Sustainable Portfolio Management, responsibly managing Solvay’s product portfolio

Sustainable value creation is measured by Solvay’s Sustainable Portfolio Management tool. It enables Solvay to make strategic decisions that steer its portfolio, support progress toward its sustainability objectives, and factor sustainability into operating decisions.

Definition

Based on the intuition that true business solutions to sustainability challenges will lead to superior growth over time, the Group has developed the Solvay Sustainable Portfolio Management tool. This innovative yet pragmatic tool identifies market signals on sustainability by assessing the business on a two-dimensional matrix:

  1. The product’s environmental manufacturing footprint, associated risks and opportunities, paired with a well-considered Life-Cycle-Assessment;
  2. The product’s potential, when in use, to benefit or pose challenges to customers, as measured by a market fact-based assessment.

With the Sustainable Portfolio Management tool, decision-makers can anticipate sustainability risks and opportunities along the entire value chain (cradle-to-grave), develop action plans, and deliver innovative solutions that balance economic, social, and environmental values.

Sustainable Portfolio Management tool assessments are reviewed completely every year in order to capture the most recent signals from the market and remain relevant. In this respect, the Sustainable Portfolio Management tool strengthens the Group’s focus on the circular economy and raw material sourcing issues that are increasingly important to customers and investors, and therefore to the business.

2009

SPM created

80%+

of the portfolio analyzed

1,700+

Product-Application Combinations assessed

600+

experts involved

50%

of revenues in sustainable solutions*

*Scope: consistent with financial reporting.

Sustainability integrated into management processes

Since its implementation in 2009, the Sustainable Portfolio Management tool has been widely adopted by Solvay Global Business Units and Functions to integrate sustainability into their key processes:

  • The Sustainable Portfolio Management profile is an integral part of strategic discussions between Global Business Units and the Executive Committee;
  • Solvay uses the Sustainable Portfolio Management tool to evaluate mergers and acquisition projects to see if the investment is feasible in the light of Sustainable Portfolio targets;
  • Investment decisions (capital expenditure above € 10 million and acquisitions) made by the Executive Committee or the Board of Directors include a sustainability aspect that involves an exhaustive Sustainable Portfolio Management analysis of the potential investment;
  • All Research and Innovation projects are evaluated using Sustainable Portfolio Management;
  • In Marketing and Sales, Sustainable Portfolio Management allows Solvay to engage customers on fact-based sustainability topics – such as climate change action, renewable energy, recycling, and air quality – with the goal of differentiating and creating value for Solvay and the customer.

Building a reference framework for active portfolio management

  • Benchmarking and sharing best practices among peers and customers make the Sustainable Portfolio Management methodology more robust and leads to better decision-making. Solvay is a key contributor to the World Business Council for Sustainable Development’s Portfolio Sustainability Assessment. The initiative sets a high standard and gives industries a common framework for its implementation, detailing a specific methodology for the chemical industry;
  • Customers and industrial players see adoption of Solvay’s Sustainable Portfolio Management as a powerful tool for creating value by integrating sustainability into their own strategic and operational processes.