DISCLOSURE 103-1: EXPLANATION OF THE MATERIAL TOPIC AND ITS BOUNDARY
Sika converts raw materials to value-added finished products and solutions relying mainly on non-renewable input materials. Direct materials are Sika’s major cost factor, corresponding to approximately 45% of sales. Almost all materials used in production – e.g. for polyurethane adhesives, epoxy-resin products, polymeric roofing and waterproofing membranes, cementitious mortars, polymer concrete admixtures or parts for the automotive industry – are based on crude oil or crude oil derivatives (downstream products) or require fossil fuels for conversion. Other large contributors are sand, minerals, cement, and water.
Sika’s energy consumption is to a large extent based on fossil, non-renewable sources of energy, exposing Sika to price volatilities, supply and production uncertainties, and increasing regulatory interventions related to climate change.
Although Sika’s production itself is less energy-intensive than the supplier industries, specifically the chemical industry, Sika sees itself as responsible for minimizing its impact with regard to climate change by reducing its energy consumption. Sika views energy efficiency and the mitigation of emissions as major drivers of its overall efficiency effort that additionally contribute to cost reductions.
Water is a crucial input factor for Sika’s production, and water quality and scarcity are important issues for Sika in water-stressed regions and geographies. This applies for production facilities in certain areas of the Middle East, Latin America, Southeast Asia, and Australia, where water can be scarce.
Increasing water scarcity in many regions of the world is a potential threat to business growth and expansion. Especially in regions where freshwater is scarce, businesses may be exposed to water shortages, lower water quality, water price volatility, and reputational issues.
Emissions are a material topic for the company. All non-greenhouse gas emissions are managed and controlled locally in the operating facilities. Greenhouse gas (GHG) emissions are a result of combustion processes to generate electricity and heat and power for production processes and facilities, transportation, and travel.
Although Sika’s production itself is less CO2-intensive than the supplier industries, specifically the chemical industry, Sika sees itself as responsible for minimizing its impact with regard to climate change by reducing its energy consumption, replacing more CO2-intensive fossil energy sources with less CO2-intensive fossil energy and increasing the renewable electricity rate. Sika views energy efficiency and the mitigation of emissions as major drivers of its overall efficiency effort that additionally contribute to cost reductions.
Given that Sika is a chemicals company, stakeholders and communities close to Sika’s production sites have a great interest in how Sika manages waste and water discharge from production as they may be directly impacted through potential water contamination and improper waste disposal.
The efficient use of input materials for production and the recycling of materials to reduce waste are key priorities for Sika. Water discharge is heavily regulated by local authorities at the Sika locations, and Sika adheres to permit limits and set standards.
DISCLOSURE 103-2: THE MANAGEMENT APPROACH AND ITS COMPONENTS
GOALS AND TARGETS
Sika aims to reduce:
- 15% less energy consumption per ton sold
- Maximize share of renewable electricity
- 12% reduction of CO2 emissions per ton sold
- 15% less water consumption per ton sold
- 15% less waste generation per ton sold
- 25% higher recycling rate of total waste
until 2023. The reference year is 2019
The line management of Sika’s operations is responsible for the target achievements. At local level, the operations manager is responsible for helping Sika’s targets to be met and for setting and achieving local targets accordingly.
- Life Cycle Assessment (LCA): Sika sets out to undertake objective, transparent, and comparative assessments of the sustainability performance of its products – not only in manufacturing, but throughout their life cycle, in accordance with internationally recognized standards. These analyses may pinpoint potential improvements for existing or new products during product development and maintenance. They may also deliver important insights into resource management (raw materials, energy, water, and waste), production processes, or application efficiency and thereby promote innovation and optimize the development of new products and systems.
- Energy management system to ISO 50001: Some Sika entities are in the process of developing energy management systems to ISO 50001, which provide for continuous improvements in energy efficiency. Seven locations of Sika Germany are certified to ISO 50001.
- Environmental management system ISO 14001: Two-thirds of Sika production facilities are certified to ISO 14001 and perform impact assessments, target setting, and management reviews of the effectiveness of the management system regarding energy use.
- Sustainable solutions: Sika seeks to enhance the outstanding and widely appreciated usefulness of its products by optimizing their sustainability profile, and thus to create added value for customers.
- Risk Management: The objective of risk management at Sika is to secure the supply of materials in all market situations in the required consistent quality at competitive conditions. A structured and systematic recording and rating process for relevant risks is implemented in order to enable early identification of critical materials and/or suppliers through the systematic analysis and implementation of measures based on a clear classification of potential risks.
- Benchmarking: The procurement and technology organization screens Sika’s supplier base and the market in general for alternative or more efficient raw materials.
- Technology comparison: Based on the life cycle approach for raw materials, Sika compares the effectiveness and efficiency of competing technologies to Sika’s existing technology base.
DISCLOSURE 103-3: EVALUATION OF THE MANAGEMENT APPROACH
Sika monitors and evaluates the effectiveness of its management approach according to target achievement.