Sustainability at Sika: Results 2020
Sika takes a long-term perspective on the development of its business. The company seeks to generate benefits for stakeholders that outweigh the potential environmental impacts of the production process and resources consumption. The Sika journey to global leadership is founded on the company’s entrepreneurial philosophy and the Sika Spirit, which is a synonym for the strong set of five values and principles that make up the DNA and culture of the company: customer first, courage for innovation, sustainability & integrity, empowerment & respect, and manage for results.
In this respect, 2020 has been the year of implementation of the new Sustainability Strategy across the Group. The 2020 figures include the acquired company activities on a full year basis, including Parex, whose integration had a substantial impact on the monitored KPI’s. The following details relate to all business operations of the Sika Group focusing on the core themes of sustainable solutions, community engagement, energy, water/waste, occupational health and safety, and CO2 emissions at the more than 300 Sika production sites.
In 2020, two out of the six targeted strategic pillars, namely Operational Efficiency and Sustainability, has driven most of the initiatives at Sika’s production sites. Therefore, to monitor the performance and supporting management decisions, Sika has implemented additional sustainability indicators within the factory KPI’s reporting system. This reporting finally enables Sika to track the finance, operations, quality and sustainability performance at once, thus supporting managers at all levels in their short, mid, and long-term decisional process.
More Value — Less Impact Results 2020 (Overview)
Innovation in “Sustainable Solutions” is a key objective in the Sika Strategy 2023, to create value-added products – combining performance and sustainability into one integral concept. Managing innovation and sustainability together, minimizing the risks and maximizing the opportunities and creating positive business impact: this is the purpose of the new Sustainability Portfolio Management (SPM)-based concept.
The main focus in 2020 was the further development of the SPM methodology which will be fully implemented by end of 2021. This methodology represents the core mechanism used by Sika to evaluate, classify, and position products in defined market segments in terms of Performance and Sustainability-related criteria. The Sika SPM methodology provides guidance on how a “Sustainable product” is defined and ensures that sustainability is measured and communicated in a systematic and comprehensive way in the market. It is built on the World Business Council for Sustainable Development (WBCSD) chemical industry framework, which is a best practice approach to guide companies from the chemical industry in developing and applying consistent, high quality SPM approaches that will result in more sustainable product portfolios and proactively steering their overall product portfolios towards improved sustainability results.
The aim of Sika’s SPM based concept is to build a portfolio of Sustainable Solutions as part of the Sika innovation strategy. Long-term, this approach will support Sika in steering its product portfolio towards proven sustainability benefits aligned with key sustainability megatrends. It is a strong management tool to integrate sustainability into strategic and operational processes.
In 2020, Sika sponsored 183 projects (previous year: 149 projects). This equates to a year-on-year increase of 22.8%. In total, Sika employees spent 1,119 man-days of volunteering work (2019: 401 man-days, +178%). 268,581 individuals were benefitting of the community engagement projects directly (previous year: 35,539).
In 2020, fewer social projects could be carried out in many countries due to COVID-19 restrictions, especially in combination with volunteering schemes. At the same time, Sika companies carried out projects all over the world to support social institutions in coping with the pandemic, through the production and distribution of disinfectants and masks as well as in the construction of urgently needed pandemic-related infrastructure. The strong increase of the number of direct beneficiaries derives from projects which supported neighborhoods to cope with COVID-19. A high number of individuals benefitted from these activities.
The “Sika Cares” community engagement program focuses on improving the quality of life of children, adults, and families in the communities in which the company is active. There are three focus areas: education and vocational training, buildings and infrastructure as well as waste and climate protection.
The company endeavors to provide intelligent support for projects through the application of company-specific expertise, voluntary work by its employees, and long-term collaboration with partners.
EDUCATION AND VOCATIONAL TRAINING
Investment in good education gives young people the most important tool they need to lead an independent life. Sika works to ensure that disadvantaged children and young people get a genuine chance in life. Projects sponsored by Sika in the year under review include initiatives such as the support of children’s
homes throughout the world. In China, Sika supports the Library Project, a nationwide initiative to sponsor libraries in public schools. Between 2015 and 2020 the Sika team helped to create reading rooms and corners in 99 schools, donating more than 94,000 books and providing comfortable, well-equipped learning environments for more than 24,000 children. Alone in 2020, direct beneficiaries of this project amounted to 4,082 children and 233 teachers.
BUILDINGS AND INFRASTRUCTURE
The health and dynamism of communities also depends on the infrastructure in place for people and the environment. This is where Sika comes in with its expertise and product solutions. Sika Chile for example has joined the “Zona Cero” project of the University of Chile. Due to the COVID-19 pandemic, hospitals in the country were facing an increase of inpatients. The Faculty of Architecture and Urbanism, University of Chile, developed auxiliary building modules that could be easily located outside hospital facilities. The implementation of this modular building design has been made possible due to the expertise of Sika and its technologies.
WATER AND CLIMATE
Sika employees support projects which link social causes with ecological interest. Sika also seeks to promote on-the-ground self-help. The main sponsorship partner in this field is the Global Nature Fund (GNF). Sika has supported the GNF and its international Living Lakes environmental program since 2004. Made up of over 100 partner organizations from various lake regions
across the globe, the Living Lakes network aims to promote sustainable development and the protection of drinking water, lakes, and wetlands. In 2020, Sika sponsored projects to ensure drinking water in Angola and Botswana. Furthermore, community development projects were planned and implemented in Mexico and India.
Sika aims to run business in a responsible way to mitigate climate change and its impacts. CO2 emissions are a consequence of energy consumption and can be limited by increasing energy efficiency and improving energy mix. Total CO2 emissions (scope 1, 2, and partially 3) in 2020 summed up to 239,228 tons (previous year: 243,000 tons).
On relative terms, the CO2 emissions have decreased from 27 kg per ton sold in 2019 to 20 kg per ton sold in 2020. This significant decrease is due to acquisitions and scope impact for 3 kg per ton sold and several initiatives implementation as Renewable Energy purchase and Energy management improvement for 4 kg per ton. Direct CO2 emissions (scope 1):
CO2 emissions from burning fossil fuels by all Sika companies and by its own vehicles are calculated based on the reported fuel quantities. In 2020, CO2 emissions from the use of primary energy sources amounted to 102,528 tons (previous year: 88,000 tons). Indirect CO2 emissions (scope 2): CO2 emissions from electricity consumption are derived from the reported energy quantities. In 2020, CO2 emissions caused by electricity consumption amounted to 121,700 tons (previous year: 124,000 tons).
Leased vehicles and business travels (part of scope 3) caused additional CO2 emissions of 11,000 tons and 4,000 tons. Several countries, among them for example China, UK, United States, Brazil, Canada, Chile, and Paraguay have decided to either switch to 100% renewable electricity contracts or commit to purchase Renewable Electricity Certificates (REC) which led to a 10% CO2 scope 2 reduction in 2020. In Italy, process optimization in bituminous production has led to a 4% decrease in CO2 scope 1 emissions with an estimated reduction of 20% by 2022. In China, United States, and Mexico, the replacement of 30 diesel forklifts by electrical ones and LED lighting implementation will also contribute to lower CO2 scope 1 emissions.
In 2021, the company will conduct a deeper GHG scope 3 baseline assessment. This includes a materiality assessment of the relevant carbon-related scope 3 activities and will enable the identification of the material scope 3 categories as defined in the GHG Protocol Corporate Value Chain (scope 3) Accounting and Reporting Standard. Based on this analysis, Sika will quantify the GHG emissions per material scope 3 category and define a carbon reduction pathway to reach net zero in the long-term.
Apart from raw materials, energy is the main resource input for Sika’s operations and thus a relevant cost factor. Therefore, the efficient use of energy is highly important for the company to develop sustainably. Due to the lower energy intensity of the acquired Parex company and the initiatives put in place, energy consumption per ton sold has further decreased in the year under review.
Energy consumption in 2020 was 286 megajoules per ton sold (previous year: 363 megajoules per ton sold) which leads to a reduction of 21 % compared to the previous year. Reduction of fossil fuel consumption by upgrading sand drying equipment in mortar production, decrease of electricity usage by more efficient processes in membrane production and higher efficiency of compressed air equipment are some of the key measures set up to reduce energy consumption.
In Serbia for example, sand drying optimization through the installation of two online moisture sensors will reduce gas consumption by 30%. The same scheme has been installed in Chile. In Singapore and Malaysia, the replacement of older sand dryers by state-of-the-art technology will significantly contribute to the reduction of energy consumption. In Germany, the switch to liquid instead of flakes production contributed to reduce energy costs by CHF 200,000 on a yearly basis.
Sika takes measures to use water economically by reducing consumption, treating water or using lower-grade water qualities when possible, especially in geographies with water scarcity. In 2020, Sika used approximately 2.5 million cubic meters of water (previous year: 2.7 million cubic meters). The water consumption per ton sold was around 0.22 cubic meters (previous year: 0.34 cubic meters). This decrease is mainly due the acquisitions completed since 2019 and the initiatives implemented by the countries. Efficient production projects have been implemented using closed-loop cooling, cooling towers, and switching from public to groundwater. In Spain for example, production process optimization allowed to reduce water consumption by 7,000 cubic meters.
Efficient use of input materials is key for all Sika companies. Sika's production facilities use resources such as sand, cement, fillers, organic raw materials, packaging, and transportation materials. The impact of input materials makes their efficient use and reuse a mandatory element. Efficient production means reducing waste at source, reusing production scrap and packaging materials as well as improving packaging design.
With an increased production volume, the company generated 141,675 tons of waste (previous year: 112,000 tons). This corresponds to 12.4 kilograms of waste per ton sold (previous year: 14.1 kilograms per ton sold) or a decrease of 12% compared to 2019.
Overall, Sika reduces the amount of waste by putting in place activities such as recycling scrap membranes, as for example in Russia, where quantities to be discarded have been reduced by 200 tons. The recycling rate of the total waste volume was 35% in 2020. This was an improvement on the 2019 figure (34%).
In South Africa, cement and sand waste from mortar production is being valorized to a dedicated program (Reconstruction and Development Program) in charge of building houses for disadvantaged people, lowering the waste sent to landfill by 70%.
In Singapore, a sand crusher has been set up in 2020. This initiative will contribute to reduce the reject of oversized sand going to the sand dryer. In Paraguay, the new water treatment plant set up end 2020 will reduce the wastewater generation by 50% and operating costs by 75%. In addition, the final effluent will have the required quality to be reused in the production processes reducing also the water withdrawal of the plant.
The number of occupational accidents with one or more lost working days decreased by 11.9 % in 2020 compared to 2019. In the year under review, 8.4 occupational accidents per 1,000 employees were recorded (previous year: 9.6). In 2020, injuries caused absences, on average, of 20.2 days (previous year: 21.5 days). There has been one fatality of a Sika employee due to a road traffic accident.
In 2020, Sika has further strengthened the global, regional and area EHS structure by taking an integrated approach to Quality and EHS, the supporting management systems, and through building a stronger network of global, regional, and local EHS professionals.
The health, safety, and wellbeing of all Sika employees, contractors and visitors is of paramount importance for Sika. The company is committed to improving its safety performance as part of the Sika Strategy 2023. In order to achieve the targets of a 50% reduction in accidents and zero fatalities by 2023, Sika has established the Sika Vision Zero Program. One of the first measures of this program has been the definition and implementation of Minimum Requirements for each Sika company in relation to workplace safety.
In addition, Sika Life Saving Rules have also been defined to raise awareness of key risks and to help keep all Sika employees safe. Together with the Minimum Requirements, these Life Saving Rules are mandatory for all Sika companies. With regards to the Minimum Requirements, the first four instructions approved by Group Management encompass General Site Rules for all employees, further instructions dedicated to contractors and their employees, and for visitors. These are supplemented by an instruction on Personal Protective Equipment (PPE) to protect employees, contractors, and visitors from hazards.
The implementation of this first set of instructions and the Life Saving Rules has been completed in 2020 supported by EHS professionals and signed off by management. Key areas of focus in 2021 will be leadership commitment to safety and employee participation on safety topics.