Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Governance

Environmental Achievements

• Reduced GHG emissions (Scopes 1 and 2) from approximately 6.5 million tons of CO2e to approximately 3.2 million tons between 2004 and 2018 (halved emissions).

Social Achievements

• Decreasing accident rate over the last years.
• Operates neighborhood offices at a majority of its sites.

Governance Achievements

• All board members, including the chair of the board, are independent (as of February 5, 2021).
• Established committees in charge of audit, remuneration, and nomination.
• Discloses its remuneration policy for executives, including long-term components, which could incentivize sustainable value creation.
• Group-wide code of conduct that covers issues such as corruption, conflicts of interest, and anti-competitive practices.

Climate Goals & Targets

Environmental Challenges

• Significant sustainability risks related to production processes (handling of hazardous substances and greenhouse gas intensity) and its product portfolio.
• Scope 3 emissions represent approximately 85% of the company’s total GHG emissions.

Mitigation Strategies

• Comprehensive climate strategy that includes emission reduction targets and addresses energy use through dedicated management systems and energy reduction targets.
• Procedures to mitigate supply chain risks.
• Measures to manage product risks (life cycle assessments).
• Sustainable chemicals management strategy that includes comprehensive risk assessments of its products.
• Working on a roadmap to reduce Scope 3 emissions.
• Plans to invest up to €100m in its climate protection projects by 2025.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Sustainability-Linked Bond Principles (SLBPs), Sustainability-Linked Loan Principles (SLLPs)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Circular Economy
• Sustainable Procurement
• Safe and Sustainable Sites
• Good Corporate Governance
• Employee Well-being
• Diversity & Inclusion
• Human Rights

Environmental Achievements

• Reduced CO2e emissions by 60% versus 2004 (6.5 million metric tons of CO2e)
• Reduced absolute CO2e emissions (Scope 1 and 2) to 2,591 thousand metric tons in 2021
• Reduced NMVOC emissions by 85% compared to the base year 2015
• Reduced specific water consumption by 21% year-on-year
• Reduced specific TOC in wastewater by 10% year-on-year
• 87% of total sales from products meeting sustainability requirements

Social Achievements

• Launched LANXESS Water Program in 2020
• Implemented water stewardship programs at all water-risk sites
• Employee turnover rate of 3.4%
• 83% of apprentices hired after completing training
• 89% of countries with derived and implemented work-life balance principles
• Exceeded targets for women in management positions

Governance Achievements

• Established a Sustainability Committee with all Board of Management members
• Implemented a wide range of risk-mitigating measures
• Received a top score of “A” from CDP in the climate category
• No reports or knowledge of systematic discrimination against employees

Climate Goals & Targets

Environmental Challenges

• Strain in global supply chains resulting in rising material costs
• Rising electricity and gas prices impacting production costs
• Reduced waste management capacity at Chempark Leverkusen
• Government-ordered power rationing in China causing production interruptions
• Uncertainty over emissions trading and national Emissions Trading System (n-ETS)

Mitigation Strategies

• Established a systematic sustainability risk analysis for suppliers
• Developed a strategy plan for products with critical substances
• Implemented a global procurement guideline for sustainable supplier behavior
• Strategic partnership with bp for sustainable raw materials
• Participation in the Together for Sustainability (TfS) initiative
• Implemented various methods and training modules to address digitalization challenges

Supply Chain Management

Supplier Audits: Over 10,500 sustainability assessments and 740 audit reports in 2021

Responsible Procurement

• Global procurement guideline
• Supplier Code of Conduct (Business Partner Code of Conduct)
• Participation in TfS initiative

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts
• Uncertainty over emissions trading

Opportunities

• Development of energy-efficient products
• Use of renewable raw materials

Reporting Standards

Frameworks Used: GRI, UN Global Compact, Responsible Care®, International Labour Organization standards

Certifications: ISO 9001, ISO 14001, ISO 50001

Third-party Assurance: TÜV SÜD

UN Sustainable Development Goals

• Goal 3 (Good Health and Well-being)
• Goal 4 (Quality Education)
• Goal 6 (Clean Water and Sanitation)
• Goal 7 (Affordable and Clean Energy)
• Goal 8 (Decent Work and Economic Growth)
• Goal 9 (Industry, Innovation and Infrastructure)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)

Initiatives contribute to these goals through various environmental, social, and governance programs

Sustainable Products & Innovation

• Durethan with 92% sustainable raw materials
• Tepex with recycled raw materials
• Bayferrox 303 T black pigment for plastic recycling
• Lewatit ion exchange resin for ultra-pure water processing
• Adiprene LF TR400 high-temperature prepolymer

Awards & Recognition

• CEO Safety Award
• Leading Employer ranking (Germany)
• Best employer in chemical and petrochemical industry (Brazil)

Environmental Metrics

ESG Focus Areas

• Climate Action
• Circular Economy
• Sustainable Sourcing
• Safe and Sustainable Sites
• Good Governance
• Employee Well-being
• Diversity & Inclusion

Environmental Achievements

• Reduced CO2e emissions by 69% for continuing operations and 62% including the +30 business unit compared to 2004.
• Reduced absolute water withdrawal at water risk sites by 16.8% compared with the base year 2019.
• Increased share of recovered waste (material recycling/energy recovery) by 8 percentage points year-on-year to 18%.

Social Achievements

• Launched global “Women Initiative LANXESS” (WInX) network.
• Implemented rainwater projects with local communities in India.
• Supported over 1,500 people through social commitment projects globally.

Governance Achievements

• Established a new committee structure for sustainability management at the Board of Management level.
• Revised and replaced the existing guideline on incentives with a new Group-wide anti-corruption guideline.
• Received a top score of “A” from CDP in the “climate” category.

Climate Goals & Targets

Environmental Challenges

• Ongoing bottlenecks in global supply chains resulting in rising material costs.
• Increased energy prices, particularly in Europe due to the war in Ukraine.
• Shortage of truck drivers causing supply chain delays.

Mitigation Strategies

• Incorporated cost increases into price negotiations with customers.
• Developed a load-securing standard for LANXESS to improve efficiency in hazardous goods transport.
• Launched the “Net Zero Value Chain” initiative to make the entire supply chain climate-neutral by 2050.

Supply Chain Management

Supplier Audits: More than 13,000 sustainability assessments and around 790 audit reports available as of the end of 2022 (TfS)

Responsible Procurement

• Global procurement guidelines
• Business Partner Code of Conduct
• Participation in TfS initiative

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Uncertainty over emissions trading
• Additional costs due to Fuel Emissions Trading Act (n-ETS)

Opportunities

• Development of energy-efficient products
• Transition to green logistics
• Expansion of climate-neutral products

Reporting Standards

Frameworks Used: GRI, UN Global Compact, Responsible Care®, TCFD, ISCC PLUS

Certifications: ISO 9001, ISO 14001, ISO 50001, ISO 45001, IATF 16949

Third-party Assurance: TÜV SÜD

UN Sustainable Development Goals

• Goal 3 (Good Health and Well-being)
• Goal 4 (Quality Education)
• Goal 6 (Clean Water and Sanitation)
• Goal 7 (Affordable and Clean Energy)
• Goal 8 (Decent Work and Economic Growth)
• Goal 9 (Industry, Innovation and Infrastructure)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)

The report details how various initiatives contribute to these goals.

Sustainable Products & Innovation

• Scopeblue series of products
• Nagardo natural preservative
• High-performance plastic Durethan Scopeblue

Awards & Recognition

• CDP 'A' rating for climate change
• CDP A– rating for water security
• 2022 World Beverage Innovation Award for Nagardo

Environmental Metrics

ESG Focus Areas

• Circular Economy
• Safe and Sustainable Sites
• Climate Action and Energy Efficiency
• Good Governance and Energized Employees
• Sustainable Products

Environmental Achievements

• Reduced CO2e emissions by 73.5% (continuing operations) and 72% (including HPM business unit) versus 2004.
• Reduced NMVOC emissions by 91% (continuing operations) and 90% (including HPM business unit) compared to 2015.
• Reduced absolute water withdrawal at water risk sites by 31% compared with the base year 2019.
• All four water risk sites met the requirements of the LANXESS Water Stewardship Program.

Social Achievements

• Launched LANXESS Science Exploration Challenge in Seoul.
• Continued “Climate Class and Science Experiment Workshop” in Japan.
• Ran “Juntos pelo clima/Together for the Climate” project in Brazil.
• Provided around €1.1 million globally for social projects.

Governance Achievements

• Established a new committee structure for sustainability management in 2021.
• Launched a cross-functional CSRD project to meet the EU’s Corporate Sustainability Reporting Directive (CSRD) reporting obligations.
• No reports or knowledge of systematic discrimination against employees.

Climate Goals & Targets

Environmental Challenges

• Geopolitical instability and a tough economic environment.
• Uncertainty over emissions trading in Europe.
• Difficulty in significantly expanding renewable energy share at competitive prices.
• Shortage of truck drivers, especially in Europe, Great Britain, Canada and the U.S.

Mitigation Strategies

• Implemented FORWARD! action plan to stabilize the company and make it more structurally efficient.
• Spot market prices and fixed price components to mitigate electricity price volatility.
• Strategic partnerships with suppliers to reduce carbon footprint of raw materials.
• Transitioning from road transport to intermodal transport options.

Supply Chain Management

Supplier Audits: 15 high-risk suppliers audited in 2023; 71% of relevant procurement volume covered by TfS assessments.

Responsible Procurement

• Global procurement guideline defining employee conduct; standardized workflows; expectation of supplier compliance with national and international laws and regulations; Business Partner Code of Conduct.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Uncertainty over emissions trading; additional costs from Fuel Emissions Trading Act (n-ETS) and EU-ETS II.

Opportunities

• Development of energy-efficient products; expansion of renewable energy portfolio; transition to green logistics; offering climate-neutral products.

Reporting Standards

Frameworks Used: GRI, UN Global Compact, Responsible Care®, International Labour Organization standards

Certifications: ISO 9001, ISO 14001, ISO 50001, ISCC+, RC14001, ISO 45001, EcoVadis

Third-party Assurance: PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft (limited assurance for environmental and safety performance data)

UN Sustainable Development Goals

• SDG 3 (Good Health and Well-being)
• SDG 6 (Clean Water and Sanitation)
• SDG 7 (Affordable and Clean Energy)
• SDG 8 (Decent Work and Economic Growth)
• SDG 9 (Industry, Innovation and Infrastructure)
• SDG 12 (Responsible Consumption and Production)
• SDG 13 (Climate Action)
• SDG 14 (Life Below Water)
• SDG 15 (Life On Land)

Initiatives contribute to these goals through various environmental, social, and governance programs.

Sustainable Products & Innovation

• Scopeblue® product range; Neolone BioG Preservative; Nagardo® preservative; UltraPure 1296 MD PLUS resin.

Awards & Recognition

• Global Transition Award from Handels - blatt; nomination for German Sustainability Award; CDP A rating for climate and A- for water security; HR Excellence Award for knowledge transfer program; second place in German Human Resources Award; FICCI Chemical & Petrochemicals Award 2023 for Sustainability and Excellence (India); recognized as top employer in China; Nagardo® won Just Drinks Excellence Awards.