2017 Sustainability Report - Heubach

 
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2017 Sustainability Report - Heubach
Sustainability Report
           2017
2017 Sustainability Report - Heubach
Table of Contents

01   About This Report        		                    2   08   Environmental Protection                         28
     Reporting Period, Scope and Limits             2        Energy and Climate                               28
     Report Content and Practical Information                Emissions                                        32
                                                             Water                                            34
02   Key Performance Indicators         		          4        Materials                                        37
                                                             Waste                                            38
03   Foreword by Management             		          6        Logistics and Transportation                     39
                                                             Damage Events                                    40
04   About Heubach 		                               8
     Organization 		                                8   09   Employee Responsibility                          42
     Milestones                                    12        Employment                                       42
     Stakeholders                                  14        Remuneration Policy and Employee Benefits        44
     Materiality Matrix                            16        Job Satisfaction and Employee Retention          45
                                                             Personnel Development     		                     48
05   Sustainability Management                     18        Demographic Change       		                      50
     Organization of Sustainability Management     18        Diversity and Equal Opportunities                51
     Sustainability-Oriented Corporate Policy      18        Safety and Health                                54
     Management Systems        			                 19
     Memberships in Initiatives and Associations   20   10   Supply Chain Management                          58
     Compliance                                    20        Procurement                                      58
                                                             Vendor Selection and Evaluation                  58
06   Sustainability Program                        22
                                                        11   Social Commitment                                60
07   Products                                      24
     Sustainable Pigment Solutions                 25   12   Reference Table for the German 		                62
     Product Responsibility                        26        Sustainability Code
     Research and Development                      27
                                                        13   Glossary and Abbreviations                       66

                                                             Legal Notice                                     69

                                                                                                  Contents        1
2017 Sustainability Report - Heubach
01
About This Report
                                                                                   2017
> Reporting Period, Scope and Limits                                                                           > Report Content and Practical Information

                                                                         22        309
This is the first sustainability report of the                   61                                            This sustainability report is published in Ger-
Heubach GmbH Group. Key figures and                                                                            man and English. For better readability, per-
developments in this report generally refer to                                                                 sons will be referred to in the male form. But
the 2017 reporting year. Where possible and                         Employees                                  this encompasses all people, regardless of
appropriate, we also present time series for                   Heubach GmbH Group*                             gender.
the financial years 2015, 2016 and 2017. The
editorial deadline for the sustainability report
was July 28, 2018.
                                                                        392                                    In preparing this report, we observed the
                                                                                                               following guidelines: the Chemie3 Reporting
                                                                                                               Guide for SMEs, the Sustainability Report Ran-
Unless otherwise indicated, the information                                                                    king criteria of future e. V. and the IÖW (Insti-
and figures contained in this report refer to                                                                  tut für ökologische Wirtschaftsforschung, In-
the Heubach GmbH Group. This includes                                                                          stitute for Ecological Economy Research), the
Heubach GmbH, located in Germany                                                                               DNK (Deutscher Nachhaltigkeitskodex, Ger-
                                                                                  2016
(Langelsheim and Cologne), and the sub-                                                                        man Sustainability Code, as of 2015) of the
sidiary Heubach Pigment Manufacturing                                                                          RNE (Rat für Nachhaltige Entwicklung, Coun-
GmbH & Co. KG, which has its production                                            311                         cil for Sustainable Development), and the UN
                                                                         22
facilities at the Langelsheim site. In addition,                 61                                            Global Compact guidelines. In addition, we
the North-American production subsidia-                                                                        consider selected criteria of the Sustainabi-
ry Heucotech Ltd., Fairless Hills, USA, and                                                                    lity Reporting Standards (SRS) of the Global
Hangzhou Heubach Pigment Co. Ltd., a sa-                                                                       Reporting Initiative (GRI) where this proves
                                                                   Employees
les subsidiary in Hangzhou, China, belong to                                                                   beneficial to readers of this report.
                                                              Heubach GmbH Group*
the Group.

Heubach Color Pvt. Ltd., India, is not part of                          394                                    As a member of the UN Global Compact, we
                                                                                                               also present our first progress report (Com-
the Heubach GmbH Group and therefore not                                                                       munication on Progress, CoP) with this sus-
included in this sustainability report. How-                                                                   tainability report. We further plan to submit
ever, we will refer to that production site in                                                                 the declaration of conformity in accordance
key passages.                                                                                                  with the DNK (Deutscher Nachhaltigkeitskodex,
                                                                                                               German Sustainability Code).
Heubach – including Heubach Color Pvt. Ltd.                                       2015
in India – has 1,093 employees worldwide,                                                                      Our objective is to inform the stakeholders
with 392 employees working at the Heubach                                        302                           of our company – customers, employees,
                                                                         21
GmbH Group. The employees are distributed                        60                                            business partners, local residents and all other
across the different sites as follows:                                                                         interested parties – about our sustainability
                                                                                                               activities no later than every three years. These
                                                                   Employees                                   include economic, environmental and social
    Germany                                                   Heubach GmbH Group*                              aspects.
    USA
    China                                                               383                                    Accordingly, we will publish our second
                                                                                                               sustainability report by 2021 at the latest.

                                                   *
                                                       Effective date: 31.12.2017 without temporary workers.

2                                                                                                                                                                   About This Report   3
2017 Sustainability Report - Heubach
02
        Key Performance Indicators                                                                                                                                                                                                               Percentage change
                                                                                                                                                                                                                                                      2017 vs. 2016                              2017                      2016                     2015
         We regularly record the key performance in-
         dicators (KPIs) 1) that are economically, so-                                                                                                                          Total production (t)		                                                               +3.7                      23,172                    22,348                   22,205
         cially and ecologically decisive for Heubach.
         On the basis of these indicators, we measure                                                                                                                           Sales (t)                                                                            +5.9                      25,746                    24,306                   23,646
         and control the implementation of the focal
         areas of sustainability, and thus create a basis                                                                                                                       Sales revenue (€ million)                                                            +8.0                       145.6                       134.8                   132.1
         for forecasts as well as for other objectives.
         As far as possible we record the KPIs on the                                                                                                                           Investments (€ million)                                                      +17.9                         9.5 8.1 3.3
         same basis and provide transparent informa-
         tion about any changes in order to guaran-                                                                                                                             R&D expenditure (€ million)                                                   +1.3                         3.7 3.7 3.6
         tee a high degree of reliability, comparability
         and consistency of our data.                                                                                                                                           Employees			                                                                          -0.5                        392                        394                      383
                                                                                                                                                                                                                                                                      -0.3                        30.6                       30.7                     31.9
         A selection of the most important KPIs is                                                                                                                                           Share of female employees (%)
                                                                                                                                                                                                                                                                     +2.1                         34.0                       33.3                    33.3
         shown in the following table. Further key                                                                                                                                           Share of women in executive positions (%)
         indicators are described in the respective                                                                                                                                                                                                                 -24.5                           1.9                        2.6                     2.0
                                                                                                                                                                                             Percentage of trainees (%)1)
         chapters.                                                                                                                                                                                                                                                    -4.5                          4.8                        5.1                     8.1
                                                                                                                                                                                             Staff turnover (%)
                                                                                                                                                                                                                                                                    -40.9                           9.4                      15.9                      8.1
                                                                                                                                                                                             Frequency of accidents 2)

                                                                                                                                                                                Environmental protection

                                                                                                                                                                                             Energy consumption (MWh)			                                             +5.5                     60,254                       57,105                 56,361
                                                                                                                                                                                             Energy intensity (MWh/t)
                                                                                                                                                                                                                  3)                                                 +1.8                           2.6                        2.6                     2.5
                                                                                                                                                                                             Scope 1-Emissions (t)     4)                                             -3.7                      6,050                      6,285                   6,378
                                                                                                                                                                                             Scope 2-Emissions 5) (t)                                               +16.2                      15,412                     13,264                  12,962
                                                                                                                                                                                             Water input (m3)                                                       -10.6                     152,977                    171,202                169,286
                                                                                                                                                                                             Specific water input           6)
                                                                                                                                                                                                                                 (m /t)
                                                                                                                                                                                                                                   3                                -13.8                           6.6                        7.7                      7.7
                                                                                                                                                                                             Waste (t)                                                               +2.9                       3,873                      3,765                   3,045

                                                                                                                                                                           1)
                                                                                                                                                                                As measured against the number of employees in Germany.
                                                                                                                                                                           2)
                                                                                                                                                                                Number of industrial accidents with at least three days of work missed per 1 million working hours.
                                                                                                                                                                           3)
                                                                                                                                                                                Ratio of energy consumption and sales volume produced (total production). Commercial products are not included.
                                                                                                                                                                           4)
                                                                                                                                                                                Emissions resulting from own business, that is, from the consumption of natural gas, for example, for steam generation, the operation of production plants, heaters or lift trucks.
                                                                                                                                                                                The emission factors used are based on the report "Emissionsfaktoren für Strom, Fernwärme und Kraftstoffe" (Emission Factors for Electricity, District Heating and Fuels) by the VDA
                                                                                                                                                                                (Verband der Automobilindustrie, German Association of the Automotive Industry) (2018). The stated values for Germany, China East and USA East were used. Our calculations are
                                                                                                                                                                                based on the assumption that only CO2 is emitted by the complete combustion of all natural-gas components.
                                                                                                                                                                           5)
                                                                                                                                                                                Emissions from the production of energy sourced from outside the company (e.g., electricity). The conversion factor for Germany was specified by the electricity supplier. For the
                                                                                                                                                                                U.S. and China, the regional average emission factors relative to the electricity provided according to the
1)
     Note: The key indicators shown in the report are commercially rounded to a maximum of one decimal place. For the purpose of a more precise representation, however,
                                                                                                                                                                                report "Emissionsfaktoren für Strom, Fernwärme und Kraftstoffe" (Emission Factors for Electricity, District Heating and Fuels) by the VDA (Verband der Automobilindustrie, German
     the calculation of percentages is based on exact, non-rounded numbers. In individual cases, this may lead to them not resulting from the values shown.
                                                                                                                                                                                Association of the Automotive Industry) (2018) were used.
                                                                                                                                                                           6)
                                                                                                                                                                                Ratio of water input and sales volume produced (total production). Commercial products are not included.

4                                                                                                                                                                                                                                                                                                             Key Performance Indicators                             5
2017 Sustainability Report - Heubach
03
    Foreword by Management   Dear Readers,

                             That Heubach has grown into a global pro-           This is why we use the different arrangement     In addition, with the Heubach GmbH Group
                             ducer of pigments and pigment preparations          options in our business activities and develop   joining the UN Global Compact in 2017, we
                             is, above all, the result of our staying true to    solutions that actively address the challenges   have made a public commitment to uphol-
                             our core values: linking comprehensive chemi-       of climate change, scarcity of resources and     ding human rights and labor standards, pre-
                             cal know-how, technological competence,             environmental protection. We also seek for       venting discrimination, protecting the envi-
                             internationalization, service, quality and reli-    solutions in the areas of health protection,     ronment and combating corruption.
                             ability – and combining this with enthusiasm        occupational safety, demographic change or
                             that has stayed alive for generations. It is this   reconciling life and work.                       With our first sustainability report, we cordi-
                             force that breeds innovation.                                                                        ally invite you to get to know Heubach as
                                                                                 In order to identify the sustainability issues   a responsible manufacturer and supplier
                             Sustainability and intergenerational thin-          relevant to Heubach and its main stakehol-       of pigments and pigment preparations. In
                             king have always been a high priority in            ders, we conducted a sustainability check        it, we provide a comprehensive picture of
                             the 210-plus-year history of our company. Alt-      developed by the Chemie3 initiative. Through     our sustainability performance in terms of
                             hough it must be said also that not all susta-      a cross-departmental workshop, we iden-          the "triple bottom line", by reporting on the
                             inability aspects have always been taken into       tified fourteen relevant sustainability areas    implementation of sustainability in our core
                             account equally. Nonetheless, the long-term         with the help of this tool. We are already       business and detailing the measures taken
                             success of a manufacturing company always           very well positioned in some of the fields of    and planned.
                             requires sustainability-based handling of the       action, and others will have to be filled with
                             needs of customers, vendors, service provi-         further measures in the future.                  Furthermore, we use the reporting process
                             ders, principals, employees, neighbors and                                                           to focus our sustainability activities in a tar-
                             the environment.                                    Successful implementation requires the           geted manner, to strategically align them, to
                                                                                 sensitization of individual responsibility and   achieve our objectives, and to continuously
                             Today, sustainability is inseparably linked to      awareness for sustainable actions of each        expand our reporting.
                             our corporate strategy. For the development,        employee. After all, the success of Heubach
                             production and marketing of chemical pro-           depends largely on the ingenuity and moti-       We would like to thank all the employees
                             ducts comes with a responsibility that does         vation of our employees. This is why we have     who, through their commitment, make Heubach
                             not only extend to economic aspects. On             integrated the essential aspects of a susta-     a sustainable employer, business partner and
                             the contrary, our business also affects the         inability strategy into our corporate policy     neighbor, and we hope you will enjoy rea-
                             environment and the society in which we             and, through the corresponding manage-           ding this report.
                             operate.                                            ment systems, into the respective processes,
                                                                                 and set up a sustainability program. By way
                                                                                 of continuity and conviction, we will promo-
                                                                                 te the further development of all aspects of
                                                                                 sustainability on the solid basis that we have
                                                                                 put in place so far.
                                                                                                                                  Dr. Reiner Martens         Birgit Genn

                                                                                                                                  Management of Heubach GmbH

6                                                                                                                                   Foreword by Management                     7
2017 Sustainability Report - Heubach
04
About Heubach
> Organization

For more than 210 years, Heubach has been        An extensive distribution network on six             The majority of our products are used in prin-
                                                                                                                                                          01               02               03           04            05               06
producing pigments and pigment prepara-          continents supports and advises the custo-           ting inks, coatings and plastics industries. The
tions for numerous applications. Since the       mers of all Heubach locations through their          color and protective pigments from Heubach
1980s, the company has developed into a          respective sales and service organizations,          are also suitable for use in many other fields
global organization with production facilities   including the laboratory capacities available        of application, for example, the coloring of
in Germany, the USA and India. The parent        there. In addition, a global team of experts         latex, seeds, adhesives or building materials.       Purchasing                                    Marketing &     Storage &
                                                                                                                                                          Raw materials
                                                                                                                                                                          R&D/Application   Production                                  Processing
company has its head office in Langelsheim,      ensures on-site technical support in the indi-                                                                             technology                      Sales      Transportation    Industry
near Goslar in Lower Saxony. The companies       vidual national markets.                             In 2017, the Heubach GmbH Group gene-
of the Heubach Group are owned by the                                                                 rated annual consolidated sales of €145.6
Heubach family, and are consolidated under       Our comprehensive product portfolio ranges           million on a production volume of 23,172 t.
the Austrian Heubach Holding GmbH.               from high-quality organic and inorganic
                                                                                                                                                          Purchasing
                                                 colored pigments to various pigment pre-
                                                                                                                                                          Merchandise
The Heubach GmbH Group manufactures              parations and customized color shade solu-
inorganic colored pigments and selected          tions. In addition, Heubach produces a variety
pigment preparations for the plastics and        of so-called corrosion inhibitors to cover the
coatings industry at the German site in Lan-     entire performance spectrum of modern
gelsheim. At our sites in Germany and the        protective coating.
USA, we also manufacture anti-corrosive
pigments, printing ink concentrates and pig-
ment pastes. Founded in 1994, the affiliated
company Heubach Color Pvt. Ltd. based in
Ankleshwar, India, produces organic pig-
ments as well as some pigment prepara-
tions.                                              26,000 t                                           €146 million
                                                                   25,746

                                                                                                                         145.6

In Asia, the establishment of Hangzhou Heubach
                                                                                 24,306

Pigment Co. Ltd., Hangzhou, China, in 2009
                                                                                             23,646

                                                                                                                                      134.8

was another important step of our growth
                                                                                                                                                  132.1

strategy. The focus is on supporting national
and international customers in the dynami-
cally developing Chinese market.

                                                                  2017          2016      2015                          2017         2016     2015

                                                                                Sales                                            Sales revenue
                                                                            (consolidated)                                       (consolidated)

8                                                                                                                                                                                                                                           About Heubach   9
2017 Sustainability Report - Heubach
Germany

                                Production:
                                Anti-corrosive pigments,
                                inorganic pigments,
                                pigment preparations
                                                                                          China

                                                                                          Laboratories

     USA

     Production:
     Anti-corrosive pigments,
                                                           India
     pigment preparations

                                                           Production:
                                                           Organic pigments,
                                                           pigment preparations

10                                                                                 About Heubach        11
> Milestones

Becoming a globally operating and re-             2012
cognized producer of high-quality color           > Expanded production for
pigments and pigment preparations was               anti-corrosive pigments by 700 t
accompanied by numerous technical inno-           > Implementation of a fully automated
vations and various strategic acquisitions.         calcination technology for the manufacture
As early as in 1984, a link to North Ameri-         of inorganic colored pigments
ca was established through the acquisition
of the pigment division of the U.S. company       2016
DuPont de Nemours. In Germany, Heubach            > Setup of a second, fully automated
increased its product portfolio by acquiring        calcination line to manufacture
the lightfast pigment business of Bayer AG          inorganic colored pigments
in 2002.
                                                  2017
The expansion of organic pigment produc-          > Launch of an innovative, highly
tion in India was made possible by the              flexible production concept to
acquisition of the pigments business of Ave-        manufacture pigment pastes in Germany
cia (formerly: ICI) in 2003. We also invested
in production facilities for the manufacture of   2018
high-quality organic red, yellow and orange       > Launch of a new production
pigments, as well as in the plant completed         system for anti-corrosive pigments in
in 2013 for the manufacture of indanthrone          the USA (capacity: 4,000 t)
blue crude.

At the German and American locations, the
following investments have contributed sig-
nificantly to the growth of our Group in re-
cent years:

12                                                                                                About Heubach   13
> Stakeholders

Having trusting and cooperative communi-         We re-analyzed the key stakeholders along        The open dialog with the stakeholders regu-      In order to develop our stakeholder commu-       The respondents were to assess the relevan-
cations with numerous stakeholders is cru-       the value chain as part of the recertification   larly takes place both directly – for example,   nications further, and to review our assess-     ce of a wide range of sustainability topics as
cial for the future-oriented development of      of our quality and environmental manage-         with customers and vendors – and indirectly      ments, we conducted our first stakeholder        well as which instruments were suitable for
our company. We see this as an opportunity       ment system, and explored their basic requi-     through advocacy groups and our member-          survey in the second quarter of 2018.            dialoging with stakeholders.
to identify the expectations and needs of the    rements and expectations with respect to         ship in associations. The individual channels
various stakeholders and to respond to new       the company.                                     and formats depend on the respective stake-      Heubach invited selected representatives of      The evaluation of this survey and the measu-
risks, requirements or trends at an early sta-                                                    holder group as well as the topics.              the following stakeholders to a survey: cus-     res taken in this context will be published in
ge.                                                                                                                                                tomers, vendors, employees, financial service    the next sustainability report in 2021.
                                                                                                                                                   providers, authorities, neighbors, cooperation
                                                                                                                                                   partners, and members of the local public.

Stakeholders                       Formats & Channels             Key Topics                                                                        Stakeholders                      Formats & Channels             Key Topics

                                                                  Product selection / quality / availability                                                                                                         Profitability / cost efficiency
                                                                  Contract-compliant order processing                                                                                 General shareholders'          Sustainability / growth
                                                                                                                                                    Owners
                                   Customer visits                Know-how transfer/service                                                                                           meeting                        Livelihood security
                                   Trade shows                    Sustainable alignment of processes with regard to quality standards                                                                                Profit optimization
Customers
                                   Satisfaction surveys           Socially acceptable production conditions
                                   Website                        Innovation
                                                                  Competitiveness                                                                                                                                    No adverse effects due to environmental impacts
                                                                  Global presence                                                                                                     Open House Day                 (e.g., noise, emissions)
                                                                                                                                                    Neighbors                         Neighborhood brochure          Information
                                                                                                                                                                                                                     Prevention of accidents (e.g., road traffic, plant damage)
                                   Audits                         Purchase of specified quantities / compliance with payment conditions                                                                              Jobs
Vendors and
                                   Vendor evaluations             Sustainable partnership / business relationship
Service Providers
                                   Trade shows                    Solvency
                                                                                                                                                                                                                     Liquidity
                                                                                                                                                                                                                     Reserves
                                                                                                                                                    Banks                             Meetings
                                                                  Motivation                                                                                                                                         Company performance / rating
                                                                  Safe workplaces                                                                                                                                    Loans / other banking products
                                   General meeting                Regulation of tasks / competencies
                                   Feedback meetings              Opportunity for personal development
                                   Complaints box                 Clear communication structures / leadership                                                                         Visits                         Regular exchange
Employees
                                   Intranet                       Provision of necessary resources                                                  Regional Policy                   Meetings                       Economic success
                                   Employee surveys               Fair and secure income                                                                                              Networking                     Social/cultural commitment
                                                                  Work-life balance
                                                                  Inclusion
                                                                                                                                                                                                                     Compliance with standards and regulations
                                                                                                                                                                                                                     Further development of the M-system
                                                                                                                                                    Auditors                          Audits
                                                                                                                                                                                                                     Provision of documentation
                                                                  Fulfillment of promised personnel resources                                                                                                        Employee availability
                                                                  Equal treatment of employees
                                   Meetings                       Compliance with labor law requirements
Works Council                                                                                                                                                                                                        Compliance
                                   Assemblies                     Respectful way of interacting with employees
                                                                                                                                                                                      Meetings
                                                                  Inclusion / information regarding personnel management                            Regulatory Authorities                                           Transparency in relevant areas / processes / documents
                                                                                                                                                                                      Visits
                                                                  Binding collective bargaining                                                                                                                      Implementation of specific measures identified

14                                                                                                                                                                                                                                                                  About Heubach   15
> Materiality Matrix

     In order to identify the sustainability issues     The materiality analysis resulted in the priority
     relevant to Heubach and its main stakehol-         areas of action, which we then analyzed,
     ders, we relied on the sustainability check of     discussed and evaluated in a second step –

                                                                                                            Strategic significance for Heubach
     the Chemie3 initiative. This is a partnership      under the direction of an external consul-
                                                                                                                                                                                                                                          Corporate governance /
     between the VCI (Verband der Chemischen            tant. The sustainability officer, management,                                                                                                                                     compliance
     Industrie e. V., Chemical Industry Association),   and the department heads responsible for                                                   Strengthened skills basis
     the IG BCE (Industriegewerkschaft Bergbau,         Purchasing, Sales & Logistics, Production,                                                                                                        Protection of the environment
     Chemie Energie, Industrial Union for Mining,       Environmental and Quality Management,                                                                                                             Supply and value chain
     Chemistry, Energy) and the BAVC (Bundesar-         Product Management and Marketing &                                                                                                   R&D                   Climate protection
     beitgeberverband Chemie, Federal Emplo-            Communications participated in this evalu-                                                                                                                      Conservation of resources
                                                                                                                                                 Sustainability in corporate strategy
     yers' Federation for the Chemical Industry).       ation.
                                                                                                                                                                                                         Sustainability information
     The sustainability check covers 31 action areas
                                                                                                                                                                                        Sustainability
     based on the sustainability guidelines for         The materiality matrix of the Heubach GmbH                                                                                                                 Personnel policy; management and
                                                                                                                                                                                        management
     the chemical industry. These fields of action      Group shows – as a result of this sustai-                                                                                                                  corporate culture
     were developed by the Chemie3 initiative in        nability check – all the topics dealt with in
     a comprehensive analysis; in the process, it       this sustainability report. We rated issues as
     involved various stakeholders (in the form of      particularly important if they were highly re-                                                                                             Work-life balance
     surveys) and evaluated studies and literature.     levant for both stakeholders and Heubach. In
     Thanks to these thorough preparations, Heubach     addition, we included topics of great signifi-
                                                                                                                                                                                                           Stakeholder dialogs
     was able to forego a direct survey of its          cance to Heubach. Among other things, we
     stakeholders in 2017.                              identified in the analysis the following social
                                                                                                                                                                                        Age and health-appropriate design of jobs
                                                        and environmental aspects as being essen-
     We carried out our own sustainability check        tial: energy efficiency, climate and resource
     in a two-day, in-house workshop. In a first        protection, compliance, work and family life,
     step, the sustainability officer – in close con-   occupational health and safety, strengthened
     sultation with management – assessed the           skills base, personnel management, procure-
     materiality of the individual action areas, both   ment and vendor selection.
     from the point of view of specific stakehol-
     ders and from the point of view of Heubach.                                                                                                                                                                   Materiality from stakeholders' point of view

16                                                                                                                                                                                                                                   About Heubach           17
05
                                                                                                                                                     > Ensuring a High Standard                        > Protection of the Environment                      > Safety and Health
                                                                                                                                                       of Quality                                        and Energy-Efficient Action                          Protection

                                                                                                                                                     Assuming quality responsibility means for us      To avoid environmental impacts, we con-              We are aware that achieving these quality,
                                                                                                                                                     the obligation to fulfill the requirements de-    tinuously improve our products and pro-              environmental and energy objectives is not
                                                                                                                                                     manded of us. This includes the high quality      cesses. We ensure the monitoring, testing            possible without our employees. For this rea-
                                                                                                                                                     of our products and services, adherence to        and evaluation of products and processes             son, ensuring occupational safety and health

Sustainability Management                                                                                                                            delivery times, comprehensive advice for our
                                                                                                                                                     customers, and protecting the interests of
                                                                                                                                                     our employees.
                                                                                                                                                                                                       through comprehensive HSE and quality
                                                                                                                                                                                                       management.
                                                                                                                                                                                                       As part of our energy management, we not
                                                                                                                                                                                                                                                            is one of our overarching goals.

                                                                                                                                                                                                       only commit ourselves to optimizing the
                                                                                                                                                                                                       use of energy in our production, but also to
                                                                                                                                                                                                       increasing energy efficiency in the procure-
                                                                                                                                                                                                       ment of new plant and equipment, as well
                                                                                                                                                                                                       as in product development.

> Organization of                                 > Sustainability-Oriented
  Sustainability Management                         Corporate Policy                                                                                 > Management Systems

Heubach management sets the strategic             For Heubach, economic success and susta-          To underscore the importance of these values     Heubach has introduced an integrated ma-          In order to ensure a systematic preparation          The planning and supervision of the M-sys-
direction for sustainability. Together with an    inability are inextricably linked. That is why    and beliefs, we have formulated three guide-     nagement system (M-system). This supports         of our sustainability activities, we also plan       tem as well as document maintenance are
interdisciplinary team, it coordinates the sus-   we have integrated the essential aspects of       lines. They have already shaped Heubach in       us in implementing our corporate policy –         to integrate sustainability management into          the responsibility of the management officer.
tainability-oriented corporate policy and lays    a sustainability strategy into corporate policy   the past, and are decisive for the sustainable   above all, in the continuous improvement of       the M-system.                                        In addition, all managers and employees are
down the sustainability program. On the one       and into the respective processes via the         development of our company both over the         our processes, increasing customer satisfac-                                                           encouraged to contribute to the ongoing
hand, this team consists of the sustainability    corresponding management systems. The             medium and long term:                            tion, operational safety, compliance with all     Through performance measurement sys-                 development of the M-system. Management
officer and, on the other hand, the depart-       company objectives, therefore, include the                                                         relevant legislation, and protecting the envi-    tems, organizational guidelines, process and         is responsible for providing appropriate finan-
ment heads for Purchasing, Sales & Logistics,     sustainability targets, which we break down                                                        ronment and resources.                            work instructions, regular internal and exter-       cial and human resources to implement the
Production, Environmental and Quality Ma-         into division and departmental objectives                                                                                                            nal audits, we ensure that our management            M-system.
nagement, Product Management and Mar-             according to the organization.                                                                     For decades, we have had a certified quali-       systems meet specific requirements, and
keting & Communications.                                                                                                                             ty management system in accordance with           continue to drive the continuous improve-
                                                  We are convinced that the satisfaction of our                                                      DIN EN ISO 9001 in Germany, which we also         ment process.
The sustainability program is implemented         customers is crucial to the success and repu-                                                      rolled out to our U.S. site a few years ago.
together with the specialists in the individual   tation of our company. Therefore, we rely on                                                       In order to determine and steer the envi-         A central document management system
areas – from sustainability-relevant processes    customer-specific services as well as long-                                                        ronmental impact of our corporate activities,     (DocMan) has been set up to ensure com-
to the defined objectives and the associated      term cooperation. This is characterized by                                                         we introduced an environmental manage-            pany-wide access to all valid documents and
measures. All parties involved report on the      trusting, open and respectful action in order                                                      ment system in accordance with DIN EN ISO         process descriptions of the M-system.
current state of affairs in regular meetings      to recognize the requirements of customers                                                         14001 in Germany in 2008.
and assess the status achieved.                   and markets at an early stage and to be able
                                                  to respond to them promptly.                                                                       Furthermore, the German site maintains a           Management Systems by Location
The tasks of the sustainability officer include                                                                                                      safety management system according to the
the further development, coordination and         First and foremost, the quality features of our                                                    Hazardous Incident Ordinance.
monitoring of the sustainability activities as    business policy are the continuous improve-                                                                                                           Germany
well as the preparation of the sustainability     ment of products, services and processes,                                                          In 2013, we introduced an energy manage-           Quality management                                   DIN EN ISO 9001 : 2015
report and the implementation of the volun-       taking into account the relevant environ-                                                          ment system in accordance with DIN EN ISO          Environmental management                             DIN EN ISO 14001 : 2015
tary commitments.                                 mental and safety aspects – secondly, the ac-                                                      50001, which systematically records and eva-       Energy management                                    DIN EN ISO 50001 : 2011
                                                  tive commitment and, thirdly, the conscious                                                        luates our energy consumption, and identi-         Occupational safety                                  Partially integrated into M-system,
                                                  interaction of employees, executives and                                                           fies potential for energy savings. In addition,                                                         but no certification at this time
                                                  management.                                                                                        occupational safety aspects are comprehen-         Construction Products Regulation                     DIN EN 12878 : 2005
                                                                                                                                                     sively integrated into our management sys-
                                                                                                                                                     tem, so that certification according to DIN        USA
                                                                                                                                                     ISO 45001 is currently not planned.                Quality management                                   DIN EN ISO 9001 : 2015

18                                                                                                                                                                                                                                                           Sustainability Management                 19
> Memberships in Initiatives                                                                       > Compliance
  and Associations

Our long-term objective is to sustainably in-     > AGV (Allgemeiner Arbeitgeberverband,           It is critical to our business success and repu-   > Code of Conduct                                 > Compliance Organization                         > Data Privacy
crease the business activities of the Heubach       General Employers' Federation)                 tation that our stakeholders have confidence
GmbH Group and the associated enterpri-           > ACA (American Coatings Association)            in the responsible and lawful conduct of all       As the key compliance element, our Code           Within the framework of the materiality ana-      Maximum care, the utmost in confidentiality
se value. That is why we align our business       > Arbeitgeberverband ChemieNord                  of our employees and managers. As a global         of Conduct includes commitments to respect        lysis carried out for this report, the topic of   and compliance with applicable laws and
practices with different principles of respon-      (Employers' Organization Chemistry North)      company, the highest priority for us is the ob-    human rights, to uphold fair competition, to      corporate governance/compliance was               regulations have the highest priority for Heu-
sible corporate governance.                       > VEA (Bundesverband der Energie-                servance of company-specific and legal rules       protect the climate, environment and health       ascribed special significance from the stake-     bach in handling personal data of emplo-
                                                    Abnehmer e. V. (German Association of          for the protection of human rights and the         in a sustainable manner, to ensure equal op-      holders' point of view as well as from the        yees, business partners or other third parties.
For example, Heubach has been a member              Energy Consumers)                              environment as well as for the prevention of       portunities, and to oppose all forms of discri-   perspective of Heubach.
of the Ecological and Toxicological Associa-      > ChemieNetzwerk Harz e. V. (Chemistry           corruption.                                        mination.                                                                                           In the performance of their tasks, the mana-
tion of Dyes and Organic Pigments Manu-             Network Harz)                                                                                                                                       This is why we decided to set up an ISO           gers are assisted by both an external data
facturers (ETAD) since 1998. We are commit-       > CPMA (Color Pigment Manufacturers              The trust placed in Heubach is based on the        All employees are called upon to uphold the       19600 compliance organization. In a first         protection officer and an internal data pro-
ted to adhering to the ETAD Code of Ethics          Association), USA, Canada, Mexico              integrity of each individual. In our Code of       provisions and ethical principles of the Code     step, the scope of application covers the Ger-    tection coordinator; both report directly to
based on the principles of the Responsible        > DIN (Deutsches Institut für Normung,           Conduct, we have therefore defined clear           of Conduct within their activities.               man locations of the Heubach GmbH Group.          management. In order to be able to better
Care Initiative. With this membership, we           German Institute for Standardization)          and comprehensible guidelines as a beha-                                                             An expansion of the organization to the USA       reflect the diverse data protection require-
want to meet the demands made of us for           > DKG (Deutsche Keramische Gesellschaft          vioral standard. They provide a summary of         Special responsibility rests with the manage-     and China will follow in a second step.           ments in the planning, installation and ope-
the continuous minimization of possible im-         e. V., German Ceramics Society)                the key compliance principles based on the         ment of our company, who are required to                                                            ration of information processing procedures
pairments of health and the environment by        > Forschungsgesellschaft für Pigmente und        UN Global Compact. They also provide the           convey the meaning of the Code of Conduct                                                           in the future, we plan to introduce a data
way of organic pigments.                            Lacke e. V. (Research Institute for Pigments   foundation for a common value system that          to their employees and to support them in                                                           protection management system by 2022.
                                                    and Paints)                                    is not only relevant to internal collaborati-      its implementation, as well as compliance
In addition, the Heubach GmbH Group has           > Industrieverein Goslar (Industrial Group of    on, but also to our conduct toward external        thereof.
been a member of the UN Global Compact              Goslar)                                        business partners.
since 2017. The ten principles relating to        > International Zinc Association                                                                    As any breach can have far-reaching conse-
human rights, labor standards, environmen-        > MNYCA (Metropolitan NY Coatings                                                                   quences for both the company and the em-
tal protection, and the fight against corrupti-     Association)                                                                                      ployees concerned, anyone who is aware of
on represent another guideline for respon-        > NAM (National Association of Manufacturers)                                                       any violations of laws or this voluntary com-
sible corporate governance.                       > NAPIM (National Association of Printing                                                           mitment is required to report them.
                                                    Ink Manufacturers)
We are also involved in working groups or         > VCI (Verband der Chemischen Industrie                                                             During the reporting period, we did not re-
specialist lectures in various specialist and       e. V., German Chemical Industry Association)                                                      gister any reports via the central compliance
industry associations, including:                 > CEFIC (European Chemical Industry Council)                                                        hotline or the compliance e-mail address.
                                                  > VDSI (Verband für Sicherheit, Gesundheit
                                                    und Umweltschutz bei der Arbeit,
                                                    Federation of OSH Professionals)
                                                  > Verein zur Förderung der Fachschule für
                                                    Wirtschaft und Technik e. V. (Association
                                                    To Promote Colleges of Business and
                                                    Technology)
                                                  > VILF (Verband der Ingenieure des Lack-
                                                    und Farbenfaches e. V., Association of
                                                    Engineers of the Coating and Paint Industry)

20                                                                                                                                                                                                                                                         Sustainability Management                 21
06
     Sustainability Program
Field of Action     Objective(s) and Measures                                                                Period              Field of Action     Objective(s) and Measures                                                                    Period

Environmental Protection                                                                                                         Sustainability Management

Energy Efficiency   Improvement of energy efficiency by 4%                                                   by 2020             Compliance          Expansion of a systematic protection of the company                                          by 2022
                    > Establishment of the new calcination technology and introduction of new                (Base year: 2015)                       > Setup of a compliance organization
                      technologies in wet grinding                                                                                                   > Implementation of a data protection management system
                    > Continued switchover to energy-saving lighting (LED)
                    > Development of a heat exchanger strategy for heat recovery                                                 Management and      Development of a systematic survey of sustainability-relevant data and                       by 2020
                    > Systematic consideration of energy-saving potential in                                                     Controlling         development of rules for reporting key performance indicators
                      investment decisions

                                                                                                                                 Voluntary           Development of a concept to support the United Nations Sustainable                           by 2020
Emissions           Reduction of specific dust emissions by more than 5%                                     by 2020
                                                                                                                                 Commitment          Development Goals (SDGs)
                    > Installation of new exhaust-air purification technologies                              (Base year: 2017)
                    Reduction of specific CO2 emissions by 10%
                    > Increased efficiency through new production technologies
                    > Conversion of the energy supply to a power mix with a higher proportion of             from 2020           Employee Responsibility
                      renewable energies
                                                                                                                                                     Reduction of accident frequency (occupational accidents with at least three                  by 2020
Water               Reduction of specific water requirements by 5%                                           by 2020             Safety              days of work missed per 1 million working hours) to six                                      (Base year: 2017)
                    > Continued conversion to dry processes                                                  (Base year: 2017)                       (interim target 2018: eight).
                    > Optimization of the cooling water system
                                                                                                                                 Health              Promotion of employees' health
Waste               Reduction of specific waste by 5% through process optimization                           by 2020                                 > Decision on the introduction of e-bike leasing                                               by 2020
                                                                                                             (Base year: 2017)                       > Promotion of physical activity through participation in sporting events (e.g., Business-Run) from 2019

Supply Chain                                                                                                                     Personnel           Methodological and content-related further development of professional
                                                                                                                                 Development         training and development
                                                                                                                                                     > Introduction of the key performance indicator "Average number of hours for                 from 2019
                    Greater anchoring of sustainability in supply chain management                           by 2020                                   training and development per year and per employee"
                    > Expansion of the vendor-audit evaluation sheet to include labor and                                                            > Evaluation of cooperation with the Technische Universität Clausthal (Clausthal             by 2019
                      social standards, human rights, corruption and antitrust law                                                                     University of Technology) a dual Bachelor's program
                    > Check to see to what extent a rating platform of sustainability services can be used
                      and integrated by Heubach                                                                                  Demographic         Development of a demography concept focusing on health, work and family,                     by 2022
                                                                                                                                 Change              qualification, knowledge, employer attractiveness

Products                                                                                                                         Work-Life Balance   Additional childcare                                                                         by 2020
                                                                                                                                                     > Development of a concept
                    Expanded integration of sustainability into product development                                                                  Focus on the topic of care
                    > Development of a concept for the analysis and evaluation of the most important         by 2020                                 > In-house information events; external counseling
                      products/product lines from a sustainability point of view
                    > Creation of a do-not-use list for product development as well as extended              by 2019
                      specifications/specification descriptions to include quality/energy/environment/
                      sustainability
22                                                                                                                                                                                                                                   Sustainability Program          23
07         One of our key guidelines is to provide high quality pigments and pigment preparations that
                incorporate environmental and safety concerns along the entire product lifecycle.

     Products
                > Sustainable Pigment Solutions

                The demands made on pigments and pig-                            > Zinc-Free Pigments                                         > Lead Chromate Replacement
                ment preparations are growing steadily: Our
                customers expect our products to have an                         Heubach has been developing zinc-free                        The worldwide use of chrome-yellow or
                ever longer service life and a qualitative                       anti-corrosive pigments for decades. In re-                  molybdenum-red pigments has dropped
                superiority for end products, but at the same                    cent years, zinc has come increasingly                       significantly in recent decades due to their
                time demand the consideration of ecologi-                        under attack, as it is a harmful to aquatic                  toxicity. However, these pigments have not
                cal factors.                                                     organisms. In the course of our long-term                    completely been replaced due to their good
                                                                                 development program, we therefore manu-                      price-performance ratio. So far, their use has
                The Heubach portfolio includes numerous                          factured zinc-free anti-corrosive pigments                   only been significantly limited by the REACH
                products that make an important contribution                     with ever better long-term protection, which                 Regulation in the European Union (EU), but
                to sustainability. For clarification, we provide                 can also be used as universally as possible.                 not completely eliminated.
                some examples below:
                                                                                 The result is a comprehensive product port-                  Heubach has been working intensively for
                                                                                 folio of zinc-free ortho- or polyphosphates –                decades to replace these toxic inorganic pig-
                > Anti-Corrosive Pigments                                        based on harmless metals such as calcium,                    ments and developed a product line of high-
                                                                                 strontium or magnesium, which provide                        performance hybrid pigments. These high-
                Worldwide, around five tons of steel are                         excellent protection for a wide range of ap-                 quality yellow, orange and red pigments
                destroyed by rust every second. In Germany                       plications.                                                  provide excellent coloristic properties such
                alone, the overall economic loss amounts to                                                                                   as high color strength, opacity and durabi-
                more than €90 billion a year. 1)                                                                                              lity. Easy incorporation and high stability in all
                                                                                 > Water-Based Pigment Preparations                           common coating systems make this product
                With the development, production and mar-                                                                                     line an excellent alternative for high-quality
                keting of so-called corrosion inhibitors, our                    In recent decades, the market share and de-                  applications. In addition, Heubach offers various
                company contributes significantly to the                         mand for environmentally-friendly, aqueous                   custom pigment preparations as a direct
                manufacture of long-lasting and resistant                        paints and varnishes has risen continuously. Heu-            one-to-one replacement for the chrome-
                coatings, and thus also to the conservation                      bach has actively helped shape this develop-                 yellow and molybdenum-red pigments.
                of resources.                                                    ment by developing and producing aqueous
                                                                                 pigment preparations for a wide variety of
                                                                                 applications for 30 years. These modern
                                                                                 water-based products contain no solvents,
                                                                                 and are therefore particularly environmen-
                                                                                 tally-friendly.

                1)
                     Online article in Farbe und Lack: Eine Industrie gibt Auskunft: Korrosionsschutz kann mehr! (An industry Provides Information: Corrosion Protection Can Do More!)

24                                                                                                                                                                    Products              25
> Product Responsibility                                                                                                                             > Research and Development

From raw material purchasing as well as                                                                                                              As part of its research and development, the       In addition to the aforementioned aspects           These properties provide our customers with
research and development to production,                                                                                                              Heubach GmbH Group is constantly wor-              of health and environmental protection, we          maximum flexibility, significantly reduced
storage, transport and further processing                                                                                                            king to make its products more sustainable.        also consider all other safety aspects along        stock levels, and thus a cost advantage.
to sales and disposal: Product responsibili-                                                                                                                                                            the entire product life cycle.
ty at Heubach covers the harmless and safe                                                                                                           For example, Product Safety regularly informs                                                          2. Heubach has been working together with
handling of chemical substances and pro-                                                                                                             the R&D department about changes in the            Expenditure for research and development            the Technische Universität Clausthal (Claust-
ducts along the entire product life cycle.                                                                                                           status of chemicals, especially if their use is    (R&D) amounted to approximately €3.7                hal University of Technology) for decades,
                                                                                                                                                     prohibited, restricted, controversial, or other-   million in 2017 and 2016, respectively. R&D         and has further intensified the cooperation
                                                                                                                                                     wise undesirable for the customer. This infor-     expenditures in 2017 accounted for 2.6%             through a very closely networked partner-
                                                                                                                                                     mation flows into our product developments.        of sales, just below the previous year (2016:       ship. The two cooperation partners jointly
> Chemical Control Regulations                   > Product Information                                                                                                                                  2.7%). The majority of these expenditures           operate a high-performance X-ray diffraction
                                                                                                                                                     Furthermore, we regularly review the use of        accounted for the (energetic and resource-          device. This analysis method is used to de-
REACH                                                                                                                                                raw materials from recycling processes or the      saving) optimization of inorganic pigments          termine crystal structures and so-called se-
                                                                                                                                                     substitution of water-soluble and (environ-        as well as the development of water-based           condary phases, which can arise in the pro-
In the field of chemical safety, the EU Che-     Of great importance to the responsible              In addition, upon request, we will use our      mentally/aquatically/human-)toxicologically        pigment pastes for the production of decora-        duction process. The combined know-how
micals Regulation for the Registration, Eva-     handling of pigments and pigment prepara-           Regulatory Affair Sheets (RAS) to pass on all   active components. When selecting raw ma-          tive paints and the coloring of paints.             enables us to meet the requirements of the
luation, Authorization and Restriction of        tions is not only their safe handling, but also     the regulatory information we have on a pro-    terials, we also evaluate their potential pollu-                                                       lowest detection limits. With the X-ray diffrac-
Chemicals (REACH) came into force in 2007.       the provision of comprehensive information          duct. In this way, we support our customers     tant inputs during the production process in                                                           tion device, we have a tool at our disposal
This regulation states that manufacturers,       for customers and partners.                         in complying with the downstream legal          order to minimize them if necessary.               > Partnerships in                                   to optimize processes, on the one hand, in
importers and users take responsibility for                                                          regulations, such as when our products are                                                           Product Development                               research and development and, on the other
their chemicals by ensuring their safe use.      Heubach creates safety data sheets (MSDS)           used in toys or food contact materials.         During new product development, we always                                                              hand, to issue product certificates attesting
In due course, Heubach has registered all        for all its products in accordance with Art.                                                        take into account all regulatory aspects, from     Through our collaboration with universities,        that the products are free of by-products.
substances that are produced or imported in      31 REACH. If the creation of an MSDS is not                                                         the raw materials to the final product (e.g.,      research institutes, customers and vendors,
quantities of more than one tonne with the       required for products, Heubach will prepa-                                                          with regard to the wastewater to be dispo-         we ensure a comprehensive and efficient             3. Furthermore, Heucotech Ltd. has developed
European Chemicals Agency (ECHA).                re Product Information Sheets (PIS) for the                                                         sed of or cleaned). Of course, we also take        development of pigment innovations that             bio-based printing ink concentrates as part
                                                 dissemination of information in accordance                                                          into account the energy requirements of the        not only improve the performance of end             of a cooperation project with customers.
                                                 with Art. 32 REACH. MSDS and PIS are sent                                                           relevant process engineering projects. The         products, but are also safe in terms of health      Thanks to the successful substitution of
Globally Harmonized System (GHS) /               either automatically with every first delivery of                                                   aim is, for example, to optimize production        and the environment.                                petroleum-based raw materials,
CLP Regulation                                   a new product, or with relevant changes to                                                          steps with high energy requirements ener-                                                              the selected dispersions contain about 38%
                                                 information or on request. In total, we pub-                                                        getically, or to avoid energy-consuming pro-       The following three examples illustrate our         of renewable materials – and that with the
In parallel with REACH, Heubach implemented      lish more than 1,800 MSDS per year in up to                                                         cess steps.                                        collaborative development partnerships:             same or even better application properties.
the requirements of the CLP Regulation ((EC)     27 languages.
No. 1272/2008), which came into force in                                                                                                             In the (further) development of liquid pig-        1. Together with an external partner, our
2009, which transfers the United Nations         To support customers' product development,                                                          ment preparations, Heubach works conti-            specialists develop pigment preparations
Globally Harmonized System (GHS) to the          Heubach provides Technical Data sheets                                                              nuously to minimize the concentration of           for coloring plastics. Thanks to an innovative
European regulations. The aim of the GHS is      (TDS) containing all application-related infor-                                                     additives in the formulation. We, therefore,       production technology,
to maximize the standardization of chemical      mation – for example, light and weather fast-                                                       reduce the levels of volatile organic com-         we can produce highly concentrated pig-
labeling worldwide.                              ness, heat and chemical resistance, density                                                         pounds (VOCs) and biocides to a minimum.           ment granules that are dust-reduced, low-
                                                 or pH. These are available for download on                                                          When selecting additives, we make sure that        dusting and easy to disperse – they are
In connection with the CLP Regulation, we        our website, or will be sent on request.                                                            as far as possible no polyaromatic hydrocar-       characterized by their universal compatibility.
have reviewed, reclassified and, if necessary,                                                                                                       bons (PAHs), no halogenated compounds,             The preparations can be applied to plastics
re-labeled more than 1,800 products.                                                                                                                 and no formaldehyde are included. Moreo-           of all kinds (polyolefins (PO), polyvinyl chlori-
                                                                                                                                                     ver, additives based on renewable raw ma-          de (PVC) or engineering plastics). Due to the
                                                                                                                                                     terials are becoming increasingly important.       highly concentrated pigment content of our
                                                                                                                                                                                                        product, we were able to reduce its input
                                                                                                                                                                                                        quantity compared to conventional products.

26                                                                                                                                                                                                                                                                              Products                27
08
Environmental Protection
                                                                                                                                                                                                           Emissions
As a manufacturer of chemical raw materials, we cannot completely avoid environmental impacts, as our company uses up resources, and                                                                       > Carbon dioxide
the production process produces emissions, wastewater and waste. However, we can continuously minimize the risk of polluting factors and,                                                                  > Nitrogen oxide
thus, ensure careful and respectful action with respect to the environment. We have committed ourselves to this goal, and have therefore                                                                   > Sulfur oxide
incorporated resource conservation and climate protection in our corporate policy.                                                                                                                         > Dust

> Energy and Climate
                                                                                                                                                                        Pollution
The main impacts of our production activities    The energy sources that we mainly use are        After some directly fired calcination units                                                                                                                         > Noise
include energy consumption and the emission      electricity and natural gas. About 75% of        were replaced by electrically heated pro-                                                                                                                           > Heat
                                                                                                                                                                                                                                             Pollution
of climate-damaging greenhouse gases.            natural gas is used to generate steam in         duction processes back in 2013, a similar                                                                                                                           > Light
                                                 our own steam boilers and 20% for directly       second plant was put into operation at the
For this reason, we have focused in recent       fired calcination units for the production of    end of October 2016. During the reporting
years on developing and implementing             colored pigments at a temperature of up to       period, however, it was only used in trial ope-
measures to increase energy efficiency and       1250°C. The remaining 5% is consumed in          ration for up-scaling purposes. This led to a
optimize production processes.                   the heating of buildings.                        reduction in natural gas consumption, while
                                                                                                  increasing the required electricity input. But
                                                 The majority of the electricity consumption      the specially developed process allows for a
> Energy Consumption                             is for the operation of additional calcination   considerable increase in throughput: At full
                                                 units for colored pigment manufacturing.         capacity utilization of both systems, we ex-
Heubach uses energy in different ways. On        The balance of the electricity is used for the   pect a reduction of the specific energy requi-                         Raw
                                                                                                                                                                                                                                                                                   Products
the one hand, the company converts heat          generation of compressed air, the seconda-       rement for the high-temperature processes                             materials
and kinetic energy to chemical energy via        ry energy driving various production equip-      by up to 3% (about 700 MWh/year).
endothermic chemical processes. On the           ment such as grinding, drying, precipitation
                                                                                                                                                    Electricity                                                             Storage & transport
other hand, Heubach operates exothermic          processes and cleaning filters.                  At our U.S. facility, we produced only water-
chemical processes in which heat is released                                                      based pigment preparations in the reporting                                                                                                       Waste
by chemical reactions, which requires appro-     The increased energy demand in 2017 is           period. The energy requirement for the cor-                                                                                                       > Slurry
priate cooling. In addition, energy is spent     exclusively attributable to strong growth in     responding process steps (grinding, dispersi-                                                                                                     > Paint waste
on numerous ancillary processes, such as for     production volumes in the energy-intensive       on) is small compared to the German facility.     Water consumption               Resource consumption                                            > Packaging                 Wastewater
compressed-air generation, for the operation     production area of inorganic colored pig-        The first production plant for anti-corrosion     > Well water                    > Natural gas
of heating systems and steam generators, for     ments. This is associated with a plant-related   pigments with a capacity of 4,000 t was           > Municipal water               > Heating oil                                                                               Indirect discharge
the in-house transport of raw materials and      capacity expansion at the German site.           commissioned in early 2018. Due to this ca-                                       > Mineral & metallic                                                                        Sewer / sewage treat-
products, as well as for laboratory and office                                                    pacity increase, we expect energy demand                                           resources                                                                                  ment plant
operations.                                                                                       to increase in the future, especially for the                                                                                                                                 > Polluted wastewater
                                                                                                  grinding and drying processes.                                                                                                                                                > Heat

                                                                                                                                                                                                                                                                                Direct discharge
                                                                                                                                                                                                                                                                                > Purified wastewater
                                                                                                                                                                                                                                                                                > Heat

28                                                                                                                                                                                                                                                              Environmental Protection               29
> Energy Efficiency

                                                                                                                                                       Heubach works continuously to improve              To raise employees' awareness, the voluntary    In addition, a development partnership was
                                                                                                                                                       energy efficiency and reduce energy inten-         commitment to energy efficiency has been        entered into to optimize horizontal bead
                                                                                                                                                       sity.                                              included officially in the company's goals.     mills. The potential energy-saving potential
                                                                                                                                                                                                                                                          due to shorter process time is estimated at
                                                                                                                                                       In 2013, we introduced an energy manage-           We developed an energy strategy for the         10 to 15%.
                                                                                                                                                       ment system in accordance with DIN ISO             production area at the German site by 2020
                                                                                                                                                       50001 at the German site. As part of this, in      (base year: 2015). The goal is to improve       As a next step, we plan to increase efficiency
                                                                                                                                                       addition to the measures described above,          energy efficiency by around 4% by 2020          in the production of anti-corrosive pigments
                                                                                                                                                       we planned and implemented numerous                using the latest technologies.                  as well. Based on the operating experience
                                                                                                    60,254                                             actions – for example, the installation of                                                         of the state-of-the-art plant installed in the
                                                                                                                                                       solenoid valves in compressed-air lines to         The focus here is on the energy-intensive       USA, we would like to introduce various
                                                                                                                    57,105                             minimize the risk of leakage, or the conver-       production of inorganic pigments, as well as    measures for increasing energy efficiency in
                                                                                                                                                       sion of lighting in the warehouses from HQL        on the optimization of the process techno-      individual process steps or units in Germany
                                                                                                                                56,361                 luminaires to LEDS. Especially in the latter, we   logy, which is used in wet grinding and in      from 2020 onwards.
                                                                                                                                                       achieved an annual saving of 88.9 MWh 2).          almost all production areas.
                                                                                                                                                       In order to further expand on this success,                                                        As the implementation of the energy strategy
                                                                                                 30,333

                                                                                                                                                                                                          An example would be the new calcination
                                                                                                                 26,023

                                                                                                                                                       we will develop a concept for equipping all                                                        is still in its initial phase, only the individual
                                                                                                                             24,828

                                                                                                                                                       lighting with energy-efficient LED light sour-     technology which described above guaran-        value considerations already mentioned are
                                                                                                                                                       ces over the next few years.                       tees highly efficient, quality-optimized pro-   currently available. In the Sustainability Report
                                                                                                                                                                                                          cess control in the production of inorganic     2021, however, we will report in detail on the
                                                                                                                                                       With the setup of an energy team we pro-           colored pigments. Thanks to this, we have al-   achievement of the planned targets and ob-
                                                   2.6                                                                                                 vided further necessary human resources to         ready reduced the specific energy consump-      jectives.
                                          2.5
                                                                                                                                                       continuously evaluate and institute options        tion of some product lines by up to 50%.
                                                                                                                                                       for the most efficient utilization of energy in
                                                                                                                                                       order to ensure the effectiveness of the ener-
                                                                                                                             31,533
                                                                                                                 31,082
                                                                                                 29,9201

                                                                                                                                                       gy management system.
                                     Energy intensity 1)
                                        in MWh/t
                                                                                        MiWh

              2017
                            2.6

              2016
              2015                                                                                                                       Electricity
                                                                                                2017            2016         2015        Natural gas

                                                                                                           Energy consumption

1)
     Ratio of energy consumption and sales volume produced (total production). Commercial products are not included.                                   2)
                                                                                                                                                            Extrapolated to one year.

30                                                                                                                                                                                                                                                             Environmental Protection                 31
> Emissions

> Greenhouse Gas Emissions                                                 6,400 t CO2

                                                                                                                            6,378
                                                                                                                                                                                            > Pollutant Emissions into the Air                                                                                > Noise Emissions

                                                                                                               6,285
                                                                                                  6,050
The chemical processes for the manufac-
ture of pigments and pigment preparations                                                                                                                                                   The manufacture of inorganic pigments pro-                     By switching from gas to electricity-powered       The German factory site is located in a com-
themselves release no greenhouse gases.                                                                                                                                                     duces dust emissions. The permits for our                      calcination units, we reduced emissions of         mercial area with predominantly industrial
Rather, these are energy-related emissions.                                                                                                                                                 production areas, therefore, contain limits for                nitrogen oxides (NOx) and carbon monoxide          use and is adjacent to a mixed area with re-
Direct CO2 emissions include, for example,                                                                                                                                                  dust as well as for metals, which are used in                  (CO). In the case of the latter, a further favo-   sidential buildings. Accordingly, the minimi-
steam generation (60-68%), the operation                                                                                               0.29 t CO2/t                                         the form of metal oxides. Depending on the                     rable trend in 2017 was the fact that the oil-     zation of noise emissions for the protection

                                                                                                                              0.29
                                                                                                                0.28
of gas-fired calcination units (24-30%), some                                                                                                                                               particular raw materials used for the manu-                    based operation of steam boilers – as back-        of the neighborhood has a very high priority

                                                                                                 0.26
drying units and heating systems. Indirect                                                                                                                                                  facture of the pigments and the pigments                       up in the event of natural gas failure – hardly    for Heubach. We have already successfully
CO2 emissions are caused by the electricity                                                                                                                                                 handled, these involve primarily zinc (Zn), tita-              needed to be used.                                 implemented a multi-year soundproofing
purchased.                                                                                                                                                                                  nium (Ti), bismuth (Bi), cobalt (Co), nickel (Ni),                                                                program.
                                                                                                                                            Scope 1 absolute                                antimony ( Sb), chromium (Cr), copper (Cu),                    The increase in dust emissions results from
Greenhouse gases other than CO2 are not                                                                                                     Scope 1 GHG intensity 2)                        manganese (Mn), calcium (Ca), iron (Fe) and                    the two-stage expansion of production              In order to achieve the necessary reduction
emitted. Even though methane (CH4) is the                                                                                                                                                   vanadium (V). There are emissions, to a low                    capacities; this is accompanied by additional      of noise emissions, we installed sound
main constituent of natural gas, it is incinera-                                                                                                                                            degree, of both raw materials, such as the                     emission sources with high air volumes. In         absorbers on all relevant noise sources. In
                                                                                                2017         2016         2015
ted and emitted as CO2. This assumes com-                                                                                                                                                   corresponding metal oxide, and the product                     2017, we planned additional extensive mea-         addition, we pay close attention to the strict
plete combustion.                                                                                                                                                                           manufactured, that is, the pigment.                            sures to further reduce dust emissions; we         observance of various nocturnal measures.
                                                                                      Greenhouse gas emissions Scope 1 1)
                                                                                                                                                                                                                                                           already installed a corresponding exhaust-air      For example, there are no truck movements
Our CO2 emissions increased by around                                                                                                                                                       The manufacture of some products also                          filter in the first half of 2018. We plan to in-   at night; forklifts may operate only inside the
9.8% in 2017. Although the share of direct                                                                                                                                                  creates sulfur oxides (SOx).                                   vest a total of around €1.5 million in the 2018    buildings, and doors and windows must be
emissions (Scope 1) fell by just under 3.7%,                                                                                                                                                                                                               financial year to implement these measures         closed.
we recorded an increase of around 16.2% in                                                                                                                                                                                                                 in order to reduce specific dust emissions by
the case of indirect emissions (Scope 2). This                                                                                                                                                                                                             more than 5% by 2020.                              Furthermore, we have sound measurements
is due, on the one hand, to the increased ca-                             15,500 t CO2                                                                                                                                                                                                                        taken by an external expert after every new
                                                                                                  15,412

                                                                                                                                                                                                                      1      58.43
pacity of the calcination technology and, on                                                                                                                                                                      43.0                                     SO2 emissions increased during the reporting       construction of a plant or every significant
                                                                                                               13,263

the other hand, to the partial replacement of                                                                                                                                                                                                              period, as the raw material used for some          change to existing plants.
                                                                                                                            12,962

gas by electricity in the calcination processes.                                                                                                                                                                                                           of the more highly demanded product lines
                                                                                                                                                                                                                                                           contains sulfate, which causes SO2 emissions       The last noise measurement (October 2017)
                                                                                                                                                                                                              Specific dust emissions   1)                 during subsequent calcination. The use of          at the relevant affected location (a residen-
                                                                                                                                       0.67 t CO2/t                                                                                                        this raw material is essential due to quality      tial building in the adjacent street) showed
                                                                                                 0.67

                                                                                                                                                                                                                        in g/t
                                                                                                                                                                                                                                                           standards. Nevertheless, teams in R&D pro-         that the exposure reference values (45 dB(A))
                                                                                                               0.59

                                                                                                                              0.58

                                                                                                                                                                                                                                                           jects are working on minimizing the use of         were clearly undershot with 42.5 dB(A).
                                                                                                                                                                                                                                                           this raw material or, at best, substituting the
                                                                                                                                                                                                        .72

                                                                                                                                                                                                     55
                                                                                                                                                                                                                                                           substance.
                                                                                                                                            Scope 2 absolute
                                                                                                                                            Scope 2 GHG intensity 4)

                                                                                                2017         2016         2015                                                                      2017                                                     Air emissions in kg                                   2017            2016             2015
                                                                                                                                                                                                    2016
                                                                                      Greenhouse gas emissions Scope 2 3)                                                                           2015
                                                                                                                                                                                                                                                             Sulfur oxide (SOx/SO2)                                1,341            1,286            1,184

                                                                                                                                                                                                                                                             Nitrogen oxide (NOx)                                  7,050           8,356            8,061

                                                                                                                                                                                                                                                             Carbon monoxide (CO)                                   569               740             881

1)
     Emissions resulting from own business, that is, from the consumption of natural gas, for example, for steam generation, the operation of production plants, heaters or lift trucks.                                                                     Volatile organic compounds without
                                                                                                                                                                                                                                                                                                                       0                0               0
     The emission factors used are based on the report "Emissionsfaktoren für Strom, Fernwärme und Kraftstoffe" (Emission Factors for Electricity, District Heating and Fuels) by the VDA                                                                    methane (NM-VOCs)

(Verband der Automobilindustrie, German Association of the Automotive Industry) (2018). The stated values for Germany, China East and USA East were used. Our calculations
     are based on the assumption that only CO2 is emitted by the complete combustion of all natural-gas components.                                                                                                                                          Dust                                                  1,354            1,245             955
2)
     Relative to sales volume produced (total production). Commercial products are not included.
3)
     Emissions from the production of energy sourced from outside the company (e.g., electricity). The conversion factor for Germany was specified by the electricity supplier. For the
     U.S. and China, the regional average emission factors relative to the electricity provided according to the report "Emissionsfaktoren für Strom, Fernwärme und Kraftstoffe"
     (Emission Factors for Electricity, District Heating and Fuels) by the VDA (Verband der Automobilindustrie, German Association of the Automotive Industry) (2018) were used.
4)
     Relative to sales volume produced (total production). Commercial products are not included.                                                                                            2)
                                                                                                                                                                                                 Relative to sales volume produced (total production). Commercial products are not included.

32                                                                                                                                                                                                                                                                                                             Environmental Protection                     33
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