Significance to WACKER of Sustainability and Other Non-Financial Performance Indicators

Sustainability has been firmly rooted in our business processes for many years. Sustainable development means balancing economic, ecological and social factors in everything we do. The fact that we have made sustainability one of our strategic goals emphasizes its importance. As an innovative chemical company, WACKER makes a vital contribution to improving the quality of life around the world. We want to continue developing and supplying solutions that meet our own expectations of adding value for our customers and shareholders, and growing sustainably.

Sustainability also lies at the heart of our strategic medium-term plan for the WACKER Group through 2020, which we presented at the Capital Market Day in October 2016. One of our five strategic goals is to “focus even more strongly on sustainability.”

Responsible Care® and the UN Global Compact

Our actions are guided by two voluntary global initiatives that form the basis for sustainable corporate management at WACKER: the chemical industry’s Responsible Care® initiative and the UN Global Compact. WACKER has been an active member of the Responsible Care® initiative since 1991 and, as a program participant, the company must act to continually improve health, safety and environmental performance on a voluntary basis – even in the absence of statutory requirements. As a member of the UN Global Compact, we actively support the goals of this, the world’s most important and extensive initiative for responsible corporate management. The Global Compact addresses the protection of human rights, social and environmental standards, and the fight against corruption. We submit a progress report every year in April. The progress reports of recent years can all be viewed on the UN Global Compact website.

The current progress report is also published on the WACKER website at: www.wacker.com/cms/en/wacker_group/sustainability/selbstverpflichtungen/global_compact.jsp

Principles of Corporate Ethics

Aside from our vision and goals, our ethical principles form the third pillar of WACKER’s corporate policy guidelines. These principles are laid down in five corporate codes – including the Code of Sustainability – and are supplemented by a body of regulations and directives. They are mandatory for all employees worldwide. The content of the codes is described in detail in the corporate governance report.

The codes can also be viewed on the WACKER website at: www.wacker.com/cms/en/wacker_group/wacker_facts/policy/policy.jsp

Integrated Management System

We control operational processes via our integrated management system (IMS). This system stipulates uniform standards throughout the Group for issues relating to quality, environmental protection, and health and safety. We have our Group management system certified by an international certification organization to ensure its compliance with ISO 9001 (quality) and ISO 14001 (environmental protection) and, at our German sites, also with ISO 50001 (energy).

Our Group certification program ensures that all WACKER sites implement legal and customer-related rules as well as our corporate standards. Almost every WACKER production site is included in the ISO 9001 (quality) and ISO 14001 (environment) Group certificates. Exceptions are the Kolkata plant of Wacker Metroark Chemicals Pvt. Ltd., India, and the Tsukuba site of Wacker Asahi Kasei Co., Ltd., Tokyo, Japan, which have corresponding individual certificates. The Charleston plant (USA) will be added to the ISO 14001 Group certificate in the spring of 2019. In the reporting period, we recertified all sites to the new specifications of ISO 9001:2015 and 14001:2015.

The regional focus of sustainability management in the reporting year was the Americas. Our sites at Charleston, Adrian, Eddyville and Calvert City underwent health and safety audits. In 2019, the regional focus will be Europe.

Analysis of Fundamental Sustainability Issues

WACKER communicates regularly with numerous stakeholder groups – ranging from employees, customers, suppliers, analysts, investors and journalists to scientists, neighbors, politicians, associations and NGOs. For years, WACKER has regularly held stakeholder surveys as part of its sustainability reporting. In 2018, our global survey identified which sustainability topics are vital to stakeholders and upper management. The five top issues for companies and stakeholders were the safety of production plants, product safety, competitiveness / value trends, occupational safety / employee health, and compliance.

As a chemical company, we also prioritize transport and storage safety, risk management, energy consumption, resource conservation and the development of new, sustainable products.

As part of our materiality analysis, we also took account in this report of the statutory definition of materiality pursuant to Sections 315 b, 315 c and 289 b through 289 e of the German Commercial Code (HGB). For major non-financial issues, we ensure that the relevant stakeholders are involved. The corresponding Executive Board committees deal with all key topics.

For more details about resource-saving production and sustainable products, please refer to the section in the combined management report entitled Further Information on R&D, Employees, Procurement, Production, Sales and Marketing.

Every two years, we publish a sustainability report in order to inform our stakeholders about WACKER’s sustainability work in an open and comprehensive manner. In 2019, WACKER will publish its Sustainability Report for 2017/2018.

Silicones
General term used to describe compounds of organic molecules and silicon. According to their areas of application, silicones can be classified as fluids, resins or rubber grades. Silicones are characterized by a myriad of outstanding properties. Typical areas of application include construction, the electrical and electronics industries, shipping and transportation, textiles and paper coatings.

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