Process - 2017 Annual Integrated Report

Solvay bases its materiality analysis on the Sustainability Accounting Standards Board (SASB) approach. It offers an exhaustive, validated list of material aspects to start with. Below you will find more details about why each aspect is material depending of three tests for prioritizing issues and classifying their level of short-term and long-term impacts.

The three tests are:

Evidence of interest: how frequently the issue appears in publications related to our company or industry;
Evidence of financial impact: the impact on revenue and cost, assets and liabilities, and risk profile;
Forward looking impact: how the issue’s importance will evolve over time, in terms of magnitude, probability, or externalities.

Moderate
High
Priority

Aspects	Definition	Evidence of interest	Evidence of financial impact	Forward looking adjustment	Materiality
Sustainable business solutions	Chemical products economical, environmental and social impacts throughtout the supply chain	High High materiality for the Chemical industry Solvay is more CO₂-intensive than the average of the chemical industry	High Revenue/cost: yes Asset/liability: yes Cost of capital: no	Yes Probability/magnitude: yes Externalities: yes

Aspects	Definition	Evidence of interest	Evidence of financial impact	Forward looking adjustment	Materiality
Energy	Energy production and consumption optimization and management of energy transition	High High materiality for the Chemical industry Solvay is more energy-intensive than the average of the chemical industry	High Revenue/cost: yes Asset/liability: yes Cost of capital: no	Yes Probability/magnitude: yes Externalities: yes
Greenhouse gas emissions	Greenhouse gas emissions reduction plans.	High High materiality for the Chemical industry Solvay is more CO₂-intensive than the average of the chemical industry	High Revenue/cost: yes Asset/liability: yes Cost of capital: no	Yes Probability/magnitude: yes Externalities: yes
Air quality	Air pollutants emissions reduction plans	High High materiality for the Chemical industry	High Revenue/cost: yes Asset/liability: yes Cost of capital: no	Yes Probability/magnitude: yes Externalities: yes
Water and wastewater	Management of water withdrawals, dicharges and consumption	High High materiality for the Chemical industry	Medium Revenue/cost: yes Asset/liability: yes Cost of capital: no	Yes Probability/magnitude: yes Externalities: yes
Waste and hazardous materials	Management of hazardous materials in raw materials, intermediate products, sold products and wastes. This includes Safety & Environmental Stewardship of Chemicals.	High High materiality for the Chemical industry REACH/SVHC; Kyoto protocol	High Revenue/cost: yes Asset/liability: yes Cost of capital: no	Yes Probability/magnitude: yes Externalities: yes

Aspects	Definition	Evidence of interest	Evidence of financial impact	Forward looking adjustment	Materiality
Diversity and inclusion	Non discrimination and diversity management in operations and management structures	High Specific item of 2014/95/EU High for 4 pilot GBUs (regional)	Medium Revenue/cost: yes Asset/liability: no Cost of capital: no	Yes Probability/magnitude: yes Externalities: yes
Employee health and safety	Occupational safety, industrial hygiene and health management. Employees and contractors of all sites under Solvay’s operational control are covered.	High High materiality for the Chemical industry	High Revenue/cost: yes Asset/liability: yes Cost of capital: no	Yes Probability/magnitude: yes Externalities: yes
Employee engagement and wellbeing	Labour relations, employee well-being	High Historical commitment of the Solvay group since its foundation	Medium Revenue/cost: yes Asset/liability: yes Cost of capital: no	Yes Probability/magnitude: no Externalities: yes

Aspects	Definition	Evidence of interest	Evidence of financial impact	Forward looking adjustment	Materiality
Customer welfare	Customer relations management, customer loyalty, net promoter score	Medium High for some business units (access to customers development pipeline)	High Revenue/cost: yes Asset/liability: no Cost of capital: no	Yes Probability/magnitude: yes Externalities: yes
Societal actions	Community relations Corporate citizenship and philanthropy Business programs for social needs	High May be linked to license to operate	Low Revenue/cost: no Asset/liability: yes Cost of capital: no	No Probability/magnitude: no Externalities: no

Aspects	Definition	Evidence of interest	Evidence of financial impact	Forward looking adjustment	Materiality
Management of the legal, ethics and regulatory framework	Includes Business ethics and transparency of payments, and Competitive behavior	High High materiality for the Chemical industry Rising legislative requirements for the chemical industry	Medium Revenue/cost: yes Asset/liability: yes Cost of capital: no	Yes Probability/magnitude: yes Externalities: yes
Process accident and safety	Process safety programs and management of environmental accidents consequences.	High High materiality for the Chemical industry	High Revenue/cost: yes Asset/liability: yes Cost of capital: no	Yes Probability/magnitude: yes Externalities: yes

2017 Annual Integrated Report

3.2.1. Materiality analysis process

Business model and innovation

Environment

Human capital

Social capital

Leadership and governance