Material Impacts, Risks and Opportunities

The following is a description of WACKER’s material impacts on biodiversity and their connection with the business model, value chain, strategy and decision-making. No material risks or opportunities were identified.

Process to identify and assess impacts

Proximity of company sites to areas with biodiversity in need of protection

Potential biodiversity risks at all WACKER sites are assessed using the WWF (World Wide Fund for Nature) Biodiversity Risk Filter, which takes into account both ecosystem conditions and the impacts and dependencies of industries based on 33 biodiversity-related indicators. The assessment focuses on “Environmental Factors” and on the indicators “Protected/Conserved Areas”, “Key Biodiversity Areas”, “Ecosystem Condition” and “Range Rarity.”

WACKER reports all production sites that are classified as having a potentially high or very high risk in the categories “Key Biodiversity Areas” and “Protected Areas” based on the WWF Biodiversity Risk Filter. Legally protected areas (IUCN categories I–IV) include nature reserves and wildlife sanctuaries, whose protection status may vary depending on the legal regulations, as well as Natura 2000 sites and World Heritage Sites. A geoinformation system-based analysis was used to evaluate both the distances between these sites and the protected areas, and the type of protected areas concerned. This involved checking whether there were any protected areas within a three-kilometer radius of each site.

The data collected has not been verified externally. The analysis is reviewed at regular intervals and adjusted as necessary. The disclosure of this data is voluntary and is not required by law.

We also analyzed the potential production-related impacts on these areas as well as the areas themselves. Assessing the condition of these ecosystems is a key part of the analysis, ensuring that the natural environment surrounding WACKER’s sites remains intact and ecologically connected. The assessment is based on the indicators specified in the WWF Risk Filter.

Protecting endemic species that are particularly sensitive to changes in their habitats is another focal area. We use the WWF Biodiversity Risk Filter Range Rarity Indicator to assess the risk to these species based on their prevalence at our production sites.

To gain a deeper understanding of the specific dependencies of its own value chain on natural systems, WACKER also uses the online ENCORE (Exploring Natural Capital Opportunities, Risks and Exposure) tool. This tool was developed specifically for sector-specific assessments and helps to evaluate the relevance of individual ecosystem services – from “very high” to “very low”. This allows critical dependencies on nature to be identified and prioritized. WACKER’s analysis focuses on those ecosystem services that have been assigned higher ratings, particularly with regard to chemical production (according to the international standard classification: manufacture of chemicals and chemical products). The focus was on our own operations.

Our biodiversity assessment evaluated the impacts, risks and opportunities for WACKER in relation to biodiversity. In particular, it examined the company’s current and future activities with regard to its own production, also including the upstream and downstream value chain.

Assessment of the impacts on biodiversity is covered by the materiality assessment under ESRS 2 – General Disclosures and described in the individual standard chapters.

Physical, transition and systemic risks related to biodiversity were not analyzed separately.

Impacts, risks, opportunities

While most WACKER production sites are located in industrial regions, some are located close to Key Biodiversity Areas (KBAs) or Protected Areas (PAs).

The fact that a production site is located close to areas with biodiversity in need of protection does not, however, automatically mean that the site has a negative impact on the protected area. As explained, additional factors were taken into account for the purposes of the assessment.

The results of the WWF Biodiversity Risk Filter analysis indicate a potentially low to moderate risk with regard to ecosystem condition. This means that our operations do not have any material impact on ecosystem condition, let alone do they contribute to the destruction or fragmentation of habitats. This largely ensures the integrity of the surrounding ecosystems.

There is no need for any remedial measures with regard to the sites located near protected areas or their impact on biodiversity.

The Range Rarity Indicator shows that no sites are associated with a very high or high risk. This means that our activities do not pose any direct threat to endemic species.

According to the ENCORE Framework, the chemical industry as a whole has low materiality in terms of land use, as companies such as WACKER operate predominantly in established industrial areas. This means that there is hardly any need for land-use changes. Significant environmental impacts such as soil degradation or soil sealing are largely avoided. As a specialty chemical company, WACKER relies in a whole variety of ways on ecosystem services that support its operations either directly or indirectly. These include supply services such as water and raw materials, regulation services such as climate regulation and flood protection, supporting services such as soil formation and pollination, and cultural services such as recreation and experience of nature. The results of the ENCORE analyses confirm that WACKER is supported by various ecosystem services, but that there are no critical dependencies.

Based on the analysis results, the impact of our operations (our own operations as well as the upstream and downstream value chain) with regard to land degradation, desertification, soil sealing and endangered species was not identified as material.

Nevertheless, WACKER has potentially negative impacts on biodiversity and ecosystems through its greenhouse gas emissions, emissions to air and water, and water consumption. These could also potentially affect protected areas near our sites.

These impacts are described in the chapters on Climate Change (ESRS E1), Pollution (ESRS E2), and Water and Marine Resources (ESRS E3).

No material risks or opportunities were identified.