TAG overview

Climate action

Climate change is one of the most pressing challenges of the 21st century. Because our operations also generate greenhouse gas emissions, we endeavor to reduce these emissions to mitigate our impact on the climate, a course of action expected by our customers and stakeholders. Although stricter regulatory requirements may lead to planning and investment uncertainty, burgeoning regulations and rising energy costs are making climate impact mitigation an increasingly smart investment.

Our contribution to climate protection

We are taking action to mitigate our impact on the climate. Our goal for 2020 is to reduce our direct emissions (Scope 1) and indirect emissions (Scope 2) by 20% relative to the 2006 baseline, an objective set by the Executive Board in 2009. Scope 1 covers emissions that we produce ourselves, for instance by burning fossil fuels to generate power, while Scope 2 pertains to emissions from the consumption of purchased energy, such as electricity or district heating.

Across the globe, 40 of our sites account for roughly 80% of our greenhouse gas emissions, which is why we are focusing our efforts here.

Energy conservation represents a key component of our climate impact mitigation activities. By adapting and updating our technology, we are improving the energy efficiency of our R&D operations, our production processes and our buildings. Just as important for climate impact mitigation is the reduction of . Furthermore, we are working to lower the emissions resulting from energy generation. Where financially viable, we additionally make use of renewable energies to generate our own power.

How we structure our climate impact mitigation efforts

Our Group function Environment, Health, Safety, , Quality () is responsible for globally overseeing all climate impact mitigation efforts (see also Environmental stewardship), with each of our sites handling the actual implementation of the specific measures.

Our commitment: Standards and legal frameworks

Our Corporate Environment, Health and Safety () standards on energy management and emissions from coolant ensure that energy and process-related emissions are managed consistently across the Group. We audit our EHS processes at random to verify with all EHS standards.

We know that efficient energy management plays a major role in climate impact mitigation and is also becoming increasingly important to our customers. With this in mind, 13 of our sites have decided to obtain certification, the international standard for energy management.

Our company is subject to a wide array of national and international energy and emissions regulations such as the German Energy Conservation Act and the German Renewable Energy Sources Act. Our activities are also governed by EU Directive 2012/27/EU, which stipulates that relevant companies must establish energy management systems and regularly audit their energy consumption. The sites subject to these requirements are responsible for implementing them and furthermore undergo audits conducted by internal or external experts.

The revised EU Emissions Trading System took effect in April 2018, establishing a legal framework for installations covered by this system for the fourth phase of the trading program (2021 – 2030). Going forward in phase four, we foresee having to purchase the emissions allowances that we are still largely obtaining for free during phase three (2013 – 2020).

Slight increase in energy consumption

We used 2,232 gigawatt hours of energy in 2018, versus 2,194 gigawatt hours in 2017. Our energy intensity relative to sales totaled 0.15 kWh/€ in 2018.

Emissions lowered despite growth

Despite growth in our operating business, we managed to reduce our greenhouse gas emissions by 11% relative to the 2006 baseline. We thus lowered our process-related emissions from 111,000 metric tons in 2017, to 95,000 metric tons in 2018. In 2018, we emitted 698,000 metric tons of , versus 704,000 metric tons in 2017. emission intensity amounted to 0.047 kg of CO2eq per euro of net sales in this period.

Between 2006 and 2018 we more than doubled our sales, which means that, relative to sales, our emissions dropped significantly.

Total greenhouse gas emissions (metric kilotons)1

(Scope 1 and Scope 2 of the Greenhouse Gas Protocol)

Total greenhouse gas emissions (bar chart)
1 In line with the Greenhouse Gas Protocol, for all previous years (up to the 2006 baseline), the greenhouse gas emissions have been calculated based on the current corporate structure of the reporting year and retroactively adjusted for acquisitions and divestments of (parts of) companies, or for changes in emission factors (portfolio-adjusted). Because it was divested in 2018, emissions from the Consumer Health business are no longer included in these figures.

Strategic climate program

Since 2009, all our measures to improve energy efficiency and reduce process-related greenhouse gas emissions have been housed under our strategic Edison program. Within this framework, our Group function EQ collaborates with a working group comprising representatives from all our business sectors. Any site can propose a project to curb CO2 emissions.

Through the more than 360 Edison projects initiated since 2012, we aim to save around 177,000 metric tons of CO2 annually in the medium term. Since 2012, these efforts have conserved approximately 89,000 megawatt hours of energy in total, primarily from electricity.

By the end of the year, we had implemented or launched 34 of the 48 Edison projects approved for 2018. These initiatives are expected to achieve savings of around 75,000 metric tons of CO2 in the medium term. As in previous years, we also accepted new project proposals.

In 2018, the efficiency projects underway focused on optimizing air conditioning and ventilation systems, using and optimizing electric motors, and energy generation at installations mainly located in Germany, the United States and Switzerland.

In 2017, the Executive Board approved a roadmap for achieving the remaining savings needed to meet our climate target, and in 2018 they made the decision to purchase more power from renewable sources in an effort to achieve this objective faster.

Investing in renewable energies

Globally, we utilize photovoltaic plants with a total output of approximately 2,500 kilowatts. In 2017, we installed a solar voltaic system at our site in Burlington (Massachusetts, USA). It has an installed capacity of 182 kilowatts and generated 136,000 kilowatt hours of power in 2018, reducing our emissions by roughly 37 metric tons.

Educating employees about climate impact mitigation

We encourage our employees to do their part to preserve the climate and regularly report on our Group-wide climate action efforts in our EHS newsletters while also providing helpful information and tips on our Intranet. Moreover, we support employees who prefer greener modes of transportation. For instance, we constantly update our leased vehicle pool with more efficient models so as to reduce the average carbon emissions of our fleet Group-wide by 30% by 2020, relative to 2013.

Subsidies for our employees

In January 2017, we lowered the CO2 emission rate for newly registered company cars from 150 g/km to a maximum of 135 g/km. We are currently in the process of updating our vehicle emissions limits to the new requirements (test cycle). At our German subsidiaries, we offer a subsidy of € 100 towards monthly lease payments to employees who opt for a greener car model.

The average emission rate of our company fleet in Darmstadt and Gernsheim is 122 g/km, with about 15% of the fleet being electric.

In the United States, we provide our people with financial incentives to choose greener options. For instance, they receive up to US$ 1,000 in subsidies towards the construction of a private solar power unit and up to US$ 100 towards an energy audit for their home. They are also eligible for as much as US$ 3,500 towards the purchase of a hybrid or electric car. To date, we have helped 55 of our employees install solar panels and motivated 361 employees to switch to a hybrid or electric car.

Recharging facilities at our sites

Our company fleet in Darmstadt and Gernsheim includes 23 electric vehicles (as of December 2018) that our employees can use for business purposes, but we also want to encourage our workforce to use electric cars in their private lives. To this end, our Darmstadt headquarters offers ten charging stations in the employee parking garage that recharge electric vehicles using green electricity. Furthermore, this site has six additional charging stations and 15 charging boxes for departmental vehicles. Over the next several years, we intend to continually expand the charging infrastructure at our German and European sites. Charging is processed via a payment platform called eCharge. Employees already registered on the platform also have access to a network across Germany featuring 6,000 charging stations across 740 cities.

In 2018, we installed eight new charging stations in the United States and Switzerland. In the United States, we now offer 43 such stations to our employees at 11 sites nationwide. Moreover, we have ten charging stations available (as of December 2018) at our sites in France, Ireland and Switzerland.

Jobticket and carpooling

We offer our workforce in Darmstadt a “Jobticket”, an annual subscription to use local public transportation whose cost we partially cover. In 2018, more than 5,800 employees made use of this option. Our people also have access to an online tool that helps them organize carpools.

Bike sharing in Germany

At our German facilities, we also encourage our people to use eco-friendly forms of transport through “bike4me”, a program enabling them to lease a bike at special rates with payments coming out of their pre-tax income. In 2018, 161 of our employees signed up for the program.

Furthermore, our employees can also use the Deutsche Bahn Call a Bike service throughout Germany and borrow a bike free of charge for the first half hour. Deutsche Bahn, the German national rail company, has set up further rental stations all around our sites in Darmstadt, and in 2018 we sponsored 100 bikes in the city.

Switching to sea freight

In an effort to lower greenhouse gas emissions resulting from the transport of our products, we utilize sea rather than air freight whenever possible. However, this is only an option for products that survive protracted transport times undamaged, and we cannot allow the quality of customer service to suffer due to lengthy transport. The raw material mica, for instance, is transported primarily by ship.

Transparency regarding CO2 emissions and energy consumption

The organization CDP (formerly the Carbon Disclosure Project) assesses the ways in which companies are working to minimize the risks and consequences of climate change, along with their success and strategy for doing so. The rating scale used ranges from A to D-, with A being the top score. In 2018, we received a C (B in 2017). The lower rating is attributable to several factors, including our failure to make progress on our ambitious emissions target in the reference period.

Since 2008, we have been reporting in detail on our climate impact mitigation efforts as stipulated by the CDP. We track our greenhouse gas emissions in line with the Greenhouse Gas (GHG) Protocol, an internationally recognized standard, reporting on Scopes 1 and 2 as well as parts of . Regarding Scope 3 emissions, we only track emissions from business trips and employee commuting, from waste management, and from the manufacture and transport of fuel. Besides these emissions, we also measure energy consumption at our sites. However, this does not include energy use outside our field of activity such as raw materials production, as we do not have sufficient data available to perform these complex calculations.

Greenhouse gases
Gases in the atmosphere that contribute to global warming. They can be either naturally occurring or caused by humans (such as CO2 emissions caused by burning fossil fuels).
Process-related emissions
Greenhouse gases released into the atmosphere during manufacturing operations.
This term stands for all necessary measures and governance activities to detect, analyze, handle, and mitigate security- and crime-based threats to the company. This helps to protect employees as well as the tangible and intangible assets of the company.
EQ stands for our Group function “Environment, Health, Safety, Security, Quality”.
Short for “Environment, Health and Safety”, this refers to environmental management, health protection and occupational safety throughout a company.
Adherence to laws and regulations as well as to voluntary codices that are internal to a company. Compliance is a component of diligent corporate governance.
ISO 50001
This international standard defines globally recognized requirements for energy management systems.
CO2 equivalents
CO2 equivalents (CO2eq) indicate how much a specified quantity of a specific greenhouse gas has contributed to the greenhouse effect, using the global warming potential of carbon dioxide as a reference.
Greenhouse gases
Gases in the atmosphere that contribute to global warming. They can be either naturally occurring or caused by humans (such as CO2 emissions caused by burning fossil fuels).
Scope 3
Scope 3 includes indirect greenhouse gas emissions, such as the extraction and production of purchased materials, transport-related activities, waste disposal, and employee travel.

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