2. Clariantfigures Key Figures 20111 2010 CHF m CHF m Sales
7370 7120 EBITDA before exceptionals 975 901 EBITDA margin before
exceptionals (%) 13.2 12.7 Net income 251 191 Basic earnings per
share 0.86 0.81 Operating cash flow 206 642 Investment in property,
plant and equipment 370 224 Research & Development costs 176
135 Total assets 9081 5921 Total equity 3026 1806 Equity ratio (%)
33.3 30.5 Net financial debt 1740 126 Gearing ratio2 (%) 58 7
Employees 22149 16176 1 Including Sd-Chemie 2 et financial debt to
equity N Sales by Business Unit Sales by Region CHF m CHF m Total
2011: 7370 Total 2011: 7370 Industrial & Consumer Specialties
1473 20% Europe 3029 41% Masterbatches 1124 15% Middle East &
Africa 642 9% North America 958 13% Pigments 973 13% Textile
Chemicals 675 9% Latin America 1144 15% Oil & Mining Services
620 8% Leather Services 265 4% Performance Chemicals 1293 18% 1
Asia/Pacific 1597 22% Functional Materials2 456 6% Catalysis &
Energy2 491 7% 1 erformance Chemicals includes the Business Units
Additives, Detergents & Intermediates, P Emulsions, Paper
Specialties. 2 ay December 2011 M Cover photo This photograph was
taken by Jo Rttger at Clariants Corporate Headquarters in Pratteln,
Switzerland. In the background it shows an artwork of the British
artist Charlotte Mann. ClariantClariant Sustainability Report 2011
Sustainability Report 2011 www.charlottemann.co.uk
3. 1Foreword Page 02Sustainability Management and Objectives
Page 04 04High priority of sustainability 06 Environmental goals
for 2020 in corporate strategy 07 Opportunities and risks of
sustainability strategy 05 Clariant Sustainability Policy 07
Sustainability management at ClariantThe Clariant Group Page 10 10
Business performance 18 Precise environmental targets for 2020
13Organization 20 Responsible action, obligations and commitment 15
Corporate GovernanceClariant and the Environment Page 22 22
Materials used 31 Atmospheric emissions 24 Reducing energy
consumption with 33Waste future-oriented programs 34 Renaturalizing
the Catawba River in the 26 Energy consumption US State of North
Carolina 27 Water usage 36Biodiversity 28 Thorough analysis of
uncontaminated cooling water 37 Investments in environmental
protectionHuman Resources and Occupational Health and Safety Page
38 38Employees 45 Occupational safety 39Compensation 45 Active
prevention management 40 Employee policies 46 Most occupational
accidents can be prevented 42 Upholding corporate values to drive
motivation 49 Recording of events relevant to process 44 Training
and personnel development safety in accordance with CEFIC
criteriaProduct Stewardship Page 50 50 Product analysis 54Marketing
51 Product evaluation 54 Transport and packaging 51 Product
information 55 Intelligent testing and ethical working practices 52
EcoTain a holistic concept ranging from product innovative
approaches to substance analysis development to final disposal 57
Customer protectionClariant and Society Page 58 58 Respect for
human rights 62 Economic commitment 59 Corporate citizenship 63
Anti-corruption policy 62 Effects on local economies
63FinesReporting Framework and Explanatory Notes Page 64GRI Content
Index Page 67
4. 2 Clariant Sustainability Report 2011 Dear Readers, Despite
the challenging economic environment, we have once again
intensified our efforts in 2011 to achieve sus- tainable
management. In our Business Units and regions, we are optimizing a
large number of activities to meet sustainability objectives. We do
this because Clariant attaches a high priority to sustainable,
business actions, in terms of the environment, society, and
employees as well as other aspects. Accordingly, in 2011 we
achieved further goals to reduce emissions and the concentration of
pollutants in the environment. In addition, for the first time we
defined concrete goals for the period ending in 2020, objectives we
intend to measure ourselves against. Our aim is to reduce energy
consumption in the Clariant Group by 30percent and CO2 emissions
and waste accumulation by 45percent, each compared with 2005
levels. These efforts represent an important condition for meeting
our responsibilities. At the same time, they offer us an
opportunity to lay the foundation, both operationally and
technologically, for sustainable, profitable and socially
acceptable growth. Over the next few years, we will invest more
than ever before in innovative products for current and future
megatrends. We are convinced that only those companies that manage
sustainably and act responsibly will be successful in the long
term. We are therefore bringing the Clariant Group systematically
in line with the criteria of sustainability and of corporate and
social responsibility. Our products and production processes are
using resources and energy more and more efficiently and are thus
continually reducing our impact on the environment. The innovations
that have been and are being developed for our Business Units play
a key role in this positive trend. Our customers are the primary
beneficiaries of these innovations, and more and more of them are
also operating their companies in accordance with sustainable
management criteria.
5. Foreword 3 Clariant does not limit its focus on
sustainability strictly to product safety and environmental
protection. Occupational safety, employee satisfaction, and a good
balance between societal and corporate interests are aspects that
have equal priority. This all represents sustainability to
Clariant, and is why Clariant nurtures an ongoing, regular dialogue
with interest groups that have a stake in our company our
stakeholders. By implementing these measures and policies, we are
determined to make a contribution towards meeting the global
challenges of our time: an ade- quate food supply, clean water,
environmentally compatible energy generation and economical energy
consumption, climate protection, and last but not least quality of
life for a growing world population. In the past year, we announced
that we will also devote more attention to communicating
information about all of these activities and reporting
transparently on the subject of sustainability at Clariant. And we
have followed through on our promise. The structure of this
sustainability report has been optimized and the content expanded.
You will find a greater amount of data and facts relating to
sustainability management than was included in last years report.
Nevertheless we have a long road ahead of us, one which we persist
on. Hariolf Kottmann Chief Executive Officer
6. 4 Clariant Sustainability Report 2011 sustainability
management and objectives Population growth, improved living
standards, and globalization have created op- possible. Clariants
purchasing organization portunities but have also generated
challenges. The need for raw materials, for will play a key role in
this regard by giving example, is increasing while total available
resources are shrinking. This means greater consideration to
sustainability when that the current generation must manage
existing resources much more efficiently purchasing supplies and
materials. and responsibly so that future generations may still
have comparable opportunities for development. High priority of
Globalization also puts increasing pressure The social
responsibility expected of a glob- sustainability in corporate on
peoples willingness and ability to work, ally operating chemical
company requires strategy and involves considerable individual and
so- that Clariant act to achieve more than just cial changes. Even
today many people are the purely business goals supported by its
Clariant has committed itself 100 percent highly stressed by the
increasingly rapid shareholders. It must also focus on conserv- to
the principle of sustainable corporate changes in the world around
them with ing resources, protecting the environment, growth whether
in production, shipping associated psychological and physical con-
creating a pleasant and performance- and distribution, or in the
utilization of sequences. A modern and sustainably suc- enhancing
workplace, and treating people products and services. As a leading
spe- cessful company is not only in a position to with respect.
cialty chemical company, Clariant does not counteract these
effects, it is required to do limit itself to compliance with legal
require- so. We are already very actively involved in Clariant is
aware of the fact that the path ments. It also participates in a
number of this area with appropriate programs. to sustainable
management involves con- voluntary sustainability programs
including siderable effort. The market demand for self-commitments
under the Global Respon- sustainable products will continue to
grow. sible Care Charter and the Global Product Clariants aim is to
meet current market Strategy. needs and to exceed expectations, if
at all
7. sustainability management 5 and objectivesClariant
Sustainability PolicyCommitment & Clariant programs. The system
complies with ISO Risk and EmergencyExcellence 9001, ISO 14001,
OHSAS 18001, and Re- ManagementClariant is committed to ethical and
sus- sponsible Care. Achieving and maintaining Comprehensive
assessment of risks relatedtainable operation and development in
all a high level of quality across all aspects of to our operations
and products is a prerequi-business activities in accordance with
the our businesses, our ESH-related activities, site for our
business processes. A local andprinciples of the Responsible Care
Initia- social responsibility and Responsible Care global emergency
organization is in place totive and Clariants own Code of Conduct.
is our understanding of Corporate Sustain- ensure comprehensive
emergency manage-Clariant strives for a business culture of con-
ability. ment and response.tinuous improvement as well as for
sustain-able competitiveness and top performance Compliance
Innovation and Productconsistent with Clariants ethical standards.
Compliance with laws, international stan- Stewardship dards,
internal regulations, and Clariants We are convinced that it will
be essentialResponsibility Code of Conduct are basic requirements
for for our success to continue to understandClariant bears ethical
responsibility for sus- all our activities. Clariant appreciates
vol- our customers needs. Innovation and cus-tainable, economical,
environmental, and untary initiatives and provides appropriate
tomer focus are the keys to our business.fair business practices.
Corporate social re- support to develop effective and efficient We
are constantly developing new and im-sponsibility is therefore an
integral compo- safety, health, and environmental regula- proved
products and services to add valuenent of our companys corporate
philosophy. tions. to our customers and to our environment. AtAll
Clariant employees are educated and the same time, we make sure
that the safetytrained to assume responsibility in line with Safety
and Environment of our products during their entire life cycletheir
function, level of authority and quali- One of Clariants most
important objectives is always ensured for employees,
custom-fications. in its global activities is the safety and the
ers, the public, and the environment. protection of people and the
environment.Clariants Management System We set protection goals
which are valid Sustainable OperationClariants certified management
system ad- throughout the entire group, and monitor and
Processesheres to all internal and external standards and evaluate
all aspects of our activities. We take measures to reduce
environmental,to which Clariant subscribes, and forms the safety,
and health risks and strive to avoidcompanys documented structural
frame- waste during production, storage, distribu-work as the basis
for our objectives and tion, and use of our products. This includes
the efficient use of energy and resources and the continuous
improvement of our pro- cesses, in order to minimize the impact of
our activities on the environment. continued on page 6
8. 6 Clariant Sustainability Report 2011 continued from page 5
Third-Party Management Communication Monitoring and Review Our aim
is to establish mutually beneficial Clariant fosters a culture of
proactive and We monitor and review all business aspects
relationships with our third-party suppliers transparent
communication as the key to re- and processes including Responsible
Care and contractors, in order to support our busi- lationships
based on trust. All stakeholders issues at regular intervals.
Keeping a close nesses on the basis of our internal ESHQ are
regularly informed about our activities, watch on our quality and
performance is an standards, which include Corporate Social our
objectives, and our ESHQ performance. integral part of our business
processes and Responsibility and Responsible Care. We We
systematically identify the concerns and strategic planning and is
one of our top pri- encourage our suppliers and service pro-
expectations of our stakeholders. orities. viders to adopt
standards comparable to Clariants policies. Clariant is very
committed to environmen- as well as in the future. Selecting,
training, more effective, or increasing communica- tal protection
and safety in all areas of and qualifying suitable employees is a
top tion with stakeholders. Some goals, how- activity. Its own
environmental, safety and priority from the standpoint of
continuous ever, are quantitative by nature, such as health (ESH)
regulations are based on the improvement. With its specific
employee continuously reducing specific water and charters
objectives. In addition, Clariant development programs, Clariant
provides energy consumption, waste and noxious plants throughout
the world have been cer- its employees with the skills and
resources emissions. Clariant has set new targets for tified under
ISO9001, ISO14001, and OH- they need in order to work more
efficiently these crucial, clearly definable and measur- SAS 18001.
Each production facility must and innovatively. able indicators,
and Group management will comply strictly with the Clariant Groups
measure itself according to whether these ESH guidelines for
environmentally compat- targets are reached. ible and safe business
operations. In addi- Environmental goals tion, Clariant has a
global system for inci- for 2020 In setting environmental goals for
2020 dent reporting and emergency management. based on reference
values for 2005 Clariant takes responsibility for the environ-
Clariant has defined binding long-term com- Treating customers,
employees, and other ment, employees, customers, and society pany
targets for the first time. The potential fellow human beings and
the environment with the clearly stated intention of achiev-
reductions that the company is aiming to responsibly strengthens
partnerships with ing our sustainability objectives. Some of
achieve by 2020 represent obligatory bench- the groups on which
success ultimately de- these goals are qualitative in nature, such
marks for all activities within the Clariant pends in the current
market environment as increasing plant safety and improving Group
and will give the company a greater products through ongoing
research, making focus on sustainable management than programs for
employee development even
9. sustainability management 7 and objectivesever before. This
signal is intended to have strategy is desirable and reasonable
from REACH therefore involves substantial ad-more than just an
internal effect. It is also both a societal and economic
perspective, ditional cost and labor for the registrationa
commitment to the public that Clariant but in order for it to be
affordable in the and evaluation activities. On the other hand,will
be even more dependable, reliable, long run, a companys
sustainability efforts REACH also represents opportunities forand
deserving of trust than in the past. If must result in lower
current expenses (such companies to differentiate themselves
fromour strong efforts should make it possible as for energy) and
additional sales (due to other suppliers. REACH plays a key role
into achieve and sustain these targets earlier greater demand for
sustainable products, enhancing protection of human health, thethan
2020, the company will not hesitate to for example). environment
and consumers. By comply-reformulate its goals. ing with this
legislation, Clariant offers Clariants business opportunities lie
in the greater benefits to its customers throughThe targets are
relative quantities in order development of innovative products
that a higher level of communication and detailedto avoid
distortion based on production fluc- require fewer and fewer raw
materials, but customer-oriented information on the use oftuations.
The values are therefore always a greater proportion of renewable
resources its products. The overall effect of REACHdefined in
relation to the volume of goods that can be produced with less and
less will be to strengthen customer and supplierproduced (see also
page 18). risk while generating smaller and smaller loyalty which
also fosters sustainable volumes of waste. Their potential impact
corporate growth. The regulation is alsoClariants environmental
goals for 2020: on people and the environment as they a catalyst
for the development of new and Energy consumption to be cut are
used must also be continually reduced. better products. Clariant
will take advan- by 30percent Clariants business risks primarily
involve tage of this opportunity. Direct CO2 emissions to be
reduced the possibility that the market will not re- by 45percent
ward the company for its level of care and Direct and indirect
emissions of green- effort, and will turn to lower-priced prod-
Sustainability management house gases to decrease by 35percent
ucts. Clariant can counter this potential at Clariant Water usage
to be reduced by 25percent response by convincing customers that
its The volume of effluents to drop products and production methods
are desir- Clariant has developed an efficient manage- by 40percent
able because they help protect the environ- ment system for
successful implementation The volume of waste to fall by 45percent
ment and safeguard our economic future. of its sustainability
strategy. It is an integral part of the Group-wide process planning
A good example of the relationship be- and corporate planning
system. It involvesOpportunities and risks of tween effort and
opportunity is the uniform an ongoing compliance review to verify
thatsustainability strategy and binding regulation for the
registration, actual business development complies with evaluation,
authorization, and restriction regulations. All employees are
responsibleSustainability costs money and resources. of chemicals
(REACH) that now applies for proper operation of this system in
lineMore complicated production processes, throughout the European
Union. This regu- with their particular function, position, andmore
expensive raw materials, cleaner and lation harmonizes and
simplifies the chemi- qualifications. At the same time,
Clariantmore efficient plants, and programs for em- cal laws of
individual member states (seeployees and other interest groups
require also page 51). Only chemical substancesinvestments, some of
them substantial, and that have been previously registered
andfrequently trigger ongoing expenses. This analyzed for potential
risks may be mar- keted within the territory covered by the EU
regulation.
10. 8 Clariant Sustainability Report 2011 focus on sustainable
management is firmly anchored A in Clariants business strategy.
Christian Kohlpaintner, Member of the Executive Committee has
established appropriate incentives that tion processes, as well as
delivery routes Comprehensive risk management for are linked to
this system. Bonuses for em- and systems in relation to
sustainability ob- achieving sustainability objectives ployees, for
example, are also partly tied to jectives. Clariant works with
customers to Dealing with risks is very important at specific
targets in the area of sustainability. improve the entire process
chain. Clariant. Comprehensive risk identifica- tion and assessment
is therefore the pre- Guidelines for ensuring product and pro-
Clariants corporate risk management sys- requisite for all of
Clariants sustainability duction safety are an essential component
tem determines levels of risk and encour- activities. When
assessing the risks that of the management system. The goal is to
ages entrepreneurial thinking within the may arise during
development, manufac- limit the impact of business on the environ-
Group. In the course of this process, all ture, storage, and
transport of products, ment, health, and safety to the greatest
opportunities and risks are evaluated with human health and
environmental protection extent possible. Protection of people and
regard to the short- and medium-term ob- have absolute priority.
Risk mitigation and the environment is a top priority in all our
jectives defined by the Board of Directors. prevention is carried
out using specialized activities. This is reflected in an extensive
Risk Management examines these analy- management approaches
tailored to the body of regulations and programs within the ses for
relevance, consistency and accu- particular area. Measures are
carefully as- management system and in a Group-wide racy in order
to then decide on potential sessed in order to achieve the best
possible risk measurement system. Regular training optimization
measures. Risk assessment cost-benefit ratio. sessions for
employees are held. Processes, is carried out annually and
supplemented procedures and measures are also continu- by quarterly
updates and interim reporting, These measures are implemented by
all em- ously monitored through internal and exter- as necessary.
The system also guarantees ployees, according to their function,
level nal audits. that all significant risks are reported to the of
authority, specialized knowledge, and Executive Committee and the
Board of education and training. A positive attitude All of
Clariants plants around the world Directors. Another function of
risk manage- toward sustainability is encouraged through are
scrutinized for potential risks and opti- ment is to inform,
educate and motivate open dialogue. Continuous improvement is
mization opportunities. The results of these employees. achieved by
using the best available tech- studies are included in the
Group-wide risk nology that is economically justifiable. This
control system, analyzed for urgency and If necessary, the Clariant
risk management applies particularly to the development of
relevance and then implemented according- system makes it possible
to specify coun- new and optimized products, processes and ly.
Clariant can also respond to incidents im- ter measures and assign
responsibilities services. mediately and highly effectively through
its quickly. The corresponding regulations are efficient emergency
management system, based on the standard of the Institute of
Clariant has an emergency management which includes a comprehensive
catalog of Risk Management and benchmarked to the system that works
together with the ap- actions to be taken. Enterprise Risk
Management Integrated propriate authorities to control and limit
the Framework of the Committee of Sponsoring impact of unusual
incidents or events. Em- In addition, ESH criteria play an
important Organizations of the Treadway Commission ployees, the
authorities, customers, share- role in Clariants business
relationships. (COSO). The results of risk assessments are holders
and the general public are regularly Suppliers, outsourcing partner
and service consolidated, and the risks are then evalu- informed
about Clariants sustainability per- providers undergo spot checks
for compli- ated by the Executive Committee and the formance.
Compliance with the principles ance with these standards. The
careful se- Board of Directors. and guidelines on sustainable and
respon- lection process that is part of procurement sible action is
reviewed using a recurring management is based not only on economic
http://www.coso.org audit program that also includes specific
criteria, but also on purchasing and produc- steps to be taken and
the successful results of those measures.
11. sustainability management 9 and objectives Clariant has
also established stringent tar- gets in the area of procurement, in
an ef- fort to achieve sustainable management. Clariants
sustainability standards are ap- parent in its purchasing
strategies, procure- ment policies, and general guidelines: Strict
energy management, with continu- ous development and optimization.
Increase in the proportion of renewable raw materials. Active waste
management at all Plants are audited at regular intervals. Clariant
production sites; i.e., the choice of a waste management company is
also a waste management approach via itsBy establishing a series of
regulations and and waste disposal. All identified and as-
procurement.programs, Clariants objective is to perma- sessed risks
are documented in a risk port- Joint development of innovative
projectsnently strengthen safety, assuming respon- folio, in order
to be able to determine and in collaboration with selected
suppliers.sibility for people and the environment, and control
potential risk. This forms the basisbusiness success. Clariant
defines its own for determining improvement measures and Clariants
suppliers are an important part ofcomprehensive safety standards
and guide- the corresponding investment requirements. the worldwide
Clariant network. They arelines relating to product safety,
manufactur- Risk assessment is carried out annually and therefore
expected to apply the same stan-ing safety and process safety;
these extend supplemented by quarterly updates and in- dards in the
areas of human rights, workingbeyond the scope of national
regulations. A terim reporting, as necessary. conditions,
environmental protection, andlarge proportion of these guidelines
relates corruption prevention as Clariant itself.solely to plant
safety. The system ensures a Plants are audited at regular
intervals, de- Clariant also expects that its suppliers willhigh
level of safety in procurement, process- pending on the potential
risks and local show initiative in striving to achieve sus-ing, and
storage operations as well as in the changes. Units involving
chemical process- tainability. This means cooperating
activelydistribution of raw materials and products. es are audited
at least every three years. to reduce the environmental footprint
by All of Clariants facilities buildings, ware- optimizing the
procurement chain appropri-The management system is designed to
houses, production plants and energy sup- ately. For Clariant,
respect for these valuesidentify and record risks on an ongoing ba-
ply systems are audited to verify guideline is a pre-condition for
continuation of busi-sis. It is used to control potential risks in
the implementation, compliance, and effective- ness
relationships.entire production process from suppliers ness. The
composition of the audit teamsto receiving to manufacturing to
shipping may vary. Depending on the type of audit, auditors may be
internal ESH and produc- tion experts, independent external
auditors, or insurance company specialists.
12. 10 Clariant Sustainability Report 2011 The Clariant Group
Clariant is a global leader in the field of specialty chemicals. In
the fiscal year 0.30 for the year under review; net financial 2011,
Clariants business structure consisted of 12 Business Units:
Additives; expense was CHF 125 million. The company Catalysis &
Energy; Emulsions, Detergents & Intermediates; Functional
Materi- made donations in cash to those in need and als; Industrial
& Consumer Specialties; Leather Services; Masterbatches; Oil
& in kind to charitable campaigns in the low Mining Services;
Paper Specialties; Pigments; and Textile Chemicals. Including
single-digit million range. More information Sd-Chemie AG, which
was acquired in 2011, the Swiss-based Clariant Group con- can be
found in the Clariant 2011 Annual sists of more than 200
operational companies worldwide with a total of around Report on
page 100. 22100 employees. Group sales in 2011 came to more than
CHF7.3billion. Raw material costs, which increased sig- Business
performance sales of CHF 7.37 billion represented nificantly in
2011, were largely passed a 3.5percent increase over 2010, and
EBIT- on to customers through price increases. The positive
business trend at Clariant DA (earnings before interest,
depreciation, Clariant also put into practice its plan to in 2010
continued in fiscal year 2011. and amortization) before exceptional
items strengthen both the portfolio and future po- Clariant was
able to benefit from its re- totaled CHF975million, an improvement
of tential through external growth. In 2011 the structuring efforts
in recent years. Although as much as 8.2percent. Given this
excellent Clariant Group acquired Sd-Chemie AG, progress in the
areas of profitability, inter- overall picture, Clariant was able
to report a global and highly innovative specialty nal and external
growth was slowed by positive results on almost all levels and in
chemical company based in Munich, Ger- a subdued macro-economic
environment, most business areas following the tough many. The
operating fundamentals of the Clariant made headway on its strate-
restructuring process carried out in 2009 Sd-Chemie transaction
underscore how gic path to sustainable and profitable and 2010. The
savings obtained through the advantageous the acquisition is for
Clariant. growth. This is confirmed by the num- Clariant Excellence
initiative, for example, Group sales will increase by about 20per-
bers reported at the end of 2011. Despite have totaled CHF 163
million since 2009. cent. Sd-Chemie will be consolidated for
clearly more negative currency effects Clariant expects to pay a
dividend of CHF the first time on the basis of a full fiscal year
and a noticeable economic slowdown in in 2012. the second half of
2011, full-year Group
13. The Clariant Group 11Key economic indicatorsCHF m 2007 2008
2009 2010 20111Group sales 8533 8071 6614 7120 7370EBITDA before
exceptionals 812 783 495 901 975EBITDA 628 691 263 646 786Personnel
expenses 1960 1759 1757 1646 1623R&D investments 211 184 150
135 176Financial result 71 138 101 123 173Liquid funds 509 356 1140
716 1199Dividends per share (in CHF) 0.25 0.25 0 0 0.303Total
assets 7285 5946 6092 5921 9081Equity2 2372 1987 1896 1806
3026Equity ratio (%) 32.6 33.4 31.1 30.5 33.3Employees 20931 20102
17536 16176 221491 including Sd-Chemie2 including minority
interests3 Payment as reduction in par value. Subject to approval
at the Annual General Meeting.In addition, Clariant is expecting
integration ductivity and international competitiveness. able
products, even in the area of specialtyto result in an additional
increase in EBITDA At the same, time sustainable management
chemicals. As long as the market is willingof CHF 90, to 115
million, by 2013, as the limits the impact on people, the environ-
to pay a higher price for these products,result of
integration-based synergies and ment and resources. The value that
it gen- which is often the case, Clariant sees defi-Clariant
Excellence initiatives. With this erates also benefits Clariants
shareholders nite growth potential in this area in the
com-acquisition, Clariant now offers a very wide and satisfies the
needs and demands of ing years.range of specialty chemical
products. The capital markets. Climate change has not hadcompany
has more than 10 products 000 a measurable effect on Clariants
activities During the difficult years of restructuring inand, based
on client request, has highly to date. However, the company is
strength- the Clariant Group, all efforts and
resourcesindividualized lines in the portfolio, that ening its
efforts to reduce its impact on were focused on restoring the
companyshave unique specifications. The number of
climate-determining factors as much as productivity and economic
competitiveness,products thus varies, depending on precise
possible. and putting it on a foundation that wouldclient demand.
remain stable for many years to come. The The business
opportunities for Clariant lie long-term security of current jobs
was a topProfitable growth and sustainability: in the development
of innovative products priority, from both an economic and a
socialthe watchwords of our business that require fewer and fewer
materials as perspective. That is also an aspect of sus-Despite
restructuring efforts and the chal- well as a greater proportion of
renewable tainability.lenging economic environment, the goal of
materials produced by processes that con-sustainability is an
integral part of Clariants sume less and less energy. After all,
thecorporate strategy. Sustainability-oriented issue of climate
change, which has beenmanagement substantially enhances pro- a
focus of public discussion in recent years, has led to greater
environmental awareness and an increase in the demand for
sustain-
14. 12 Clariant Sustainability Report 2011 Employee benefits at
Clariant CHF m 2005 2006 2007 2008 2009 2010 2011 Pension
provisions (employee retirement plan obligations) 507 495 515 478
484 443 538 Sales by region CHF m 2005 2006 2007 2008 2009 2010
2011 EMEA (Europe, Middle East, Africa) 4191 4333 4616 4313 3334
3529 3671 North America 1120 1143 1102 994 792 860 958 Latin
America 1052 1149 1262 1261 1138 1199 1144 Asia/Pacific 1365 1475
1553 1503 1350 1532 1597 In 2012 and 2013, Clariant will carefully
an- However, all other products that need not The ongoing process
of globalization is forc- alyze its employee pension plan and other
meet such requirements are largely pur- ing companies with
international operations benefits and will optimize them, as neces-
chased locally, where Clariants plants are to adapt their
organizations and strategies sary. Clariant has always considered
the fol- located. Clariants activities as an em- more and more
quickly to changing condi- lowing to be very important: ployer, as
a customer for local products and tions. In recent years, Clariant
has thus sys- A state-of-the-art occupational pension services, and
as a payer of taxes and fees tematically adapted its production
footprint system. support local economic development in to the
changing global economic param- enefits beyond those required by
law, B the respective regions and countries, which eters. The
company has a presence on all such as extended time-off for raising
chil- is particularly important in regions with continents, with
152 locations in 42 coun- dren, subsequent to statutory parental
emerging economies. Clariant thus helps tries. The focus for the
future which is leave, or for caring for family members raise the
living standards of the population also reflected in the Clariant
Groups growth who are ill or disabled. in each area, both directly
and indirectly, by strategy is on expanding market share creating
added value. Clariant is not aware in high-growth emerging
countries in Asia Further details about this can be found in of any
significant negative effects result- and Latin America. Clariant as
a producer the Clariant Annual Report 2011, on pages ing from such
activities. The same is true of specialty chemicals delivers
exclusively 103 to 122. of undesirable effects of local production
to companies in the manufacturing sector regional or supraregional.
No negative ef- that also process these chemicals. Compa- Global
positioning fects of this type were identified in 2011 or nies
outside the manufacturing sector are Sustainable management also
includes in previous years. only supplied in rare individual cases,
but no the issue of subsidies. Clariant did not re- private
clients. ceive any significant public funding in 2011.
Sustainability also means contributing in a The Clariant Group has
seen a definite shift positive way to the development of the lo- in
regional sales percentages in recent cal economy through the
companys own years. As a result of dynamic economic business
activities at each location. As growth in emerging markets, sales
have a producer of specialty chemicals, Clariant increased
significantly in these regions must purchase its raw materials
wherever when measured against Group sales. This they are available
in the quality and purity it requires, and wherever the purchase
prices ensure Clariants competitiveness.
15. The Clariant Group 13increase in sales percentages was
especial- The Catalysis & Energy Business Unit is The Oil &
Mining Services Business Unitly pronounced in Latin America and
Asia/ a leading supplier of catalysts for the chemi- is a leading
provider of products and ser-Pacific. Whereas Latin America
generated cal, petrochemical, polymer, refinery and au- vices for
the petroleum, refinery, and miningonly 13.0 percent and
Asia/Pacific only 17.1 tomotive industries. industries.percent of
sales in 2005, these figures hadrisen to 15.5 and 21.7 percent,
respectively, Detergents & Intermediates is one of the Paper
Specialties is among the largestby 2011. Notably, China now
accounts for most important producers of key raw mate- providers of
products for optical brightness,a much higher percentage of
Clariant Group rials for detergents and household cleaners color,
coating and thickness of paper.sales. Six years ago Chinas share
was still as well as chemical intermediates.comparatively small at
3.4 percent, but by The Pigments Business Unit is is among2011 it
had risen to as much as 6.0percent. The Emulsions Business Unit is
one of the the leading global suppliers of organic pig-Sales from
the traditional industrial nations most important suppliers of
latex/polymer ments, pigment preparations and dyes usedof North
America and Europe declined ac- dispersions for paints, coatings,
adhesives, for coatings, printing inks, plastics, andcordingly.
Whereas these nations account- sealants, and for the textile,
leather, and pa- other special applications.ed for a total of 63.4
percent in 2005, their per industries.share had contracted to 54.1
percent by The Textile Chemicals Business Unit2011. The Functional
Materials Business Unit is supplies specialty chemicals for the
pre- a leading manufacturer of specialty products treatment,
dyeing, printing and finishing of and solutions for improving
product and ef- textiles.Organization ficiency characteristics in
various industries. In 2011, Clariant acquired Sd-Chemie
AG,Clariant is an important international sup- The Industrial &
Consumer Specialties which enabled it to own two attractiveplier of
specialty chemicals. In some areas, Business Unit is one of the
most important high-margin businesses. In 2011, the newlyit is the
market leader, and in other areas it suppliers of specialty
chemicals and appli- acquired Business Units of Functional
Ma-competes with companies that have similar cation solutions for
the consumer care sec- terials and Catalysis & Energy
generatedmarket shares. There is some outsourcing tor and for
industrial markets. an EBITDA return of almost 13 and 22per-of
business activities takes part to same cent, respectively.
Sd-Chemie also hasextend. The outsourcing specialists have to The
Leather Services Business Unit is outstanding expertise in
technologies ofaccept the same strict rules that are manda- one of
the leading suppliers in the market the future and innovation.
Overall, Clarianttory for suppliers and service providers. for
chemicals and services of the leather increased Group sales and
performance by processing industry. about 20percent as a result of
the acquisi-The Clariant Group is organized in the fol- tion.
Clariant expects an additional CHF90lowing Business Units: The
Masterbatches Business Unit is to 115million increase in EBITDA as
a result among the global leaders in the manufacture of
integration-related synergies and ClariantThe Additives Business
Unit is a leading of dye and additive concentrates and spe-
Excellence initiatives by 2013.provider of flame retardants, waxes,
and cialty compounds for the plastics industry.polymer additives
for effects in plastics,coatings, and other applications.
16. 14 Clariant Sustainability Report 2011 Organizational
Structure Executive Committee Corporate Center Business Units
Business Services Group Technology Service Centers Services Group
Finance Group IT Group Tech- Additives Leather Services Europe
Services Services nology Services Catalysis & Group HR Group
Logistic Middle East & Masterbatches Energy Services Services
Africa Group Group Detergents & Oil & Mining Communications
Procurement Japan Intermediates Services Services Services Paper
Group Legal Group Product Emulsions Greater China Specialties
Services Stewardship Functional Pigments Latin America South East
Asia Materials Industrial & Textile Consumer North America
India Chemicals Specialties The organizational structure shown here
in addition to Business Controlling, Accounting, Treasury, Tax, HR,
Legal, Business Develop- Units, Business Services, Group Technology
Services and Service ment, Group Communications & Investor
Relations as well as ESHA Centers for the Corporate Center also
includes functions such as (Environment, Safety, Health
Affairs).
17. The Clariant Group 15Clariant worldwide Countries where
Clariant is represented For an overview of countries in which the
company is active with (primary) operating facilities, see the
Annual Report, pages 154-157.Corporate Governance the SIX Swiss
Exchange corporate gover- Ownership structure nance directive.
Clariant conducts its busi- The business activities of Clariant AG
areClariants corporate governance principles ness in compliance
with the applicable laws conducted by the companies in the
Clariantdefine the management structure, organi- and rules of free
competition and rejects Group. ClariantAG, a holding company
es-zation, and processes of the Clariant Group corruption in any
form. Clariant avoids con- tablished under Swiss law, owns all
Clariantthat provide transparency as well as ensure flicts of
interest and ensures that corporate Group companies worldwide,
either directlysustainable long-term success. The Group is assets
will not be used improperly. Clariant or indirectly. Except as
noted below, thecommitted to Swiss and international stan- strives
for sustainability in all areas and at shares of these companies
are not publiclydards of corporate governance and follows every
process level. The Articles of Associa- traded.the rules set out in
the Swiss Code of Best tion, Bylaws of the Board of Directors
andPractices for Corporate Governance and in Clariant Code of
Conduct can be viewed on- line at www.governance.clariant.com.
18. 16 Clariant Sustainability Report 2011 Clariant AG holds a
63.4 percent interest (2010: < 3percent); CS Asset Management
ciation are available on the Clariant website in Clariant Chemicals
(India) Ltd, based Funds AG, Zurich (Switzerland), 3.0184per- at
www.governance.clariant.com. Of these in Thane, India, and a 75
percent stake in cent (2010: 3.04 percent). No other share-
39998831 shares, 35086549 are allocated Clariant (Pakistan) Ltd,
based in Karachi, holder was registered as holding 3 percent to a
CHF300million senior unsecured con- Pakistan. In addition,
ClariantAG how holds or more of the total share capital. vertible
bond issued on 2 July 2009. A to- 100percent of Sd-Chemie AG, a
company tal of 1169 shares were issued in 2011 by based in Munich,
Germany, which was ac- These transactions, which were reported to
single exercises of the conversion right. The quired on 21 April
2011. Clariant became the Stock Exchange Disclosure Office pursu-
convertible bond will mature on 7July2014, sole owner upon
registration on 30 No- ant to Art.20 of the Stock Exchange Act, can
and the conversion price is CHF8.55. vember 2011 of the squeeze-out
resolution be viewed on the SIX Swiss Exchange re- passed by the
extraordinary general meeting porting platform:
http://www.six-exchange- Management structure of Sd- hemie AG on
22November2011. C regulation.com/obligations/disclosure/ma- The
Board of Directors of Clariant AG is the jor_shareholders_de.html.
highest management body and consists of An overview of the most
important compa- a minimum of six and a maximum of twelve nies in
the Clariant Group is in the Clariant As of 31 December 2011, the
nomi- members, each of whom serves for a three- 2011 Annual Report,
on pages 154 to 157. nal share capital of Clariant AG was year
term. Re-election is possible. CHF 1 009 183 016, fully paid and
di- As of 31 December 2011, the former vided into 295 254
registered shares, 752 The Board of Directors consists of the
Chair- shareholders of Sd-Chemie AG who had each with a nominal
value of CHF 4.00. man, one or more Vice Chairmen, and the
exchanged their shares in April 2011 for ClariantAG shares have
been listed on the other members. No non-executive mem- Clariant
shares and are related through fam- SIX Swiss Exchange since 1995
(symbol: ber of the Board of Directors held a senior ily or other
ties (specifically the Wamsler, CLN, ISINNo.: CH0012142631).
Clariant AG management position at ClariantAG or any Winterstein,
Schweighart and Stockhausen does not issue non-voting equity
securities Clariant Group company between 2008 families) together
owned 15.127percent of (Genussscheine). and 2011 or has any
significant business Clariants share capital. In addition, the fol-
relationships with Clariant AG or any oth- lowing shareholders held
a participation of The companys share capital may be in- er
Clariant Group company. The Board of 3percent or more of the total
share capital: creased by a maximum of CHF159995324 Directors forms
the following committees Fidelity Management & Research, Boston
by issue of a corresponding maximum of from among its members:
(USA), 5.23 percent (2010: 5.23 percent); 39 831 registered shares
with a nomi- 998 Chairmans Committee Teachers Insurance and Annuity
Association nal value of CHF 4.00 each. These must Compensation
Committee of America College Retirement Equity Fund be paid for in
cash through the exercise of Audit Committee (TIAA-CREF), New York
(USA), 3.097percent conversion or warrant rights granted to their
Technology and Innovation Committee holders in connection with
bonds issued by the company or one of its subsidiaries. The details
are set out in Article 5b of the Ar- ticles of Association. The
Articles of Asso-
19. The Clariant Group 17The Board of Directors appoints the
Chair- the Board of Directors and for the office of Management
training and qualificationman, Vice Chairman or Chairmen, and CEO,
and prepares the corresponding rec- The management of the Clariant
Group, lo-members of the committees. The Board of ommendations. The
CC also considers and cal plant management, and ultimately
everyDirectors meets at least once a quarter. The submits to the
Board of Directors the CEOs individual employee is part of a
continuousCEO, CFO, and other members of the Execu- proposals
concerning candidates for Execu- improvement process. Through the
provi-tive Committee and/or other employees and tive Committee
positions. sions, processes, regulations and instruc-third parties
regularly attend the meetings tions that comprise the management
sys-of the Board of Directors at the invitation of The Board of
Directors has delegated the ex- tem and through training and
qualificationthe Chairman for the purpose of reporting or ecutive
management of the Clariant Group programs, Clariant ensures that
employeesimparting information. Each committee has to the CEO and
the other members of the have the skills required for their
respectivea written charter outlining its duties and Executive
Committee. The Executive Com- jobs. Employees can therefore review
theirresponsibilities. The committees charters mittee is mainly
responsible for implement- own actions and results as well as
thoseare published on Clariants website (www. ing and monitoring
Group strategy, for the fi- of their fellow employees and can
identifyclariant.com/committees). The committees nancial and
operational management of the potential for improvement. Risks and
oppor-report on their activities and results to the Group, and for
the efficiency of the Groups tunities are also identified and
appropriateBoard of Directors. They prepare the busi- structure and
organization. The members of measures initiated on this basis.ness
of the Board of Directors in their re- the Executive Committee are
appointed byspective areas. the Board of Directors on the
recommenda- Environmental protection and safety are tion of the
Chairmans Committee. integral parts of the responsibility
assumedThe Chairmans Committee (CC) comprises by Group management,
local CEOs, plantthe Chairman, the Vice Chairman, and a The
Executive Committee consists of the managers, department heads, and
everythird member of the Board of Directors. The CEO, the CFO, and
three additional mem- employee. Each employee is required
toCommittee prepares the meetings of the bers. The Executive
Committee meets regu- follow regulations in his or her
particularBoard of Directors and meets as needed. It larly at the
Corporate Center in Pratteln or sphere of responsibility, develop
processesmakes decisions on financial and other mat- at other
Clariant sites worldwide. It uses and procedures, and make sure
that impor-ters delegated to it by the Board of Directors such
meetings away from headquarters as tant information is passed on
and that thein accordance with the Bylaws of the Board an
opportunity to discuss business perfor- necessary documentation is
kept.of Directors. It also makes decisions on mat- mance with local
company management inters that would normally be handled by the
person. Only one member of the Executive A sense of responsibility
and commitmentBoard of Directors but cannot be postponed.
Committee, the CEO, is a member of the to improvement is encouraged
by supervi-The CC draws up principles for the selection Board of
Directors. The members of the sors and managers. Employees are
famil-of candidates for election and re-election to Executive
Committee do not have other iarized with tasks and challenges and
how jobs, advisory functions or hold other of- they relate to
corporate policy, strategy, fices. There are no management
contracts and objectives. Everybody who takes part in with third
parties. The members of the Executive Committee are all male and
are profiled in the Annual Report of ClariantAG.
20. 18 Clariant Sustainability Report 2011 45% Percentage of
waste generated by Clariant that it intends on eliminating by 2020.
Precise environmental targets for 2020 Optimizing costly and
complex processes offers Clariants environmental targets initially
focus on relevant key indi- broad potential for savings cators, for
which an adequately large and detailed quantity of data Our
abilities improve to fit the task at hand. This is why Clariant
seeks is available from all business activities spanning a
sufficiently long not merely to improve its efforts in areas
important to sustainability, period of time. This approach is
essential, in order to adequately but also to set challenging goals
for itself that are not only achievable and reliably forecast and
plan for the future. Clariants definition of wherever possible,
irrespective of economic and corporate devel- specific targets is
based on a comprehensive analytical process that opments but which
can also be regarded as industry benchmarks. encompasses all
business areas and plants over a number of years Such aims are
particularly meaningful in areas where decisive criteria and has
identified concrete potential for improvement and savings. can be
clearly defined as precise target figures, for example, in energy
consumption, water usage and generated waste volumes. At the same
time, realistic assumptions must be made about fu- ture
developments in production. For example, an increase in the
Clariant is striving not only to significantly reduce the absolute
quan- manufactured quantity of a product with high energy
requirements tities of waste it produces; rather, it defines its
sustainability goals will yield entirely different results, when
factored into the pertinent primarily on the basis of relative
variables. The Company strives for equations, than will a product
for which energy demand in produc- improvement based on the
produced amount, i.e. per produced ton. tion is merely of secondary
importance. In this way, Clariant intends to improve the efficiency
and sustain- ability of its production in the years ahead.
Individual targets for each Business Unit Against this backdrop,
individual targets for the key indicators not- Environmental
targets for 2020 ed are specified for each Business Unit. The
investment planning laid out for multi-year timelines will be
devised accordingly, since Consequently, Clariant has formulated
the following environmental Clariant will only be able to achieve
the improvements it is seeking and sustainability goals for 2020
targeted reductions based on bench- mark reference values
established for the year 2005: by drawing on state-of-the-art
technologies and processes. These efforts also consider that demand
for resources on the part of some 30% 45% 35% production processes
is very difficult to predict owing to complexity, and that the need
for resources could possibly be higher for inno- vations
implemented in the introductory and development phases. Energy
Direct CO2 Direct and indirect Such unforeseen adjustments and
developments should then be consumption emissions emissions of
green- compensated for with additional improvements in other areas.
house gases Clariants 2020 environmental targets are the first such
goals the 25% 40% 45% company has set for itself, for Clariant
wants to do its part to meet the major challenges and megatrends
facing our world: environmen- tal protection, energy efficiency and
resource conservation. Efforts will of course be made to
continuously pursue possible means and solutions for achieving
savings that go beyond the defined targets. Water usage Wastewater
Waste As noted, these target values constitute relative variables;
thus, each is based on a defined unit of produced goods.
21. The Clariant Group 19a project is involved with project
identifica- ever, all candidates have been evaluated a whole and
those of the Executive Commit-tion. Performance-based teamwork is
delib- and selected on the basis of the same list of tee have been
accomplished. It then directserately encouraged. The plant
suggestion criteria (in this regard, also see pages 72-79 that
funds be allocated in accordance withsystem individually designed
in the respec- of the Annual Report 2011). Clariants strategic
business plan for thetive countries also supports this process.
prior year. The allocation is subsequently Management compensation
submitted to the Board of Directors forFurthermore, Clariant is in
contact with Compensation for the Board of Directors approval. This
process ensures that bonusexternal specialists, associations, and
au- and the members of the Executive Commit- payments to employees,
including execu-thorities in order to determine focal points tee is
described in detail in the notes to the tive management, are also
in line with thefor environmental protection and safety financial
statements and in the compensa- Groups overall performance and
objectives.programs. Priorities and programs for emis- tion report
of Clariant AG (Annual Report Details are available in Clariants
2011 An-sion reduction, plant safety, or for improving page 86) and
can be checked. nual Report.industrial safety and training programs
aredeveloped in working groups and environ- The companys
compensation policy for ex- Participation rights of
shareholdersmental protection committees. ecutives is based on
three main principles: and employees he level of compensation
should be T Each registered share entitles the holder toComposition
of management competitive and in line with market condi- one vote
at the Annual General Meeting.Members of the Board of Directors:
tions; it should enable Clariant to recruit Shareholders have the
basic right to pay- 5 Swiss citizens experienced executives and
experts from ment of dividends and also have other rights 3 German
citizens anywhere in the world and ensure their under the Swiss
Code of Obligations. Only 1 British citizen long-term commitment to
the Group. shareholders entered in the Clariant share 1 Austrian
citizen The structure of total remuneration should register have
voting rights. 1 US citizen be highly performance- and
profit-oriented in order to ensure that shareholder and All
employees may submit requests or rec-The members of the committees
are mem- management interests are aligned. ommendations at any time
to the company,bers of the Board of Directors. he compensation
components should be T its management, or the a
