but has almost no oil or gas reserves. The new process has increased plant efficiency by around 3 percent and reduced CO2 emissions by some 800 tonnes per year. The energy saved is equivalent to the average annual consumption of some 100 European households.

The German location in Lahnstein was given its own eco-friendly thermal power station in the reporting period. The new power station produces electricity and heat from natural gas. Most of the electricity is used directly in Clariant’s Lahnstein factory, with any excess power being fed into the municipal grid. Previously, all the electricity had been purchased externally. The new power station has resulted in a reduction

in CO2 emissions of around 375 tonnes per year. The entire Lahnstein hot-water processing system also underwent a conversion in the course of the power plant replacement project. The installation of an additional gas condensing boiler has allowed the plant’s central heating system to be switched off entirely over the summer months. The energy saved is equivalent to the average annual consumption of some 140 European households.

At Jamshoro in Pakistan, frequent power cuts, sometimes lengthy in duration, resulted in costly production downtimes, entailing additional expenditure on materials and increased amounts of waste. Emergency generators running on diesel oil were relatively expensive to operate. Clariant therefore decided to acquire its own power supply. Not only does the gas-operated unit now supply the required electricity, but up to 90 percent of the heat it produces is used to generate hot water and heating steam. The investment was amortized in just two-and-a-half years. Product quality has been enhanced with the elimination of production downtimes, while air pollution from operation of the new unit is extremely low.

At the Swiss location of Muttenz, a roof covering some 10 000 square meters was optimized in terms of energy aspects in the course of general repairs. An external partner took over the entire surface to erect a photovoltaic system designed to utilize solar energy. The biggest of its kind in north-western Switzerland, it generates electricity equivalent to the average annual consumption of 100 European households.

Clariant has now further expanded its eWATCH energy project, turning it into an autonomous efficiency program to build on this success. Data on energy consumption and saving potential continues to be gathered on a regular basis, while the use of machines and plants is also optimized. One objective is to schedule and utilize machines in the production process in such a way that they only work at optimum or near-maximum efficiency. Displays at the measuring stations and elsewhere are designed to depict the degree of efficiency attained.

A Group-wide energy management policy has also been implemented. It is hoped that improved coordination will result in further savings and make it easier to assess the cost-benefit ratio of savings investments. Finally, training courses hone the energy awareness of employees and broaden their knowledge in the field of savings potential. Some 60 percent of the savings potential identified at Clariant by the end of 2010 can be achieved at the European sites, as it is here that the lion’s share of production takes place. All the measures are coordinated by the central Global Competence Center Energy & Utilities as part of Group Technology Services (GTS).

31SuStainability in buSineSS operationS

Page 32: Clariant Sustainability Report 2010

An entire bundle of measures is designed to help reduce energy consumption further in the future:› Development of reference values for the entire Group, allowing

every Clariant production or energy generation unit to see immediately which optimum values are attainable in terms of consumption and efficiency

› Continuous updating: the Clariant Energy Intelligence Guide is regularly reviewed and amended to ensure that it is always up to date

› Ongoing monitoring: regular examination of the figures, coupled with on-site checks where appropriate, enables the correct implementation and thus also the efficiency of energy-saving measures to be ascertained. This in turn allows conclusions to be drawn concerning the potential for improvement

› Staging of special “energy days”: savings opportunities are presented to senior executives at local, regional and global events in the form of lectures and debates

› Increasing of awareness with regard to energy savings: employees are made more aware of energy issues via working groups at the locations. Information is also provided on specific saving measures and the identification of saving potential

› “Operating energy efficiency”: following the technical optimization of plants and systems, operational optimization is now being promoted by means of relevant employee training courses

› The operating energy optimization effort is being closely coordinated with Clariant Excellence and the latter’s production improvement initiatives

Product StewardshipClariant regards product responsibility as an important part of its overall corporate strategy. Responsibility for consumer and environmental protection in product use is accorded top priority. Clariant’s commitment and professional service in the context of its product responsibility creates significant added value for customers as well as ensuring that the Clariant products satisfy all sustainability requirements.

Criteria relating to the safe and ecologically compatible use of a substance are assessed during the product development or product design stage. A product is subjected to a number of tests before Clariant can manufacture and market it. This ensures that it can be used safely and without any danger to people or the environment throughout its lifecycle.

Clariant provides its customers with the relevant information and comprehensive advice on how to use its products safely and efficiently. Clariant’s expertise in “product stewardship” guarantees that its products comply with national and international chemical legislation at all times.

As part of REACH and product stewardship, potential for improvement is assessed with regard to product lifecycles. Clariant is launching a project to determine a concept and priorities for systematic lifecycle analysis.

32 Sustainability Report 2010

Page 33: Clariant Sustainability Report 2010

“We are constantly seeking potential for improvement. How can we save energy or water? How can we reduce waste water volumes?” Hans-Werner Fritzke points at a blue pump. It is perhaps 30 centimeters long, with a yellow one behind it that is about twice as big. “This here is a good example,” explains the manager of the Clariant Ethylene oxide and glycol plant in Gendorf. “The blue pump is relatively new, around two years old. For production it has just the same power as the yellow one from the 70s – but it uses considerably less electricity and water.”

In glycol production at the Clariant site in Gendorf, this liquid ring pump in the dehydration tower creates a vacuum for vaporizing excess water from the glycol. This step is necessary for producing pure glycol that is later used, for example, in the production of PET bottles or as an antifreeze agent. The yellow pump in Gendorf performed its function with no problems for a considerable time, and even now it is still working – but only as a back-up when, for example, the blue one is being serviced. “But actually the old pump is now too big and therefore uses too much energy and water. Over time, technical advances have significantly improved the air-tightness of the dehydration tower,” explains Hans-Werner Fritzke. “This means that less air flows in, and as a result less air needs to be pumped out. The smaller pump is therefore easily sufficient.”

Smaller pump, less consumption. Boiled down, this means that the smaller pump saves 134 400 kilowatt hours of electricity per year, which corresponds to the annual consumption of approximately 30 private four-person households, as well as 3 780 cubic meters of water and the associated waste water – a quantity equivalent to that consumed by 80 individuals in an entire year. The blue pump is therefore both good for the environment and highly economical – a worthwhile investment across the board. “It’s simply a question of having the idea in the first place to make such changes,” says Hand-Werner Fritzke. “This is why we have our eyes open at all times, asking ourselves where we can make changes that will help protect the environment. We question everything with a view to making continuous improvements.”

Replacing the pump is just one of the many examples at Clariant. Among other things, the company promoted the replacement of mechanical drives with more energy efficient models as part of the Energy 2010 and eWATCH projects (see pages 30/31). Even if the projects themselves are often relatively small, each and every one of them is sustainable in its approach and is good for the environment – and cumulatively they make production considerably more ecological. And this is precisely the point, says Hans-Werner Fritzke. “We don’t say ‘Now everything’s fine.’ No – we want to carry on optimizing production. And there’s always plenty to do!“

Small changes with a big impact

33SuStainability in buSineSS operationS

Page 34: Clariant Sustainability Report 2010

“Stickies” are small and extremely troublesome. These sticky lumps occur whenever paper is produced using waste paper as a “raw material” and come, for example, from address labels, post-its or the glued edges of envelopes. Stickies not only cause holes and defects in the paper sheet, but above all they foul the machinery, as they tend to be deposited in synthetic machine fabrics. This means that paper producers have to keep stopping their machines – which clog up – to clean them, leading to downtime and resulting in the consumption of large quantities of hydrocarbon solvent.

Now, however, the little stickies have a new, powerful opponent to contend with: Cartaspers® PSM liquid from Clariant. The liquid is added to the water during the paper production process and continuously produces a repellant protective layer on the machine clothing. The stickies are simply rinsed away before they can collect on the paper and on the machinery. Furthermore, due to its non-ionic properties, Cartaspers® PSM liquid can easily be combined with many other additives and can also be used in hard water.

All very practical, and not just that: Cartaspers® PSM liquid is almost completely biodegradable. “Looking at the market, we can really say that environmentally speaking, this product is one of the best currently available,” says John Cowman, Technical Manager of the process chemicals group Clariant Production UK Ltd. And because the machines no longer have to be cleaned to remove the stickies, this saves on large quantities of solvent. Good for the environment – and good for factory staff who are no longer exposed to the emissions.

The environmental sustainability of Cartaspers® PSM liquid has been confirmed in a number of official and independent tests – it meets the requirements of the Nordic Swan and EU Ecolabel schemes and was also approved by the US Food & Drug Administration (FDA) as being suitable for food packaging materials. And the customers? “The reactions from paper producers are extremely positive,” reports John Cowman. “They are unanimous in their reports that this is just the product they’ve been waiting for!”

So that nothing sticks – “stickie”-free paper production with Cartaspers® PSM liquid

34 Sustainability Report 2010

Page 35: Clariant Sustainability Report 2010

REACHThe EU REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) legislation entered into force on 1 June 2007. This regulation aims to ensure a high level of protection both for people and the environment, to improve communications when dealing with chemical products and to maintain and enhance the competitiveness of the chemical industry in the European Union. Clariant fully supports the REACH objectives.

This uniform and binding regulation on the registration, evaluation, authorization and restriction of chemicals throughout the EU not only harmonizes and simplifies legislation pertaining to chemicals in the individual countries, but above all ensures that only chemical substances that have been pre-registered and analyzed in terms of their potential risks can be put into circulation within the territory in which REACH is applied.

REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) is the vehicle by which the European Union (EU) regulates the handling and use of chemicals. It does so via registration and monitoring of the individual substances. The aims of REACH are to enhance health and environmental protection, to improve alternative testing methods, to facilitate the free circulation of substances in the EU domestic market and to promote the competitiveness and innovation incentives of the companies based there.

The application of REACH extends to all substances, including those in products, which are produced, imported or traded in EU territory. The REACH legislation therefore also affects non-EU businesses that wish to export substances or substances in products to the EU or import them from the EU. EU business operations involving chemicals are consequently only possible if the registration requirements pertaining to the respective substances are observed in the individual phases.

phase I Registration deadline of 1 December 2010 for produced/traded:› substances in quantities of 1 000 tonnes per year and above;› carcinogens, mutagens and reprotoxic substances (CMR

category 1 and 2) above one tonne per year;

› substances classified as very toxic to aquatic organisms and which may cause long-term adverse effects in the aquatic environment (R50/53) above 100 tonnes per year.

During Phase I of REACH Clariant had registered a total of 152 substances.

phase II Registration deadline of 1 June 2013 for produced/traded substances in quantities of 100 tonnes per year and more. Around 300 chemicals fall into this category at Clariant.

phase III Registration deadline of 1 June 2018 for produced/traded substances in quantities of 1 tonne per year and more.

In the case of substances deemed to be of very high concern, the EU authorities can require further measures within the framework of restriction or authorization procedures. REACH thus demands that the industry analyze and assess the risks emanating from chemicals and provide users with appropriate information on safety.

eu RuLeS on the ManuFaCtuRe and handLIng oF CheMICaLS

35SuStainability in buSineSS operationS

Page 36: Clariant Sustainability Report 2010

Clariant played a role in development of the REACH legislation with its intensive participation in trade association activities and discussions with authorities during the draft stage, and has prepared carefully for the new requirements. Thanks to its preparation, provision of resources and extensive project management, Clariant was successful in completing the extensive pre-registration of its product portfolio, followed by the registration of the respective substances in Phase I of the registration phase. REACH not only entails additional costs and personnel expenses for the registration activities; it also offers opportunities through supplier differentiation in the market.

REACH makes a substantial contribution to further improving health and environmental protection as well as consumer protection. Clariant offers customers greater benefits in the field of product application – thanks to intensive communication and the drafting of detailed customer-oriented information on product use. REACH makes for enhanced customer and supplier loyalty, which provides a further boost to sustained corporate development. The regulation also acts as a catalyst for the development of new and better products. Clariant intends to seize this opportunity. It ultimately results in positive connotations for the brand, which can claim to be “REACH registered”. The products are then both synonymous with and warranties of comprehensive product responsibility and set themselves apart from chemicals produced in countries whose standards are not as high.

Globally Harmonized SystemOne of the aims of the UN Conference on Environment and Development held in Rio de Janeiro in 1992 was to achieve global harmonization in the classification and labeling of chemicals. The “Globally Harmonized System of Classification and Labeling of Chemicals” (GHS) laid the foundations for the international harmonization of existing classification and labeling systems from various sectors such as transport as well as consumer, employee and environmental protection. GHS has now been introduced in the European Union in the form of a regulation on the classification, labeling and packaging of substances and preparations (CLP). In compliance with this new regulation, Clariant has classified more than 2 500 substances, defined new labeling elements and reported these to the European Chemicals Agency (ECHA) for inclusion in the classification and labeling inventory which is publicly accessible online.

36 Clariant Nachhaltigkeitsbericht 2010

Page 37: Clariant Sustainability Report 2010

There was a time when N-Methylpyrrolidone was extremely popular. No wonder – the solvent, known as NMP for short, has many benefits both in the production of resins and in their use in the final coating of tanned leather – for example in smoothing and in the deep black color. In California in 2001, however, NMP was found to be a reproductive toxicant and banned.

This immediately caught the attention of Clariant. “It has always been important for us to offer not only high-quality and user-friendly products,” explains Dr. Ralph-Günther Blach, Head of Marketing and Application Development within the Leather Services BU at Clariant. “Sustainability with regard to both the environment and human health is also vital.” Instead of waiting for new legislation and changing nothing in the meantime, the Clariant Leather Services Business Unit immediately set about achieving the goal of completely NMP-free leather processing.

So the research and development began – with great success. From as early as 2005, only completely NMP-free products for leather processing have been offered. The Swiss firm has long been considered the pioneer and specialist in this area.

Clariant’s forward-looking approach paid off – today, NMP is no longer used in the automotive industry, for example. And wherever it is still permitted in minimal quantities, it must be expressly declared. Many customers now demand products which no longer contain any NMP whatsoever. “If we hadn’t been so quick to start developing a substitute, we would be under enormous time pressure today,” says Ralph-Günter Blach. Here at Clariant we can therefore observe the current race to find substitutes from the sidelines, because we’ve had them for a long time already.

A solvent-free solution – new directions in leather processing

37SuStainability in buSineSS operationS

Page 38: Clariant Sustainability Report 2010

38 Sustainability Report 2010

Page 39: Clariant Sustainability Report 2010

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. Risks inherent in production facilities are systematically captured and analyzed in order to identify and realize potential for improvement.

In a subsequent stage, the energy required for production is determined and optimization potential in the process or product itself 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 recent years.

Clariant has made clear improvements according to key environmental indicators in the recent past, with the absolute consumption of energy and resources, and emissions falling considerably in some areas. This can be attributed to Clariant 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 has seen Clariant’s manufacturing output rise substantially again, a fact inevitably reflected in absolute terms in the relevant environmental indicators.

EnergyDespite the best efficiency drives, no production process can do without energy. Clariant’s plant and equipment requires energy mainly in the form of steam, electricity, natural gas and coolants (cooling brine). Electricity is used mainly for drive systems such as electromotors in mixers, pumps and other processing apparatus. Measuring and control technology and lighting also require electricity. Clariant uses natural gas for heating dryers and firing cracking furnaces and for generating electricity and steam in its own power stations. By the same token, Clariant uses steam heat in its reactors and separators, e.g. in distillation columns. The resulting condensate is used as far as possible for heating purposes.

Sustainability in detailBetween 2005 and 2010, Clariant’s production processes have become much more energy-efficient. In this time, energy consumption per tonne of product fell by 25 percent to around 1 275 kilowatt hours (kWh). This was the result of a concerted energy-saving drive (see also “Energy 2010” chapter, p. 30). With overall productive output falling over the same period, Clariant’s 2005 global energy requirement of almost 4 700 million kilowatt hours fell considerably by more than a third to 3 029 million kilowatt hours in 2010.

eneRgy ConSuMptIon In ReLatIon to pRoduCtIve output

Kilowatt hours per tonne

2 000

1 500

1 000

500

0

2005 2006 2007 2008 2009 2010

1 711 1 606 1 469 1 397 1 319 1 275

eneRgy ConSuMptIon

Kilowatt hours (in millions)

5 000

4 000

3 000

2 000

1 000

0

2005 2006 2007 2008 2009 2010

4 6604 217

3 6703 309

2 812 3 029

39SuStainability in detail

Page 40: Clariant Sustainability Report 2010

WaterBetween 2005 and 2010, absolute water consumption fell by around 30 percent to 80 million cubic meters, although this too was a consequence of Clariant’s overall productive output falling over the same period. That said, energy consumption per tonne of product fell by almost 20 percent to 34 cubic meters.

Water is one of the chemical industry’s most important resources. Clariant uses it above all as a coolant and as process water in production. Especially in the major production sites, water requirements are met largely using river water. Before flowing into the piping systems at the individual locations, and depending on intended use, the river water is cleaned using various filters.

Of the total water volume withdrawn in 2010, around three quarters was used for cooling purposes in Clariant’s factories, around a seventh in production processes, with the remainder forming product constituents or used for sanitary purposes. At some sites, spent cooling water is recycled in large recooling plants for re-use as a coolant. Deployed as far as technically feasible, this particularly eco-friendly cooling procedure resulted in avoiding the use of additional 180 million cubic meters of water in 2010.

wateR ConSuMptIon In ReLatIon to pRoduCtIve output

in m 3/ tonne

50

40

30

20

10

0

2005 2006 2007 2008 2009 2010

42 43 41 40 3834

wateR ConSuMptIon

m3 millions

120

90

60

30

0

2005 2006 2007 2008 2009 2010

114 112 103 9681 80

40 Sustainability Report 2010

Page 41: Clariant Sustainability Report 2010

92 percent less water consumption. 30 percent less energy consumption. 87 percent less cotton waste. And, added to this, higher quality and an endless range of colors. Advanced Denim from Clariant: a real innovative concept in the production of the denim fabric used to make jeans. Instead of the usually required long and resource-heavy dyeing facilities, only a simplified process is now necessary – thanks to the innovative composition of smart chemicals and efficient process steps. This saves a great deal of water and energy. On top of this, it is also safer: with fewer steps to the process, there is also less that can go wrong. And less waste water is produced, which is even more ecologically acceptable. Environmental awareness and fashion consciousness are not necessarily mutually exclusive. On the contrary: Advanced Denim takes both aspects into account in equal measure.

“The world of fashion is constantly demanding something new,” says Miguel Sanchez of Clariant, and he knows from experience. The Head of the Global Product Line for cellulose dyes is often asked in conversations with jeans manufacturers whether he has anything innovative to offer – colors, color nuances and effects never before seen, or an unbeatable sheen. “With Advanced Denim we can offer our customers something very special: first-class processing, exclusive colors – and all with a production process that saves considerable amounts of both time and

environmental resources as well as costs,“ says Miguel Sanchez. The environmental benefits are particularly impressive, with spectacular savings in raw materials and the elimination of hazardous waste water. These features can then incidentally be used by the jeans labels to advertise their products when they produce with Advanced Denim.

A completely new concept that brings together a wide range of interests: no wonder the enthusiasm from the industry is so widespread. Advanced Denim was born two years ago, and the first tests by producers have long been completed. Since 2010, trousers and jackets manufactured with the Clariant procedure have been available in shops for marketing tests. The switch to mass production will take a while longer, as changes in collections take time: “Implementation in the market is always a long-term undertaking,” explains Rainer Rösch, Head of Global Marketing and Application Development. “First the fabric needs to be produced and tested, then made into clothes and sold in the first shops. Only then does it become apparent from the market reactions whether production should be scaled up.”

The initial feedback from manufacturers is highly positive. A concept that allows for greater creativity and is both economically efficient and environmentally friendly.

Blue goes green – dyeing jeans with Advanced denim

41SuStainability in detail

Page 42: Clariant Sustainability Report 2010

EffluentsClariant uses water for numerous different purposes in the manufacture of its chemical products, water that can become contaminated. For this reason, effluents from productive or sanitary processes undergo multi-stage chemical and physical cleaning at the respective site before entering the waste-water treatment plants for microbiological purification.

By contrast, cooling water along with rainwater can be returned straight to the rivers without cleaning as it does not come into contact with chemicals. In order to avoid contamination from undetected leaks in the cooling system, cooling water and rainwater are permanently monitored and analyzed at the individual sites as an additional safety measure. Should contamination be identified, the flow of water into the river system can be halted through various retention systems.

Between 2005 and 2009, the volume of effluents produced by Clariant fell by around 40 percent to 19 million cubic meters, although this was also the consequence of the drop in productive output. In 2010, despite the rise in productive output, the absolute volume of effluents produced by Clariant's factories rose by just 5 percent to 20 million cubic meters, and a further improvement to around 8.5 cubic meters per tonne of product was achieved.

Since 2005, Clariant’s factories have succeeded in reducing the chemical oxygen demand (COD) of their effluents after treatment by more than 25 percent. Clariant’s aim is to further reduce the specific COD value of its effluents by e.g. recycling and recovering so-called mother liquors and by reducing product quantities in the effluents, thereby also reducing production costs.

The effluents produced at Clariant’s various locations contain only small amounts of heavy metals. Some of the extrapolated values are calculated based on concentration levels on or even below the detection limit. The amount of heavy metals introduced is also largely dependent on the elimination efficiency of the upstream waste-water treatment plant, the chemical composition of the effluent, the effectiveness of chemical precipitation before the effluent enters the

biological purification process, and the tendency of the heavy metals or heavy-metal components to adhere to sewage sludge. In 2010, Clariant’s heavy-metal emissions fell by a third versus 2005 levels. Today, Clariant’s effluent cleaning and water treatment capabilities are of an exceedingly high standard.

WasteClariant’s maxim for waste disposal is “avoidance before recycling; recycling before disposal”. Production waste must be recycled or disposed of properly. Each item of waste is recorded, then analyzed and documented as accurately as possible. Proper disposal must be verified in the form of appropriate documentation. It is also important to know from which factory the waste originated, the volume produced over a given period, the properties of the waste components, whether the waste is hazardous, and how it can be recycled or disposed of.

voLuMe oF eFFLuentS In ReLatIon to pRoduCtIve output

in m 3/ tonne

12

9

6

3

0

2005 2006 2007 2008 2009 2010

11.5 11.3 10.8 10.88.9 8,5

voLuMe oF eFFLuentS

in m 3 millions

40

30

20

10

0

2005 2006 2007 2008 2009 2010

31 30 27 2619 20

42 Sustainability Report 2010

Page 43: Clariant Sustainability Report 2010

Data on waste generated at the various sites is allocated to the respective originators and waste-disposal companies and evaluated. Waste-disposal companies are selected and audited according to stringent quality criteria. The results of the audits are logged and the relevant information exchanged between the individual Clariant locations. In their totality, these measures ensure that all industrial waste streams at the various locations are permanently monitored and controlled.

The volume of hazardous waste produced by Clariant was reduced drastically from some 175 000 tonnes in 2005 to roughly just half of that figure in 2010. Over the same period, the volume per tonne of product fell by more than 40 percent to 36 kg per tonne.

Clariant monitors site compliance with these values by taking measurements itself; independent institutes then conduct additional measurements as part of the official regulations. At regular intervals stipulated by the authorities, Clariant calculates the overall emissions at the individual locations.

Between 2005 and 2010, Clariant cut its CO2 emissions to 366 048 tonnes. The total of all greenhouse gases emitted (besides carbon dioxide, notably also nitrogen oxide), i.e. what is known as the CO2 equivalent, fell by around the same amount to 616 886 tonnes. CO2 emissions per tonne of product fell by around a third to 154 kg per tonne and the total volume of all greenhouse gases per tonne of product by more than 30 percent to 260 kg. Over the same period, i.e. from 2005 to 2010, fine-particle emissions fell by around 35 percent to 66 tonnes, and by around 25 percent to less than 30 grams per tonne of product.

Substances that can no longer be further treated such as filtration dust from the company’s own waste incineration facilities or other manufacturing processes are deposited at permanent disposal sites. The volume of such substances is falling all the time thanks to improvements in manufacturing procedures and continuous reductions in the overall volume of waste produced.

Air emissionsEven with the best available technology, it is not possible to avoid air emissions completely. They are just as much a side effect of the production process as are waste products and the consumption of resources and raw materials. Emissions are subject to limits set out in the official permits industrial plants must obtain in order to operate.

hazaRdouS waSte In ReLatIon to pRoduCtIve output

in kg/tonne

70

60

50

40

30

20

10

0

2005 2006 2007 2008 2009 2010

64

55

4551

38 36

CaRbon dIoxIde eMISSIonS In ReLatIon to pRoduCtIve output

Kg/tonne

250

200

150

100

50

0

2005 2006 2007 2008 2009 2010

236 227202 197 184

154

CaRbon dIoxIde eMISSIonS

in tonnes

700 000

600 000

500 000

400 000

300 000

200 000

100 000

0

2005 2006 2007 2008 2009 2010

641 634596 319

506 229 468 016393 032 366 048

43SuStainability in detail

Page 44: Clariant Sustainability Report 2010

The European Pollutant Release and Transfer Register was introduced in the European Union in 2008. Updated on an annual basis, it provides the public at large with information concerning significant pollutant releases to air, water and land as well as off-site transfers of waste. Providing key environmental data on specific industrial facilities, the reports are easily accessible via the Internet. The objective of the register is to make it easier for the public to access information on the environment and to contribute to public participation in environmental decision-making.

Noise emissionsResidential areas are located in the direct vicinity of some of our sites. Due to the multitude of companies operating in the area, we also have neighbors within the big industrial estates. Of course, protecting our own employees from the hazards of noise pollution is just as important as safeguarding the interests of our neighbors. For this reason, Clariant’s objective is to further reduce noise pollution.

Noise is produced mainly by the production sites and when goods are loaded and transported by road and rail. Coupled with ambient noise, an acoustic footprint readily emerges that is typical of this industrial environment. For this reason, Clariant appoints special firms to carry out measurements at the locations and in the neighboring areas. Complaints due to noise are investigated without delay.

In order to provide staff with effective protection, Clariant ensures that the noise level at permanently manned workstations remains under 85 dB(A). This is achieved by converting and encapsulating machinery, by fitting equipment with appropriate housing, and by procuring low-noise plant and electromotors. In areas where noise levels do reach 85 dB(A) and more, staff are required to wear ear protectors and measures aimed at reducing noise levels are considered. Noise measurements are taken regularly at plant and workstations. If the values have increased compared with past recordings, the cause is determined and counter-measures initiated.

totaL gReenhouSe gaS eMISSIonS In ReLatIon to pRoduCtIve output (Co2 equIvaLent)

Kg CO2 equiv./tonnes

400

300

200

100

0

2005 2006 2007 2008 2009 2010

379342

283 275 300260

FIne-paRtICLe eMISSIonS In ReLatIon to pRoduCtIve output

Grams/tonne

40

30

20

10

0

2005 2006 2007 2008 2009 2010

3834 32 32 31 28

FIne-paRtICLe eMISSIonS

tonnes

120

90

60

30

0

2005 2006 2007 2008 2009 2010

10289 80 77

65 66

totaL gReenhouSe gaS eMISSIonS (Co2 equIvaLent)

tonnes CO2 equiv.

1 200 000

900 000

600 000

300 000

0

2005 2006 2007 2008 2009 2010

1 031 289897 633

708 014 653 146 638 347 616 886

44 Sustainability Report 2010

Page 45: Clariant Sustainability Report 2010

In many regions of Chile in which copper is mined, dust is a constant problem – and often the mines are located very close to towns and villages. “The dust is not only unpleasant, it also makes people ill – the workers and the residents,” explains Edson Barros, Global Business Development Manager at the Clariant Emulsions Business Unit. In the last year his department has developed a polymer that has finally put an end to this dust. “It was important to us to do something for people’s health, and this is exactly what the newly developed product does,” he explains.

The access road to a mine. Just a few days earlier it was dusty here, too. But then along came a large truck and sprayed warm water mixed with anti-dust polymer on the loosened earth – in an approach similar to the fertilization of a field in agriculture. Just a few hours later the earth was dry again and the dust had disappeared.

The anti-dust polymer developed by Clariant binds the smallest of particles and stabilizes the soil. And the effect is lasting – the process should not have to be repeated for another 18 months, with rain and even frost unable to disturb the surface.

“This procedure is much faster, cheaper, and more environmentally friendly than surfacing roads with asphalt,” explains Edson Barros. “This makes it highly practicable even in poorer regions.” And as a positive side effect, it also helps to improve safety for truck drivers who benefit from better visibility. At the same time it ensures that truck tires have a better grip on the road.

This is not all – the water-soluble polymer has even more to offer. Sometimes the problem is caused not by dust but by mud, with the softened ground making the roads almost impassable for heavy vehicles, and even if they do manage to get through, conditions are extremely hazardous due to the risk of skidding. And here again, in a higher concentration, the new product can help by “sealing” the ground. Edson Barros comments that “It is important to know that the product is non-toxic, does not contain any heavy metals, and does not contaminate the ground – it is biodegradable as per standard OECD 302 B.” An innovation, therefore, that is good for the environment and above all contributes to improved health and safety.

Don’t stir up any dust – with help from a new polymer from Clariant

45SuStainability in detail

Page 46: Clariant Sustainability Report 2010

nuMbeR oF ReCognIzed oCCupatIonaL dISeaSeS/deathS

2005 2006 2007 2008 2009 2010

Occupational diseases 12 10 9 9 9 7

Fatal accidents* 1 1 0 2 0 1

*Accidents unrelated to work with chemicals, such as road accidents.

dayS LoSt due to aCCIdentS at woRK

2005 2006 2007 2008 2009 2010

Days 3 537 4 038 3 128 2 182 1 931 1 066

LWDR 17.3 19.6 15.9 11.3 11.2 6.1

LWDR = Lost Workday Rate (the ratio of the number of days lost due to accidents at work to every 200 000 hours of work)

nuMbeR oF oCCupatIonaL aCCIdentS wIth at LeaSt one day’S woRK LoSt

Accidents

250

200

150

100

50

0

2005 2006 2007 2008 2009 2010

221 218180

150117

79

nuMbeR oF oCCupatIonaL aCCIdentS In ReLatIon to output

ltAR

1.5

1.0

0.5

0.0

2005 2006 2007 2008 2009 2010LTAR = Lost Time Accident Rate (the ratio of the number of occupational accidents where at least one

day’s work was lost to every 200 000 hours of work)

1.21 1.120.92 0.78 0.68

0.45

Occupational health and safetyEfforts to prevent accidents happening at work are a core component of Clariant’s production activities and require line managers to consistently motivate their staff in this regard. In 2007, Clariant launched an initiative aimed at reducing the number of accidents and their consequences (see also the chapter entitled “AvoidingAccidents@Clariant”). The success of this initiative and the concomitant efforts in this regard are reflected in the sharp decline in the accident figures. Thus, in 2010, Clariant registered a total of 79 occupational accidents where at least one day’s work was lost – a drop of almost 60 percent compared with 2007 and a fall of around a third compared with the previous year.

The “AvoidingAccidents@Clariant” initiative has already brought about a tangible improvement in the number of days lost due to accidents. Thus, the Lost Time Accident Rate (LTAR) of the Clariant Group has fallen from 1.12 in 2006 to 0.45 in 2010; the LTAR is the ratio of the number of occupational accidents with at least one day’s work lost to every 200 000 hours of work. This reduction is not just a 60 percent improvement; the current LTAR figure is also the lowest ever recorded by the Group. Days lost due to occupational accidents fell significantly from 4 038 in 2006 to just 1 066 in the year under review, a trend which points to a decline in both the incidence and severity of accidents at work.

The improvements in the number and severity of accidents, and the safety record in general, underline the success of Clariant’s extensive and ongoing efforts to prevent accidents and limit the

potential consequences. It is important that staff awareness for safety at the workplace is maintained and promoted in the future so that today’s safety record is safeguarded in the long term.

46 Sustainability Report 2010

Page 47: Clariant Sustainability Report 2010

Key eConoMIC IndICatoRS

CHF millions 2005 2006 2007 2008 2009 2010

Sales1 7 728 8 100 8 533 8 071 6 614 7 120

Operating result 448 385 278 229 – 20 366

Group result 192 – 78 5 – 37 – 194 191

Wages and salaries2 1 952 1 817 1 930 1 759 1 757 1 668

Dividends (in CHF) 0.25 0.25 0.25 0 0 0

Financial result – 97 – 110 – 71 – 138 – 101 123

R&D expenditure 197 207 211 184 150 135

Liquid funds 223 443 509 356 1 140 7161 Continuing operations2 Including exceptional personnel costs

Plant safetyClariant invests significant resources and a great deal of care in ensuring that its production plants and facilities are as safe as possible. This applies both to the construction of new facilities and to ongoing service and maintenance. To this end, the Group has drawn up an extremely comprehensive list of rules and measures which is always kept up to date and complete.

Clariant’s production sites in Germany are subject to the requirements of the country’s Major Accidents Ordinance (Störfallverordnung), its European sites to the EU Seveso II Directive, and its non-European sites to similar rules and regulations. In this context, corresponding reports are drawn up detailing the Group’s security management system and the plant-specific measures for securing operational safety. Clariant’s own guidelines are updated when significant changes need to be made or, at the latest every five years, whichever is applicable. Not a single reportable event occurred at any of Clariant’s production sites in 2010. This positive result is testament to the high level at which the Group’s plant safety concepts are drafted, implemented and maintained.

Any release of substances into the atmosphere, any explosion or fire with consequences for the health of company employees or its neighbors, any damage to plant and equipment, any case of environmental impairment, and any hazardous emissions which exceed defined quantity thresholds are systematically recorded,

evaluated and reported. In addition, by analyzing past incidents, Clariant has developed a concept which aims to support the recording and reporting of events below reporting requirements.

In 2010, Clariant put this concept to test on a worldwide basis. On the basis of the findings, the recording of incidents relevant to plant safety will become an integral part of Group reporting from 2011. With this development, Clariant is supporting the general guidelines of an initiative of the European Chemical Industry Council (CEFIC).

Economic performance and employee structureIn 2010, Clariant successfully implemented its restructuring plans to create a new and stable basis for its operating activities. The success of the initiative is reflected in increased sales and results. 2010 saw Clariant generate additional cash flow, cut its costs, and reduce the complexity of the Group as a whole, resulting in a significant rise in profitability. The economic recovery helped the Group bring its restructuring endeavors to fruition. Clariant has now reached its goal of securing profitability above the average for the sector. The objective is to continue this trend in the years to come. Building on the excellent results of 2010 and the positive effect of the restructuring program, Clariant’s goal for 2011 is to continue to grow in a sustainably profitable manner and to achieve an operating margin in excess of 8 percent.

47SuStainability in detail

Page 48: Clariant Sustainability Report 2010

Clariant is working intensively to increase productivity. This can be verified by the continuous reduction of material losses via waste, waste water and air emissions. Due to the economical crisis in 2009 and regular changes in the product portfolio no clear trend is visible for 2009 and 2010 in the material balance. Clariant is also producing products and mixtures with water as a regular ingredient. As this is not included as a raw material, but separately considered in the balance, the amount of products in total is higher than the amount of raw materials. Also intermediates are not included, which are further processed internally at the Clariant production sites.

The proportion of recycled materials is traditionally low as they cannot be used. Other starting compounds and auxiliary materials are recycled many times over in the production process itself. In addition, Clariant is making increasing use of renewable raw materials.

SaLeS by RegIon

CHF millions 2005 2006 2007 2008 2009 2010

EMEA (Europe, Middle East, Africa) 4 191 4 333 4 616 4 313 3 334 3 529

North America 1 120 1 143 1 102 994 792 860

Latin America 1 052 1 149 1 262 1 261 1 138 1 199

Asia/Pacific 1 365 1 475 1 553 1 503 1 350 1 532

pRoduCtIon and MateRIaLS uSed

20102 376

2 15999.8

20092 131

1 935100.3

20082 372

2 18299.0

20072 504

2 31898.4

20062 626

2 40499.5

20052 722

2 480100.0

t 3 000 2 000 1 000 0 98 99 100 101 Index

Production Materials used Relation (index) Base year of index: 2005

48 Sustainability Report 2010

Page 49: Clariant Sustainability Report 2010

As in 2009, personnel management again had major challenges to contend with in 2010. As part of the restructuring and systematic analysis of the entire company, the area of personnel was also reviewed to create a platform for sustainable, profitable growth. Extensive restructuring had a direct effect on Group headcount.

In 2009 the number of full-time employees had already fallen by more than 2 500; as a result, the employee headcount dropped to 17 536 at the end of the year due to restructuring measures. In 2010, the employee headcount then fell further (as notified) to 16 176. Clariant considers it extremely important to conduct its employee downsizing in as fair and socially acceptable a manner as possible. All the job cuts were made in close cooperation with local employee representatives and authorities. The introduction of shorter working hours proved an important tool for managing headcount during the economic crisis, as it enabled us to retain highly qualified specialists, particularly during the major downturn of 2009, so we could swiftly return them to full-time work when the situation turned round. By mid-2010 we were able to discontinue shorter working hours as the economical situation improved. Clariant is an international organization not only on account of its global business activities, but also because it employs staff from 98 different nations of the world.

eMpLoyee StRuCtuRe by natIon

Germany 25 %

Brazil 10 %

France 7 %

America 6 %

China 6 %

India 6 %

Italy 4 %

Spain 4 %

Indonesia 3 %

Mexico 3 %

Switzerland 3 %

Other 23 %

eMpLoyee StRuCtuRe by RegIon and gendeR

Employees in region Of which male Of which female

Clariant worldwide 100 % (= 16 176) 81 % 19 %

Europe 49 % (= 7 925) 81 % 19 %

Asia 21 % (= 3 393) 80 % 20 %

Latin America 17 % (= 2 828) 82 % 18 %

North America 7 % (= 1 135) 79 % 21 %

Middle East/Africa 6 % (= 8 94) 87 % 13 %

49SuStainability in detail

Page 50: Clariant Sustainability Report 2010

50 Sustainability Report 2010

Page 51: Clariant Sustainability Report 2010

Clariant Ltd, a holding company organized under Swiss law, directly or indirectly owns all Clariant Group companies worldwide. Its registered domicile is Rothausstrasse 61, CH-4132 Muttenz. As a rule, shares of group companies are not publicly traded. The holding company unites some 100 companies in more than 50 countries. The company’s business operations are conducted through Clariant Group companies.

Clariant has business operations in 53 countries around the globe. Its key locations are in Switzerland (Group controlling, production), Germany (research and development, production), and China and India. Clariant’s business operations are divided into ten business units, with each BU having full responsibility for its operating results. The BUs control and manage the value chain, including: applications, purchasing, production, supply chain, marketing, and sales.

The Executive Committee (Group management) is responsible for the financial and operational management of Clariant and is accountable to the Board of Directors, the ultimate decision-making authority. The Executive Committee implements Group strategy and aligns the structure of the organization to meet these targets. The Executive Committee bears the principal responsibility for allocating resources to implement Group strategy, for succession planning, and for talent management to ensure that Clariant has the right people in the right places to deliver continuous improvement going forward.

The Corporate Center comprises all the core business functions. Encompassing approximately 100 employees, it supports the Executive Committee. In this regard, the Corporate Center works closely with the Business Units and defines the strategy and scope of Business Services.

Business Services are coordinated from both Muttenz and the Corporate Center and comprise Human Resources, IT, Strategic Procurement, Logistics, Supply Chain, Accounting, Legal, and Communications. Guidance and direction with regard to regional services is provided either by the Corporate Center or the Global Business Services.

Each region/country has a Business Service head who is responsible for coordinating across all the BUs to ensure they receive the right level of service. However, the regional/country lead has no direct business responsibility as this remains entirely with the BUs. The country or regional head is also Clariant’s point of contact for external stakeholders, ranging from local communities to national governments.

Group Technology Services (GTS), comprising six central units, was formed with the aim of streamlining and strengthening important functions along the technology and innovation chain. Innovation and technology are crucial to our success as a business. As such GTS play a vital role.

At 31 December 2010 the following shareholders held a participation of 3 percent or more of the total share capital: Fidelity Management & Research, Boston (USA) 5.23 percent (2009: < 3 percent), AXA, Paris (France) 5.09 percent (2009: < 3 percent), Amundi, Paris (France) 3.07 percent (2009: < 3 percent), Credit Suisse, Zurich (Switzerland) 3.04 percent (2009: < 3 percent). No other shareholder was registered as holding 3 percent or more of the total share capital. At 31 December, 2009 the following shareholders held a participation of 3 percent or more of the total share capital: BlackRock Inc., New York (USA), 4.11 percent, JPMorgan Chase & Co., New York (USA) 3.71 percent, ABN Amro Bank N.V., Amsterdam (NL) 3.34 percent, Dimensional Fund Advisors, Austin (USA) 3.11 percent. No other shareholder was registered as holding 3 percent or more of the total share capital.

The Clariant Group

51the clariant Group

Page 52: Clariant Sustainability Report 2010

Volunteering to help others is a key component of Clariant’s successful corporate citizenship in North America. Coordinated by the Clariant Volunteer Council, Charlotte-area employees participate in a wide array of community services. As part of the Charlotte-area’s “School Tools” campaign in 2010, needy schoolchildren got basic supplies for a good start of the school year. Clariant’s Contribution Committee made a grant in order to buy software for the Oakhurst Elementary School and top U.S. college graduates taught chemistry in chronically underperforming schools. For the “2010 Heart Walk”, energetic Clariant walkers took to the streets of downtown Charlotte and raised a considerable fund for the “American Health Association“. Also in 2010 “Meat, Bread and Cheese” emerged as a new event, with Clariant employees making more than 1 000 sandwiches for the homeless – in just 12 minutes.

In Brazil, too, Clariant works closely with local organizations such as the Bachiana Foundation set up by the famous Brazilian conductor, João Carlos Martins. Around 90 young people are currently learning to play the flute and the violin in Suzano; they practice together in a small orchestra and receive instruction in music theory. The lessons are paid for by Clariant.

After the devastating floods in Pakistan in the summer of 2010, Clariant Pakistan and its employees donated more than CHF 38 000 to an emergency aid project aimed at renovating houses and repairing the drinking water system in the community of Chakar Khan in which many of the workers at the Clariant plant in Jamshoro live. They also helped with project work in their free time.

Acting globally, helping locally – Social projects in the uSA, brazil and Pakistan

52 Sustainability Report 2010

Page 53: Clariant Sustainability Report 2010

Report structure: data capture, period under review, method

In order to inform our shareholders and other stakeholders about our responsible corporate management efforts in a transparent way, we follow the guidelines of the Global Reporting Initiative (GRI). The GRI checked and confirmed our successful adherence to its G3 sustainability reporting guidelines at A-Level throughout the entire report. This is the first separate comprehensive Clariant AG Sustainability Report. There are therefore no notes or changes to earlier publications. There has been no independent validation of the content. The period under review extends from 1 January to 31 December 2010 and is therefore the same as Clariant’s business year. The last sustainability information relating to Clariant appeared in the 2009 Annual Report published in March 2010. Further information can be found on the Internet at www.clariant.com. Clariant publishes a sustainability report annually.

Clariant’s sustainability report spans all Group companies and sites, as well as all pertinent subject areas. Data and facts relevant to sustainability were gathered from all locations for evaluation and compilation. Information on suppliers originates from supplier audits. Information on sales has been analyzed insofar as it was made available by the customer. Otherwise the sustainability report contains no deliberate boundaries. A great deal of care and attention was invested in this report.

Clariant ensures ongoing and prompt communication with key stakeholders in the relevant form for each target group. Stakeholders are involved in the work at the various sites and at company headquarters by means of various activities including surveys, neighborhood forums, open days, industrial park meetings, cooperation between management and unions, written communications and online information. Events are usually held quarterly or twice a year. Discussions were held, for example at the sites, with individual stakeholders before this report was drawn up.

Clariant has undergone fundamental restructuring under its new management in recent years in order to bring efficiency and the cost structure of the Group up to an internationally competitive level. As part of this essential program, the workforce was reduced by some 25 percent. The restructuring was successfully completed in 2010, and Clariant is currently creating a new HR reporting system. Employees are informed as soon as possible about major operational changes. Accident figures and the number of occupational diseases, lost days, absences and work-related fatalities are recorded and evaluated worldwide and by region. The findings are then incorporated into the continuous improvement process.

As is clear from the employee structure, Clariant largely employs local staff at its sites in individual countries. This also applies to management roles. Foreign employees are only appointed in isolated cases.

53the clariant Group

Page 54: Clariant Sustainability Report 2010

drastic reduction in emissions thanks to the further processing of carbon dioxide Clariant avoids carbon dioxide emissions by permanently optimizing production processes in line with environmental sustainability objectives. For example, carbon dioxide resulting from the catalytic incineration of emissions in the Gendorf plant in Germany is purified and passed on to partner company Linde for liquefaction under compression.

Following a 10-month construction period, Linde started up a plant for carbon dioxide (CO2) liquefaction at the Clariant site in Gendorf in mid-September 2010. Boasting an annual capacity of up to 80 000 tonnes of CO2, it plays a central role in Linde’s European production network. The raw gas used to liquefy the carbon dioxide is taken directly from Clariant’s neighboring ethylene oxide production facility, purified to food-grade quality and liquefied for onward transport. Clariant has made technical modifications to its respective purification plant and connected the production facilities to adapt the CO2 to Linde’s requirements – an investment that primarily benefits the environment. CO2 emissions at the Clariant plant have been cut by 95 percent in the wake of this cooperation. This approach guarantees Linde a continuous flow of high-quality raw gas regardless of season and economic trends, in contrast to the widespread production of CO2 via the manufacture of fertilizers. Reliability of Supply is correspondingly high.

use of innovative technologies A reduction in air emissions is also being achieved at the Höchst site in Germany through use of a thin-layer evaporator. Construction of a conventional thermal incineration unit would

otherwise have produced an additional 1 400 tonnes of carbon dioxide (CO2), 16 tonnes of carbon monoxide (CO) and 16 tonnes of nitrogen oxides (NOx) per year. The latter in particular contribute to high ozone values near ground level over the summer months.

Organic solvents are used at the site to manufacture polyolefin waxes for a range of application areas. Multi-stage distillation was previously used to separate the organic solvent for reuse in the process. The process was analyzed in 2007 and 2008 with a view to reducing the resulting residual emissions of organic hydrocarbons and finding a technical alternative to exhaust gas purification. The analysis found that the partial replacement of conventional vacuum distillation by a modern thin-layer evaporator is almost just as efficient as conventional exhaust gas purification at separating organic solvents from the exhaust gas. However, unlike with the conventional waste gas incinerator, there was no way of knowing whether this technology could meet the strict new statutory emission limits, and so extensive preliminary tests were required before the decision could be made to go ahead with this substantial investment. The tests yielded positive results. On completion of the test period in 2010, exhaust gas measurements showed that the strict limits could be significantly undershot. By investing in the thin-layer evaporator instead of installing an additional conventional waste gas incinerator, Clariant has managed to implement a much more eco-friendly process than found in the market previously. There has also been a noticeable reduction in operating costs.

SuStaInabILIty In pRoduCtIon wIth LeSS Co2

54 Sustainability Report 2010

Page 55: Clariant Sustainability Report 2010

Due to difficulties with definition and the unclear cost-benefit ratio, other indirect greenhouse gas emissions are not included in this report. Total energy use is included, irrespective of whether this is covered by own energy generation or external sources. Indirect emissions thus include, for example, CO2 from coal-fired power stations. However, they are not included in this report. Clariant cannot make any valid measurement of the impact of climate change on the company’s performance.

Clariant implemented a global initiative in the year under review and highlighted the risks of corruption again to the entire organization in the course of strengthening its Code of Conduct. This code, which applies to all employees, explicitly prohibits corruption. Clariant considers special anti-corruption information events for employees to be part of the company’s training program. Clariant’s subsidiaries are regularly inspected by the Internal Audit department for risks of corruption. Inspections took place in Turkey, Thailand, Singapore, Indonesia and China, among others, in 2010.

Some of Clariant’s investment agreements already include contracts with clauses regarding human rights. New investment agreements are checked for this. Suppliers and contractual partners are obliged to respect human rights and are also subject to targeted checks in this regard.

Clariant does not support any party political positions. Clariant is involved in industry policy either through trade associations or through policy and its neighbors. Clariant has not received any significant government grants.

Awards

So far, Clariant has received the following awards in recognition of its sustainability initiatives:› U.S. Environmental Protection Agency (EPA): in 2009, Clariant

received an award from the U.S. Environmental Protection Agency for developing ExolitOP 560 – a non-halogenated flame retardant for polyurethane foams used in the automobile and furniture industries and in the manufacture of other consumer goods.

› U.S. Environmental Protection Agency (EPA): in 2009, Clariant received an award from the U.S. Environmental Protection Agency for developing Cartaspers PSM – a non-ionic, water-binding polymer for treating hydrophobic surfaces. Cartaspers is used in paper manufacture.

› Pakistan National Forum for Environment & Health: this non-profit organization awarded Clariant its prestigious environmental prize in 2009 in recognition of the Group’s operating policies which have helped promote Pakistan’s social and economic development without impairing the environment and its natural resources.

› Dyestuffs Manufacturers’ Association of India: Clariant received an award from the Dyestuffs Manufacturers’ Association of India in 2009 in recognition of its “excellent performance in pollution control by a large-scale unit”.

› U.S. Environmental Protection Agency (EPA): in 2010, Clariant's Business Unit Industrial & Consumer Specialties (ICS) received a “Design for Environment” award for products in three of its lines: Genapol®, Hostapur® and TexCare®.

55the clariant Group

Page 56: Clariant Sustainability Report 2010

gRI-Index

dimension Page

1. Strategy and Goals

1.1. Foreword from the CEO 4, 5

1.2. Key sustainability implications, 7, 15, 16, 35, 36

risks and opportunities

2. Organizational Profile

2.1. Name of the organization 51

2.2. Primary brands, products and services 16, 51

2.3. Operational structure of the organization 13, 14, 51

(divisions, factories, subsidiaries)

2.4. Location of organization’s headquarters 51

2.5. Number of countries where the organization operates 51

2.6. Nature of ownership and legal form 51

2.7. Markets served 48, 51, Annual Report

2.8. Scale of the organization (number of employees, 47, 48

net sales, total capitalization)

2.9. Significant changes during the reporting period 51

regarding size, structure or ownership

2.10. Awards received in the reporting period 55

3. Report Profile

3.1. Reporting period 53

3.2. Date of most recent previous report 53

3.3. Reporting cycle 53

3.4. Contact point for questions regarding 59

the report or its contents

3.5. Process for defining report content 4-8, 53

3.6. Report scope and boundary 53

3.7. Specific limitations on the scope or 53

boundary of the report

3.8. Joint ventures, subsidiaries, Annual Report

outsourced operations

3.9. Basis for calculating and reporting data 20, 23, 44

3.10 Changes to the company compared to previous reports 53

3.11 Changes to the information structure compared 53

to previous reports

3.12. Table identifying the location of the Standard 56

Disclosures in the report

3.13. External validation 53

dimension Page

4. Corporate Governance

4.1. Governance structure of the organization 13, 14, 51

4.2. Independence of the Chairman of the Annual Report

Supervisory Board

4.3. Controlling body 13, 14

4.4. Shareholder and employee recommendations 14, 15, 21, 22

4.5. Remuneration policy 14

4.6. Avoidance of conflicts of interest 14, 15

4.7. Expertise of the management committees 4, 5, 21, 22

regarding sustainability

4.8. Mission statements and corporate codes 7-11, 14

4.9. Monitoring sustainability performance 13, 14

4.10. Assessment of the Executive Committee Annual Report

4.11. Implementation of the precautionary principle 14, 15, 19-23

4.12. Support for external initiatives 8, 13, 22, 25

4.13. Membership of associations/interest groups 8, 13, 25

4.14. Engagement of stakeholder groups 7, 53

4.15. Selection of stakeholders 53

4.16. Approaches for stakeholder dialogue 7, 8, 14, 22, 25, 27, 36, 53

4.17. Position on stakeholder concerns 22, 27, 29, 44, 46

5. Management Approach and Performance Indicators

Management approach 7-11, 19

Economic Performance Indicators

EC1 Economic value generated and 47, 48, Annual Report

distributed

EC2 Financial implications, risks and opportunities 4, 7, 55

due to climate change

EC3 Coverage of the defined benefit plan obligations 21, 27, 29, 47

EC4 Financial assistance received from the government 55

EC5 Wages and minimum wage 15, 27

EC7 Procedures for local hiring 8, 49, 53

EC8 Infrastructure investments and services for public benefit 52

Ecological Performance Indicators

EN1 Materials used 48

EN2 Recycled materials used 48

EN3 Direct energy consumption 30-32, 39

EN4 Indirect energy consumption 55

56 Sustainability Report 2010

Page 57: Clariant Sustainability Report 2010

dimension Page

EN5 Energy saved 30-32, 39

EN6 Initiatives to provide energy-efficient products 30-32, 54

EN7 Initiatives to reduce indirect energy consumption 30-32

EN8 Total water withdrawal 40

EN9 Water sources 40

EN10 Recycled water used 40, 42

EN16 Greenhouse gas emissions 43, 44

EN17 Other greenhouse gas emissions 55

EN18 Initiatives to reduce greenhouse gas emissions 30-32

EN19 Emissions of ozone-depleting substances by weight 43, 44

EN20 NOx, SOx, and other significant air emissions 44

EN21 Total water discharge 42

EN22 Total weight of waste by type and disposal method 20-22, 42-43

EN23 Total number and volume of significant spills 43, 44

EN24 Hazardous waste 42, 43

EN25 Waste water and biodiversity 42

EN26 Environmental impacts of 10, 11, 19, 20, 23, 25, 32

products and services

EN27 Packaging material 20, 21

EN28 Significant fines and non-monetary sanctions 15

for non-compliance with environmental laws and regulations

EN29 Environmental impacts of transporting products 20, 21

Employment

Labor Practices & Decent Work

LA1 Total workforce 49

LA5 Notice periods regarding significant operational changes 53

LA7 Rates of injury, occupational diseases, 29, 30, 46

lost days, and work-related fatalities

LA8 Risk control and programs regarding serious diseases 29

LA9 Health and safety topics 29, 30

LA10 Hours of training 8, 15, 20, 27, 29

LA13 Composition of governance bodies and 49, 53

breakdown of employees

dimension Page

Human Rights Indicators/Business Practices

HR1 Investment agreements that include human rights 55

clauses/have undergone human rights screening

HR2 Screening of suppliers and contractors 8, 25, 27, 55

on human rights

HR4 Total number of incidents of discrimination 8, 15

and actions taken

HR5 Risk to right to exercise freedom of association 8

and collective bargaining

HR6 Risk of incidents of child labor 8, 55

HR7 Risk of incidents of forced or compulsory labor 8, 55

Society/Social Indicators

SO1 Programs and practices regarding the impacts 8, 10, 14, 22

of operations on communities

SO2 Business units analyzed for corruption 55

SO3 Employee training in anti-corruption policies 55

and procedures

SO4 Actions taken in response to incidents of corruption 55

SO5 Public policy positions and participation in 35, 36, 55

public policy development and lobbying

SO7 Total number of legal actions for anti-competitive 15

behavior, anti-trust and monopoly practices

SO8 Monetary value of significant fines 15

Product Responsibility Indicators

PR1 Impacts of products 7, 8, 10, 32

PR3 Information on products and services 16, 21

PR6 Programs for adherence to competition law 15

PR7 Non-compliance with advertising and competition law 15

PR8 Total number of substantiated complaints regarding 15

breaches of customer privacy

PR9 Monetary value of significant fines for non-compliance 15

with laws and regulations

57

Page 58: Clariant Sustainability Report 2010

58 Sustainability Report 2010

Page 59: Clariant Sustainability Report 2010

Overview of Information

› Company principles regarding the environment, health and safety, p. 10

› In search of renewable raw materials, p. 11› Business Units Overview, p. 16› Rules designed to ensure safety during transport, p. 20› Product and transport packaging, p. 21› Clariant Excellence as an initiative for

continuous improvement, p. 23› Measures and methods designed to improve

occupational safety, p. 30› Specific energy measures within the framework

of Energy 2010, p. 31› EU rules on the manufacture and handling of chemicals, p. 35› Sustainability in production with less CO2, p. 54

Sustainable Initiatives

› Not only clean, but…, p. 9› On fire for sustainable fire protection, p. 17› Acting globally, helping locally, p. 26, 52› Revolution in white, p. 28› Small changes with a big impact, p. 33› So that nothing sticks, p. 34› A solvent-free solution, p. 37› Blue goes green, p. 41› Don’t stir up any dust, p. 45

List of Charts

› Energy consumption, p. 39› Energy consumption in relation to productive output, p. 39› Water consumption, p. 40› Water consumption in relation to productive output, p. 40› Volume of effluents, p. 42› Volume of effluents in relation to productive output, p. 42› Hazardous waste in relation to productive output, p. 43› Carbon dioxide emissions, p. 43› Carbon dioxide emissions in relation to productive output, p. 43› Greenhouse gas emissions, p. 44› Greenhouse gas emissions in relation to productive output, p. 44› Particle emissions, p. 44› Particle emissions in relation to productive output, p. 44› Number of occupational accidents, p. 46› Accident figures in relation to output, p. 46› Production and materials used, p. 48

List of Tables

› Days lost due to accidents at work, p. 46› Number of recognized occupational diseases/deaths, p. 46› Key economic indicators, p. 47› Sales by region, p. 48› Employee structure by region and gender, p. 49› Employee structure by nation, p. 49

59

Page 60: Clariant Sustainability Report 2010

PublisherClariant International Ltd, Muttenz

ContactContacts at Clariant for sustainability issues:

Corporate CommunicationsJochen Dubiel, telephone +41 (0) 61 469 64 97

Investor RelationsSiegfried Schwirzer, telephone +41 (0) 61 469 67 49.

Inquiries by e-mail to [email protected].

Websitewww.clariant.com

Ordering addressOrders may be placed on the Clariant website or sent in writing to: Clariant International Ltd Rothausstrasse 61 4132 Muttenz Switzerland ® Product and service marks protected by Clariant in many countries

© 2010 Clariant International Ltd, Rothausstrasse 61, 4132 Muttenz, Switzerland

Publication details

SC2011020801 –

Concept and editorial officeGFD Finanzkommunikation, Frankfurt

Design, graphics and layoutKuhn, Kammann & Kuhn GmbH, Cologne

Photography Jo RöttgerThe photos for each chapter show Clariant employees at the Corporate Center in Pratteln/Switzerland.

PrintingNeidhart + Schön, Zurich

60 Sustainability Report 2010

Page 61: Clariant Sustainability Report 2010

www.clariant.com

Clariant International LtdRothausstrasse 614132 MuttenzSwitzerland

© Clariant International Ltd, 2011 SAP-

Nr.

1099

792