3. Basis of preparation
Task Force on Climate-related Financial Disclosures (TCFD)
To help identify the information that investors, lenders, and insurance underwriters need to appropriately assess and price climate-related risks and opportunities, the Financial Stability Board established an industry-led task force: the Task Force on Climate-related Financial Disclosures.
The Task Force structured its recommendations around four themes that represent key aspects of how organizations operate: governance, strategy, risk management, and metrics and targets.
- The Charter of Corporate Governance describes how the Board of Directors manages sustainability-related aspects and is available on the Solvay Website. The Board thus devotes at least one meeting per year to an update on trends in global sustainable development issues, including climate change risks and opportunities.
- A Responsible for Climate risks has been appointed at the Executive Committee level. He is in charge of ensuring that climate-related aspects are well considered in the Group’s strategy and operations.
- Long-term horizon assumptions are presented in the description of megatrends. See in particular the description of the “Resource constraints and demand for sustainability” megatrend. Mid-term assumptions (in the coming five years) are described in our main markets description. Short-term assumptions (one year) are presented in our outlook.
- Climate-related physical risks and climate transition risks are described in the risk management section.
- The Sustainable Portfolio Management (SPM) methodology is used to assess sustainability-related risks and opportunities for each combination of product and application, with a focus on the long term. Environmental impact monetization of CO2 emissions uses a CO2 price of € 75 per ton, in line with 2°C scenarios assumptions. This allows us to have a sound understanding of the climate resilience of the majority of our products and solutions portfolio but we need to extrapolate this understanding to a strategic business level. We plan to conclude our work in this regard, to identify mitigation actions by reference to innovation priorities, capital investments, and portfolio actions, and to disclose our progress qualitatively, over the next two years.
- The presentation of the Group’s main risk does not include a differentiation between short, medium, and long-term horizons. Quantification of impacts is not disclosed.
- The risk management process, the main risks, and the process used to rank them are described in the risk management section.
- Analysis of sustainability-related risks and opportunities is done through the SPM methodology, for each product in each application or market, including the climate change transition risk.
- “Greenhouse gas emissions” has been identified as a priority aspect in the materiality analysis of the group. “Climate-related physical risks” and “Climate transition risks” have been identified as part of the Group’s main risks. Correspondence between main risks and highly material issues is part of the materiality analysis process.
- SPM is a mandatory requirement in key group processes and in particular in the assessment of capital expenditures projects, research and innovation projects, and acquisition and divestiture projects.
Metrics and targets
- Strategic objectives to drive sustainable value creation are described in our scorecard.
- Greenhouse gas emissions, energy consumption, and SPM metrics and targets are reported in the extra-financial statements section.
- Greenhouse gas Scope 1 and Scope 2 emissions are fully reported. The scope of emissions reporting is consistent with financial reporting.
- Scope 3 emissions related to upstream activities are disclosed. Scope 3 emissions related to processing, use and end-of-life treatment of sold products are qualitatively assessed and potential meaningful impacts have been identified but not fully quantified, and therefore not disclosed. This does not prevent us from proactively engaging with customers to ensure responsible activities to minimize emissions
Corporate reporting on the SDGs
Solvay has joined a Corporate Action Group as part of the SDG Action Platform to help influence a broader multi-stakeholder movement that will play a pivotal role shaping the future of corporate reporting on the SDGs.
This Action Platform is a two-year initiative led by the United Nations Global Compact (UNGC) and GRI. The Action Platform aims to facilitate corporate reporting on the SDGs, and to leverage the GRI Standards and the Ten Principles of the UN Global Compact so that businesses can incorporate SDG reporting into their existing processes, empowering them to act and making it possible to achieve the SDGs.
Main reporting reference frameworks used in the preparation of this integrated report
Global Reporting Initiative (GRI): the GRI Standards are the main reference for Solvay’s sustainability reporting.
United Nations Global Compact: the information provided serves as a progress report on the implementation of the ten principles of the United Nations Global Compact.
International Integrated Reporting Council (IIRC): Solvay adheres to the principles and content elements of Integrated Reporting, as described in the “International
2014/95/EU: Solvay uses the GRI Standards to comply with the Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014 amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information. The Directive has been transposed into Belgian Legislation in September 2017.
Sustainability Accounting Standards Board (SASB): Solvay aligns its materiality analysis with the SASB approach to prepare the SASB Materiality Map™. See the Materiality Analysis section of this report for more details.
United Nations Sustainable Development Goals (SDG): Solvay has integrated the SDGs into its materiality analysis as the official agenda of the “Planet” (Governments and NGOs) stakeholders group. Solvay has worked with other chemical companies, under the leadership of the World Business Council for Sustainable Development (WBCDS), to identify the SDGs most impacted by the chemical industry. The SDGs relevant to Solvay confirmed the priorities the Group had already identified through its materiality analysis. Solvay has also joined the “Reporting on the SDGs” Action Platform of the GRI and the UN Global Compact to identify relevant impact indicators.