Solvay SA – Annual report – 31 December 2017
ABOUT THIS REPORT (extract)
GOING FURTHER IN OUR INTEGRATED MANAGEMENT JOURNEY
Solvay’s 2017 Annual Integrated Report gives an account of the progress we made last year in transforming ourselves into an advanced materials and specialty chemicals company. We are committed to sustainable and long-term value creation. Our Annual Integrated Report is based on the framework established by the International Integrated Reporting Council (IIRC) and reflects how we integrate sustainability into the management of our businesses, creating value for our customers and many other stakeholders.
Our ambition is to be a leading contributor to the reshaping of the global chemical industry and help deliver solutions that will meet the planet’s sustainability challenges. We believe that collaboration makes a real difference, and we invite our stakeholders to contribute their skills, technologies, and resources. Creating sustainable value is more than a responsibility; it is also an opportunity. This is why in this year’s report, we have asked our stakeholders for feedback on how we have been able to contribute to their long-term interests.
“ Our journey towards integrated reporting continues to evolve deliberately yet cautiously. With over 150 years of history, we are deeply aware of the importance of value that stands the test of time. Sustainability without strong profits is not sustainable, while strong profits to the detriment of sustainability undermine the longevity of a business. “
Member of the Executive Committee and Chief Financial Officer
HOW TO APPROACH THIS REPORT
The “Understanding Solvay” section of this Report follows an integrated thinking approach, putting selected contents into the perspective of our vision and strategy, linking material information, and providing an outlook on the future. It focuses on priority topics for Solvay, telling the story of the Group’s transformation, and presenting the objectives it has pursued over the last few years and its recent key achievements. The Management report provides more detailed analyses and also includes a focus on high materiality issues and a more detailed description of our business model.
EXTRA-FINANCIAL STATEMENTS (extract 1)
- BASIS OF PREPARATION (extract)
Main reporting reference frameworks used in the preparation of this integrated report
Global Reporting Initiative (GRI): the GRI Standards are the main reference for Solvay’s sustainability reporting.
United Nations Global Compact: the information provided serves as a progress report on the implementation of the ten principles of the United Nations Global Compact.
International Integrated Reporting Council (IIRC): Solvay adheres to the principles and content elements of Integrated Reporting, as described in the “InternationalFramework” published by the IIRC.
2014/95/EU: Solvay uses the GRI Standards to comply with the Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014 amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information. The Directive has been transposed into Belgian Legislation in September 2017.
Sustainability Accounting Standards Board (SASB): Solvay aligns its materiality analysis with the SASB approach to prepare the SASB Materiality Map™. See the Materiality Analysis section of this report for more details.
United Nations Sustainable Development Goals (SDG):
Solvay has integrated the SDGs into its materiality analysis as the official agenda of the “Planet” (Governments and NGOs) stakeholders group. Solvay has worked with other chemical companies, under the leadership of the World Business Council for Sustainable Development (WBCDS), to identify the SDGs most impacted by the chemical industry. The SDGs relevant to Solvay confirmed the priorities the Group had already identified through its materiality analysis. Solvay has also joined the “Reporting on the SDGs” Action Platform of the GRI and the UN Global Compact to identify relevant impact indicators.
3.1. Reporting practices
Greenhouse gas emissions reporting practices
Greenhouse gas (GHG) emissions are reported in accordance with the world’s most prevalent standards for sustainability reporting (GRI guidelines and GHG protocol). In particular, because Solvay is a chemical company, it was decided to apply the “Guidance for Accounting & Reporting Corporate GHG Emissions in the Chemical Sector Value Chain” published by the World Business Council for Sustainable Development, which provides best practices for greenhouse gas accounting and reporting. By extension, other emissions are reported according to the same guidelines.
To better reflect its sustainability policy, Solvay decided to apply the market-based method to calculate CO2 emissions associated with purchased electricity. To fully comply with GRI’s requirements, the following criteria (in decreasing order of priority) are applied to select the CO2 emission factor of each electricity supply contract:
- Energy attribute certificates – emission factors resulting from specific instruments such as green energy certificates;
- Contract based – the emission factor obtained from contract agreements on specific sources for which there is no emission of specific attributes;
- Supplier / utility emission rates – the emission factor that is disclosed as result of the supplier’s retail mix;
- Residual mix – the emission factor which is calculated based on the non-attribute claimed production and reflects the mix after the subtraction of certified products;
- Location-based – if none of the above factors is available, the national emission factor published by national authorities, the International Energy Agency. Based on a World Resources Institute (WRI) recommendation, for the USA, Emissions & Generation Resource Integrated Database (eGRID) emission factors published by the United States Environmental Protection Agency are used instead of the state emission factor.
Energy reporting practices
Energy consumption components are converted into primary energy, with the following conventions:
- fuels, using the net calorific values
- steam purchased, taking into account the reference value of boiler efficiency related to the fuel used for its generation (e.g. 90% efficiency based on the net calorific value for natural gas)
- electricity purchased, assuming an average efficiency of 39.5% for all types of power production except for nuclear power (33%), based on net calorific value (source International Energy Agency (IEA)).
Environmental reporting practices
Environmental data are collected yearly on all Solvay industrial sites (production sites and R&I centers) and for each business separately in the case of multi-business sites. The data collection comprises substance emissions to air and water, waste production, and a series of parameters dealing with water and general environmental management.
After a thorough validation process, these data are consolidated at the Group level in consistency with financial reporting. In addition, the consolidated data are verified by an external auditor.
For 2017, the data for all Performance Polyamides GBU sites have been excluded (i.e. financially deconsolidated), with the exception of the Paulinia (Brazil) site, which is not part of the deal with BASF.
Data from all of the sites of two Cytec legacy GBUs (“Technology Solutions” and “Composite Materials”), acquired at end 2015, have been integrated as from this year.
It has to be noted that the 2020 (and intermediate 2017) targets for the Group’s Environmental Plan have been calculated with the information at hand in 2015. In particular, the divestment of the GBU’s Acetow and Emerging Biochemicals has been integrated but not the recently announced divestment of the GBU Performance Polyamides.
Safety reporting practices
Safety performance is measured in all entities under Solvay operational control, i.e. on sites where Solvay policies and procedures apply. Accidents are reported to a central database and classified according to time lost and severity of injuries.
Frequency rates are calculated monthly at the GBU and Group levels. Performances and accident typology are analyzed on a quarterly basis. Reports are provided to the Executive Committee and GBUs.
Medical Treatment Accident Rate (MTAR), Lost Time accident Rate (LTAR) and Process Safety Rate are calculated based on million hours worked. The Group reporting guidelines for calculating hours worked hours (employees, contractors and temporary workers) are under revision to ensure higher consistency of the methodological approaches across all Group entities as of 2018.
Social reporting practices
Headcount is provided for two scopes:
- Solvay Continuous Operations includes continuous operations only and matches Financial accounts presentation;
- Solvay Total Headcount also considers discontinued operations.
Apprentices, trainees and students are excluded from the numbers. Headcount refers to employees having a contract with Solvay, who are classified as active as they have a position in the org chart. FTE (Full Time Equivalent) corresponds to Active employees times capacity utilization.