ESG Glossary

A measure of a group, individual or a company’s total greenhouse gas emissions.  A carbon footprint is the total amount of greenhouse gases (including carbon dioxide and methane) that are generated by our actions. The average annual carbon footprint for a person in the United States is 16 tons.
 

Carbon neutrality refers to achieving net zero carbon dioxide emissions by balancing carbon dioxide emissions with removal (often through carbon offsetting) or simply eliminating carbon dioxide emissions altogether. It is used in the context of carbon dioxide-releasing processes associated with transportation, energy production, agriculture, and industrial processes.

Carbon pricing is an instrument that captures the external costs of greenhouse gas (GHG) emissions—the costs of emissions that the public pays for, such as damage to crops, health care costs from heat waves and droughts, and loss of property from flooding and sea level rise—and ties them to their sources through a price, usually in the form of a price on the carbon dioxide (CO₂) emitted.

Cement replacement has a high impact for the Sika Sustainability Strategy as it helps to reduce CO₂ emissions and improves the sustainability profile of the Sika dry mix OPC (Ordinary Portland Cement).

50% reduction of CO₂ emissions of operational footprint in cement production thanks to the introduction of SCM in dry mix mortars in France and China.

The company is already able to reduce the CO2 emitted by the operations footprint by 50% by replacing ordinary Portland cement by SCM (supplementary cementitious materials). Such an alternative materials can be for example, fly ash, calcium carbonate, ground granulated blast furnace slag, a by product of pig giron making.

The focus of the circular economy approach relates to direct circular handling of material and energy flows—for example closing loops, extending product lifecycles and increasing usage intensity.

The business case for adopting circularity principles is becoming more and more compelling due to higher awareness and shifting demand towards more sustainable solutions among customers in construction and transportation markets. Sika’s initiatives to impact the development towards a circular economy in its industry, range from the alignment with the UN Sustainable Development Goals (SDGs) 11, 12, and 13 in particular, to the partnering with downstream clients, universities and startups to co-design and implement products.

Collaboration projects are  essential because the deployment of deep circularity interventions relies on access to cost-effective sustainable energy and renewable/recyclable feedstock with appropriate specifications.

The UNFCCC, in its Article 1, defines climate change as: ‘a change of climate which is attributed directly or indirectly to human activity that alters the composition of the global atmosphere and which is in addition to natural climate variability observed over comparable time periods.’ The UNFCCC thus makes a distinction between climate change attributable to human activities altering the atmospheric composition and climate variability attributable to natural causes.

(Source: United Nations Framework Convention on Climate Change (unfccc.int))

Concept of a state in which human activities result in no net effect on the climate system. Achieving such a state would require balancing of residual emissions with emission (carbon dioxide) removal as well as accounting for regional or local biogeophysical effects of human activities that, for example, affect surface albedo or local climate.

(Source: Glossary — Global Warming of 1.5ºC (ipcc.ch))

• Scope 1: Direct emissions from owned or controlled sources (fuel combustion, company vehicles) --> action: e.g. gas consumption reduction in Sika plant
  
• Scope 2: Indirect emissions from the generation of purchased energy (purchased electricity, heat and steam) --> action: e.g. renewable electricity consumption in Sika plant
  
• Scope 3: All other indirect emissions that occur in the value chain (purchased goods, transportation & distribution, waste disposal, business travel/ employee commuting, processing and use of sold products etc.) --> action: e.g. cement reduction (replacement with SCM) in mortars formulations; energy savings thanks to cool roofs
  

Corporate Social Responsibility (CSR) is a management approach that applies sustainability values in business to promote social welfare within a company and outside it, employs ethical business concepts, supports effective company’s  resource management and preservation of nature.

In December 2019, the European Commission (EC) presented the  European Green Deal, an overarching framework and programme of actions to transform the European economy. A key component of the Green Deal is the proposed Climate Law  embedding a legal commitment for the EU to achieve climate neutrality by 2050. Other core components of the Green Deal are strategies and actions on supplying clean, affordable, and secure energy, biodiversity, zero pollution, a circular economy and sustainable food production.

The GRI provides a global standard for sustainability reporting – the GRI Standards - which helps businesses, governments and other organizations understand and communicate their impacts on ESG issues such as climate change, human rights, and corruption. Sika is reporting according to the GRI Standards since 2014.

Greenhouse gases are those gaseous constituents of the atmosphere, both natural and anthropogenic, that absorb and emit radiation at specific wavelengths within the spectrum of terrestrial radiation emitted by the Earth’s surface, the atmosphere itself and by clouds. This property causes the greenhouse effect. Water vapor (H₂O), carbon dioxide (CO₂), nitrous oxide (N2O), methane (CH4) and ozone (O3) are the primary GHGs in the Earth’s atmosphere. Moreover, there are a number of entirely human-made GHGs in the atmosphere, such as the halocarbons and other chlorine- and bromine containing substances, dealt with under the Montreal Protocol. Beside CO₂, N₂O and CH4, the Kyoto Protocol deals with the GHGs Sulphur hexafluoride (SF6), hydrofluorocarbons (HFCs) and perfluorocarbons (PFCs).

(Source: Glossary — Global Warming of 1.5 ºC (ipcc.ch))

• Globally recognized standard, since 2013 Sika’s system to manage and report all nsustainability topics.
• The data/ information is collected from local Sika companies via Operational Reporting and on Group level.

Net zero carbon dioxide (CO₂) emissions are achieved when anthropogenic CO₂ emissions are balanced globally by anthropogenic CO₂ removals over a specified period. Net zero CO₂ emissions are also referred to as carbon neutrality.

(Source: Glossary — Global Warming of 1.5 ºC (ipcc.ch))

The Paris Agreement aims to limit the rise in global average temperatures to below 2 °C above pre-industrial levels by the end of this century, and to pursue efforts to limit it to 1.5 °C. It has revolutionized climate politics by changing the model of negotiations. Now, all countries voluntarily set their goals based on their economic abilities. To achieve this, countries put forward individual plans known as nationally determined contributions (NDCs), which outline their proposed emissions reductions and adaptation strategies. The International Panel on Climate Change (IPCC) in 2018 warned that to achieve the lower 1.5 °C target, emissions need to be cut by 40%-60% from 2010 levels by 2030, reaching net zero around 2050.

(Source: The Paris Agreement | UNFCCC)

Scope 1 emissions: Direct GHG emissions occur from sources that are owned or controlled by the company, for example, emissions from combustion in owned or controlled boilers, furnaces, vehicles, etc.; emissions from chemical production in owned or controlled process equipment.

Scope 2 emissions: Scope 2 accounts for GHG emissions from the generation of purchased electricity consumed by the company. Purchased electricity is defined as electricity that is purchased or otherwise brought into the organizational boundary of the company. Scope 2 emissions physically occur at the facility where electricity is generated.

Scope 3 emissions: Scope 3 emissions are a consequence of the activities of the company but occur from sources not owned or controlled by the company. Some examples of scope 3 activities are extraction and production of purchased materials; transportation of purchased fuels; and use of sold products and services.

(Source: GHG Protocol)

The “Sika Cares” community engagement program focuses on improving the quality of life of children, adults and families in the communities in which the company is active. There are three focus areas: Education and vocational training, buildings and infrastructure, climate and environment. The company endeavors to provide intelligent support for projects through the application of company-specific expertise, voluntary work by its employees, and long-term collaboration with partners.

TCFD (Taskforce for Climate-related Financial Disclosures): Evaluating climate-related risks and opportunities related to its business and developing appropriate response measures are of vital importance to ensure a sustainable development and the business continuity of Sika. As a framework to disclose the impacts of climate change on Sika’s business and to increase the understanding of the related risks and opportunities, the Group has endorsed thenrecommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

Sika has started a process for identifying and assessing the potential implications of plausible future scenarios. Those scenarios allow Sika to explore and develop an understanding of how various combinations of climate-related risks, both transition and physical risks, may affect its businesses, strategies, and financial performance over time.  

As sustainability is a core element of Sika’s growth strategy and procurement plays a key role guaranteeing to select and cooperate with vendors according to the highest ESG standards. In alignment with this strategy, and with a strong focus on sustainable supply and cost & efficiency improvement, Sika ensures responsible sourcing and compliance with sustainability and quality standards within Sika procurement and supply chains.

Sika participates at the ‘Together for Sustainability’ (TfS) initiative as an active member. The organization, founded in 2011, aims to improve sustainability practice within the supply chain of the chemicals industry. The TfS program is based on the UN Global Compact and Responsible Care® principles and allows Sika to assess and evaluate the performance of its suppliers in various aspects. This includes environmental, labor & human rights, ethical and sustainable procurement performance.

The participation at the TfS initiative enables Sika to learn and exchange with its members best practices in sustainable procurement principles, and to actively participate in the improvement of sustainability practices within the chemical industry supply chains.  

Sika is making a contribution to the UN 2030 Agenda for Sustainable Development, focusing on eight of the 17 goals.

Among others, both the construction and the automotive industry highly influence these goals:

• 3 (Good health and well-being)
  
• 4 (Quality education and lifelong learning)
  
• 6 (Clean water and sanitation)
  
• 8 (Decent work and economic growth)
  
• 9 (Industry, innovation and infrastructure)
  
• 11 (Sustainable cities and communities)
  
• 12 (Responsible consumption and production)
  
• 13 (Climate Action)

• WBCSD: World Business Council for Sustainable Development
  
• CEO-led organization of industry leaders aiming to accelerate the transition to a sustainable world. Sika is member since 2010.
  
• Active participation in chemical sector industry group (Sustainability Portfolio Management (SPM) project).
  
• Sika works with WBCSD to test Circular Transition Indicators (CTI) framework