Annual
Integrated Report 2023
ADVANCING
HUMANITY
The future is rich with unexplored possibilities.
We are explorers.
People from many horizons who dream the impossible, solve the
unsolvable, partnering to pioneer the future of science.
Because a sustainable future starts with our commitment, our
solutions and innovations are the catalysts that open new frontiers
for the planet and its people.
WE ARE SYENSQO,
EXPLORERS
CREATING
BREAKTHROUGHS THAT
ADVANCE HUMANITY.
SYENSQO 2023
MANIFESTO _01
About this report
Syensqo’s 2023 Annual Integrated Report provides material information on Syensqo for the nancial year ending December 31, 2023. This report
reects our progress in our integrated management journey, as it integrates all content into one comprehensive document.
The rst chapters tell the story of the year, outlining Syensqo’s establishment as a new company, our strategic approach and our key business areas
and nancial results. These chapters also provide a comprehensive overview of our sustainability objectives and the progress we have made.
Syensqo’s Annual Integrated Report includes a management report, as required by article 12 of the Royal Decree of November 14, 2007 relating to the
obligations of issuers of nancial instruments admitted for trading on a regulated market. The information required by articles 3:6 and 3:32 of the
Belgian Code of Companies and Associations can be found in various chapters of the report. They include our corporate governance statement,
remuneration report, risk management report, business performance review, extra-nancial statements and nancial statements.
The Annual Integrated Report has been prepared using the GRI Sustainability Reporting Standards and the World Business Council for Sustainable
Development (WBCSD) Environmental, Social and Governance (ESG) Disclosure Handbook as a reference framework. Our Annual Integrated Report
has been established by Syensqo’s Executive Leadership Team and Board of Directors.
02 Message from Ilham Kadri, Chief Executive Officer, and
Rosemary Thorne, Chair of the Board of Directors
06 Introducing Syensqo
24 Accelerating innovation
52 Our sustainability ambition
71 Performance
89 Corporate governance statement
127 Risk management
147 Extra-financial statements
235 Financial statements
347 Auditor’s reports and Declaration by the
persons responsible
365 Glossary
Contents
SYENSQO 2023
LEADERSHIP
ANNUAL INTEGRATED REPORT
02_
A DISCUSSION WITH OUR CHAIR AND OUR CEO
We are explorers - be part
of the journey!
With two women at the helm of the company, Syensqo presents a unique governance
profile compared with its peers in the industry. Rosemary Thorne, Chair of the Board
of Directors and Dr. Ilham Kadri, Chief Executive Ofcer, discuss the genesis and ambitions
of our science company, and deliver a message of ambition and hope.
_03
“OUR PEOPLE DID AN OUTSTANDING
JOB RUNNING THE COMPANY,
SUPPORTING THE BUSINESS IN A
CHALLENGING MARKET
ENVIRONMENT AND WORKING HARD
TO MAKE THE SPINOFF A REALITY.”
Ilham Kadri, Chief Executive Ofcer of Syensqo
a 6.2% organic growth in EBITDA (Compound Annual Growth Rate —
CAGR), a reduction of total net debt by €4.3 billion, the doubling of
Return on Capital Employed (ROCE) from 8.1% to 15.2% and the gene-
ration of €4.5 billion in free cash ow. The company invested a total of
€4 billion and distributed €2 billion in dividends to shareholders.
According to a report by a leading Belgian business school, Solvay
created more than 20% (€1.8 billion) of shareholder value between
2019 and 2023, outperforming the BEL20 reference index. Over the
same period, Solvay’s Total Shareholder Return (TSR) performance
has consistently surpassed the €Stoxx 600 and BEL20 indexes.
As we closed 2023 successfully, delivering on our nancial commit-
ments, we will be rewarding our investors accordingly after the vote at
the Annual General Meeting on the proposed dividend of €1.62 per
share.
Creating value in the interest of all stakeholders implies
both nancial and non-nancial performance… Where
does Syensqo stand in terms of its Environmental,
Social and Governance (ESG) commitment?
R.T. — We are clearly positioned as a growth company with the nan-
cial flexibility to invest in growth that will deliver sustainable value
creation to shareholders over time. We will also be building on a
strong legacy. Solvay conrmed its status as an ESG-driven company
in 2021, when the Board created an ESG Committee, to help guide
strategic priorities and ensure execution was aligned to the Group’s
commitments. In that respect also, the results were truly impressive.
Likewise, Syensqo today benets from the support and guidance of a
highly qualied and dedicated ESG committee.
I.K. — In this area also, the facts and gures make me proud of our
teams. They are a compelling illustration of Solvay’s extra-nancial
performance over the past ve years, resulting from the ambitious
One Planet and One Dignity roadmaps. The company’s accomplish-
ments during the transformation include a steep decline in CO
2
emis-
sions, twice faster than the target set by the Paris Agreement. In that
same period, the company earned certication by the Science-Based
Targets initiative (SBTi). On the social and people front, Solvay intro-
duced a 16-week co-parental leave policy, initiated a shareholdership
plan with signicant employee participation, addressed 951 gender
pay gaps and achieved a 76% employee engagement score by the
end of 2023.
R.T. — I would like to emphasize that this high level of engagement has
endured through major changes and headwinds. As Ilham said,
Solvay went through a profound transformation — and it did so while
navigating unprecedented challenges, including a global pandemic,
armed conflict in Ukraine and subsequent crises. Engagement
numbers and the above-benchmark success of Solvay’s employee
shareholding program are a testament to the commitment of our
teams, as well as to their resilience and ghting spirit.
I.K. — This spirit also proved its worth throughout 2023: our people did
an outstanding job running the company, supporting the business in
a challenging market environment and working hard to make the
spinoff a reality.
Ms. Thorne, you were a member of the Board of
Directors of Solvay — and you have now moved on as
Chair of the Board of Syensqo. You were at the forefront
of a bold move — how did that feel?
R.T. — I have indeed been involved with Solvay for over nine years, as
a member of the Board and chair of the audit committee. Obviously
when the shareholder assembly elected me, I was delighted at the
prospect of taking on these new responsibilities, because I believe in
the story. I was a rsthand observer of the profound transformation
led by Ilham and her team and of the impressive results it generated.
I have seen the process unfold, leading to the spinoff, which as board
members, we discussed, steered and fully supported.
We’ve done incredibly well; our metrics are a testament to our
success — and metrics don’t lie. Believe me, I’m a stickler for numbers:
an accountant by profession, I’ve been the Chief Financial Ofcer of
major UK companies for a number of years. More recently, I was
appointed as an independent non-executive director and chair of the
audit committee at Merrill Lynch International, which is the internatio-
nal division of Bank of America. Previously, I also chaired the audit
committee at Smurt Kappa Group. And what I saw at Solvay was
truly compelling.
Six out of ten board members at Syensqo are women.
Was that deliberate?
R.T. — Before I speak about the board, let me tell you that as an orga-
nization, we’re certainly aiming for more diversity, including gender
diversity. During her time at Solvay, Ilham has been a strong advocate
for Diversity, Equity and Inclusion, which she took to the next level. We
still need to get more women into our sites, at all levels — but we start
with a good basis of 24% female employees overall at Syensqo, in an
industry that has been overwhelmingly masculine ever since its
inception. We are aiming for gender parity at mid and senior mana-
gement level by 2033 — and we are moving in the right direction:
today, 35% of our junior executives are women.
Regarding the composition of our Board, another positive feature
is that we have attracted ve new high-prole members for Syensqo.
As a consequence, we have an equal number of Directors stemming
from the Solvay legacy — such as Ilham and myself — and newco-
mers with a fresh perspective.
Needless to say, I am very pleased with the quality, the expertise
and the experience of the people who sit on the Board today. Their
combined competence ts the needs of Syensqo and is a tribute to
diversity and inclusion as well as globalization, representing our
customers’ footprint. We have six independent directors, eight natio-
nalities and one US-based female director. Together, they have
decades of complementary experience in governance, finance,
industry, innovation, sustainability and talent management.
We were all eager to get to work and gain a deeper understan-
ding of Syensqo in the eld. As soon as the rst quarter after the crea-
tion of our company, the Board of Directors visited our plants in
Spinetta and Bollate, Italy, where they met the teams and focused on
the company’s innovation and sustainability ambition.
Turning to Dr. Kadri: the transformation and split which
Ms. Thorne has just evoked — you actually made it
happen. What is your state of mind today, looking back
at the journey?
I.K. — I feel a combination of pride and gratitude to the teams, the
management, the Directors and the shareholders of Solvay who
made it possible. When I arrived in 2019, my mission was to unleash
the potential of Solvay. We reinvented the company culture, structure
and strategy — and the new energy that was injected into the
company generated fantastic results. Like Rosemary said, numbers
don’t lie! Our nancial achievements over the past ve years include
SYENSQO 2023
LEADERSHIP _05
ANNUAL INTEGRATED REPORT
04_
Taking advantage of our exposure to high growth markets, our
strategy is to accelerate our investments that align with megatrends
such as: electrification, lightweighting, advanced connectivity,
resource efciency, sustainable sourcing and improving quality of life.
We also want to accelerate our time-to-market, as well as to invest in
new capacity and capabilities that will further improve how we serve
our clients, such as our recent investments in clean mobility.
Our ambition is to become our customers’ prime innovation
partner, and we have what it takes to succeed: some 15% of Syensqo’s
workforce — and brain power! — is active in research and innovation
and our target is to lift our annual research and innovation expendi-
ture to approximately 5% of net sales. We also joined the articial intel-
ligence (AI) revolution to boost innovation and growth. Generative AI’s
latest breakthrough will help us reach new heights with data, and
benefit our customers and society at large. Finally, we’re already
working hard on “blockbuster” projects including solutions for solid
state and high energy batteries as well as advanced materials for
hydrogen storage, production and conversion.
The recently announced partnership with Climate
Impulse will certainly be a great showcase for Syensqo
technologies, won’t it?
I.K. — Absolutely! We are the main technological partner of this rst
non-stop nine-day round-the-world-flight in a green hydrogen-
powered airplane. It’s an engineering challenge and a human adven-
ture that can only succeed with our high-tech materials and our solu-
tions for hydrogen-based energy systems. Solving challenges for
Climate Impulse will pave the way for groundbreaking innovations not
only in aviation, but also in other modes of transportation, storage and
industrial use. Furthermore, it will contribute to the effective deployment
of the green hydrogen economy, which is vital to reach net-zero.
But more importantly, I am thrilled that Climate Impulse will y our
colors and carry our name because it is a perfect illustration of the
spirit that drives us at Syensqo. This partnership positions us not only
as innovators but also as the architects of a sustainable world. Let’s
face it: global warming and the environmental polycrisis are a frighte-
ning reality. Some still choose to ignore the situation, which is irres-
ponsible. Others are petried by pessimism and eco-anxiety — and let
themselves grind to a standstill. At Syensqo, we are the explorers of
the third way: that of science and action, which in my mind is the only
one capable of restoring hope for generations to come.
What message would you like to leave with the readers
of this Report?
I.K. — I invite them to be part of the journey and to support our team
of explorers. 2024 will be the year of Syensqo — the year when we will
operate with a clear roadmap to become a purer player, focusing on
our core business, core strategies and preparing our organic growth
plans in the service of sustainability.
R.T. — We also want to thank the investors who have placed their trust
in our project so far, and to deliver our message of optimism to those
who are more attracted by investments with a growth prole. Syensqo
now offers a clear trajectory and high ambitions.
I.K. — Yes! Join us on our value creation journey: together, we’ll explore
breakthrough technologies that advance humanity and we’ll contri-
bute to making a dream come true: the ambition of a circular,
carbon-neutral economy. We will be doing well by doing good.
Now that the spinoff is complete, will the One Planet
ambition live on at Syensqo?
I.K. — Absolutely - and moreover, we are accelerating! I left the Solvay
legacy with 59 energy transition projects around the world, equivalent
to taking two million internal combustion engine cars off the road
every year. It’s massive! To de-coal and prepare the new Solvay for
the future, we notably implemented biomass energy in large sites
such as Rheinberg in Germany and Dombasle in France. But we are
agnostic to energy and we will resort to whichever low-carbon solu-
tion is most appropriate to the location under consideration: solar,
wind, hydro, etc. Our ultimate objective is climate neutrality.
Going forward at Syensqo, I am very happy to say that we are in a
position to achieve net zero by 2040, which would be ten years faster
than Solvay. We are serious about decarbonization. I believe there is
no alternative: the companies who are still struggling with it will disap-
pear. That is why we are investing heavily: Rosemary and the Board
approved a total budget of €2 billion for Solvay legacy energy transi-
tion projects — of which 44 were transferred to Syensqo. Furthermore,
our ambition spreads beyond our walls, as we will keep working hard
on our Scope 3 emissions.
What are your sustainability priorities beyond climate
and carbon neutrality?
I.K. — Syensqo One Planet will focus on fewer priorities, where we can
have the biggest impact. With regard to resources, our scientists,
chemical engineers and business can make a big difference as we
embed circularity by design in our products. The second and subse-
quent usages must be part of the plan from the outset. Back in 2019,
the share of sustainable solutions driven by circularity in our sales was
2%. Five years later, the gure for these bio- or plant-based products
stood at 9%. Now at Syensqo, we’ve committed to doubling the share
of circular solutions in our turnover by 2030.
We call the third pillar of our sustainability program “better life.”
Occupational safety is at the top of our priorities in that respect. We
aim for zero accidents, with everyone returning home unharmed after
a day’s work at Syensqo, always. Another key challenge, like Rosema-
ry said, is to include more women at all levels in our organization. More
specically, we are aiming to reach gender parity at Syensqo within
the next ten years. Also, we fully subscribe to the UN Global Compact
call for action on Living Wage: we have committed to ensuring that by
2026, every single one of our 13,100 employees — irrespective of their
job category or location — will be earning enough to afford a fair stan-
dard of living, even if he or she is the only income earner of the family.
How does your sustainability ambition relate to your
business strategy?
I.K. — Our sustainability goals are more than just an ethical obligation
- they are at the heart of our strategy.
As a growth company, one of our fundamental objectives is to
further extend our market leading positions. The beauty is that we will
not be growing at the expense of the planet, which is our home, but
much on the contrary, we will reimagine ourselves, reinvent new solu-
tions and contribute to xing our home.
We supply the technologies and solutions our clients need to
make their own products more sustainable and to reduce their
impact on the environment. We are in one out of two electric vehicles,
we are in almost every vehicle that ies because we lighten and elec-
trify ground and air mobility, we enable green hydrogen (that’s
making energy from water!), we are in 80% of medicine packaging
and we are in 25% of all shampoos.
“WE ARE CLEARLY
POSITIONED AS A GROWTH
COMPANY WITH THE
FINANCIAL FLEXIBILITY
TO INVEST IN GROWTH
THAT WILL DELIVER
SUSTAINABLE
VALUE CREATION TO
SHAREHOLDERS OVER
TIME.”
Rosemary Thorne,
Chair of the Board of Directors
“OUR SUSTAINABILITY
GOALS ARE MORE THAN
JUST AN ETHICAL
OBLIGATION - THEY ARE
AT THE HEART OF OUR
STRATEGY.”
Ilham Kadri,
Chief Executive Ofcer of Syensqo
SYENSQO 2023
_07
ANNUAL INTEGRATED REPORT
06_
INTRODUCING SYENSQO
At Syensqo, we are scientic explorers pursuing breakthroughs that
advance humanity. Supported by our market-leading positions
and innovation leadership, we invest in science and in the future,
creating advanced, sustainable solutions that help drive growth.
08 Key figures for 2023
10 Highlights of 2023
12 An introduction to Syensqo
14 160 years of scientific exploration
16 Our business model
18 Our strategy
20 Our value chain
21 Partnerships
22 Syensqo explorers
01
Summary
SYENSQO 2023
INTRODUCING SYENSQO _09
ANNUAL INTEGRATED REPORT
08_
Key gures for
2023
Syensqo is a science company developing groundbreaking
solutions that enhance the way we live, work, travel and play.
Inspired by the scientific conferences initiated by Ernest
Solvay in 1911, our diverse and global team of more than 13,000 asso-
ciates brings great minds together to push the limits of science and
innovation for the benet of our customers.
Our solutions help make products found in homes, food and consu-
mer goods, planes, cars, batteries, smart devices and health care
applications safer, cleaner, and more sustainable. And our innovation
power enables us to deliver on the ambition of a circular economy,
and explore breakthrough technologies that advance humanity.
Syensqo around the world
1. Organic growth excludes forex conversion and scope effects.
2. Free cash ow to Syensqo shareholders is the free cash ow after payment of net
interests, coupons of perpetual hybrid bonds and dividends to non-controlling
interests. This represents the cash ow available to Syensqo shareholders, to pay
their dividend and/or to reduce the net nancial debt.
3. Return on capital employed.
4. Recommended to the shareholders meeting on May 23, 2024.
5. Our circularity KPI encompasses products either: based on recycled or renewable
materials, produced with renewable energy, with increasing longevity in the use
phase or enabling recycling at the end of life.
6. Total emissions from Syensqo operations.
7. Focus 5 categories of Scope 3 emissions: (1) purchased goods and services and
(2) fuel-and energy-related activities (both upstream); and (3) processing of
sold products, (4) use of sold products and (5) end-of-life treatment of sold
products (all downstream).
8. Number of work-related injuries and illnesses (employees and contractors)
resulting from an accident with severity above rst aid, according to US OSHA 29
CFR 1904, per 200,000 work hours.
Research and innovation
1,950
Employees
20.7%
Vitality index
85%
Expected R&I revenue from
sustainable solutions according to
our SPM methodology
€343M
R&I effort
Financial indicators
(2022 vs. 2023)
Environmental and social
indicators
(2023 vs. 2021)
€1,618M
Underlying EBITDA
-10% organic basis
1
€1.62
4
Dividend per share
10.6%
ROCE
3
+240bps vs. 2021
€448M
Free cash ow
2
To Syensqo shareholders
28% conversion
Better life
0.28
Reportable injuries and illnesses
rate
8
(RIIR)
28%
Gender parity
Women in mid and senior
management
Sustainable growth
13%
Circular sales
5
€6.8BN
Net sales
13,102
Employees
Americas
41%
Europe
25%
Asia-Pacic
35%
Americas
41%
Europe
38%
Asia-Pacic
21%
62
Industrial sites
12
Major research and innovation
centers
Americas
36
Europe
14
Asia-Pacic
12
Americas
4
Europe
5
Asia-Pacic
3
Climate
Greenhouse gas emissions
1.6MT CO
2
EQ
6
Scopes 1 and 2
-25% (-20% structural)
6.1 MT CO
2
EQ
7
Scope 3 Focus 5 categories
SYENSQO 2023
INTRODUCING SYENSQO _11
ANNUAL INTEGRATED REPORT
10_
Highlights of 2023
DECEMBER 11
Successful launch and
“investment grade” rating
for Syensqo
Syensqo’s shares are listed on Euronext
Brussels and Euronext Paris, marking
the start of an exciting new journey
focused on innovation and growth. The
strong credit rating conrms Syensqo
as an attractive investment prospect
with solid nancial foundations.
P. 12
P. 12
DECEMBER 8
99.53% of shareholders
approve Syensqo spinoff
The demerger of Solvay receives
overwhelming support from
shareholders at the Extraordinary
General Meeting and Syensqo is born.
JUNE 28
Settlement on PFAS
remediation in New Jersey
Syensqo announces an agreement with
the New Jersey Department of
Environmental Protection resolving
certain PFAS-related claims in the area.
JUNE 15
Launch of Naternal™
bio-based biodegradable
polymers for hair and skin
care
Our Naternal™ range for
biodegradable-by-design hair and skin
care solutions is supported by
investment in a new, world-class,
multipurpose microbiology lab, with
tools to enable innovation that is safe
and sustainable by design.
JUNE 7
Expansion of US mining
solutions capacity to meet
demand for copper
Syensqo announces completion of a
20% capacity expansion for our
ACORGA® product line at our Mount
Pleasant facility in Tennessee, which will
help meet increasing demand for
copper in e-mobility and clean energy
applications.
NOVEMBER 13
Syensqo unveils
ve-year growth strategy
and objectives
Syensqo presents exciting new
medium-term nancial targets and
sustainability commitments at our
inaugural Capital Markets Day.
MARCH 23
Launch of new polymer
for insulation of high-heat
EV battery modules
The new high-heat and ame
retardant grade in our Xydar® liquid
crystal polymers (LCP) range meets
the challenging requirements of
next-generation electric vehicle models,
which use higher voltage systems.
P. 34P. 55
P. 64
P. 38
P. 18
P. 12
P. 12
P. 64
P. 36
MARCH 6
Northrop Grumman supplier
excellence award
This major aerospace and defense
company’s Quality Excellence award
recognizes the role we play in ensuring
they can deliver advanced technology
solutions with quality and speed.
APRIL 4
A strategic collaboration with
Ginkgo Bioworks
Syensqo joins forces with Ginkgo
Bioworks to accelerate development of
sustainable biopolymers and acquires
a Ginkgo lab in Cambridge,
Massachusetts that enables us to
expand our R&I footprint in this
important biotechnology hub.
P. 48
P. 58
NOVEMBER 3
Syensqo announces Board
of Directors and Executive
Leadership Team
A diverse and experienced Board and a
world-class Executive Leadership Team
are appointed to lead Syensqo.
The new leadership includes Syensqo’s
rst ever Chief Asia Ofcer.
NOVEMBER 2
US grant conrmed to help
fund pivotal project for EV
battery supply chain
Syensqo conrms plans to build North
America’s largest production facility for
electric vehicle materials, with the
support of a grant from the US
Department of Energy and a Joint
Venture with Orbia.
P. 44
SEPTEMBER 27
Syensqo completes liability
management process
In anticipation of the spinoff from
Solvay, the nal step of our liability
management process is completed
with the redemption of US bonds.
JANUARY 23
ISCC PLUS mass balance
certication for Syensqo’s
vanillin production
Our vanillin is the rst on the market to
be accredited as International
Sustainability and Carbon Certication
(ISCC) PLUS compliant, meeting
customer demands for more
sustainable products. Our sulfone
polymer plant in Marietta, Ohio and our
PPS plants in Borger, Texas and
Kallo-Beveren, Belgium also obtained
this certication later in the year.
P.06
SEPTEMBER 19
Syensqo joins the UN Global
Compact Living Wage
initiative
The initiative involves launching an
assessment to guarantee living wage
equity across the company and
committing to close any gaps before
2030.
SEPTEMBER 6
New Syensqo R&I facilities
inaugurated in Shanghai,
China
Syensqo’s new research building is
designed to support local customers
and help fulll demand for innovative
and sustainable solutions in the region,
serving critical sectors, such as green
hydrogen, electronics and
semiconductors.
P. 46
SYENSQO 2023
INTRODUCING SYENSQO _13
ANNUAL INTEGRATED REPORT
12_
An introduction
to Syensqo
In 1863, Ernest Solvay founded a company
with innovation and a passion for science
and progress at its heart. For 160 years, this
company has continually reinvented itself to
advance science, society and humanity as
a whole. Syensqo is the product of its latest
reinvention.
Syensqo was established on December 11, 2023, following
overwhelming shareholder approval for the separation of
the former Solvay into two separate companies. A specialty
chemical company, Syensqo is a market leader in material and consu-
mer solutions. It is composed of the former Solvay materials segment,
which includes our specialty polymers and composites businesses,
our four growth platforms and the majority of the former Solvay solu-
tions segment, namely our technology solutions, aroma performance
and oil and gas businesses.
With the launch of Syensqo, we begin a new chapter in our history,
focused on growth, innovation and sustainability. We aim to be the
innovation leader in our industry, centering our innovation agenda on
our customers, and the value we create for and with them.
Unlocking Syensqo’s full potential
— Syensqo is the product of Solvay’s successful transformation story. In
2022, we delivered on our G.R.O.W. strategy, ahead of schedule. Two
distinct business groups emerged from this strategy, focused on essen-
tial chemicals and specialty chemicals. Each group had different – and
sometimes competing – needs, operating requirements and investment
demands, and we believed that the only way to truly unlock the full
potential of each of these business groups was to create two new
companies.
As a standalone company, Syensqo will be better able to create
sustainable shared value for all, both now and in the future. Building on
the results of the G.R.O.W. strategy, we aim to expand our presence and
inuence in our markets, targeting above-market growth at superior
returns, and beneting from market-driving megatrends, such as elec-
trication, lightweighting, advanced connectivity and resource efcien-
cy.. We will do this by providing innovative and sustainable solutions that
help our customers and their customers to build a better world.
Inspired by the legacy of the Solvay Conferences
— In 1911, Ernest Solvay brought 24 of the world’s most brilliant minds
together to advance scientic research, at the rst Solvay Conference.
This gathering paved the way for the birth of modern and quantum
physics – scientic theories that are fundamental to the work we do at
Syensqo today. This extraordinary convergence of scientic explorers,
who were driven by a shared passion for unraveling the mysteries of
the universe, serves as the foundation for Syensqo. We endeavor to
follow in their footsteps, embracing the legacy of the Solvay Conferences
by pushing the boundaries of what is known today, so that we can
create breakthroughs that advance humanity.
Driven by innovation
— At Syensqo, we are explorers. Innovation excellence, scientic curiosity
and a commitment to making the world a better place are all part of
our DNA. Our company was founded following a technological break-
through that revolutionized the way soda ash is made. Customer-
focused innovation and a commitment to enabling progress for people
and the planet has served as a driving force for us ever since.
Our commitment to innovation excellence will only intensify at Syensqo.
Our businesses hold leading positions in their core markets, developed
over decades of collaboration with our customers. They benet from
strong innovation pipelines and our unique application expertise. And
with around 25% of our workforce working in customer-facing roles and
15% in research and innovation (R&I), we are well placed to extend our
leadership positions, by developing new products that exceed expec-
tations and deliver value-added benets for our customers.
An ongoing commitment to social responsibility
— As one of the rst companies to implement a social welfare plan back
in 1878, social responsibility has always been at the heart of our company
culture. We believe that the best ideas will ourish in environments where
stress is managed and the health, well-being, living standards and work-
life balance of our employees are prioritized. Our Syensqo Cares package
guarantees that all our employees receive at least minimum social
benets, including 16 weeks of parental leave for all parents, and health,
disability and life insurance. We also offer exible work practices, and
our Solidarity Fund is there to help when our employees and commu-
nities face challenging times.
Diversity, Equity and Inclusion (DEI) is fundamental to social progress
and the creation of a better life for all. This is why we have set ambitious
targets and initiatives to help us lead the way in DEI by 2025, building on
the progress made through our One Dignity program. We are also proud
to count more than 25% of our employees as Syensqo shareholders,
with a clear stake in our company’s success.
Science that powers sustainability
— Ernest Solvay sought to make the world a better place – and we’re
committed to doing the same, by investing in and driving sustainable
growth. This includes using our innovation power to support our
customers’ needs and environmental ambitions, as well as collaborating
with suppliers and customers to reduce our carbon footprint and improve
quality of life for all. Our focus is on the three pillars where we can contri-
bute most: climate, sustainable growth and better life.
Thanks to the Solvay One Planet sustainability roadmap, we have a
strong base to build on. As a company, we’re on track to become carbon
neutral by 2040. China is the rst of our markets where every site uses
100% renewable electricity, while globally, 65% of our sites are powered
solely by renewable electricity. With the help of our Sustainable Portfolio
Management (SPM) tool, we’ve increased sales of sustainable solutions
to 60%, and 13% of our sales now contribute to the creation of a circular
economy. And as part of our continued efforts to improve quality of life,
we’re committed to ensuring we pay all our employees a fair living wage
by 2026.
Strong nancial foundations
— Syensqo has a proven track record of delivering strong protability
and creating value. Looking at the three years to 2022, we delivered more
than 300 basis points of EBITDA margin improvement, with EBITDA
margins above 23%, as well as a material increase in return on capital
employed (ROCE), which has more than tripled over the same three
year period to approximately 13.7% in 2022.
To put this in an industry context, Syensqo has consistently outper-
formed the majority of our peers, delivering top quartile sales and EBITDA
growth, growing at a compound annual growth rate (CAGR) of 9% and
14% respectively. Looking ahead to 2028, we are structurally positioned
to continue outperforming the market, giving us a great foundation on
which to build the next chapter in our company’s history.
“THERE ARE
NO LIMITS
TO WHAT SCIENCE
CAN EXPLORE.”
Ernest Solvay
Our name – Syensqo – reects
our history of science at the service
of humanity.
S and Y: the rst and last letters
in Solvay.
SYENS (saı.əns): a reference to our
ambition to continue pioneering
scientic breakthroughs
Q: represents the Solvay
conference of 1911, which laid the
foundations for quantum physics.
E and N: letters from the name of
our founder, Ernest Solvay.
The story behind
our name
1863 2010
1878 2013
1880 2015
1911
&
1922
2018
1965 2020
1978 2022
1990 2023
Ernest Solvay invents
a new process for producing
soda ash
Solvay ies around the world
with Solar Impulse
Solvay partners with L’Oréal,
HiChem and Technoserve
to launch the Sustainable
Guar Initiative
Solvay is the rst industrial
multinational company
operating simultaneously in the
US and Europe
Solvay partners with the
Ellen MacArthur Foundation:
a bold step toward a circular
economy
Rhodia, a future Solvay unit,
invents precipitated silica
for green tires
Development of PSU,
a revolutionary healthcare
polymer used for hemodialysis
membranes
13 products labeled
Efcient Solutions
by the Solar Impulse Foundation
Prof. Katalin Karikó wins
Solvay Prize on 100-year
anniversary
of the Solvay Conferences
Launch of our fourth Growth
Platform on renewable
materials and biotechnology
First Chemistry for the Future
Solvay Prize
Solvay innovates in social
welfare (paid vacations,
social security,
8-hour day)
Ernest Solvay establishes
the rst Councils of Physics and
Chemistry, which continue to
bring together the brightest
scientic minds today
Launch of PEEK, a very strong
thermoplastic
to replace metal for lighter,
more fuel-efcient planes
Solvay creates the Solvay
Solidarity Fund, to help
colleagues and communities
facing hardship
Solvay launches its rst green
solvent, enabling a more
sustainable approach to
agriculture
Launch of Syensqo
SYENSQO 2023
_15
ANNUAL INTEGRATED REPORT
14_
160 years of scientic
exploration
Syensqo may be a new company, but our foundations are rmly rooted in the past. We are
able to draw on a 160-year legacy of invention, curiosity and passion for science to inspire
our work today – and in the future – as we seek to develop breakthroughs that advance
humanity.
INTRODUCING SYENSQO
SYENSQO 2023
_17
ANNUAL INTEGRATED REPORT
16_ INTRODUCING SYENSQO
Designed
to accelerate
sustainable
value
creation
Our separation from Solvay will allow us to
accelerate our efforts to create more sustai-
nable value for our stakeholders. With one
operating model, ideally suited to both of
our business segments, we can better focus
our resources on what matters most for our
customers.
OUR BUSINESS MODEL
Our nancial results and the progress made toward meeting
our ambitious sustainability objectives in 2023 provide a solid
foundation to build on. With a portfolio of products aligned
with the megatrends that drive our end markets, Syensqo is uniquely
positioned to deliver long-term growth. This is reected in our strategy
and our sustainability ambition, which are aligned to ensure sustainable
growth, by delivering solutions that contribute to the customer’s perfor-
mance and, at the same time, demonstrate a lower environmental
impact.
1. Excluding hybrid bonds.
2. Excluding the contribution from corporate and business services.
3. Recommended to the Shareholders meeting on May 23, 2024.
4. Total emissions from Syensqo operations.
5. Focus 5 categories of Scope 3 emissions: (1) purchased goods and services and
(2) fuel-and energy-related activities (both upstream) and (3) processing of
sold products, (4) use of sold products and (5) end-of-life treatment of sold
products (all downstream).
6. Number of species potentially impacted in one year. ReCiPe method for
biodiversity impact assessment.
7. The Syensqo KPI “share in circular revenues” is calculated by adding: sales of
products increasing durability in the use phase downstream in the value chain;
sales based on recycled or renewable materials (85%) and renewable energy
(15%); and sales enabling recycling at the end of life downstream in the value
chain.
8. Number of work-related injuries and illnesses (employees and contractors)
resulting from an accident with severity above rst aid, according to US OSHA 29
CFR 1904, per 200,000 work hours.
9. All employees worldwide grade S14 or below.
10. Solvay Pulse surveys, March, September and November 2023.
11. Combined Syensqo and Solvay donations.
Human
Syensqo’s employees represent 112 different nationalities and
are located across the world: 38% in Europe, 38% in North
America, 3% in Latin America and 21% in Asia and the rest of the
world. In total, 15% work in research and innovation.
13,102 Employees
24% Women
Financial
Syensqo has invested €848 million in growth and energy
transition projects, and €343 million to develop innovative
sustainable solutions.
€7.6bn Equity attributable to Syensqo share
1
€1.6bn Underlying net debt
€0.8bn Total Capex
€1.6bn Personnel expenses
Natural
Our net energy costs represented about €0.2 billion and our
overall raw materials expenses amounted to around €2.1
billion.
931kt Raw materials
20.4PJ Energy consumption
Syensqo’s portfolio of products and culture of innovation are
fully aligned with the megatrends that will shape our society
and our planet. Collectively, these trends provide a clear and
long-term tailwind for our businesses that will accelerate our
growth.
Materials
Our unique high-performance polymers and composite
technologies provide innovative solutions for cleaner mobility,
electronics and healthcare.
74% of Group EBITDA
2
Consumer and Resources
We are global leaders in essential chemicals. Our solutions are
used in a broad range of applications in end markets such as
home and personal care, agro, resources and building.
26% of Group EBITDA
2
ONE operating model
Our operating model is focused on addressing our customers’
needs, and is supported by a customer-obsessed, engaged
and diverse team that will drive growth.
Our One Planet sustainability roadmap is an integral part of
our strategy. It focuses on climate and nature, sustainable
growth and better life.
Economic
€1.6bn Underlying EBITDA
€448M Free cash ow (FCF) to Syensqo shareholders from
continuing operations
€1.62 per share Recommended 2023 dividend
3
€218M Income taxes
255 Core suppliers
Environmental
Greenhouse gas emissions Air emissions
1.6Mt CO
2
eq. Scopes 1 and 2
4
613t Nitrogen oxides
6.1Mt CO
2
eq. Scope 3 1,029t Sulfur oxides
Focus 5 categories
5
33 Species potentially affected by our operations
6
35.1kt Industrial waste not treated in a sustainable way
77.7Mm
3
Freshwater withdrawal
60% Group net sales with sustainable solutions
13% Group net sales enabling the circular economy
7
Social
0.28 Reportable Injury and Illness rate
8
(RIIR)
28% Women in mid and senior management
25% Employees that are Syensqo shareholders
€2M Global Performance Sharing plan
9
63% Average response rate to Pulse survey
10
79% Employees feel “ok or better”
10
€4M Group donations
11
RESOURCES WE USE HOW WE CREATE VALUE VALUE WE CREATE
*Health and personal care (HPC), healthcare, consumer goods
WHERE WE CREATE VALUE
Industrial Applications
14%
Automotive
16%
Aerospace
15%
Electronics
10%
Building
5%
Consumer centric*
13%
Resources
& Environment
17%
Agro,
Feed
& Food
10%
SYENSQO 2023
_19
ANNUAL INTEGRATED REPORT
18_
A strategic approach
that creates value for all
stakeholders
Our separation from Solvay aims to accelerate our ability to create value in the interest
of all stakeholders. It will further sharpen our focus and offer enhanced capital allocation
optionality, which will prioritize protable growth. This will enable us to focus our efforts more
intensely and effectively on addressing our customers’ most pressing needs.
Our strategy is built on four pillars: superior growth, innovation leadership, sustainable solu-
tions and capital discipline.
As a growth company, we aim to further extend our market
leading positions. Leveraging our exposure to high-growth
markets, our strategy is to accelerate our investments in
alignment with the megatrends shaping our society and planet. For
example, we are already leaders in markets such as clean mobility,
healthcare, sustainable farming and bio-based personal care. Our
products are in some 85% of aircraft and 50% of electric vehicles (EVs),
delivering value to customers, who seek to produce lighter planes, and
EVs that consume less fuel and have a reduced carbon footprint – all at
a lower total cost of ownership.
The separation from Solvay will allow us to accelerate time-to-mar-
ket, as well as to invest in new capacity and capabilities that will further
improve how we serve our clients. Some 25% of our workforce are now in
customer-facing roles, and we have 45 application labs close to
customers worldwide, deepening and extending our long-term rela-
tionships.
Investments to support long-term growth are underway, and are
aligned with the most attractive growth opportunities. Together, these
investments are expected to generate at least €500 million of EBITDA at
maturity – albeit these returns are back-end weighted in our ve-year
plan. Our most signicant projects focus on battery materials, including
expansion of PVDF capacities in Europe and a greeneld in the US – to
serve the automotive transition to EVs – and also on capacity for sulfone
polymers in India, to bolster our presence in the healthcare and water
purication sectors.
Our long track record of innovation leadership and differen-
tiation in specialty materials and consumer technologies is
widely recognized and valued by our customers globally.
Driven by around 2,000 scientists and innovators dedicated to research
and innovation, or approximately 15% of our total workforce, we have
established strong intellectual property (IP) protection, with a portfolio
of more than 1,800 patent families. Moreover, approximately 50% of our
current net sales are protected by intellectual property or long-term
contracts.
To support our ambition to become our customers’ prime innovation
partner, we plan to propel our capabilities to create breakthroughs that
advance humanity and accelerate our long-term growth. This includes
collaborating with leading institutions and biotech startups, expanding
our application labs, and continuing to hire top talents and invest in
disruptive technologies. Overall, our target is to increase our annual
research and innovation expenditure to approximately 5% of net sales
– signicantly higher than the average of our peers.
We believe that this increase in investment will support further diffe-
rentiation of our portfolio, create new patent families to protect our
innovation, and create significant long-term value. Specifically, we
have identied “blockbuster” projects which are expected to drive more
than €2 billion in sales beyond 2028. These include suldes for solid
state batteries, advanced materials for hydrogen storage, lithium-ion
salts and solvents for high-energy batteries, and our Aquivion® for
hydrogen production and conversion.
At Syensqo, we believe that our sustainability goals are more
than just an ethical obligation. They are a source of strategic
differentiation, aligned with the evolving needs and priorities
of our customers and partners. Building on the strong foundations of
Solvay’s One Planet sustainability program, we have adapted our
sustainability targets to our growth strategy, resulting in more ambi-
tious goals. For example, we now expect to achieve carbon neutrality
by 2040, 10 years earlier than Solvay’s previous target.
In addition, our revenue growth will be increasingly driven by a
higher share of sales enabling the circular economy, covering the
entire value chain, from the origin of the product to its end of life. We
are reinventing the way we produce chemicals to accelerate the
development of cleaner and more natural solutions that meet the
growing demand of our customers and fulll their sustainability goals.
By 2030, our target is for 18% of our sales to be driven by circularity,
compared to 13% in 2023.
Underpinning Syensqo’s growth strategy is a capital alloca-
tion framework that prioritizes growth, while continuing to
target medium-term improvement to our returns. This
disciplined approach, with clear return parameters, is governed by a
rigorous and disciplined capital allocation framework. We intend to
continue our balanced approach, ensuring that we maintain a
well-invested asset base that is t for the future, the exibility to pursue
investment options through the cycle and a strong investment-grade
credit rating. In the medium term, we target the generation of more
than €7 billion in cash. Approximately 30% of this will be allocated to
sustenance capital expenditure, including asset maintenance, our One
Planet initiatives and investments in our IT systems to support our
operations, which we believe will deliver signicant benets over time.
A further 25% will be spent on growth capital, as well as research and
innovation projects with returns exceeding 15%.
We plan to allocate the balance of approximately €3 billion of cash
to additional value-creative initiatives. The current cycle of investments
in growth (R&I and capacity expansions) require cash outlays upfront.
But this will eventually strengthen our competitive position and lead to
higher earnings and cash flow once projects become operational
during the ongoing medium-term plan and beyond. We will ensure
there is effective competition for any discretionary capital that we allo-
cate to the most attractive growth projects that build on the competi-
tive advantages across our portfolio and deliver the most value to our
shareholders.
01 0302 04
Accelerating our growth engine Propelling our innovation
leadership
Expanding our share of sustainable
solutions
Creating value through capital
discipline
OUR STRATEGY
Four strategic pillars
Growth
Engine
Innovation
Leadership
Sustainable
Solutions
Capital
Discipline
EXTEND
Market leading
positions
PROPEL
Product
development to
new heights
EXPAND
Share of sales
from sustainable
solutions
DELIVER
Strengthening
ROCE over
the long term
INTRODUCING SYENSQO
SYENSQO 2023
_21
ANNUAL INTEGRATED REPORT
20_
Shaping the future and
advancing humanity
End-to-end value
creation
As explorers, we are passionate about the
possibilities science holds and eager to
push its boundaries to advance humanity.
While Syensqo may be a new company, we
are already taking advantage of some exci-
ting opportunities to collaborate with
partners and put this mission into action.
Syensqo’s core activities involve producing synthetic and natural
ingredients that meet our customers’ needs, and we aim to do this
using processes that minimize our impact on the environment.
PARTNERSHIPS
INTRODUCING SYENSQO
“WE HAVE A
160-YEAR LEGACY
OF PUSHING THE
LIMITS OF SCIENCE
FOR THE BENEFIT
OF SOCIETY. WE’VE
ALWAYS BELIEVED
IN BERTRAND
PICCARD’S
DREAMS AND
WANT TO MAKE
THEM COME
TRUE.”
Ilham Kadri,
Chief Executive Ofcer of
Syensqo
Pushing the limits of science and innovation with
Climate Impulse
— In February 2024, we announced that Syensqo will be the rst and
main technological partner for Climate Impulse, a non-stop, emis-
sion-free ight around the world in a hydrogen-powered plane. Led
by Swiss pilot and explorer Bertrand Piccard, the project aligns perfec-
tly with Syensqo’s core values and purpose, as explorers creating
breakthroughs that advance humanity.
The Climate Impulse project will change the landscape of sustai-
nable science and air travel. It marks a significant milestone in
Syensqo’s ongoing commitment to innovation and environmental
responsibility, positioning us as innovators and architects of a sustai-
nable world.
Over the next four years, we will work with Piccard, composite
engineer and co-pilot Raphaël Dinelli and their team to manufacture
the aircraft’s parts and conduct test ights. Many of our solutions will
be on board the plane, including composites for lightweighting, and
green hydrogen solutions for electrolyzers, fuel cells and safe storage.
Our businesses are involved both upstream in the value
chain, producing intermediate products, and downstream,
processing chemicals or producing formulations. We also
blend or transform products, developing tailor-made solutions that
offer more innovative features and bring added value for our
customers. Our surfactant and solvent formulations, and our compo-
site materials are good examples of this.
Gearing up for an electric future with the DS PENSKE
Formula E Team
— In January 2024, we announced a three-year collaboration with
leading Formula E team, DS PENSKE. The partnership is built on our
shared commitment to raising the bar in technology, innovation,
performance and sustainability, by advancing research and deve-
lopment in electric technology.
The Formula E championship aims to accelerate the world toward
an electric future and achieve sustainable human progress. Backed
by DS Automobiles, the DS PENSKE team is a key player in achieving
this mission. The team strives to bring its historic achievements on the
track to the open road and inspire a new generation of electric cars
– and Syensqo is proud to support this endeavor.
Renewing our strategic partnership with the Ellen
MacArthur Foundation
— Syensqo signed a three-year strategic partner agreement with the
Ellen MacArthur Foundation in early 2024, focused on advancing the
circularity and sustainability agenda in the chemical sector. This
agreement is a continuation of the previous partnership with Solvay
and underscores our commitment to transforming value chains into
circular business models.
2025
Aircraft parts manufactured
Aircraft parts assembly
2027
Test ights for Round the
World Record
Climate Impulse Flight Plan
2024
Adventure announcement
First aircraft parts
manufactured
2026
Test ights for Atlantic crossing
Permissions to y
2028
Round the World Record
ight attempt
(9-day ight)
Main inputs Businesses Intermediate
products
Production
of ingredients
Processing/
formulation
End markets
Raw materials
Minerals
Fossil-based
Renewable/recycled
Primary energy
Fossil (gas, solid, liquid)
Renewable/recycled
Secondary energy
Electricity
Heat
Cooling
MATERIALS
Automotive
and Aerospace
Consumer Goods,
Home and
Personal Care,
Healthcare
Resources and
Environment
Agro, Feed and
Food
Electronics
Building
Industrial
Applications
Specialty Polymers
Composite Materials
CONSUMER AND RESOURCES
Novecare
Technology Solutions
Special Chem
Aroma Performance
Oil & Gas Solutions
Fully involved Partially involved Core activity of the business
Involvement of businesses in production steps
OUR VALUE CHAIN
SYENSQO 2023
_23
ANNUAL INTEGRATED REPORT
22_
Customer-obsessed, engaged
and diverse
SYENSQO EXPLORERS
Jerry works at our Shanghai R&I
center. He set up and manages
the automation and robotics
lab there, helping to drive our
digital transformation. Made up
of diverse young talents, Jerry’s
team has created many new
tools and automation
platforms, which help us better
serve customers by
accelerating innovation and
reducing time to market.
Working with Syensqo’s lab
researchers, Jerry’s team
develops solutions that make
research easier, safer and
quicker. This includes
automating and robotizing
tasks like data analysis, and
using articial intelligence to
develop new approaches to
research. Examples include
creating a digital reactor to
automate chemical reactions in
one click and an end-to-end
digital solution for metal
treatment.
Jerry believes Syensqo’s
explorer mentality has changed
the way our researchers see
digital. “They now recognize
that adopting new, cutting-
edge technologies will help us
develop the solutions our
customers – and the world –
need,” he says.
Jef acts as Syensqo’s face, eyes and ears.
He works closely with aerospace and defense customers to ensure
the right product ends up in the right place and dedicates 100% of his
time to making sure they are happy. If customers have technical
questions, issues or ideas for new projects, it’s Jef they reach out to.
Regular visits allow him to develop a clear understanding of each
customer’s processes and people, and the issues they face. He
makes sure this information gets back to the right people at
Syensqo, so that we can develop or improve products to meet the
customer’s needs. Jef believes the creation of Syensqo will only help
to improve this customer relationship further.
“Listening is really important,” he says. “It’s how we work out what our
customers need and what could make their lives easier.” Jef is
involved in our Climate Impulse partnership with Bertrand Piccard
and applies the same principles here, working closely with the
people designing the plane to ensure they have the right materials
and parts to make this ground-breaking project a success.
Solomon is based in
Johannesburg, South Africa.
His role involves nding the best
way to serve our customers’
needs, while protecting
Syensqo’s best interests.
He sees himself as the link
between Syensqo and our
customers, serving as the voice
and face of Syensqo externally,
and of the customer internally.
“Syensqo’s sales teams are the
glue that brings our resources
together to meet customers’
needs,” says Solomon. For
example, when a global key
account needed to formulate a
new shampoo product on a
very tight deadline, the sales
team took the lead,
coordinating teams from
across the globe
to make this major project
a success.
Solomon sees salespeople
as natural explorers. Their job is
to go to new markets and
explore new opportunities, and
support customers in exploring
new ways of using our solutions.
The creation of Syensqo
will have a positive impact on
the way we serve our
customers, empowering us
to explore more.
In charge of R&I for our Novecare business,
Jean-Pierre translates Syensqo’s growth
ambition into innovation and research
projects, and leads a team of scientists
around the world who implement them.
Covering a wide variety of markets,
from agro to coatings, Novecare serves
many different customers, who all expect us
to help them solve the challenges they face
relating to performance and sustainability.
Jean-Pierre says the key to being successful
is having an in-depth understanding
of these challenges, as well as the solutions
our chemistries can offer. “Novecare’s
innovation model is very customer and
market driven,” he explains. “To meet our
customers’ needs we need to go beyond
conversations and be able to offer
practical solutions.”
Jean-Pierre believes Syensqo’s creation
will allow us to better focus our resources
and investments on elements that can
differentiate us from competitors.
This includes developing the sustainable
solutions our customers need, anticipating
future trends and challenges and making
the most of digitization.
Jerry-Peng Li,
Automation and Robotics Lab
Manager, Research and
Innovation /
Jef Delbroek,
Customer Engineer, Composite Materials /
Solomon Lamola,
Home and Personal Care
Distribution Manager for Africa,
Novecare /
Jean-Pierre Marchand,
Executive Vice-President for Research and
Innovation, Novecare /
“Syensqo’s
researchers are
explorers with an
eye on the future.”
“Listening is how we work out what our
customers need.”
“We need to speak to the customer
about our products in their language.”
“Syensqo wouldn’t
exist without
our customers.”
“We need to go beyond
conversations and
offer practical solutions.”
Based in Tokyo, Kiyomi manages
our relationship with one of Japan’s biggest
chemical companies.
She is also an ambassador for our X Factor
Employee Resource Group, which focuses
on attracting, retaining and enabling
women at Syensqo.
Kiyomi’s job is not only about selling
products, it’s about developing mutually-
benecial relationships with customers and
collaborating with colleagues internally to
meet the customer’s – and Syensqo’s –
needs. She believes Syensqo and Japanese
companies have complementary strengths
and leverages this in her work, combining
Syensqo’s production and manufacturing
capabilities with Japanese excellence in
customization.
For Kiyomi, the creation of Syensqo will have
a big impact on how we serve customers.
“Demand for high-performance polymers is
high, and there is a need for increased
capacity and quicker decisions,” she says.
She believes that as Syensqo we will be
better placed to meet these needs.
DeeDee started her Syensqo career in R&I,
developing new products for the automotive industry.
She moved into a more commercial role to be closer
to the customer.
Now globally responsible for marketing our products
for electric motors, DeeDee works with cross
functional teams in Syensqo to weave the value
proposition of our solutions into content that is
compelling for our customers.
“We need to make sure the customer understands
our value,” she says. This means talking to them
about our products, but in their language. She gives
the example of our Ajedium™ PEEK Slot Liners,
designed to replace a cheaper material with a more
than 50-year track record. “To persuade customers
to make the switch, we talk to them about how
Ajedium™ PEEK Slot Liners can help maximize
e-motor efciency and reduce costs, because this is
what matters to them,” she explains.
DeeDee sees the creation of Syensqo as a really
positive step in bringing us closer to customers. It will
accelerate a transition already underway in our
businesses, making us more agile and responsive in
meeting customers’ unmet needs.
Kiyomi Ando,
Key Account Manager, Specialty Polymers /
Dr. DeeDee Smith,
E-Mobility Market Manager, Specialty Polymers /
“Our new structure and focus
will make it easier to meet needs
for increased capacity and
quicker decisions.”
INTRODUCING SYENSQO
13,102
Employees,
112 Nationalities
~25%
Employees that hold shares
in Syensqo
~25%
Employees that are customer-
facing
ACCELERATING
INNOVATION
Syensqo was born out of a vision of innovation and growth, and a
dedication to making a meaningful impact in our industry and
communities. Building on a legacy of scientic exploration, disrup-
tion and innovation, we aspire to become the innovation leader in
our industry.
26 The global megatrends that
power our growth
33 Creating market-leading solutions that
support a more sustainable world
34 Specialty polymers
36 Composite materials
38 Consumer and Resources
40 The tools that drive our innovation
42 Interview with Mike Finelli
44 Battery materials
46 Green hydrogen
48 Renewable materials and
biotechnology
50 Thermoplastic composites
02
SYENSQO 2023
_25
ANNUAL INTEGRATED REPORT
24_
Summary
Investment in technologies that support the energy transition and
clean mobility, preserve our natural resources and improve the
quality of our lives is accelerating, as companies, governments and
consumers begin to adapt to the realities of a world that is consu-
ming beyond its means.
Syensqo’s portfolio of products and culture of innovation are fully
aligned with these megatrends, which will shape our society and
our planet, both now and in the decades to come. Collectively, they
provide a clear and long-term tailwind for our businesses, and will
serve to accelerate our growth.
The global megatrends
that power our growth
Facilitating the transition
to electric vehicles
ELECTRIFICATION
€25BN
Total addressable market for
Syensqo
~50%
Amount of electric or hybrid
vehicles in global production
by 2030
(Source: LMC Automotive)
>20%
CAGR in batteries between
2018 and 2030
(Source: World Material Forum)
>€400BN
OEM investment in EVs over
the next 10 years
(Source: OEM/company public
disclosures)
To achieve climate neutrality, we need electrication. The
transition from combustion engines to electric and hybrid
vehicles is a key part of many green stimulus packages.
China, the EU and several US states have all announced targets for
2035. And in response, many major original equipment manufactu-
rers (OEMs) have announced plans to shift to electric eets by 2030,
investing huge amounts in capacity and infrastructure to achieve
their goals.
All this, combined with a buoyant consumer electronics market, is
driving demand for batteries and investment in the green hydrogen
economy. Solutions are also needed to overcome some of the
challenges of electrication, such as security of supply for raw mate-
rials and adequate charging infrastructure, efcient battery recycling
and improved battery performance.
One area we are working to
improve in electric motors is
electrical insulation. Our
Ajedium
TM
PEEK lm offers lower
wall thickness, increased
copper slot ll and superior
thermal conductivity, which
enable signicant
improvements in e-motor
efciency. This material can
replace incumbent solutions,
and offers additional benets,
such as the potential to
downsize and reduce the
weight of the electric motor.
In 2023, Ajedium™ PEEK was
named runner-up in the Altair
Enlighten Award’s Future of
Lightweighting category.
It has been proven to enable
a potential mass reduction
of 12kg in the battery pack and
4kg in the e-motor of EVs,
compared to the weight of
systems made using traditional
materials.
Product prole: Ajedium™ PEEK
SYENSQO OFFER
Our solutions are used in applications such as e-motors,
battery cells and modules and charging infrastructure.
Battery materials:
Our PVDF suspension solutions help
batteries perform better. We are also the European
front-runner in developing solid-state battery technology,
which will improve safety and performance in the future.
With plants in every major region, we can support
customers globally and locally.
Specialty polymers:
Our advanced materials for e-motors,
power electronics and battery packs enable OEMs to
improve the energy efciency, system integration, safety
and sustainability of e-mobility applications.
Technology solutions:
Our metal-specic extractants,
especially the CYANEX® range, optimize the extraction and
purication of critical battery metals from end-of-life
electric vehicle batteries, transforming them into high-
purity raw materials to be used in new batteries.
Green hydrogen:
The solutions we are developing are a
key lever for decarbonizing hard-to-abate sectors. We
focus on improving system durability, efciency and total
cost of ownership, to help customers improve the viability
and scalability of green hydrogen technologies. Used
within electrolyzers, fuel cells and other facets of hydrogen
systems, our products and solutions support leading
hydrogen technology platforms.
SYENSQO 2023
ACCELERATING INNOVATION _27
ANNUAL INTEGRATED REPORT
26_
CASE STUDY
SYENSQO 2023
ACCELERATING INNOVATION _29
ANNUAL INTEGRATED REPORT
28_
Solutions that help to lower
emissions
LIGHTWEIGHTING
>€10BN
Total addressable market for
Syensqo
-7.6G/KM
Carbon emissions for every
100kg weight reduction
(Source: International
Organization of Motor Vehicle
Manufacturers)
+7.3%
CAGR in lightweight
automotive materials by 2025
(Source: International
Organization of Motor Vehicle
Manufacturers)
Lightweighting lowers CO
2
emissions and enables more
efcient use of natural resources. In the aviation industry,
where fuel consumption accounts for the majority of emis-
sions and 20-40% of operating costs, lightweighting improves sustai-
nability and competitiveness, while in the automotive industry, redu-
cing the weight of a vehicle by 10% can lead to 6-8% better fuel
economy.
To be effective, lightweight materials need to be sustainable and
recyclable, exhibit high mechanical properties and enable fast
production cycles and easy part integration. One option is to replace
metal with lightweight plastic alternatives. Depending on the applica-
tion, these also offer design flexibility, improved safety, enhanced
durability and lower maintenance costs. A wide variety of customized
and modular products are now possible, and with the rise of electric
vehicles and increasing momentum in aviation there are many new
opportunities to use these adapted materials.
Our CYCOM® range provides
solutions for the most technically
challenging composite
applications, enabling the
development of light, safe and
fuel-efcient aircraft. Developed
to address a range of high-
performance needs, CYCOM®
boasts the largest number of
products qualied on
commercial and defense
aircraft programs, providing
manufacturers with different
options to support aircraft
assembly that help to reduce
weight and save costs. CYCOM
EP2190®, for example, is a
lightweight thermoset
composite that can be used in
wing and fuselage applications.
This incredibly tough epoxy-
based system is available in
thick and thin structures, and
offers excellent performance in
all environments, while also
meeting customer demands for
increased production rates and
improved manufacturing
efciency.
Product prole: CYCOM EP2190®
SYENSQO OFFER
Our solutions help OEMs adapt to the growing EV market and
respond to demand for lightweight parts elsewhere.
Specialty polymers: Our range of extremely lightweight polymers
can be used to replace heavy metal parts in automotive and
aerospace applications, offering the same strength and often
increased resistance to corrosion and extreme temperatures.
They can also help improve engine efciency.
Composites: Our thermoset composites offer unique benets for
aerodynamics, design, part integration and corrosion resistance.
Some specic thermoset composites for high-volume
automotive applications also provide superior ame retardancy
in EV battery enclosures.
Thermoplastic composites (TPCs): These durable, chemical-
and corrosion-resistant, lightweight and recyclable materials
offer high build rates for mass production. They combine our
broad specialty polymers portfolio with our composite material
technologies expertise, providing solutions in aerospace,
automotive and energy transition.
Energy industry solutions: Lightweight, and chemical- and
corrosion-resistant, our composites and polymers can replace
metal. Our high-performance pipe systems are quicker and
cheaper to install, and have a lower total expenditure cost and
carbon footprint.
Solutions that enable efcient
use of resources
RESOURCE EFFICIENCY
>€50BN
Total addressable market for
Syensqo
X6
Lithium supply by 2030
(Source: World Material Forum)
X5
Copper demand for batteries
from 2021-2030
(Source: Bloomberg NEF)
50%
Consumers ready to pay more
for a product designed to be
reused or recycled
(Source: Accenture 2019)
The urgent search for resource-efcient solutions is driven
by many factors. They include air, soil and water pollution,
the growing pressure on biodiversity and the ever-increa-
sing importance of reducing CO
2
emissions and shifting to a net-zero
economy. This has inspired increased industrial innovation, which has
benets for the planet while also ensuring that businesses remain
competitive.
Manufacturers are now actively looking for solutions that enable
efcient use of resources. This includes using modular design and
lightweighting, as well as transitioning to manufacturing methods
that incorporate recycling and circular economy principles.
Syensqo is the leading reagent
solutions provider for the mining
industry, offering extractants
that improve operational
productivity and yield for nickel,
cobalt, copper, lithium, rare
earths, gold, silver and other
metals.
To support demand for electric
vehicle battery materials, we
developed CYANEX® 936P. This
highly effective and efcient
lithium extractant enables a
continuous lithium production
process within hours, regardless
of weather conditions, as
compared to the 18 months
needed for techniques such as
natural evaporation and
precipitation, resulting in a
more cost-effective process.
Lithium solvent extraction
requires a fraction of the
surface area that natural
evaporation ponds demand,
and involves a low CO
2
footprint
and non-water-intensive
process.
Our CYANEX® range also
supports recovery of other
critical EV battery metals, such
as nickel and cobalt, both
through primary mining and
recovery of metals from spent
lithium-ion batteries. Recycling
will help meet future demand
for battery metals, which
cannot be met by primary
mining alone, by enabling a
circular approach to the
production of EV and other
batteries. It will also help solve
problems associated with
traditional battery recycling,
which is both costly and highly
polluting.
Product prole: CYANEX® 936P
SYENSQO OFFER
Syensqo offers leading technologies to many markets where the
need to improve resource efciency is a key driver, such as
mining and packaging.
Digitization of mines: Our unique methodology makes it
easier for customers to optimize their operations using
digitization. This enables them to increase mineral recovery. In
addition, we offer a broad range of solvent extractants that
can be used for the purication and concentration of metals.
Polymers: These are used to manufacture food packaging
that can be safely reused and recycled. Our polymers are also
found in lter bags and membranes, used to treat gases
emitted by multiple industries.
CASE STUDY
CASE STUDY
SYENSQO 2023
_31
ANNUAL INTEGRATED REPORT
30_ ACCELERATING INNOVATION
Embracing the wellness
trend
SUSTAINABLE SOURCING
>€10BN
Total addressable market for
Syensqo
+5.7%
CAGR in waterborne coatings
by 2025
(Source: internal research)
+3.1%
CAGR in organic shampoos
through 2025
(Source: internal research)
$19.5BN
Market for agricultural
biologicals by 2031
(Source: IDTechX)
The wellness trend has led to increasing consumer demand
for organic, natural and environmentally friendly products.
This demand is likely to strengthen as consumers become
more aware of the impact of products on health and the environ-
ment. Manufacturers have responded to this, and increasingly strict
emissions restrictions, by embracing and accelerating trends related
to naturalness, sustainability, carbon neutrality and ethical sourcing.
Chemical companies are increasingly investing in the biospace
to accommodate this. Syensqo’s renewable materials and biotech-
nology growth platform, for example, is designed to enable the adop-
tion of renewable carbon, biotechnology and biodegradable solu-
tions, speeding up the transition toward a more sustainable and
circular portfolio, while providing customers with the sustainably
sourced solutions they need.
The guar plant is an abundant
and renewable resource that
grows in arid and dry
environments. The inner part of
the plant is extracted to provide
galactomannan, a large
polymeric molecule with high
molecular weight, which we can
use to design new molecules,
including polymers in our
Naternal™ range.
We source guar through our
Sustainable Guar Initiative
(SGI), which aims to improve
the lives of guar farmers in
India. Our Naternal™ HP-8 COS
SGI, for example, is part of the
SGI program. This
biodegradable thickening
polymer can be used in
beauty formulas that claim
naturalness, biodegradability
or ethical sourcing. It is used in
various formulas, including
shampoos, body washes, hair
conditioners and hair
treatments, helping to build
viscosity and improve the
stability of the formula, while
also providing effective care
and conditioning for hair
and skin.
Product prole: Naternal™
HP-8 COS SGI
SYENSQO OFFER
Syensqo is a market leader in several bio-based ingredients,
and is developing a sustainable and circular portfolio that
responds to our customers’ needs.
Bio-based ingredients: We are a top producer of natural
vanillin, bio-sourced from rice bran, and over the coming years
we will enhance our capabilities to develop natural ingredients
for the food, avors and fragrance markets. We are also the
world leader in the chemical modication of guar, used in the
agro and nutrition, and home and personal care markets.
Waterborne coating solutions: These solutions address the
challenges of adhesion to difcult substrates and overall
durability, while complying with ever-stricter regulations. We
are also developing new coating monomers with increased
durability and sustainability.
Polyphthalamide (PPA): This material, used for demanding
electrical and electronic applications in e-mobility, is made
from non-food competing bio-based sources. This ensures a
reduced environmental impact, without compromising on
material performance.
Addressing the challenges of
a growing population
IMPROVING QUALITY OF LIFE
10BN
Projected world population
by 2050
(Source: FAO: Global agriculture
toward 2050)
+70%
In food output needed to feed a
population of 9.1 billion
(Source: IDTechX)
$19.5BN
Market for agricultural
biologicals by 2031
(Source: Fresenius 2030 vision)
+6%
Patients needing kidney
replacement therapy per year
(Source: Fresenius 2030 vision)
The Covid-19 pandemic exposed the limits of global health-
care systems and led to increased consumer awareness of
mental and physical well-being. But with the world’s popu-
lation projected to reach 9 billion in 2037
1
, pressure on the environ-
ment, food sources, scarce natural resources such as water and
public services is set to increase, threatening quality of life.
Managing this will require constant improvements in healthcare
and hygiene, as well as solutions to ensure adequate food and water
supplies and restore biodiversity. For industry, this means creating
products that can help address these challenges, while also acting
responsibly, by addressing climate change, social inequality and
diminishing biodiversity, and improving quality of life for the commu-
nities they impact.
1. United Nations Report, World population prospects 2022.
Agrochemical formulators
are developing more complex
and safer formulations for pest
control and disease prevention.
However, choosing
co-formulants, particularly
solvents, which are used to
solubilize active ingredients
in formulations, is difcult
because they need to solubilize
increasingly complex
formulations, while being
environmentally friendly
and not subject to regulation.
Syensqo’s portfolio of green
solvents offer superior
performance and are
non-(eco)toxic, bio-sourced
or circular. Our Rhodiasolv®
green solvents can be used
instead of toxic solvents, such
as NMP and aromatics, and
work with Emulsiable
Concentrate (EC) agricultural
formulations. And our
innovative articial intelligence
tool can be used to suggest the
best green solvents to solubilize
active ingredients.
Product prole: Rhodiasolv®
green solvents
SYENSQO OFFER
Syensqo is a leader in hemodialysis technologies, green solvents
and crop protection solutions.
Agro solutions: Our solutions cover crop protection, plant
nutrition and grain and seed care, encouraging more
sustainable agricultural practices. We also offer solutions to
enable digitization and development of equipment.
Smartphone polymers: These are used in internal electronic
and structural applications in the most advanced wearable
devices, used by consumers to monitor health and well-being.
Specialty polymers for healthcare: Our high-performance,
biocompatible polymers are used for hemodialysis
membranes, our biomaterials enhance functional
performance of implantable devices and our Actizone™
technology provides reliable, long-lasting disinfection.
Water treatment: Our materials, chemicals and solutions
products are used across the value chain to treat industrial,
municipal, drinking, ground and fresh water. We offer
sustainable, cost-effective solutions that help meet society’s
growing need for clean water.
CASE STUDY
CASE STUDY
Syensqo offers the most differentiated portfolio of technologies
in our industry and we are a leader in our markets. As a pure special-
ties company, supported by a culture of innovation that is fully
aligned with the megatrends shaping our society and planet,
we are now structurally positioned to outgrow our markets, by
providing our customers with vital technologies that help advance
humanity.
Syensqo’s innovative, value-creating and market-leading
solutions are designed to support a more sustainable world.
They are grouped into two business segments:
Materials: an industry leader in advanced materials that provides
customers with new solutions to solve critical performance and envi-
ronmental challenges.
Consumer and Resources: a market leader providing specialty
ingredients focused on more natural and sustainable solutions, able
to anticipate rapidly evolving customer needs.
Syensqo’s separation from Solvay is allowing us to maximize oppor-
tunities in both segments. Our Materials businesses will benet from
increased investments in capacity, innovation and commercial capa-
bilities, which will support above-market organic growth, superior
returns and industry-leading margins. Our Consumer and Resources
businesses are now well positioned to drive the consumer industry
toward bio-based, natural, circular and resource-efcient solutions,
leveraging our portfolio of innovative solutions and application exper-
tise to drive above-market growth at strong returns.
As specialty businesses with a common approach to their markets
and a shared obsession for customers, the two business segments
complement each other well. Both will share digital systems designed
to help us better serve our customers and innovate faster. And while
our Materials segment has high capital intensity, long product life
cycles, high barriers to entry and a value proposition that presents
attractive margins, our Consumer and Resources businesses offer
shorter time to market and demand much less capital.
Perhaps most importantly, both business segments focus on inno-
vation-led growth that is fully aligned with the key megatrends driving
our markets. Collectively these trends will provide a clear and long-
term tailwind for all our businesses, serving to accelerate our growth.
Syensqo sales by end market
(% of Group sales)
SYENSQO 2023ANNUAL INTEGRATED REPORT
32_
Enabling developments
in digital
ADVANCED CONNECTIVITY
>€50BN
Total addressable market for
Syensqo
$84BN
Sales of consumer electronics
devices by 2030
(Source: Digitimes)
$144.2BN
Estimated global automotive
semiconductor market value
by 2030
(Source: TechInsights)
+24%
CAGR in the augmented and
virtual reality industry by 2032
(Source: IDTechX)
ACCELERATING INNOVATION
Developments in digital technologies continue to generate
disruptive new business models. And as technology
becomes ever more integrated into our daily lives, this
phenomenon is unlikely to lose momentum any time soon. Driving the
market are key trends like growing demand for hyper-connectivity,
the rapid expansion of 5G and the exponential growth of data.
At the same time, there is also a need for sustainably-made
components that consume less energy and enable the diverse form
factors that make up our interconnected world. A foldable 5G smart-
phone, for example, relies on the most advanced semiconductor
chips and on high-performance polymers that meet electrical and
mechanical requirements.
Swyft-Ply™ is a new Syensqo
brand that allows electronic
and smart device
manufacturers to reduce the
weight and thickness of their
devices, to enable advanced
connectivity. The brand name
refers to the lightweight, strong
and fast-curing nature of our
composites (“Swyft”) and the
use of multiple layers of
material in the construction of a
composite part (“ply”).
Swyft-Ply™ is a composite
product line, offering solutions
that can be used to develop or
manufacture parts for phones,
tablets, Internet of Things (IoT),
augmented and virtual reality
devices and other similar
products that can benet from
the structural, design,
lightweighting and functional
attributes of composite
materials. Some of these
functional attributes include
dielectric properties, thermal
conductivity and the possibility
of integration with other
materials using overmolding.
Product prole: Swyft-Ply™
We offer advanced materials for the manufacture of premium
smart devices and leading edge semiconductor chips, which
help respond to the need for precision performance and
improved sustainability footprint.
Smart devices: Our specialty materials for smartphones span
our specialty polymer and composite portfolios. These help
facilitate the design freedom needed for making
new-generation smart devices, which need to be lightweight,
exceptionally robust and sustainably made, while meeting
precise electrical, thermal and ammability performance
requirements.
Semiconductor consumables: These solutions, based on
high-purity materials, are uniquely suited for high temperature
and chemically-resistant applications. They ensure a clean
and controlled environment for manufacture and assembly of
semiconductor chips.
Solutions for the future: The high chemical and temperature
resistance and mechanical strength of our advanced
materials will prove increasingly benecial as we transition to
the more demanding material performance required for chip
miniaturization and enabling innovation in new electronics
devices.
_33
Creating market-leading
solutions that support
a more sustainable world
SYENSQO OFFER
Automotive 16%
Aerospace 15%
Electronics 10%
Building 5%
Agro, Feed & Food 10%
Consumer centric* 13%
Resources & Environment 17%
Industrial Applications 14%
*HPC, Healthcare, consumer goods
CASE STUDY
SYENSQO 2023
ACCELERATING INNOVATION _35
ANNUAL INTEGRATED REPORT
34_
Life solutions:
Materials that are used to save lives
Our life solutions offer focuses on healthcare-related segments and
water purification. In both areas, there is a long-term trend toward
using our materials. Within healthcare, for example, we have a long
track record of double GDP growth, which we fully expect to continue
into the future. We supply dialysis equipment manufacturers with a
sulfone polymer and work closely with them to continually improve our
offer, ensuring better long-term survival rates and improved quality of
life for patients. Long-term growth is driven by an aging population and
increasing treatment numbers.
Transportation:
Driving the transition to electric vehicles
Nearly half our electric vehicle revenues come from applications other
than batteries, such as e-motors, power electronics, battery compo-
nents outside the cell, cooling systems and charging applications.
Examples include Syensqo’s PEEK, which can be used to insulate
e-motor magnet wire and as secondary insulation as a slot liner.
Together, Syensqo’s PEEK magnet wire and slot liner solutions can
improve e-motor efciency of up to 2%, which can lead to a reduction
in motor weight of up to 11%, while also improving power. Polymers used
in battery components enable further weight reduction, while providing
superior protection against battery res and facilitating functional inte-
gration.
Our enduring collaboration with Bosch exemplies this. What once
centered around materials for combustion engine emission control
systems has evolved into a dynamic partnership focusing on materials
for electric motors and e-axles – a shift that underscores our collective
commitment to driving sustainable mobility forward. This collaboration
goes beyond transportation to other industries, showing our commit-
ment to innovation and mutual growth.
SPECIALTY POLYMERS
A unique portfolio
of high-performance
polymers
Syensqo’s Specialty Polymers global
business unit (GBU) offers the widest range
of high-performance polymers in the world.
With unparalleled expertise in aromatic
polymers, high-barrier polymers and uoro-
polymers, we can create tailor-made solu-
tions for our customers.
Our specialty polymers are used in applications where other
polymers cannot provide the performance standard
needed. We offer the lowest total cost of ownership and our
portfolio is supported by best-in-class technical service and extensive
R&I competencies, with nearly 1,000 chemists, physicists and engineers
working with our customers to provide leading-edge service in target
segments. This combination of great support and high-performance
products means we can solve problems that no one else can.
We focus on three key growth markets that are supported by
megatrends: advanced connectivity in electronics, electrication and
lightweighting in transportation and quality of life in the life solutions
market. In all three areas, sustainability and circularity are critically
important. Our outstanding track record combined with our pipeline of
projects and customer-driven investments will drive growth far into the
future, giving us a clear, organic growth-driven path toward creating a
€5 billion business by 2030.
Electronics:
A strategic relationship with the world’s
largest chip supplier
Our relationship with the world’s largest semiconductor manufacturer,
TSMC, has transformed over the last ve years. Through a new engage-
ment model, we work directly with TSMC to drive material specication
and innovation along the value chain. We have rapidly built our
business from one product family to five major product lines sold
globally, by partnering with TSMC to identify new solutions that address
yield, performance and sustainability specications. Our business with
TSMC now focuses on strategically supporting their most advanced
nodes, providing opportunities for growth both now and in the future. In
2023, TSMC awarded us a certicate of appreciation, recognizing the
strength of our partnership and our excellence in materials supply and
technical consultation.
~90%
Advanced semiconductor chips enabled
using Syensqo materials
~€1BN
Syensqo revenue generated in the
automotive industry
>65%
Dialysis patients in North America and Europe using
cartridges containing Syensqo materials
Unique capabilities to create value for customers
Broadest portfolio of high-performance
polymers
Full suite of extensive
solutions
Across fast-growing
end markets
Battery
Healthcare
Environment
Semicon.
Automotive
Building
Construction
Consumer
Goods
Electronics
Surface properties
Lightweighting
Chemical resistance
Broad range of
temperature
Electrical conductivity
Heat resistance
Commodities Engineered
plastics
Specialty
Polymers
SYENSQO 2023
ACCELERATING INNOVATION _37
ANNUAL INTEGRATED REPORT
36_
Defense:
A segment that will continue to grow
Defense is the second largest market segment for our Composite
Materials business. Our material solutions are used in a wide variety of
applications, from fighter jets to helicopters to Unmanned Aerial
Vehicles (UAVs) and more. Syensqo is a leader in this space, as
demonstrated by the presence of our materials in all major defense
programs. Our technology solutions and our understanding of the
specic requirements of this market will enable Syensqo to continue
growing our presence and leadership in the defense market segment.
Advanced Air Mobility:
New opportunities for growth
Composites offer a very strong value proposition for the growing
Advanced Air Mobility (AAM) sector. They serve as an enabler for
lightweighting, which is critical to the success of electric aviation as it
will help deliver longer range and greater payload to these types of
aircraft. Syensqo’s potential for innovation in this space is signicant,
and we also have the ability to help our AAM customers in the material
qualication and certication process of these vehicles. We have key
partnerships and collaborations with players who will help revolutionize
the future of mobility in a sustainable way, while providing signicant
growth potential.
COMPOSITE MATERIALS
A top-tier supplier
in a fast-growing
market
Syensqo’s Composite Materials GBU is a
top-tier supplier of advanced composites,
adhesives and surfacing materials to
the aerospace industry. Our expertise in
material formulation, design and applica-
tion and process engineering allows us to
deliver optimal solutions that address our
customers’ need for high performance,
lightweighting, improved aerodynamics
and lower total costs.
Over the next decades, the composite materials market will
experience intense growth, fueled by new and existing
programs and applications with current and new customers.
Syensqo’s technology and innovation capabilities in composite mate-
rials are present in all market segments within the aerospace and
defense, automotive and other industries.
Through our composite and bonding solutions we have established
very strong relationships with customers over decades, in many fast-
growing industries. Our customers rely on our product portfolio, innova-
tion capabilities and highly specialized technical support to enable
lightweighting in high-performance applications. We work in
partnership with customers from the design phase all the way to certi-
cation, and ultimately to industrialization. Our products are developed
to meet very specic requirements and specications to address a
wide variety of application needs.
Commercial:
Syensqo products in every part of
the plane
The commercial aerospace market is our largest segment, accounting
for approximately 60% of our business. Within this market, large
commercial transport is the most prominent segment, with more than
24,000 aircraft active today. Over the next two decades, the replace-
ment of existing aircraft and new growth means another 40,000 aircraft
are expected to enter into service.
Composites will continue to be a key and growing enabler to meet
the fuel efciency targets set by the industry. Modern twin-aisle aircraft,
for example, like the Boeing 787 and the Airbus A350, use a high content
of composites, making them around 20% lighter than the traditional
aluminum construction and enabling them to use about 20% less fuel
than comparable aircraft. A key advantage composites have over
other materials is that they can deliver lightweighting improvements in
both aerostructures and propulsion, while also enabling aerodynamic
improvements. As an established player in the aviation industry, this
represents a signicant opportunity for growth. Syensqo is a trusted,
valued and prominent supplier in this industry, providing solutions that
have a place in every part of the aircraft.
X10
Expected growth in aerospace
market by 2050
50
Syensqo products used in the F35
combat aircraft
X10
Estimated growth of carbon materials
market size by 2050
Enhancing performance all over the aircraft
Primary structures
Engines
Interiors & Galleys
Secondary structures
Our products
Thermoset composites
Thermoplastic
composites
Adhesives & surfacing
Specialty polymers
SYENSQO 2023
ACCELERATING INNOVATION _39
ANNUAL INTEGRATED REPORT
38_
Agro:
Accelerating the transition to
sustainable agriculture
Trends shaping the agrochemical industry include the need to reduce
environmental impact by expanding sustainable farming practices
and reducing carbon footprint, a growing focus on pest resistance
issues and different regulations that are accelerating change. By
working closely with leading agrochemical companies to improve crop
yields and enable the transition to more sustainable agricultural prac-
tices, Syensqo’s portfolio of solutions is helping to overcome these
challenges.
Our green solvents enable the best efcacy in the eld, offering high
solubility performance while reducing environmental impact. In seed
care, our Peridiam® microplastic-free seed coatings meet various
needs, with solutions tailored to different crops and market require-
ments. They offer the seed industry safer and better-performing solu-
tions that are more respectful of the environment.
Mining Chemicals:
Helping meet demand for critical metals
Demand for certain critical metals is growing, driven by the move
toward electrication, as well as operational and sustainability issues.
Syensqo is a leader in this area and our businesses have been serving
mining companies for over a century. Our technical service, combined
with tailored solutions, has led to long-term customer partnerships
based on trust with all the leading mining companies. In the mineral
processing segment, for example, we support the otation process,
which is one of the industry’s leading separation techniques. Our
AEROPHINE® otation agents help mines extract maximum value from
every metric ton of ore processed, improving efciency while offering
an improved safety prole compared to alternative chemistries.
1. The Mass Balance (MB) approach tracks the sustainability of a product through
the whole value chain, driving the industry toward adopting critical environmental
best practices.
CONSUMER AND RESOURCES
A broad portfolio
of common technology
platforms to fuel
sustainable growth
Our diverse Consumer and Resources
businesses serve attractive end markets,
and are driven by secular and sustainability
trends. These businesses leverage our core
technology platforms – like surfactants,
monomers, polymers and green solvents –
and our unique formulation and application
capabilities, to deliver value-added solu-
tions for our customers that enhance their
processes and formulations. Customers rely
on our solutions to maximize performance
properties, yield and efciency while minimi-
zing environmental impact.
We hold leadership positions across our key markets, and
continue to upgrade and expand our portfolio of differen-
tiated technologies and formulation capabilities. With exible
and multipurpose manufacturing sites spread across the world, we are
well placed to anticipate and respond to our customers’ needs.
Our Consumer and Resources businesses include:
Novecare: a global leader in specialty chemicals, offering high-per-
forming, differentiated solutions across the agrochemical, home and
beauty care, coatings and industrial markets.
Aroma Performance: a leading global producer of diphenols and
the world’s largest producer of vanillin for the food, flavors and
fragrances industries.
Technology Solutions: a global leader in specialty mining reagents,
phosphine-based chemistry and solutions for polymer stabilization.
Oil and Gas Solutions: offering a wide product portfolio in the
upstream oileld chemicals sector aimed at improving efciency
and protecting resources.
Home and Beauty Care:
Helping our customers respond to
consumer demand
Performance and sustainability demands drive the fast-moving home
and beauty care markets. As a leader in hair care and cleansing solu-
tions, our customers count on us to help them design high quality and
eco-conscious products, and ensure compliance with increasingly
strict regulations. These trends are leading to the introduction of more
bio-based solutions and new technologies, as well as signicant refor-
mulation opportunities, helping to transform the entire value chain
toward more responsible sourcing practices. Our Sustainable Guar
Initiative and our bio-based, biodegradable polymers – the Naternal™
range – are great examples of this.
We also offer solutions that can help our customers reduce their
product carbon footprint. Our fully circular Mirataine® CBS UP, for
example, is a high-foaming surfactant derived from coconut fatty
acids. It is commonly used in premium quality shampoos, skin clean-
sers and high-foaming bath and toiletry products. Based on 100%
circular raw materials according to the mass balance
1
principle, it
offers a signicantly reduced net CO
2
footprint in comparison to our
standard Mirataine® CBS.
-33%
Net CO
2
footprint of Mirataine® CBS UP compared
to standard Mirataine® CBS
2-3X
Syensqo agro solutions projected growth
vs. market
~5%
Expected growth per year in Syensqo
mining solutions sales
Leadership positions across markets
1. Leadership is equivalent to Top 3 market position.
Food, Flavor
& Fragrances
Synthetic vanillin
EU natural vanillin
1
Agro
Crop protection
Green solvents
Home
& Personal Care
Natural hair care
conditioning polymers
Mild cleansing
solutions
Mining
Mineral processing
Metal extraction
Coatings
Binders
Performance
additives
SYENSQO 2023
_41
ANNUAL INTEGRATED REPORT
40_
The tools that drive
our innovation
Syensqo’s businesses are already widely recognized by our
customers as leaders in material and consumer technologies. As an
independent company, we are now able to intensify our focus on
customer-driven innovation, investing in the talents, resources and
research projects that will deliver added value for our customers.
With 15% of our people working in R&I, we can count on a talented and
diverse team of explorers to create best-in-class technologies that
will solve our customers’ sustainability challenges and enable the
transition to a carbon-neutral world.
Our innovation strategy is supported by our four growth plat-
forms, each of which contributes to the decarbonization of
our planet. Focused on key business trends, such as electri-
cation, lightweighting and resource efciency, and set up to serve our
customers as efciently as possible, the platforms offer a combined
market opportunity of over €10 billion by 2030, complementing and
amplifying the growth opportunities being generated by our GBUs.
Open innovation: Syensqo Ventures and our
partnerships with academia
— Syensqo Ventures is our venture capital fund. We use it to expand
customer relationships and innovation activities by investing in early-
stage startups that address major human challenges associated with
resource scarcity, climate change and quality of life. The startups we
invest in are all aligned with the work we do as a company, meaning
that they benet not only from our nancial investment, but also from
the innovation expertise and resources we can share. This also benets
Syensqo, by providing opportunities for collaboration, innovation and
growth acceleration within our own businesses.
We launched a series of internal panel discussions in 2023, designed
to foster connections between our businesses and startups, identify
potential business opportunities and encourage the development of
an entrepreneurial mindset at Syensqo. Strengthening the relationship
between our businesses and the startups we invest in will help us make
the most out of our investment partnerships.
New Syensqo Ventures investments in 2023 include:
Compact Membrane Systems (CMS): This US company has deve-
loped a unique membrane-based separation technology that can
capture CO
2
at the scale and cost needed to decarbonize hard-to-
abate industries. Syensqo’s specialty polymers have the potential to
provide the durability, performance and form factor required to
support CMS’ CO
2
capture solution. This investment is part of our
efforts to invest in sustainable solutions enabled by specialty
polymers, and grow our offering and expertise in decarbonization
technologies. We invested alongside Chevron, Technip Energies and
PTT Global Chemical, creating a strong group of corporations that
span the supply chain and who can support CMS in their research
and development and commercialization efforts.
Genesis Consortium: Through the consortium, we support startups
in SOSV’s IndieBio startup development program, which holds a port-
folio of early-stage, venture-backed companies with ties to key
Syensqo markets, including agritech, food, bio-based materials and
personal care. This investment supports our consumer and
resources businesses and our renewable materials and biotechno-
logy growth platform, providing them with early access to technolo-
gy and partnership opportunities. For example, in December 2023, we
invested directly in Bioeutectics – an investment that was sourced
through our Genesis partnership. Bioeutectics is developing a new
class of natural green solvents that are biodegradable, high perfor-
ming, non-toxic and low cost, and which have many applications,
aligned with Syensqo’s core markets.
In addition to our Syensqo Ventures activities, we continue to rein-
force our partnerships with key institutes and universities worldwide.
These partnerships help us to explore potential new technologies in
core strategic areas of development and to develop our capabilities.
In 2023, we signed a new partnership in the United States with Ginkgo
Bioworks, in the eld of biotechnology, helping to establish Syensqo as
a key player in this very active eld. In Europe, we reinforced our various
existing partnerships, while also signing a collaboration agreement with
the European Organization for Nuclear Research (CERN) to promote
science, technology, engineering and mathematics (STEM) education.
And in China, we signed comprehensive agreements on scholarships,
training for outstanding students and upstream research programs in
the eld of simulation and catalysis with two of the most prominent
universities: Fudan University and East China University of Science and
Technology.
Developing products that are safe and
sustainable by design
— Our safe and sustainable by design (SSbD) initiative is designed to
put safety and sustainability at the heart of Syensqo’s innovation
process. The initiative involves a mindset change that will transform the
way we develop new products and solutions, with benefits for our
businesses, customers, the environment and society in general.
The SSbD approach involves integrating safety and sustainability
assessments into product development from the very start of the inno-
vation process. This will allow us to prioritize innovation projects that will
help the industry develop safer, circular and sustainable solutions, by
substituting or minimizing the use of substances of concern , minimi-
zing impact on climate and the environment and enabling change in
R&I processes. It builds on, and will reinforce, our innovative Sustainable
Portfolio Management approach, which we use to assess the sustaina-
bility of our business, including our projects and investments.
Our SSbD initiative brings us in line with thinking at EU and global
levels. The EU Chemicals Strategy for Sustainability, which is part of the
EU Green Deal, encourages European companies to lead the transition
to a SSbD approach, for the benet of society and European business.
The World Business Council for Sustainable Development (WBCSD),
chaired by our CEO Ilham Kadri, echoes this call to action, encouraging
all members to raise their safety and sustainability ambitions to future-
proof their businesses.
20.7%
Vitality Index
>1,800
patent families of which
>600 led less than 5 years ago
5%
annual R&I spend on sales
ACCELERATING INNOVATION
15%
workforce in R&I
SYENSQO 2023
_43
ANNUAL INTEGRATED REPORT
42_
INTERVIEW
Intensifying our
innovation-focused culture
In conversation with Mike Finelli, Chief Technology and Innovation Ofcer (CTIO)
“INNOVATION IS AT
THE HEART OF
OUR STRATEGY: IT
WILL FUEL OUR
GROWTH AND
ACCELERATE
VALUE CREATION.”
Mike Finelli,
Chief Technology and
Innovation Ofcer
binders have very high adhesion, which makes them the best for
high-energy, high-performance batteries. They are currently used to
help solve range anxiety in today’s Generation 2 and 3 batteries. We
continue to expand our capacity, while introducing new electrolytes
and solvents to help manage higher voltages and temperature
cycles. Having invested in Europe’s rst sulde pilot plant, we’re also
ahead of the game in the development of materials for Generation 4,
or “solid state”, batteries. With the industry regionalizing, North America
is set to become the fastest-growing market in the next 10 years, and
our partnership with Orbia to develop the largest PVDF plant in the
region will allow us to take advantage of this growth area.
What about the other platforms?
M.F. — For thermoplastic composites, the focus is on enabling decar-
bonization in three industries: energy, aerospace and mobility. Having
invested heavily in our capabilities and capacity over the past few
years, we have positioned ourselves as a development partner for our
customers, with state-of-the-art labs where we can create tailor-
made products that meet their exact needs.
Green hydrogen is a huge market, with huge opportunities for
growth, as the only way that humanity will reach carbon neutrality by
2050 is by developing a green hydrogen economy. Today, there are
two main ways to make green hydrogen and we are the only
company in the world that has materials that can go in both types of
membrane.
Last but not least, we have our renewable materials and biotech-
nology platform. We only launched this last year, but we’ve already
made progress, signing a strategic partnership with Ginkgo Bioworks
to investigate new biopolymers, acquiring a former Zymergen lab in
the US and building a multi-purpose microbiology lab at our R&I
center in France.
What drives innovation at Syensqo?
M.F. — Two key factors drive innovation at Syensqo. The first is our
obsession with providing customers with the solutions they need. This
is about using our customer-centric organization to understand the
challenges our customers face so that we can provide them with the
tailored solutions they need. It’s an approach that allows us to build
long-lasting relationships that create long-term value for everyone.
The second is the megatrends, such as lightweighting, electri-
cation and advanced connectivity, that are driving our customers’
end markets, and will shape our society and our planet for decades to
come. These disruptive trends, which our portfolio of technologies is
ideally placed to leverage, will bring signicant opportunities across
markets, fueling our innovation pipeline and growth. Around 80% of
our innovation pipeline is based on sustainable solutions. Our north
star is bringing innovations to market that will help us, our customers
and end consumers to decarbonize the planet.
How will Syensqo use innovation to fuel growth?
M.F. — Our growth platforms, combined with continued innovation
and growth in our GBUs, will make the difference here. Aligned with key
megatrends that contribute to the decarbonization of our planet, they
offer huge opportunities for growth. They also bring us closer to our
customers, helping us to identify the areas in which future innovation
would bring most value. About 22% of the overall Syensqo R&I budget
is allocated to our platforms and our overall investment in R&I is now
four times the amount it was just a few years ago. This gives us the
scope to invest heavily in blockbuster innovation projects that will
transform our portfolio and generate the revenue we need to conti-
nue investing in similar projects – and fuel growth – in the future. Our
ambition is to not only be the innovation leader in our markets, but to
set the innovation benchmark for the industry.
Does Syensqo have the relevant capabilities
to meet its ambitions and deliver on its innovation
strategy?
M.F. — To meet our goals, we’re developing our capabilities and tech-
nologies in three main areas. First, we’re investing in new capabilities,
recruiting new talents in biotechnology and making sure we have the
digital talents and tools we need to transform the way we do research.
Second, we’re expanding our geographical footprint so that we’re
better able to respond to demand and grow our businesses, particu-
larly in China. Our new application development lab in Shanghai, for
example, will help us respond to growing customer demand for
tailored high-performance material solutions in China, while the
recently-inaugurated research building in our Shanghai Technology
Park will help us address fast-evolving market needs and accelerate
innovation for future-shaping sustainable solutions. And third, we
continue to develop our open innovation activities, through external
partnerships with academic institutions and startups, and through
our venture capital fund, Syensqo Ventures.
Where do we stand on electric vehicle
battery materials?
M.F. — We are a leader in lithium-ion battery materials and we’re
developing a product portfolio that will enable the battery technology
of the future. Our roadmap is aligned with the roadmaps of our
customers, enabling us to offer them the solutions they need, when
they need them and make the most of growth opportunities. Our PVDF
Four growth platforms to fuel
our innovation
Our four strategic growth
platforms play an important
role in the decarbonization of
our planet. Focused on battery
materials, thermoplastic
composites, green hydrogen
and renewable materials and
biotechnology, the platforms
are aligned with the needs of
our customers and support key
megatrends, such as
electrication, lightweighting,
sustainable mobility and
resource efciency. They drive
our innovation agenda,
allowing us to get closer to our
customers and better
understand the challenges they
face. Our diverse portfolio
includes technologies at
different stages of
development, fully aligned with
industry roadmaps.
ACCELERATING INNOVATION
FOCUS
SYENSQO 2023
_45
ANNUAL INTEGRATED REPORT
44_
BATTERY MATERIALS
Addressing the key
challenges
of the battery industry
The electric vehicle is at the center of huma-
nity’s fourth energy transition, driving the
electrification – and decarbonization – of
our society. Changing consumer prefe-
rences and increasing environmental regu-
lations, among other factors, have inspired
an acceleration in EV production. And as a
consequence demand for lithium-ion EV
batteries is growing.
Syensqo enjoys a strong relationship with the automotive
industry, built on a 30-year history of supplying original
equipment manufacturers and their Tier 1 suppliers with the
solutions they need. As a leader in lithium-ion battery materials, with a
product portfolio designed to enable the battery technology of the
future, we are well placed to capitalize on the electrication megatrend
through our battery materials growth platform.
An innovation roadmap aligned with
industry needs
— Syensqo’s research and innovation priorities are aligned with the
current and future needs of the battery industry. This means we will be
able to provide our customers with the technologies they need, when
they need them, helping them to overcome challenges relating to
energy density, safety, cost, weight, sustainability and security of supply.
Our PVDF binders are used in the Generation 2 batteries found in EVs
today. Our Solef® PVDF provides superior adhesion, which allows
battery makers to add more active ingredients in the cathode. This
increases the energy density of the battery, extending driving range.
Generation 3 batteries are now on the market and will become
increasingly common in the next three to ve years. They offer impro-
ved energy density, which will increase range and decrease char-
ging times. To safely manage the higher voltages and temperatures
this requires, these batteries need new solvents and electrolyte salts,
such as our Energain® solvent for electrolytes, which can be used in
high manganese cathodes and very high nickel cathodes, and our
LiFSI electrolyte salts.
Generation 4, or solid state, batteries will appear on the market
toward the end of the decade, offering improved performance and
safety. As sulfide is the leading technology for solid electrolytes,
Syensqo has invested in Europe’s rst pilot plant for sulde chemistry.
In addition, our Solgain™ technology, a solid lm based on PVDF with
an encapsulated electrolyte, offers easy-to-scale “semi-solid” solu-
tions that can provide a bridge to full industrialization of all solid state
batteries (ASSB).
Investing in technology and capacity
to secure future growth
— PVDF is needed in Generation 2 and 3 batteries, and in some formu-
lations of Generation 4. We are therefore investing heavily in increasing
PVDF production capacity at key regional sites. These investments
ensure we are able to respond to increased global demand, at a local
level, and extend our leadership position in the global lithium-ion
battery market.
Europe: In 2022, we invested €300 million in our Tavaux site in
France to more than double the existing production capacity of our
high-performance polymer Solef® PVDF, making it the largest PVDF
production site in Europe. We expect the increased capacity to be
operational in 2025.
Asia: We doubled PVDF production capacity at our Changshu site in
China in 2022.
North America: In 2023, we nalized a joint venture agreement with
Orbia to create the largest suspension-grade PVDF production faci-
lity in North America.
In addition, we are investing in the materials needed for future genera-
tions of batteries. This includes next-generation solvents and electrolyte
salts, such as Energain® and LiFSI, for Generation 3 batteries, and our
state-of-the-art sulfide pilot unit in La Rochelle, France, which will
enable us to scale up development of advanced inorganic materials
for solid electrolytes used in Generation 4 batteries.
Syensqo is a member of the Important Project of Common European
Interest (IPCEI) initiative on batteries, funded by several EU Member
States. Through this, we have secured a sizable amount in subsidies
from France, Belgium and Italy to fund and support innovation from
research up to rst industrial units for advanced battery materials.
Going beyond battery materials
— With our extensive and proprietary range of high-performance
polymers and innovative compounds, we are able to work with our
customers to meet their most critical needs. For batteries, this means
helping to make them safer, more powerful, longer lasting and lower
cost. We offer material solutions for all four main components of Li-Ion
battery cells: the cathode, the anode, the electrolyte and the separator.
We also provide solutions for other areas of the battery, including
battery cases, packs and recycling. Our thermoplastic composite tech-
nology, for example, is used to make battery enclosures. It reduces the
weight of the battery enclosure by 25% compared to aluminum, and
40% compared to steel. It also makes the battery safer, while still
allowing for all battery components to be easily integrated.
With more than half of US car
sales expected to be electric by
2030, demand for lithium-ion
batteries – and the PVDF
needed to make them – is
increasing. Our Joint Venture
with Orbia will ll a supply gap,
taking advantage of favorable
regulatory conditions
promoting regional production
and material security to
establish a robust, secure and
local PVDF supply chain.
Orbia offers a secure supply of
the critical minerals and
intermediate materials needed
to manufacture PVDF, such as
hydrouoric acid, vinyl chloride
monomer (VCM) and chlorine.
As a global leader in PVDF,
Syensqo brings process
technology and unparalleled
market know-how to the
venture. By combining Orbia’s
material assets and production
expertise with our own Solef®
PVDF innovations, we will create
the largest PVDF plant in North
America and be able to provide
a secure supply of PVDF in the
region that optimizes energy
storage efciency by increasing
the energy density, safety and
power of EV batteries.
The total Syensqo investment is
expected to be funded in part
by a grant of $178 million
awarded by the US Department
of Energy, which will be used by
Syensqo to build a facility in
Augusta, Georgia. The Joint
Venture involves two plants, one
for raw materials and the other
for nished products.
Partnering with Orbia to meet
increasing demand for PVDF in North
America
CASE STUDY #1
CASE STUDY #2
FOCUS
In March 2023, Syensqo’s Battery Enclosure Materials
Automation (BEMA) project won major funding from Innovate UK,
part of the United Kingdom’s national innovation agency, UK
Research and Innovation. Collaborating with Airborne, a technology
leader in automated and digitalized advanced composite
manufacturing, our aim is to develop an all-composite solution for
energy-efcient battery packs.
The project has already received letters of support from Jaguar Land
Rover and Vertical Aerospace. Both companies recognized the great
potential of the design in creating more compact and lightweight
enclosures for high-energy batteries in the electric cars and aircraft
of the future. They also recognized the sustainability credentials of
the project, which aims to reuse composite waste.
Collaborating with Airborne
to create more compact and lightweight
enclosures for high-energy batteries
ACCELERATING INNOVATION
Electrifying mobility
Li-ion batteries
2015 2040s
Gen. 2: 150 - 180 Wh/kg Gen. 3: 180 - 320 Wh/kg
Leading supplier of PVDF for cathode binders
Electrolyte & ingredient solutions (Energain® & LiFSI)
Solid state batteries
2028
Gen. 4: 300 - 500 Wh/kg
New inorganic conductors for solid state
batteries
“AS A GLOBAL LEADER IN
LITHIUM-ION BATTERY BINDERS,
WE SET THE INDUSTRY STANDARD,
OFFERING PRODUCTS THAT EXCEL
IN ADHESION, PROCESSABILITY
AND DURABILITY.”
Marco Avataneo,
Head of Battery Application Development
€6BN
Market opportunity by 2030
Syensqo has developed strong relationships with leading
EV battery producers, working with them to develop solutions that
will accelerate the shift to e-mobility and a more sustainable way of
life. In 2023, we were one of seven companies to receive an award
from Panasonic Energy, in recognition of our contribution to business
management in the production of batteries for electric vehicles.
ANNUAL INTEGRATED REPORT
46_
Enabling the transition
to a green hydrogen
economy
Over the coming decades, hydrogen will
disrupt the balance of geopolitical power,
as countries that currently play no role in the
energy economy become major exporters
of energy in the form of hydrogen. As of
January 2023, more than a thousand
hydrogen projects had been announced
worldwide, with governments racing to
partner with key industry players to build the
infrastructure they need to develop a green
hydrogen economy.
It is impossible to reach the target of net-zero carbon emis-
sions by 2050 without green hydrogen – and the key to trans-
forming it into the green energy solution of the future is
chemistry. While conventional hydrogen is produced from fossil fuels,
green hydrogen is produced entirely from renewable energy. It can
therefore be used both to decarbonize the existing hydrogen economy
and in new applications, such as clean mobility. It also has a key role to
play in the decarbonization of hard-to-abate sectors, such as heavy-
duty transportation, and emissions-intensive industries, like steel
manufacturing.
Technologies that enable all areas of
the green hydrogen economy
— With relevant products and solutions all along the green hydrogen
value chain, our ambition is to be a leading material solutions provider
for the green hydrogen economy. Our green hydrogen platform brings
together all of our innovative material and chemical solutions and
competencies, concentrating our resources and efforts in one place to
better serve and advise customers across industries, globally.
The hydrogen economy is made up of three main components:
production, transportation and storage and consumption in fuel cells.
Syensqo has technologies that enable all three areas:
Hydrogen production: We are developing and producing critical
materials for use in the membranes that split the water molecule
(H
2
O) into hydrogen and oxygen. The two primary technologies used
are alkaline electrolyzers and proton exchange (PEM) electrolyzers.
Syensqo is the only company in the world that produces polymers for
membrane materials for both technologies. This part of our business
is doubling every year and we are expanding quickly to keep up with
demand.
Transportation and storage: We are working on solutions for storing
green hydrogen in vehicles. Using our high performance polymers
and thermoplastic composite technology, we will enable production
of high pressure storage tanks that can be produced at high build
rates and are recyclable.
Consumption: This is where hydrogen is recombined with oxygen to
create water and generate electricity to power a truck, for example,
completing the cycle from water to water. Green hydrogen can also
be used as a compound for fertilizers, as a reduction agent for steel
production and as fuel to produce heat, among other things.
Syensqo offers a unique portfolio of advanced solutions that goes
beyond ionomers for the membrane and binder, such as high
performance polymers for other critical parts of the fuel cell stack.
Speeding up the transition to a green
hydrogen economy
— We have significantly increased the resources dedicated to the
emerging green hydrogen market, particularly in research and innova-
tion. Our innovation efforts focus on improving system durability, ef-
ciency and total cost of ownership to help our customers improve the
viability and scalability of green hydrogen technology.
We have teams located across continents, from the Americas, to
Europe, to Asia. With a global reach and local presence, our focus is on
building intimacy with our customers along the value chain and
co-developing solutions tailored to their unique requirements. Our new
R&I building in Syensqo’s Shanghai Technology Park, for example, which
was inaugurated in 2023, will help us to expand our competencies and
foster collaboration with customers and innovation partners, allowing
us to better serve the green hydrogen sector in China.
Syensqo’s commitment to this growth industry is demonstrated by
our membership in the Hydrogen Council, a global CEO-led initiative
that brings together leading companies with a united vision and long-
term ambition to make green hydrogen a catalyst for the clean energy
transition.
GREEN HYDROGEN
SYENSQO 2023
ACCELERATING INNOVATION
Polymers for core and balance of stack
Our solutions: uoro-ionomers, e.g.
Aquivion®, and sulfone polymers, e.g. Radel®
and Udel®
Polymers for H
2
storage vessels
Our solutions: specialty polymers
Polymers for core, balance of stack and
H
2
storage vessels
Our solutions: uoro-ionomers, e.g.
Aquivion®, and sulfone/sulde polymers,
e.g. Radel®, Udel® and Ryton®, and other
specialty polymers
Enabling carbon neutrality with green hydrogen
H
2
Production
(PEM & alkaline electrolyzers)
H
2
Transportation & Storage
(Composite tanks)
H
2
Consumption
(PEM fuel cells)
Industrial
Electrolyzers
Fuel cells
Gas grid
Mobility
Power
Résidential
“WE HAVE BEEN BENEFITING FROM
SYENSQO’S AQUIVION PRODUCT
PERFORMANCES FOR MORE THAN
15 YEARS AND ARE COMMITTED
TO PURSUE THE COLLABORATION
ON THIS STRATEGIC COMPONENT OF
THE HYDROGEN REVOLUTION.
WE TRUST IN SYENSQO’S CAPABILITY
TO BRING THIS PRODUCT INTO
A SUSTAINABLE FUTURE.”
Holger Dziallas, President of Greenerity
_47
€2BN
Market opportunity by 2030
Enabling carbon neutral
and circular solutions
across our businesses
With consumers increasingly prioritizing
wellness and quality of life, demand for
natural, sustainable, organic and carbon-
neutral products is growing. Through our
renewable materials and biotechnology
growth platform, we aim to provide a range
of customers with the innovative and circu-
lar solutions they need to meet this demand.
This includes formulations for agro and
personal care, solutions for food and avors
and advanced materials for transportation
and aerospace.
RENEWABLE MATERIALS AND BIOTECHNOLOGY
SYENSQO 2023
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ANNUAL INTEGRATED REPORT
48_ ACCELERATING INNOVATION
Syensqo is already a market leader in several bio-based
products, including guar, bio-sourced solvents and natural
vanillin. We also enjoy strong links with customers and exter-
nal innovation partners. This ensures we are well placed to leverage the
enormous innovation potential that biotechnology presents. By blen-
ding science and sustainability, our growth platform will enable the
adoption of renewable carbon, biotechnology and biodegradable
solutions, speeding up our transition toward a more sustainable and
circular portfolio that reects the needs of our customers – and the
planet.
Meeting growing demand for sustainable
and circular solutions
— To meet customer needs, we aim to embed circularity in all areas of
the value chain. Our objective is to enable €500 million in new business
revenues by 2030, based on the following three pillars:
Renewable carbon: By using sustainable and renewable feedstocks
to develop more environmentally friendly, natural and circular
products, we aim to signicantly increase the share of renewable
carbon in our product offering. Syensqo has joined Biochem Europe
(Cec) and the Renewable Carbon Initiative (RCI) to strengthen our
participation in the bio-economy, paving the way for new product
innovations in this field. Our objective here is to generate new
business revenues from sales of products enabled by renewable
feedstocks, such as guar, natural vanillin and bio-sourced solvents.
Biotechnology: We aim to expand our customer base through new
businesses enabled by biotechnology. These disruptive transforma-
tion technologies use enzymes or micro-organisms to transform
feedstocks, such as crops, waste and CO
2
, into valuable molecules.
Our acquisition of the former Zymergen biotech lab and the establi-
shment of a strategic partnership with Ginkgo Bioworks are impor-
tant steps in this journey.
End-of-life management: Developing technologies that are biode-
gradable by design will enable us to manage the end-of-life of our
products and move toward zero environmental pollution. This will
allow us and our customers to better adapt to evolving regulations,
such as the EU Green Deal or the EU Chemicals Strategy for
Sustainability. Our new microbiology lab in Lyon, France will enhance
our ability to develop and test our novel biodegradable solutions
Fueling innovation through strategic alliances
— Through open innovation and strategic alliances, we intend to build
new growth businesses that will benet multiple markets, including
agro and personal care, food and flavors and transportation and
aerospace. Our collaboration with Ginkgo Bioworks and our acquisition
of a former Zymergen lab in the US are good examples of progress
made in this area in 2023, allowing us to improve our competencies
and strengthen our position in the biotech industry.
Expanding our capabilities and competencies
— In addition to acquiring the Ginkgo lab, Syensqo is investing in the
construction of a world-class, multipurpose microbiology lab at our site
in Lyon, France. Expected to be operational by late 2024, this lab will
increase our biodegradability and toxicity testing capabilities. This will
enable innovation in consumer applications while improving customer
service and expanding our expertise. The lab will house state-of-the-art
biodegradation, human and environmental toxicity screening tools
that will enable an innovation process that ensures our products are
safe and sustainable by design.
As a leading supplier of specialty ingredients that improve perfor-
mance in the agrochemical and home and personal care markets, we
are already actively engaged in addressing the key challenges these
markets face in delivering zero-pollution products. The new lab will
allow us to accelerate efforts in this area, building new competencies
and capabilities, and strengthening our ability to develop breakthrough
solutions that are biodegradable-by-design.
€1.5BN
Market opportunity by 2030
Supporting circularity with biotechnology
Focus on three key areas:
01
Focus on the origin
Increase the content of sustainable
renewable carbon
02
Focus on the end-of-life
Develop biodegradable-by-design
technologies
03
Transforming feedstock into valuable molecules
through biotechnology:
Microbes
(bacteria, yeasts)
Enzymes
Sugars
Lignin
Fatty acids
CO
2
Biogas
Proteins
Monomers
Polymers
Solvents
Surfactants
Transforming the way we do chemistry
through biotechnology
In the next 15-20 years,
biotechnology will completely
change the way we produce
chemicals. In a traditional
chemical plant, there are often
a dozen steps with many
complex operations covering
50-100 acres of land. Using
biotechnology, we can
signicantly reduce the number
of steps and the amount of
space required, as most of the
chemistry is carried out inside a
microorganism within one large
warehouse. In addition, by using
microorganisms to do the
chemistry, biotechnology has
the potential to create new
chemical structures that cannot
be created with conventional
chemistry, converting
renewable feedstocks into
sustainable solutions that
preserve natural resources and
support the transition to a
carbon-neutral future. For
example, we can use
biotechnology to turn sugars or
waste oils into new classes of
biosurfactants, which are
bio-based, biodegradable and
signicantly less carbon
intensive.
In April 2023, we announced a multi-year strategic collaboration
with Ginkgo Bioworks, which is building the world’s leading platform
for cell programming and biosecurity. The partnership aims
to unlock the power of synthetic biology to create more sustainable
and environmentally-friendly chemicals and materials. We will focus
rst on accelerating development of new and sustainable
biopolymers, which have the potential to impact a number of
markets, from home and personal care to agriculture and food. As
part of the alliance, Syensqo has also acquired a Ginkgo (formerly
Zymergen) lab in Cambridge, Massachusetts. This will expand our
R&I footprint in the US, provide access to new talents and establish a
growth base for synthetic biology in one of the most important
biotech hubs in the world, accelerating Syensqo’s biotechnology
development plan.
Partnering with Ginkgo Bioworks
>10%
CAGR in natural vanillin by 2024
“WITH THE EXPANSION OF
OUR FOOTPRINT TO THE MOST
IMPORTANT BIOTECH HUB IN THE
US, AND THE ESTABLISHMENT OF
A STRATEGIC PARTNERSHIP WITH
GINKGO TO DEVELOP NEW
BIOPOLYMERS, SYENSQO HAS
SENT A CLEAR MESSAGE ABOUT
THE IMPORTANCE
BIOTECHNOLOGY WILL PLAY IN
OUR FUTURE GROWTH.”
Thomas Canova, Head of Renewable Materials and
Biotechnology Growth Platform.
$19.5BN
Market for agricultural
biologicals by 2031
CASE STUDY #1
CASE STUDY #2
€1BN
Market opportunity by 2030
SYENSQO 2023
_51
ANNUAL INTEGRATED REPORT
50_ ACCELERATING INNOVATION
THERMOPLASTIC COMPOSITES
Enabling lightweighting
through our
TPC platform
Thermoplastic composites (TPC) are
strong, chemically resistant and lightweight
materials that can be used as a replace-
ment for metal. They are a critical techno-
logy enabler, providing customers across
many industries with a solution that helps
them meet challenging lightweighting,
strength and build rate targets, at lower
total cost of ownership.
Over the past few years, Syensqo has invested in stepping up
our installed capacities and creating state-of-the-art TPC
laboratories, while also establishing strong strategic collabo-
rations with partners and customers. The world-class infrastructure
and unique end-to-end innovation approach we have developed,
combined with our unmatched historical expertise in composite and
specialty polymer technology, makes us an important development
partner for customers in several markets.
A unique position in the TPC industry
— Offering the broadest portfolio of specialty polymers and composite
processing technologies, Syensqo is unique. We enjoy a leadership
position in end-to-end technology, which we use to better serve our
customers. Our TPCs can be used as a replacement for metal in some
of the most demanding applications. They offer three benets that
address our customers’ main challenges:
Reducing carbon emissions through lightweighting: With our tech-
nology, customers can make parts that are 40-50% lighter than steel
or aluminum yet provide the same or better performance.
High build rates: TPC enables automation and a simplied produc-
tion process, which allows a range of different industries to achieve
challenging production rates. Our customers can form parts in just a
few minutes and re-form them as needed, which makes TPCs ideal
for high-volume applications and enables big savings for our
customers.
Recyclability: TPCs are inherently recyclable at the end of their life
cycle because of the high-performance thermoplastic resins we use
to create them.
A critical technology enabler in three
key markets
— TPC is a critical technology enabler in many markets. We focus our
efforts on three areas in particular – aerospace and advanced air
mobility (AAM), clean energy and automotive.
Enabling higher build rates in aerospace and AAM
TPC helps the aviation industry address one of its biggest challenges:
the need for higher build rates. High-volume production rates for TPC
are around 5-10 times faster than for other technologies, and TPC also
makes aerospace products lighter, safer, stronger and more fuel and
cost efcient. The main applications for TPCs in aircraft are in structures
such as clips, brackets and stiffeners. In AAMs they play a vital role in
reducing weight in areas like the main body and wings.
In 2021, we joined forces with aerospace, defense and security tech-
nology company Leonardo to facilitate broader adoption of TPCs by
the aerospace industry. Our joint lab, based in Syensqo’s Material
Science Application Center in Brussels and the Leonardo Lab in
Grottaglie, Italy, focuses on composite materials and production
processes critical for the future of the aerospace industry.
“Our joint lab agreement has been renewed and a new collaboration
program on the assessment of TPC solutions for high rate aerostructu-
ral part manufacturing has now begun,” says Salvatore Rino Scervo,
Senior Vice President Innovation Labs & IP, Leonardo SpA. “The main
focus of this program is next generation VTOL (vertical take-off and
landing) aircraft and larger-scale TPC aerostructures. By combining
the complementary skill sets of Syensqo and Leonardo, we are boos-
ting our innovation ability and reducing the time to market.”
In April 2023, we renewed our collaboration agreement with global
company GKN Aerospace, aimed at expanding the use of TPC mate-
rials in aerospace structures. We are building a joint TPC roadmap to
explore new materials and manufacturing processes for aerospace
structures and targeting future strategic high build rate programs for
commercial aviation and AAM.
“We are delighted to renew our agreement with Syensqo,” says Arnt
Offringa, Director Global Technology Center Netherlands, GKN
Aerospace. “Lightweight technologies will play a key role in the journey
to more sustainable aviation and working together has strengthened
our technology leadership in thermoplastic innovation. Collaboration
will be vital as we continue to push the boundaries of technology in
order to meet our sustainability targets.”
Enabling clean energy through decarbonization
and better performance
The energy sector requires solutions that facilitate the transition to
cleaner energy. Syensqo provides TPC solutions across the full spec-
trum of energy sources, focusing on two main areas:
1. Making current energy sources more efcient and sustainable:
TPC pipes can be used as a more sustainable replacement for steel
pipes in the energy industry. Offshore and onshore risers and exible
pipes using thermoplastic composites don’t require corrosion or
corrosion-related maintenance, are affordable and easy to install,
and offer a 30% weight reduction and a 40% lower carbon footprint
in comparison to steel.
2. Developing solutions for sustainable energy sources: We work with
energy companies to help them develop clean energy solutions. The
broad chemical resistance of TPC pipes means that they can enable
future opportunities in offshore hydrogen and other sustainable
energy applications.
Syensqo has been working with Baker Hughes, one of the world’s largest
energy technology companies, for decades to replace metal with
advanced materials. Our solutions are helping them to decarbonize
their activities and facilitate cleaner energy production.
“Syensqo’s advanced material innovation capabilities, along with its
focus on partnering with end users, are a critical enabler in supporting
Baker Hughes in taking energy forward: making it safer, cleaner
and more efficient for people and the planet,” says Domenico
Di Giambattista, Vice President for Flexible Pipe Systems, Baker Hughes.
Enabling lightweighting and improved performance
in automotive
TPCs offer exibility, high throughput, functional integration and recy-
clability, providing solutions to some of the main challenges faced by
the automotive industry. Our single step process also reduces the total
cost of ownership, which is critical in high-volume auto applications.
Among the solutions we offer are structural functional parts that enable
the e-motor revolution. This includes our PEEK rotor sleeves, developed
in collaboration with Trelleborg Sealing Solutions, which help to increase
e-motor performance. Other ongoing projects include working on an
application that will allow us to replace a part made from 22 welded
steel parts with one piece of TPC, overmolded with one of our specialty
polymers.
Investing in state-of-the-art infrastructure
— Our TPC growth platform brings end-to-end innovation – from mole-
cules to composites – under one roof. This allows us to collaborate with
customers from concept to commercial application, providing support
in early-stage design, prototyping and testing of parts, and drastically
reducing the time to market of our materials.
Syensqo’s product development center in Alpharetta, Georgia, in the
US, is unique. It’s the only facility in the world where it is possible to
produce a new experimental high-performance polymer, use that
polymer to create unidirectional composite tapes and then test the
new material’s performance in relation to the customer’s needs
without walking further than 100 meters.
At our Material Science Application Center (MSAC) in Brussels,
Belgium, we have prototyping capabilities that allow us to design and
produce a customer part and then test it all in the same building. We
can do this on large-scale parts, up to one meter squared.
Thermoplastic Composites: Lighter, Faster, Stronger
Aerospace & AAM Scaling manufacturing processes
Energy Design exibility and more efcient solutions
Automotive Higher electric motor efciency and power density
“OUR TPC GROWTH PLATFORM
IS A TRUE INNOVATION JOURNEY:
PARTNERING WITH OUR
CUSTOMERS FROM START TO
FINISH, CO-INNOVATING AND
CO-DEVELOPING NEW PRODUCTS,
NEW APPLICATIONS, AND
OFTENTIMES PIONEERING NEW
PROCESSES.”
Fabrizio Ponte,
TPC Platform Director
OUR SUSTAINABILITY
AMBITION
Sustainable business is not just the right thing to do; it is fundamen-
tal to everything we do. Through our sustainability ambitions, we
drive more environmentally friendly solutions to our customers and
make our own operations more sustainable. We also aim to design
solutions for a better and more equitable life, for employees and
across the value chain.
54 A sustainability commitment aligned
with our growth strategy
55 One Planet: Sustainable growth
58 One Planet: Climate
64 One Planet: Better life
68 Engaging with stakeholders
03
SYENSQO 2023
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ANNUAL INTEGRATED REPORT
52_
Summary
Our sustainability commitment, which encompasses the environ-
ment, business and society, is a top priority for all our stakeholders.
It is an integral part of our values and helps us to provide sustai-
nable solutions to our customers.
A sustainability
commitment aligned with
our growth strategy
ONE PLANET: SUSTAINABLE GROWTH
Reinventing the way we
do chemistry
Our sustainability commitments are inte-
grated into our growth strategy and the
way we do business. Eighty-ve percent of
our research and innovation projects are
considered sustainable solutions, based on
our Sustainable Portfolio Management
framework, and our top-line growth will
increasingly be driven by these sustainable
solutions and circularity. This will mean
providing our customers with the low envi-
ronmental impact and renewable-based
solutions they need to make their own
operations and products more sustainable,
for the benefit of our own business, our
customers’ businesses and the planet.
Our circular approach to chemistry involves reinventing the
way we have traditionally manufactured products – from
sourcing to end of life. Our new target of 18% circular sales by
2030 represents a 50% growth, reecting our ambition in this area - in
absolute revenue (Euros) it will double our circular sales by 2030. In
2023, 13% of Syensqo’s sales were generated by products that enable
durability or are based on renewable raw materials or energy
2
.
Demand for our natural and biodegradable portfolio is increasing in
consumer markets in particular, but also in materials markets, where
the focus is on renewable raw materials, such as those offered in our
Specialty Polymers ECHO portfolio. In addition to the ongoing work of
our Global Business Units, our renewable materials and biotechnology
growth platform, launched in 2022, will play a key role in accelerating
our efforts to embed circularity and sustainability into our businesses.
Naternal™: biodegradable-by-design beauty care
— In 2023, we launched Naternal™, our new brand of bio-based biode-
gradable polymers for biodegradable-by-design hair and skin care
solutions. The brand embraces the concept of regenerative beauty,
going beyond sustainability to provide a product that is positive for
both the planet and mankind. This means caring for every stakeholder
in the value chain, from the planet and farming communities to brands
and consumers.
SYENSQO 2023
_55
ANNUAL INTEGRATED REPORT
54_
Climate Sustainable growth Better life
Carbon neutral
Scope 1 and 2 by 2040
Sustainable solutions driven
by circularity
Aim for zero
4
Safety: reportable injuries and
illness rate (RIIR)
-40%
Scope 1 and 2
1
by 2030
18%
Circular sales by 2030
3
Gender parity
5
By 2033
-23%
Focus 5 categories
of Scope 3
2
by 2030
Living wage
to 100% of workforce
By 2026
Our One Planet goals
Baseline 2021
Enabling our customers to do better
1. Total emissions from Syensqo
operations.
2. Emissions upstream and
downstream in the value chain
(suppliers and customers).
The Focus 5 categories are:
(1) purchased goods and services
and (2) fuel-and energy-related
activities (both upstream),
(3) processing of sold products,
(4) use of sold products and
(5) end-of-life treatment of sold
products (all downstream).
3. The Syensqo KPI “share of sales
of product contributing to the
circular economy” is calculated by
adding: sales of products
increasing durability in the use
phase downstream in the value
chain, sales of products based on
recycled or renewable materials
(85%) and renewable energy (15%)
and sales of products enabling
recycling at the end of life
downstream in the value chain.
4. Number of work-related injuries
and illnesses (employees and
contractors) resulting from an
accident with severity above rst
aid, according to US OSHA 29 CFR
1904, per 200,000 work hours.
5. Mid and senior management.
6. Assuming a market share of 30%
for Syensqo in the total CO
2
savings from eet electrication in
the world.
7. Includes Scopes 1 and 2 GHG
emissions and targeted areas of
Scope 3 emissions.
Catalyst for lightweighting
UP TO 20%
lower fuel consumption and
CO
2
emissions in aviation
Critical enabler of electrication
100 KT
of CO
2
reduction per day
6
Champion in decarbonization
>20%
CO
2
emissions reductions
achieved
7
across value chain
since 2018
Promoter of clean beauty
>80%
of hair and skin care products
derived from natural origin
>80%
of innovation pipeline focused
on sustainable solutions
OUR SUSTAINABILITY AMBITION
Our One Planet sustainability roadmap helps pave the way
to better growth for us all. Building on the results we achieved
with Solvay in 2023, we have adopted a much more ambi-
tious approach that sees us target climate neutrality in all our
businesses by 2040. It is structured around three pillars: climate, sustai-
nable growth and better life.
SYENSQO 2023
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ANNUAL INTEGRATED REPORT
56_
Syensqo is a global leader in naturally-derived polymers for beauty
care formulations. Our Naternal™ range brings together all our biode-
gradable beauty care polymers, including guar and other natural
feedstocks. These products are aligned with the biodegradable-by-
design approach, which aims to integrate end-of-life management
into the early stages of research, ensuring that product development is
driven by both application and end-of-life performance.
Over the next few years, we plan to add new solutions and chemis-
tries to our Naternal™ range. This effort will be supported by our
renewable materials and biotechnology growth platform, which
focuses research and innovation on using renewable feedstocks and
biotechnology to develop innovative, safe and sustainable solutions.
UP: home and beauty care solutions that protect the
environment without compromising on performance
— As consumer trends shift and the market moves toward natural and
circular materials, beauty and detergent companies must switch to
more sustainable feedstocks. However, this switch is technically
challenging due to the lack of direct replacements and the limited
availability of natural feedstocks.
To address this, Syensqo launched our UP range: circular mass
balance
3
solutions that utilize upcycled circular raw materials. They
offer identical performance to traditional fossil-feedstock-based alter-
natives, but with two key advantages: a signicantly lower CO
2
footprint
and an overall positive impact on environmental aspects, such as land
use and water consumption. And as the nal product specications are
exactly the same as their fossil-feedstock-based counterparts, our UP
range can be used as “drop-in” replacements. Our Mirataine® CBS UP,
for example, is used in several key home and beauty care applications,
such as hand, dish and body washes and can be used as a direct
replacement for its fossil-feedstock-based equivalent.
Setting the standard in sustainable
guar farming
— Guar gum can be used as a thickening agent, stabilizer and binder
in various industries. Made from the guar bean, a legume that is culti-
vated in the semi-arid regions of northern India, it’s a renewable
resource that helps us respond to growing customer demand for
natural, sustainable and circular solutions. However, as industrial
demand for guar has grown, environmental challenges have also
emerged. The Sustainable Guar Initiative (SGI), which we set up along-
side L’Oréal and international NGO TechnoServe in 2015, aims to
address these issues, by ensuring higher and fairer prices for farmers,
and encouraging better and more sustainable agricultural practices.
The program also offers training and education programs in domains
such as water management and nutrition, and aims to empower
women farmers, through training focused on hygiene, health, nutrition
and digital literacy.
In 2023, the SGI launched an agroforestry pilot project, with the aim
of introducing farmers to more regenerative farming practices, provi-
ding cover for guar, and capturing and storing CO
2
. Twenty-ve agro-
forestry plots were planted in 2023, and the plan is to scale it up to one
million trees in the next three years, once we develop an appropriate
model. This work comes in addition to the establishment of four
community plantations and two silvi pasture units – amounting to
69,000 trees planted in total – which have signicantly increased guar
cover, and improved soil quality and access to fodder grass.
About 12,500 farmers – 3,500 of which are women – across 60
villages in Rajasthan are now covered by the SGI. International compa-
nies Henkel and Procter & Gamble joined in 2017 and 2022 respectively,
and negotiations are ongoing to develop new partnerships, including
for new markets, such as the agrochemical industry.
1. Reference year 2021.
2. Our circularity KPI encompasses products either: based on recycled or renewable
materials, produced with renewable energy, with increasing longevity in the use
phase or enabling recycling at the end of life.
3. The Mass Balance (MB) approach tracks the sustainability of a product through
the whole value chain, driving the industry toward adopting critical environmental
best practices.
SPM: A key tool in our decision-
making process
Our Sustainable Portfolio
Management tool was
launched in 2012 as a way to
assess the sustainability of our
products and help us
communicate this to our
customers. SPM evaluates the
risks and opportunities of our
portfolio, taking into account
the social and environmental
impact of our operations, and
the market trends and signals.
The information we gather
through the tool informs key
business decisions, facilitating
sustainable growth in the
long-term. In 2023, 60% of our
portfolio was considered a
solution under the SPM tool.
Examples of our solution
products include ultra-barrier
lm for pharmaceutical blister
packaging, polymers for reverse
osmosis water treatment and
renewable-based solvents for
agro applications.
OUR SUSTAINABILITY AMBITION
Goals (baseline 2021)
Sustainable solutions driven
by circularity
18%
Circular revenues by 2030
1
2023: 13%
“THE INTRODUCTION OF
NATERNAL™ CLEARLY
DEMONSTRATES
SYENSQO’S LONG-TERM
COMMITMENT TO
SUSTAINABLE GROWTH.
NATERNAL™ REPRESENTS
A NEW ERA, WHERE
BEAUTY, THE PLANET AND
FAIR TREATMENT OF
FARMING COMMUNITIES
CAN ALL BE BALANCED.”
Jean-Guy Le-Helloco,
Vice-President Home and Personal Care
“UNTIL A YEAR AGO, I WAS
STRUGGLING WITH LOW YIELD AND
WATER LOSS IN MY FIELD.
TODAY, I DON’T JUST ACHIEVE
SUBSTANTIAL PRODUCTION, I’M
ALSO ABLE TO CULTIVATE DURING
WINTER SEASONS.”
Dhannaram, a resident of Dudiwal, India, partnered
with TechnoServe to construct a Khadin in his sloped
eld, to collect and store rainwater, addressing
the challenges of high temperatures and water runoff.
His guar crop production increased by 25-40%.
FOCUS
Our sustainable growth targets
relate to two of the UN Sustainable
Development Goals
Renewable energy (solar, wind, biomass, biogas)
Process ef ciency (electri cation, waste heat recovery, equipment optimization)
Other (energy mix, industrial emissions)
Accelerating the energy transition
1 site (ON)
2023
1 site (DE)
2022
1 site (IT)
2023
1 site (DE)
2023
1 site (IT)
2019, 2023
1 site (TH)
2019
1 site (BE)
2022
4 sites (CN)
2023
1 site (CN)
2022
2 sites
(IN)
2019, 2021,
2022, 2023
2 sites (NJ)
2020, 2024
20 sites
(East Coast)
2021
4 sites (US)
2023
2 sites (FR)
2023
7 sites (CN)
2019, 2022
1 site (TH)
2023
4 sites (FR)
2020, 2024,
2025, 2026
8 sites
(TX, LA)
2021
1 site (CA)
2023
Forty-seven projects to enable our
energy transition
— In 2023, we delivered a reduction of 15% for Scope 1 and 2 green-
house gas (GHG) emissions. Of these, 11% are structural reductions
achieved through our portfolio of energy transition projects. This
equates to a reduction of 0.5Mt of CO
2
since the 2021 baseline, or 25%
at constant scope.
We have launched 47 projects globally since 2018 to transition to
green energy, accelerate electrication and improve processes, all
reducing Scope 1 and 2 emissions. Seventy-three percent of our sites
are now using 100% renewable purchased electricity.
A carbon neutrality plan for our
Saint-Fons site in France
— In March 2023, we unveiled plans to decarbonize our Aroma
Performance plant in Saint-Fons, France. With more than 95% of its
energy coming from renewable sources, the site will become the rst
aroma plant in the world to be powered by renewable energy by 2026.
For the 5% residual emissions that are too hard to abate, we plan to
achieve carbon neutrality through high-integrity, nature-based
offsets. These developments will allow us to bring products with a
lower carbon footprint to market and deepen engagement with
customers who are actively pursuing climate impact reductions. All
our decarbonization initiatives at Saint-Fons combined will reduce the
plant’s GHG emissions by 75 kilotons per year compared to 2018 levels
– the equivalent of removing 45,000 combustion engine cars from the
road.
Advancing efforts to reduce emissions with
our new product carbon footprint tool
— In 2023, we launched our new automated tool for measuring
product carbon footprint (PCF), rolling it out across five of our
Novecare business sites, in France and the US, and preparing to
extend use of the tool globally. PCF is a measurement that takes into
account all greenhouse gas emissions generated by a product, from
raw material extraction to when it leaves the Syensqo factory (cradle
to gate). Being able to quickly and efciently calculate it will help both
us and our customers reach Scope 3 emissions reduction targets.
Our PCF tool is aligned with customer needs and industry guide-
lines, including the Product Carbon Footprint Guideline for the
Chemical Industry issued by Together for Sustainability (TfS). It
enables our businesses to quickly calculate the PCF of each of our
commercial products. This will allow us to identify areas where we can
reduce emissions and track our progress over time, and it will make it
easier to initiate collaborative projects with suppliers and customers
across the value chain to develop innovative and climate-friendly
solutions that respond to customer needs. In 2023, we also began
preparations to extend use of the tool to our Specialty Polymers
business.
Expanding our mass balance portfolio
— Our Scope 3 strategy includes switching to “renewable carbon”,
moving from fossil-based raw materials to bio- and recycled-based
raw materials and using high-integrity certication schemes for mass
balancing. Integrating these circular raw materials into our solutions
enables us to offer products with a lower carbon footprint and
reduced fossil-based feedstocks, reducing supplier-side Scope 3
emissions for both Syensqo and our customers.
The mass balance concept is a globally-recognized industry
approach that provides a dened set of rules for tracking and tracing
Accelerating on Scope 3
— Scope 3 emissions are GHG emissions occurring in the value chain
that are associated with our activities. Specically, they are emissions
that occur at suppliers’ sites, or earlier in the supply chain, as well as at
customers’ sites, when the consumer uses our product or at the end
of a product’s life. Syensqo is one of the few companies in the global
chemical sector to have set such a high Scope 3 emissions reduction
target that covers emissions both upstream and downstream in the
value chain
3
.
Reducing Scope 3 emissions requires close cooperation with our
suppliers and customers. In 2023, we achieved a reduction of 1Mt of
CO
2
, or 14%, for our Focus 5
1
categories of Scope 3 emissions since 2021,
at constant scope. Of these, 11% are structural reductions. This reduc-
tion came as a result of portfolio management and the phasing out
of a high impact product. The majority of our efforts this year have
focused on establishing the foundations that will enable us to make
the next structural reductions to reach our new Scope 3 target. This
includes deploying the latest digitization capabilities for measuring
product carbon footprint and aligning on emissions data with
suppliers and customers, intensifying collaboration with suppliers to
enable lower carbon footprints for raw materials, and leveraging the
power of mass balance to expand our offer of low carbon alternatives
for the benet of our customers.
Goals (baseline 2021)
Carbon neutral
Scope 1 and 2 by
2040
-40%
Scope 1 and 2
by 2030
1
2023: -0.5Mt
2
-25%
(-20% structural)
-23%
Focus 5 catego-
ries of Scope 3
by 2030
1
2023: -1Mt
2
-14%
(-11% structural)
Our climate targets relate to three
of the UN Sustainable Development
Goals
SYENSQO 2023
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58_ OUR SUSTAINABILITY AMBITION
ONE PLANET: CLIMATE
Stepping up our
climate commitment
Building on the success of the Solvay One
Planet sustainability roadmap, we have
intensified our climate ambitions, setting
more demanding targets for reducing
Scope 1, 2 and 3 emissions, and committing
to achieving carbon neutrality by 2040. Our
new targets are aligned with the Paris
Climate Agreement’s most ambitious
trajectory, aiming to limit global warming to
1.5° celsius. We will seek validation of these
goals from the Science Based Targets initia-
tive (SBTi) in 2024, improving on our previous
“well below 2°C” SBTi target.
1. Reference year 2021. For Scope 3, the Focus 5 categories are:
(1) purchased goods and services and (2) fuel-and energy-related
activities (both upstream) and (3) processing of sold products,
(4) use of sold products and (5) end-of-life treatment of sold products
(all downstream).
2. At constant scope.
3. Our Scope 3 target refers to the Focus 5 categories of Scope 3
outlined above.
Roadmap developed
Roadmap under implementation
Local biodiversity roadmaps being developed and implemented
on our sites
West Deptford
Clamecy
Saint-Fons
Mt Pleasant
Itatiba
Winder
Niagara Falls
/Welland
Oldbury
Roha
Hengchang
Changshu
Zhangjiagang
Taboão
Willow Island
Méréville
Operational projects
Ongoing feasibility study
Committed projects
Cooling or process
water optimization
Ef uent
recycle
Initiatives to reduce freshwater intake underway at most of our sites
Our most advanced projects
Zhangjiagang
Hengchang
(CN)
Zhangjiagang
Feixiang
(CN)
Atequiza
(MX)
Baton Rouge
(LA)
Marietta
(OH)
Augusta
(GA)
Spinetta (IT)
Saint-Fons
(FR)
Tavaux (FR)
Melle
(FR)
Niagara
(ON)
Chang Shu
(CN)
Clamecy
(FR)
Willow Island (WV)
the content of circular and renewable feedstock in materials and end
products. All of the products in our growing mass balance portfolio
are produced in our International Sustainability and Carbon
Certication (ISCC-PLUS) certied plants. This certication allows us to
verify the use of bio, bio-circular and circular raw materials as repla-
cements for fossil resources in our products, lending credibility to our
own and our customers’ sustainability claims.
Decarbonizing our supply chain: a step change in
carbon content measurement in sourcing
— Our upstream Scope 3 emissions are related to the actions of our
suppliers. Mobilizing our supply chain to reduce the impact of raw
materials is a key priority, helping us to achieve our Scope 3 target
and improve our offering of low carbon footprint products.
We have continued to collect PCFs from the raw material suppliers
that make the highest contributions to our GHG emissions. By late
2023, PCFs received and passing our quality standards accounted for
40% of Scope 3 emissions for our purchases of raw materials, surpas-
sing our target for the year of a 35% coverage rate. Our efforts will
continue into 2024.
To make further progress in reaching our Scope 3 target, at the end
of 2023 we engaged with our top raw materials suppliers on their
climate strategy and decarbonization action plans. This will allow us
to better understand their plans and to discuss with them opportuni-
ties to improve. This will continue into 2024.
Having an impact beyond our Scope 3:
avoided emissions
— One area that is not counted in our Scope 3 measurements is the
role our solutions play in avoiding emissions. Through our Sustainable
Portfolio Management tool, we have identied €1.2 billion in turnover
that contributes to reducing climate impact. We offer several
products that play a key role in enabling electrication and the switch
to renewable energy, for example, such as our battery materials and
our solutions for green hydrogen.
Our products also enable energy savings, by improving energy ef-
ciency. Fuseply®, for example, is an innovative new adhesive bonding
product, introduced to the market in 2023. It provides customers with
a reliable way of bonding composite structures, eliminating the need
to use fasteners, which add weight. This allows them to take full
advantage of the lightweighting potential of composites - and lighter
aircraft produce less emissions.
Reducing our impact on nature
— We have implemented multiple actions and concrete projects to
address biodiversity, water use and the disposal of industrial waste at
each of our sites, through the Star Factory program. This is essential to
minimize our impact on the environment, preserve scarce resources
and regenerate biodiversity. These projects also help us create value
for our customers and other stakeholders, as more sustainable sites
and processes will enable us to create more sustainable products.
Improving the biodiversity of our sites
— Preserving the world’s ecosystems is essential for human, animal
and plant health. In 2023, we focused our attention on local efforts,
developing roadmaps to restore biodiversity in and around our sites.
This is the case for fteen sites and our aim is for all our industrial sites
to have developed a roadmap by the end of 2024. Actions imple-
mented at our Oldbury site in the UK, our Clamecy and Saint-Fons
sites in France and our Hengchang site in China, for instance, include
IN CONVERSATION WITH
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60_ OUR SUSTAINABILITY AMBITION
FOCUS
FOCUS
By the end of 2023, we had
covered 75% of our global
primary energy consumption
under the energy transition part
of our Star Factory program.
This included identifying new
projects and creating
plant-level 2030 roadmaps to
enable energy efciency gains
or facilitate the shift to
renewable energy sources. At
our Hengchang site in China, for
example, we have installed
vapor recompression
technology to enable energy
efciency gains and switched a
fuel source from coal to gas,
generating overall reductions
equivalent to 3% of Syensqo’s
Scope 1 and 2 emissions.
In 2023, we launched our ECHO portfolio, designed to make it easier
for customers to source the specialty polymer solutions they need to
accelerate on their carbon-neutrality journeys. Engineered with
bio-based, recycled and mass balance-certied raw materials, the
products in this portfolio provide more sustainable and circular
alternatives to conventional fossil-derived materials, without
compromising on performance. Most offer PCF reductions of up to
20% and as high as 60% in some cases.
Addressing our energy consumption
and mix
A Specialty Polymers portfolio
designed to accelerate the transition
to a carbon-neutral future
What is your relationship with Syensqo?
D.T. — 2Masters and Syensqo have maintained a longstanding
strategic partnership dating back many years, and this enduring
relationship continues to ourish. Having operated in the polymer
industry since the 1990s, we are committed to sustaining and
nurturing this partnership for many more years, with the shared
hope for continued sustainable growth and collaboration.
What is your organization doing to reduce its carbon footprint
and how is Syensqo helping you to do this?
D.T. — In our collaboration, Syensqo’s sustainability commitment
has notably inspired 2Masters, driven by Syensqo’s leadership in
programs such as Ecovadis and TfS. This is evident in 2Masters’
recent move to an energy-neutral facility in December 2022,
showcasing our sustainability mindset. Features like using cooling
water for heating, motion-activated LED lighting, improved waste
management and 723 photovoltaic panels powering operations
highlight this integration.
How could we work better together to further reduce our
impact on the planet and society?
D.T. — Sustainability is deeply embedded in our way of working
– it’s a regular topic in our discussions with Syensqo. Together, we
will continue to strive for further investigation and implementation
of energy-saving technologies, driving continuous improvement
in sustainability across our operations. We eagerly anticipate
exploring new initiatives with Syensqo that will enable us to take
additional steps in reducing our joint carbon footprint across the
entire value chain.
Dinand Tijhuis, from 2Masters
Operational projects
Ongoing feasibility study
Hazardous waste diverted from land ll
Reduce
Reuse
Recycle
Waste to cement
Waste to energy
Our most advanced recovery projects in a pipeline addressing 40kt/year
of non-sustainable industrial waste
Augusta
(GA)
Atequiza
(Mx)
Tavaux
(FR)
Willow Island
(WV)
Marietta
(OH)
Borger
(TX)
Zhenjiang
(CN)
Zhenjiang Henchang
(CN)
Saint Fons
(FR)
Spinetta (IT)
Panoli (IN)
Piedmont (SC)
Mt Pleasant (SC)
When did your site join the Star Factory program and what
have you achieved so far?
M.J. — Roha joined the Star Factory program in the second
quarter of 2023. Our key achievement so far has been the creation
of a strategic roadmap. It provides a comprehensive overview of
our site’s potential, based on an in-depth analysis of our
operations, market dynamics and growth opportunities. Star
Factory has allowed us to formulate a visionary roadmap that
aligns seamlessly with our ambitious objective of achieving €120
million in sales, with a contribution margin (CM) of 40%, by 2030.
With the help of the Star Factory program, what do you aim to
achieve at the site in the long term?
M.J. — Our site’s long-term objectives include nancial prosperity,
operational excellence, market leadership, sustainability and the
scalable implementation of successful strategies. To achieve
these objectives we will need to adopt digitalization and
implement creative solutions that expedite procedures, maximize
resource use, take advantage of growth opportunities and stay
ahead of industry trends, and incorporate more environmentally-
friendly practices into our operations, among other actions. One
of the big benets of the program is being able to share
successful strategies with other Syensqo businesses, to drive
success across all our sites.
What benets will this have for customers, local communities
and the environment by 2030?
M.J. — Our focus on innovation and quality improvement, and on
digital transformation efforts aimed at streamlining processes
and making interactions more efcient, will ensure enhanced
products and services for customers. Market leadership and
strategic growth initiatives will result in an expansion of our
product and service offerings, and we will also be able to offer our
customers more sustainable options.
We want to ensure Roha is an active and constructive part of local
society. Growth will lead to more local employment opportunities,
and the new skills and knowledge our team gains through Star
Factory will help foster local talent. We also intend to actively
engage with our local communities through partnerships,
sponsorships and social initiatives.
On top of this, Star Factory will allow us to implement sustainable
processes and technologies that will reduce our environmental
footprint, by conserving resources and reducing waste. There will
be greater potential for the development and promotion of
environmentally friendly products, and by optimizing our
operations and implementing green technologies we aim to
reduce our overall carbon footprint.
setting up insect hotels and beehives, developing participative
gardens, tree planting and removing invasive species.
Syensqo is a member of the Wildlife Habitat Council, an internatio-
nal NGO that helps us to identify areas for improvement in the actions
we take, both at our sites and in collaboration with local stakeholders.
A comprehensive approach to reducing
our freshwater intake
— Syensqo’s freshwater intake (FWI) trajectory continued to move in
the right direction in 2023. The nal result of 77.7Mm
3
was 11% lower
than in 2022. Through our Star Factory program, we aim to dene a
clear roadmap for addressing water scarcity at each of our plants,
outlining targeted actions that will reduce our freshwater intake in the
long term. Most sites have now designed their roadmaps and many
are now implementing them. As part of the process, we are encoura-
ging site leaders to integrate sustainability indicators into their perfor-
mance management systems. Examples in 2023 include:
Tavaux, France: We reduced freshwater intake by 4%, or 460km
3
,
compared to 2022, by optimizing the water cooling loop that serves
our energy and PVDF services at the site.
Borger, Texas, US: The site made improvements to its reverse
osmosis recovery system, decreasing water requirements by 31km
3
.
Feixiang, China: Through a combination of several initiatives, we
achieved freshwater savings of up to 80km
3
per year. One project
involved recovering and treating discharged efuent water, so it
could be reused as cooling tower water, deionized water and
steam. It was replicated elsewhere at the site and also helped to
reduce energy use, CO
2
emissions and costs.
Keeping up momentum in industrial
waste reduction
— Non-sustainable industrial waste (NSIW) is waste that is landlled
or incinerated without energy recovery. Reducing NSIW means nding
ways to valorize it, either by reducing it at the source, reusing it in the
same process, recycling it in another process or recovering energy
from it. The NSIW trajectory remained on track in 2023, with a final
result of 35.1kt, 12% lower than in 2022. Some of our achievements in
2023 include:
Tavaux, France: The site reduced suspended solids in efuents by
300 tons and became one of the rst in Europe to be awarded the
Operation Clean Sweep (OCS) certification, aimed at reducing
microplastic emissions into water and air.
Borger, Texas, US: As part of a project to optimize production of our
Ryton® polyphenylene sulfide (PPS), the plant launched two
programs in 2022 to recycle monomer waste and reduce the
amount of plastic waste sent to landll, reintroducing a previously
unsuccessful recycling program for dichlorobenzene (DCB)
monomer waste. In 2023, the amount of monomer waste gene-
rated and amount of landlled plastic waste was reduced by 88%
and 91% respectively, compared to 2021.
West Deptford, New Jersey, US: We implemented a project aimed
at reducing the amount of inorganic sludges generated by the
plant, achieving a structural reduction of solid waste to landll of
222 tons in 2023, compared to 2022.
Roha, India: The site diverted sludges from landll to incineration,
enabling energy recovery. The ashes are used to make cement,
saving 20 tons of waste per year.
Transforming our industrial sites into
star factories
— Our Star Factory program is designed to help us meet increasingly
high customer expectations. Through the program, we aim to trans-
form our factories, so that they are best-in-class in all areas. The
program is now underway at 19 Syensqo sites. Fifteen joined the
program in 2023 and we aim to extend it to our remaining 37 industrial
sites before the end of 2024. Star Factory focuses on four main areas:
Operational excellence: implementing best practice and levera-
ging digital technologies to achieve and maintain best-in-industry
excellence.
Sustainability: developing sustainability roadmaps for each of our
sites to help reduce their environmental footprint and improve their
diversity, equity and inclusion performance.
Digital: using digital technologies to accelerate delivery of digital-
and data-enabled value for our customers.
People development: upskilling our manufacturing teams, equip-
ping them with the right capabilities to help them achieve their
objectives and act as an incubator for future generations of talents.
One of our main areas of focus is getting our sites to make progress
on energy efciency, energy transition and GHG emissions reduction
projects that benet our businesses and the environment. We have
now launched around 2,000 initiatives as part of our Star Factory
program and about a quarter are designed to advance our sustaina-
bility ambitions. At our Tavaux site, in France, for example, we carried
out an energy audit to identify “quick wins” to improve energy perfor-
mance. By reducing the pressure set point for the water feeding the
super pressure pumps for the site’s boilers, we reduced CO
2
emissions
by 317 tons per year.
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62_ OUR SUSTAINABILITY AMBITION
FOCUS
Developing our Aroma Performance
mass balance portfolio
Our Aroma Performance sites in
Saint-Fons and Melle, in France,
received ISCC PLUS
certications for the production
of specic ingredients between
late 2022 and 2023. This growing
Aroma Performance mass
balance portfolio includes:
Rhovanil® MB, the world’s rst
ISCC Plus mass balance
certied range of high-purity
vanillin.
Hydroquinone (HQ MB)
and hydroquinone
monomethylether (MeHQ MB),
which can be used as building
blocks in the formulation of
polyetherether ketone (PEEK)
and other high-performance
engineering thermoplastics.
The rst mass balance
certied cyclopentanone, an
ingredient used in perfume
and a number of other
applications, including as a
solvent for electronics.
The development of this
portfolio is driven by consumer
demand and aligned with
megatrends such as resource
efciency, reduced carbon
footprint of solutions and
sustainable sourcing. We work
closely with our customers to
help them address the
challenges they face. Mass
balance either provides the nal
solution or serves as a viable
transition product to the
development of a completely
bio-based solution. The CO
2
footprint of our mass balance
HQ is 43% lower than Syensqo’s
synthetic HQ, while the
equivalent reduction for vanillin
is 30%.
Mohit Jalote, Industrial Director for India and Operations
Manager for Syensqo’s Roha site in India
IN CONVERSATION WITH
Committed to being a responsible employer
— Through our Better Life at Work program, we offer a range of well-
being webinars and workshops, available to all Syensqo employees
worldwide. In 2023, these included well-being at work sessions facili-
tated by certied psychologists. In March and October 2023, we orga-
nized two special webinars, focused on understanding menopause in
the workplace and on how to tackle burnout in the workplace. All
employees and members of their households have access to our
Employee Assistance Program, which includes free psychological
support, well-being advice, life coaching and mindfulness and we
offer exible working frameworks for all of the countries we operate in.
A strong commitment to ethics and compliance
— Ethical and compliant behavior is essential to how Syensqo does
business. In 2023, we published a new section on our corporate
website, highlighting our commitment to ethics and compliance, our
Code of Business Integrity and our policies, actions and audited data.
All our employees undertake compulsory annual training, and we
offer a Speak Up service, which employees and third parties can use
to safely report or seek assistance if they witness inappropriate or
unethical behavior.
Ensuring our employees receive a fair living wage
— In 2023, we joined the UN Global Compact call for action on living
wage. This will allow us to ensure that all our employees worldwide
receive a fair living wage, which equates to remuneration sufcient for
each employee to afford a fair standard of living.
To achieve this, we are partnering with the Fair Wage Network, an
independent organization helping us to ensure fair wage practices.
The rst assessments are currently taking place in China, the US and
the UK, which represents about 55% of Syensqo’s workforce. We will
report annually to the UN Global Compact on our progress.
tatives, and is something that undoubtedly contributed to the success
of our separation from Solvay.
Throughout the separation (Po2) project, both the Solvay Global
Forum (SGF) and the European Works Council (EWC) consulted
closely, through a “Po2 Ad Hoc Committee”. It was therefore possible
to address representatives’ concerns at an early stage and provide
responses. This included putting in place support for exiting
Transitional Service Agreements (TSAs). We were also able to ensure
the new Global Forum of Syensqo (GFS) and EWC were active as soon
as the spinoff took place.
Responsible management of PFAS
— In 2023, we reached an agreement with the New Jersey Department
of Environmental Protection (NJDEP) to resolve the NJDEP’s litigation for
the clean up of historical PFAS contamination and to recover Natural
Resource Damages associated with our West Deptford site. Under the
settlement, Syensqo agreed to investigate, test for and remediate
PFAS contamination throughout the area near the site, including
contamination for which we believe other sources are responsible.
This agreement represents a constructive and timely path toward
remediating PFAS in the environment, while allowing us to recover
costs from other sources of PFAS. It is Syensqo’s latest step in our
Our living wage initiative complements our Syensqo Cares
program, which provides all our employees with social benets, inclu-
ding 16 weeks of parental or adoption leave for both parents,
regardless of sexual orientation. The program now includes ve days
per year for employees with unexpected caregiving duties, comple-
menting any provisions in local legislation. We also created a holiday
donation bank for employees to use for caregiving purposes.
Our employees can count on the Solidarity Fund to help them and
their communities in challenging times. Since 2020, the Fund has
donated close to €11 million to help individuals and communities
facing hardship. In 2023, it was used to nance emergency efforts
following the earthquakes in Turkey, Syria and Morocco and conti-
nuing initiatives related to Ukraine. The Fund’s impact activity report
details its 2023 activities.
The importance of social dialog
— Good social dialogue is vital to business success. Employees’ repre-
sentatives at Syensqo are always informed about strategic decisions
and we encourage feedback, because if employees understand our
intentions, we are more likely to be able to build trust and increase
motivation. This process ensures a high level of transparency, matu-
rity and trust between senior management and employee represen-
journey to responsibly manage fluorosurfactant use at our West
Deptford site, following elimination of the use of all uorosurfactants
in the US in July 2021.
As we focus on innovation to constantly improve the sustainability
of our products and processes, we are also investing in emerging
technologies that can destroy fluorosurfactants remaining in the
environment. This includes working with several partners at the fore-
front of biodegradation technologies, including Princeton University
and the University of Belgrade, that have the ability to develop orga-
nisms or enzymes to destroy PFAS molecules. In addition, we are
investing in our own research on the chemical degradation of PFAS
through mineralization.
Syensqo has been innovating to nd alternatives for the PFAS subs-
tances that may trigger concern, which is why our focus has been on
phasing out the use of uorosurfactants. In 2022, Syensqo committed
to voluntarily phasing out use of fluorosurfactants from the PFAS
family of chemicals by 2026, by investing in new technological inno-
vations that advance our sustainability ambitions. While this transition
occurs, we keep investing in state of the art technologies enabling us
to reduce our fluorosurfactant emissions by nearly 100% – a level
known as technical zero.
In February 2023, the national competent authorities of The
Netherlands, Denmark, Germany, Sweden and Norway submitted an EU
Restriction proposal of PFAS under the EU REACH Regulation. The propo-
sal, however, is much wider in scope, also covering chemically inert
uoropolymers that are critical to the future development of a sustai-
nable society. Syensqo believes in responsibly making, processing and
using fluoropolymers. We therefore advocate for a science-based,
targeted regulation of PFAS. A wide ban of the entire family of chemicals
would actually hamper the EU’s ability to achieve its climate objectives
and succeed in its transition to a low-carbon society.
We are actively engaging with relevant stakeholders on this topic
and will continue to do so, promoting responsible and science-based
management of PFAS.
Engaging with local communities
— Building strong and mutually beneficial relationships with the
communities in which our sites are located will allow us to advance
initiatives that benet both people and the planet. Many of our sites
operate local engagement programs that allow communities to
better understand our activities and ensure that we address any
concerns.
A long-standing
commitment to creating
a better life for all
Improving quality of life and well-being for
our employees and the communities we
serve is in our DNA. Employee and commu-
nity welfare programs were implemented
by our founder, Ernest Solvay, as early as
the 1880s, as a way of ensuring that our
workforce could perform at its best. Through
the better life pillar of our sustainability
roadmap, we aim to continue this tradition
by creating a safe, fair and inclusive work-
place, and acting in a way that benefits
society as a whole.
SYENSQO 2023
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64_ OUR SUSTAINABILITY AMBITION
Goals (baseline 2021)
Safety RIIR
1
Aim for zero
2023: 0.28
Gender parity
2
by 2033
2023: 28%
Living wage to
100% of workforce
by 2026
Our better life targets relate to three
of the UN Sustainable Development
Goals
1. Reportable Injuries and Illnesses per 200,000 work hours
2. Mid and senior management
“THE INCLUSIVE LEADERSHIP
WORKSHOP HELPS EVERYONE TO
IDENTIFY AND ELIMINATE BIAS IN
OUR DAILY WORK, SO THAT WE
CAN INSPIRE AND SUPPORT EACH
OTHER BETTER, AND ESTABLISH
A MORE EFFICIENT TEAM.
AN INCLUSIVE TEAM BENEFITS
EACH TEAM MEMBER.”
Qian Lu, R&I Lab Manager and inclusive leadership
workshop participant
FOCUS
Changshu, China: a site
that cares
As part of the Star Factory program, Changshu aims to create a site
that prioritizes caring for its people, its customers and the planet.
Building on existing DEI initiatives, the site has set several goals
aimed at reinforcing a work culture that embraces diversity and
empowers employees. These include improving gender balance
and doubling the presence of women in site management teams,
improving disability inclusion and creating a safe and inclusive work
environment where everyone feels supported.
ONE PLANET: BETTER LIFE
Fabbriche Aperte Lab, Spinetta Marengo, Italy: Showcasing the
work we do to ensure the safety, health and prosperity of our local
communities is particularly important at Spinetta. In 2023, more
than 300 members of the local community participated in our
Fabbriche Aperte Lab initiative. Facilitated by 100 employee
volunteers, this series of ve, interactive “Open Lab” events each
covered a topic of local interest or concern. The events allowed
local people to get a real sense of what the site currently does,
generating engagement and trust through open dialogue, and
helping people understand the benets of our work.
The Residents’ Committee, Oldbury, United Kingdom: In early
2024, Oldbury celebrated the 160th meeting of its Residents’
Committee, which is run by local residents and hosted by the site.
The Committee meets every quarter, allowing the site to update the
local community on the work it is doing, new developments and
community actions. The meetings allow the site to maintain an
open dialogue and to get involved in other events. Oldbury distri-
butes communication material to all households within a 1km
radius, engages in fundraising and organizes activities showcasing
lab experiments or biodiversity initiatives.
Chemical Grade 10, Itatiba, Brazil: Since 2018, Itatiba has partici-
pated in an educational program that recognizes the 50 best
students in the city’s public schools. As part of this program, the top
ve students in chemistry are recognized by Syensqo as Chemical
Grade 10. The site awards the top two students with laptops and the
other three with tablets to help them in their studies, and welcomes
all 50 students for a plant visit. In 2023, we received special recogni-
tion from Itatiba city hall for the site’s contributions to local educa-
tion.
Responding to local emergencies, Zhangjiagang, China:
Syensqo’s health, safety and environment emergency response
plan (HSE ERP) team in Zhangjiagang has participated in responses
to local emergencies many times and has been recognized and
praised by the local government for its efforts. In 2023, for example,
the team participated in rescue work relating to a gasoline leakage,
playing a key role in mitigating losses and reducing the impact of
accidents.
Embedding DEI in the way we do business
— Establishing and maintaining a diverse workforce, providing equal
career opportunities and making all our employees feel included,
respected for who they are and valued for their contributions are key
priorities for Syensqo. As a science company, we believe in the power
of different ideas, perspectives and experiences to create break-
through innovations. We prioritize DEI goals that can be measured,
helping us identify areas where we have made progress and where
we need to improve. We are also ambitious, with targets that cover
the full DEI spectrum.
Making an impact
— Our approach builds on the legacy inherited from Solvay, which
made DEI an integral part of our company culture. At Syensqo, we
have revised our DEI strategy around four pillars with aspirational
goals, measurable outcomes and an action plan. Our aim is to be
best-in-class and recognized for offering an inclusive environment,
equitable opportunities, diverse teams and engagement within our
ecosystem. Our approach includes initiatives for leaders, employees
and our value chains. We integrated DEI roadmaps into our Star
Factory program and created a DEI Lab with our top clients and
suppliers. In 2023, we included 10 concrete DEI initiatives in the variable
part of our managers’ remuneration.
Engaging our leaders
— Over 600 leaders from Solvay and Syensqo have now participated
in our Inclusive Leadership Workshop. The workshop gives them the
tools and resources they need to recognize unconscious bias, create
an environment in which everyone feels valued, respected and
included, and establish their own individual buy-in, by better unders-
tanding the business case for DEI. Held in a workshop format, it also
gives leaders a space to engage in meaningful conversations with
their peers, and share experiences and challenges.
In 2023, 19 leaders from Syensqo and Solvay took part in a
mentorship program designed for members of our Employee
Resource Groups (ERGs). This initiative followed through on one of the
commitments included in the DEI pledge signed by Syensqo leaders
in 2022: to engage in conversations with employees from under-re-
presented groups and expand understanding of issues that might not
directly affect them.
Focusing on our employees
— In partnership with Disability:IN, a nonprot organization that works
with businesses to improve disability inclusion, we started to imple-
ment the Disability Equality Index in 2023. This comprehensive bench-
marking tool helps us advance Syensqo’s disability inclusion prac-
tices. In alignment with the Index, we carried out qualitative interviews
with various teams, and with volunteer employees willing to discuss
their experiences relating to visual and hearing impairments and
neurodiversity.
Through our ERGs, we give a platform to under-represented
communities within Syensqo, with benets for all employees. In 2023,
for example, our X Factor ERG, which works on initiatives designed to
promote, retain and attract women, launched a series of 14 testimo-
nial videos, designed to help people of all genders to recognize their
career blind spots, make the most of their talents and inspire them to
go after their goals.
We have also succeeded in launching initiatives at shop oor level.
Our Star Factory program aims to transform our manufacturing sites
into “factories of the future”, excelling in all areas. To do this, we need
a workforce that is not only skilled, but also motivated and inspired. For
this reason, DEI is now an integral part of the Star Factory program.
Collaborating with our customers and partners
— In 2023, Syensqo signed up to Unilever’s Living Wage Promise. This
species that anyone who directly provides goods and services to
Unilever must earn at least a living wage. We are now assessing living
wage equity within Syensqo and have promised to close any gaps in
our own workforce before 2026, underlining our commitment to
achieve the United Nations’ Sustainable Development Goals.
We are also exploring ways in which we can promote diversity in our
value chain. For example, we are now using Amazon Business
Marketplace in North America to buy from and support diverse
suppliers and we have worked with all of our strategic key account
managers to increase their awareness of our DEI program so that
they are better able to identify opportunities for more collaboration.
What was the process involved in setting up
the Global Forum of Syensqo?
L.C. — We discussed the new structure of the Global
Forum of Syensqo prior to the spinoff. We examined
the proposed global footprint of Syensqo and
discussed the ratio of employees in different
geographical areas, ensuring that seats at the Global
Forum are allocated in a way that best represents our
colleagues at Syensqo. The Global Forum Agreement
established in Solvay was transferred to Syensqo
and an endorsement was signed by Syensqo’s Chief
People Ofcer. This is when we became the Global
Forum of Syensqo. We have held our rst meeting
and are now in the nal stages of lling the
vacant seats.
We are a new company and a new global forum
but we bring with us knowledge and experience from
representatives from the legacy of the Solvay Global
Forum. This will be combined with new
representatives and an appetite for increased
collaboration and dialogue within the new Syensqo.
What are your priorities as the Global Forum
Coordinator of Syensqo?
L.C. — Social dialogue at Syensqo is rmly built on
the legacy of established social dialogue that existed
at Solvay. We benet from inherited agreements,
including our renamed Syensqo Cares employee
benets package, and we will continue to ensure
these agreements stay relevant to our workforce.
Another priority is making sure that all our colleagues,
no matter where they work in the world, are paid a
wage that allows them to ensure a good standard of
living, and we will work with Syensqo to implement the
living wage commitment by 2026.
It’s clear that social dialogue is a key factor in a
company’s success, but also for the well-being of
employees. In today’s economy and pace of life,
well-being at work and social dialogue go hand in
hand. The world around us is changing rapidly, as is
every aspect of the working day, as we move toward
an even more digital work environment. It is
important that Syensqo not only continues the
legacy inherited from Solvay, but that it advances
social dialogue and the well-being of employees in
each country it operates in. I am excited to live our
motto of advancing humanity.
Louise Collett was elected as the Coordinator of the new GFS, a
global body for employee representation that represents the
interests of all Syensqo colleagues worldwide.
Louise Collett, Global Forum of Syensqo Coordinator
IN CONVERSATION WITH
“AS THE PROGRAM
DEVELOPED, I QUICKLY
REALIZED THE BENEFITS
OF MENTORING APPLY TO
BOTH SIDES. SHARING
HOW I FELT AT DIFFERENT
PHASES OF LIFE HELPED
ME TO DISCOVER LESSONS
THAT WERE BENEFICIAL
FOR ME AND HOPEFULLY
PROVIDED THE MENTEES
WITH ANOTHER
PERSPECTIVE.”
Massimo Genoni,
Vice President, Product and Asset
Management
SYENSQO 2023
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ANNUAL INTEGRATED REPORT
66_ OUR SUSTAINABILITY AMBITION
Engaging with stakeholders
Advancing our sustainability ambitions involves strengthening bonds with our stakeholders
— our customers, employees, investors, suppliers, local communities and the planet
(governments and NGOs). We listen to their needs and respond to their feedback, collabo-
rating to improve our collective impact on climate change, nature and quality of life, and
support sustainable growth through creating more sustainable and circular solutions.
SYENSQO 2023ANNUAL INTEGRATED REPORT
68_ OUR SUSTAINABILITY AMBITION
Customers SuppliersEmployees Local communitiesInvestors
Planet
(NGOs and governments)
STAKEHOLDER
ENGAGEMENT AND ACTIONS
Ambitious sustainability targets aligned
with our growth strategy
Engagement of major customers
on common high materiality aspects
(e.g. Sustainable Guar Initiative,
seminars on reducing carbon footprint
through upcycled surfactants, seminars
on APE-free coatings, etc.)
Direct contact with GBU teams
(management, R&I, sales, supply chain)
Close collaboration between
key account managers and strategic
customers
Ratings questionnaires (CDP, EcoVadis)
Sustainable Portfolio Management
proles
Partnership with the Ellen MacArthur
Foundation
Product Carbon Footprint
Renewable Carbon Index (RCI)
Strong investments promoting
sustainability of our products and
processes
Engagement at site level through Star
Factory project and One Planet initiatives
(biodiversity, Stop Ofce Waste
program), developing and managing
relationships with local stakeholders
Partnership with Wildlife Habitat Council
Annual Citizen Day at Group level.
2023 theme was the Group’s 160th
anniversary, focusing on passing on
knowledge, know-how and experience,
and raising awareness about the
Group’s heritage for future generations:
11,200 participations, of which 4,100 were
from local communities, and more than
30 sites across the world participated
Solidarity Fund supported more than
60 projects related to urgent needs
(e.g. ooding) in 16 countries and
donated €1.9M to several initiatives in
Ukraine, as well as in Turkey, Syria
and Morocco
Responding to ratings agencies,
credit rating agencies, proxy voting
agencies
One Capital Markets Day (CMD) and
one post-CMD roadshow
Six cities visited in Europe and the United
States: London, New York, Brussels, Paris,
Zurich, Frankfurt
Five groups of sell-side engagement
to “teach” Syensqo’s equity story
Two conferences attended
80 in-person meetings and calls
110 investors met
Proposed total gross dividend of
€1.62, subject to AGM approval at the
AGM in May 2024
Solidarity Fund to enhance solidarity
between employees and regular Pulse
surveys to identify areas for
improvement regarding employee
well-being
Regular communication between
CEO and employees (digital or onsite
visits)
Digital communication with employees
Regular dialogue between managers
and employees
Social dialogue: labor relations dialogue
with employee representative bodies at
site, country, European and Group levels
Annual Citizen Day (32 participating sites
- more than 60 activities globally)
Better Life at Work program
Employee Assistance Program offering
mental health support and additional
services to employees and relatives
Ensuring a living wage for 100% of
employees by 2026
100% employees covered by collective
agreement
Global Forum of Syensqo: Employee
representatives come from the US,
Europe, China and India
An average of 15 hours of training
per employee
Syensqo One Dignity program:
six Employee Resource Groups (ERGs),
six partnerships with NGOs
(e.g. Disability:IN), mentoring programs
(e.g. BeFace), a total of 325 women
participating in the A Effect program
since 2021, a review of website and
physical accessibility (Wipro report)
Supplier key account management
Supplier commitment to Supplier Code
of Business Integrity
Ecovadis and other third party ESG
assessments: 92% of our core suppliers
Third-party audits through Together
for Sustainability (TfS)
Supplier Engagement Program and
Product Carbon Footprint project
Environmental, Social and Governance
(ESG) risk management approach
_69
Constructive dialogue with public
authorities on issues of legitimate
interest to Syensqo
Participation in global and regional trade
associations (WBCSD, ICCA,
BusinessEurope, CEFIC) and scientic
organizations (IUCN, SETAC)
Climate Impulse partnership
Sustainability ambition for Syensqo:
new ambitious goals dened through
the One Planet sustainablility roadmap
Conrmation of SDGs where Syensqo
can have most impact across the value
chain: SDGs 13, 14 and 15 on climate,
SDGs 12 and 13 on sustainable growth
and SDGs 3, 5 and 8 on better life
Announced plans to reach carbon
neutrality by 2040
DEI partnerships with NGOs
(e.g. Disability:IN)
Roadmap to phase out uorosurfactants
in Italy, having already done so in the US
SYENSQO 2023
PERFORMANCE
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PERFORMANCE
72 1. Overview of the consolidated results
72 1.1. Financial figures
72 1.1.1. Key financial figures
73 1.1.2. Historical key financial data
74 1.2. Extra-financial figures
75 2. Preparation background
75 2.1. Comparability of results and
reconciliation of underlying income
statement indicators
75 2.2. Alternative performance metric (APM)
75 2.3. Description of the operational segments
76 3. Underlying Group figures
76 Note B1: Net sales
76 Note B2: Underlying raw materials and
energy costs
77 Note B3: Underlying EBITA
77 Note B4: Underlying depreciation and
amortization
77 Note B5: Underlying net financial charges
78 Note B6: Underlying income taxes
78 Note B7: Capex
79 Note B8: Free Cash Flow
79 Note B9: Net working capital
80 Note B10: Underlying net debt
80 Note B11: Provisions
81 Note B12: ROCE
81 Note B13: Research & innovation
82 4. Underlying figures per segment
82 Segment overview
83 Note B14: Materials
84 Note B15: Consumer & Resources
85 Note B16: Corporate & Business Services
87 Note B17: Earnings per share
87 Note B18: Dividend
SYENSQO 2023
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PERFORMANCE
72_
Performance
1. OVERVIEW OF THE CONSOLIDATED RESULTS
1.1. Financial figures
1.1.1. Key financial figures
IFRS Underlying
In € million
Notes FY2023 FY2022 % YOY FY2023 FY2022 % YOY
Net sales B1 6,834 7,890 -13.4% 6,834 7,890 -13.4%
Net operating costs, excluding depreciation &
amortization
B2 -5,548 -6,169 +10.1% -5,216 -6,027 +13.5%
EBITDA B3 1,286 1,720 -25.3% 1,618 1,863 -13.1%
EBITDA margin - - - 23.7% 23.6% +0.1pp
Depreciation, amortization & impairments B4 -739 -622 -18.8% -484 -482 -0.6%
EBIT 547 1,098 -50.2% 1,134 1,381 -17.9%
Net nancial charges B5 -158 -132 -19.6% -159 -133 -20.1%
Income tax expenses B6 -192 -2 n.m. -218 -260 +15.9%
Tax rate B6 - - - 23.0% 21.1% +1.9pp
Prot/(loss) for the period 197 964 -79.6% 756 989 -23.6%
(Prot)/loss attributable to non-controlling interests -3 -14 -76.0% -4 -14 -72.5%
Prot/(loss) attributable to Syensqo shareholders 193 950 -79.6% 752 974 -22.8%
Basic earnings per share (in €) B19 1.83 8.97 -79.6% 7.10 9.20 -22.8%
Dividend (1) B20 1.62
-
n.m. 1.62
-
n.m.
Capex (total) B8
-
- - 848 642 +32.2%
Cash conversion B8
-
- - 47.6% 65.5% -18.0pp
FCF to Syensqo shareholders B9
-
- - 448 577 -22.3%
FCF conversion ratio B9
-
- - 28.2% 31.4% -3.2pp
Net working capital B10 1,200 1,213 -1.07% 1,200 1,213 -1.07%
Net nancial debt (2) B11 1,584 3,814 -58.5% 1,584 3,814 -58.5%
Underlying leverage ratio B11
-
- - 1.0 2.0 -52.2%
ROCE B13
-
- - 10.6% 13.7% -3.1pp
Research & innovation B14
-
- - 340 312 +12.4%
Research & innovation as % of sales B14
-
- - 5.0% 3.8% +1.1pp
(1) Recommended dividend for 2023.
(2) Underlying net debt includes the perpetual hybrids bonds, accounted for as equity under IFRS.
1.1.2. Historical key financial data
As published
In € million
2020 2021 2022 2023
Income statement data
Sales a 5,381 6,032 8,123 7,065
Net sales b 5,261 5,915 7,890 6,834
Underlying EBITDA c 1,027 1,282 1,863 1,618
Underlying EBITDA margin d 19.5% 21.7% 23.6% 23.7%
IFRS EBIT e -931 585 1,098 547
Underlying prot for the period f 260 567 989 756
IFRS prot for the period g -1,282 453 964 197
Underlying prot attributable to Syensqo share h 257 559 974 752
IFRS prot attributable to Syensqo share i -1,285 444 950 193
Cash ow data
Capex j 372 451 642 848
— of which from continuing operations k 372 451 642 848
Cash conversion l = (c-k)/c 63.8% 64.8% 65.5% 47.6%
FCF m 572 243 577 448
FCF to Syensqo shareholders n 572 243 577 448
Balance sheet data
Net working capital o 760 1,024 1,213 1,200
Net working capital/sales p = µ(o/a) 14.1% 17.0% 15.2% 18.7%
Underlying net debt
(1)
q = r+s 4,201 3,938 3,814 1,584
Perpetual hybrid bonds r - - - 500
IFRS net debt s 4,201 3,938 3,814 1,084
IFRS equity t 3,078 4,333 4,946 7,608
Equity attributable to non-controlling interests u 13 18 24 42
Perpetual hybrid bonds in equity v 500
Equity attributable to Syensqo share w = t-u-v 3,065 4,315 4,922 7,066
Underlying leverage ratio x = q/c 4.10 3.07 2.05 0.98
Other key data
Research & innovation A 241 254 302 340
Research & innovation as % of sales B = -A/b 4.6% 4.3% 3.8% 5.0%
(1) Underlying net debt includes the perpetual hybrid bonds, accounted for as equity under IFRS.
SYENSQO 2023
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PERFORMANCE
74_
The table above presents the historical figures of the Group as published at the reference date. These data have not been affected by possible subsequent
restatements due to perimeter changes, IFRS/IAS standards evolution, changes in definition of APM, etc.
Over the reference periods, the following main changes have occurred:
2020:
At the end of December 2020, the assets and liabilities related to some businesses have been reclassified as “held for sale” (assets for a total amount of
€118 million and liabilities for a total amount of €65 million):
· The commodity amphoterics surfactants activities in Novecare.
· The Process Materials business (part of Composites).
2021:
During 2021, the assets and liabilities related to the following businesses previously classified as “held for sale” were divested:
· The Process Materials business (part of Composite Materials).
· The Novecare amphoterics surfactants activities.
· The Novecare surfactants and antioxidants business in Rasal (India).
These divestments led to a decrease in sales of €133 million in 2021 compared to 2020. There was no material capital gain/loss on these divestments.
On July 1, Syensqo announced the closing of the acquisition, from Bayer, of a seed coating business, with facilities in Méréville, France, and tolling
operations in the U.S. and Brazil. This is a natural extension to Syensqo’s own AgRHO
®
family of sustainable seed boosting solutions (part of Novecare)
and supports the drive toward more bio-based, sustainable technologies.
1.2. Extra-financial figures
In November 2023, we released our new, more ambitious sustainability targets, structured around three pillars: climate, growth and better life. Through
our sustainability ambitions, we aim to drive more environmentally friendly solutions to our customers and make our own operations more sustainable.
We also aim to design solutions for a better and more equitable life, for employees and across the value chain.
Climate 2023 vs 2021 2023 2021 2030 target
Scope 1 & Scope 2
GHG emissions (Mt)
20%
Structural
reduction(a)
1.6 Mt 2.1 Mt(b) Reduce by 40%
“Focus 5” categories’ Scope 3
GHG emissions (Mt)(c, d)
11%
Structural
reduction(a)
6.1 Mt(c) 7.1 Mt(b, c) Reduce by 23%(e)
Growth 2023 vs 2021 2023 2021 2030 target
Circular sales(f) +1pp 13% 12% 18%
Better life 2023 vs 2021 2023 2021 target
Safety
Reportable Injury and Illness rate - RIIR(g)
38%
Reduction 0.28 0.45 Aim for zero
% of women in middle & senior management(h) +4pp 28% 24%(i)
Aim for gender
parity by 2033
a) Structural reductions are linked to specific projects and recurring impacts. It excludes lower activity levels.
b) In 2021, Scope 1 & 2 of GHG emissions are at 2.1 Mt at constant scope with +0.1Mt led by change in the reporting scope. In 2021, Scope 3 GHGemissions for “focus five”
categories are at 7.1Mt at constant scope +0.4Mt led by change in the reporting scope. Total Scope 3 GHG emissions at 8.4Mt in 2023 and at 8.5Mt in 2021 at constant scope.
c) Syensqo’s “Focus 5” categories of Scope 3 GHG emissions are: (1) purchased goods and services (Category 1), which includes impacts of upstream transportation and distri-
bution (Category 4) and waste generated in operations (Category 5); (2) fuel-and-energy-related activities (Category 3); (3)processing of sold products (Category 10); (4) use of
sold products (Category 11); and (5) end-of-life treatment of sold products (Category 12).
d) Total Scope 3 greenhouse gas emissions indicator is in the scope of the reasonable assurance report from our independent auditor while Scope 3 “Focus 5” categories green-
house gas emissions indicator is not in the scope of our independent auditor. A revision of the methodology for categories 3.1 (purchased goods and services), 3.4 (upstream
transportation and distribution) and 3.5 (waste generated in operations) by the end of 2024 will address a limitation in accuracy identified in the existing methodology.
e) Reduce by 23% Scope 3 greenhouse gas emissions, as compared to 2021, from its “Focus 5” categories(c).
f) The Syensqo KPI is “share sales of product contributing circular economy.” This approach has been reviewed by the Ellen MacArthur Foundation’s Circulytics organization. We
identified limits in accuracy to this approach as the cumulated mass of all reactants might be higher than the final mass of products for some products (due to evaporation pro-
cesses, waste and by-product generation). Therefore, for year 2024, we will incrementally adopt the Renewable Carbon Index calculation approach, that will allow us to measure
the molar content of renewable carbon from reactants included in the final product over the molar content of total carbon from the final product. This will help us bring the
accuracy of renewable content measurement to the highest standard.
g) RIIR: (Reportable Injury and Illness rate): number of reportable injuries or illnesses per 200,000 work hours. Scope: Employees and contractors.
h) % of women in middle/senior management
– Management categories are defined on the basis of the Hay Job Evaluation Methodology. Middle and senior management
levels refer to the entire active internal workforce having Hay points above 530.
i) Figure published in the supplement to the registration document dated June 29, 2023.
Climate
In November 2023, we unveiled our plans to achieve carbon neutrality for Scope 1 and 2 emissions before 2040 across all businesses. In addition, we
announced a target to reduce our greenhouse gas emissions by 40% by 2030, compared to 2021 levels. By the end of 2023, we had already achieved a
20% structural reduction in Scope 1 and 2 emissions, or half of our 2030 target.
Since 2018, Syensqo has launched 47 projects globally to drive our transition to green energy, accelerate electrification and improve processes, all
focused on reducing Scope 1 and 2 emissions. By the end of 2023, 73% of our sites were procuring 100% renewable electricity.
In 2023, we also established another new and ambitious goal, targeting a 23% reduction of our Scope 3 greenhouse gas emissions from the “Focus 5”(c)
categories by 2030, versus 2021. This target covers more than 73% of Syensqo’s total Scope 3 emissions. By the end of 2023, we achieved a 11% structural
reduction of “Focus 5” categories’ Scope 3 GHG emissions.
Growth
Committed to the transition to a circular economy, Syensqo aims to increase the share of sales enabling circularity for our customers, targeting 18% of total
net sales in 2030 (versus 12% of sales in 2021). In 2023, 13% of Syensqo’s sales were generated by products that enable circularity, based on renewable raw
materials and energy. Syensqo and the Ellen MacArthur Foundation have signed a Strategic Partner agreement for three years, focusing on advancing
the circularity and sustainability agenda within the chemical sector. The partnership underscores Syensqo’s commitment to actively contribute to the
transformation of value chains to circular business models. This partnership will enable the Foundation network to continue relying on Syensqo’s input
and expertise, while also supporting its efforts to find new solutions to eliminate waste, make products and materials circular, and regenerate nature.
Better Life
The safety and wellbeing of our people is a key priority for Syensqo. In 2023, our reportable injury and illness rate (RIIR) decreased to 0.28 (versus 0.42 in
2022), an improvement of 38%.
During 2023, we also accelerated our progress towards gender parity. The share of women in middle and senior management reached 28%, an
improvement of 400 basis points, compared to 2021. Syensqo has committed to reaching 100% employees earning living wage, according to the
UNGlobal Compact definition, by 2026. Our living wage initiative complements the “Syensqo Cares” program, which provides all our employees with
social benefits, such as disability leave, healthcare and life insurance as well as 16 weeks of parental or adoption leave for both parents, regardless of
sexual orientation.
2. PREPARATION BACKGROUND
2.1. Comparability of results and reconciliation of underlying income statement indicators
In addition to IFRS accounts, Syensqo also presents alternative performance indicators (“underlying”) to provide a more consistent and comparable
indication of the Group’s underlying financial performance and financial position, as well as cash flows. These indicators provide a balanced view of the
Group’s operations and are considered useful to investors, analysts and credit rating agencies as these measures provide relevant information on the
Group’s past or future performance, financial position or cash flows. These indicators are generally used in the sector it operates in and therefore serve
as a useful aid for investors to compare the Group’s performance with its peers. The underlying performance indicators adjust IFRS figures for the non-
cash Purchase Price Allocation (PPA) accounting impacts related to acquisitions, for the coupons of perpetual hybrid bonds, classified as equity under
IFRS but treated as debt in the underlying statements, for impairments and for other elements that would distort the analysis of the Group’s underlying
performance.
2.2. Alternative performance metric (APM)
Syensqo measures its financial performance using alternative performance metrics, which can be found below. Syensqo believes that these measurements
are useful for analyzing and explaining changes and trends in its historical results of operations, as they allow performance to be compared on a
consistent basis. Definitions of the different metrics presented here are included in the glossary at the end of this financial report.
2.3. Description of the operational segments
Syensqo is organized into three Operating Segments:
· Materials, consisting of the GBUs Composite Materials and Specialty Polymers. The Materials segment offers a unique portfolio of high-performance
polymers and composite technologies used primarily in sustainable mobility applications. Its solutions enable weight reduction and enhance
performance while improving CO2 and energy efficiency. Major markets served include next-generation mobility in automotive and aerospace,
healthcare and electronics.
· Consumer & Resources offers unique formulation and application expertise through customized specialty formulations for surface chemistry and liquid
behavior, maximizing yield and efficiency of the processes they are used in while minimizing the eco-impact. Novecare, Technology Solutions, Aroma,
and Oil & Gas focus on specific areas such as resources (improving the extraction yield of metals, minerals and oil), industrial applications (such as
coatings), and consumer goods and healthcare (including vanillin and guar for home and personal care).
SYENSQO 2023
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76_
· Corporate & Business Services includes corporate and other business services, such as research & innovation, cogeneration units dedicated to the
Syensqo activities and new business development (NBD).
3. UNDERLYING GROUP FIGURES
Note B1: Net sales
Net sales of €6,834 million in 2023 declined by 13% on a reported basis, or 10% organically, versus a record 2022 performance, driven by lower volumes,
particularly in the Consumer & Resources segment. This was partially offset by higher overall pricing, driven by the Materials segment.
Net sales – in € million
FY 2022 7,890
Scope -40
Forex conversion -239
Volume & Mix -845
Price +68
FY 2023 6,834
SALES BY END-MARKET
2023 sales by end-markets
(in %) Materials Consumer & Resources Syensqo
Automotive 25% 4% 16%
Aerospace 26% 0% 15%
Electronics 16% 1% 10%
Building 3% 9% 5%
Resources & Environment 7% 30% 17%
Consumers goods, Healthcare & HPC 12% 16% 13%
Agro, Feed & Food 3% 19% 10%
Industrial applications 8% 22% 14%
Syensqo 100% 100% 100%
Note B2: Underlying raw materials and energy costs
The overall raw materials expense of the Group amounted to circa €2.3 billion in 2023 (vs. €3.1 billion in 2022). The raw materials expense can be split into
several categories: crude oil derivatives for 32%, minerals derivatives for 18% (e.g. glass fiber, phosphorus, sodium hydroxide, etc.), natural gas derivatives
circa 4%, biochemicals for 9% (e.g. glycerol, guar, fatty alcohol, ethyl alcohol, etc.) and others for 37% (composites, etc.).
Net energy costs represented about €218 million (vs €367 million in 2022). The distribution per region is as follows: Europe 38%, Asia 31% and Americas
31%. The main energy source expenses are natural gas 35% (45% in 2022 and 35% in 2021), electricity 41% (32% in 2022 and 38% in 2021), and steam
hydrogen biomass 23% (22% in 2022 and 26% in 2021).
More information on energy efficiency Is section 4.2 of the Extra-financial chapter.
Note B3: Underlying EBITDA
Underlying EBITDA evolution
Underlying EBITDA – in € million
FY 2022 1,863
Scope –15
Forex conversion -53
Materials +41
Consumer & Resources -257
Corporate & Business Services +40
FY 2023 1,618
Underlying EBITDA – in € million
FY 2022 1,863
Scope –15
Forex conversion -53
Volume & Mix -387
Net pricing +248
Fixed costs –7
Other –30
FY 2023 1,618
Underlying EBITDA of €1,618 million in 2023 declined by 13% on a reported basis, or 10% organically, versus a record 2022 performance, driven by lower
volumes described above. This was partially offset by positive net pricing, particularly in the Materials segment and, to a lesser extent, in the Consumer &
Resources segment. On a full year basis, fixed costs remained broadly stable versus 2022, as inflationary pressures and an increase in operating expenses
to support future growth were largely offset by cost saving initiatives. Underlying EBITDA margin of 23.7% in 2023 increased by 10 basis points versus
2022 as higher Materials EBITDA margin was offset by lower Consumer & Resources EBITDA margin.
Note B4: Underlying depreciation and amortization
Amortization, and depreciation and impairment charges were €484 million in 2023, compared to €482 million in 2022.
Note B5: Underlying net financial charges
In € million
FY 2023 FY 2022
Net cost of borrowings -190 -133
Interest on loans and short-term deposits 81 34
Other gains and losses on net indebtedness -24 -37
Net cost of borrowings a -133 -136
Coupons on perpetual hybrid bonds b -1
–
Cost of discounting provisions c -25 3
Net nancial charges d = a+b+c -159 -133
The net cost of borrowings variance is mainly explained by the higher interest rates applicable to the borrowings, loans and internal bank accounts in
place with the remaining Solvay Group.
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The movement in other gains and losses on net indebtedness is largely attributable to foreign exchange results.
The cost of discounting provisions relates to post-employment benefits (net of the expected return on plan assets) and to environmental provisions; its
increase is largely attributable to the evolution of the applicable discount rates.
Note B6: Underlying income taxes
In € million
FY 2023 FY 2022
Prot/(loss) for the period before taxes a 974 1,248
Earnings from associates and joint ventures b 25 16
Income taxes c -218 -260
Underlying tax rate d = -c/(a-b) 23.0% 21.1%
The 1.9 percentage point increase is mainly due to the unfavorable mix of taxable profit by country.
Note B7: Capex
(in € million) FY 2023 FY 2022
Acquisition (-) of tangible assets a -762 -522
of which capital expenditures required for the partial demerger and excluded from Free Cash Flow b 54 -
Acquisition (-) of intangible assets c -88 -69
Payment of lease liabilities d -53 -51
Capex e = a+b+c+d -848 -642
Materials -557 -400
Consumer & Resources –217 -190
Corporate & Business Services –74 -52
Underlying EBITDA f 1,618 1,863
Materials 1,312 1,290
Consumer & Resources 458 749
Corporate & Business Services -151 -177
Cash conversion g = (e+f)f 47.6% 65.5%
Materials 57.5% 69.0%
Chemicals 52.6% 74.6%
Capex in continuing operations was €848 million in 2023, an increase of 32% compared to €642 million in 2022.
Note B8: Free Cash Flow
(in € million)
FY 2023 FY 2022
Cash ow from operating activities a 1,275 1,336
of which voluntary pension contributions b -86 -
of which cash ow related to internal portfolio management and excluded from Free
Cash Flow
c -105 -6
Cash ow from investing activities d -1,231 -644
of which change in internal bank accounts with remaining Solvay Group e -570 -227
of which capital expenditures required for the partial demerger and excluded from
Free Cash Flow
f -54 -
Acquisition (-) of subsidiaries g -2 -
Acquisition (-) of investments – other h -14 -3
Loans to associates and non-consolidated companies and related parties i 172 102
Sale (+) of subsidiaries and investments j 32 66
Recognition of factored receivables k - -26
Corporate costs after taxes l -51 -53
Payment of lease liabilities m -53 -51
FCF n = a-b-c+d-e-f-g-h-i-j+k+l +m 568 682
Net interest received/(paid) o -119 -97
Dividends paid to non-controlling interests p -8 -8
Capital injection from non-controlling interests q 7 -
FCF to Syensqo shareholders r = n+o+p+q 448 577
FCF to Syensqo shareholders from continuing operations (LTM) s 448 577
Dividends paid to non-controlling interests from continuing operations (LTM) t -8 -8
Underlying EBITDA (LTM) u 1,618 1,863
FCF conversion ratio v = (s-t)/u 28.2% 31.4%
Free Cash Flow to shareholders reached €448 million in 2023 versus €577 million in 2022, primarily due to lower profitability and higher capital expenditures,
partially offset by cash inflows from working capital movements.
Note B9: Net working capital
(in € million)
December 31, 2023 December 31, 2022
Inventories a 1,244 1,392
Trade receivables b 907 1,027
Other current receivables c 384 305
Trade payables d -918 -972
Other current liabilities e -417 -538
Net working capital f= a+b+c+d+e 1,200 1,213
Quarterly sales g 1,601 1,996
Annualized quarterly total sales h = 4*g 6,404 7,984
Net working capital/sales I=f/h 18.7% 15.2%
Net working capital over sales was 18.7% in 2023, due to lower sales in the fourth quarter.
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Note B10: Underlying net debt
(in € million)
December 31, 2023 December 31, 2022
Non-current financial debt
a -2,159 -1.851
Current nancial debt b -154 -4,025
IFRS gross debt c=a+b -2,313 -5,877
Underlying gross debt d=c+h -2.813 -5,877
Other nancial instruments (current + non-current) e 78 1,818
Cash and cash equivalents f 1,150 244
Total cash and cash equivalents g=e+f 1,228 2,062
IFRS net debt I=c+g -1,084 -3,814
Perpetual hybrid bonds h -500 -
Underlying net debt j=i+h -1,584 -3,814
Underlying EBITDA (LTM) k 1,618 1,863
Underlying leverage ratio l=-j/k 1.0 2.0
Underlying net financial debt amounted to €1,584 million at the end of 2023, representing a leverage ratio of 1.0x.
Note B11: Provisions
Provisions at the end of 2022 (in € million) -712
Payments 132
Net new liabilities -470
Unwinding of provisions -112
Asset return 56
Additional voluntary pensions contributions 86
Remeasurements -42
Changes in scope and other -14
Provisions at the end of 2023 -1,076
Provisions increased by €364 million in 2023 to €1,076 million, primarily driven by an additional €229 million related to PFAS settlement with the New
Jersey Department of Environmental Protection (NJDEP). The Company expects to make a cash payment of approximately $180 million related to the
settlement during Q2 2024, with the balance paid over a 30-year period.
Note B12: ROCE
(in € million)
2023
As calculated
2022
As calculated
EBIT a 1,134 1,452
Non-cash accounting impact from amortization and depreciation of
purchase price allocation (PPA) from acquisitions
b -134 -211
Numerator c = a+b 1,000 1,241
WC industrial d 1,443 1,323
WC Other e -146 -205
Property, plant and equipment f 3,243 3,035
Intangible assets g 1,785 1,843
Right-of-use assets h 199 198
Investments in associates and joint ventures i 208 205
Other investments j 8 5
Goodwill k 2,648 2,624
Denominator l = d+e+f+g+h+i+j+k 9,388 9,028
ROCE m = c/l 10.6% 13.7%
ROCE has been defined as one of the key performance metrics to evaluate the strategy. ROCE for 2023 was 10.6% versus 13.7% in 2021 mostly from the
higher capital investment.
Note B13: Research & innovation
(in € million) FY 2023 FY 2022
IFRS research & development costs a -339 -312
Grants netted in research & development costs b 29 30
Depreciation, amortization and impairments included in research & development costs c -84 -89
Capex in research & innovation d -56 -50
Research & innovation e = a-b-c+d -340 -302
Materials -227 -186
Consumer & Resources -101 -97
Corporate & Business Services -12 -19
Net sales f 6,834 7,890
Materials 4,004 4,078
Consumer & Resources 2,826 3,805
Corporate & Business Services 4 7
Research & innovation as % of sales g = -e/f 5.0% 3.8%
Materials 5.7% 4.6%
Consumer & Resources 3.6% 2.5%
R&I effort further increased during 2023, compared to 2022.
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4. UNDERLYING FIGURES PER SEGMENT
SEGMENT OVERVIEW
(in € million) FY 2023 FY 2022 % YOY % organic
Net sales 6,834 7,890 -13.4% -10.2%
Materials 4,004 4,078 -1.8% +1.5%
Specialty Polymers 2,936 3,124 -6.0% -2.6%
Composite Materials 1,069 954 +12.0% +14.9%
Consumer & Resources 2,826 3,805 -25.7% -22.7%
Novecare 1,367 1,905 -28.2% -24.7%
Technology Solutions 687 739 -7.0% -5.4%
Aroma Performance 347 575 -39.6% -38.0%
Oil & Gas 424 586 -27.7% -23.5%
Corporate & Business Services 4 7 -47.1% -46.0%
EBITDA 1,618 1,863 -13.1% -10.0%
Materials 1,312 1,290 +1.6% +3.2%
Consumer & Resources 458 749 -38.9% -36.0%
Corporate & Business Services -151 -177 +14.3%
-
EBITDA margin 23.7% 23.6% +0.1pp
-
Materials 32.8% 31.6% +1.1pp
-
Consumer & Resources 16.2% 19.7% -3.5pp
-
Capex in continuing operations 848 642 +32.2%
-
Materials 557 400 +39.3% -
Consumer & Resources 217 190 +14.2% -
Corporate & Business Services 74 52 +43.4% -
Cash conversion 47.6% 65.5% -18.0pp -
Materials 57.5% 69.0% -11.5pp -
Consumer & Resources 52.6% 74.6% -22.0pp -
Research & innovation 340 302 +12.4% -
Materials 227 186 +21.6% -
Consumer & Resources 101 97 +4.0% -
Corporate & Business Services 12 19 -35.2% -
Research & innovation as % of sales 5.0% 3.8% +1.1pp -
Materials 5.7% 4.6% +1.1pp -
Consumer & Resources 3.6% 2.5% +1.0pp -
Note B14: Materials
(in € million)
FY 2023
FY 2022 % YOY % organic
Net sales 4,004 4,078 -1.8% +1.5%
Specialty Polymers 2,936 3,124 -6.0% -2.6%
Composite Materials 1,069 954 +12.0% +14.9%
EBITDA
1,312
1,290 +1.6% +3.2%
EBITDA margin 32.8% 31.6% +1.1pp -
Capex in continuing operations 557 400 +39.3% -
Cash conversion 57.5% 69.0% -11.5pp -
Research & innovation 227 186 +21.6% -
Research & innovation as % of sales 5.7% 4.6% +1.1pp -
NET SALES BRIDGE
Underlying – in € million
FY 2022 4,078
Scope -
Forex conversion -129
Volume & Mix -152
Price +208
FY 2023 4,004
Net sales of €4,004 million in 2023 declined by 2% on a reported basis, but increased by 1% organically, versus 2022. On a reported basis, the 2% year-
on-year decline was driven by the combination of lower volumes and unfavorable foreign exchange movements, partially offset by higher prices. The
decline in volumes was a result of softer demand across most end markets, particularly in Automotive and Construction, partially offset by strong growth
in Aerospace and Electronics. Automotive volumes were also impacted by customer destocking.
Specialty Polymers’ net sales of €2,936 million in 2023 declined by 6% on a reported basis, or 3% organically, versus a record 2022 as higher prices were
offset by lower volumes. Composite Materials net sales of €1,069 million in 2023 increased by 12% on a reported basis, or 15% organically, versus 2022,
driven by a combination of higher prices and volume growth. The year-on-year increase in volumes was driven by sustained growth in both commercial
aircraft as well as space and defense applications.
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Note B15: Consumer & Resources
(in € million) FY 2023 FY 2022 % YOY % organic
Net sales 2,826 3,805 -25.7% -22.7%
Novecare 1,367 1,905 -28.2% -24.7%
Technology Solutions 687 739 -7.0% -5.4%
Aroma Performance 347 575 -39.6% -38.0%
Oil & Gas 424 586 -27.7% -23.5%
EBITDA 458 749 -38.9% -36.0%
EBITDA margin 16.2% 19.7% -3.5pp -
Capex in continuing operations 217 190 +14.2% -
Cash conversion 52.6% 74.6% -22.0pp -
Research & innovation 101 97 +4.0% -
Research & innovation as % of sales 3.6% 2.5% +1.0pp -
NET SALES BRIDGE
Net sales FY – in € million
FY 2022 3,805
Scope -40
Forex conversion -110
Volume & Mix -692
Price -138
FY 2023 2,826
Net sales of €2,826 million in 2023 declined by 26% on a reported basis, or 23% organically, versus 2022. On a reported basis, the 26% year-on-year
decline was primarily driven by sharply lower volumes in the second half of the year. To a lesser extent, the decline in net sales was also due to lower
pricing as well as scope changes and unfavorable foreign exchange movements. The decline in volumes was primarily a result of customer destocking
and softer demand across most end markets, particularly in Agro, Feed & Food, Resources & Environment and Construction.
Novecare net sales of €1,367 million in 2023 declined by 28% on a reported basis, or 25% organically, versus 2022. This was primarily driven by lower
volumes across all major end markets as a result of softer demand as well as customer destocking, particularly Agro, Feed & Food, Construction and
Industrial applications.
Technology Solutions net sales of €687 million in 2023 declined by 7% on a reported basis, or 5% organically, versus 2022, driven by lower demand in the
second half of the year, as well as lower volumes from mining due to disruptions at certain mines. This was partially offset by higher year-on-year pricing.
Aroma Performance net sales of €347 million in 2023 declined by 40% on a reported basis, or 38% organically, versus 2022, driven by significantly lower
demand in the second half of the year as well as strong competition in the food, flavor and fragrance markets.
Oil & Gas net sales of €424 million in 2023 declined by 28% on a reported basis, or 24% organically, versus 2022, driven by lower drilling activity in the
United States, lower natural gas demand, as well as higher competitive pressure.
Note B16: Corporate & Business Services
(in € million)
FY 2023 FY 2022 % YOY % organic
Net sales 4 7 -47.1% -46.0%
EBITDA -151 -177 +14.3% -
Capex in continuing operations 74 52 +43.4% -
Research & innovation 12 19 -35.2% -
BRIDGE
in € million
FY 2022 7
Scope
–
Forex conversion
–
Volume & Mix -2
Price -1
FY 2023 4
Corporate & Business Services reported a loss of €151 million to Syensqo’s EBITDA in 2023, a year-on-year reduction of €26 million versus 2022, primarily
driven by lower spend related to the separation project and structural cost savings initiatives, partially offset by higher spend on growth platforms.
Reconciliation of underlying and IFRS measures
In addition to IFRS accounts, Syensqo also presents underlying income statement performance indicators to provide a more consistent and comparable
indication of Syensqo’s economic performance. These figures adjust IFRS figures for the non-cash Purchase Price Allocation (PPA) accounting impacts
related to acquisitions, for the coupons of perpetual hybrid bonds classified as equity under IFRS but treated as debt in the underlying statements, and
for other elements to generate a measure that avoids distortion and facilitates the appreciation of performance and comparability of results over time.
EBITDA on an IFRS basis totaled €1,286 million, versus €1,618 million on an underlying basis. The difference of €332 million is explained by the following
adjustments to IFRS results, which are done to improve the comparability of underlying results:
· €269 million to adjust for the “Result from portfolio management and major restructuring” (excluding depreciation, amortization and impairment
elements), including the costs attributed to Syensqo for the separation of the Solvay Group into two independent, publicly listed companies and other
restructuring initiatives.
· €168 million to adjust for the “Result from legacy remediation and major litigations,” mainly due to environmental provisions accrued for the settlement
agreement with the New Jersey Department of Environmental Protection.
· -€38 million to exclude net gains related to the novation of the CO2 hedges, in the context of the separation from the Solvay Group, deferred in
adjustments until the maturity of the economic hedge.
· -€66 million to consider a portion of the Solvay “Corporate costs," based on their relative usage by Syensqo, as they were not included in the IFRS
financial statements.
EBIT on an IFRS basis totaled €547 million, versus €1,134 million on an underlying basis. The difference of €587 million is explained by the above-
mentioned €332 million adjustments at the EBITDA level and €255 million of “Depreciation, amortization and impairments.” The latter consists of:
· €135 million to adjust for the non-cash impact of purchase price allocation (PPA), consisting of amortization charges on intangible assets, which are
adjusted in “Research & development costs” for €1 million, and in “Other operating gains & losses” for €134 million.
· €119 million to adjust for the impact of impairment of the CGU Aroma and of other minor non-performing assets in “Results from portfolio management
and major restructuring.”
Net financial charges on an IFRS basis were -€158 million versus -€159 million on an underlying basis. The €1 million adjustment made to IFRS net financial
charges mainly consists of:
· €8 million related to the remeasurement of the long-term incentive plans for which the beneficiaries will receive Solvay shares.
· €2 million related to the impact of decreasing discount rates on environmental provisions.
· -€10 million related to the exclusion of the results from investments at fair value through P&L.
Income taxes on an IFRS basis were -€192 million, versus -€218 million on an underlying basis. The -€26 million adjustment mainly relates to the adjustments
of the earnings before taxes described above.
Profit / (loss) attributable to Syensqo shareholders was €193 million on an IFRS basis and €752 million on an underlying basis. The delta of €559 million
reflects the above-mentioned adjustments to EBIT, net financial charges and income taxes.
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Notes to the figures per share
HISTORICAL KEY SHARE DATA
2023
Number of shares (in 1,000 shares)
Issued shares at end of year a 105,876
Treasury shares at end of year b 655
Shares held by Solvac c 32,622
Outstanding shares at the end of the year d = a-b 105,221
Average outstanding shares (basic calculation) e 105,835
Average outstanding shares (diluted calculation) f 106,316
Data per share (in €)
Equity attributable to Syensqo share g = .../d [1] 72.31
Underlying prot for the period (basic) h = .../e [1] 7.10
IFRS prot for the period (basic) i = .../e [1] 1.83
IFRS prot for the period (diluted) j = .../f [1] 1.82
Gross dividend [2] k 1.62
Net dividend [2] l = k*(1-…%) [4] 1.13
Share price data (in €) [3]
Highest m 109.90
Lowest n 89.52
Average o = v/u 93.57
At the end of the year p 94.26
Underlying price/earnings q = p/h 13.3
IFRS price/earnings r = p/i 50.7
Gross dividend yield s = k/p 1.72%
Net dividend yield t = l/p 1.20%
Stock market data [3]
Annual volume (in 1,000 shares) u 6,312
Annual volume (in € million) v 591
Market capitalization, end of year (in € million) w = p*d 9,918
Velocity x = u/a 5.96%
Velocity adjusted for free oat y = u/(a-b-c) 8.69%
(1) The numerator can be found under the same label in the historic key nancial data table in section 1 of the Business review.
(2) Recommended 2023 dividend, pending General Shareholders’ Meeting on May 23, 2024.
(3) The stock market data are based on all trades registered by Euronext. The data is for the period December 11, 2023, to December 31, 2023.
Note B17: Earnings per share
FY2023 FY2022
Prot attributable to Syensqo share (in € million)
Underlying prot for the period a 752 974
IFRS prot for the period b 193 950
Number of shares (in 1,000 shares) (1)
Issued shares at end of year c 105,876 105,876
Treasury shares at end of year d 655
–
Outstanding shares at the end of the year e = c-d 105,221 105,876
Average outstanding shares (basic calculation) f 105,835 105,876
Average outstanding shares (diluted calculation) g 106316 105,876
Data per share (in €)
Underlying prot for the period (basic) h = a/f 7.10 9.20
Underlying prot for the period (diluted) i =a/g 7.07 9.20
IFRS prot for the period (basic) j = b/f 1.83 8.97
IFRS prot/loss for the period (diluted) k = b/g 1.82 8.97
1) Amount of shares for FY2022 are merely for comparative purposes.
Note B18: Dividend
Total proposed dividend of €1.62 per share, as announced in November 2023, subject to Shareholders’ approval during the Annual General Meeting
scheduled for May 23, 2024, with payment thereafter. Moreover, in compliance with Belgian tax law, Syensqo SA will exceptionally withhold an amount
corresponding to the tax on the 2023 dividend (at 30% or at a reduced rate in application of the applicable tax treaties) paid to the shareholders usually
benefitting from an exemption of withholding tax (under article 264/1 of the Belgian Income Tax Code, Article 106 §5 or Article 106 §6 of the Royal Decree
implementing the Income Tax Code). The amount will be provisionally retained, not paid to the Belgian Treasury and released by Syensqo SA once the
one-year detention is reached. These shareholders or their paying agents are however advised to contact Syensqo Investor Relations department to
discuss a potential way forward.
Outlook
For 2024, we expect the overall demand dynamics across our major end markets to reflect the trends we saw towards the end of 2023, with flattish overall
volumes. In addition, the end of customer destocking in a number of our end markets has started to prompt a more stable demand outlook since the
start of the year. More specifically, and based on our year-to-date performance, we expect our Q1 2024 underlying EBITDA to increase by approximately
20% versus the level achieved in Q4 2023.
Full-year underlying EBITDA is currently estimated to be in the range of €1.4 billion and €1.55 billion. The lower end of range is aligned with current
market dynamics and the annualized EBITDA performance we expect to achieve in Q1 2024. The higher end of the range assumes a modest year-on-year
volume recovery, predominantly in the second half of the year, subject to the overall macroeconomic and demand environments.
Capital expenditures are expected to be in the range of €600-€650 million as we prioritize our investments based on the outlook for 2024 and take into
account the acceleration of overall spend in 2023. Free Cash Flow is estimated to be in the range of €400 million to €500 million, excluding the previously
announced c.$180 million PFAS payment to the New Jersey Department of Environmental Protection, which is expected to be made during Q2 2024.
Aligned with the mid-term financial targets provided at our recent Capital Markets Day, the Syensqo team is focused on accelerating value creation by
delivering superior revenue growth, margin expansion and increasing returns.
Mid-term Financial Targets
Syensqo’s mid-term financial targets, as set at our Capital Markets Day, are as follows:
· Net sales growth: 5% to 7% (2024-2028)
· Underlying EBITDA margin (in %): to mid-20s by 2008
· Return on capital employed: to mid-teens by 2028
ANNUAL INTEGRATED REPORT
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GOVERNANCE
90 1. Introduction
92 2. Capital, shares and shareholders
95 3. Board of Directors and Board Committees
104 4. Executive Leadership Team (ELT)
106 5. Renumeration report
120 6. Main characteristics of risk management,
internal control and internal audit
123 7. External audit
123 8. Deviation from the Belgian governance
code
123 9. Items to be disclosed pursuant to article
34 of the Belgian royal decree of November
14, 2007
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Corporate Governance
Statement
1. INTRODUCTION
Syensqo SA/NV (“Syensqo” or the “Company”) – headquartered in Belgium and listed on Euronext Brussels and Euronext Paris – is committed to
upholding global governance best practices and disclosures, emphasizing transparency and promoting a culture of sustainable long-term value creation,
in line with our Purpose.
In accordance with Belgian law, Syensqo adheres to the principles and provisions of the 2020 Belgian Corporate Governance Code (the “Belgian
Governance Code”), which is based on a “comply or explain” principle. The English, Dutch and French versions of the Belgian Governance Code can
be found on the website of the Belgian Corporate Governance Committee.
On December 9, 2023, Syensqo’s Board of Directors adopted a Corporate Governance Charter (the “Charter”), which is available on Syensqo’s website.
It describes the main aspects of Syensqo’s approach to corporate governance, including the governance structure and the internal rules of the Board of
Directors, the “Executive Leadership Team” (the “ELT”) and Committees set up by the Board of Directors.
In addition, Syensqo publishes a Corporate Governance Statement in the Annual Integrated Report, which includes the information required by the
Belgian Code of Companies and Associations (hereafter the “Code of Companies and Associations” or the “BCCA”) and the Belgian Governance
Code. The Corporate Governance Statement includes additional factual information regarding Syensqo’s corporate governance practices and relevant
modifications to this, together with details on the remuneration of directors and executives, and on relevant events that took place during the preceding
financial year.
Thissection of the Annual Integrated Report constitutes Syensqo’s Corporate Governance Statement for the financial year 2023.
Highlights of the Year
2023: Birth of Syensqo
The Company was incorporated on February 27, 2023, as a private limited company (société à responsibilité limitée / besloten vennootschap). On
October 16, 2023, the Company converted into a public limited liability company (société anonyme / naamloze vennootschap). On December 8, 2023,
the Extraordinary Shareholders Meetings of Syensqo and Solvay SA respectively approved the partial demerger of Solvay whereby the shares and other
interests Solvay held in the legal entities operating the so-called “Specialty Businesses,” its rights and obligations under the agreements entered into
with those legal entities, as well as certain other assets and liabilities were transferred to Syensqo (the “Partial Demerger”). Accordingly, the Partial
Demerger became effective at 00:00 am CET during the night of December 8, 2023, to December 9, 2023, at which time the assets and liabilities of Solvay
set forth in the Partial Demerger proposal were transferred pursuant to a universal succession regime to Syensqo.
The Company’s separation from the Solvay Group aims to accelerate the Company’s ability to create value for all our stakeholders. It will further sharpen
the Company’s focus and offer enhanced capital allocation optionality, which will prioritize profitable growth. This will enable Syensqo to devote its
efforts more intensely and effectively to addressing its customers’ most pressing needs. Syensqo’s strategy is built on four pillars: superior growth,
innovation leadership, sustainable solutions and capital discipline.
Syensqo’s Governance Structure
The Company opted for a “one tier” governance structure, which it considers the most appropriate for the Group to operate effectively. This means
that the Company is managed by a Board of Directors (conseil d’administration/raad van bestuur) empowered to carry out all acts necessary or useful to
achieve its Purpose, except those reserved by law or the articles of association to the General Meeting. The Board of Directors has delegated specific
management powers to the Executive Officers of the Company, who collectively run the Company, within the framework of an Executive Committee,
also named ELT. The respective functions and responsibilities of the Board of Directors and the Executive Leadership Team are clearly defined in the
Corporate Governance Charter (available on the Company’s website), in accordance with applicable rules.
The composition and functioning of the Board and the ELT are designed to ensure that the right profiles are represented, with the skills and experience
deemed necessary to drive Syensqo’s business and sustainability strategy.
Board of Directors
Syensqo’s Board of Directors promotes good governance practices that create transparent dialogue among the Group’s stakeholders. It pursues
sustainable value creation by setting the Company’s overall strategy, establishing effective, responsible and ethical leadership, and monitoring its
performance. To do so, the Board develops an inclusive approach which balances the legitimate interests and expectations of shareholders and those
of other stakeholders.
Syensqo’s Board of Directors is responsible for maintaining the Group’s long-term strategic thinking and for overseeing, challenging and supporting the
ELT’s implementation of Syensqo’s strategy.
The articles of association and the Charter of the Company define the role and mission, functioning, size, composition, training and evaluation of the
Board of Directors. The internal rules of the Board of Directors and the Committees are attached to the Charter. The main features can be summarized
as follows:
· The Board elects a Chair from among its members, who cannot be the CEO.
· The Board may elect from among its members a Vice-Chair who may or may not be an independent Director. The Vice-Chair shall be a non-independent
Director if the Chair is independent.
· The Chair of the Executive Leadership Team must be a Director of the Company and is the CEO.
· The Reference Shareholder may propose the appointment of certain Directors.
· The Board may also appoint on each Specialized Committee one of the Directors appointed upon proposal of the Reference Shareholder, subject to
such Director having the appropriate skills and experience to serve in the relevant Committee.
· Certain decisions are subject to a positive vote of the majority of three-quarters (rounded up to the nearest unit) of the votes of the Directors present
or represented:
- Any transaction that would substantially modify the activities of the Company or its Group which are considered to be: transactions involving
investment, acquisition, shareholding, divestment or sale, in any form whatsoever, representing an enterprise value of at least €2 billion or
generating either sales of at least €2 billion or a contribution to the Group’s operating results of at least €250,000,000.
- Any use of the authorization granted by the Extraordinary Shareholders’ Meeting to the Board of Directors to increase the share capital.
· To enhance the overall effectiveness of the Board of Directors by ensuring focus, oversight and monitoring of sensitive areas, the Board of Directors
has set up on a permanent basis the following specialized Committees: the Audit and Risk Committee; the Finance Committee; the Remuneration
Committee; the Nomination Committee; and the Environmental, Social and Governance (ESG) Committee.
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The age limit for membership on the Board of Directors is the Ordinary Shareholders’ Meeting following the Director’s 75th birthday.
As of December 31, 2023, the Board of Directors is a collegial body composed of 10 members (including the CEO and nine non-executive Directors)
and made up of a diverse group of highly experienced Directors, of which six Directors are independent. Six of the 10 Directors, including the CEO, are
women. Collectively, the Directors bring the wide set of skills and experience required to develop and oversee the Group’s long-term strategy and to
ensure efficient decision-making. All 10 Directors were appointed at the Extraordinary Shareholders Meeting of December 8, 2023, for a four-year term,
until the end of the Ordinary Shareholders Meeting to be held in May 2027:
· The five following directors had previously served on the Solvay SA’s Board of Directors:
- Rosemary Thorne, Independent Director, Chair of the Board
- Ilham Kadri, Chief Executive Officer
- Françoise de Viron, Non-Executive Director, Vice-Chair of the Board*
- Edouard Janssen, Non-Executive Director*
- Matti Lievonen, Independent Director
· The five following directors joined Syensqo’s Board of Directors:
- Roeland Baan, Independent Director
- Nadine Leslie, Independent Director
- Mary Meaney, Non-Executive Director*
- Heike van de Kerkhof, Independent Director
- Julian Waldron, Independent Director
* Directors appointed upon proposal of the Reference Shareholder.
For more details on the Board of Directors and Board Committees, please refer to section 3 of the Governance chapter.
Executive Leadership Team
The ELT gives shape to the strategy, steers the Group’s business portfolio, and protects the Group’s interest. It also makes sure everything is in place to
achieve our vision to outgrow the market and deliver strong returns through customer-driven innovation. It is in charge of Syensqo’s overall performance,
enabling us to achieve our long-term value creation goals and meet financial targets.
On December 9, 2023, the Board of Directors appointed the members of the ELT of the Company for a four-year term, as follows:
· Ilham Kadri (Chief Executive Officer and Chair of the ELT)
· Christopher Roger Davis (Chief Financial Officer)
· Marc Chollet (Chief Strategy Officer)
· Hervé Tiberghien (Chief Operations Officer)
· Joëlle Boxus (Chief People Officer)
· Mark Rollinger (Group General Counsel)
Syensqo’s Executive Leadership Team brings decades of global experience in advanced materials across multiple industrial sectors. It ensures the
Company is set up to deliver the best-in-class science and technologies needed to advance humanity through the energy transition and into a low-
carbon future.
For more details on the ELT, please refer to section 3 of the Governance chapter.
2. CAPITAL, SHARES AND SHAREHOLDERS
2.1. Capital
Syensqo’s share capital amounts to €1,351,624,292.82 and comprises 105,876,417 issued shares.
2.2. Syensqo shares
Syensqo (SYENS.BE) is listed on Euronext Brussels, which is our primary listing. Syensqo has a secondary listing on Euronext Paris.
Syensqo is included in the BEL20, the main Belgian index. Syensqo is also included in other indices such as the Euronext, BEL, CAC, DJ EURO STOXX,
MSCI, FTSE Russel, S&P and Bloomberg.
Syensqo has been officially listed on Euronext Brussels since December 11, 2023, at an opening price of €90. The average share price over the period
was €95.86, with a low of €93.50 and a high of €109.90. Syensqo’s closing share price on December 29, 2023, was €94.26, which represents an increase of
4.7% compared to the opening price on December 11, 2023.
Average daily trading volume as reported by Euronext was 485,514 shares in 2023, representing approximately €45.4 million exchanged per day. In
addition to Euronext, there are other alternative trading venues where investors are able to buy and sell Syensqo shares.
Shareholders
2.2.1. Shareholder structure
As of December 31, 2023, Syensqo’s capital was represented by 105,876,417 ordinary shares. As there are no different classes of shares, all Syensqo shares
carry the same rights. Each share comes with the right to one vote, following the “one share, one vote” principle.
Syensqo ordinary shares can be held as either:
· Registered shares: shares represented by an entry within Syensqo’s share registry, managed by Syensqo’s Shareholders Service.
· Dematerialized shares: shares represented by a book entry in the name of the shareholder with a recognized account keeper or a clearing institution.
· Transparency notifications are required by Belgian law and Syensqo’s bylaws when an investor crosses the thresholds of 3%, 5%, 7.5% or any multiple
of 5% of Syensqo voting rights. Unless otherwise indicated, section 2.3.1 of this Annual Integrated Report refers to theoretical voting rights, taking into
account all the shares to which voting rights are attached, even if the exercise of these rights is suspended.
· Solvac gave notice that as of December 11, 2023, it held 32,621,583 Syensqo shares, representing 30.81% of voting rights. This percentage results from
the fact that Solvac SA held 30.81% of Solvay SA share capital and voting rights at the time of the partial demerger of Solvay SA.
· Blackrock Inc., an institutional investor, gave notice that as of December 11, 2023, it held 3,481,185 Syensqo shares, representing 3.29% of the voting
rights, and 901,384 equivalent financial instruments, representing 0.85% of the voting rights. This amounts to a combined interest in Syensqo of 4.14%.
The remaining shares, comprising approximately 65%, are held by institutional and retail shareholders.
Solvac
Syensqo’s largest shareholder is SolvacSA (“Solvac” or the “Reference Shareholder”). Solvac is a public limited liability company established under
Belgian law, incorporated in 1983. Its primary asset consists of shares in Solvay SA and shares in Syensqo.
Solvac’s shares are traded on Euronext Brussels. It has approximately 14,000shareholders. Among these, approximately 2,400individuals are related to
the founding families of Solvay and Solvac, which, combined, are reported to hold approximately 77.32% of Solvac shares.
On November 14, 2023, Solvac confirmed its full and unanimous support for Solvay’s separation to split the company into two independent listed
companies, Solvay SA and Syensqo. A relationship agreement with Solvac has not been considered necessary, given Solvac’s stated investment objective
and track record of engagement with Solvay since its initial investment in1983. Syensqo’s articles of association do not provide for any specific director
nomination rights for Solvac, however Solvay may propose the appointment of certain Directors.
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Syensqo Stock Option Management
Syensqo Stock Option Management SRL (“SSOM”) is a wholly owned indirect subsidiary of Syensqo. As of December 31, 2023, SSOM owned
655,072Syensqo shares and 230,939 call options. Those shares and options are held by SSOM on its own account, as part of its strategy to cover
the obligations assumed by SSOM regarding stock options granted by Syensqo (or formerly by Solvay) to Group senior executives. The voting rights
attached to the Syensqo shares held by SSOM are, as a matter of law, suspended.
Employee Share Purchase Plan
In September 2022, Solvay launched the first Employees Share Purchase Plan initiative strongly supported by the employees’ representatives.
More than 3,800 Syensqo employees contributed to the plan (out of the 6,100 participants before the Partial Demerger). In October 2024, they will
receive their free and matching Syensqo shares. The number of those free and/or matching shares will be determined based on the 30-day average
closing price of Syensqo shares relative to the combined 30-day average closing prices of Syensqo shares and Solvay SA shares. It is expected that
Syensqo will implement similar employee-related share purchase programs in the future.
2.3. Relations with investors and analysts
Syensqo maintains an open, ongoing and constructive dialogue with the investment community. Syensqo seeks to provide pertinent and accurate
information to ensure understanding of the Company’s business and strategy, helping the financial community to make its own informed assessments
and judgments. Detailed information on our business activities, strategy and financial performance is available through various regulatory and other
publications, such as the Annual Integrated Report, financial reports and press releases, as well as other media, such as webcasts, which are available on
our website.
The Investor Relations team maintains a close relationship with investors throughout the year. The CEO and CFO also prioritize interactions with the
investment community. Syensqo’s teams interact with investors using both digital technologies and face-to-face meetings.
Syensqo adheres to the guidelines issued by the FSMA (Belgian Financial Services and Markets Authority) and complies with the disclosure obligations
defined by Belgian law and contained in the Market Abuse Regulation (EU) 596/2014 (MAR).
On November 13, 2023, Syensqo presented its new mid-term financial targets and sustainability commitments at its inaugural Capital Markets Day.
Syensqo’s incoming senior leadership team, announced on November 3, 2023, committed to accelerating value creation by delivering superior revenue
growth, margin expansion and increasing returns. The mid-term financial targets (on an organic basis) are as follows:
· 5% to 7% net sales growth over 2024-2028 (average annual organic sales growth over the period).
· Underlying EBITDA Margin (in %) to mid-20s by 2028.
· Return on Capital Employed to mid-teens by 2028.
Syensqo’s One Planet targets represent a commitment to making the world a better place, and act as a driver of revenue growth. Syensqo’s specific
targets include:
· A 2030 target to reduce by 23% Scope 3 greenhouse gas emissions, as compared to 2021, in its Focus 5 categories both upstream and downstream.
· Carbon neutrality on Scope 1 and 2 GHG emissions by 2040, with -40% Scope 1 and 2 GHG emissions by 2030 compared to 2021.
· Sales enabling the circular economy in total sales to reach 18% in 20301.
· Aiming for gender parity across Syensqo’s organization by 2033 for mid and senior management.
· Living wage for 100% of Syensqo’s own employees by 2026.
On December 8, 2023, at the Extraordinary General Shareholders Meeting of Solvay SA, the separation plan was supported by 99.53% of positive votes,
giving official birth to Syensqo.
2.3.1. Interactions with shareholders, Solvac and Syensqo founding families
Committed to maintaining relationships of trust with shareholders and the financial community, Syensqo aims to provide comprehensive, transparent
and timely information regarding the Group’s vision and strategic ambition, most relevant developments as well as financial performance and targets.
The Company has an Investor Relations Team fully dedicated to providing information and services as well as organizing activities for shareholders,
including institutional investors. Every shareholder has access to clear, comprehensive, transparent information, tailored to their individual needs,
through a dedicated “investor relations” section on Syensqo’s website. Syensqo also engages with retail banks, regularly interacting with their analysts
and participating in events dedicated to private investors. The Group also organizes investor conferences and events as well as presentations, visits and
roadshows and a Capital Markets Day for investors and analysts. In addition, to maintain a close relationship with its individual shareholders in particular,
the Group has had in place a Shareholders Service which responds to all queries and requests for information from shareholders (subject to applicable
law and in particular closed periods).
In 2023, during the preparation of the separation of Solvay, the management at that time held regular meetings with Syensqo’s major reference
shareholder, Solvac.
1 Reference year 2021. For scope 3, on Focus 5 categories.
2.3.2. Interactions with sell-side analysts
Syensqo is covered by 19sell-side analysts who regularly publish research on the Company. The up-to-date list of analysts can be found on Syensqo’s
investor relations website.
In addition to regular meetings, emails and conversations, Syensqo organizes quarterly conference calls between the senior management and the
financial community, following the publication of the Group’s results. Although specifically geared toward analysts, these conference calls are accessible
live to all investors, and remain available in the form of an on-demand video and transcript on Syensqo’s website. The Company also hosts webinars,
focused on specific topics to further enhance the financial community’s understanding of Syensqo’s business units and technologies.
2.3.3. Interactions with institutional investors
Syensqo’s dedicated interactions with institutional investors began following its Capital Markets Day event held on November 13, 2023. Subsequent to
the event, the CEO and CFO engaged with the financial community in a three-week roadshow in Europe and the United States with both existing and
prospective shareholders. In total, the Company met with approximately 130 investors during the roadshows.
The meetings focused on a range of topics, including the short-term demand environment, mid-term growth drivers (revenues, profit, cash, returns),
capital allocation and capital structure priorities as well as sustainability targets.
2.3.4. Interactions with stewardship and responsible investment teams at shareholders and ESG research providers,
including proxy advisors
At least once a year, the CEO, the CFO, the Group General Counsel, the Chief People Officer, the Chief Sustainability and Government Affairs Officer,
and the Head of Investor Relations meet with the stewardship and responsible investment teams of institutional investors and ESG research providers,
including proxy advisors. The purpose of this exercise is to provide an update on Syensqo’s key ESG targets, as well as our performance. In2023, topics
included:
· The strengthening of Syensqo’s climate commitments, restarting the SBTi process as a new independent company.
· The actions and investments made to reinforce responsible site management.
· The phasing out of fluorosurfactants globally.
Syensqo also treats these meetings as an opportunity to understand changes in the methodologies and policies used by these teams, aswell as to
actively solicit their feedback on how Syensqo can improve ESG practices and disclosures.
3. BOARD OF DIRECTORS AND BOARD COMMITTEES
The Charter defines the role and mission, functioning, size, composition, training and evaluation of the Board. The internal rules of the Board are
attached to the Charter and are available on Syensqo’s website.
3.1. The Board of Directors
3.1.1. Structure and composition
Syensqo’s Board of Directors is a collegial body made up of a diverse group of highly experienced directors. The composition and functioning of the
Board are designed to ensure that the right profiles are represented, with the skills and experience deemed necessary to drive Syensqo’s business and
sustainability strategy. The Board of Directors is empowered to perform all acts necessary or useful for the achievement of the Company’s Purpose,
except those reserved to the Shareholders Meeting by law or by the articles of association.
As of December 31, 2023, the Board of Directors was composed of 10 directors and had the following attributes:
· The Board is chaired by an independent director.
· The roles of Chair and CEO are separated.
· Nine of the 10 directors are non-executive, representing diverse competencies as highlighted in the table below.
· A Vice-Chair has been appointed.
· Six of the 10 directors are Independent non-executive directors according to article 7:87, §1 of the BCCA and meet the criteria set out in rule 3.5 of
the Belgian Corporate Governance Code. In addition, and without prejudice to the application of the criteria set out in the Corporate Governance
Code, the Corporate Governance Charter of the Company requires a waiting period of at least one year before the Company can recognize the
independence of a director of the Company’s reference shareholder, Solvac SA, who would leave the board of directors of Solvac SA to join the Board
of Directors. All Independent directors have been recognized as such by the Extraordinary Shareholders Meetings of December 8, 2023.
· Six of the 10 directors, including the CEO, are women.
· Directors represent eight different nationalities.
All 10 directors were newly appointed at the Extraordinary Shareholders Meeting of December 8, 2023, for a four-year term, until the end of the Ordinary
Shareholders Meeting to be held in May 2027.
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The Board organized one meeting between December 9, 2023, and December 31, 2023. All directors participated in this meeting. The Board also
attended an onboarding session on the Partial Demerger, its consequences and the key agreements in place in this respect.
The overall meeting attendance by directors in 2023 was 100%.
✪ Year of rst appointment
☑ Presence at Board meetings in 2023
ROSEMARY THORNE
British / Born in: 1952
Independent Director
✪ Dec 2023 ☑ 1/1
SYENSQO mandates:
Chair of the Board, Chair of the Finance Committee, Member of the
Remuneration and Member of the Nomination Committees
Directorship expiry date: 2027
Diplomas:
Honors Degree in Mathematics and Economics from the University
of Warwick, (UK)
Fellow of the Chartered Institute of Management Accountants
FCMA and CGMA
Fellow of the Association of Corporate Treasurers FCT
Other roles:
Board Member and Chair of Audit Committee of
Merrill Lynch International (UK), a wholly owned subsidiary of Bank
of America Corporation
Publicly listed directorships:
None
ILHAM KADRI
French-Moroccan / Born in: 1969
Non-Independent Director
✪ Dec 2023 ☑ 1/1
SYENSQO mandates:
Chair of the Executive Committee, Member of the Finance
Committee and Member of the ESG Committee
Directorship expiry date: 2027
Diplomas:
PhD in Macromolecular Physics-Chemistry from Louis Pasteur
University, Strasbourg, France
Degree in Chemical Engineering from l’Ecole des Hauts
Polymères, Strasbourg, France
Publicly listed directorships:
Board Member of A.O. Smith Corporation and L’Oréal SA
FRANÇOISE DE VIRON
Belgian / Born in: 1955
Non-Independent Director
✪ Dec 2023 ☑ 1/1
SYENSQO mandates:
Vice-Chair of the Board, Member of the Remuneration Committee,
Member of the Nomination Committee and Chair of the ESG
Committees
Directorship expiry date: 2027
Diplomas:
PhD in Science (Physics) from the UC Louvain, Belgium
Master in Sociology from the UC Louvain, Belgium
Driving Sustainability from the Board Program, IMD, Switzerland
Other roles:
Professor emeritus at the Faculty of Psychology and Education
Sciences and Louvain School of Management (Université
Catholique de Louvain, Belgium)
Publicly listed directorships:
None
ROELAND BAAN
Dutch / Born in: 1957
Independent Director
✪ Dec 2023 ☑ 1/1
SYENSQO mandates:
Member of the ESG Committee, Member of the Finance
Committee and Member of the Audit and Risk Committee
Directorship expiry date: 2027
Diplomas:
Vrije Universiteit Amsterdam Master of Science (MSc.)
Economics
Other roles:
President and CEO of Topsoe
Publicly listed directorships:
Chair of Supervisory Board of SBM Offshore NV
EDOUARD JANSSEN
Belgian / Born in: 1978
Non-Independent Director
✪ Dec 2023 ☑ 1/1
SYENSQO mandates:
Member of the Audit and Risk Committee and Member of the
Finance Committee
Directorship expiry date: 2027
Diplomas:
Master of Science in Finance and Management (2000: Magna cum
laude and Prix de Barsy), Solvay Brussels School
MBA, INSEAD, (July 2009, France and Singapore) and INSEAD
IDP-C (2022)
Other roles:
Belron, Insead HGIBS, Solvay Brussels School (Vice-Chairman)
Publicly listed directorships:
CFO of D’Ieteren Group, Board Member of Financière de Tubize
NADINE LESLIE
Haiti & US / Born in: 1963
Independent Director
✪ Dec 2023 ☑ 1/1
SYENSQO mandates:
Member of the ESG Committee, Member of the Nomination
Committee and Member of the Remuneration Committee
Directorship expiry date: 2027
Diplomas:
BS Civil Engineering Faculté des sciences Port-au-Prince Haiti
Other roles:
Board Member of Provident Financial Services Inc. and of its
subsidiary Provident Banking, Member of the Board of Trustees
at Hackensack Meridian Health network
Publicly listed directorships:
CEO of Middlesex Water Company (US)
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MATTI LIEVONEN
Finnish / Born in: 1958
Independent Director
✪ Dec 2023 ☑ 1/1
SYENSQO mandates:
Chair of the Remuneration Committee, Member of the Nomination
Committee
Directorship expiry date: 2027
Diplomas:
BSc (Eng.), Savonia University of Applied Science, Finland. EMBA,
Aalto University, Finland
DSc (Tec.) h.c. Aalto University, Finland
Other roles:
ExecutiveChairman of EcoCeres,
Member of the Supervisory Board of Wintershall Dea
Publicly listed directorships:
None
MARY MEANEY
French & US / Born in: 1972
Non-Independent Director
✪ Dec 2023 ☑ 1/1
SYENSQO mandates:
Member of the ESG Committee
Diplomas:
BA in Public & International Affairs, Princeton University
D.Phil. in politics, Oxford University
Other roles:
Board Member and Member of the Remuneration Committee
of Beamery UK
Publicly listed directorships:
Board Member and Member of the Audit Committee of
Groupe Bruxelles Lambert (GBL)
HEIKE VAN DE KERKHOF
German / Born in: 1962
Independent Director
✪ Dec 2023 ☑ 1/1
SYENSQO mandates:
Chair of the Nomination Committee, Member of the Remuneration
Committee and Member of the Audit and Risk Committee
Directorship expiry date: 2027
Diplomas:
BSME University Mönchenglabach, Germany Textile Engineering -
MBA European University Genève, Switzerland
Other roles:
CEO and Board Member of Archroma Management GmbH
(until end 2023)
Publicly listed directorships:
Independent Board Member, Member of the Audit Committee and
Member of the HSE& Sustainability Committees of OCI N.V.
JULIAN WALDRON
French & British / Born In: 1964
Independent Director
✪ Dec 2023 ☑ 1/1
SYENSQO mandates:
Chair of the Audit and Risk committee,
Member of the Finance committee
Directorship expiry date: 2027
Diplomas:
Ma (hons) Cambridge university 1986
Other roles:
Chair of the Board of Albéa Group and Executive President of
Albéa Tubes
Independent Board Member and Chairman of the Finance,
Risk and Investment Committee of Carbon Clean
Publicly listed directorships:
None
3.1.2. Director skills and qualification matrix
Collectively, the members of the Board bring the wide set of skills and experience required to develop and oversee the Group’s long-term strategy.
Thisexperience has been aggregated in the Director Skills and Qualification Matrix. The Board’s skills and experience range from international markets,
business strategy and operations, specialty industries, clean technology to risk management, corporate governance, finance and talent management.
This Matrix also helps the Nomination Committee, together with the Board, to identify the skills and experience needed to help drive Syensqo’s
business and sustainability strategy when considering new Board members. Each director’s skills and experience are presented in the Director Skills and
Qualification Matrix below.
Chemical /
Industrial
Finance
/ Risk
manage-
ment
Management of
large
companies
Research &
Innovation
Digital /
Cyber
security
Human
resources
manage-
ment
ESG International
experience
Rosemary Thorne
X
X
X X X X
Ilham Kadri
X
X X X X X
X X
Françoise de Viron
X
X
X X
Roeland Baan
X X X X X X X
Edouard Janssen
X
X X
X
Nadine Leslie
X X X X X X
Matti Lievonen
X X
X
X X
X
Mary Meaney
X X X X
Heike van de Kerkhof
X X X X X X X
Julian Waldron
X X X X X X
All the Board members are actively engaged on the topic of sustainability, through dedicated Board meetings.
3.1.3. Diversity at Board level
The composition of the Board satisfies the legal requirements applicable in Belgium relating to gender diversity. Furthermore, Syensqo not only aims
to ensure the gender diversity of its directors, but also diversity in age, nationality, experience, education and skill set, representing Syensqo customers’
footprint – including a Board with eight nationalities, 60% women and one US-based female director. Details of the qualifications and experience of
the Board members can be found in sections 3.1.1 and 3.1.2. Syensqo’s commitment to diversity at Board level is further evidenced by the criteria for
appointment of directors listed in section 5.2.3 of the Charter, which is available on Syensqo’s website.
3.1.4. Functioning of the Board of Directors
The Board of Directors held one meeting between December 9, 2023, and December 31, 2023
3. All directors participated (100% of attendance) in this meeting. The whole Board also participated in an onboarding session dedicated to the Partial
Demerger, its consequences and the key agreements in place in this respect.
The Company applies a strict policy to prevent conflicts of interest, particularly in the operation of its governing bodies, as described in article 1.9 of the
Corporate Governance Charter, and applies in particular articles 7:96 and 7:97 of the BCCA. In 2023, no decision or deliberation required the application
of these articles.
3.1.5. Evaluation
In order to improve its effectiveness, the Board of Directors, under the leadership of the Chair of the Board and the Chair of the Nomination Committee,
will regularly (and preferably annually) assess its composition, its operation and its interaction with executive management. The members of the Board of
Directors will be invited to express their opinions on these various points. In addition, an external consultant is expected to carry out an evaluation every
three years. As part of its own evaluation, the Board of Directors will also assess the Audit and Risk Committee, the Finance Committee, the Remuneration
Committee, the Nomination Committee and the ESG Committee, as well as their composition and operation. The Board's recommendations on possible
improvements will be implemented by each committee.
At the end of each director’s term of office, the Nomination Committee will assess that director’s attendance at Board or Committee meetings, as well as his
or her commitment and constructive participation in discussions and decision-making, in accordance with a pre-established and transparent procedure.
In this context, the Nomination Committee will also assess whether the contribution of each director is appropriate to the changing circumstances facing
the Company from time to time. On the basis of the results of the Nomination Committee’s performance evaluation, the Board of Directors will, where
appropriate, propose the appointment of new directors, propose not to reappoint existing directors or take any other action deemed appropriate for
the proper functioning of the Board of Directors.
The Board of Directors will regularly review its internal procedures (at least every three years).
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3.1.6. Induction and continuous Board training
Information sessions are organized for new directors, aimed at acquainting them with the Group as quickly as possible. The program includes a review
of the Group’s strategy and activities and of the main challenges in terms of growth, competitiveness and innovation, as well as finance, research &
development, human resources management, legal context, corporate governance, compliance and the general organization of operations. These
information sessions are open to every director who wishes to participate. Furthermore, visiting industrial or research sites at least once a year is also part
of the Board program.
Following the Partial Demerger in December 2023 and the establishment of the Board of Directors, a first onboarding session was organized in December
2023, with a focus on the Partial Demerger, its consequences and the key agreements in place in this respect. An ESG training was also organized in
March 2024.
3.2. Board committees
To enhance the overall effectiveness of the Board of Directors by ensuring focus, oversight and monitoring of sensitive areas, the Board of Directors
has set up on a permanent basis the following specialized Committees: Audit and Risk Committee, Finance Committee, Remuneration Committee,
Nomination Committee and Environmental, Social and Governance (ESG) Committee. The principles governing the composition, role and missions of
the committees, as well as their internal rules, are set out in the Charter.
These Committees are advisory in nature. Within their respective areas of responsibility, the Committees make recommendations to the Board of
Directors, assure the Board of Directors that certain issues have been adequately addressed and, if necessary, bring specific issues to the attention of the
Board of Directors. Except where otherwise provided by law or upon specific delegation by the Board of Directors, the decision-making shall remain the
collegial responsibility of the Board of Directors.
The various Committee members are appointed for two-year renewable terms by the Board of Directors, upon prior advice of the Nomination Committee.
The Board of Directors aims at appointing a majority of independent members to all its Committees, unless it deems it appropriate to proceed differently
from time to time. As of today, all key Committees (Audit and Risk, Nomination and Remuneration Committees) are composed solely of non-executive
directors, a majority of whom are independent, and are chaired by independent directors. More importantly, these Committees comprise members who
have the experience and skills necessary to ensure they deliver on their mandate.
The Board of Directors may also set up temporary, ad hoc Committees.
Where needed, each Committee has access to independent professional advice, financed by the Company, for all topics pertaining to the competence
of such Committee.
Independent
Director
Audit and Risk
Committee
Finance
Committee
Remuneration
Committee
Nomination
Committee
ESG
Committee
Rosemary Thorne
(Chair)
X
X (Chair)
X X
Ilham Kadri
(CEO)
X X
Roeland Baan
X X X X
Françoise de Viron
(Vice-Chair)
X X
X (Chair)
Matti Lievonen
X
X (Chair)
X
Heike Van de Kerkhof
X X X
X (Chair)
Julian Waldron
X
X (Chair)
X
Edouard Janssen
X X
Mary Meaney
X
Nadine Leslie
X X X X
3.2.1. The Audit and Risk Committee
Composition
The Audit and Risk Committee is composed of a minimum of three members. The members of the Audit and Risk Committee are all non-executive
directors and at least a majority of them are independent directors. The Chair of the Audit and Risk Committee must be an independent Member.
The members of the Audit and Risk Committee collectively are competent in the area of activities of the Company, as well as in financial management,
financial reporting, accounting and audit through their training and experience acquired in the course of their careers (see section3.1.1.regarding the
composition of the Board of Directors). The Corporate Secretary acts as Secretary to the Audit and Risk Committee.
As of December 31, 2023, the Audit and Risk Committee is composed of:
· Julian Waldron, Independent Director, Chair of the Audit and Risk Committee
· Edouard Janssen, Non-Executive Director
· Heike Van de Kerkhof, Independent Director
· Roeland Baan, Independent Director
Duties
The Audit and Risk Committee assists the Board of Directors to ensure in particular the reliable nature of financial information and compliance with
relevant laws, regulations and control processes, examining the areas of risk that can potentially have a material effect on the Group’s financial situation.
The Audit and Risk Committee hears reports from the CFO, the Head of Internal Audit and Risk Management and the Statutory Auditor in charge of
the external audit. It also examines the quarterly report by the Group General Counsel on significant ongoing legal disputes. It meets alone with the
Statutory Auditor in charge of the external audit whenever it deems such meetings useful.
In addition, the Audit and Risk Committee collaborates as appropriate with other Committees, in particular with the ESG Committee as regards key ESG
performance indicators and the Group’s extra-financial strategy and performance.
Internal rules relating to the Audit and Risk Committee are set out in the Charter, which is available on Syensqo’s website.
Report of activities
Following the establishment of Syensqo’s Board of Directors on December 8, 2023, the first meeting of the Audit and Risk Committee took place in
January 2024.
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3.2.2. The Finance Committee
Duties
The Finance Committee gives an opinion on financial matters, such as the levels and currencies of indebtedness and credit, including in light of interest
rate developments and macroeconomic environment, the hedging of foreign-exchange and energy risks, the hedging policy of the long-term incentive
plans and the financing of major investments. When called upon, it gives opinions on board policies on the above matters and makes recommendations
to the Board of Directors. It also gives an opinion on the financial implications of strategic projects falling within the competence of the Board of Directors.
Internal rules relating to the Finance Committee are set out in the Charter, which is available on Syensqo’s website.
Composition
The Finance Committee is composed of a minimum of three members. The Chair of the Board of Directors and the Chair of the ELT are members of
the Finance Committee. The Board of Directors aims at appointing an independent member as Chair of the Finance Committee. The members of the
Finance Committee are qualified in the fields of corporate finance and accounting through training and experience acquired in the course of their careers
(see section3.1.1.regarding the composition of the Board of Directors). The Corporate Secretary acts as Secretary to the Finance Committee.
As of December 31, 2023, the Finance Committee is composed of:
· Rosemary Thorne, Independent Director, Chair of the Board of Directors and of the Finance Committee
· Julian Waldron, Independent Director
· Edouard Janssen, Non-Executive Director
· Roeland Baan, Independent Director
· Ilham Kadri, Director and Chief Executive Officer.
Report of activities
Following the establishment of Syensqo’s Board of Directors on December 8, 2023, the first meeting of the Finance Committee took place in March 2024.
3.2.3. The Remuneration Committee
Duties
The Remuneration Committee performs the duties assigned to it by Article 7:100, § of the BCCA. In particular, without limitation:
· It advises the Board of Directors on the policy and level of remuneration for directors and ELT members, including the CEO.
· It gives its opinion on the Group’s principal remuneration policies (including long-term incentive plans).
· It prepares the Remuneration Policy and the annual Remuneration Report.
Composition
The Remuneration Committee is composed of a minimum of three members. A majority of the Remuneration Committee members are independent
directors. The Board of Directors aims at appointing an independent Member as Chair of the Remuneration Committee. The Remuneration Committee
members are qualified in the field of remuneration policy (see section3.1.1.regarding the composition of the Board of Directors). The Corporate
Secretary acts as Secretary to the Remuneration Committee.
Internal rules relating to the Remuneration Committee are set out in the Charter.
As of December 31, 2023, the Remuneration Committee is composed of:
· Matti Lievonen, Independent Director and Chair of the Remuneration Committee
· Rosemary Thorne, Independent Director and Chair of the Board of Directors
· Françoise de Viron, Non-Executive Director
· Heike Van de Kerkhof, Independent Director
· Nadine Leslie, Independent Director
Report of activities
Following the establishment of Syensqo’s Board of Directors on December 8, 2023, the first meeting of the Remuneration Committee took place in
February 2024.
3.2.4. The Nomination Committee
Duties
The Nomination Committee’s principal role is to make recommendations relating to, and examine proposals in respect of appointments to the Board of
Directors and its Committees, and the ELT (including the CEO).
Internal rules relating to the Nomination Committee are set out in the Charter, which is available on Syensqo’s website.
Composition
The Nomination Committee is composed of a minimum of three members. A majority of Nomination Committee members are independent directors.
The Board of Directors aims at appointing an independent Member as Chair of the Nomination Committee. The Chair of the Board of Directors is a
Member of the Nomination Committee. The Corporate Secretary acts as Secretary to the Nomination Committee.
As of December 31, 2023, the Nomination Committee is composed of:
· Heike Van de Kerkhof, Independent Director and Chair of the Nomination Committee
· Nadine Leslie, Independent Director
· Françoise de Viron, Non-Executive Director
· Rosemary Thorne, Independent Director and Chair of the Board of Directors
· Matti Lievonen, Independent Director
Report of activities
Following the establishment of Syensqo’s Board of Directors on 8 December 2023, the first meeting of the Nomination Committee took place in February
2024.
3.2.5. The Environmental, Social and Governance (ESG) Committee
Duties
The ESG Committee supports the Board in understanding (i) the expectations of Syensqo’s key stakeholders, (ii) the impact of ESG issues on Syensqo’s
ability to create value, and (iii) ESG trends and associated risks and opportunities. The ESG Committee monitors the Company’s overall approach
towards ESG matters, ensures this approach is aligned with and integrated in the overall Group strategy and defines in this respect ESG key performance
indicators. It also monitors the implementation of the Corporate Sustainability Reporting Directive (CSRD) and other similar laws and regulations. In
addition, the ESG Committee collaborates as appropriate with other Committees, such as the Audit and Risk Committee and the Remuneration
Committee, with oversight responsibility for executive remuneration, talent management and other shared topics.Internal rules relating to the ESG
Committee are set out in the Charter, which is available on Syensqo’s website.
Composition
The ESG Committee is composed of a minimum of three members. The Chair of the ESG Committee shall be a member with appropriate skills, training
and experience on ESG-related topics. The Corporate Secretary acts as Secretary to the ESG Committee.
As of December 31, 2023, the ESG Committee is composed of:
· Françoise de Viron, Non-Executive Director and Chair of the ESG Committee
· Nadine Leslie, Independent Director
· Roeland Baan, Independent Director
· Mary Meaney, Non-Executive Director
· Ilham Kadri, Director and Chief Executive Officer
Report of activities
Following the establishment of Syensqo’s Board of Directors on December 8, 2023, the first meeting of the ESG Committee took place in April 2024.
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4. EXECUTIVE LEADERSHIP TEAM (ELT)
Having opted for a “one-tier” governance structure, the Company is run by a Board of Directors empowered to carry out all acts necessary or useful
to achieve its Purpose, except those reserved by law or the articles of association to the Shareholders Meeting. The Board of Directors has delegated
specific management powers to the Executive Officers of the Company, who act collectively, within the framework of an Executive Committee, also
named Executive Leadership Team (ELT).
Syensqo’s ELT gives shape to the strategy, steers the Group’s business portfolio, and protects the Group’s interests. It also makes sure everything is in
place to achieve Syensqo’s vision to outgrow the market and deliver strong returns through customer-driven innovation. The ELT collectively is in charge
of Syensqo’s overall performance, enabling Syensqo to achieve our long-term value creation goals and meet financial targets.
ELT members are appointed by the Board of Directors in consultation with the CEO (except for his/her own appointment) upon recommendation of the
Nomination Committee, for four-year renewable terms, unless otherwise decided by the Board of Directors.
The role, responsibilities, composition, procedures and evaluation of the ELT are described in detail in the Charter, which is available on Syensqo’s
website.
Following completion of the Partial Demerger on December 8, 2023, the Board of Directors of Syensqo appointed the following members of the ELT,
on December 9, 2023.
The ELT held one onboarding meeting between December 9, 2023, and December 31, 2023. The overall meeting attendance by ELT members in 2023
was 100%.
✪ Year of rst appointment ☑ ELT meeting(s) in 2023
ILHAM KADRI
French-Moroccan / Born in: 1969
Executive Director
✪ Dec 2023 ☑ 1/1
Term of office ends: 2027
Diplomas and main Syensqo activities::
PhD in Macromolecular Physics-Chemistry from Louis Pasteur
University, Strasbourg, France
Degree in Chemical Engineering from l’Ecole des Hauts Polymères,
Strasbourg, France
Chair of the Executive Leadership Team
and Chief Executive Officer
JOËLLE BOXUS
Belgian / Born in: 1971
✪ Dec 2023 ☑ 1/1
Term of office ends: 2027
Diplomas and main Syensqo activities:
Degree in Psychology and Educational Sciences and Master’s
degree in Applied Economics from Louvain-La-Neuve Belgium
Executive Leadership Team Member and Chief People Officer
MARC CHOLLET
French / Born in: 1964
✪ Dec 2023 ☑ 1/1
Term of office ends: 2027
Diplomas and main Syensqo activities:
Engineer in Agronomy from the National Institute of Agronomy
Paris-Grignon, Specialization in Business Economics & Marketing
Management
Executive Leadership Team Member and Chief Strategy Officer
CHRISTOPHER ROGER DAVIS
South Africa & UK / Born in: 1973
✪Dec 2023 ☑ 1/1
Term of office ends: 2027
Diplomas and main Syensqo activities:
Bachelor of Commerce degree and postgraduate diploma
from the University of South Africa in Accounting & Auditing
and postgraduate diploma in Treasury Management from the
University of South Africa
Executive Leadership Team Member and Chief Financial
Officer
MARK ROLLINGER
USA / Born in: 1969
✪ Dec 2023 ☑ 1/1
Term of office ends: 2027
Diplomas and main Syensqo activities:
Bachelor of Arts from Yale, Doctorate (JD) of Law from Harvard
Executive Leadership Team Member and Group General
Counsel
HERVÉ TIBERGHIEN
French / Born in: 1964
✪ Dec 2023 ☑ 1/1
Term of office ends: 2027
Diplomas and main Syensqo activities:
Master’s in Human Resources from HEC St Louis, Brussels,
Belgium
Executive Leadership Team Member and Chief Operations
Officer
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5. REMUNERATION REPORT
5.1. Introduction from the Chair of the Remuneration Committee
“I am delighted to present the first Remuneration Report for Syensqo, following the completion of the Partial Demerger of Solvay into two companies –
Solvay and Syensqo. Key features of the Board members’ and Executive Leadership Team’s remuneration components were disclosed in the Prospectus
published in November 2023. At the Extraordinary Shareholders Meeting on December 8, 2023, shareholders approved the Syensqo Remuneration
Policy, which retained the remuneration policy principles applicable before the Partial Demerger. Whilst Syensqo operated for only 23 days in 2023,
making this Remuneration Report fairly short, our aim has been to embody transparency in the way Syensqo operates, especially with regard to executive
and non-executive director remuneration. Syensqo has already and will continue to take into consideration the broader environment and context when
making decisions in respect of the Board and Executive Leadership Teams’ renumeration. We will proactively and continuously engage with the key
stakeholders, including institutional investors and proxy advisors’ to understand how to strengthen its remuneration practices and policies and ensure
that Syensqo’s approach to remuneration remains aligned with the interests of all stakeholders. Changes to the remuneration policy may be proposed in
the coming years in light of Syensqo’s strategic ambition and compelling purpose – centered on creating advanced, sustainable solutions that advance
humanity. As the Chair of the Remuneration Committee, it will be my focus to ensure that, when changes to the remuneration policy are contemplated,
we will proactively seek to gather a wide range of views from stakeholders, including institutional investors and proxy advisors, before bringing the
changes for shareholders’ approval. Syensqo aims to not only have policies and processes that are compliant with applicable regulatory requirements
and consistent with the Belgian Governance Code, but also global best practices.”
A new chapter with an experienced Executive Leadership Team
On November 3, 2023, Syensqo announced its future Board members and Executive Leadership Team (ELT) following the Partial Demerger. The ELT was
officially appointed on December 9, 2023, with their employment and remuneration terms taking effect from that date.
Ilham Kadri serves as Syensqo’s CEO, leading a team with extensive global experience across various sectors. They aim to excel in markets such as
batteries, green hydrogen, thermoplastic composites, renewable materials and biotechnology, operating across North America, Asia and Europe.
The Peer Group underwent a thorough review, with the support of external consultants, to align with Syensqo’s scope following the Partial Demerger,
ensuring competitive pay benchmarks. Remuneration for the ELT reflects the company’s scale, international presence, industry, complexity and talent
market dynamics
The Remuneration Committee, with the support of independent consultants, will undertake a robust review of remuneration policy in 2024, which
will include conducting a comprehensive analysis of market trends, gathering feedback from stakeholders (including institutional investors and proxy
advisors), and benchmarking against peer practices. This review is to ensure that every facet of the policy fosters the desired behavior to advance
Syensqo’s objectives, while aiming to align with the latest market practices and reflecting stakeholder expectations.
Details of the remuneration payable to Board and ELT members are set out on the following pages. Unless otherwise stated, all amounts in this
Remuneration Report are presented as gross amounts and in euros.
Workforce rewards and benefits embed our purpose
At Syensqo, our global team of 13,100 employees collaborates to advance science and humanity. We prioritize the well-being of our workforce, especially
in uncertain economic times. Offering competitive remuneration and benefits, including initiatives like the Employee Share Program and Syensqo Cares
(which includes 16 weeks of parental leave, additional days for caregiving duties, etc.) demonstrates our commitment to employee welfare.
As we enter a new chapter focused on growth and innovation, our approach to supporting and rewarding our employees will evolve to align with our
objectives, empowering them to reach their full potential.
5.2. Remuneration of the Board of Directors
Syensqo’s directors are remunerated, in line with Syensqo’s Remuneration Policy, with fixed emoluments, the common basis of which is set at the Annual
Shareholders Meeting. Any additional remuneration to this is decided by the Board in accordance with Article 24 of the articles of association, which
states that:
· “Directors shall receive fixed emoluments, the amount and terms of which shall be determined by the General Meeting. The decision of the General
Meeting shall stand until otherwise decided.
· “The Board of Directors is authorized to grant fixed emoluments in addition to the emoluments provided for in the preceding paragraph to directors
entrusted with special duties distinct from their directorship.
· “The directors responsible for day-to-day management and the members of the Executive Committee are also each entitled to a variable remuneration
determined by the Board of Directors on the basis of their individual performance and the consolidated performance of the Syensqo Group.”
The Group provides to the Chair of the Board administrative support, an office and the use of the General Secretariat.
The other non-executive directors receive logistical support from the General Secretariat when needed. Syensqo also provides customary insurance
policies covering the Board of Directors’ activities when they are carrying out their duties.
Board fees are determined after considering the roles and responsibilities of each director, and the practices of companies of a similar size and international
complexity. An assessment of market practice is conducted on a regular basis and the fees are disclosed in the remuneration report each year.
5.2.1. Board of Directors individual remuneration
The Extraordinary Shareholders Meeting of December 8, 2023, appointed Board members, set their attendance fees and approved directors’ pay to be
set as follows, starting as from December 9, 2023:
Board fees by type Gross amount
Annual gross fixed remuneration
€35,000
Board meeting attendance fee
€4,000
Audit and Risk Committee Chair attendance fee
€6,000
Audit and Risk Committee Member attendance fee
€4,000
Remuneration, Nomination, ESG and Finance Committees Chair attendance fee
€4,000
Remuneration, Nomination, ESG and Finance Committees Member attendance fee
€2,500
Where meetings occur on the same day, only one meeting fee is paid. There are no committee attendance fees for the Chair of the Board, nor the CEO.
In accordance with the Remuneration Policy, the annual gross fixed remuneration for the CEO is included in her annual remuneration fees as an ELT
member, and the Board meeting attendance fees are paid for the board meetings she attends. For the Chair of the Board, a yearly fixed remuneration
of €250,000 gross, paid in monthly installments.
Non-executive directors do not receive any additional remuneration linked to results or other performance criteria. More specifically, non-executive
directors are not entitled to annual bonuses, stock options or performance share units, or to any supplemental pension scheme.
Syensqo reimburses directors’ travel and expenses for meetings related to their Board and Board Committee functions.
5.2.2. Share ownership guidelines for the Board
Syensqo acknowledges that the Belgian Governance Code recommends that a portion of the remuneration paid to non-executive directors be in shares
(Principle 7.6), and that Syensqo’s Remuneration Policy does not provide for this. However, the Remuneration Committee considers that the current
Remuneration Policy complies with the objectives of Principle 7.6. Indeed, the Share Ownership Guidelines provide that non-executive directors need
to hold equivalent to 100% of their gross annual fixed fees in shares. These shares should be held until at least one year after the non-executive director
leaves the Board of Directors and, in any case, for at least three years after the shares were acquired. The dividends attached to these shares are paid at
the same time as for the other shareholders.
The Remuneration Committee regularly reviews Syensqo’s remuneration practices, disclosures and market practices to determine whether the
Remuneration Policy currently in practice remains appropriate. Any changes to the Remuneration Policy regarding the Board’s remuneration will be
submitted to shareholders and only be implemented following shareholder approval.
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5.2.3. Amount of remuneration and other benefits granted directly or indirectly to the members of the Board by the
Company or by an affiliated company
Gross remuneration and other benefits granted to directors
FOR DIRECTORS FROM DECEMBER 9 TO DECEMBER 31, 2023
in €
2023
Total gross
amount
including
fixed fees
Board fixed
remuneration
Board mee-
ting atten-
dance fee
For the role
in Finance
Committee
For the role in
Audit
Committee
For the role in
Remuneration
and Nomination
Committee
For the role in
ESG Committee
Rosemary Thorne
Fixed emoluments +
attendance fees
6,083 2,083 4,000
“Article 24” supplement
Chair Fees
14,881
Ilham Kadri
6,083 2,083 4,000
Françoise de Viron
6,083 2,083 4,000
Matti Lievonen
6,083 2,083 4,000
Edouard Janssen
6,083 2,083 4,000
Julian Waldron
6,083 2,083 4,000
Heike Van de Kerkhof
6,083 2,083 4,000
Roeland Baan
6,083 2,083 4,000
Mary Meaney
6,083 2,083 4,000
Nadine Leslie
6,083 2,083 4,000
Total
75,711 20,830 40,000
5.3. Remuneration of the Executive Leadership Team (ELT)
5.3.1. Syensqo’s remuneration philosophy and policy
Syensqo’s Remuneration Policy aims to ensure that Syensqo’s ELT members are rewarded for their experience, responsibilities and individual performance
while maximizing returns in a responsible and sustainable way. The strengthened framework looks to attract, motivate and retain the best executive
talent in alignment with market trends and shareholders’ long-term interests. These important principles are also reflected in the remuneration policies
and programs offered to Syensqo employees globally.
The remuneration structure is designed in line with the following principles, which apply both to ELT members and other senior executives:
· Fixed remuneration aims to provide market-aligned cash income, which is regularly reviewed by the Remuneration Committee considering positioning
relative to the peer market median, performance, indexation and role changes.
· Short- and long-term variable remuneration is tied to the achievement of strategic objectives, including driving sustainable performance, and
recognizes the delivery of excellent results.
· Total remuneration is set at a level that is competitive in the relevant market and sector, in order to attract, retain and motivate the high-caliber talent
needed to deliver the Group’s strategy and drive business performance.
Remuneration decisions are compliant and equitable, keeping in mind pay levels within the wider workforce, and balance cost and value appropriately.
The following table summarizes the core elements and key principles of Syensqo’s Remuneration Policy:
Long-Term Incentive
Short-Term Incentive
Benefits
Fixed base
remuneration
Competitive
to relevant peers
to:
Attract, retain
and
motivate high
calibre
executives
~45%
of total
remuneration
~55%
of at Target
remuneration package
with significant
upwards opportunity
Aligned with shareholder interests
Results driven
Aligned with our short, mid- and
long-term strategy,
objectives and aspirations
Reflection of Pay
for performance principle
Reflects experience, skills,
responsibilities and contribution
and is reflection of Syensqo's reward
principle of Meritocracy
Set around the median of
the market and is a reflection of Syensqo’s
principle of Care
The Remuneration Committee retains discretion to adjust performance outcomes under the Short-Term Incentive (STI) and Long-Term Incentive (LTI)
programs based on various factors, including unforeseen circumstances, shareholder experience and other relevant considerations, with explanations
provided in the annual remuneration report. Additionally, the Committee may apply discretion to adjust award opportunities, with details as to how
discretion was applied to be disclosed in the Remuneration Report for shareholder approval.
5.3.2. Use of market data
In line with the Remuneration Policy, remuneration of the ELT members is benchmarked against that of a relevant peer group.
The peer group reflects Syensqo’s strategy and pool for executive talent, while also considering other factors such as: industry, size, geographic presence
and complexity. Starting December 9th, 2023, the peer group considered for the ELT is the following:
Brenntag
LANXESS
Wacker Chemie AG
Umicore
Babcock International Group
Givaudan
Akzo NobelUCB Covestro
BASF
Croda International Plc
Clariant Johnson Matthey Plc
Evonik
Syensqo aligns the remuneration of its Executive Leadership Team (ELT) with a peer group that mirrors its strategic focus and executive talent pool. This
peer group comprises European chemical and industrial firms similar in operational footprint, revenues and headcount.
The Remuneration Committee targets positioning Syensqo’s remuneration packages around the market median, considering individual experience and
performance. As a result of this review, the like-for-like pay for the positions within the ELT were reduced to reflect the Company’s new scope and size.
Regular reviews of the peer group composition ensure alignment with Syensqo’s strategic direction and changes in the selected companies’ ownership
or operating models.
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5.3.3. Pay mix and remuneration opportunities for ELT members
The pay mix of ELT members at the end of the reporting period is outlined below, and displays their Total Direct Remuneration “at target.” As shown
in the below graphs, the Remuneration Policy is highly geared towards variable remuneration that is subject to meeting pre-determined performance
objectives that are aligned with what is communicated to the financial market as well as incorporating our sustainability ambitions.
Overview
The below table covers base remuneration and the standard short-term and long-term incentives granted as part of the Remuneration Policy “at target”
for the full year 2023 (in millions of euros). It is worth highlighting that the below tables display the remuneration to which ELT members would have been
entitled, at target, for the period from January 1, 2023, until December 31, 2023.
as of December 31, 2023
LTI
STI
Fixed base
PAY MIX OF THE ELT MEMBERS
in millions of euros
€2.06
C. DavisI. Kadri
0.70
0.87
0.49
€1.85
H. Tiberghien
0.63
0.78
0.44 24%
42%
34%
24%
42%
34%
€1.47
J. Boxus
0.50
0.62
0.35
€1.47
M. Chollet
0.50
0.62
0.35 24%
42%
34%
€1.32
M. Rollinger
0.45
0.56
0.31 24%
42%
34%
€5.31
1.43
1.72
32%
41%
27%
24%
42%
34%
2.15
DETAILED TABLE AS OF DECEMBER 31, 2023
in €
Variable Remuneration as on December 31, 2023
Fixed
remuneration
(on a
comparable
full year basis)
Value
measurement
STI target LTI target
issued as
Performance
Share Units
LTI target
issues as Res-
tricted Share
Units
Total LTI
value
Total direct
remuneration
Ilham Kadri
CEO and Chair of the
ELT
1,435,200
Amount 1,722,240 1,506,960 645,840 2,152,800 €5,310,240
% of Salary 120% 105% 45% 150%
Fixed 27% / Variable
73%
Christopher Davis
CFO and ELT Member
700,000
Amount 490,000 612,500 262,500 875,000 2,065,000
% of Salary 70% 87.5% 37.5% 125% Fixed 34% / Variable 66%
Hervé Tiberghien
COO and ELT Member
630,000
Amount
441,000 551,250 236,250 787,500
1,858,500
% of Salary 70% 87.5% 37.5% 125% Fixed 34% / Variable 66%
Joëlle Boxus
CPO and ELT Member
500,000
Amount
350,000 437,500 187,500 625,000
1,475,000
% of Salary 70% 87.5% 37.5% 125% Fixed 34% / Variable 66%
Marc Chollet
CSO and ELT Member
500,000
Amount
350,000 437,500 187,500 625,000
1,475,000
% of Salary 70% 87.5% 37.5% 125% Fixed 34% / Variable 66%
Mark Rollinger
GC and ELT Member
450,000
Amount
315,000 393,750 168,750 562,500
1,327,500
% of Salary 70% 87.5% 37.5% 125% Fixed 34% / Variable 66%
PAY MIX OF THE ELT MEMBERS
in millions of euros
CEO
I. KADRI
Fixed pay: €1,435k
Variable pay: €3,875k
CFO
C. DAVIS
Fixed pay: €700k
Variable pay: €1,365k
COO
H. TIBERGHIEN
Fixed pay: €630k
Variable pay: €1,228k
CPO
J. BOXUS
Fixed pay: €500k
Variable pay: €975k
CSO
M. CHOLLET
Fixed pay: €500k
Variable pay: €975k
GC
M. ROLLINGER
Fixed pay: €450k€
Variable pay: €877k
5.3.4. Base remuneration and benefits
Fixed base remuneration
Fixed base remuneration reflects the individual’s experience, skills, responsibilities and performance. It is reviewed annually and may be adjusted, taking
into consideration a number of factors, including:
· Comparable salaries in appropriate comparator groups.
· Changes within the scope of the role.
· Changes in the Group’s size and profile.
· Inflation, following legal requirements in different countries.
Fixed base remuneration, which does not include the value of any benefits offered to ELT members, is used to calculate targets for variable remuneration.
Except for CEO Ilham Kadri, whose new fixed base remuneration of €1,500,000 will take effect on January 1, 2024, the Board of Directors does not
anticipate revising the base salaries of other ELT members in 2024, as they are already aligned with the market median of the peer group. Given the
CEO’s pivotal role in steering the Company’s success and in alignment with the peer group, inflation rates and increases provided to the general
workforce, a salary increase of approximately 5% was made to maintain its competitiveness and recognize leadership contributions.
Details of the fixed base remuneration of the CEO and other ELT members are disclosed in Sections [5.3.2.] and [5.3.4.] of this Annual Integrated Report.
Pension and other benefits
Benefits are not dependent on an individual’s performance and are seen as a critical part of Syensqo’s remuneration package. Syensqo aims to ensure
that the nature and level of these benefits are in line with market practice and what is provided to other executives in the Group.
In accordance with Belgian legal requirements, the CEO, Ilham Kadri, is self-employed and has a separate management agreement with the Company
which was transferred from Solvay to Syensqo. This agreement provides for specific provisions with respect to pension contributions, death-in-service
and disability benefits.
Some of the ELT members have a separate contractual agreement, giving them self-employed status in Belgium. This includes pension, death-in-service
and disability provisions.
Except the CEO, who must be self-employed, the other ELT members are either employees of the Company or self-employed. ELT members who are
employees are granted benefits such as a pension plan, death-in-service, disability and healthcare benefits according to the provisions of the plans
applicable in their home countries. Self-employed ELT members (other than the CEO) are entitled to the payment of an annual fixed base fee under
their contractual agreement with the Company, which will also cover pension contributions, death-in-service, disability and healthcare benefits, as well
as certain benefits-in-kind (e.g. company vehicle or car allowance, tax filing assistance).
Syensqo aims to ensure that the nature and level of these other benefits are appropriately aligned with market practice and what is provided to other
executives in the Group.
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As from December 9, 2023, Hervé Tiberghien (Chief Operations Officer) and Joëlle Boxus (Chief People Officer) have entered into separate management
agreements with the Company, giving them self-employed status in Belgium. These agreements include pension, death-in-service and disability
provisions.
As the change of status from employee to self-employed under a management agreement requires a change in immigration status, the transition from
employee status to self-employed for Christopher Davis (Chief Financial Officer), also based in Belgium, will enter into force in the following months once
the required documents are granted from the competent Belgian authorities. In the meantime, Christopher Davis will remain an employee. Marc Chollet
(Chief Strategy Officer) and Mark Rollinger (General Counsel), based in France, remain under local employment contract under French law.
5.3.5. Short- and long-term variable pay
5.3.5.1. Short Term Incentive (STI) plan
Maximum award opportunities
As per the Remuneration Policy, the STI target is 120% of fixed base remuneration for the CEO and up to 70% of fixed base remuneration for other ELT
members. The minimum payout is 0% and the maximum is 200% of the STI target. The award limit complies with the recommendation of the Corporate
Governance Code (2020) that the short-term variable remuneration to the executive management be subject to a cap (Principle 7.10).
These maximum award opportunities will remain for the 2024 financial year.
Malus and clawback
As per the Remuneration Policy, the Remuneration Committee will exercise discretion to activate malus and clawback provisions in exceptional
circumstances, such as serious reputational damage, risk management failures, financial errors, misconduct, regulatory breaches, significant losses or
deteriorating financial health, with clawback potentially extending up to three years for awards under the Remuneration Policy.
Setting STI performance objectives
Annually, the Board establishes performance objectives for both the Group and the CEO, a process typically conducted during the February Board
meeting. The performance objective-setting aims to establish challenging yet achievable targets, incorporating input from various perspectives within
the business while ensuring alignment with Syensqo’s long-term growth and sustainability goals communicated to the market. Moreover, this process is
also mindful of not incentivizing executives to take excessive risks that could jeopardize the company’s stability, reputation and long-term sustainability.
Syensqo’s strategy for performance objectives tied to Short-Term Incentives (STIs) involves establishing ambitious, growth-focused targets for the
“target” award level, while “maximum” awards are reserved for achieving exceptionally high performance levels, ensuring adherence to the principle
of pay-for-performance.
In line with market practice, and due to the commercial sensitivity of disclosing short-term targets prospectively, Syensqo discloses the performance
objectives set and the performance against them on a retrospective basis.
STI performance objectives
The STI plan provides a cash opportunity that is based solely on the achievement of pre-determined annual financial, non-financial and individual
objectives.
65% Group objectives
between 0% to 200%
of the STI target
Set as a
% of the fixed base
remuneration
Target amount Payout range
15% Sustainability
65% Group objectives
20% Individual objectives
Payout is calculated on the basis of
the achievement of the 3 components
with respective weighting
The 2024 STI plan will focus on three broad performance categories with the following weightings for all ELT members:
· Financial Objectives (65% of the STI) aims to align with shareholder interests through various criteria, which could include metrics such as free cash flow
conversion, alongside other measures focused on enhancing profitability and shareholder value.
· Syensqo One Planet Objectives (15% of the STI), aims to reflect our sustainability initiatives and use them to our strategic advantage by focusing on
three areas: Climate and Nature, Sustainable Growth, and Better Life.
· Individual Objectives (20% of the STI): are customized for each ELT member to align with their specific roles and responsibilities within the organization.
They may include objectives related to areas such as project milestones, innovation initiatives, leadership development, or any other relevant metrics
that measure the ELT member’s impact on Syensqo’s success. These objectives are predetermined and may be quantitative and/or qualitative. These
objectives are defined by the Board for the CEO and then cascaded down to other ELT members by the CEO. The CEO assesses the achievement
of individual objectives by the ELT Members, and this assessment is then reviewed and validated by the Board. The individual performance of the
CEO is assessed by the Remuneration Committee, and this is then reviewed and validated by the Board. The CEO is absent from the Remuneration
Committee and Board during all discussions relating to CEO pay.
In line with market practice, and due to the commercial sensitivity of disclosing short-term targets, Syensqo will disclose targets and the performance
against these targets on a retrospective basis only. However, Syensqo will disclose in a separate document, ahead of the Ordinary General Shareholders
Meeting, the performance measures and associated weighting of each measure selected under the STI plan to determine the CEO’s bonus for the
upcoming financial year.
Bonuses are subject to malus and clawback provisions, as foreseen in the Remuneration Policy.
5.3.5.2. Long Term Incentive (LTI)
5.3.5.2.1 Scheme
Purpose and components of the long-term variable remuneration
Syensqo aims to incentivize its ELT members by implementing a Long Term Incentive (LTI), wherein a substantial portion of equity awards is contingent
upon performance criteria aligned with the Company’s communicated strategy. This approach fosters alignment with shareholder interests, promoting
accountability and driving long-term value creation through strategic execution and performance excellence.
Syensqo uses two equity vehicles to incentivize its ELT members. The first is through Performance-based Share Units (PSUs), which vest by meeting pre-
defined long-term financial and non-financial objectives over a three-year performance period to promote a focus on long-term enterprise value growth
and sustainability. The second equity vehicle used is Restricted Stock Units (RSUs), which vest over three years and aim to align ELT members’ interests
with that of shareholders and foster the retention of key personnel.
As per the Remuneration Policy, LTI grants for ELT members will continue to be offered, as follows for the 2024 financial year:
70% of the annual grant value will be offered in the form of Performance-based Share Units (PSU).
30% of the annual grant value will be offered in the form of Restricted Share Units (RSU).
LTI award opportunity for ELT members
The annual grant value is determined as a percentage of fixed base remuneration for all ELT members.
The CEO has a LTI grant target of 150% of fixed-base remuneration. For all other ELT members, the grant target value is up to 125% of the fixed base
remuneration. Outcomes range from zero if the minimum targets are not met, to a maximum of 150% of target if all plan objectives are achieved.
For the 2024 financial year, the maximum award opportunities will remain in place. The actual annual grant value, within the limits of the Remuneration
Policy as explained above, will be determined and approved by the Board.
Performance Share Units and Restricted Share Units
— PSUs
As per the Remuneration Policy, the PSUs determine 70% of the annual LTI grant, which vest three years from the date of grant, subject to the achievement
of the pre-set performance objectives. The opportunity varies from a minimum of zero, if the minimum target is not met, to a maximum payout of 150%,
if the maximum target is achieved.
Performance objectives are distributed across Financial (60% to 80% of the award) and One Planet (20% to 40% of the award) categories, with targets
and their respective weights established to align with the Group’s mid- and long-term strategy. In addition, for the vesting of the PSUs, a performance
measure compares the relative performance of the Group to the TSR performance of the Stoxx 600 index, ensuring a clear focus within the ELT to create
shareholder value. Where the PSU result is above zero, the TSR measure can decrease the PSU outcome by 25% of the PSU result when the TSR is in the
lower quartile of the Stoxx 600 index, and increase the PSU result by 25% when the TSR is in the top quartile of the Stoxx 600 index.
No PSUs were granted by Syensqo for the 2023 financial year; however, Syensqo will disclose in a separate document, ahead of the Ordinary General
Shareholders Meeting, the performance measures and associated weighting of each measure selected under the LTI plan to determine the vesting of
PSUs granted in 2024.
The Board assesses the achievement of the targets set, based as a rule on the audited results of the Group. Every year, the Board determines the budget
available for distribution and the total volume of PSUs available is subsequently allocated to the eligible population.
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PSUs feature employment or presence conditions, and dividends accrue solely on vested awards, paid out at the conclusion of the performance period.
— RSUs
The remaining portion of the LTI grant is in RSUs (30% of the LTI), where executives receive shares that vest after three years. RSUs feature employment
or presence conditions, and dividends accrue solely on vested awards, paid out at the conclusion of the three-year vesting period.
— Clawback provisions relating to LTI
Syensqo has the right to claim reimbursement of any amounts paid in accordance with the PSU/RSU plans, from any participant, during a period of three
years from the date of the payment, on the basis of erroneous results that were subsequently adjusted or corrected.
5.3.5.2.2 Adjustments to the outstanding SOP, PSU and RSU plans in the context of the Partial Demerger
As part of the Partial Demerger, Solvay contributed to Syensqo its rights and obligations under its outstanding incentive plans, in each case to the extent
the beneficiaries of such plans (including members of the ELT before the Partial Demerger date) were employed by Solvay and transferred to Syensqo
or one of its affiliates following completion of the Partial Demerger.
Several ELT members participated in one or more of the following components of Solvay SA’s long term incentive plans: stock option plan (granted
until 2021), stock options granted in 2022 in the context of the Partial Demerger, performance-based share unit plan and restricted share unit plan. As of
December 2023, the following plans remain outstanding: the 2021 PSU plan, the 2022 PSU and RSU plan, and the 2023 PSU and RSU plan.
In the context of the Partial Demerger, most outstanding long term incentive plans of the Group were adjusted by the Board of Directors, upon the advice
of the Remuneration Committee, to take into account the impact of the Partial Demerger, as follows:
The 2018-2021 SOPs were adjusted to allow the beneficiaries to receive, for each outstanding stock option giving the right to acquire one Solvay share,
the right to acquire one Syensqo share (in addition to the right to acquire one Solvay share). The initial exercise price of the stock options was split
between both the Solvay share and the Syensqo share, based, as a rule, on the closing prices of the Solvay share (€20.62) and of the Syensqo share
(€98.93) on the first trading day following the Partial Demerger date (December 11, 2023).
The 2021 cash-settled PSU plan was adjusted so that (i) the performance for the 2023 financial year would be assessed based on the data available as of
the time of the Partial Demerger and (ii) the payout would be determined based on the average of the last 10 closing prices of the Solvay share for the
period ended on November 30, 2023 (from November 17, 2023, until November 30, 2023, inclusive). Payout will occur in June 2024 in accordance with
the original plan rules.
The 2022 PSU plan was adjusted to allow the relevant beneficiaries to receive, for each 2022 PSU held entitling them to receive one Solvay share, one PSU
entitling them to receive one Syensqo share (in addition to the 2022 PSU entitling them to receive one Solvay share they already held). In addition, the
Board of Directors decided that (i) the performance for year 2024 would be extrapolated from the performance for the years 2022 and 2023, and (ii) the
vesting multiplier dependent on Solvay’s performance against the median of total shareholders’ return of the Stoxx 600 Index peer group (TSR) would be
measured on the basis of the average closing prices of the Solvay share over the three-month period ended on November 30, 2023. The vesting period
and conditions remain unchanged.
The terms of the 2022 RSU plan were adjusted to allow the relevant beneficiaries to receive, for each RSU held entitling them to receive one Solvay share,
one RSU entitling them to receive one Syensqo share (in addition to the RSU entitling them to receive one Solvay share they already held
The 2023 PSU plan was adjusted so that the number of PSUs held at the time of the Partial Demerger by participants who would be transferred to
Syensqo or any of its affiliates following the Partial Demerger date, would be multiplied by a factor determined based on the average closing prices
of the Syensqo share relative to the combined average closing prices of the Solvay share and the Syensqo share over the 30 trading days starting
immediately following the completion of the Partial Demerger. In addition, the performance conditions linked to the 2024 and 2025 performance years
are being adjusted to reflect the strategy of Syensqo and the impact of the Partial Demerger. The vesting period and conditions remain unchanged.
The 2023 RSU plan was adjusted so that the number of RSUs held at the time of the Partial Demerger by participants who would be transferred to
Syensqo or any of its affiliates following completion of the Partial Demerger date, would be multiplied by a factor determined based on average closing
prices of the Syensqo share relative to the combined average closing prices of the Solvay share and the Syensqo share over the 30 trading days starting
immediately following the completion of the Partial Demerger.
As part of the Partial Demerger, Solvay contributed to Syensqo its rights and obligations under its outstanding incentive plans (including the 2022 stock
option grant), in each case to the extent the beneficiaries of such plans (including members of the ELT before the Partial Demerger Date) are employed
by Syensqo or one of its affiliates following completion of the Partial Demerger. Specific adjustments were made to the 2023 PSU and RSU plans for such
beneficiaries.
Stock options (SOP)
The historical Stock Option Plan (SOP) under Solvay in place before the Partial Demerger was replaced by the PSU and RSU plans detailed above.
However, as of December 31, 2023, stock options remained outstanding under the 2016, 2017, 2018, 2019, 2020 and 2021 SOPs, and the rules thereof
are reiterated below.
Under Belgian law, unlike most other jurisdictions, taxes on stock options are due at the time of grant. Solvay, like other Belgian companies, had therefore
set no additional performance criteria for determining the vesting of stock options. The options have a vesting period of three full calendar years –
meaning that options will vest on the first day of the fourth year after the grant year – followed by a four-year exercise period.
When they were granted, the SOPs gave each beneficiary the right to buy shares at a strike price corresponding to the fair market value of the shares
upon grant. Every year, the Board determined the volume of stock options available for distribution, based on an assessment of the economic fair value
at grant, using the Black Scholes valuation formula. The total volume of options available was subsequently allocated to the eligible population.
Features:
· Options are granted at the money (or fair market) value
· They become exercisable for the first time three full calendar years after they are granted
· They have a maximum term of eight years
· They are not transferable inter vivos
· The plan includes a bad leaver clause
The outstanding SOPs were adjusted in the context of the Partial Demerger with a view to safeguard the interests of the beneficiaries. Such adjustments
are described in Section [5.3.5.2.2] “Adjustments to the outstanding SOP, PSU and RSU plans.”
In addition, SOPs also remain outstanding under the 2022 SOP that was set up in the context of the Partial Demerger, the features of which are as follows:
· Stock options were subject to performance conditions – implementation of separation and value creation – and would have been forfeited in full if the
Partial Demerger had not occurred by 2025.
· The combined share prices of Solvay and Syensqo following completion of the Partial Demerger had to be above €100 for at least 15 trading days in
total (not required to be consecutive days), for the options to become exercisable from January 1, 2026, and deliver value. If this criterion had not been
met, the award would have lapsed.
· The options may be exercised by beneficiaries between January 1, 2026, and December 31, 2027, inclusive, providing presence and performance
criteria are met.
· Taxes were paid at the time of the grant in Belgium and cannot be recouped if the options do not vest or upon voluntary departure, demonstrating
executives’ commitment and belief in the success of the Partial Demerger and value creation for both companies.
· The exercise price of each option is €84.34, which was the fair market value of one Solvay share at the time of the grant (August 2022).
· Each stock option entitles its holder to acquire one Solvay share and one Syensqo share against payment of the exercise price (“basket” options).
· Stock options were determined as a multiple of annual base salary in a range between 50% and 200%, depending on the Board’s view of how critical
the role of the beneficiary was for project Po2.
The 2022 SOP plan was not adjusted in the context of the Partial Demerger. Accordingly, the 2022 stock options remain “basket” options entitling their
holders to acquire one Solvay share and one Syensqo against payment of the exercise price.
Stock options, PSUs and RSUs held on December 31, 2023, by the ELT members
The table below shows the evolution of outstanding balances of stock options issued to ELT members and the balance of the Syensqo stock options held
by the ELT members as of December 31, 2023.
As part of the Partial Demerger and as described in section [5.3.5.2.2] “Adjustments to the outstanding SOP, PSU and RSU plans,” the SOPs, PSUs and
RSUs were adjusted in the context of the Partial Demerger and the outstanding SOPs, PSUs and RSUs were transferred from Solvay to Syensqo on
December 8, 2023. Therefore, Syensqo ELT members who have been transferred from Solvay to Syensqo hold SOPs and/or PSUs and RSUs as part of the
LTI plans adjustments validated by Solvay’s Board and described above.
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STOCK OPTIONS – BALANCE ON 31/12/2023
Name SOP Balance on
9/12/2023
Granted
between
9/12/2023
and
31/12/2023
Exercised
between
9/12/2023
and 31/12/
2023
Expired
between
9/12/2023
and
31/12/2023
Vested Non-
vested
Balance on
31/12/2023
Kadri, Ilham
Solvay
(segregated options) (1)
93,617 56,632 36,985 93,617
Syensqo
(segregated options) (1)
93,617 56,632 36,985 93,617
Basket options (2)
129,418 129,418 129,418
Tiberghien,
Herve
Solvay
(segregated options) (1)
27,135 16,415 10,720 27,135
Syensqo
(segregated options (1)
27,135 16,415 10,720 27,135
Basket options (2) 23,355 23,355 23,355
Chollet,
Marc
Solvay
(segregated options) (1)
41,536
34,675
6,861 41,536
Syensqo
(segregated options (1)
41,536
34,675
6,861 41,536
Basket options (2) 22,399 22,399 22,399
Total
Solvay
(segregated options) (1)
162,288 107,722 54,566 162,288
Syensqo
(segregated options (1) 162,288 107,722 54,566
162,288
Basket options (2)
175,172 0 175,172
175,172
(1) Options granted under the historical SOPs reflecting the adjustments described above (“Adjustments to the outstanding SOP, PSU and RSU plans in the context of the Partial
Demerger”) and which, accordingly, entitle their holder to acquire a Solvay share or a Syensqo share against the payment of separate exercise prices.
(2) Options granted under the 2022 Po2 SOP and which, accordingly, entitle their holder to a Solvay share and a Syensqo share against the payment of a single exercise price
None of the other ELT members hold any stock options as of December 31, 2023.
SHARES PLAN (PSU AND RSU)
Name Numbers of shares Balance on 31/12/2023 Vested Non-vested
Kadri, Ilham
PSU 2021 (phantom shares) 11,640 11,640
RSU 2022 (restricted shares) – Solvay (1) 26,550 26,550
RSU 2022 (restricted shares) – Syensqo (1) 26,550 26,550
PSU 2023 (performance shares) (2) 26,049 26,049
RSU 2023 (restricted shares) (2) 11,164 11,164
Tiberghien, Herve
PSU 2021 (phantom shares) 2,616 2,616
RSU 2022 (restricted shares) – Solvay (1) 6,303 6,303
RSU 2022 (restricted shares) – Syensqo (1) 6,303 6,303
PSU 2023 (performance shares) (2) 5,522 5,522
RSU 2023 (restricted shares) (2) 2,367 2,367
Chollet, Marc
PSU 2021 (phantom shares) 1,674 1,674
RSU 2022 (restricted shares) – Solvay (1) 5,836 5,836
RSU 2022 (restricted shares) – Syensqo (1) 5,836 5,836
PSU 2023 (performance shares) (2) 4,900 4,900
RSU 2023 (restricted shares) (2) 2,100 2,100
Joëlle Boxus
RSU 2022 (restricted shares) – Solvay (1) 1,595 1,595
RSU 2022 (restricted shares) – Syensqo (1) 1,595 1,595
PSU 2023 (performance shares) (2) 2,851 2,851
RSU 2023 (restricted shares) (2) 2,496 2,496
Christopher Davis
PSU 2023 (performance shares) (2) 4,186 4,186
RSU 2023 (restricted shares) (2) 1,795 1,795
Mark Rollinger
PSU 2023 (performance shares) (2) 2,851 2,851
RSU 2023 (restricted shares) (2) 4,086 4,086
Total
PSU 2021 (phantom shares) 15,930 15,930
RSU 2022 (restricted shares) – Solvay (1) 40,284 40,284
RSU 2022 (restricted shares) – Syensqo (1) 40,284 40,284
PSU 2023 (performance shares) (2) 46,359 46,359
RSU 2023 (restricted shares) (2) 24,008 24,008
(1) RSUs granted under the 2022 RSU plan reflecting the adjustments described above (“Adjustments to the outstanding SOP, PSU and RSU plans in the context of the Partial
Demerger”) and which, accordingly, entitle their holder to receive either a Solvay share or a Syensqo share.
(2) PSUs and RSUs granted under the 2023 PSU and RSU plans reflecting the adjustments described above (“Adjustments to the outstanding SOP, and PSU and RSU plans in
the context of the Partial Demerger”) and which were, accordingly, multiplied by a factor determined based on the average closing prices of the Solvay share relative to the
combined average closing prices of the Solvay share and the Syensqo share over the 30 trading days starting immediately following the completion of the Partial Demerger.
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Share ownership guidelines
To align executives’ interests with those of shareholders, a requirement to build and maintain a shareholding in Syensqo equivalent to 150% of fixed
base remuneration for the CEO and 100% of fixed base remuneration for other ELT members is included in the Remuneration Policy. This shareholding
should normally be built up over a period not exceeding five years. This is in compliance with the recommendation of the Belgian Governance Code
(Principle 7.9).
Any shares acquired to meet this requirement should be held until at least one year after the ELT member leaves the Group and, in any case, for at least
three years after the shares were acquired.
ELT members are building their shareholding to meet these Share Ownership Guidelines.
5.3.6. Amount of remuneration paid and other benefits granted directly or indirectly to the CEO and other
ELTmembers
According to the Remuneration Policy and based on the Board of Directors’ assessment of the performance of the Group and our executives in 2023
from December 9 to December 31, the remuneration of the CEO and other ELT members was as follows:
5.3.6.1 ELT members from December 9, 2023, to December 31, 2023
in €
Name,
Position
Fixed
remuneration/
Base salary
from 9/12/2023
to 31/12/2023
(1)
Variable remuneration Benefits
Annual variable
pay based on
2023 paid in
2024 (2)
For the time
spent under
Syensqo ELT
The value of
vested equity
based re-
muneration
2023 (3)
Total direct
remunera-
tion
Extraordina-
ry items
Pension
Other
(4)
Total re-
muneration
Ilham Kadri,
CEO & Chair
of the ELT
85,429 134,534 219,963 - 82,720 19,623 322,306
Christopher
Davis,
CFO & ELT
member
35,980 31,988 67,968 - 18,226 13,165 94,404
Hervé Ti-
berghien,
COO & ELT
member
37,500 29,742 67,242 - 16,404 8,210 91,856
Joëlle Boxus
CPO &
ELT member
29,762 22,849 52,611 - 13,019 7,082 72,712
Marc Chollet
CSO &
ELT member
29,762 24,008 53,770 - 11,656 782 66,208
Mark Rollin-
ger,
GC & ELT
member
26,786 20,564 47,350 - 6,441 782 54,573
(1) Remuneration from December 9 to December 31, 2023, as ELT members for Syensqo.
(2) Annual variable pay based on 2023 performance and paid in 2024 for the time related to their ELT mandate from December 9 to December 31, 2023. For Ilham Kadri, Hervé
Tiberghien and Marc Chollet the amounts have been prorated (for 23 out of 365 days) of the full year 2023 STI disclosed in Solvay’s 2023 Integrated Annual Report. For Joëlle
Boxus, Christopher Davis and Mark Rollinger the amounts have been prorated (for 23 days out of 365 days) of their 2023 STI.
(3) PSU 2020-2022 have been paid in June 2023 for those who were entitled and the amount for the ELT members transferred from Solvay to Syensqo is reflected in Solvay’s 2023
Integrated Annual Report.
(4) Long-term benefits (e.g. death-in-service, disability and medical benefits) and benefits in kind (e.g. company vehicle, education, expatriation package expenses).
COMPARATIVE INFORMATION ON THE EVOLUTION OF REMUNERATION AND COMPANY PERFORMANCE
We will start reporting on this item in the next year, considering the start date of the ELT of Syensqo.
5.4. Statements of compliance of remuneration for Chair and ELT members
This report has been prepared by the Remuneration Committee.
The remuneration packages of Ilham Kadri, the Chair of the ELT (and CEO) and the other ELT members, are in compliance with Article7:91 of the BCCA,
which provides that, in the absence of statutory provisions to the contrary or express approval by the Annual Shareholders’ Meeting, at least 25% of the
variable remuneration shall be linked to predetermined performance criteria that are objectively measurable over a period of at least two years, and at
least another 25% should be based on predetermined performance criteria that are objectively measurable over a period of at least three years.
The remuneration packages are set by the Board, based on recommendations from the Remuneration Committee. These remuneration packages are
also compliant with the Belgian Governance Code.
Variable remuneration consisted of an annual incentive based on the performance achieved relative to the Group’s economic and sustainable
development performance objectives, and on the performance of the individual as measured against a set of pre-determined individual objectives.
ELT members, including the CEO, will receive, as from 2024, PSUs and RSUs in the form of shares.
The expenses of the ELT members, including those of its Chair (the CEO), are governed by the same rules that apply to all senior management staff,
namely the justification of all business expenses, item by item. Private expenses are not reimbursed. In the case of mixed business and private expenses,
such as cars, a proportionate rule is applied in the same way as to all management staff in the same position.
According to Belgian Law, any material changes to our Remuneration Policy need to be submitted to shareholders for approval before implementation.
5.5. Key provisions of Executive Leadership Team members’ contractual relationships with
the Company and/or an afliated company, including provisions relating to remuneration
in the event of early departure
ELT members, including the Chair (CEO), have directorships in Group subsidiaries as a function of their responsibilities. Where such directorships are
compensated, they are included in the amounts given above, regardless of whether the position is deemed to be salaried or undertaken on a self-
employed basis under local legislation.
ELT members have been appointed under a self-employed status and have a management agreement as of Belgian law, except Marc Chollet, Mark
Rollinger and Christopher Davis, who are employed under employment contracts (subject to French law for the first two and Belgian law for the third).
The management contract of Ilham Kadri, CEO (previously with Solvay), has been contributed to Syensqo as part of the Partial Demerger of Solvay.
In the event of a decision to terminate Ilham Kadri’s contract, she will be eligible for a contractual indemnity of 18 months of her fixed and variable
remuneration and all other benefits granted. A non-competition period of 12 months applies, with payment of an indemnity equivalent to six months of
remuneration computed on the same basis as the termination indemnity, unless the parties agree to waive the application of the clause.
In the event that Ilham Kadri resigns, she must give Syensqo a notice period of six months and she is subject to the non-competition clause described
above, unless the parties agree to waive the application of the clause.
In the event of a change in control of Syensqo or a major restructuring of Syensqo, Ilham Kadri may ask that her contract be terminated, with the same
conditions as in the case of termination by Syensqo, no later than 90 days following such a request.
The contractual indemnities of 18 months and six months have been approved by the Annual Shareholders’ Meeting of Solvay on May 10, 2022, which
approved the Remuneration Policy of Solvay, in compliance with Article 7:92 of the Belgian Companies and Associations Code.
In the event of the termination of the contract of an ELT member, or if their mandate is not renewed at the end of a four-year period, they will be eligible
for a contractual indemnity equal to the annual fixed fees and the short-term variable fees at target for a period of six months for a seniority of less than
one year and 12 months for a seniority of more than one year within Syensqo at the time of the termination. Their management contracts provide for
a non-competition period of 12 months after termination, with an indemnity that equals 50% of the remuneration for the non-competition period (if
Syensqo does not waive the application of the clause). This indemnity, if due by the Company, is included in the termination indemnity, from which it shall
be deducted. This excludes members with high seniority, where the local legislation surpasses this provision, in which event local legislation will prevail.
The notice period for the ELT members is 4.5 months and are subject to the non-competition clause described above, unless Syensqo waives the
application of the clause.
A non-competition period of 12 months after termination applies to Marc Chollet , with an indemnity that equals to the higher of (i) 50% of his gross
remuneration (including fixed remuneration, non-fixed remuneration and benefits) and (ii) 70% of the gross fixed remuneration, unless Syensqo waives
the application of the clause.The above report is aligned with Belgian Governance Code requirements. Except for the CEO (whose contract has been
contributed to Syensqo and whose contract’s key provisions are mentioned in and aligned with the Remuneration Policy), the terms and conditions of
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the other ELT members’ contracts are in deviation from the Remuneration Policy of Syensqo insofar as contractual termination indemnities apply to ELT
members with a management contract, and non-competition indemnities in excess of the legal minimum requirements are foreseen in their contracts.
The terms and conditions of the ELT members’ contracts aim to align with market practices.
6. MAIN CHARACTERISTICS OF RISK MANAGEMENT, INTERNAL CONTROL AND
INTERNAL AUDIT
6.1. Roles and responsibilities
Syensqo’s governance and organizational structure for risk management adhere to the “three lines of defense model” as depicted in the table
below:
Board of Directors / Audit and Risk Committee
Executive Leadership Team
First Line of Defense Second Line of Defense Third Line of Defense
- Risk and control owners, own risks
and controls aligned with their area
of operational responsibility
- Global Business Service
- Functions
- Group Business Units
- Risk Management, Compliance and
other monitoring and oversight
functions
- Internal Audit
Syensqo’s leaders and managers, as the first line of defense, are accountable for ensuring the adequacy of the risk management and internal control
framework in their respective Global Business Units (GBUs) and functions.
The Internal Audit and Risk Management department organizes internal audit, internal control and risk management activities in a global assurance
function to strengthen the efficiency and effectiveness of the risk management and internal control systems.
The Risk Management and the Corporate Internal Control team, as part of the second line of defense, provide advice and ensure that leaders address
the challenges at stake. It is in charge of setting up and maintaining a comprehensive and consistent system for risk management and internal control
across the Group, which is independently reviewed by the Internal Audit team – the third line of defense.
Independant review of
the system
Shared
framework
Internal Audit
Internal Control Design
and implementation
Internal Control
Process risks
Control on risks
Risk identification
and assessment
Risk Management
Feedback on level
of control
Audit Plan
Procedure
and controls
Recommendations
The extent to which Syensqo is willing to take risks in pursuit of its business strategy and its objective to create shareholder value is defined by a number
of qualitative and quantitative expressions of risk appetite, operated through the risk management system.
Syensqo has set up an internal control system with the aim of ensuring that:
· Current laws and regulations are respected.
· Policies and objectives set by general management are implemented.
· Financial and extra-financial information is accurate.
· Internal processes are efficient and effective, particularly those contributing to the protection of Syensqo’s assets.
The five components of the internal control system and the role of internal audit as an independent assurance provider are described below.
6.2. The control environment
The control environment, at the core of the internal control system, reflects the tone at the top, fosters awareness and promotes compliant behavior
among all employees. Its diverse components establish a clear structure of principles, rules, roles and responsibilities, while demonstrating general
management’s commitment to compliance.
· The Code of Business Integrity, available on our website, serves as a reference for underlying policies and procedures. Employees regularly receive
training on the code. More information can be found in the chapter on Corporate Governance and the Extra-financial section of this report.
· To facilitate reporting onpotential Code of Business Integrity violations, an Ethics Hotline managed by a third party is available for employees who
cannot approach their managers or the compliance organization, or who prefer to remain anonymous. More information can be found in the Extra-
financial section of this report.
6.3. The risk assessment process
The risk management process takes into account the organization’s strategic objectives and is structured into the following phases:
· Risk analysis (identification and evaluation), risk assessment and decision on how to manage critical risks.
· Implementation of mitigation plans with risk owners accountable for delivery.
· Monitoring of risk mitigation plans for adequacy and effectiveness.
Our approach to designing internal controls for major processes includes a risk assessment step defining which key control objectives to tackle. This is
the case for processes at subsidiary, Global Business Services, GBU or corporate level, leading to the production of reliable financial reporting.
The Board meets once a year to discuss the major risks facing the Group. During the year, the Audit and Risk Committee systematically reviews progress
and regularly invites the relevant leaders and risk owners to provide overviews of their risk assessments and progress on mitigating actions. In accordance
with the defined Group risks, topics such as industrial safety, physical security, cybersecurity, ESG-related subjects, or ethics and compliance matters are
addressed.
More information on enterprise risk management, including a description of the Group’s main risks and the actions taken to avoid or mitigate them,
canbe found in the Risk Management section of this report.
6.4. Control activities
Built on the existing framework, Syensqo uses a systematic approach to designing and implementing control activities for the most relevant Syensqo
processes. Internal control governance has been established under the CFO’s sponsorship.
Controls are designed and described by the process owners, based on a risk analysis, with the support of the Corporate Internal Control team. The
descriptions of the controls are used as a reference for the internal control assessment and roll-out across the Group.
At each level of the Group, Control Owners are responsible for the control execution.
Part of Syensqo’s internal controls is operated by Solvay, under the Transition Services Agreement entered into between Solvay SA and Syensqo in the
framework of the Partial Demerger (“TSA”). For those controls, Solvay is expected to operate the controls in accordance with the standards and framework
set by Solvay and Syensqo. For those controls, Syensqo’s Internal Control team receives assurance over the effectiveness of the internal controls from
Solvay’s Internal Audit & Risk Management function, as specified in the Separation Agreement. In accordance with the Separation Agreement entered
into between Solvay SA and Syensqo in the framework of the Partial Demerger, Syensqo’s Internal Audit team is granted the authority to carry out
independent internal audits, evaluating the adherence to and effectiveness of the services outlined in the TSA. Furthermore, additional internal controls
are set, when appropriate, to ensure the delivery of the services under the TSA.
Control activities, policies and procedures, are defined for the major financial processes and an online Financial Reporting Guide explains how the IFRS
rules should be applied throughout the Group.
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A process is in place to ensure that financial elements are consolidated monthly and analyzed at every level of responsibility in the Company, including
Global Business Services, the finance director of the entity, Group accounting and reporting, and the Executive Leadership Team. Elements are analyzed
using various methods, such as a variance analysis, plausibility and consistency checks, ratio analysis and comparison with forecasts.
In addition to the monthly reporting analysis prepared by the Group Controlling teams, the Executive Leadership Team thoroughly reviews GBU
performance every quarter in the context of business forecast reviews.
6.5. Internal control monitoring
The Corporate Internal Control team oversees and defines a framework to ensure monitoring of the effectiveness of internal controls within the
organization. The Internal Audit team conducts periodic reviews of key controls and high-risk processes and verifies compliance with established policies
and procedures.
The Audit and Risk Committee is in charge of monitoring the effectiveness of internal control systems. It supervises the work of internal audit and risk
management relating to financial, operational and compliance monitoring. It also verifies that audit recommendations are properly implemented. The
role and responsibilities of the Audit and Risk Committee are detailed in the Corporate Governance Charter. For additional information on the work of
internal audit see section6.7 below.
The Ethics and Compliance department coordinates investigations of potential Code of Business Integrity infringements.
6.6. Information and communication
Effective communication channels of internal control responsibilities and relevant information are implemented throughout the Company. Regular
updates, meetings and documentation ensures critical information is disseminated in a timely and transparent manner across departments.
A large majority of Group operations are supported by a small number of integrated Enterprise Resource Planning (ERP) systems, with financial
consolidation being supported by a dedicated tool.
All financial reporting procedures and internal controls ensure that all material information disclosed by Syensqo to our investors, creditors and regulators
is accurate, transparent and timely, and that it fairly represents the Group’s most relevant developments, financial fundamentals and performance.
6.7. Internal Audit
The Internal Audit team provides risk-based, independent and objective assurance to enhance and protect the organization’s overall value. It uses a
systematic and methodological approach to evaluate and improve the effectiveness of governance, risk management and internal control processes and
procedures, helping the organization accomplish its objectives.
The team performs internal audit assignments across the entire Group on the basis of its Audit Charter and the risk-based annual internal audit plan
approved by the Audit and Risk Committee. The audit plan takes into consideration internal and external data, risk factors and benchmarks. It includes
both entity-level audits and transversal, Group-wide assignments to address the Group’s main risks, which are identified as part of the enterprise risk
management process. Based on a risk assessment, all Group operations are inspected by internal audit on a rotation basis.
The assignments are scoped, planned and defined on the basis of a risk analysis, with the internal audit work focusing on the areas perceived as having
the highest risks. Internal audit recommendations are implemented by management. The implementation status is monitored by the Internal Audit team
and reported to management and the Audit and Risk Committee on a regular basis.
In 2023, as part of the 2023 Internal Audit plan approved for Solvay SA, the Internal Audit team conducted 22audit assignments, in which Syensqo’s
scope of operations was covered. These audits were performed across all of Syensqo relating to the effective management of Group risks, efficiency of
operations and internal controls, as well as to governance and compliance. Its areas of focus included ESG, compliance, safety of operations, information
and physical security and Group transformation.
The Head of Internal Audit and Risk Management reports to the Chief Financial Officer and maintains reporting relationships with the Chair of the Audit
and Risk Committee and the CEO. The Head of Internal Audit & Risk Management attends all Audit and Risk Committee meetings and periodically
presents an activity report summarizing internal audits performed, the follow-up of recommendations and the annual audit program. At each meeting,
the Head of Internal Audit & Risk Management has a private session, in the absence of management, with the Audit and Risk Committee. The Head of
Internal Audit & Risk Management has direct access at all times to the Chair of the Audit and Risk Committee and the CEO.
7. EXTERNAL AUDIT
The audit of the Company’s financial situation, financial statements, extra-financial statements and the conformity of these statements – and the entries
to be recorded in the financial statements in accordance with the BCCA and the bylaws – are entrusted to one or more auditors. These are appointed at
the Shareholders’ Meeting and chosen from among the members, either natural or legal persons, of the Belgian Institute of Company Auditors.
The responsibilities and powers of the auditor(s) are set by law.
The Shareholders’ Meeting sets the number of auditors and their emoluments in accordance with the law. Auditors are also entitled to reimbursement
of their travel expenses for auditing the Company’s sites and administrative offices.
The Shareholders’ Meeting may also appoint one or more alternate auditors. Auditors are appointed for three-year renewable terms, which cannot be
revoked by the Shareholders’ Meeting without good reason.
The Audit and Risk Committee assesses the effectiveness, independence and objectivity of the external auditor with regard to the:
· content, quality and insights provided in key external auditor plans and reports, in particular those summarizing audit work performed on risks identified
by the Company
· engagement with the external auditor during committee meetings
· robustness of the external auditor in their handling of key accounting principles
· provision of non-audit services
For the year ending December 31, 2023, professional services were performed by Ernst and Young Réviseurs d’Entreprises SRL, duly incorporated and
validly existing under the laws of Belgium, whose registered office is at Kouterveldstraat 7B 001, 1831 Diegem, Belgium, registered in the register of legal
entities of Brussels under business registration number 0446.334.711 and their respective affiliates. The yearly 2023 audit fees for Syensqo SA were set at
€1.4 million. They include the audit of the statutory and consolidated accounts of Syensqo SA. Additional audit fees for Syensqo affiliates in 2023 amount
to € 1.9 million. Supplementary non-audit fees € 0.06 million were engaged in 2023 by Syensqo SA and affiliates.
The Ernst and Young mandate has started at the date of the constitution of Syensqo on 27th February 2023 and is the company’s statutory auditor for
a period of three years, ending after the Ordinary Shareholders’ meeting of 2026, which will be called upon to approve the accounts for the year 2025.
The Non Audit Services Policy has been approved during the first Audit and Risk Committee of 2024.
8. DEVIATION FROM THE BELGIAN GOVERNANCE CODE
The Company deviates from Rule7.6 of the Belgian Corporate Governance Code which recommends that a portion of the remuneration paid to non-
executive directors be in shares. The Company considers however that its remuneration practices remain relevant and comply with the spirit of Rule7.6
because non-executive directors are required to hold a number of Company shares equivalent to 100% of their gross annual fixed board fees. These
shares should be held until at least one year after the non-executive director leaves the Board of Directors and, in any case, for at least three years after
the shares were acquired.
For further details, please see Section 5.
9. ITEMS TO BE DISCLOSED PURSUANT TO ARTICLE 34 OF THE BELGIAN ROYAL
DECREE OF NOVEMBER 14, 2007
Article 34 of the Royal Decree of November 14, 2007, on the obligations of issuers of financial instruments admitted to trading on a regulated market
(hereinafter the “Royal Decree”), requires them to enumerate and, if appropriate, comment in a management report on the following elements where
their nature is such that they may have an impact in the event of a takeover bid.
9.1. Capital structure
As of December 31, 2023, the capital of the Company amounted to€1,351,624,292.82, represented by 105,876,417ordinary shares with no designated
par value, fully paid up.
All Syensqo shares are entitled to the same rights. There are no different classes of shares.
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9.2. Transfer of shares and shareholders’ arrangements
Syensqo’s articles of association do not contain any restriction on the transfer of shares.
The Company has been informed that certain individual shareholders who hold shares directly in Syensqo may decide to consult one another when
questions of particular strategic importance are submitted by the Board of Directors to the Shareholders’ Meeting. Each of these shareholders, however,
remains free to vote as he or she chooses. None of these individuals, either individually or in concert with others, reaches the initial 3% transparency
notification threshold. Syensqo is not aware of the existence of a concert between its shareholders.
9.3. Holders of securities with special control rights
There are no such securities.
9.4. Control mechanism of any employee share scheme where the control rights are not
exercised directly by the employees
There is no employee share scheme with such a mechanism.
9.5. Restrictions on the exercise of voting rights
Each Syensqo share entitles holders to exercise one vote at Shareholders’ Meetings.
Article 10 of the Company’s articles of association provides that the exercise of voting rights and other rights attached to shares that are jointly owned, or
of which the usufruct and bare ownership rights have been separated or are pledged, are suspended pending the appointment of a single representative
to exercise the rights attached to the shares.
The voting rights attached to the shares in Syensqo held by Syensqo Stock Option Management, a wholly owned indirect subsidiary of the Company,
are, as a matter of law, suspended.
9.6. Appointment, renewal, resignation and dismissal of directors
The articles of association of the Company provide that the Company is to be managed by a Board of Directors composed of no less than five members,
their number being determined by the Shareholders’ Meeting (Article 12). Directors are, in principle, appointed by the Shareholders Meeting for four
years, and may be reappointed.
The Board of Directors submits directors’ appointments, renewals, resignations or dismissals to the Ordinary Shareholders Meeting for approval. Italso
invites such Shareholders’ Meetings to vote on the independence of the directors fulfilling the related criteria, having first sought the advice of the
Nomination Committee, whose mission is to define and assess the profile of any new candidate using its criteria for appointment and for specific
competences.
The Ordinary Shareholders’ Meeting decides on proposals made by the Board of Directors on this matter by a simple majority.
If a directorship becomes vacant during a term of office, the Board of Directors may co-opt a new director, subject to ratification at the next Shareholders’
Meeting.
9.7. Amendment of Syensqo’s articles of association
Amendments to the Company’s articles of association must be submitted as a resolution to the Shareholders’ Meeting, at which at least 50% of the share
capital of Syensqo must be present or represented. In principle, amendments must be passed by a 75% majority of the votes cast.
If the attendance quorum is not met at the first Extraordinary Shareholders’ Meeting, a second Shareholders’ Meeting may be convened and will take a
decision without any attendance quorum requirement.
For certain other matters, such as amendment of the Purpose of the Company, higher voting majorities may apply.
9.8. Powers of the Board of Directors
9.8.1. Powers of the Board of Directors
The Board of Directors is the highest governing body of the Company.
· It is entrusted with all the powers that are not reserved, by articles of association, to the Shareholders’ Meeting.
· The Board of Directors has kept responsibility for certain key areas and has delegated the remainder of its powers to an Executive Leadership Team
(further detailed in the Charter).
In all matters for which it has exclusive responsibility, the Board of Directors works in close cooperation with the Executive Leadership Team, which,
inparticular, is responsible for preparing most of the proposals for decisions made by the Board of Directors.
9.8.2. The Board’s authorizations to issue and buy back shares and increase the capital
Following the Extraordinary Shareholders’ Meeting of December 8, 2023, the Board of Directors is authorized to acquire or pledge Syensqo shares at a
unit price which may not be less than one euro (€1.00) and which may not be more than 10% higher than the highest price on the last 20 trading days prior
to the transaction. The Company must also comply with the price limits set out in Articles 7:215 and following of the BCCA and Articles 8:2 and following
of the Royal Decree implementing the BCCA. This authorization extends to the acquisition or pledging of shares in the Company by one of its direct and,
insofar as necessary, indirect subsidiaries, as well as by any person acting in his or her own name but on behalf of these companies. The nominal value
of the shares acquired, including those previously acquired by the Company and held in its portfolio and those acquired by a direct subsidiary within the
meaning of Article 7:221, par. 1 of the BCCA, may not exceed 10% of the subscribed capital. This authorization is valid for five years from February 2, 2024.
The Board of Directors is also authorized to acquire or pledge shares in the Company, where such acquisition is necessary to avoid serious and imminent
harm to the Company, including in the event of a public takeover bid for the Company's shares. This authorization is valid for two years from February
2, 2024.
The Board of Directors is authorized to sell Syensqo shares, subject to compliance with the applicable legal requirements, to one or more specific
persons other than staff members. This authorization extends to the disposal of shares in the Company by one of its direct and, insofar as necessary,
indirect subsidiaries, as well as by any person acting in his or her own name but on behalf of these companies. The Board of Directors is also authorized to
dispose of shares in the Company, in accordance with the conditions set out in Articles 7:215 and following of the BCCA, when such disposal is necessary
to avoid serious and imminent harm to the Company, including in the event of a public takeover bid for the Company’s shares. This authorization extends
to the disposal of shares in the Company by one of its direct and, insofar as necessary, indirect subsidiaries, as well as by any person acting in his or her
own name but on behalf of these companies. This authorization is valid for two years as from February 2, 2024.
Following the same Extraordinary Shareholders’ Meeting, the Board of Directors is authorized to increase the capital of the Company by a maximum
amount of €135,000,000. This authorization is valid for a duration of five years, as from February 2, 2024. The Board of Directors may limit or cancel
shareholders’ preferential rights. This option includes the limitation or elimination of shareholders’ preferential rights in favor of one or more specific
persons other than employees of the Company or its subsidiaries. Any decision to use the authorization given to the Board of Directors to increase the
capital requires a majority of three quarters of the votes (rounded up to the nearest whole number) of the directors present or represented on the Board.
The Board of Directors is further authorized to increase the Company’s capital (including, where applicable, with limitation or cancellation of the
shareholders’ preferential rights) in the event of a public takeover bid for the securities issued by the Company, subject to the conditions and within
the limits set out above and in Article 7:202 of the BCCA. This authorization is valid provided that the notification by the Financial Services and Markets
Authority that it has received notice of a public takeover bid for the Company is received within two years as of December 8, 2023. Capital increases
carried out by the Board of Directors under this authorization will be deducted from the remaining amount of the authorized capital.
9.9. Signicant agreements or securities that may be impacted by a change of control of the
Company
The Extraordinary Shareholders’ Meeting of November 13, 2023, approved the change of control provisions set out in:
· The Separation Agreement (article 4.2) entered into between the Company and Solvay SA, governing certain matters relating to the separation of
the Solvay Group and prior reorganization transactions, and the relationship of Syensqo, Solvay SA and their respective affiliates as from the effective
date of the Partial Demerger, and implementing certain additional arrangements relating thereto, including certain cross-indemnification undertakings
related to environmental liabilities.
· The U.S. Tax Matters Agreement (article 3.02) entered into between the Company and Solvay SA, Essential Holding America LLC and Solvay Holding,
Inc., governing the respective rights, responsibilities and obligations of Syensqo and Solvay SA with respect to certain U.S. tax matters, including with
respect to U.S. tax liabilities (including, generally, responsibility and potential indemnification obligations for U.S. taxes attributable to each company’s
business and taxes and losses arising, under certain circumstances, in connection with the intragroup spin-off of certain U.S. entities and the Partial
Demerger, U.S. tax attributes, U.S. tax contests and U.S. tax returns.
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9.10. Agreements between the Company and its directors or employees providing for
remuneration if directors resign or are good leavers, or in the case of a public takeover
bid
Not applicable to the non-executive directors. The key provisions of the ELT Members’ contractual relationships with the Company and/or an affiliated
company are described in section 5.5 of the Remuneration Report.
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128 1. Risk management process
130 2. Syensqo’s main & emerging risks
132 2.1. Security
133 2.2. Environmental impacts
134 2.3. Compliance and business integrity
136 2.4. Operations safety
138 2.5. Climate change
140 2.6. Spin-off transformation-related
risks
141 2.7. Geopolitical impacts
141 2.8. New technology, digital disruption
and generative artificial intelligence
(AI)
142 3. Other risks
145 4. Litigation
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Risk Management
In a context of elevated global economic and geopolitical uncertainty, and heightened sensitivity and expectations related to climate change and
sustainability, we believe that effectively monitoring and managing risks is crucial for Syensqo success.
Our risk management approach focuses on the main critical and emerging risks that could significantly impact Syensqo’s ability to achieve its strategic
objectives. The evolution of our risk management system is an ongoing process, characterized by performance monitoring and the enhancement of our
processes and data to ensure effective risk management.
1. RISK MANAGEMENT PROCESS
At Syensqo, anticipating, measuring, mitigating and monitoring risks is as important as the process to identify and capture opportunities. The extensive
risk-related processes and provisions that we apply from the Board of Directors to front-line workers and to supply chain partners and customers
demonstrates this. These processes are outlined below.
1.1. Risk analysis and decision on how to manage critical risks
We analyze risks in three steps. First, we establish their level of priority for Syensqo, which means categorizing them as “main risks” (most critical),
“emerging risks” or “other risks”. Second, we identify in which area the risk would have the most impact: the environment, people, economic or
reputation. Third, we classify risks according to their time horizon: short term (up to one year); medium term (more than one year and less than five); and/
or long term (more than five years).
In accordance with the Task Force on Climate-related Financial Disclosures (TCFD) and the EU Taxonomy frameworks, we also assess and categorize our
main risks as “Environmental (E)”, “Social (S)”, or “Governance (G)”, where applicable.
1.2. Risk management in action
Syensqo’s Enterprise Risk Management methodology, inspired by the Committee of Sponsoring Organizations (COSO) principles, requires our Global
Business Units (GBUs) and Functions – and the Group as a whole – to prioritize risks, develop and deliver on mitigation plans, continually scan the
environment to assess whether risks and exposures are changing and test whether priorities and plans remain appropriate. This process is closely
followed by the Corporate Risk Management team through systematic assessments enabling us to monitor decisions and measure actions and progress.
The process we use is regularly adjusted in order to constantly improve the identification and classification of risks. In 2023, the Corporate Risk Management
team continued to work with the Sustainable Development team to align our risk analysis with the Corporate Sustainability Reporting Directive (CSRD).
Critical risks for the Group are closely and systematically monitored by the Group Risk Committee, which ensures that these risks are assessed for
materiality and are adequately addressed. The Committee is composed of the Executive Leadership Team (ELT), establishing a direct link between the
Group’s strategy and the risk management process, the Chief Technology & Innovation Officer, the Chief Sustainability Officer, and the Head of Investor
Relations. Group Risk Committee meetings are facilitated by the Head of Internal Audit and Risk Management.
Business and Function leaders integrate risk management into decision making to support delivery of objectives
Leaders of GBUs and Functions are responsible for identifying, monitoring and managing the key risks in their areas. Risk management is embedded in
the day-to-day operations of each entity and operational managers are expected to anticipate and react rapidly when circumstances change.
Group risks are overseen at Executive Leadership Team level
Group-level risks are managed and monitored throughout the various levels within the Syensqo organization, starting with the top management. Senior
management participates in the identification of risks and their treatment and response. The Group Risk Committee contributes to identifying and
assessing risks as well as appointing Risk Sponsors, who are members of the Executive Leadership Team. Board Members provide independent input,
contributing with their broad expertise. Additional input is provided by the Corporate Risk Management team, which scans external sources, such as
the World Economic Forum Global Risks report, the Risk in Focus report from the ECIIA1, the AXA Future Risks Report or the Economist Intelligence
Unit Risk Outlook, for relevant information. This input is reviewed and validated by the ELT once a year, but more frequent updates are prepared and
reviewed when necessary.
1. European Confederation of Institutes of Internal Auditing
The Audit Committee meets with the CEO, CFO, Head of Internal Audit & Risk Management and all other members of the Board once a year to discuss
the major risks facing the Group. During the year, the Audit Committee reviews progress and regularly invites the relevant leaders and Risk Owners to
provide overviews of their risk assessments and progress on mitigating actions.
RISK MANAGEMENT PROCESS
Risk analysis and decision Implementation Monitoring
Board
Gather input through dedicated
sessions on Group risks
–
· Annual Group risk assessment and
update
Audit Committee
Gather input through dedicated
sessions on Group risks
–
· Assess effectiveness of risk
management
· Periodic presentation by Risk
Owners
· Periodic review (minimum twice
per year) and assessment of Group
risks (minimum annually)
Senior Management
Define risks at business and function
levels
· Risk Coordinators appointed at Group Business Units and Function level
· Mitigation plan developed with Risk Owners accountable for delivery
· Regular progress update (minimum annually)
Executive Leadership
Team (ELT)
Provide input on Group risks
establishing a direct link between
the Group strategy and the risk
management process
· ELT members appointed Risk Sponsors
· Oversee risk mitigation progress and ensure adequate resources
· Ad-hoc risk sessions and Group risk assessments twice a year
Group Risk Committee
Decide and validates Group risks Nominates ELT Risk Sponsors
· Monitors the level of control
of Group risks (effectiveness of
mitigation plans)
Internal control
Internal control is a key aspect of risk management. The Corporate Governance chapter of this report provides a detailed description of Syensqo’s risk
management and internal control system (see chapter6).
1.3. Crisis preparedness
There is a network within the Group to ensure crisis preparedness. Members of this network perform tasks and implement programs in order to ensure
that their business units and Functions are prepared for specific crisis situations. These programs include crisis simulations, media training for potential
spokespersons, maintenance of key databases, and analysis of relevant internal and external events.
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2. SYENSQO’S MAIN & EMERGING RISKS
The Group Risk Committee assesses the impact of risks and the level of control for Group risks. To assess impact, we use a four-level scale: low, medium,
high or very high.
Impact Low Medium High Very high
Economic
Less than €10 million €10 million to €50 million €50 million to €100 million €100 million or larger
Injury to people
Nuisance
(noise, smoke, odor)
One or multiple first aid injuries
or shelter-in-place
One irreversible injury or
multiple reversible injuries
One or multiple fatalities or
multiple irreversible injuries
Reputation
-
· Local news headlines
· Low activity in social media
· Moderate to strong
reaction from local
stakeholders
· National news headlines
· Strong activity in social
media
· Strong reaction from
stakeholders
· International news
headlines
· Significant activity in social
media
· Severe reaction from all
stakeholders
Environment
Non-reportable operating
permit limits exceeded
· Damages limited to the
immediate vicinity of the
site
· Minor impact on plants or
animals around the site
· Reversible damages off-site
· Major impact on plants or
animals around the site
· Long-term damages off-site
(>ten years)
Level of control
The Group Risk Committee assesses the level of control over these risks based on Corporate Risk Management team recommendation and by
considering whether:
· Key actions and controls are identified
· Effectiveness of key actions and controls is assessed
· The level of control is adequate and proportionate to the risk
· Mitigation actions, which are deemed appropriate, are implemented
Syensqo’s Main & Emerging Risks
To determine how critical a risk is, we combine the two ratings described above (impact and level of control).
Criticality ESG Risk Time
horizon
Trends of level
of control
(after mitigation)
Corresponding Materiality
SASB Topics
Very High S Security Short Stable
· Critical incident risk
management
· Community relations
· Data security
E
Environmental impact
and controversies
Short to long Stable
· Air quality
· Water and wastewater
· Waste management
· Hazardous materials
G,S
Compliance and
business integrity
Short to
medium
Stable
· Management of the legal
and regulatory framework
· Competitive behavior
· Business ethics
· Product quality and safety
· Product design & lifecycle
management
E,S Operations safety Short Stable
· Critical incident risk
management
· Employee health and safety
G
Spin-off Transforma-
tion Risk
Short to
medium
New Risk
· Data security
· Management of the legal
and regulatory framework
· Competitive behavior
High
E Climate change Short to long Stable
· Greenhouse gas emissions
· Physical impacts of climate
change
Emerging Risks
N/A Geopolitical impacts
Short to
medium
Not applicable -
N/A
Digital disruption,
new technology and
generative artificial
intelligence
Medium to long Not applicable -
Short term < 1 year < Medium term < 5 years < Long term
Emerging risks are newly developing or changing risks that may cause a potential significant impact to the Group. These risks are undergoing a detailed review to ensure that
proper mitigation strategies are defined and implemented.
The risks relevant to Syensqo, and the Group’s risk-reduction actions, are listed below. The mitigation efforts described do not guarantee that risks will
not materialize or impact the Group, but they show how we proactively manage our exposure to risk.
++
+
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2.1. Security
MAIN RISK
RISK HORIZON: SHORT TERM
TREND: STABLE
2.1.1. Risk description
Certain security threats can have negative consequences for our business. These include terrorism, crime, violence, vandalism, theft and cyberattacks,
which may impact employees or other stakeholders, sites, assets, operations and/or critical information.
Syensqo is exposed to physical security risks because it has 33 high-risk operations (high Seveso level, process safety management (PSM) covered).
Anumber of our products, if mishandled, can cause severe damage. For more information on this, see the Extra-financial statements section of the
report: 5.4 hazardous materials.
We also have sites located in countries where security concerns are rated high by SOS International. Seventy (70) industrial, and twenty (20)administrative
and R&I sites have undergone a Security Vulnerability Self-Assessment (SVSA) and only one R&I site and one Industrial site has been assessed as having
the highest level of security risk – Level 1 – since the previous SVSA. The site SVSA is completed by each site once in every three years or after a major
security incident or system break-down.
Syensqo’s exposure to cyber risk, as for most major companies, stems from our extensive use of information and communication technologies and
the gradually increasing automation level of our sites. Like most multinationals, Syensqo experiences cyber incidents and actively responds to those
incidents to limit the impact. The Syensqo management team is not aware of any incident that would have significant consequences for our financial
statements or our business.
2.1.2. Prevention and mitigation actions
Syensqo has an intelligence-driven and risk-based security approach to protecting sites, operations, information, and people.
The Head of Facilities & Group Security, reporting to the Chief Operations Officer (COO) coordinates all the physical security activities related to the
security of people, sites and operations. The COO is directly reporting to the CEO.
The Chief Information Security Officer (CISO), reporting to the Chief Information Officer (CIO), coordinates all digital-related information security
activities. The CIO is directly reporting to the CEO.
Three governance bodies lead the security risk management effort:
· the Security Board, chaired by the CEO, provides strategic direction for the Group’s security risk mitigation;
· the Cyber Security Leadership Committee, chaired by the CISO, oversees all cyber security activities and provides budget and priority recommendations
to the Security Board;
· a Security Coordination Working Group runs a security threat monitoring program and an optimized security program for the Group.
Cyber security program
The three governance bodies leading the security risk management effort also supervise our cyber security program, which includes:
· the use of assessments conducted by external experts;
· the use of penetration tests and internal phishing simulations;
· substantial training for all Syensqo Business Services and Digital Technology (DT) professionals, and mandatory cyber security training for all employees;
· the regular publication of cybersecurity tips to increase employee awareness;
· several significant improvements in security posture were achieved by deploying enhanced security technology across the network. This includes
controls such as endpoint detection and response, multi-factor authentication, immutable back-ups, a stronger demilitarized zone (DMZ), improvement
of the security identity and the improvement of the Security Operation Center (SOC).
A significant cyber attack could negatively impact Syensqo in many ways, including people, operations and results, as well as know-how and intellectual
property. We will therefore continue to solidify our cyber defenses so that we are able to manage the evolving cyber threat landscape.
Insurance
Syensqo is insured against the potential financial impact of a cyber attack. This insurance covers damage to assets, business interruption, ransomware
and third party liability in case of loss of third party confidential information.
2.1.3. Main events in 2023
· Launch of the Syensqo Cyber Security Risk Management Program - a comprehensive program to capture, assess, prioritize, manage and monitor cyber
security risks within the Group. This includes a formalized process that assigns accountability and provides risk mitigation measures and reporting;
· A comprehensive IT Acceptable Use and Security policy was issued with an e-security training module deployed to train employees and contractors.
This training is available in 16 languages and is mandatory for employees and contractors;
· A Cyber Third Party Risk Management program was defined and designed for IT vendors, with the full rollout of the program expected in 2024;
· The Specialty Polymers business unit achieved the automotive TISAX certification for the Research & Innovation Centers of Aubervilliers and Alpharetta sites,
reflecting our cyber security capabilities.
2.2. Environmental impacts
MAIN RISK
RISK HORIZON: SHORT, MEDIUM AND LONG TERM
TREND: STABLE
2.2.1. Risk description
Syensqo’s activities impact the environment through:
· our use of raw materials based on fossil or non-renewable resources and our consumption of energy;
· our access to scarce resources, including water;
· our management of waste and emissions to air and water;
Syensqo manages or remediates historical soil contamination at all sites for which we are responsible, including divested or discontinued operations,
ensuringcontinuous compliancewith the applicable environmental legislation. More information can be found in the Extra-financial section of the
Annual Integrated Report.
These impacts on the environment, in turn, create the following risks:
· challenges and expenses related to meeting increasingly strict regulatory standards and changing customer expectations, standards and purchasing
decisions;
· changes in investor sentiment and preferences as a result of the changing investor environment;
· impact on our ability to recruit employees due to negative public perceptions of environmental issues.
2.2.2. Prevention and mitigation actions
An established Environment SteerCo meets regularly and addresses all environmental topics, including remediation, operations and potential risks.
Prevention and mitigation activities include:
· monitoring and management of sites with a history of soil contamination by a dedicated expert team. We follow about 160 locations across the world;
· rolling out a risk characterization approach for relevant sites;
· regulatory monitoring to proactively assess and address upcoming changes in legislation;
· a Group strategy for managing chemicals of concern is to develop alternatives with a reduced human and environmental impact or to phase them
out completely. For example, Syensqo developed a next generation, more sustainable range of very specialized fluoropolymers, without the use
of fluorosurfactants, while keeping the unique properties of these products, as required for special applications. This innovation allowed Syensqo
to successfully discontinue the use of fluorosurfactants in the United States in July 2021 and will allow the Group to manufacture nearly 100% of its
fluoropolymers without the use of fluorosurfactants by 2026. (See the Extra-financial chapter of the report: 5.4 Hazardous materials)
To mitigate environmental risks, the following minimum requirements have been established:
· the discharge of substances, wastewater and atmospheric emissions from our plants must meet all applicable emission limit values and environmental
quality standards where relevant;
· waste must be disposed of using appropriate and sustainable technologies with qualified companies;
· Sites are required to assess their emissions of hazardous substances and implement actions to reduce and/or eliminate these emissions.
We have also implemented a comprehensive program to reduce workplace chemical exposure using:
· chemical risk assessments and risk-based medical surveillance, using both qualitative and quantitative methodologies;
· human biomonitoring, when warranted;
· improving and adapting working conditions;
· promoting general physical and mental health; and
· setting more conservative in-house exposure limits for critical substances.
We regularly monitor changes to the regulations that could impact emission permits for manufacturing sites. One example of this is the requirement
of sites to have a regulatory watch program which identifies changes to regulations that could impact their site. We use our Sustainable Portfolio
Management (SPM) tool to help identify substances with a reduced environmental impact that will continue to meet our customers’ needs. We revise our
materiality analysis on a yearly basis to align it with evolving stakeholder expectations, including environmental impacts.
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Syensqo is insured, within the limits of the policy and its exclusions, for unknown gradual pollution, and sudden and accidental pollution. Coverage
includes defense costs, clean-up costs and third-party liability.
2.2.3. Main actions in 2023
The Syensqo One Planet Ambition was released on November 13, 2023 during the Syensqo Capital Markets Day where the key targets were announced.
During 2023, the following sustainability initiatives have been incorporated:
· identify substances of concern (SOC), develop alternatives and implement abatement solutions with a focus on 20priority group of substances;
· deliver our carbon neutrality ambition with 47energy transition projects aimed at reducing scope 1&2 GHG emissions by -1.7Mt;
· progress on a pipeline of industrial waste recovery projects to reduce our industrial waste;
· systematically collect fines and settlements received at our sites with quarterly reporting to the ELT;
· approve sustainable investment projects using a One Planet profile review;
· identify and launch R&I projects to address potential risks;
· reduce our pressure on biodiversity by reducing our impact on climate change, terrestrial acidification, water eutrophication and marine ecotoxicity in
our operations and upstream in our value chain;
· identify sites most at risk of drought and draft roadmaps for the priority sites;
· Star Factory roadmaps addressing GHG, water, waste, pollutants emissions and biodiversity initiatives have been developed for an additional
15Syensqo sites in 2023; and
· detailed annual reporting of environmental emissions (air and water) and environmental events resulting in a regulatory non-compliance.
More information can be found in the Extra-financial statements chapter of the report: 3.1 Syensqo One Planet Ambition 4.4. Air quality, 4.6. Water and wastewater, 4.5. Waste
2.3. Compliance and business integrity
MAIN RISK
RISK HORIZON: SHORT TO MEDIUM TERM
TREND: STABLE
2.3.1. Risk description
Compliance and Business Integrity:
Syensqo has zero tolerance for violations of its Compliance and Business Integrity policy. Syensqo’s activities require that the following risk categories -
among others - be considered in relation to compliance and business integrity:
· failure to comply with governmental laws and regulations in jurisdictions in which Syensqo operates.
· failure to comply with Syensqo’s Code of Business Integrity, including:
- intentional misconduct;
- corruption, misappropriation;
- by-passing corporate controls, and fraud;
- human rights violations;
- failure to implement good governance in a joint venture.
Products and Regulated Markets:
Failure to comply with chemical product usage standards, such as:
· inappropriate use of a Syensqo product by Syensqo personnel or customers, which can lead to adverse health and environmental impacts, property
damage and resulting litigation;
· production of faulty products, which can result in exposure to liability for injury, health impairment and damage, or product recalls. Product liability risk
is generally higher for products used in medical devices, healthcare, food contact and feed applications, and sensitive applications in general;
· Failure to comply with chemical and market regulations in countries where a product is sold. There are many regulatory activities worldwide; in
particular, we are closely monitoring the upcoming European Union Chemical Strategy for Sustainability (CSS) regulatory framework and the EU PFAS
restriction proposal, including its possible impact on our business and operations and potential opportunities stemming from it. The US administration
is also developing a stricter regulatory framework for chemicals; and continued enforcement activities are expected, especially around compliance
monitoring for specific substances.
2.3.2. Prevention and mitigation actions
Compliance and Business Integrity:
Our Code of Business Integrity includes a wide range of topics, among which those listed above. It applies to all employees and majority-owned joint
venture partners. Our Supplier Code of Business Integrity applies to suppliers.
We introduced training courses which all employees are required to attend and to obtain the knowledge check approval. We require that all employees
certify through an annual acknowledgement integrated in the Code of Business Integrity training that they have read and understood the Code, that
they are in compliance with its requirements and that they have nothing to report. We have increased awareness about specific behavioral risks through
training courses and consistent communication. These include:
· a culture of business integrity;
· anti-bribery and anti-corruption;
· antitrust and competition law;
· confidential and proprietary information;
· conflict of interest;
· reporting non-compliance with human rights in business policy;
· use of a gifts and entertainment tracking system;
· use of third-party reporting hotlines and a Group-wide “Speak Up” program to report non-compliance, speaking up, listening up and non-retaliation;
· sanctions and export control;
· data protection and privacy.
Before entering into a business relationship, our suppliers are required to sign our Supplier Code of Business Integrity and commit to its principles.
In addition, we are increasing our oversight on third parties and suppliers in the field of human rights, anti-bribery and corruption and environmental
breaches through proactive screening. Human rights has been integrated in our Ethics Helpline as a matter type and is also open to the employees of
our suppliers.
Additional assurance over the deployment of the Syensqo ethical policies and procedures, including the Code of Business Integrity, is obtained through
Internal Audits which are conducted at selected Group entities, as part of the internal audit plan.
Products and Regulated Markets:
Our customers are informed about hazards of our products and handling advice through Safety Data Sheets (SDS).
· Syensqo SDS process ensures harmonized content by implementing a common worldwide SAP system for the Group. This SAP system has been
implemented across the company.
· SDS are constantly maintained for all products and are distributed worldwide to all customers, in compliance with local regulations and in the local
language. The Product Stewardship team ensures that SDS are revised at least once every three years or when needed for all products the Group sells.
Information on regulated markets is provided to customers by the Product Stewardship team through relevant certificates.
Additionally, 3 control processes are implemented:
· An in-house Product Stewardship Management System (PSMS) based on the US Product Safety Code is in place;
· A Product Safety Management Process (PSMP) methodology has been developed, aiming at identifying and prioritizing risks related to products
marketed by Syensqo;
· The Product Stewardship team performs an annual inventory of Substances of Very High Concern (SVHC) — defined by Syensqo — in the products
they sell by business. A risk assessment and analysis of any available safer alternatives is being performed for each SVHC identified in the inventory (cf.
the Extra-financial statements section 5.4 Hazardous materials). The framework of this process includes the identification of some SVHCs for defined
uses that can be progressively phased out.
Recall procedures are developed and deployed as prescribed by the product stewardship programs. Insurance reduces the financial impact of a product
liability risk, including for first-party and third-party product recalls.
2.3.3. Main actions in 2023
Compliance and Business Integrity:
We continue to invest in our Speak Up program to raise awareness and ensure people can raise concerns when they notice a potential breach of
regulation, our policies or our Code of Business Integrity. We adapted our system and procedures to integrate the new EU Whistleblowing directive, and
drafted a new global Speak Up policy. Fraud was added as a new topic to our Ethics Helpline. Specific training modules for managers increased their
awareness on the role they play in protecting our culture of integrity and how to listen and act on concerns raised by employees.
We developed a new external website for Ethics & Compliance that was launched in 2023, ensuring that information about our program, the Code of
Business Integrity, the Supplier Code of Business Integrity, our compliance policies as well as our Ethics Helpline are available and easily accessible to
employees and externals. This increases awareness around Syensqo’s culture of integrity and the detection, identification and addressing of potential
issues and risks. It also ensures that third parties and other stakeholders can access our Ethics Helpline easily. Concerns or potential breaches that relate
to our supply chain can now be reported by any third party, including by the employees of our suppliers. We have 21 matter types, including Human
Rights and Environmental violations. Reported incidents are investigated and preventive and corrective actions implemented when required.
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In 2023, we also conducted an internal audit exclusively focused on ESG matters where we reviewed the commitment of our suppliers to our Supplier
Code of Business Integrity and also conducted a Compliance Audit on business integrity, bribery & corruption and travel and expenses in APAC.
Additionally, as part of the work performed by Internal Audit during its reviews of the group operations, compliance aspects such as the deployment of
Code of Business Integrity and the Anti-Bribery & Anti-Corruption policy are also reviewed.
We developed an ESG risk management approach for our supply chain. It provides a systematic approach for identifying risks and assessing their severity
in our value chains, and triggers a risk mitigation action plan. In 2023, we increased our efforts and screened our suppliers to identify the Human Rights
risks based on an internal analysis by country and value chain and on an analysis with an external provider based on adverse media. This allowed us
to categorize our suppliers in a high, medium and low risk cluster. Ensuring compliance with social and environmental standards, including respect for
human rights, in our supplier network is important to us.
A dedicated expert competition law team is in place to provide training on specific topics and ad hoc legal advice on the subject. We upgraded our
Antitrust Toolkit available to all employees to reflect the latest legal developments and provide employees with practical guidelines to address recurrent
questions.
Products and Regulated Markets:
The Syensqo Product Safety Management Process (PSMP) identifies risks relating to products marketed by Syensqo. In 2023, all Syensqo sensitive
applications have been covered.
Analysis of Safer Alternatives have been conducted in 2023 to replace Substances of Very High Concern in our products wherever possible (See Extra-
financial chapter of the report: 5.4 Hazardous materials).
2.4. Operations safety
MAIN RISK
RISK HORIZON: SHORT TERM
TREND: STABLE
2.4.1. Risk description
The safety of our people is a priority for Syensqo, as is specified in our One Planet sustainability roadmap. A major accident – whether occupational,
process or transport related – that is linked to our internal or outsourced activities may cause human, environmental or asset damages, lead to significant
exposure or cause injuries or fatalities. Syensqo’s industrial sites, like most industrial operations, carry out high-pressure and high-temperature processes.
We also use chemical substances that have risks associated with their chemical composition.
For more information about Syensqo’s management approach, see the Extra-financial chapter of the report: 6.1 Employee Health and Safety, 6.6 Critical incident risk manage-
ment (process safety), 5.4 Hazardous materials.
We have identified four major operational risks:
· an occupational safety incident which results in a fatality or irreversible (life-altering) injury;
· a severe process safety incident which results in fatalities, irreversible injuries, environmental harm, and/or loss of physical assets;
· chronic exposure to occupational agents – chemical, physical, biological or psychological – known to cause work-related disease;
· a severe transport accident in connection with hazardous chemical transportation which results in irreversible injuries, fatalities or environmental
damages.
2.4.2. Prevention and mitigation actions
Syensqo has a set of health, safety and the environment (HSE) Minimum Requirements to create a shared understanding and approach to mitigating
major risks. As part of this approach, we also introduced a new way of working, including a more collaborative and supportive approach to HSE across
the Group.
Our HSE strategy is based on the following four levers:
· Culture: promoting a culture of safety for all employees and contractors;
· Continuous improvement: utilizing networking, best practice sharing, common methods and tools, Syensqo HSE Minimum Requirements, external
monitoring and benchmarking to improve our HSE performance. Sites are audited on Group HSE procedures at least once every five years;
· Competency: ensuring all employees have the right level of knowledge and skills to put in place the HSE Minimum Requirements, starting with those
working in key positions;
· Compliance: detecting and mitigating regulatory and non-regulatory compliance issues, with a focus on priority risks, both in our operations and
commercialized products.
Occupational safety
Syensqo has consistently prioritized occupational safety. Our efforts to create a safety culture where all employees work together and care for one
another are based on:
· Syensqo’s HSE Excellence Plan, which involves and engages all Syensqo employees. It includes activities such as Safety Days, Leadership Safety Visits,
Behavior-Based Safety programs, Safety Dialogues and Safety Culture training.
· The Syensqo HSE Minimum Requirements for the Syensqo Life Saving Rules (SLSR);
· The Creating Safety program for leadership teams, aimed at changing mindsets and behavior;
· A monthly review of occupational safety results by the relevant GBUs and at the Executive Leadership Team level.
Industrial hygiene and occupational health
Syensqo has implemented a comprehensive approach to reducing risks in the workplace. Our approach includes:
· risk assessments and risk-based medical surveillance, using both qualitative and quantitative methodologies, with a focus on chemicals;
· pandemic preparedness and mitigation plans;
· Bio Safety Planning in our research labs;
· human biomonitoring, when warranted;
· improving and adapting working conditions;
· deployment of a well-being at work program;
· promoting general physical and mental health;
· setting more conservative in-house exposure limits for critical substances.
Process safety management
Syensqo has created and uses a Process Safety Management System. Among other things, this system includes:
· a preventative risk-based approach founded on systematic Process Hazard Analyses (PHA), and the identification of critical scenarios for which
mitigation action must be implemented in a committed time frame;
· management of changes (MOC);
· a team of process safety experts trained to apply the PHA methodologies.
Transport safety
We have put in place a number of tools and procedures that allow us to identify and take action to mitigate transport-related risks. These include:
· qualification standards for carriers of dangerous goods;
· enhanced training where appropriate;
· implementation of safety procedures and guidelines;
· collection and sharing of lessons learned;
· providing emergency response hotlines worldwide and in many languages.
2.4.3. Main actions in 2023
Occupational safety
· Continued awareness campaign of Syensqo Life Saving Rules at site level.
· Continuing deployment of Safety Culture programs (training and sharing). For example, training to avoid complacency and overconfidence has been
completed this year.
· Systematic tracking and analysis of High Severity Potential (HSPo) events. These events, as well as other types of significant incidents in process or
transport safety, are subject to a root cause analysis.
More information can be found in the Extra-financial statements section of the report: 3.3. Health, safety and environment management.
Industrial hygiene
We continued to roll-out SOCRATES (Syensqo Occupational Risk Assessment Tool for Employees). This tool:
· provides easy access to industrial hygiene (IH) methods, tools and databases;
· enables consistent documentation of IH assessments;
· enhances the traceability of potential exposure throughout a person’s working life;
· will be linked to the Safety Datasheet system to ensure the most recent information on chemical hazards is available.
More information can be found in the Extra-financial statements chapter of the report: 3.3. Health, safety and environmental management
Process safety
· Process Hazard Analyses carried out for 99% of all units, on all sites, within the last five years (Group requirement). All detected high-risk situations are
treated within one year, with any extensions having to be duly authorized.
· Investigation of a selection of Process Safety Incidents and lessons learned shared with all sites.
· Initiated review of select Process Hazard Analysis in 2023 to evaluate proper application of mitigation actions.
More information can be found in the Extra-financial statements chapter of the report: 6.6. Critical incident risk management.
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Transport safety
· Continuous improvement of our Group processes on Qualification of Logistics Service Providers (LSPs) for Dangerous Goods, including tolling and
storage operations. Significant progresses are:
- Vetting process prioritized according to LSPs risk category
- List in SAP of the vetted and non-vetted LSPs with warning message in SAP when selecting non-vetted LSP
- Monitoring of Vetted LSP compliance scorecard by GBU
· Continued application of a global Transport Emergency Response covering Level 1, Level 2 and Level 3 in all countries
· Continued development of expertise in Transport Safety through the following activities:
- Global Transport Safety Network.
- Feedback on transport accidents.
- Regular training of people involved in the transportation of dangerous goods.
More information can be found in the Extra-financial statements chapter of the report: 6.6. Critical incident risk management
Occupational health
· Syensqo has a team of Occupational physicians who monitor health events globally in order to prepare for any pandemic related issues whether global
in nature or within select regions of the world.
· Syensqo has deployed a global program for mental health and well-being at work:
- Quarterly pulse surveys to help us understand the psychological climate at Syensqo.
- Training on resilience offered to all employees.
- Training for managers on “Leading on well-being mindset”.
- Stress management training facilitated by internal trainers.
· Communication campaigns on Health Promotion.
· Inclusion of health and well-being in the site Health and Safety Days.
More information can be found in the Extra-financial statements chapter of the report: 6.1 Employees health and safety
2.5. Climate change
MAIN RISK
RISK HORIZON: SHORT, MEDIUM AND LONG TERM
TREND: STABLE
2.5.1. Risk description
Climate change is a priority for Syensqo and it presents both risks and opportunities for the Group. The Group strategy to address climate-related risks,
as defined by the Task Force on Climate-related Financial Disclosures, could be ineffective and damage the environment, the lives of current and later
generations, and Syensqo’s reputation. This, in turn, could cause business losses and difficulties in attracting long-term investors. The possible risks to
Syensqo that we have identified are as follows:
Transition risks:
Syensqo’s raw materials, which include petrochemicals, and our end markets, which include markets sensitive to the climate and energy transition like
automotive, aerospace, consumer goods and agro markets, mean that we are exposed to risks and opportunities as part of the climate change transition.
This transition risk includes the following:
· Policies and legal context: regulations and actions to limit GHG emissions, such as increasing carbon taxes, barring internal combustion engines,
mandating the use of certain fuel types and tightening environmental standards;
· Technology: unsuccessful investment in new, lower-emission technologies;
· Markets: failure to adapt to changing customer behavior;
· Financial: inability to cope with the influence of climate change on investors’ and lenders’ decisions;
· Changed climate: failing to adequately anticipate the impact of upcoming changes on industrial operations and in the value chain or the tightening
of environmental standards;
· Reputation: negative stakeholder attitudes caused by failing to address stakeholder climate change concerns effectively.
Physical risks:
· Sites in water scarcity regions
· Sites in flood and convective storm zones
More information can be found in the extra-financial section 3.8. Climate risks analysis
Prevention and mitigation actions
· Syensqo is progressing towards the 2030 objective to reduce Scope1 and2 greenhouse gas (GHG) emissions by 40% from the 2021 base year. This
trajectory is at an annual pace aligned with 1.5°C and preparing for Syensqo’s ambition to reach carbon neutrality for our operations (i.e. Scope 1 and
2) by 2040. The company will seek revalidation of its targets by the Science Based Targets Initiative (SBTi) in 2024.
· Syensqo is also progressing towards the 2030 target to reduce Scope 3 GHG emissions by 23% from the “focus five” categories both upstream
and downstream in the value chain, representing over 75% of the total Scope 3. Syensqo’s “focus five” categories of Scope 3 GHG emissions are (1)
purchased goods and services (Category 1), which include impacts of upstream transportation and distribution (Category 4) and waste generated
in operations (Category 5), (2) fuel-and energy-related activities (Category 3), (3) processing of sold products (Category 10), (4) use of sold products
(Category 11) and (5) end-of-life treatment of sold products (Category 12).
· Assessment of potential climate change impacts on our operations due to flooding, water scarcity, hurricanes, and other environmental events through
the application of best-in-class models and collaboration with external experts (more information on this can be found in Extra-financial section 3.8:
Climate risks analysis).
· As part of the Star Factory program, energy transition roadmaps were created and managed for each site covered.
· A team of energy transition experts in Syensqo’s Industrial Function supports roadmapping for each site and the development of projects worldwide,
taking into account the specifics of each site’s local energy market.
· Using the internal carbon price policy under which a €100 per metric ton CO
2
eq price is applied to all Scope 1 and 2 greenhouse gas emissions and
serves as an input cost into all CAPEX investment decisions, irrespective of prevailing market prices and using our Sustainable Portfolio Management
tool (SPM) to assess all capital investment decisions worldwide.
· Alignment of R&I projects with market expectations and assessment of operations exposure relating to the environment using an SPM lens.
· Linking the long-term incentives of senior executives to our achievements in reducing greenhouse gas emissions.
2.5.2. Main actions in 2023
Transition risks:
A revision of Syensqo’s transition risks scenario analysis aiming at understanding and assessing climate-related transition risks and opportunities was
completed in 2023. Two scenarios were considered with two time horizons 2030 and 2050: a 1.5°C scenario with the IEA Net Zero Emissions Scenario
2021 and a 3°C scenario corresponding to "business as usual" with the IEA Stated Policy Scenario 2021.
Main conclusions of the scenario analysis include:
· An overall favorable growth outlook and a well-balanced portfolio for the 3 business units included in the scenario analysis.
· Specialty Polymers and Composite Materials business units are resilient to cost increases. Focusing on increasing production capacities for the Specialty
Polymers business should be prioritized in a 1.5°C world. Novecare faces risk for the part of its supply chain starting from palm oil and other vegetable
oil alternatives that are GHG emission and water intensive. Suppliers should be engaged to reduce Scope 3 emissions and GHG intensity in the supply
chain should be monitored.
More information can be found in the Extra-financial section 3.8. Climate risks analysis
Syensqo’s SPM tool classifies a sustainable solution as a product in a given application that makes a significant climate change contribution to the
customer’s performance while also demonstrating a lower carbon impact in its production phase. In 2023, sales from "climate solutions" reached €1.2
billion. For more details about SPM, see section 5.1 Product design and life cycle management and the SPM guide.
Examples of actions decided upon in 2023 to manage the risks and opportunities identified by the Transition risks scenario analysis include:
— Opportunity seizing:
In November 2023, Syensqo confirmed its plans to build a new battery-grade PVDF facility in Augusta, Georgia. The new operations will provide material
for more than 5 million EV batteries per year at full capacity and create hundreds of jobs throughout the value chain. Syensqo and Orbia have signed their
joint venture agreement for this project. The partnership secures the supply by Orbia of needed materials for Syensqo to manufacture its suspension-
grade polyvinylidene fluoride (PVDF) production, which is used as a lithium-ion binder and separator coating in electric vehicle batteries. Syensqo will
bring its process technology and global market know-how to this venture.
— Mitigation actions:
Engaging on the GHG intensity of the supply chain: we have aligned with Syensqo’s suppliers on the product carbon footprint data of purchased raw
materials for over 40% of Syensqo’s related impact (Scope 3 category 1), as a first step to engagement with strategic suppliers to cut the carbon footprint
of their supplies to Syensqo.
Syensqo’s announcement in October 2023 of rolling out a new product carbon footprint digital tool, starting with Novecare. The information allows our
business teams, our suppliers and customers to identify areas in which emissions can be reduced, and regularly track progress.
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Physical risks:
A new climate physical risks scenario analysis was performed in 2023 with a leading audit, tax and consulting services company’s tool, in line with the
TCFD updated recommendations for scenario analysis. Two scenarios were considered and projected to 3 time horizons (2030, 2050, and 2100): >4°C of
global warming (corresponding with the IPCC’s RCP 8.5 and SSP-5.85) and 3°C of global warming (corresponding with the IPCC’s RCP 4.5 and SSP-2.45),
corresponding to a "business as usual" reference scenario. The 1.5C climate physical risk scenario analysis was not performed due to its inherent lower
impact.
Main conclusions of the 2023 physical risks scenario analysis include:
· Overall risk levels are moderate for the sites selected in both scenarios by 2050. The Changshu site is the most financially impacted. Asset damage is
up to 2x annual maintenance costs in total. Business interruption in absolute terms is generally lower than asset damage.
· Difference between the 3°C and 4°C scenarios is marginal for the sites assessed.
· Convective storm and flood might cause the highest absolute damage across all sites until 2090. The strongest increases are caused by heatwaves, with
a solid acceleration by 2050, and droughts, with a solid acceleration after 2050. Sea level rise is a risk for the Changshu site and has a moderate increase
over time. Tropical cyclone and wildfire do not pose a significant financial impact at any location.
The current risk linked to floods and hurricanes is assessed annually with our property insurers. This exercise identifies sites in risk areas with a maximum
foreseeable loss greater than €10million. Three Syensqo sites are located in high frequency (1% chance per year) flood areas, with a loss expectancy
range of €14-30 million. Eight Syensqo sites are located in low frequency (0.2% chance per year) flood areas, with a loss expectancy range of €11-198
million. Two sites are located in a wind exposed area, with a loss expectancy of €10-40 million. Syensqo has a damage insurance program in place to cover
catastrophic risks, while covering smaller losses through self-insurance.
Sites in areas of water scarcity have been identified, and the risks have been assessed based on their water consumption and maximum foreseeable
loss. Fifteen Syensqo sites are located in areas subject to hydric stress, of which three have been identified as having a high business impact. The highest
annual business interruption value is €83million.
More information can be found in the Extra-financial section 3.8. Climate risks analysis
2.6. Spin-off transformation-related risks
MAIN RISK
RISK HORIZON: SHORT TO MEDIUM TERM
2.6.1. Risk description and mitigation actions
Following the separation from Solvay SA, Syensqo is exposed to significant risks related to the dependency on Solvay SA for services provided under
the Transition Service Agreement (TSA) and to risks related to the impacts which may arise if Syensqo fails to comply with pre spin-off commitments.
Should Solvay SA not maintain the level of services throughout the duration of the TSA, it could cause significant disruptions to Syensqo processes and
operations, namely in regards to the IT infrastructure and systems. Additionally, as the TSA has a maximum duration of 24 months, if Syensqo fails to
implement and execute adequate TSA exit strategies and is unable to replace the services Solvay SA is providing, this could cause significant disruptions
to processes and operations.
Additionally, there may be significant impacts if Syensqo fails to respect its pre-spinoff commitments, namely in respect to the tax-free treatment of the
Partial Demerger for US federal income tax purposes.
Syensqo is actively working to define and implement the Group strategy to mitigate these risks with the following key measures taken:
· TSA dependency & TSA exit strategy
- A formal TSA governance has been designed to secure an effective TSA delivery which includes the creation of a strategic steering
Committee, who meets regularly and includes the COO and the Chief Information Officers of Syensqo and Solvay SA.
- A Functional Steering Committee has been created to take high level TSA related decisions.
- TSA Managers were appointed and responsible for the entire TSA portfolios across all contractual aspects.
- Creation of a Head of Transformation position and TSA Director, reporting to the COO, who monitors and coordinates several transformation
initiatives for the successful implementation of TSA exit strategies.
· Compliance with pre-spin-off commitments
- Briefing of Executives and Board Members on key boundary conditions designated to ensure awareness and lead adherence to boundary
conditions.
- Implementation of a close monitoring of entanglements, liabilities allocation and ruling decisions, with formal rules disseminated through the
organization.
2.7. Geopolitical impacts
EMERGING RISK
RISK HORIZON: SHORT TO MEDIUM TERM
2.7.1. Risk description and mitigation actions
Geopolitical tensions can cause trade wars, supply chain constraints and/or regulatory deadlocks, leading to an inability to trade or to operate across
the three key regions, impacting financial results, and potentially leading to fines and/or litigations. In a broader sense, it also impacts the way the Group
manages its IP, people, and IT systems.
Although risk is reduced by balancing the Group’s activities across the major regions of the world, geopolitical considerations can have a significant
impact on the Group. Several actions were taken in 2023 to address those risks and will continue to be implemented through 2024:
· The Group exposure to the Russian market was significantly reduced in 2023 by selling its 50% stake in the RusVinyl joint venture to its joint venture
partner Sibur.
· An assessment of the geopolitical risk was globally performed in 2023 as well as deep dives on prioritized projects for further risk exposure assessment.
For the risks considered more significant, scenarios assessments were performed to simulate the impact of certain geopolitical events on the business
operations.
· Throughout 2024 the risk assessment will be further developed through an assessment framework, which integrates a broad range of impacts such as
supply chain, IP, industrial, and people, to ensure that key geopolitical risks are prioritized with a comprehensive strategic plan. This will involve different
Group departments and intelligence-gathering to ensure a holistic approach to stay abreast of geopolitical developments affecting key markets.
2.8. New technology, digital disruption and generative artificial intelligence (AI)
EMERGING RISK
RISK HORIZON: MEDIUM TO LONG TERM
2.8.1. Risk description and mitigation actions
New technology and generative artificial intelligence (AI) present both opportunities and risks for organizations such as Syensqo. Technological
advancements, such as generative AI, can be viewed as a digital disruption that if not correctly understood and effectively applied, could lead to existing
or new emerging competitors outpacing Syensqo’s innovation speed. Generative AI also accelerates the risk and likelihood of cyber attacks and could
lead to misinformation, which may negatively impact Syensqo’s reputation.
Syensqo is increasing its investment in generative AI by building an agile generative AI platform for the long-term success of the company. At the same
time, the Group is investing in several pilot projects that leverage its data capabilities to capture short term opportunities while developing the right
Responsible AI, security and compliance frameworks.
A comprehensive strategy, including a broad range of the Group’s operations and innovation, is being designed to ensure a holistic approach to capture
the opportunities from the new technologies and generative AI while mitigating the risk of being outpaced by competitors.
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3. OTHER RISKS
3.1. Market and growth – strategic risk
RISK HORIZON: MEDIUM TO LONG TERM
3.1.1. Risk description
This risk relates to Syensqo’s exposure to external events and evolving market dynamics when developing and executing our strategy, including the
challenge of timely identification of changes in market trends. Additionally, there is the inherent risk of making strategic errors, exemplified by potential
shortcomings in innovation choices, new business developments, or major projects.
3.1.2. Prevention and mitigation actions
· Systematic and formal analysis of current and anticipated markets as well as strategic reviews with respect to investments and innovation project ramp-
ups.
· Regular performance review of strategy deployment.
· Development of long-term GDP+ growth markets and building on sustainable development opportunities, particularly in the mobility, home and
personal care, healthcare, resources and environment, electrical and electronics, and agro, feed and food markets.
· Development of customized, mission-critical solutions with Syensqo key accounts.
· Adaptation of our operations to new energy and CO
2
markets.
· Disposal of businesses that are not in line with the envisioned strategy.
· Target acquisitions that will enable or accelerate our strategy.
3.2. Supply chain and manufacturing reliability risk
RISK HORIZON: SHORT TERM
3.2.1. Risk description
There are several risks relating to raw materials, energy, materials and equipment for construction and maintenance, suppliers, production, storage units,
and inbound and outbound transportation. These include:
· Inability of suppliers to deliver contracted volumes or capacities in line with required specifications, due to force majeure, for example, or because the
supplier has insufficient access to Logistic Service Provider capacities.
· Insufficient contracting of volumes or capacities, from both a volume and delivery timing perspective, to fulfill our demand.
· Delayed delivery of volumes or capacities.
3.2.2. Prevention and mitigation actions
In order to ensure manufacturing reliability, we:
· Ensure our production units are distributed across the world.
· Use Process Safety Management.
· Define equipment and materials as critical elements to be ordered ahead for projects and maintenance.
· Regular performance reviews with our key suppliers.
· Established the Group property loss prevention program, which focuses on the prevention and mitigation of damage to assets and loss of profit due
to fire, explosion, accidental chemical release and other adverse events, like natural catastrophes.
To mitigate risks in our supply chain we:
· Use third party corporate social responsibility assessments and adhere to the Group Supplier Code of Business Integrity.
· Deployed a live risk monitoring tool providing direct alerts to any events impacting our critical raw materials suppliers.
· Improved our Sales & Operations Planning processes to help us anticipate demand, both in terms of volume and timing.
· Improved diversity and quality of service providers and shipping channels.
· Established a central Supply Chain function, with a plan to upgrade processes, tools and build control towers for risk mitigation.
· Maintain contingency plans for the most critical suppliers.
3.2.3. Main actions in 2023
2023 has seen more stability in the supply chains across the globe, due to increase in stocking of raw materials, increase in logistics capacity, as well
as progressively softening demand since Q1. The key risks across the industry have been more linked to the geopolitical situation, as well as the latest
challenges in the Panama Canal and Red Sea attacks impacting global shipping through these routes.
The organization has raised its agility and resilience through better planning of the value chain, better sourcing of services and capacity, and more
diversity in channels of distribution, however it remains exposed to global challenges linked to shipping capacities and regional crises. There is an
increased maturity and integration in the Group Sales & Operations Planning processes, with upgraded demand and inventory management. Additional
work is planned in 2024 and beyond, to harmonize processes, upgrade ways of working and invest in digital to support resilience and response levels
end-to-end, as well as support sustainability decisions.
More information can be found in the Extra-financial chapter of the report: 3.5. Supply Chain and Procurement
3.3. Financial risk
RISK HORIZON: SHORT TO MEDIUM TERM
3.3.1. Risk description
We face various types of financial risk. These include:
· Liquidity risk (see note F33 in the consolidated financial statements, Financial instruments and financial risk management).
· Foreign exchange risk (see note F33 in the consolidated financial statements, Financial instruments and financial risk management).
· Interest-rate risk (see note F33 in the consolidated financial statements, Financial instruments and financial risk management).
· Counterparty risk (see note F33 in the consolidated financial statements, Financial instruments and financial risk management).
· Pension obligation risk (see note F32.A. Provisions for employee benefits).
· Tax litigation risk (see note F32.B. Provisions other for employee benefits).
3.3.2. Prevention and mitigation actions
A prudent financial profile and conservative financial discipline
Investment Grade status: the Group is rated Baa1/P2 (stable outlook) by Moody’s and BBB+/A2 (stable outlook) by Standard & Poor’s as of the 2023closing.
Syensqo promotes transparency of information and engages in regular discussions with leading credit rating agencies.
Strong liquidity reserves
As of the end of 2023, the Group has €1.2billion in cash and cash equivalents (other current financial instruments), as well as €1.6 billion of committed
credit facilities with key international banking partners. They were all undrawn at the end of 2023. The Group has access to a Belgian Treasury Bill program
for €1billion unused at the end of 2023.
In the context of the liability management executed prior to the Partial Demerger, Syensqo has also secured a bridge to bond of €1.4 billion fully drawn
and hedged (as disclosed in the note F34: Financial indebtedness).
Currency hedging policy
Syensqo monitors the foreign exchange market closely and takes hedging measures to:
· Limit the fluctuation of the Group’s forecasted gross margin caused by currency volatility for material exposures.
· Mitigate the foreign exchange transactional risk at Group level by limiting the profit and loss impact of rate fluctuations between the time of invoicing
and the time of cash settlement.
Interest rate hedging policy
The Group locks in the majority of its net indebtedness at fixed interest rates. Syensqo monitors the interest rate market closely and enters into interest
rate swaps whenever they are deemed appropriate.
Energy and CO
2
hedging policy
A portion of Syensqo’s sales are directly indexed with energy prices, protecting the Group from fluctuations. In addition to this, Syensqo also hedges
gas and electricity energy prices. This policy includes multi-year hedging transactions. The Group’s net exposure to carbon pricing is managed through
hedging transactions spanning the time horizon of the European Union Emissions Trading Systems.
Monitoring of Group counterparties’ ratings
For our treasury activities, Syensqo works with banking institutions of high creditworthiness (investment grade, selected based on major rating systems)
and minimizes the concentration of risk by limiting our exposure to each of these banks to a predefined threshold. We regularly monitor trends in Credit
Default Swaps to assess changes in bank creditworthiness and take rapid action if required.
For our commercial activities, Syensqo’s external customer risk and cash collection is monitored by a professional network of credit managers and cash
collectors located in the Group’s various operating regions and countries. Their controls are supported by a set of detailed procedures and managed
through Corporate and GBU Credit Committees. These loss mitigation measures have led, over the past few years, to a record low rate of customer
defaults.
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Pension governance and pension plan optimization
Syensqo engages proactively and constructively with trustees and stakeholders to ensure that funding, liability management and investment policies are
appropriate, in line with best practice and in full compliance with domestic regulatory expectations and laws.
In terms of pension plan optimization, we reduce the Group’s exposure to defined-benefit plans either by converting existing plans into pension plans
with a lower risk profile for future services or closing them to new entrants.
For each of the main Group pension plans, which represent over 90% of the Group’s gross or net pension obligations, Asset Liability Management
analyses are performed usually once every three years to identify and manage corresponding risks.
Control processes for tax regulation compliance and transfer pricing policies
Our control processes for tax regulation compliance involve monitoring procedures and systems, which we carry out thorough internal reviews and audits
performed by reputable external consultants.
Our transfer pricing policies and procedures are aimed at setting arm's length prices for the transactions between Syensqo entities based upon the
OECD Guidelines and meeting the requirements of the tax authorities. Those policies and prices are annually prepared and checked. Where and when
appropriate, the group may enter into Advance Pricing Agreements with Tax authorities to ensure upfront clarity and eliminate uncertainty.
Syensqo’s Tax department pays close attention to the correct interpretation and application of new tax rules. This ensures compliance with applicable
rules and regulations and avoids tax and future litigation risks.
3.3.3. Main actions in 2023
· Successful treasury management and rating assignment (BBB+/Baa1 stable) in the context of the Partial Demerger;
· Transfer of the 2027 senior bonds (€500 million), and the 2025 hybrid bond (€500 million). The 2025 Cytec Industries senior bonds ($163 million) benefit
from a counter guarantee from Syensqo to cover Solvay’s obligations under its guarantee to the Cytec bonds;
· Secured funding (€1.4 billion bridge to bond) and liquidity reserves (€1.6 billion of revolving credit facilities);
· Adhoc interest rate hedging in the context of the liability management (EUR and USD collars matching the bridge to bond drawdowns and for future
USD refinancing).
3.4. IT risk
RISK HORIZON: SHORT, MEDIUM AND LONG TERM
3.4.1. Risk description
Our IT risk relates to an inability to:
· Ensure the continuity of information technology services to business;
· Provide our businesses with new and sustainable capabilities while deploying Syensqo’s digital technology ambition under our operating model;
· Deploy the cybersecurity program.
3.4.2. Prevention and mitigation actions
· Close monitoring of major transformation initiatives including ‘Security by Design’ in the projects and security risk exception process.
· Significant investment in the field of information security, together with close monitoring of the deployment of our cybersecurity roadmap (see also
Security section).
· Close monitoring of security and performance indicators.
· Close monitoring of workforce and talent management.
· Globally, close monitoring of IT/Digital Technology risks:
- Digital Technology Risks were reassessed in 2023;
- A Digital Technology risk coordinator has been appointed;
- Digital Technology Risks are monitored on a monthly basis together with the DT Leadership team.
· Annual IT audit program to ensure compliance with group security policies.
Litigation
As a result of the diverse nature of its activities, and the geographic footprint of its operations, Syensqo is exposed to legal risks, particularly in the areas
of product liability, contractual relations, antitrust laws, patent disputes, tax assessments and HSE matters. In this context, litigation is a normal recurring
feature of Syensqo’s operating business, both to protect against claims, some of which we believe to be without merit, and to defend the rights and
interests of the Group.
Ongoing legal proceedings involving the Syensqo Group that are currently considered to potentially involve significant risks are outlined below. The
legal proceedings described below do not constitute an exhaustive list.
The proceedings summarized below represent the material matters pending against Syensqo regardless of the merits of the claims and the strengths of
Syensqo’s defenses. There can be no assurance regarding the outcome of any proceeding described below; Syensqo will continue to vigorously defend
itself based on the merits of its defenses while opportunistically seeking consensual resolution in appropriate cases.
For certain cases, we have created reserves or provisions in accordance with appropriate accounting governing rules and policies, to cover financial risk
and defense costs (see the section “Provisions for litigation to the consolidated financial statements” in this report). We do not ordinarily disclose the
extent to which provisions are made in relation to individual proceedings, because this would be prejudicial to our interests. In addition, we maximize all
available insurance coverage. Adverse outcomes of material contested matters, individually or in the aggregate, could exceed the amounts of applicable
provisions or insurance coverage and have a material adverse effect on the revenues and earnings of the Group.
HSE-related proceedings
· PFAS: In 2023, a Syensqo subsidiary in the US was a defendant in 36separate lawsuits relating to its use of per- and polyfluoroalkyl substances (PFAS).
Of these, 15 reached material resolution in 2023 and are expected to be dismissed in 2024.
· In June 2023, we reached a settlement with the New Jersey Department of Environmental Protection (NJDEP), for the lawsuit seeking natural resource
damages and environmental cleanup of PFAS pollution allegedly caused by a single operating facility of the subsidiary in New Jersey. This settlement
is memorialized in a Judicial Consent Order (JCO), which obtained court approval on March 1, 2024, and became final and binding.
For the remaining 21 cases: Two claims are brought by State governments, Michigan and Illinois, seeking natural resource damages and other relief.
Eighteen are filed by individuals living near the New Jersey facility, seeking personal injury damages. One is filed by a municipality in the area of a
customer's manufacturing plant. Three of these 21 cases involve allegations related to products sold by the company to its customers, claiming the
customers’ use contaminated the environment.
· Spinetta site: preliminary criminal investigations by the Public Prosecutor’s Office of the Criminal Court of Alessandria, Italy into the alleged crime of
culpable environmental disaster against two Syensqo managers and Solvay Specialty Polymers Italy SpA were closed in December 2022. After one
year of pre-trial technical assessments, the Public Prosecutor’s Office decided to send the case for trial. The case is pending before the Judge of the
Preliminary Hearing, to assess whether this decision is robust from an evidentiary standpoint.
· Spinetta site: three administrative appeals are pending before the Piedmont Regional Administrative Court concerning aspects connected with the
site’s Integrated Environmental Authorisation (“AIA”), in particular to manufacture and use cC6O4 (“AIA extension”). These three administrative
appeals, involving on the one side Solvay Specialty Polymers Italy and on the other side the Province of Alessandria, the Municipality of Alessandria,
ARPA and Legambiente (all challenging the legal validity of the AIA extension) were all discussed at a hearing on 10 January 2024. The court’s decision
is expected within the first half of 2024.
· Bussi site: administrative cases are pending in relation to the identification of the alleged polluter of the Bussi, Italy industrial site (which we sold in2016)
and of the Tirino River. These cases were started in 2020 and 2022 by Edison (as former owner), which was recognized by the competent administrative
authorities as the “sole and exclusive polluter” of both the site and the river.
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EXTRA-FINANCIAL STATEMENTS
_147
EXTRA-FINANCIAL
STATEMENTS
148 1. Overview of the consolidated extra-
financial statements
150 2. Basis of preparation
150 2.1 Reporting frameworks
151 2.2. Reporting scope and boundaries
152 2.3. Materiality analysis
157 2.4. Task Force on Climate-related
Financial Disclosures (TCFD)
159 2.5. United Nations Sustainable
Development Goals
161 2.6. Sustainability Accounting
Standards Board (SASB)
163 3. Governance
163 3.1. Syensqo One Planet Ambition
164 3.2. Management of the legal, ethics
and regulatory framework
170 3.3. Health, safety and environment
management
171 3.4. Research and innovation
173 3.5. Supply chain and procurement
175 3.6. Main partnerships
176 3.7. Membership in associations
178 3.8. Climate risk analysis
181 4. Climate and nature
181 4.1. Greenhouse gas emissions
185 4.2. Energy
187 4.3. Biodiversity
189 4.4. Air quality
190 4.5. Waste
191 4.6. Water and wastewater
193 5. Sustainable growth
193 5.1. Product design and life cycle
management
195 5.2. EU taxonomy reporting
204 5.3. Circular economy
205 5.4. Hazardous materials
208 6. Better life
208 6.1. Employee health and safety
212 6.2. Employee engagement
and well-being
215 6.3. Diversity and inclusion
218 6.4. Recruitment, development and
retention
222 6.5. Corporate citizenship
224 6.6. Critical incident risk management
226 7. GRI content index
226 7.1. Statement of use and GRI 1 used
226 7.2. GRI 2: general disclosures 2021
228 7.3 GRI 3: material topics 2021
233 7.4. Other topics included in this report
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Extra-financial statements
1. OVERVIEW OF THE CONSOLIDATED EXTRA-FINANCIAL STATEMENTS
R: reasonable assurance
L: limited assurance
Mt: million metric tons
Mm
3
: million cubic meters
PJ: petajoules
CLIMATE AND NATURE
Units 2023 2022
Greenhouse gas emissions
R Scope 1 Mt CO
2
eq. 1.3 1.4
R Scope 2 – gross market-based Mt CO
2
eq. 0.3 0.4
R Total Scope 1+2 Mt CO
2
eq. 1.6 1.8
R Scope 3 Mt CO
2
eq. 8.4 8.7
Total scopes 1+2+3 Mt CO
2
eq. 10.0 10.5
Biodiversity
R
Species potentially affected Number 33 32
Energy
Primary energy purchased for consumption (1) PJ 17.6 18.6
Secondary energy purchased for consumption (2) PJ 9.5 10.4
Energy sold (3) PJ 6.7 6.8
L Energy consumption (1)+(2)-(3) PJ 20.4 22.2
R Solid fuels PJ 0 0
L Renewable energy consumption
PJ
3.7 3.5
Water
R Total freshwater withdrawal Mm
3
77.7 86.9
Freshwater withdrawal in water-stressed areas Mm
3
2.6
L Chemical oxygen demand – COD
metric tons O
2
2,072 2,588
(1)
Waste
R Non-hazardous industrial waste 1,000 tons 49.4 52.6
R Hazardous industrial waste 1,000 tons 41.3 46.0
R Total industrial waste 1,000 tons 90.7 98.6
R Non-hazardous industrial waste not treated in a sustainable way 1,000 tons 26.9 29.7
R Hazardous industrial waste not treated in a sustainable way 1,000 tons 8.2 10.2
R Total industrial waste not treated in a sustainable way 1,000 tons 35.1
39.9
Air emissions
L Nitrogen oxides – NOx metric tons
613 638
L Sulfur oxides – SOx metric tons
1,029
940
L Non-methane volatile organic compounds – NMVOC metric tons 1,406 1,521
L Ozone-depleting substances (ODS) metric tons eq. CFC-11 3.29
4.52
(1)
(1) For 2022, chemical oxygen demand and ozone-depleting substances figures have been restated due to a reporting error.
SUSTAINABLE GROWTH
Units 2023 2022
2022
Restated
Product design and life cycle management
Revenue breakdown by Sustainable Portfolio Management (SPM) categories
R Solutions % 60 64 59
Potentials % 7 9 8
Transitions
% 9 10 10
Challenges % 12 6 13
R Not evaluated % 12 12 11
SPM solutions: sales by main impact category
Climate € billion 1.2 1.3
Resources
€ billion 3.5 4.2
Better life € billion 1.5 2.1
Total solutions net sales € billion 4.1 5
Circular economy
L Sales of products contributing to the circular economy % 13 12
Hazardous materials
L All Syensqo-Substance of very high concern (SVHC) present in marketed products number 100 77
Analysis of safer alternatives required number 43 68
L Percentage of completion of analysis of safer alternatives for marketed products % 67 57
Of which effective replacement achieved % 13 6
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BETTER LIFE
Units 2023 2022
Employee health and safety
R Reportable Injury and Illness Rate (RIIR) employees and contractors per 200,000 hours 0.28
0.42
(2)
R Lost Time Injury and Illness Rate (LTIIR) employees and contractors per 200,000 hours 0.09 0.18
R Fatal accidents – employees and contractors number 0 1
Diversity and inclusion
R Women in senior and middle management % 28 25
R Women in Syensqo’s workforce % 24 23
R Total headcount
number
13,102 12,619
L Coverage by collective agreements % 100 100
Critical incident risk management
L
Process safety incidents (medium, high or catastrophic) with environmental
consequences (medium, high or catastrophic)
number 16 17
L Process safety incident rate
Medium or higher severity
incidents per 200,000 hours
worked
0.68 0.74
(2) 2022 RIIR – Employee and contractors is different to the value published in “supplement of the registration document of Syensqo in November 2023” due to changes for the
2022 headcount figures and in the rules of split between Syensqo and the “new” Solvay Group as explained in section 2.2 Basis of preparation.
2. BASIS OF PREPARATION
2.1. Reporting frameworks
The main reporting frameworks used to prepare the Annual Integrated Report are:
· Global Reporting Initiative (GRI): the GRI standards are one of the references for Syensqo’s sustainability reporting; the latest edition of the standards
is used, including the new GRI-1 and GRI-2 universal standards.
· 2014/95/EU: Syensqo uses the GRI Standards to comply with Directive 2014/95/EU of the European Parliament and of the Council of October 22,
2014, amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information. The Directive was transposed into Belgian law
in September 2017.
· EU Taxonomy: an estimate of eligible activities as defined by the EU Taxonomy in the delegated act of April 2021 is presented in 5.2. EU taxonomy
reporting.
· Task Force on Climate-Related Financial Disclosures (TCFD): Syensqo reports on our alignment with the 11recommendations of the TCFD.
· Responsible Care
®
: Syensqo is a signatory to the International Council of Chemical Associations’ (ICCA) Responsible Care Global Charter
®
.
· Integrated Reporting Framework: Syensqo adheres to the principles and content elements of integrated reporting, as described in the “International
Framework” published by the IFRS Foundation.
· Sustainability Accounting Standards Board (SASB): Syensqo aligns our materiality analysis with the SASB approach to prepare the SASB Materiality
Map™. For more details, see the Materiality Analysis section of this chapter.
· United Nations Sustainable Development Goals: Syensqo has identified the 10 Sustainable Development Goals on which it can have the most impact,
through its operations or across its value chain, in line with the materiality analysis.
· World Business Council for Sustainable Development (WBCSD): Syensqo’s report aligns where possible with the WBCSD ESG Disclosure Handbook
guidance in terms of process and content selection.
Syensqo is working on the implementation of the Corporate Sustainability Reporting Directive (CSRD) and we are preparing to comply with the European
Sustainability Reporting Standards (ESRS).
2.2. Reporting scope and boundaries
GRI DISCLOSURES 2-2 2-3 2-4 2-7
Throughout this document, references to historical activities of Syensqo are in fact references to the activities of the relevant business units of Solvay that
have been contributed to Syensqo (the “Specialty Perimeter”) as part of the Partial Demerger, as defined and described in more detail in the financial
statements (see page 236) and Syensqo’s Registration Document dated June 29, 2023.
Unless stated otherwise, the environmental and social reporting boundaries are consistent with the financial reporting scope and boundaries, as described
in the “List of companies included in the consolidation scope” in the financial statements. In other words, in line with the approach described in the
Greenhouse Gas Protocol Corporate Accounting and Reporting Standard, consolidation of sustainability indicators includes fully consolidated companies
and companies in proportional consolidation. Apart from exceptions listed below, companies with proportional consolidation are consolidated in line
with their consolidation rate, and companies consolidated by applying the in-equity method of accounting are excluded.
More specifically, indicators linked to operations (greenhouse gas emissions, energy, air, water, waste and critical incident risk management) cover only
production and research & innovation sites where Syensqo has operational control or exercises joint control that qualify as joint operation.
Despite being treated as an equity method company in Syensqo’s financial statement, Spinetta’s power plant has been consolidated at 100% for extra-
financial KPIs linked to operations, as per contractual agreements. For similar reasons, the non-consolidated waste treatment companies operating at
the Saint-Fons and Spinetta plant have been integrated into the waste, water and wastewater indicators.
As an exception to the above rules, air, water, waste, occupational safety, process safety and management of legal ethics indicators for the Zhenjiang
company, which is fully integrated into Syensqo but in which Solvay has a minority share, have been split based on actual emissions by Syensqo and
Solvay workshops.
Employee health and safety indicators encompass all sites at which Syensqo has operational control, regardless of the site’s company consolidation
method. The data is calculated on a monthly basis.
Critical incident risk management indicators encompass all industrial functions and sites at which Syensqo has operational control, regardless of the site’s
company consolidation method. The data is calculated on a monthly basis.
The other “Better Life” social indicators include all Syensqo employees, regardless of the employee’s company consolidation method, who have an
employment contract with Syensqo and are classified as active, as they have a position in the organizational chart on the December 31, 2023.
Collective agreements cover all Syensqo employees in companies in which Syensqo has a majority stake.
Syensqo uses the “rolling base year” approach described in the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard to calculate
target achievements.
Unless stated otherwise, past years have not been restated for extra-financial indicators, with the major exception of Solvay-Syensqo impact, where 2022
and 2023 data have been split with Syensqo scope and boundaries. Other exceptions are documented in the KPI section.
Before the December 2023 spin-off, Solvay Group included the Syensqo perimeter. Therefore, indicators related to the pre spin-off period have been
split between Syensqo and the “new” Solvay Group, based on the following simplified approach inspired by the approach used for the combined
financial statements:
· Each business unit was allocated 100% to either Solvay or Syensqo.
· Corporate and shared research and innovation services were allocated 100% to Syensqo, except for the Paulinia site, allocated to Solvay, where the
site information is available.
· The Digital Technology function and Shared Business Services were allocated 100% to Solvay. These Solvay teams are engaged in the Transition Service
Agreement with Syensqo.
· The remainder, consisting mainly of Corporate and Business Services perimeters not covered above, or elements that were not tracked by a business
unit, was allocated 39.55% to Solvay and 60.45% to Syensqo. This allocation rule was also applied for Citizen Day participation.
These rules may cause a rounding error on indicators without decimals, such as for instance the Speak Up program or the number of accidents: the actual
indicator before the split may differ by one unit from the consolidation of Solvay and Syensqo split indicators.
There are two exceptions to the above rules:
· For sites shared between Solvay and Syensqo: In 2023, the results of the indicators of both Tavaux and Zhenjiang plants have been split based on
workshop allocation, for air, waste, wastewater, occupational and process safety.
· For occupational and process safety indicators: Corporate and shared functions incidents have been fully allocated to the Solvay perimeter between
January 1 and June 30.
Administrative sites that are part of greenhouse gas emissions and energy reporting are split as follows: Watford site and Brussels campus in Neder-Over-
Heembeek are included in the Solvay perimeter; Aubervilliers, Saint-Fons research and innovation center, Bristol and Butte sites are allocated to Syensqo.
2022 Solvay Group headcounts have been restated from 22,047 to 21,998 (i.e. -49 headcounts), due to retroactive employee data changes performed in
2023 (inactive headcounts departure, new hires, terminations). This 49 headcounts gap has been allocated to Syensqo (60.45%, i.e. -30 headcounts) and
the new Solvay (39.55%, i.e. -19 headcounts).
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2.3. Materiality analysis
GRI DISCLOSURES: 3-1 3-2
Syensqo adopts sustainability priorities based on a materiality analysis. This approach identifies economic, environmental and social aspects that can
impact Syensqo, or on which Syensqo has the most impact, positive or negative.
Syensqo uses three external references for our materiality analysis:
· Global Reporting Initiative (GRI) for the materiality analysis process.
· SASB Standards (now part of IFRS Foundation) for the list of aspects and for prioritization criteria.
· European Union Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS) for the definition of
double materiality.
2.3.1. Materiality table
Category Not material topics for reporting purposes Material topics for reporting purposes
Governance Customer privacy
Selling practices and product labeling
Systemic risk management
Management of the legal, ethics and regulatory
framework
Data security
Climate and nature Energy Greenhouse gas emissions
Physical impacts of climate change
Biodiversity
Air quality
Water and wastewater
Waste
Sustainable growth Supply chain and procurement
Materials sourcing and efciency
Access and affordability
Customer welfare
Product design and life cycle management
Hazardous materials
Product quality and safety
Better life Recruitment, development and retention Employee health and safety
Labor practices
Employee engagement, diversity and inclusion
Corporate citizenship
Critical incident risk management
Syensqo’s list of material topics is linked to the 2021 SASB Materiality Map
®
topics list as described in the 2.7 Sustainability Accounting Standards Board
(SASB).
2.3.2. Basis – Legacy materiality analysis process
In Solvay, the Sustainable Development Function coordinates materiality analysis with an internal network of Sustainability Champions in the Global
Business Units and functions. Experts in each corporate function review the analysis of each aspect, paying particular attention to ensuring consistency
with the Group’s risk analysis. These assessments are then reviewed and validated by the relevant business leadership teams, which is a critical step in
ensuring that business priorities and decisions appropriately reflect sustainability matters.
Identication of aspects
Use of the SASB list of sustainability-related risks and opportunities as presented on the SASB Standards
website.
Prioritization of aspects
Use of the SASB Materiality Map prioritization criteria:
- Evidence of interest, for stakeholders, including evidence of potential impacts.
- Evidence of nancial impact, actual or potential: sales, prot, return or risk prole.
- Forward-looking adjustment.
The network of Sustainability Champions and internal experts for each high materiality aspect was involved in
the prioritization analysis.
In addition to the SASB prioritization criteria, an additional focus on external impacts has been included in
the assessment since 2019.
In 2023 the alignment with enterprise risk analysis was added, as a rst step to comply with the Corporate
Sustainability Reporting Directive denition of double materiality: if a risk has been identied as a Group
main risk, as described in the Risk Management chapter of this report, the corresponding sustainability topics
are considered material.
Validation
Review of the analysis by the Executive Committee and the Global Business Unit and Corporate Function
leaders. The review includes verifying consistency with the analysis of the Group’s main risks, and a compari-
son with the Value Reporting Foundation – SASB Materiality Finder for the chemical sector.
Review
A review led by the Sustainable Development Function takes place annually, based on feedback from stake-
holders and experts. The ndings inform and contribute to the prioritization review in the next reporting
cycle.
Stakeholder inclusiveness and
sustainability context
Indirectly taken into account through:
- The exhaustive list of aspects in the SASB’s Materiality Map.
- The “evidence of interest criteria,” which includes the analysis of documents from representatives of stake-
holder groups, with emphasis on written evidence.
- Identication of the main impacts.
Report The high materiality aspects were included in the annual report, with assurance from corporate auditors.
2.3.3. Materiality analysis process in 2023
In the context of the recent spin-off and the upcoming EU regulations on ESG reporting, Syensqo’s 2023 materiality analysis should be seen as an
intermediate step to pave the way for a more in-depth double materiality assessment in line with the new Corporate Sustainability Reporting Directive
(CSRD), which will be published in our 2024 Annual Integrated Report.
Given this context, Solvay’s 2022 materiality map served as a basis for Syensqo’s 2023 materiality map, since it already includes the main material impacts
relating to Syensqo as a Solvay spin-off. The Sustainable Development team consequently engaged internal subject matter experts to review Solvay’s
2022 materiality map based on Syensqo’s new scope of activities and Syensqo’s perception of the severity of the impacts. The materiality analysis was
further improved by:
· Alignment with the CSRD double materiality definition and, in particular, better alignment with Syensqo’s risks analysis, as described in the Risk
Management chapter of this report. Only Syensqo’s Main Risks (and not Emerging Risks) are considered in the materiality analysis. This led to an
increasing focus on potential sustainability-related risks in addition to existing Environmental, Social and Governance (ESG) impacts. However, potential
sustainability-related opportunities for Syensqo have not yet been fully taken into account.
· Stricter alignment with the “SASB list of sustainability-related risks and opportunities,” as presented on the SASB Standards website.
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As per the definition of materiality, the main Enterprise Risk Management (ERM) risks (see page130 – Risk Management: 2. Syensqo’s main risks) with an
ESG component may automatically trigger financial materiality on the corresponding sustainability topics:
Syensqo’s main risks Corresponding materiality SASB topics
Compliance and business integrity
Management of the legal and regulatory framework, competitive behavior,
business ethics, product quality and safety, product design and life cycle
management.
Security (physical and cyber) Critical incident risk management, community relations, data security.
Operations safety Employee hexalth and safety, critical incident risk management.
Climate change Greenhouse gas emissions, physical impacts of climate change.
Environmental impacts and controversies Air quality, water and wastewater, waste management, hazardous materials.
Spin-off transformation risk
Data security, management of the legal and regulatory framework, competitive
behavior.
The following topics have been added to the 2023 materiality table to take into account Syensqo’s main risks:
· “Data security” has been identified as material, as it is part of one of Syensqo’s main risks (security – physical and cyber).
· “Physical impacts of climate change” has been identified as material, as it is part of one of Syensqo’s main risks (climate change).
· “Product quality and safety” has been identified as material, as it is part of one of Syensqo’s main risks (compliance and business integrity).
The analysis was presented and validated by Syensqo’s Executive Leadership Team in February 2024.
As Syensqo needs to comply with the Corporate Sustainability Reporting Directive (CSRD) for our 2024 Annual Integrated Report, we are in the process
of executing a new Syensqo double materiality process, based on the European Sustainability Reporting Standards (ESRS) and the European Financial
Reporting Advisory Group’s (EFRAG) implementation guidance for the materiality assessment. In 2023, we kicked-off this new process by organizing
internal expert workshops to identify the list of potential material sustainability matters and impacts, risks and opportunities (IROs), to draft the list of
external stakeholders, and to work on the assessment criteria. We will continue our work in 2024, with activities such as assessment of the identified
potential IROs and extensive external stakeholder engagement.
2.3.4. Why is it material?
The tables below summarize Syensqo’s assessment of materiality aspects for each topic.
When Syensqo’s internal subject matter experts reviewed the indications of impacts on people and the environment, our own operations served as the
main source of impacts. This does not mean that Syensqo is limiting our efforts on ESG impacts to our own operations. Syensqo has policies, processes
and actions in place for certain highly material value chains in regard to social and/or environmental impacts, but the entire value chain is not yet a
structural part of our impact assessment. In the framework of the CSRD, however, we will be evolving towards a structural approach, starting from our
entire value chain to map our impacts.
GOVERNANCE
SASB topic Evidence of nancial
impact on Syensqo
Indication of potential
impact on people and the
environment
Material topics for
reporting purposes
Reference
Business ethics
Link to Syensqo’s main
risks
Convincing indication of:
- signicant stakeholder
interest
- and/or signicant
controversies
- and/or potential positive and/
or negative impact
Yes
Risk management:
2. Syensqo’s main risks
Extra-nancial statements:
3.2 Management of the legal, ethics and
regulatory framework
Competitive
behavior
Link to Syensqo’s main risks Convincing indication of:
- signicant stakeholder interest
- and/or signicant controversies
- and/or potential positive and/or
negative impact
Yes
Risk management:
2. Syensqo’s main risks
Extra-nancial statements:
3.2 Management of the legal, ethics and
regulatory framework
Data security Link to Syensqo’s main risks Yes
Risk management:
2. Syensqo’s main risks
Management
of the legal
and regulatory
environment
Link to Syensqo’s main risks Convincing indication of:
- signicant stakeholder interest
- and/or signicant controversies
- and/or potential positive and/or
negative impact
Yes
Risk management:
2. Syensqo’s main risks
Extra-nancial statements:
3.2 Management of the legal, ethics and
regulatory framework
Business model
resilience
Covered under “Product
design and life cycle
management”
Extra-nancial statements:
5.1 Product design and life cycle
management
CLIMATE AND NATURE
SASB topic Evidence of nancial
impact on Syensqo
Indication of potential impacts
on people and the environment
Material for reporting
purposes
Reference
Ecological
impacts
(Biodiversity)
Convincing indication of:
- signicant stakeholder interest
- and/or signicant controversies
- and/or potential positive and/or
negative impact
Yes Extra-nancial statements:
4.3 Biodiversity
GHG emissions Link to Syensqo’s main
risks
Convincing indication of:
- signicant stakeholder interest
- and/or signicant controversies
- and/or potential positive and/or
negative impact
Yes Risk management:
2. Syensqo’s main risks
Extra-nancial statements:
3.8 Climate risk analysis
4.1 Greenhouse gas emissions
Physical impacts
of climate
change
Link to Syensqo’s main
risks
Convincing indication of:
- signicant stakeholder interest
- and/or signicant controversies
- and/or potential positive and/or
negative impact
Yes Risk management:
2. Syensqo’s main risks
Extra-nancial statements:
3.8 Climate risk analysis
4.1 Greenhouse gas emissions
Air quality Link to as Syensqo’s main
risks
Convincing indication of:
- signicant stakeholder interest
- and/or signicant controversies
- and/or potential positive and/or
negative impact
Yes
Risk management:
2. Syensqo’s main risks
Extra-nancial statements:
4.4 Air quality
Waste
management
(including
hazardous
wastes)
Link to Syensqo’s main risks Convincing indication of:
- signicant stakeholder interest
- and/or signicant controversies
- and/or potential positive and/or
negative impact
Yes
Risk management:
2. Syensqo’s main risks
Extra-nancial statements:
4.5 Waste
Water and
wastewater
management
Link to Syensqo’s main risks Convincing indication of:
- signicant interest
- and/or signicant stakeholder
controversies
- and/or potential positive and/or
negative impact
Yes
Risk management:
2. Syensqo’s main risks
Extra-nancial statements:
4.6 Water and wastewater
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SUSTAINABLE GROWTH
SASB topic Evidence of
nancial impact
on Syensqo
Indication of potential
impacts on people and the
environment
Material for
reporting
purposes
Reference
Product design and life cycle
management (including Business
Model Resilience)
Link to Syensqo’s
main risks
Convincing indication of:
- signicant stakeholder
interest
- and/or signicant contro-
versies
- and/or potential positive
and/or negative impact
Yes Risk management:
2. Syensqo’s main risks
Extra-nancial statements:
5.1 Product design and life cycle
management
Customer welfare Covered under
“Product quality and
safety”
Hazardous materials management
(with product safety)
Link to Syensqo’s
main risks
Convincing indication of:
- signicant stakeholder
interest
- and/or signicant
controversies
- and/or potential positive and/
or negative impact
Yes Risk management:
2. Syensqo’s main risks
Extra-nancial statements:
5.4 Hazardous materials
Product quality and safety Link to Syensqo’s
main risks
Yes Risk management:
2. Syensqo’s main risks
Extra-nancial statements:
BETTER LIFE
SASB topic Evidence of
nancial impact
on Syensqo
Indication of potential
impacts on people and the
environment
Material for
reporting
purposes
Reference
Community relations Link to Syensqo’s
main risks
Convincing indication of:
- signicant stakeholder
interest
- and/or signicant
controversies
- and/or potential positive
and/or negative impact
Yes Risk management:
2. Syensqo’s main risks
Extra-nancial statements:
6.5 Corporate citizenship
Critical incident risk
management (process safety)
Link to Syensqo’s
main risks
Convincing indication of:
- signicant stakeholder
interest
- and/or signicant
controversies
- and/or potential positive
and/or negative impact
Yes Risk management:
2. Syensqo’s main risks
Extra-nancial statements:
6.6 Critical incident risk
management
Employee engagement, diversity
and inclusion
Convincing indication of:
- signicant stakeholder
interest
- and/or signicant
controversies
- and/or potential positive
and/or negative impact
Yes
Extra-nancial statements:
6.2 Employee engagement and
well-being
6.3 Diversity and inclusion
Labor practices Convincing indication of:
- signicant stakeholder
interest
- and/or controversies
- and/or potential positive
and/or negative impact
Yes Extra-nancial statements:
6.2 Employee engagement and
well-being
6.3 Diversity and inclusion
Employee health and safety Link to Syensqo’s
main risks
Convincing indication of:
- signicant stakeholder
interest
- and/or signicant
controversies
- and/or potential positive
and/or negative impact
Yes Extra-nancial statements:
6.1 Employee health and safety
2.4. Task Force on Climate-related Financial Disclosures (TCFD)
The Financial Stability Board Task Force on Climate-related Financial Disclosures (TCFD) developed voluntary, consistent, climate-related financial risk
disclosures, which can be used by companies to provide information to investors, lenders, insurers and other stakeholders.
The Task Force structured its recommendations around four themes that represent key aspects of how organizations operate: governance; strategy; risk
management; and metrics and targets. This section addresses the disclosures, with links to the relevant sections of the Annual Integrated Report and
provides a self-assessment of Syensqo’s level of alignment with the TCFD recommendations.
TCFD recommendation Implementation Reference
GOVERNANCE
Disclose the organization’s
governance around climate-
related risks and opportunities
a. Describe the board’s oversight
of climate-related risks and
opportunities
The Charter of Corporate Governance describes how the Board of Directors manages
sustainability-related topics and is available on the Syensqo website. The Board de-
votes at least one meeting per year to an update on trends in global sustainable devel-
opment issues, including climate change risks and opportunities. During this meeting,
the evolution of the Group’s approach to sustainable development is presented to the
Board of Directors and notably the following elements:
- The evolution of worldwide issues in terms of sustainable development and on their
impact on Syensqo.
- The main strengths and weaknesses of the Group, identied by the self-assessment
and the evaluation made by nancial and extra-nancial rating agencies.
- The priority societal and environmental targets of the Group and the performance
achieved by the Group with respect to such priority targets. In particular, the Board of
Directors seeks to take into account in its decision process the impact of the strategic
choices on the nancial, societal and environmental indicators that the Group has de-
ned as being its main targets.
The Board of Directors has set up a permanent Committee, the Environmental, Social
and Governance (ESG) Committee, which supports the Board in understanding: (i) the
expectations of Syensqo’s key stakeholders; (ii) the impact of ESG issues on Syensqo’s
ability to create value; and (iii) ESG trends and associated risks and opportunities. The
ESG Committee monitors the Company’s overall approach to ESG matters, and ensures
this approach is aligned with and integrated in the overall Group strategy and denes
in this respect ESG key performance indicators.
The ESG Committee performs periodic reviews, at least annually, of the Group’s
ESG policies, progress and effectiveness, taking into account: a) relevant risk and
opportunity mapping; b) new sustainability developments and their impact on
the Group; c) the Group’s current sustainability performance, main strengths and
challenges; and d) future priorities, opportunities and challenges in this respect. The
results of such a review must be presented to the Board of Directors, including the
following: environmental topics, including climate-related risk mitigation, legacy
environmental risks and potential future exposures; and regulatory developments,
particularly in the chemicals sector; social topics including the health, welfare and
careers of its employees, contractors, suppliers and the broader communities in which
the Group operates; governance topics, including oversight of the integration of
the ESG commitments in Syensqo’s business activities, related internal and external
reporting and effectiveness of engagement with stakeholders on ESG-related matters.
In addition, the ESG Committee collaborate as appropriate with other Committees,
such as the Audit & Risk Committee as regards key ESG performance indicators and the
Group’s extra-nancial strategy and performance or the Compensation Committee, with
oversight responsibility for executive compensation, talent management, compliance
and other shared topics.
Corporate
governance statement
b. Describe management’s role in
assessing and managing climate-
related risks and opportunities
A climate change risk sponsor has been appointed at Executive Leadership Committee
level. The risk sponsor is in charge of ensuring that climate-related aspects are
adequately considered in the Group’s strategy and operations. In addition, the
risk sponsor nominates the risk owner – a senior manager – who is accountable for
managing the risk and for the implementation of the risk mitigation strategies
Risk management:
1. Risk management
process
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STRATEGY
a. Describe the climate-related
risks and opportunities the
company has identied over the
short, medium and long term
Long-term horizon assumptions are presented in the description of megatrends in
the “Accelerating innovation” section of this Annual Integrated Report. Medium-term
assumptions (in the coming ve years) are explained in the description of Syensqo’s
main markets. Short-term assumptions (one year) are presented in the Group’s outlook.
The presentation of the Group’s main risks includes timescales (short-, medium- or long-
term horizons). Quantication of impacts is not disclosed.
Advancing humanity:
2. Accelerating
innovation
Performance:
7. Outlook
Risk management:
2. Syensqo’s main
risks
b. Describe the impact
of climate-related risks
and opportunities on the
organization’s businesses,
strategy and nancial planning
Climate-related risks and opportunities were assessed in 2023. On transition risks, a
new climate transition scenario analysis was performed, in line with the TCFD’s updated
recommendation for scenario analysis. Two scenarios were considered: the 2021
International Energy Agency “Stated Policies Scenario” and the “Net Zero Emissions by
2050” scenario.
In 2023, Syensqo performed a qualitative and quantitative climate-related physical
risk analysis. Two scenarios were considered: the >4°C of global warming scenario
(corresponding with the IPCC’s RCP 8.5 and SSP-5.85) and 3°C of global warming
(corresponding with the IPCC’s RCP 4.5 and SSP-2.45).
*IPCC: The Intergovernmental Panel on Climate Change
In addition, acute physical climate risks linked to droughts, hurricanes and earthquakes
are assessed annually with our insurers.
Chronic physical climate risks focus on water scarcity: sites in areas of water scarcity
have been identied, and the risks have been assessed based on their water
consumption and maximum foreseeable loss.
Risk management:
2. Syensqo’s main
risks
Extra-nancial
statements:
3.8 Climate risks
analysis
c. Describe the resilience of the
organization’s strategy, taking
into consideration different
climate-related scenarios,
including a 2°C or lower scenario
Syensqo’s climate transition risk scenario performed in 2023 is in line with the TCFD’s
2020 guidance. The result of this analysis is described in a new section of this Annual
Integrated Report.
In 2023, a scenario analysis focusing on physical climate risks was performed.
Syensqo performed a qualitative and quantitative climate-related physical risk analysis.
Two scenarios were considered: the >4°C of global warming scenario (corresponding
with the IPCC’s RCP 8.5 and SSP-5.85) and 3°C of global warming (corresponding with
the IPCC’s RCP 4.5 and SSP-2.45).
*IPCC: The Intergovernmental Panel on Climate Change
Extra-nancial
statements: 3.8
Climate risks analysis
RISK MANAGEMENT
a. Describe the organization’s
processes for identifying and
assessing climate-related risks
The risk management process, the main risks and the process used to rank them are
described in the “Risk management” chapter.
Risk management
b. Describe the organization’s
processes for managing climate-
related risks
Analysis of value chain sustainability-related risks and opportunities is carried out
using the Sustainable Portfolio Management methodology for each product in each
application or market and includes climate change transition risks.
“Greenhouse gas emissions” (GHG) have been identied as a priority in the Group’s
materiality analysis. “Climate transition risks” and “Physical impacts of climate change”
have been identied as part of the Group’s main risks. Links between main risks and
high materiality issues are part of the materiality analysis process.
Extra-nancial
statements:
2.3. Materiality
analysis
5.1. Product design
and life cycle
management
3.8 Climate risks
analysis
Risk management:
2. Syensqo’s main
risks
c. Describe how processes for
identifying, assessing, and man-
aging climate-related risks are
integrated into the organization’s
overall risk management
Use of the Sustainable Portfolio Management tool is a requirement in key Group pro-
cesses and, in particular, in the assessment of capital expenditure projects, research and
innovation projects, and acquisition and divestiture projects.
Extra-nancial state-
ments:
5.1. Product design
and life cycle man-
agement
3.8 Climate risks
analysis
METRICS AND TARGETS
a. Disclose the metrics used
by the company to assess cli-
mate-related risks and opportu-
nities in line with its strategy and
risk management process
The strategic objectives used to drive sustainable value creation are described in Sy-
ensqo’s scorecard. They have been reviewed in line with Syensqo’s One Planet sustain-
ability ambition, published in November 2023.
Advancing humanity:
1. Introducing Sy-
ensqo
b. Disclose Scope 1, Scope 2
and, if appropriate, Scope 3
greenhouse gas (GHG) emis-
sions, and the related risks
Greenhouse gas emissions, energy consumption and Sustainable Portfolio Manage-
ment metrics and targets are reported in the “Extra-nancial statements” chapter.
Syensqo has a 2030 objective to reduce Scope 1 and 2 greenhouse gas emissions by
40%, as compared to 2021 and to reach carbon neutrality on Scope 1 and 2 GHG emis-
sions by 2040.
Syensqo has set a 2030 target to reduce by 23% Scope 3 greenhouse gas emissions
from its “Focus 5” categories both upstream and downstream in the value chain, which
represent more than 73% of our total Scope 3.
Extra-nancial state-
ments:
4.1 Greenhouse gas
emissions
5.1. Product design
and life cycle man-
agement
c. Describe the targets used
by the company to manage
climate-related risks and oppor-
tunities and performance against
targets
Scope 1, 2 and 3 greenhouse gas emissions are fully reported and audited. The scope
of emissions reporting is consistent with nancial reporting.
Extra-nancial state-
ments:
4.1 Greenhouse gas
emissions
2.5. United Nations Sustainable Development Goals
Since February 2024, Syensqo is signatory of the UN Global Compact.
In 2015, the United Nations established a set of goals to end poverty, protect the planet and ensure prosperity for all. Each of these 17 Sustainable
Development Goals (SDGs) includes specific targets to be achieved by 2030. Achieving the SDGs requires efforts by governments, the private sector,
civil society, communities and individuals.
The United Nations framework was primarily designed for member states to commit and report on their progress, and the contributions of businesses
were difficult to define. Syensqo – at that time Solvay – co-chaired a World Business Council for Sustainable Development (WBCSD) project to work this
out.
Sustainable Development Goals on which we could have a material impact, positive or negative, and/or for which our sustainable solutions could enable
further progress are integrated into our materiality analysis.
Syensqo’s main areas of impact can be grouped into three categories: climate and nature, sustainable growth and better life. The corresponding list of
SDGs on which Syensqo can have the most impact, positive or negative, through our operations and products, and/or for which Syensqo can enable
progress via sustainable solutions, is as follows:
· Climate and Nature includes the Group’s energy consumption and greenhouse gas emissions, and other emissions or effluents that put pressure on
biodiversity, and the Group’s raw material consumption, water consumption, effluents, emissions and waste generation.
· Sustainable growth includes the Group’s management of hazardous materials, product safety and the life cycles and end-of-life management of
products.
· Better life includes the Group’s management of people, processes and social dialogue initiatives.
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Syensqo discloses impact indicators for the SDGs in the corresponding sections of the Annual Integrated Report:
United Nations Sustainable Development Goals Reference
SDG 3: Good health and well-being Extra-nancial statements:
4.4. Air quality
4.5. Waste
4.6. Water and wastewater
5.4. Hazardous materials
6.1. Employee health and safety
6.2. Employee engagement and well-being
6.6. Critical incident risk management
SDG 5: Gender equality
Extra-nancial statements:
6.3. Diversity and inclusion
6.5. Corporate citizenship
SDG 6: Clean water and sanitation Extra-nancial statements:
4.5. Waste
4.6. Water and wastewater
SDG 7: Affordable and clean energy Extra-nancial statements:
4.2. Energy
SDG 8: Decent work and economic growth Extra-nancial statements:
6.2. Employee engagement and well-being
6.3. Diversity and inclusion
6.4. Recruitment, development and retention
SDG 12: Responsible consumption and production Extra-nancial statements:
4.5. Waste
4.6. Water and wastewater
5.1. Product design and life cycle management
5.3. Circular economy
5.4. Hazardous materials
6.6. Critical incident risk management
SDG 13: Climate action Extra-nancial statements:
4.1. Greenhouse gas emissions
4.2. Energy
4.3. Biodiversity
5.1. Product design and life cycle management
5.3. Circular Economy
SDG 14: Life below water Extra-nancial statements:
4.1. Greenhouse gas emissions
4.3. Biodiversity
4.5. Waste
4.6. Water and wastewater
SDG 15: Life on land Extra-nancial statements:
4.1. Greenhouse gas emissions
4.3. Biodiversity
4.4. Air quality
4.5. Waste
4.6. Water and wastewater
5.4. Hazardous materials
SDG 17: Partnership for the goals Extra-nancial statements:
3.6. Main partnerships
6.5. Corporate citizenship
2.6. Sustainability Accounting Standards Board (SASB)
Syensqo bases our materiality analysis on the SASB Materiality Map
®
list of material aspects. In some cases, aspects have been rephrased to fit the
vocabulary commonly used in the chemical industry, or combined differently.
Syensqo list of material topics 2021 SASB Materiality Map
®
topics list
Management of the legal, ethics and regulatory framework
Business ethics, competitive behavior, human rights, management of the legal and
regulatory framework
Material sourcing and efciency Materials sourcing and efciency
Supply chain and procurement Supply chain management
Systemic risk management Systemic risk management
Physical impacts of climate change Physical impacts of climate change
Greenhouse gas emissions GHG emissions
Energy Energy management
Biodiversity Ecological impacts
Product design and life cycle management
Product design and life cycle management,
business model resilience
Air quality Air quality
Water and wastewater Water and wastewater management
Waste Waste management (hazardous waste)
Employee health and safety Employee health and safety
Labor practices Labor practices, employee engagement
Employee engagement, diversity and inclusion Employee engagement, diversity and inclusion
Corporate citizenship Community relations
Hazardous materials Hazardous materials management, product safety
Data security Data security
Critical incident risk management Critical incident risk management
Customer welfare Customer welfare
Selling practices and product labeling Selling practices and product labeling
Product quality and safety Product quality and safety
Access and affordability Access and affordability
Customer privacy Customer privacy
The following SASB Materiality Map
®
topics are not part of the Syensqo list of material aspects: customer privacy, data security, access and affordability,
selling practices and product labeling, and customer welfare.
Syensqo discloses most of the sustainability disclosure topics and accounting metrics listed in the SASB Chemicals Sustainability Accounting Standard.
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Topic SASB – Chemicals disclosure topics Reference
Greenhouse
gas emissions
Gross global Scope 1 emissions, percentage covered under emissions-limiting regulations Extra-nancial statements:
4.1 Greenhouse gas
emissions
Discussion of long-term and short-term strategy or plan to manage Scope 1 emissions,
emissions reduction targets and an analysis of performance against those targets
Extra-nancial statements:
4.1 Greenhouse gas
emissions
Air quality Air emissions of the following pollutants: (1) NOX (excluding N2O), (2) SOX, (3) volatile
organic compounds (VOCs), (4) hazardous air pollutants (HAPs)
Extra-nancial statements:
4.4. Air quality
Hazardous air pollutants not
disclosed
Energy
management
(1) Total energy consumed, (2) percentage grid electricity, (3) percentage renewable energy,
(4) total self-generated energy
Extra-nancial statements:
4.2. Energy
Water
management
(1) Total water withdrawn, (2) total water consumed, (3) percentage of each in regions with
high or extremely high baseline water stress
Extra-nancial statements:
4.6. Water and wastewater
Number of incidents of non-compliance associated with water quality permits, standards and
regulations
Extra-nancial statements:
6.6. Critical incident risk
management
Description of water management risks and discussion of strategies and practices to mitigate
those risks
Extra-nancial statements:
4.6. Water and wastewater
Hazardous
waste
management
Amount of hazardous waste generated, percentage recycled Extra-nancial statements:
4.5. Waste
Community
relations
Discussion of engagement processes to manage risks and opportunities associated with
community interests
Extra-nancial statements:
6.5. Corporate citizenship
Workforce health and
safety
(1) Total recordable incident rate (TRIR), (2) fatality rate for (a) direct employees and (b)
contract employees
Extra-nancial statements:
6.1. Employee health and
safety
Description of efforts to assess, monitor and reduce exposure of employees and contract
workers to long-term (chronic) health risks
Extra-nancial statements:
6.1. Employee health and
safety
Product design for use-
phase efciency
Revenue from products designed for use-phase resource efciency Extra-nancial statements:
5.1. Product design and life
cycle management
Safety and
environmental
stewardship of
chemicals
(1) Percentage of products that contain Globally Harmonized System of Classication
and Labeling of Chemicals (GHS) Category 1 and 2 Health and Environmental Hazardous
Substances, (2) percentage of such products that have undergone a hazard assessment
Extra-nancial statements:
5.4. Hazardous materials
Discussion of strategy to (1) manage chemicals of concern and (2) develop alternatives with
reduced human and/or environmental impact
Extra-nancial statements:
5.4. Hazardous materials
Genetically
modied organisms
Percentage of products by revenue that contain genetically modied organisms (GMOs) Not disclosed
Management of the legal
and regulatory
environment
Discussion of corporate positions related to government regulations and/or policy proposals
that address environmental and social factors affecting the industry
Extra-nancial statements:
3.7. Membership in
associations
Operational
safety, emergency
preparedness and
response
Process Safety Incidents Count (PSIC), Process Safety Total Incident Rate (PSTIR) and Process
Safety Incident Severity Rate (PSISR)
Extra-nancial statements:
6.6. Critical incident risk
management
Number of transport incidents Extra-nancial statements:
6.6. Critical incident risk
management
Activity metric Production by reportable segment Syensqo cannot share
information that can be
considered competitively
sensitive for antitrust
compliance reasons.
3. GOVERNANCE
3.1. Syensqo One Planet Ambition
GRI DISCLOSURES 2-24
3.1.1. Definition
The Syensqo One Planet Ambition is the Syensqo Group’s sustainability framework. It addresses Syensqo’s main impacts on climate and nature,
sustainable growth and better life. The Group’s targets are grouped per impact category.
3.1.2. Management approach
Within Syensqo, the CEO and the Executive Leadership Team (ELT) are responsible for the management of Syensqo and the implementation of Syensqo’s
strategy, including on sustainability-related matters. In particular, the CEO and the ELT oversee the proper organization and functioning of Syensqo,
and provide oversight for Syensqo activities, in particular the introduction of a process for identification, management and control of the principal risks,
including sustainability-related risks.
Two sustainability-related steering committees meet every quarter. The first one, dedicated to environmental topics (climate and nature), is led by the
Chief Operations Officer, who is a member of the ELT. The second is dedicated to social topics and is led by the Chief People Officer, who is also a
member of the ELT. These steering committees involve the Chief Sustainability Officer, the GBU presidents, and several heads of function and key experts
within Syensqo. They are in charge of structuring the Group’s approach to environmental and social topics, speeding up processes, addressing resources,
risks and opportunities, and tracking performance
The Syensqo One Planet Ambition was released on November 13, 2023, during Syensqo Capital Markets Day. Each Global Business Unit (GBU) president
is accountable for the progress of Syensqo One Planet targets in their business, and delegates the coordination of the roadmap to a senior executive in
their leadership team. A network of Sustainability Champions and correspondents ensures that the ambition is deployed in all Syensqo GBUs, corporate
functions and sites. They are responsible for cascading information throughout their entity regarding any changes to the strategy and objectives, ensuring
necessary training is organized and developing an annual and multi-year roadmap to meet final objectives. They are also responsible for implementing
the roadmap in their entity, though the leaders of every entity assume ultimate responsibility for performance, taking into account that progress relative
to targets impacts the variable remuneration of all senior staff in the entity.
Definitions, management approach, indicators and targets, and main actions specific to each topic are described in the corresponding sections of the
extra-financial statements.
In order to further improve employees’ awareness on sustainability from top management to the shop floor, a sustainability e-learning program is
available to all Syensqo employees. It comprises four modules: climate; nature; sustainable business; and social aspects of sustainability. The modules
are available in seven different languages, allowing us to reach as many employees as possible, and are part of the onboarding process for all new
employees. The modules also encourage employees to provide their ideas, feedback and concerns on sustainability matters.
3.1.3. Indicators and targets
Syensqo One Planet is our roadmap for a sustainable future that provides shared value for all. Structured around the three major impact categories of
climate and nature, sustainable growth and better life, it sets out the following main targets compared to the 2021 baseline:
Climate and nature
Accelerated decarbonization:
· Carbon neutrality (Scope 1 and 2) by 2040.
· Reduction of Scope 1 and 2 GHG emissions by 40% by 2030.
· 23% reduction in Scope 3 GHG emissions from “Focus 5” (see definition page 182) categories upstream and downstream in the value chain by 2030.
Growth
Sales of products contributing to circular economy in total sales to reach 18% in 2030.
Better life
· Safety: Towards Zero RIIR.
· Diversity: Towards gender parity in 10 years.
· Living wage: 100% of employees by 2026.
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3.2. Management of the legal, ethics and regulatory framework
GRI DISCLOSURES 2-26 2-27 3-3 205-2 205-3 406-1 412-1 412-2 415-1
Management of the legal, ethics and regulatory framework encompasses business ethics, namely human rights, anti-corruption and non-discrimination,
and anti-competitive behavior.
3.2.1. Commitments and policies
Code of Business Integrity
Syensqo’s Code of Business Integrity and the policies and procedures adopted to enhance good governance apply to all employees, wherever they are
located. In addition:
· Third parties are expected to act within the framework of the Code of Business Integrity.
· All core suppliers must confirm that they adhere to the principles set out in the Supplier Code of Business Integrity.
· Majority-owned joint ventures are held to the Code of Business Integrity, or to a separate code adopted based on similar principles.
The Code of Business Integrity is available on Syensqo’s external website.
Anti-Bribery and Anti-Corruption Policy and Policy on Gifts and Entertainment
Syensqo’s Code of Business Integrity expressly states that the Group prohibits bribery in any form. Syensqo and our employees do not use gifts or
entertainment to gain competitive advantage. Facilitation payments are not permitted by Syensqo, and disguising gifts or entertainment as charitable
donations is also a violation of the Code of Business Integrity.
The Code is supported by more detailed policies, such as the Anti-Corruption Policy and a Policy on Gifts, Entertainment, Charitable Donations, and
Sponsorship.
The Group employs an internal tracking system to record gifts and entertainment that exceed the acceptable reasonable value indicated in the Policy, as
well as charitable donations and sponsorship with charitable purpose, and requires managerial approval for accepting or giving them. Prior approval and
analysis by Syensqo’s Ethics and Compliance Department is also required when a gift or entertainment is to be offered to a government official, as well
as for charitable donations exceeding a defined threshold, ensuring adherence to the policy and compliance with the law. The policy supports Syensqo’s
commitment to conducting business honestly and ethically aligned with the Syensqo Code of Business Integrity and the Syensqo Anti-Bribery and Anti-
Corruption Policy. The use of the Gift and Entertainment Tracking System (“GETS”) is part of Syensqo’s internal audit review process.
An audit on anti-bribery and anti-corruption was conducted in 2023 in the Asia Pacific region, and preventive and corrective actions were implemented.
Human Rights in Business Policy
Syensqo’s Human Rights in Business Policy, published on our website, sets out our commitment to respecting human rights and acting with due diligence
to avoid any infringement of human rights or any adverse impact on, or abuses of, such rights. The policy emphasizes Syensqo’s commitments to our
stakeholders, namely our employees and business partners, the communities and environment in which we operate, and children. This policy, as well
as Syensqo’s Conflict Minerals Policy, are currently being updated to reflect Syensqo’s commitment to the evolving regulatory standards. Human rights
topics are followed up on by the Business Ethics Board and the ESG Board.
Human rights due diligence and risk assessment
The main focus of human rights risk assessments at Syensqo sites is our business partners, namely suppliers and contractors identified according to the
risk associated with the country they operate in. Six human rights dimensions are considered: child labor; forced labor; trafficking in persons; human
development; freedom of association; and collective bargaining. This assessment is used by Syensqo’s internal auditors to identify priorities for their
work on the subject.
To assess human rights risks and impacts across our upstream value chains, Syensqo developed an ESG risk management approach for our supply chain.
This provides a systematic approach for identifying risks and assessing their severity in more than 60 upstream value chains. Based on the results of this
exercise, Syensqo has subscribed to a third-party risk management platform for adverse media screening in order to monitor and identify risks and
impacts related to different matters, such as modern slavery and human rights, including forced labor and child labor, anti-bribery and corruption, and
environmental, social and governance topics. This provides transparency across our value chains, supporting Syensqo in identifying high-risk suppliers,
and developing risk mitigation action and remediation plans.
In addition, the Internal Audit team carries out assessments to determine if our sites have established policies and processes for addressing impacts on
value chain workers. This includes evaluating engagement, decision-making, remediation of negative impacts, and the presence of channels for workers
to report concerns. The assessment also covers planned actions and the percentage of suppliers committed to the Supplier Code of Business Integrity.
In 2023, a dedicated internal audit on ESG matters was conducted that included human rights.
A multidisciplinary task force, including Ethics and Compliance, Procurement, Human Resources, Sustainability and Risk teams has also been established
to increase oversight of human rights in our own operations and value chain.
Any suspected breach of our Human Rights Policy can be reported through our Ethics Helpline and our Compliance Team. Human rights is a separate
matter type in our Helpline and is accessible to all our employees and third parties, including our suppliers. The Ethics Helpline is accessible through our
external and internal websites. Cases are investigated and remedial actions are taken as appropriate.
In 2024, we will send a questionnaire on human rights to our high-risk suppliers in order to increase due diligence and to have a better view on our supply
chain and be able to establish a gap analysis and remedy.
Competition Law Policy
Syensqo aims to conduct business ethically and not enter into any business arrangements that eliminate or distort competition. Syensqo develops and
maintains a culture of compliance to keep the company and our people on the right side of the law. Syensqo has a formal Competition Law Policy that
stresses the importance of strict adherence to all competition laws. It has been approved by Syensqo’s Executive Leadership Team and is published on
Syensqo’s intranet, to which all our employees have access. Any violation of this policy may result in disciplinary action, subject to, and in conformity with,
applicable laws.
Implementation of the Competition Law Policy
Syensqo has put in place a Competition Law Compliance Program with a zero-tolerance approach to competition law infringements. As part of our
Competition Law Compliance Program, we provide a competition law toolkit on the Syensqo intranet that includes up-to-date guidelines on specific
areas of competition law, including guidance on dealing with competitors, dawn raids, information exchange in mergers and acquisitions transactions,
swaps, price announcements and vertical relationships. To minimize cartel risks, Syensqo has put in place a computer-based system that tracks all
contacts relevant employees have with competitors through a procedure based on managerial approval.
3.2.2. Resources and responsibilities
At Syensqo, the Ethics and Compliance Team operates under the leadership of the Chief Compliance Officer, who reports to the General Counsel. It
consists of Regional Compliance Officers, who are located in the regions in which the Group operates, and compliance experts, who are responsible
for areas such as data protection or trade compliance. This department is responsible for fostering Syensqo’s culture of integrity, overseeing the
implementation of Syensqo’s Ethics and Compliance Program, Code of Business Integrity, Supplier Code of Business Integrity and compliance policies,
providing guidance to the company, and investigating, either alone or with the assistance of other departments, all reports that are brought to its
attention. The Chief Compliance Officer chairs the Business Ethics Board and reports annually to the Audit Committee of Syensqo’s Board of Directors
on ethics and compliance matters, and on trends and data related to the Speak Up Program, in accordance with confidentiality standards.
Syensqo has a dedicated team of legal experts for competition law within the General Counsel Function. They are responsible for implementing the
Competition Law Compliance Program and are in charge of providing competition law advice and guidance, as well as deploying effective and regular
communication and training on subjects related to competition law.
3.2.3. Grievance mechanisms
Syensqo has a well-embedded Speak Up program that encourages employees and other stakeholders to reach out whenever they suspect a breach of
our Code of Business Integrity, our policies, our values or the law. There are also various internal channels through which employees and third parties are
encouraged to report suspected violations or concerns. These include line management, Ethics and Compliance, the General Counsel Function, Internal
Audit, Human Resources and employees’ representatives. Syensqo has a Speak Up policy which is part of the Speak Up program and which takes into
account the EU Whistleblowing Directive.
The Group-wide Speak Up program is overseen by the Audit Committee of the Board of Directors. An external, third-party helpline, active 24 hours a
day, 365 days a year, allows employees to ask questions, raise concerns or file reports. The helpline is open to internal and external parties, available in
19 languages covering Syensqo locations. The helpline can be found in the ethics and compliance section of Syensqo’s internal and external websites,
and is easily accessible.
Cases that are reported through the Speak Up program are investigated as required. Disciplinary actions, corrective and preventive measures and
process improvements are implemented when necessary.
The following chart shows the types of reports made using Syensqo’s Speak Up program from January to December 2023.
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Syensqo’s Speak Up program
In line with paragraph 2.2 (“Reporting scope and boundaries”), we applied distribution keys to allocate the Speak Up program reports between Solvay
and Syensqo. When this split resulted in decimal numbers, the KPIs were adjusted to whole numbers to be displayed in the report. This rounding caused
negligible distortions between totals and breakdowns in the tables below.
Reports in progress relating to business functions not allocated to either Solvay or Syensqo were not split according to the distribution key for Speak Up
program reports outlined in paragraph 2.2 (“Reporting scope and boundaries”), but attributed to the company actually managing the report after the
separation.
Number of reports 2023 2022
Misconduct or inappropriate behavior 28 17
Discrimination 7 15
Harassment including retaliation 27 17
Previously: Discrimination including harassment and retaliation
Conict of interest 18 7
Computer, email, internet use and social media 3 2
Previously: Computer, email, internet
Environmental, health or safety 11 10
Previously: Environmental, health or safety law
Accounting, auditing matters, nance and banking 5 3
Previously: Accounting or auditing
Bribery/Corruption 4 6
Antitrust/Competition 0 1
Previously: Anti-bribery
Condentiality and misappropriation 3 3
Previously: Condentiality/Misappropriation
Data privacy 3 4
International trade/Trade compliance 1 1
Previously: International trade compliance
Substance abuse 3 0
Embezzlement, theft, robbery 4 4
Previously: Theft
Violence or threat 4 2
HR matters 26 30
Diversity, equity and inclusion 7 4
Human rights violations 1 0
New category: Fraud 0
0
Other 7 10
Total 162 137
Through the Speak Up program, any concerns relating to a breach are followed-up on and investigated as appropriate by Ethics and Compliance. In
keeping with our commitment to transparency, the Ethics Helpline is used to report progress on investigations and give feedback to those concerned,
as appropriate. The Ethics Helpline is easily accessible through Syensqo’s website, a toll free number or a QR-Code, and is available to employees and
third parties.
A communication campaign was also launched to increase awareness about speaking up and raising concerns without fear of retaliation when people
notice a potential breach of our Code of Business Integrity. Speak Up was also part of the annual mandatory training for all our employees, in order to
raise awareness that speaking up applies to the full spectrum of topics referenced in the Code of Business Integrity. This has led to a continuous increase
in reported incidents, as reflected in the overview, improving our ability to detect, identify and address breaches. The increase in reported incidents does
not imply that there were more incidents or issues in 2023 than before, but shows that employees report concerns or potential breaches, enabling our
Ethics & Compliance team to investigate and address them. A new topic, fraud, has now also been added to our Ethics Helpline.
The Board’s Audit Committee oversees the Speak Up program and reviews the effectiveness of the process and the outcomes.
In 2023:
· 162 cases opened:
- 23 cases still in progress.
- 165 cases resolved. These include:
- 58 substantiated cases
- 70 unsubstantiated cases
- 12 insufficient information
- 9 misdirected
- 17 transferred (previously: referred)
- 0 frivolous
Definitions:
· Substantiated: the allegation, or at least one of the allegations, are considered founded.
· Unsubstantiated: none of the allegations are considered founded.
· Insufficient information: when insufficient information has been provided and/or Ethics and Compliance has been unable to collect sufficient information
to conclude whether an allegation is substantiated or unsubstantiated.
· Misdirected: a case has been reported to Ethics and Compliance but does not fall under Ethics and Compliance’s scope.
· Transferred (previously: referred): a case has been reported to Ethics and Compliance but needs to be addressed by another department.
· Frivolous: when a reported case lacks sense or significance.
RESOLVED CASES
Cleared of
involvement
Discipline Final written/legal
warning letter
No action
necessary
Performance
Improvement Plan
Policy/Process
review
Substantiated 0 0 4 3 1 13
Unsubstantiated 0 0 0 47 0 9
Resignation in
lieu of
termination
Reassignment/
Transfer
Suspension
w/o pay
Termination Training/
Coaching
required
Verbal feedback/
Warning
Written
feedback/
Warning
Substantiated 5 6 1 10 7 7 2
Unsubstantiated 0 0 0 0 10 4 0
3.2.4. Communication and training
Syensqo’s Code of Business Integrity
Mandatory Code of Business Integrity training, both in person and web-based, is organized for all employees to ensure a strong culture of integrity at
Syensqo, and to understand and address behavioral risks, such as bribery and corruption, conflict of interest and harassment, sanctions, export control,
data protection, and gifts and charitable donations. As part of this training, employees are also trained on the Speak Up culture and Ethics Helpline.
Specific training modules are tailored to leadership, including Listening Up. In the period 2022-2023, 99.6% of the target population was trained on
the Code of Business Integrity, which is available in 19 languages. To complete the training, employees must certify that they are in compliance with
the Code of Business Integrity, understand their role in protecting a culture of integrity and are aware that they can report any violations using the
available channels and Ethics Helpline. Internal Audit regularly reviews the implementation and completion rate of training modules as part of their audit
engagement and responsibilities.
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Competition Law and Antitrust
Syensqo has a concrete Competition Law Compliance Action Plan, designed to mitigate the specific risks the Group has identified in this field of law. It
has been in force since 2003 and is updated yearly. In 2023, it covered e-learnings on competition law in general, on competitive intelligence gathering,
and on the use of the computerized tracking system of meetings with competitors mentioned above. We also organized ad hoc training for specific
high-risk target populations. The participation rate of the relevant training campaign in 2023 was above 95%.
Anti-bribery and anti-corruption
Anti-bribery and anti-corruption web-based training is carried out on a two-year cycle for a pre-identified target population, which includes all employees
grade S15 and above. The most recent online training course, available in 16 languages, took place in 2023 and 91% of the target population was trained.
The training will be rolled out again in 2025.
Public policy
Syensqo pursues constructive dialogue with governmental and political stakeholders, both to ensure and improve our license to operate and as part
of our commitment to developing sustainable solutions with partners. This exchange helps us understand societal trends and anticipate legislative and
regulatory expectations and developments, as well as to advocate for and communicate views that support Syensqo’s interests. These include:
· Promoting sustainable solutions that address climate change and facilitate the energy transition: Syensqo supports the UN Paris Climate Agreement
and contributes to implementing it. We therefore argue for the development of a clear and predictable legislative framework that promotes sustainable
growth while maintaining industry competitiveness and ensuring a balanced transition to a low-carbon economy.
· Competitiveness: Syensqo advocates for a regulatory system that fosters entrepreneurship and industrial innovation by safeguarding or improving
competitiveness, and that creates highly skilled jobs worldwide.
· Environmental and chemical policy: Syensqo collaborates with trade associations, public authorities and other stakeholders to develop science- and
risk-based regulations and standards that promote a more sustainable industry and products.
· Promoting global trade: as an international company, Syensqo recognizes the importance of free trade based on a multilateral and rules-based trading
system. Reducing trade barriers is essential for economic growth and thus for industrial activity.
· Geopolitical assessment: Syensqo assesses the geopolitical situation in order to better understand the potential impact, in relation to trade, logistics,
investments and security, on our businesses.
Syensqo’s Government Affairs and Country Management Function is responsible for coordinating relations with government and political officials. In line
with Syensqo’s Code of Business Integrity, and with the aim of ensuring the most favorable business environment, the Government Affairs and Country
Management team works to foster long-term partnerships with public authorities and other relevant stakeholders. They do this by building a transparent
and constructive dialogue that supports company strategy.
In our relations with government officials, we commit ourselves to responsible, honest and transparent action, based on our values and principles. We are
committed to ensuring that our dialogue and advocacy complies with our Code of Business Integrity, and the rules and principles set out in our policies.
Employees involved in relations with government officials have to take mandatory training on business integrity, competition law, and antitrust and anti-
corruption. In addition, we welcome initiatives for greater transparency in the area of interest representation and are listed as a company in the Lobby
and Transparency registers of the European Commission, the United States, France and Germany.
Syensqo’s public policy activities include participation in industry and trade associations, as outlined in section 3.7., Membership of associations. We aim
to conduct political relations and advocacy with our own staff resources, meaning that relevant contacts and meetings between Syensqo and political
stakeholders are made and held by Syensqo representatives in person, and not by agency or partner staff acting on behalf of Syensqo.
The Group does not take part in political party activities, nor do we make corporate donations to political parties or candidates, as indicated in the
Group’s Policy on Gifts, Entertainment, Charitable Donations and Sponsorship. We engage in constructive debate with public authorities on subjects of
legitimate interest to Syensqo, where necessary, but only those employees specifically authorized to do so may carry out such activities.
Syensqo respects the freedom of our employees to make their own political decisions. Any personal participation or involvement by an employee in the
political process must be done on an individual basis, on the employee’s own time and at the employee’s personal expense.
Ethics and compliance website
In 2023, Syensqo launched an ethics and compliance section on our website. The pages provide information on our ethics and compliance program,
including its four-pillar structure and alignment with our Core Beliefs. It ensures that the Code of Business Integrity, the Supplier Code of Business
Integrity and other ethics and compliance policies are easily accessible, and provides information on the Ethics Helpline, as well as the link for employees
and externals to access the third-party helpline through which questions, concerns or reports can be registered.
3.2.5. Animal testing
Syensqo provides innovative products for a wide variety of uses and a large number of users. The Group must have a proper understanding of the
hazards posed by our products in order to carry out our activities and protect users, the general public, Syensqo personnel and the environment. With
society continually pushing for new, better and safer chemicals and plastics, there is growing demand from both regulatory authorities and the public for
product risk and hazard assessments. These require testing, both with and without the use of animals.
Testing
To comply with new and existing chemical regulations, or to further consolidate safety data, Syensqo commissioned animal tests in 2023. Syensqo avoids
animal testing whenever possible, but in cases in which animal testing is required we commit to conducting studies that treat animals humanely, giving
them the best care possible, and using all animals responsibly, with great regard for their welfare. In compliance with European cosmetic regulations,
Syensqo does not perform specific testing solely to support cosmetic uses.
Substance-based testing for multiple applications
Syensqo carries out tests required for all regulations and applications relating to a given substance just once, unless specifically requested by any
authority worldwide. We avoid the need for new studies by actively advocating for the reuse of data from studies conducted within a given framework,
such as REACH, for other registration systems.
Ethical compliance
Syensqo’s policy, outlined in the Syensqo Animal Care and Use Procedure, is to apply the “3R principles” – Replacement, Reduction and Refinement
– in each case, and to comply with all applicable regulations. All of our studies comply with international standards, such as Organization for Economic
Cooperation and Development (OECD) guidelines. Regulatory studies are almost exclusively performed by laboratories accredited by the Association
for Assessment and Accreditation of Laboratory Animal Care International (AAALAC). This worldwide organization sets quality standards for testing
laboratories and ensures responsible and humane treatment of laboratory animals.
Once a study is underway, Syensqo staff monitor the execution and quality of the studies and maintain a continuous qualification and evaluation program
for the laboratories. A dedicated Syensqo corporate committee reviewed the animal testing activities commissioned by Syensqo during 2023, verifying
conformity with the principles and mandatory elements of Syensqo’s Animal Care and Use Procedure.
VERTEBRATE ANIMAL TESTS COMMISSIONED BY SYENSQO IN 2023
Number of studies Number of vertebrates (*)
Registration obligations (e.g. EU, China, Korea, US) 24 4,490
Additional product safety questions (toxicity, classication) 5 227
Total 29 4,717
(*) Includes all animals, including control animals not being exposed to test substances and used as reference.
Regulatory testing
In 2023, 95% of the vertebrate animals (representing 83% of the animal studies) were used to address mandatory requirements from authorities. The
remaining 5% were used to address additional product safety questions. In total, 4,717 vertebrate animals (56% rats, 23% rabbits, 15% fish, 3% guinea
pigs and 3% mice) were used. Syensqo did not commission any studies on dogs, cats, pigs or non-human primates. Most vertebrate animals (83%)
were used in tests required by the EU REACH Regulation, and these studies will also be valid for demonstrating compliance with chemical regulations
elsewhere in the world. The number of vertebrate animals used in 2023 was five times greater than in 2022, whereas the number of studies on vertebrate
animals was only slightly increased (29 in 2023 and 24 in 2022). The increase in the number of animals is mostly due to the reprotoxicity studies that were
completed in 2023.
Drivers for the future
While studies are needed for regulatory and scientific purposes, Syensqo continues to strengthen its capabilities and understanding of alternative
methodologies that do not involve vertebrate animals.
However, the higher tier animal studies requested by authorities, which required the largest number of animals in 2023, will remain the major driver for
animal tests in the near future. A significantly higher number of these regulatory studies is already ongoing, and it is therefore expected that the number
of animals in 2024 will increase in comparison to 2023.
Advances in the implementation of non-animal methods and alternative hazard identification strategies are crucial to achieving a reduction in animal
use for hazard assessment. The new information requirements under EU REACH, which are expected in 2025, will drive the trend for the future. We are
also looking forward to the European Commission roadmap toward phasing out animal testing for chemical safety assessments, which is expected at
the beginning of 2026 at the latest, and we appreciate the European Chemical Agency’s (ECHA) efforts to contribute to the introduction and regulatory
acceptance of New Approach Methods (NAMs).
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3.3. Health, safety and environment management
GRI DISCLOSURE 2-25
SDG 3, 6, 7, 12, 14, 15
3.3.1. Definition
Syensqo’s health, safety and environment (HSE) management system requirements are aligned with HSE ISO standards and our Responsible Care Policy.
Through our Responsible Care Policy, we commit to safeguarding people and the environment, by continuously improving our environmental, health
and safety performance, the security of our facilities, processes and technologies, and chemical product safety and stewardship throughout the supply
chain. This reflects Syensqo’s position as a signatory to the ICCA’s Responsible Care Global Charter
®
.
3.3.2. Management approach
Syensqo’s HSE strategy relies on the following:
· An approved HSE management system, which is implemented at every industrial (manufacturing and research and innovation) site. This includes a
Responsible Care Policy and a set of risk-based procedures that apply to all areas, including health monitoring, industrial hygiene, occupational safety,
process safety, transport safety and environment and product safety.For each domain, a network is organized at Group level to ensure implementation
of the procedures, compliance with regulations and sharing of good practice.
· A Product Safety Management System (PSMS), applied in every Global Business Unit.
· A safety culture approach, which ensures people’s safety, health and well-being. It relies on a safety leadership style, where managers act as mentors
and demonstrate genuine care for all.
· A reporting process used to evaluate performance, analyze events and define short- and long-term improvement plans.
Industrial sites
Each industrial site:
· Implements at least one approved health, safety and/or environment management system, in compliance with Syensqo’s Responsible Care Policy.
· Sets up a dedicated, systematic regulatory watch mechanism.
· Undergoes a compliance audit conducted by an internal or external third party at least once every five years, addressing both regulatory and internal
requirements.
· Addresses all identified risks, areas for improvement and gaps in compliance.
Environmental rehabilitation
Syensqo’s Health, Safety, Environment and Sustainability (HSES) Department is responsible for managing the environmental liabilities resulting from the
Group’s industrial and mining activities. HSES helps the sites and GBUs manage their environmental legacy, whether historical or recent, providing them
with technical expertise and cash management through environmental provisions. Where the local regulations allow it, a risk-based approach is used to
define management actions. For our operational sites, HSES collaborates with the local HSE team. Our closed sites are managed directly by the HSES
team on behalf of the relevant GBU. HSES is also responsible and accountable for managing Group environmental provisions.
3.3.3. Indicators
Approved HSE management systems at sites
Of our 74 sites, 92% have at least one management system in place that has been audited by a third party, or a party external to the site, in the past
five years. Many sites have been certified with multiple HSE Management Systems. Sites with fewer than 10 people, or that are not under Syensqo’s
operational control, are excluded.
Twenty-eight of our sites are certified by ISO 45001, 17 by the American Chemistry Council’s Responsible Care Management System (ACC RCMS), 15 by
ACC RC 14001 and 34 by ISO 14001. Twenty-one of our sites have another approved management system in place:
· The Responsible Care Program by Asociación Nacional de la Industria Química (ANIQ) in Mexico.
· The Responsible Care Program by Associação Brasileira da Indústria Química (ABIQUIM) in Brazil.
· The Occupational Safety and Health management system (GB/T 33000-2016) in China.
· The Occupational Safety and Health Administration Voluntary Protection Programs (OSHA VPP management system) in the US.
· Syensqo internal R&I HSE Management System (audited by persons external to the site).
At six of our sites, we plan to implement a management system by the end of 2024.
Regulatory Watch
Syensqo has installed a systematic process for monitoring regulation in all domains – health and safety, process safety, environment and transport safety
– at 93% of our sites.
3.4. Research and innovation
3.4.1. Definition
Syensqo research and innovation (R&I) is the Group’s engine for delivering highly differentiated and valuable innovations that address major human
challenges associated with resource scarcity, climate change and quality of life. Syensqo aims to build a better future by developing innovative, profitable
and sustainable solutions that turn science and chemistry into business and create value for the Group, our shareholders, our customers and all other
stakeholders.
3.4.2. Management approach
Syensqo’s research and innovation is organized around three key pillars, inspired by our sustainable growth strategy:
· Based on the existing operating businesses, which define their own innovation portfolio to develop and grow their business.
· Based on strategic growth axes, which have been defined by the Group and are areas in which the Group specifically aims to grow. This involves
structuring research and development within specific teams, known as platforms, and regrouping all the capabilities required to succeed, such as
business, R&I, industrial and product stewardship, under these platforms. The Group currently has four strategic innovation initiatives: thermoplastic
composite materials, battery materials, materials to support the green hydrogen economy, and biotechnologies. Each platform is managed by a
platform president who reports directly to Syensqo’s Chief Technology and Innovation Officer (CTIO).
· Prospective research to prepare future growth avenues for the Group. This is particularly important as a specialty company, as it is necessary to
reinvent the businesses regularly. As part of this we operate venture capital activities, including direct investment in startups, investment in funds and
partnerships with startups. We also operate a network of academic laboratories to explore possible new technologies of interest for Syensqo in the
future, and we look at new business models for the future, taking into consideration the evolution of our customers’ demands, as well as market trends
for the future.
Syensqo’s sustainable growth strategy also implies that all projects and innovation activities need to be driven toward creating a more sustainable world.
from their conception, all research topics need to be aligned with sustainability criteria and our 2030 sustainability agenda.
Group innovation is led by a Chief Technology and Innovation Officer (CTIO), who reports directly to the CEO. Platforms, as well as prospective research,
and intellectual asset management and corporate R&I functions, report directly to the CTIO. Each GBU has an R&I director, who drives the research of
the GBU and reports to the GBU president. The CTIO coordinates the activities of the GBUs, ensuring that overall Group research is perfectly aligned
with the Group’s growth strategy.
Indicators
2023 2022
Expected revenue from sustainable solutions % 85 85
R&I effort € million 343 304
R&I staff FTE 1,950 1,830
First patent lings Number 125 123
New sales ratio % 20.7 20.1
3.4.3. Key achievements
Syensqo works with customers and partners to develop sustainable solutions by addressing the key drivers that will shape our future and focusing on the
world’s sustainability needs. We also believe in the importance of working with academia, and with other companies or startups, to identify new solutions.
In total, the Group currently manages more than 150 collaborative innovation projects.
Our main achievements in R&I in 2023 are outlined below.
Important growth in sales of new products.
New product sales increased from 20.1% in 2022 to 20.7% in 2023. This increase was driven mainly by volumes of new products, resulting from the
redeployment of resources on growth projects. New products are those introduced less than five years ago.
A significant increase in the value of the portfolio
The increase in the value of our portfolio was driven by our first three strategic growth platforms moving key projects into the pilot phase and sharing
significant volumes of samples with customers. These growth platforms focus on batteries, green hydrogen and thermoplastic composites.
Significant progress in our strategic growth initiatives (Platforms)
Important steps were taken to advance our battery materials platform, with the inauguration of two new pilots at our La Rochelle plant in France, one
focused on solid state batteries, and the other on new sodium ion battery technology. We also launched a pilot focused on new solvent technology for
high voltage electrolytes. These new technologies should start impacting businesses as soon as 2025.
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Research and innovation for our green hydrogen platform focused on enabling both the dramatically accelerating volume demand growth and the
diversification of market technologies for the sustainable production, storage and conversion of green H
2
. Syensqo has been involved in designing new
collaboratively funded projects that are structuring the value chains for green H
2
market technologies.
To consolidate its industrial infrastructure, the thermoplastic composites platform brought a new world-class unidirectional tape plant fully on stream at
our plant in Piedmont, South Carolina, and completed an expansion project at our Anaheim site in California. These industrial assets in the US and our
MSAC customer engagement center in Brussels put Syensqo in a strong position to support the fast growing aerospace and energy markets, as well as
numerous other opportunities in several different segments. We also broadened our portfolio of unidirectional tapes, with the addition of tapes based
on PPS, PPA and BioPA.
These three Group strategic initiatives are well on track to deliver an additional €3 billion in growth for the Group by 2030.
Investing in and developing our new strategic growth initiative focused on renewable materials and biotechnology
Our renewable materials and biotechnology platform was launched in May 2022. It takes a holistic approach to innovation in the bio-space, focusing on
increasing the use of more renewable and sustainable raw materials, fostering the use of biotechnology combined with chemistry and accelerating our
transition toward biodegradable-by-design solutions in non-durable chemicals, like surfactants or water-soluble polymers.
In April 2023, we announced a multi-year strategic collaboration with Ginkgo Bioworks, which is building the world’s leading platform for cell programming
and biosecurity. The partnership aims to unlock the power of synthetic biology to create more sustainable and environmentally friendly chemicals and
materials. This will also expand our R&I footprint in the US, provide access to new talents and establish a growth base for synthetic biology in one of the
most important biotech hubs in the world, accelerating Syensqo’s biotechnology development plan. In addition to acquiring the Ginkgo lab, Syensqo is
investing in the construction of a world class, multipurpose microbiology lab at our site in Lyon, France. Expected to be operational by late 2024, this lab
will increase our biodegradability and toxicity testing capabilities. Our renewable materials and biotechnology platform represents a €1.5 billion market
opportunity by 2030, coming from businesses associated with renewable resources, biotechnology and biodegradable solutions, paving the way for
Syensqo to develop safer chemicals and more environmentally friendly solutions, and enhance circularity.
Reinventing sustainability of our essential products
R&I, sustainability and circularity are at the heart of Syensqo’s innovation, through the developmentof new products and solutions. This engagement is
illustrated by the following examples:
· Safer and powerful solvent solutions for crop protection formulations.
· Our ECHO portfolio, engineered with bio-based, recycled and mass balance certified raw materials, which delivers performance equivalent to
conventional materials while offering a lower carbon footprint.
· Development and commercialization of mass balance polymers, such as Udel
®
PSU and Radel
®
PPSU, or containing recycled polymers such as Omnix
®
ReCycle HPPA, or recycled carbon fibers, such as Ixef
®
, Amodel
®
and Ketaspire
®
.
A significant increase in our capabilities in different domains
· Continuous investment in the digitization of our research tools, including automation and robotics, data management and simulation and artificial
intelligence.
· Global investment in application development laboratories to help our customers accelerate innovation in alignment with megatrends. For example,
new laboratory capabilities in Asia include the creation of application laboratories for green hydrogen in Shanghai and Seoul, and the extension of
battery capabilities in Seoul. In Europe, new pilot projects for organic chemistry and polymer synthesis have been built in Lyon.
· Global reinforcement of our research and innovation workforce, adding more than 120 scientists in various fields to support our growth initiatives.
Reinforcement of our open innovation worldwide
Our open innovation allows us to monitor and drive technological breakthroughs. We do this by:
· Reinforcing our collaboration with academia worldwide. We continue to be heavily involved in high-level scientific collaborations with top universities
globally. These collaborations range from direct contracts to longer-term partnerships. In 2022, we reinforced our partnership with the National Institute
of Advanced Industrial Science and Technology, Tsukuba (AIST) through a scientist exchange agreement. We also reinforced our partnership in China
with East China University of Science and Technology (ECUST). Our strong involvement in science for the future can be seen in our award of the Solvay
Prize to Katalin Karikó, who is one of the inventors of mRNA vaccine technology, and by the Nobel Prize awarded to Carolyn Bertozzi, who received
the Solvay Prize in 2020.
· Expanding our customer relationships and innovation activities through Syensqo Ventures, to include partnerships with entrepreneurial startups that
are targeting high growth opportunities in line with our areas of technology and market leadership. These partnerships help to develop a portfolio
of highly differentiated and valuable innovations that address major human challenges associated with resource scarcity, climate change and quality
of life. In 2023, Syensqo Ventures initiated new partnerships focused on megatrends such as electrification (Tau group), lightweighting (iCOMAT),
sustainability (Compact Membrane Systems), and natural and bio-based solutions (Genesis Consortium). The new partnerships in 2023 bring Syensqo
Ventures’ total ongoing portfolio to 25 startup and venture fund relationships.
3.5. Supply chain and procurement
GRI DISCLOSURES 308-1 308-2 407-1 414-1
3.5.1. Definition
Our supply chain organization comprises about 1,000 people. Most of them are located in the GBUs, where they are in charge of planning, customer
care, logistics operations and improvement projects. In addition to this, a small Supply Chain Excellence team has been set up to lead transformation
in the areas of planning, order-to-cash, performance management and data management under the leadership of the global head of supply chain. We
have programs in place to foster continuous improvement in the value chain performance of our GBUs, while also contributing positively to cost and cash
management, as well as fulfillment at the service of customers.
Our procurement organization consists of about 280 people, working in our Corporate Procurement team. Their mission is to source products and
services leveraging scale and expertise, and to secure sustainable value creation and supply security to support Syensqo’s growth and innovation, as well
as our sustainability ambition.
3.5.2. Management approach
Syensqo integrates our Corporate Social Responsibility (CSR) principles and Syensqo One Planet ambition into our procurement processes and
strategies, in order to create sustainable business value in collaboration with our suppliers.
Procurement strategy
Procurement resources and capabilities are shared across an international network of category and sourcing managers, and individuals responsible for
site procurement, all of whom follow a common way of working known as the Syensqo global procurement process.
Our procurement strategies are defined by category experts in collaboration with the GBUs and functions. These strategies are then executed and
deployed at global, regional or local level, depending on the category specifics and suppliers’ market structure. Our strategies include ESG elements
and criteria.
Located in Procurement Excellence, the newly appointed Sustainability, Growth and Innovation team, plays a key role in enabling Syensqo’s innovation
and sustainability roadmaps. With the objective of decarbonizing our supply chain while increasing the share of renewable and recycled sourcing,
the team supports the development of low-carbon breakthrough technologies that require alternative renewable feedstocks and the redesigning of
products by using lower emissions raw material.
Core suppliers
Syensqo applies supplier segmentation in order to identify key suppliers, which we refer to as core suppliers. This approach enables Syensqo to focus
on managing performance, mitigating supply risk and improving relationships, while also forming the basis for collaboration and stimulating innovation.
Core suppliers are required to perform specific actions, such as carrying out a supplier evaluation survey, or a mandatory third-party sustainability
assessment. We have identified 255 suppliers as core suppliers. They account for 35% of Syensqo’s spend, and 92% of them are currently covered by a
third party sustainability assessment.
Key account managers are appointed for some of our core suppliers, allowing us to generate additional value and mitigate risk through strategic
relationships.
Supplier engagement
A Supplier Engagement Program is in place, with the aim of achieving common sustainability ambitions with our suppliers, to create shared value for all.
Collecting Product Carbon Footprint (PCF) data from our raw materials suppliers that emit the most GHG emissions was at the heart of our engagement
program in 2023. We have collected over 260 PCFs from more than 45 suppliers, who together account for 40% of our upstream Scope 3 raw materials
greenhouse gas emissions.
To make further progress in reaching our Scope 3 GHG emissions target, we called on our top raw materials suppliers to share their climate strategy and
decarbonization actions. To date, more than 15 suppliers have collaborated with us on this, and we exchange information on a regular basis to gain a
broader view on how their plans and the projects they undertake impact the business lines they supply us.
Together for Sustainability initiative
Syensqo is a member of Together for Sustainability (TfS), a global procurement-driven initiative that improves the sustainability performance of chemical
companies and their suppliers.
The TfS program is based on the UN Global Compact and Responsible Care
®
principles.To foster sustainable and resilient chemical supply chains,
TfS’s core offer includes assessments and audits that measure suppliers’ performance in key areas, such as environmental, labor and human rights, and
ethical and sustainable procurement. TfS assessments are carried out by the initiative’s key partner EcoVadis, a global service provider specialized in
sustainability performance assessments. For audits, TfS cooperates with a TfS-approved audit company.
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In 2022, TfS made significant progress in addressing the challenges of climate change and improving the sustainable supply chain knowledge of the
chemical industry. This included addressing Scope 3 greenhouse gas emissions. Members of TfS created the first Product Carbon Footprint (PCF)
Guidelines to enable chemical companies and their suppliers to share and develop high-quality carbon footprint data. Syensqo used these PCF
Guidelines to develop our own PCF software, which is currently at the pilot stage.
In 2023, Syensqo went a step further in using the tools provided by TfS. TfS offers a PCF data sharing solution which is currently being piloted. The
pilot will run until the first quarter of 2024. Syensqo called on our top suppliers to collect and share the product carbon footprint of the raw materials
they supply as part of the pilot phase. The PCF data sharing solution will facilitate large-scale exchange of PCF data and play a vital role in driving the
decarbonization of the industry.
TfS also has an extensive capability building and training program, which includes the TfS Academy. Launched in 2022, the TfS Academy is the
capability-building hub for TfS members and their procurement team, as well as for suppliers. With over 390 courses in 11 languages by the end of 2023,
the Academy enables stakeholders to learn about the most pertinent and trending sustainability procurement topics. Syensqo’s procurement team
participates in this TfS Academy.
ESG risk in the supply chain
To tackle human rights and environmental impacts across our value chains, we have developed an ESG risk management approach for our supply chain.
The aim is to comply with the existing and upcoming ESG regulations, especially on environment and human rights. This requires corporate governance
practices to better integrate risk management and risk mitigation in their processes. Our policy for ESG Risk Management provides a systematic approach
for risk identification and risk severity assessment of more than 62 upstream value chains and their operating countries, and triggers risk mitigation action
plans. Thanks to our due diligence process, 11suppliers conducted a TfS audit in 2023 and 1,100 suppliers performed an EcoVadis assessment.
In addition to our internal risk management framework, we also use a third-party risk management tool, called Ethixbase, to carry out screening for
adverse media screening on:
· Environmental social and governance
· Anti-bribery and corruption
· Human rights and modern slavery
About 5,000 of our suppliers considered as high and medium risk have been screened though the Ethixbase platform.
Supplier Code of Business Integrity
Our Supplier Code of Business Integrity is integral to the implementation of our Responsible Procurement Policy. It is fully aligned with Syensqo’s Code
of Business Integrity and inspired by the UN Global Compact principles and Responsible Care
®
practices.
All written procurement contracts must refer to the Supplier Code of Business Integrity or an acceptable alternative. Suppliers or partners are invited to
report any breach of Syensqo’s ethical policies or Supplier Code of Business Integrity through the Syensqo Ethics Helpline. Every report will be carefully
reviewed by the Ethics and Compliance team, who review the case and conduct an investigation as appropriate.
Syensqo is concerned that the trade in tantalum, tin, tungsten and gold, and the metals known as 3TGs that are refined from such minerals and mined in
certain conflict-affected and high-risk regions, such as the Democratic Republic of the Congo and neighboring countries, may be contributing to human
rights abuses. We are continually working to improve our awareness of 3TGs included in products, components and materials supplied to Syensqo.
We continue to work to verify the integrity of our sourcing, and to support the actions of governments, our customers and suppliers in achieving this
Syensqo Ethics Helpline aim globally. If our suppliers fail to meet our expectations in this regard, we will take these factors into consideration when
making future business and sourcing decisions.
Our supply chain due diligence processes were audited both internally and externally by one of our major customers.
3.5.3. Indicators
EcoVadis assessment
During the year, a total of 1,100 Syensqo suppliers were assessed through EcoVadis, including 221 of our core suppliers.
Supplier diversity
In 2023, Syensqo performed an analysis to assess the diversity status of its supplier database in North America. It revealed that 2.3% of Syensqo suppliers
based in the United States are diversity-certified by Coupa, a third party screening database.
Raw materials
As a large chemical manufacturer, Syensqo uses raw materials from a range of suppliers and sources: the overall volume purchased in 2023 was over
1.22million metric tons.
NON-BIOSOURCED AND BIOSOURCED RAW MATERIALS – MATERIAL PURCHASED
2023 2022
Mineral products 1,000 metric tons 275 309
Biochemical products 1,000 metric tons 111 124
Natural gas 1,000 metric tons 140 158
Petrochemical 1,000 metric tons 336 431
Other raw materials 1,000 metric tons 69 68
Total 1,000 metric tons 931 1,090
3.6. Main partnerships
SDG 17
IndustriALL Global Union
Building on 20 years of strong industrial relations between IndustriALL and Solvay, Solvay signed an improved Global Framework Agreement (GFA) on
March 31, 2022. As part of Solvay, Syensqo was covered by this agreement in 2023. The content of the agreement was strengthened in several important
areas, including:
· Telework rights
· C190
· EU due diligence and UN binding treaty – supply chain oversight
· Just transition
· Conflict resolution
· Maintaining the agreement following the split of the company
· Workers’ rights in health and safety
· Skills transfer
· Battery supply chain
· US Taskforce Agreement renewed for the duration of the GFA
The four-year agreement includes serious commitments on due diligence along the supply chain. Taking note of the different international standards on
this issue, the agreement establishes a new working group of workers and management to investigate supplier respect for core labor rights and seek
remediation where problems are found. We commit to suspend contracts with suppliers that fail to remedy human rights and environmental abuses
following warnings.
Syensqo remains committed to the values of the Global Framework Agreement and will sign a similar agreement with IndustriALL in the first quarter of
2024.
Ellen MacArthur Foundation
Syensqo, through Solvay, has been engaged with the Ellen MacArthur Foundation since 2018 to share and learn, to accelerate our transition to a circular
economy, and to engage with them to promote our leadership in the transition.
Syensqo and the Ellen MacArthur Foundation have signed a Strategic Partner agreement for three years, focusing on advancing the circularity and
sustainability agenda within the chemical sector. The partnership underscores Syensqo’s commitment to actively contribute to the transformation of
value chains to circular business models. As a continuation of the existing partnership with Solvay before the spin-off of Syensqo in December 2023, this
renewed partnership will enable the Foundation network to continue relying on Syensqo’s input and expertise, while also supporting its efforts to find
new solutions to eliminate waste, make products and materials circular, and regenerate nature.
Wildlife Habitat Council
Syensqo joined the Wildlife Habitat Council (WHC) in 2023. This international NGO works with businesses to encourage, promote and certify biodiversity
conservation to enhance its nature ambitions. The partnership helps us to better focus our efforts on biodiversity and identify areas for improvement,
both at our sites and in collaboration with our customers.
WHC is the only international conservation NGO focused exclusively on the private sector and is a leader in taking bold action for biodiversity conservation
through partnerships and education. WHC provides a framework for voluntary conservation action on a wide variety of corporate lands, promoting a
collaborative and comprehensive approach to conservation activities around the world.
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Membership in the WHC helps us to implement conservation projects that are locally relevant, practical and adaptable to any regulatory requirements,
but which don’t conflict with operations. As part of our partnership, we work to mainstream biodiversity across sectors, in collaboration with our partners
and sites, taking concrete actions to protect species and habitats, and deliver impact through biodiversity restoration and enhancement at a local level.
World Alliance for Efficient Solutions (Bertrand Piccard)
Syensqo has taken over from Solvay and is a member of the World Alliance for Efficient Solutions, created by Solar Impulse founder Bertrand Piccard to
promote efficient technologies, processes and systems that help improve the quality of life on earth. Alliance members consist of startups, companies,
institutions and organizations.
The strong partnership has enabled Syensqo to work together with the Solar Impulse Foundation (SIF) to develop sustainable solutions to fight climate
change. The SIF’s objective was to identify, select and label “1,000 solutions to change the world,” helping to fight climate change and improve the
quality of life on earth.
The Alliance surpassed its target with more than “1,500 solutions to change the world” in 2023 and committed to going further. Among these solutions
are six Syensqo products, all aligned with key megatrends that will contribute to a more sustainable world, such as clean mobility, lightweighting,
electrification and resource efficiency.
R&I partnerships
Syensqo has set up Joint Research Units with the National Scientific Research Center (CNRS) and universities in Bordeaux, France, focused on
microfluidics, high throughput screening, digital and artificial intelligence, and in Shanghai, China, focused on organic chemistry, catalysis, carbon
cycling and sustainability. Other long-term partnerships established with École Polytechnique Fédérale de Lausanne (EPFL) and the National Institute
of Advanced Industrial Science and Technology, Tsukuba (AIST), have delivered very significant results on modeling and machine learning. A series of
more recent collaborations have also been launched on topics related to energy generation and storage, bio-based chemistry, advanced polymers and
formulations, with institutions such as the University of Chicago, Edinburgh University and Politecnico di Milano.
3.7. Membership in associations
GRI DISCLOSURES 2-28
The Group maintains a dialogue with stakeholders and is a member of several associations at global, regional and national levels. Trade associations
adopt policy positions as close as possible to a consensus. Member companies can still express disagreement in a number of ways, including internal
discussion within working groups or public stances that differ from those of the trade associations.
Each membership in trade and industry associations should be aligned with our business strategy and our company interests – the association should
support Syensqo’s business and company interests, and should be in alignment with Syensqo’s public policy interests. We review our memberships on a
regular basis, to check whether positions taken by associations are still aligned with Syensqo’s interests
Senior Syensqo representatives sit on the steering boards of many of the associations we are a member of. We also participate in working groups and
policy coordination groups. The major association memberships in the regions and countries where Syensqo is present are listed below.
3.7.1. International Council of Chemical Associations
Syensqo CEO, Ilham Kadri, is a member of the Board of Directors. Through Responsible Care
®
, which is an essential part of the ICCA’s contribution to the
Strategic Approach to International Chemicals Management (SAICM), global chemical manufacturers commit to pursuing safe chemical management
and performance excellence worldwide. Syensqo is a signatory of the Responsible Care
®
Global Charter.
3.7.2. European Chemical Industry Council
The European Chemical Industry Council (Cefic) is the forum and the voice of the chemical industry in Europe. Syensqo CEO Ilham Kadri is vice-president
and member of the Cefic Board ExCom. The association facilitates dialogue that allows the industry to share its technical expertise with policymakers
and other stakeholders. Syensqo experts provide input on energy, industrial, environmental and research policy, as well as on issues relating to product
stewardship. Syensqo representatives also work with the different Cefic sector groups on specific issues related to individual substances or groups of
substances. In addition, we play an active role within Cefic in leading a proactive industry response to the need for a more innovative and sustainable
chemical industry. Syensqo also participated on behalf of Cefic in the EU Commission high-level roundtable, an active stakeholder platform with business
representatives, NGOs and academics, on the implementation of the EU Chemicals Strategy for Sustainability.
3.7.3. France Chimie
France Chimie represents chemical sector companies in France in front of public authorities at national, European and international level. The association
integrates 12 regional federations, representing 1,300 companies nationwide, and provides expertise and support relating to technical, economic and
fiscal legislation, and social and labor affairs. Syensqo representatives contribute to all key commissions. This includes those concerning competitiveness;
energy and logistics, which focuses on the decarbonization subsidy plan; and HSE. In 2023, Syensqo, through Solvay, actively supported France Chimie
positions to further decarbonize the chemical industry and promote the use of renewable energy sources.
3.7.4. Federchimica
Federchimica is the Italian chemical industry association. Federchimica facilitates dialogue with regional and national policymakers and government
bodies, by sharing technical expertise and knowledge with policymakers and other stakeholders. Syensqo experts participating in Federchimica provide
input on energy, industrial, environmental and research policy, as well as issues relating to product stewardship.
3.7.5. American Chemistry Council
The American Chemistry Council (ACC) represents a diverse set of companies engaged in the chemistry business. Syensqo sits on the Executive
Committee, as well as on several Board-level committees that contribute to setting the association’s strategy. Syensqo representatives contribute
their expertise to the ACC’s work on transportation, energy, environment, sustainability, chemical management, process safety, trade and product
stewardship issues. Syensqo experts also provide technical input for activities that focus on product-related issues relevant for Syensqo businesses, such
as advanced materials and sustainable technologies. In 2023, Syensqo, through Solvay, actively supported the development and implementation of the
ACC Sustainability Principles. The chemical industry is committed to creating a cleaner, safer and more sustainable future, and has a vitally important role
to play in the critical areas of addressing climate change, improving air and water quality, and the circularity of our products. Syensqo's portfolio, which
spans the key sustainability megatrends of the future, is well positioned to accelerate progress toward these goals.
3.7.6. Indian Chemical Council
The Indian Chemical Council (ICC) is the leading industry body representing all segments of the Indian chemical industry. Syensqo sits on the Executive
Council of the ICC. The ICC monitors and helps frame industry-specific government legislation, formally interacts with the relevant authorities on policies
and regulatory matters, and is recognized as the official voice of the Indian chemical industry. It also provides a forum for dialogue and debate within
the chemical industry, channeling and reinforcing the industry’s endeavors to boost development in India. The ICC promotes the Responsible Care
®
initiative and encourages safety, research and development, energy conservation and quality consciousness within the industry by organizing workshops
and seminars and presenting annual awards recognizing excellence and outstanding contributions to the chemical industry.
3.7.7. China Petroleum and Chemical Industry Federation
The China Petroleum and Chemical Industry Federation (CPCIF) is a comprehensive national industry organization and the official representative of the
Chinese chemical industry in the International Chemical Industry Association (ICCA). The CPCIF promotes the interests of the industry, while also serving
as a bridge between businesses and the government in China. Syensqo is a member of the Multinationals (MNC) sub-committee of the CPCIF, which
represents nearly 70 multinational companies in China. We are a founding member of this committee, which was set up in 2013. Key interests of the
committee include, but are not limited to, industrial policies, regulatory demands, chemical management, carbon trade, sustainability and innovation.In
2023, Syensqo, through Solvay, actively promoted low-carbon practices in the association’s Carbon Working Group. We also contributed expertise to
the CPCIF to prepare input on the central government’s National Development and Reform Commission, aimed at developing China’s carbon system
in line with international standards.
3.7.8. Association of International Chemical Manufacturers
The Association of International Chemical Manufacturers (AICM) represents nearly 70 major multinational companies in the Chinese chemical industry
active in the manufacture, transportation, distribution and disposal of chemicals. Together with other leading international chemical players in China,
Syensqo helps promote Responsible Care
®
and other globally recognized chemical management principles among all stakeholders, advocates for
cost-effective, science- and risk-based policies with policymakers, and strengthens the contributions made by the chemical industry to the economy.In
2023, Syensqo actively promoted the rational implementation of environmental protection and safety administration regulations in AICM, with a focus
on achieving clarification on the industry development balance while respecting the spirit of the Yangtze River Protection Law. Syensqo co-facilitated the
sustainable development panel together with AICM at the Chemical Industry Park Forum.
3.7.9. BusinessEurope
BusinessEurope is the leading European business trade association. Its direct members are national business federations, but selected companies
may participate in BusinessEurope through the Advisory and Support Group (ASG). BusinessEurope and its members campaign on the issues that
most influence the business performance and growth of European companies, in Europe and globally. Syensqo provides input through participation
in working groups dealing with energy, environment and research, as well as trade policy. Syensqo’s position on climate is more ambitious than the
federation position.
3.7.10. European Round Table of Industrialists
The European Round Table of Industrialists (ERT) is a forum that brings together around 50 CEOs of European companies. Syensqo CEO Ilham Kadri is
a member of the Steering Committee of the ERT. Among its activities, the ERT advocates for policies that improve European competitiveness, growth
and employment. In particular, Syensqo actively participates in the working groups dealing with energy, trade, competitiveness and innovation, jobs
and skills, and finance, as well as competition policies. In 2023, Syensqo, through Solvay, focused in particular on promoting the human skills agenda,
supporting the creation of new jobs through the transition to a more sustainable economy.
3.7.11. RECHARGE
RECHARGE is the leading voice of the advanced rechargeable and lithium batteries value chain in Europe. RECHARGE promotes advanced rechargeable
batteries as a core technology that will contribute to a more sustainable and circular Europe. RECHARGE also advocates to ensure a level playing field
internationally that provides continued market access for new and existing rechargeable battery products. Syensqo contributes to the association and
strengthens its value chain approach.
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3.7.12. SEMI
SEMI is the global voice of semiconductor manufacturers. SEMI advocates for a free and open global marketplace, leads workforce development efforts,
connects members to new business opportunities in high-growth markets, nurtures pre-competitive collaboration, and helps accelerate innovation.
Syensqo contributes to the association and strengthens its value chain approach.
3.7.13. Hydrogen Europe
Hydrogen Europe is the leading organization representing European-based companies and stakeholders committed to moving toward a (circular)
carbon-neutral economy. Their vision is to propel global carbon neutrality by accelerating the European hydrogen industry. Syensqo contributes to the
association and strengthens its value chain approach.
3.7.14. World Business Council for Sustainable Development
The World Business Council for Sustainable Development (WBCSD) is a CEO-led organization of over 225 leading businesses working together to
accelerate the transition to a sustainable world. Syensqo – and Solvay before – has been an active member since 2010, and Syensqo CEO Ilham Kadri is
personally engaged, serving as chair of the WBCSD Executive Committee since 2022 and until the end of 2025. She is the first woman chair in the 30-year
history of the WBCSD. Syensqo plays an active role in WBCSD Imperatives, Pathways and Education programs:
· CFO Network and Redefining Value Program: Redefining Value helps companies measure and manage risk, gain competitive advantage and seize new
opportunities by understanding ESG information. By building collaborations and developing tools, guidance, case studies, engagement and education
opportunities to help companies incorporate ESG performance and accountabilities into mainstream business and finance systems, the ultimate goal
is to improve decision-making and external disclosure, eventually transforming the financial system so that it rewards the most sustainable companies.
· Circular Product and Materials Pathway: The future of business is circular, and there’s no room for waste in it. The WBCSD’s circular economy program
brings circularity into the heart of business leadership and practice. It builds a critical mass of engagement within and across businesses and value
chains to spur the circular economy to deliver and scale the solutions needed to build a sustainable world.
· Climate Imperative: The Paris Agreement, national policies and business strategies have sent a decisive and global signal that the start of the transition
to a thriving, clean economy is inevitable, irreversible and irresistible. The WBCSD Climate Imperative facilitates interaction on cutting-edge climate and
energy topics between WBCSD members, their peers and stakeholders as they address critical industry issues and share best practice and solutions.
· Equity Action: Our current society is characterized by a range of dynamic shifts and evolutions. We are faced with a world that is polarizing, a world
that presents risks and opportunities in the way we work, a world that is on the move and a world in which people are living beyond their means. The
WBCSD flagship initiative, the Business Commission to Tackle Inequality (BCTI), is co-chaired by Syensqo CEO Ilham Kadri and sets the foundations
for a cross-sectoral and multi-stakeholder coalition of organizations and their leaders to address inequality at the heart of the business agenda for
sustainable growth.
· Education: the WBCSD places strong emphasis on the need for education on sustainable development and business, with regard to sustainable
development. This is needed to provide a deeper understanding of the opportunities and challenges, the role of business, and to share learning about
business solutions. The WBCSD partners with leading universities such as Yale University, ESADE Business School and INSEAD to support leading
educational programs and tools. Seventeen Syensqo – and previously Solvay – leaders and managers have taken part in the Leadership and LEAP
education programs, which last six months or more.
3.8. Climate risks analysis
In 2023, Syensqo completed the revision of its scenario analysis started in 2022 to understand and assess climate change risks and opportunities, for
both transition risks and physical risks. The objective is to obtain a climate risk and opportunity heatmap, with financial impact and the identification of
risk hotspots based on the latest International Energy Agency (IEA) emission scenarios and IPCC scenarios. This study provides results and insights to
integrate into Syensqo’s risk management practices and strategy.
3.8.1. Scope of the scenario analysis:
3.8.2. Transition risks:
· Focusing on the three most meaningfully exposed business units, based on total emissions (Scope 1, 2 and 3) and exposure to climate sensitive
markets, like automotive, aerospace, consumer goods and agro markets: Specialty Polymers, Composite Materials and Novecare. These three GBUs
represent 52% of Syensqo’s 2022 sales.
· Two International Energy Agency (IEA) scenarios: 1.5°C scenario (IEA Net Zero Emissions Scenario 2021) and 3°C scenario (IEA Stated Policy Scenario
2021). These two scenarios were selected to include one 1.5°C scenario and one “business as usual” scenario. IEA was selected for the combination
of quantitative and qualitative assumptions.
· Two time horizons: 2030 and 2050.
· Using a tool for climate scenario analyses provided by a leading audit, tax and consulting services company, which adds an external perspective to our
analyses and challenges Syensqo’s assumptions.
· Quantitative assumptions of price and cost changes, volume changes and adaptation potential (cost pass-through) were taken from the consultant’s
models. This included price trajectories up to 2050 for oil, coal, gas, CO
2
, electricity and energy usage in transport, in our own operations and upstream,
by regions, as presented in the IEA scenarios.
· Analysis of the market dynamics and identification of the essential characteristics of individual sites was based on the consultant and Syensqo sector
and climate expertise, considering products sold in main markets, namely automotive, aerospace, consumer goods, agro feed and food, industrial
applications, resources and environment, electronics and buildings.
· The analysis considered procurement impact, own operations impact and customer impact, to assess the financial impact on each global business unit.
The main results of the scenario analysis are published in Syensqo’s Annual Integrated Report.
· Own operations countries: all countries in which Syensqo has a site.
· Procurement countries: top 25 by procurement amount (in euros) and headquarter country.
· Market countries: top 25 by revenue (Syensqo’s sales in euros).
Physical risks
· Focusing on six Syensqo sites based on most exposed contribution margin: Augusta (GA), Marietta (OH) and Greenville (SC) in the US, Tavaux in
France, Spinetta Marengo in Italy, and Changshu in China.
· Two scenarios:
- >4°C of global warming (corresponding with the IPCC’s RCP 8.5 and SSP-5.85).
- 3°C of global warming (corresponding with the IPCC’s RCP 4.5 and SSP-2.45), corresponding to a “business as usual” reference scenario.
· Three time horizons: 2030, 2050 and 2100.
· Using a tool for climate scenario analyses provided by a leading audit, tax and consulting services company, which adds an external perspective to our
analyses and challenges Syensqo’s assumptions.
· Quantitative assumptions of the frequency of climate hazards and of vulnerability to a hazard at a given location were taken from the consultant’s
model, based on Jupiter ClimateScore™ Global and UCL EM-DAT. Financial impacts were calculated from asset damage and business interruption
and averaged over 20 years, spanning before and after the milestone selected.
As stated by the Task Force on Climate-related Financial Disclosures in their Guidance on Scenario Analysis for Non-Financial Companies (2020),
“scenario analysis helps companies in making strategic and risk management decisions under complex and uncertain conditions such as climate change.
It allows a company to understand the risks and uncertainties it may face under different hypothetical futures and how those conditions may affect its
performance, thus contributing to the development of greater strategy resilience and flexibility”. Actual results or future events may differ materially from
those expressed or implied by such analysis.
3.8.3. Transition risks and opportunities
Main conclusions of the scenario analysis
· In total, market dynamics cause sales of the three businesses to grow by 70%, to €7.6 billion by 2050, in each scenario, 1.5°C and 3°C. An important
parameter is the assumption of a cap on growth in battery applications in the 1.5°C scenario. The specialty polymers business has the most significant
growth opportunities in a 1.5°C world, with demand increasing in most consumer segments, while the composite materials business has more
opportunities in a 3°C world, and faces the risk of a reduction of short-haul flights in a 1.5°C world. Novecare growth is similar in both scenarios, with
demand per market responding differently to each scenario, contributing to an overall balanced outcome.
· Resilience to cost increases is high in the specialty polymers business and composite materials. Novecare faces risk for the part of its supply chain
starting from palm oil and other vegetable oil alternatives that are CO
2
emissions and water intensive. Focusing on increasing production capacities for
the specialty polymers business should be prioritized in a 1.5°C world.
· Suppliers should be engaged to reduce Scope 3 emissions, and CO
2
intensity in the supply chain should be monitored. Shifting the Novecare supply
chain to sustainable vegetable oil alternatives is expensive, but it may result in a reputation boost for Syensqo and decrease costs for these alternatives
in the long run.
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Examples of actions decided upon in 2022 and 2023 to manage the risks and opportunities identified by the scenario analysis include:
Opportunity seizing:
· Solvay (now Syensqo) and Orbia’s announcement in November 2022 of the creation of a joint venture in North America to supply critical materials to the
battery market. The joint venture will create the largest PVDF production facility for battery materials in the region. The total investment is estimated at
around $850 million, partially funded by a grant from the US Department of Energy totaling $178 million.
· In November 2023, Syensqo confirmed plans to build a new battery-grade PVDF facility in Augusta, Georgia. The new operations will provide material
for more than 5 million electric vehicle (EV) batteries per year at full capacity and create hundreds of jobs throughout the value chain. Syensqo and Orbia
have signed their joint venture agreement for this project. The partnership secures Orbia’s supply of needed materials for Syensqo to manufacture our
suspension-grade polyvinylidene fluoride (PVDF) production, which is used as a lithium-ion binder and separator coating in electric vehicle batteries.
Syensqo will bring its process technology and global market know-how to this venture.
Resilience:
· Engaging on the CO
2
intensity of the supply chain, we have aligned with Syensqo’s suppliers on the product carbon footprint data of purchased raw
materials for over 40% of Syensqo’s Scope 3.1 raw materials’ greenhouse gas emissions’ upstream impact, as a first step to resolute engagement with
strategic suppliers to cut the carbon footprint of their supplies to Syensqo.
· Syensqo’s announcement in October 2023 that we are rolling out a new product carbon footprint digital tool, starting with our Novecare business: this
information allows our business teams, our suppliers and customers to identify areas in which emissions can be reduced, and regularly track progress.
Product and market related risks
Our Sustainable Portfolio Management (SPM) global and systematic assessment helps alert our businesses to sustainability market signals, relating in
particular to climate risks and opportunities, to anticipate their impact and develop the right answers in a timely manner. SPM is a robust, fact-based,
future-oriented compass that allows us to take a snapshot of products’ sustainability risks and opportunities in their business environment.
SPM informs us about the contribution Syensqo’s products make to sustainability along the value chain, considering both:
· Their environmental manufacturing footprint and the associated risks and opportunities – vertical axis – with a quantitative assessment using 21 impact
indicators.
· How their applications bring benefits or face challenges from a holistic market perspective – horizontal axis – with a qualitative assessment of social and
environmental topics covering four main themes, namely health and safety, climate change, resources and opinion leaders.
Climate change is one of the focus areas for SPM assessment. This involves identifying if a product in a given application contributes to a climate
change benefit or challenge. Product-Application Combinations (PACs) that lead to benefits are identified as “climate solutions,” while those that pose
challenges are considered “climate challenges.”
Syensqo’s Sustainable Portfolio Management tool classifies a sustainable solution as a product in a given application that makes a significant climate
change contribution to the customer’s performance while also demonstrating a lower carbon impact in its production phase. In 2023, sales from “climate
solutions” reached €1.2 billion.
The SPM methodology is also used to identify eligible enabling activities, requested under the Taxonomy’s Delegated Act 2021. For more details about
Taxonomy reporting, see section 5.1., “Product design and life cycle management” in the section EU Taxonomy Reporting.
SPM is a key tool for enabling Syensqo to integrate the sustainability dimension into strategic and operational decision making in key business processes,
such as strategy, research and innovation, investment, marketing and sales, and mergers and acquisitions. We also apply the SPM tool to strategic
projects, using the same logic as for our portfolio, to make sure that these projects are heading toward business solutions that support growth and value
creation. This makes SPM a key tool for Syensqo to identify if an investment, or a strategic or innovation project can be considered a climate transition
opportunity for Syensqo.
3.8.4. Physical risks
Main conclusions of the scenario analysis
· Overall risk levels are moderate for the sites selected in both scenarios by 2050. The Changshu site is the most financially impacted. Asset damage is
up to two times annual maintenance costs in total. Business interruption in absolute terms is generally lower than asset damage.
· The difference between the 3°C and 4°C scenarios is marginal for the sites assessed.
· Convective storms and floods might cause the highest absolute damage across all sites up to 2090. The strongest increases are caused by heat
waves, with a solid acceleration by 2050, and droughts, with a solid acceleration after 2050. Rising sea levels is a risk for the Changshu site, which has a
moderate increase over time. Tropical cyclones and wildfires do not pose a significant financial impact across all locations.
Syensqo is developing a forward-looking add-on based on IPCC-based models to complement our current assessments of climate-related physical risks
and manage the risks identified by the scenario analysis.
Acute
Syensqo sites in areas currently exposed to natural hazards, with loss expectancy, calculated by our insurers, of higher than €10 million (physical damage
and contribution margin loss):
· 3 Syensqo sites in 100-year frequency (1% chance per year) flood areas, with a loss expectancy range of €14-30 million: Marietta, US; Orange, US;
Winona, US.
· 8 Syensqo sites in 500-year frequency (0.2% chance per year) flood areas, with a loss expectancy range of €11-198 million: Willow Island, US; Lock Haven,
US; Pasadena, US; Marietta, US; Winona, US; Anaheim, US; Orange Texas, US; and Changsu, China.
· 2 Syensqo sites in a wind exposed area, with a loss expectancy range of €10-40 million: Orange, US and Baton Rouge, US.
· Syensqo has a damage insurance program in place to cover catastrophic risks, and covers smaller losses through self-insurance.
· The freeze risk materialized during the 2021 Texas deep freeze event, which impacted 12 Syensqo sites and led to €10 million in total losses.
· The risk is continually assessed throughout the year, with the support of Syensqo’s property insurer FM Global and reinsurers, like Swiss Re, based on
their proprietary flood modeling. Each site with reported insured values greater than €50 million is visited by FM Global loss prevention engineers and
benchmarked with FM Global’s resilience index, which takes into account inherent risks and completion of any loss prevention recommendations.
· Based on FM Global’s benchmarking, Syensqo Corporate Insurance and Prevention proposed an action plan to the Executive Leadership Team to
improve risks. The goal was set that all sites should reach a minimum of 75% on the Resilience Index by 2025. As of October 2023, Syensqo’s average
resilience index is 68%.
Chronic
Chronic physical risks are a substantive risk category for Syensqo. They are considered as relevant and are included in Syensqo’s climate-related risk
assessment.
We have a systematic classification process to help us integrate ESG risks, including climate-related risks, into our Enterprise Risk Management
methodology, by establishing a catalog of ESG risk categories. In this catalog, climate-related risks are listed according to the TCFD classification. Water
stress is a well identified chronic physical risk linked to climate change for Syensqo.
Using the screening method from the Water Risk Filter (WRF) of WWF, we have identified 15 Syensqo production sites located in areas subject to high
or very high hydric stress, of which three have been identified as having a high potential business impact. The highest contribution margin value for any
of these sites is €83 million.
Together, these 15 sites, which represent 23% of our production facilities, withdraw 2.6 million cubic meters of freshwater, out of a total of 77.4 million
cubic meters withdrawn by all Syensqo’s production sites. This amounts to 3.4% of the Group’s freshwater withdrawal.
LOCAL RISK ASSESSMENT
The sites pinpointed by the WRF screening tool have been prioritized (from P0 high to P3 low) through dialogues with the plants based on local
considerations and the results of a fact-based questionnaire. Thirteen sites are in the highest priority classes, P0 and P1. For seven sites, risk mitigation
plans have already been developed. Plans for the remaining sites will be developed during 2024 and 2025. The sites where urgent actions will be taken
are Melle and Clamecy in France, Atequiza in Mexico and Borger in the US.
4. CLIMATE AND NATURE
4.1. Greenhouse gas emissions
4.1.1. Definitions
GRI DISCLOSURES 3-3 305-1 305-2 305-3 305-4 305-5
SDG 13 14 15
Syensqo uses the following references to address greenhouse gas emissions:
· The Guidance for Accounting and Reporting Corporate Greenhouse Gas Emissions (GHG) in the Chemical Sector Value Chain, published by the World
Business Council for Sustainable Development.
· The Greenhouse Gas Protocol Corporate Accounting and Reporting Standard.
· The Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Standard. Global warming potentials are taken from the reference table used in the
current version of the European Regulation on the fluorinated greenhouse gases (Regulation (EU) No 517/2014), meaning the Fifth Assessment Report
of the Intergovernmental Panel on Climate Change (AR5).
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To better reflect our sustainability policy, we decided to use the market-based method to calculate CO
2
emissions associated with purchased electricity
(Scope 2). To comply with Global Reporting Initiative requirements, we apply the following criteria, listed in decreasing order of priority, when selecting
the CO
2
emission factor of each electricity supply contract:
· Energy attribute certificates: emission factors resulting from specific instruments, such as green energy certificates.
· Contract-based: the emission factor obtained from contract agreements on specific sources for which there is no emission of specific attributes.
· Supplier or utility emission rates: the emission factor disclosed as a result of the supplier’s retail mix.
· Residual mix: if a residual mix is unavailable, grid-average emission factors are used as a proxy.
Location-based: if none of the above factors are available, we use the national emission factor published by national authorities or the International
Energy Agency. Based on a World Resources Institute (WRI) recommendation, Emissions and Generation Resource Integrated Database (eGRID)
emission factors published by the United States Environmental Protection Agency are used for the US, instead of the state emission factor. Similarly, grid
emission factors published by the Ministry of Ecology and Environment are used for China, instead of the state emission factors.
4.1.2. Management approach
Syensqo has a 2030 objective to reduce Scope 1 and 2 greenhouse gas emissions by 40%, as compared to 2021, and to reach carbon neutrality on
Scope 1 and 2 GHG emissions by 2040. Syensqo has also set a 2030 target to reduce by 23% Scope 3 greenhouse gas emissions, as compared to 2021,
from its “Focus 5” categories both upstream and downstream in the value chain, which represents over 73% of the total Scope 3 emissions. Syensqo’s
“Focus 5” categories of Scope 3 GHG emissions are: (1) purchased goods and services (Category 1), which includes impacts of upstream transportation
and distribution (Category 4), and waste generated in operations (Category 5); (2) fuel- and energy-related activities (Category 3); (3) processing of sold
products (Category 10); (4) use of sold products (Category 11); and (5) end-of-life treatment of sold products (Category 12).
To achieve our targets, we are taking a range of different actions:
· In our plants: this includes transforming our energy mix and investing in clean technologies. We are developing a growing pipeline of energy transition
opportunities within our Star Factory program, through collaborations between a dedicated team of experts in energy transition and operational teams
at our industrial sites. For greenhouse gas emissions not related to energy, a task force with strong technical support continues to optimize the impact
of the clean technologies recently developed. In addition, Syensqo applies an internal carbon price of €100 per metric ton of CO
2
to all greenhouse gas
emissions in our capital investment decisions worldwide.
· With our suppliers: we are engaging to align on the carbon footprint data of the purchased raw materials and to develop options to reduce their
Scope3 impact.
· We are rolling out a new product carbon footprint digital tool, aligned with ISO 14067 and the Product Carbon Footprint Guideline for the Chemical
Industry issued by Together for Sustainability (TfS). The information allows our business teams, our suppliers and customers to identify areas in which
emissions can be reduced, and regularly track progress.
An externally verified greenhouse gas emissions reporting system, and responses to rating agencies such as the Carbon Disclosure Project, help the
Group align our efforts with the magnitude of the greenhouse gas challenges we face.
4.1.3. Indicators
Syensqo’s target is to reduce greenhouse gas emissions by 40% by 2030, compared to the 2021 baseline.
GREENHOUSE GAS EMISSIONS – TARGET ACHIEVEMENT
Total greenhouse gas emissions (Scope 1 and 2) in 2023 Mt CO
2
eq
1.6
Total greenhouse gas emissions (Scope 1 and 2) in 2022 – as published Mt CO
2
eq
1.8
Total greenhouse gas emissions (Scope 1 and 2) in 2021 – as published Mt CO
2
eq
2.0
Variation due to changes in reporting scope (structural changes) Mt CO
2
eq
0.1
Variation due to changes in methodology or improvements in data accuracy Mt CO
2
eq
0.0
Emissions increase or reduction at constant scope year on year Mt CO
2
eq
-0.2
Cumulative emissions increase or reduction since 2021 at constant scope Mt CO
2
eq
-0.5
Percentage increase or reduction since 2021 at constant scope
(reference 2021: Mt CO
2
eq)
%
-25%
In 2023, emissions of other GHGs decreased by 0.2 Mt CO
2
eq compared to 2022, as a result of our projects at our Spinetta site in Italy. A lower activity
led to a decrease of 0.1 Mt CO
2
eq.
A change in the reporting scope took place, with the integration of all emissions in the joint venture in Zhenjiang, China, and at our Tavaux site in France
in the reporting scope for 2023. This led to an increase of 0.1 Mt CO
2
eq on Scope 1 and 2 market based, mainly on Scope 2 in 2022. Emissions related to
business partner activities at the two sites were not included in 2022.
The cumulative emissions reductions since 2021 at constant scope is 0.5 Mt CO
2
eq. This is in line with our target for 2030.
GREENHOUSE GAS EMISSIONS (SCOPE 1 AND 2)
Units 2023 2022 2021
Direct and indirect CO
2
emissions (Scope 1 and 2) Mt CO
2
1.3 1.4 1.7
Other greenhouse gas emissions according to Kyoto Protocol (Scope 1) Mt CO
2
eq
0.3 0.4 0.3
Total greenhouse gas emissions according to Kyoto Protocol Mt CO
2
eq
1.6 1.8 2.0
Other greenhouse gas/CO
2
emissions not according to Kyoto Protocol (Scope 1) Mt CO
2
eq
<0.1 0.1 0.0
DIRECT GREENHOUSE GAS EMISSIONS (SCOPE 1)
Units 2023 2022 2021
Methane – CH
4
Mt CO
2
eq 0.0 0.0 0.0
Nitrous oxide – N
2
O Mt CO
2
eq 0.0 0.0 0.0
Sulfur hexauoride – SF
6
Mt CO
2
eq 0.0 0.0 0.0
Hydrouorocarbons – HFCs Mt CO
2
eq 0.1 0.0 0.0
Peruorocarbons – PFCs Mt CO
2
eq 0.2 0.3 0.3
Nitrogen triuoride – NF
3
Mt CO
2
eq 0.0 0.0 0.0
Total other greenhouse gas emissions Mt CO
2
eq 0.3 0.4 0.3
Carbon dioxide – CO
2
Mt CO
2
1.0 1.0 1.1
Total direct emissions Mt CO
2
eq 1.2 1.5 1.4
Within Syensqo’s perimeter, our main greenhouse gas other than CO
2
is CF
4
in Spinetta. We have been working for several years to reduce these CF
4
emissions.
INDIRECT CO
2
EMISSIONS (SCOPE 2)
Units 2023 2022 2021
Gross market based
Electricity purchased for consumption Mt CO
2
0.0 0.1 0.2
Steam purchased for consumption Mt CO
2
0.3 0.4 0.4
Total indirect CO
2
– Gross market-based Mt CO
2
0.3 0.4 0.6
Gross location based
Electricity purchased for consumption Mt CO
2
0.4 0.4 0.4
Steam purchased for consumption Mt CO
2
0.3 0.4 0.4
Total indirect CO
2
– Gross location based Mt CO
2
0.7 0.8 0.8
Since implementing the market-based method, we carry out a detailed review of emissions factors for purchased electricity at all of our sites every year.
Greenhouse gas emissions Scope 3
Scope 3 greenhouse gas emissions are estimated as follows:
Note:
As required by the GHG Protocol Technical Guidance for calculating Scope 3 emissions (v1.0), we provide below a description of our specific
methodologies used to calculate each Scope 3 emission category.
Emissions reported herein under category 3.1 (purchased goods and services) include emissions from categories 3.4 (upstream transportation and
distribution) and 3.5 (waste generated in operations). They are calculated by the difference between, on one hand, cradle-to-gate emissions of our
products (including manufacturing) and, on the other hand, Scope 1, Scope 2 and emissions from category 3 (fuel and energy-related activities), which is
not aligned with industry practices and is not a methodology explicitly mentioned in the Technical Guidance. We have identified a limit in the accuracy
of the methodology with the reconciliation between energy bills of materials in life cycle assessments and energy in Scope 1 and 2 emissions which
affects the categories of emissions Scope 3.1, Scope 3.4 and Scope 3.5 (purchased goods and services; upstream transportation; distribution and waste
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generated in operations). The revision of the methodology for the three categories by end of 2024 builds upon progress of the Product Carbon Footprint
project in 2023 and will include their direct determination (based on raw materials quantities purchased x emission factor), address the identified limitation
in accuracy, disaggregate emissions in the inventory for these categories and increase the use of suppliers’ specific emission factors
Category
3.1. Purchased goods and services: we carry out a cradle-to-gate Life Cycle Analysis (LCA) for most of our products, representing 93% of our total sales.
The calculated greenhouse gas emissions are extrapolated to reach the totality of our purchases. They include all emissions related to raw material
extraction and precursor processing, indirect emissions from energy use for these operations, and transport between suppliers and to our plants.
3.2. Capital goods: we have used the emission factors of the WBCSD Guidance for Accounting & Reporting Corporate GHG Emissions in the Chemical
Sector Value Chain, assuming that capital goods are a mix of concrete and steel.
3.3. Fuel- and energy-related activities not included in Scope 1 or Scope 2: they represent GHG emissions that occur during the extraction and transport
of energy.
3.4. Upstream transportation and distribution: this is included in category 1 (see above), purchased goods and services.
3.5. Waste generated in operations: this is included in category 1 (see above).
3.6. Business travel: business travel undertaken by Syensqo employees is recorded by our travel agency and monitored by our purchasing department.
For air and rail travel, travel mileage is recorded. This covers more than 95% of our air and rail travel. The calculated greenhouse gas emissions are
extrapolated to represent the totality of our travel. For each transportation mode, mileage is converted into CO
2
equivalent using emission factors
from ecoInvent.
3.7. Employee commuting: the estimation is based on an assumption that all employees commute every day in an average diesel or petrol car, except
on homeworking days.
3.8. Upstream leased assets: this is not applicable as we have no upstream leased assets.
3.9. Downstream transportation and distribution: greenhouse gas emission during transportation of our products from our plants to our customers are
reported and monitored by our supply chain excellence department. Emissions factors from the European Chemical Industry Council (Cefic) are used
to calculate total emissions.
3.10. Processing of sold products.
3.11. Use of sold products.
3.12. End-of-life treatment of sold products: the computation principles for these three categories are the same. The emissions due to product processing
and transformation by third parties subsequent to sale by Syensqo are calculated according to product chemical composition and expected
chemical reactions likely to generate emissions during the transformation, the usage and end-of-life of our products.
3.13. Downstream leased assets: this is not applicable as Syensqo has no leased assets.
3.14. Franchises: this is not applicable as Syensqo has no franchises.
3.15. Investments: Scope 1 and 2 emissions from non-consolidated entities (that are not consolidated in Syensqo’s Scope 1 and 2) are reported according
to Syensqo’s financial interest in these entities, to ensure consistency with our financial statements.
In 2023, a change in methodology has taken place for emissions reported in category 3.1, which includes emissions in categories 3.4 and 3.5, by excluding
emissions related to energy sales to third parties from the Scope 1, Scope 2 and Scope 3.3, thereby aligning with the boundary for cradle-to-gate LCA
emissions of products. It has induced +0.4 MT CO
2
eq.
“Focus 5” categories include purchased goods and services (category 3.1), fuel- and energy-related activities (category 3.3), processing of sold products
(category 3.10), end-of-life of sold products (category 3.11) and end-of-life treatment of sold products (category 3.12).
OTHER INDIRECT GREENHOUSE GAS EMISSIONS (SCOPE 3)
Units 2023 2022 2021
Purchased goods and services Mt CO
2
eq
4 3.8 3.2
Capital goods Mt CO
2
eq
2.1 1.6 1
Fuel- and energy-related activities Mt CO
2
eq
0.3 0.3 0.3
Upstream transportation and distribution Mt CO
2
eq
Waste generated in operations Mt CO
2
eq
Business travel Mt CO
2
eq
0.003 0.003 0.001
Employee commuting Mt CO
2
eq
0.02 0.02 0.016
Upstream leased assets Mt CO
2
eq
Downstream transportation and distribution Mt CO
2
eq
0.1 0.3 0.3
Processing of sold products Mt CO
2
eq
0.3 0.5 0.002
Use of sold products Mt CO
2
eq
0.001 0.002 0.0001
End-of-life treatment of sold products Mt CO
2
eq
1.6 2.2 3.2
Downstream leased assets Mt CO
2
eq
Franchises Mt CO
2
eq
Investments Mt CO
2
eq
0 0 0
Sub-total Scope 3 “Focus 5” categories Mt CO
2
eq
6.1 6.8 6.8
Total Scope 3 emissions Mt CO
2
eq
8.4 8.7 8.1
Variation due to changes in methodology or improvements in data accuracy Mt CO
2
eq
0.4
Sub-total Scope 3 “Focus 5” categories variation at constant scope since 2021 Mt CO
2
eq
-1.0
Total Scope 3 greenhouse gas emissions indicator is in the scope of the reasonable assurance report from our independent auditor while Scope 3 “Focus
5” categories greenhouse gas emissions indicator is not in the scope of our independent auditor.
In 2023, total Scope 3 emissions reduced by 0.3 Mt CO
2
eq. In particular, emissions from purchased goods and services increased by 0.4 Mt CO
2
eq from
a change of methodology and reduced by 0.2 Mt CO
2
eq from activity. Emissions from end-of-life treatment of sold products reduced by 0.4 Mt CO
2
eq
from the phase-out of an impacting product and reduced by 0.2 Mt CO
2
eq from activity.
The cumulative emissions reductions for the “Focus 5” categories since 2021 at constant scope is 1.0 Mt CO
2
eq. This is in line with our target for 2030.
4.1.4. Key achievements
In 2023, 73% of our sites in Scope 1 and 2 have 100% of their electricity supplied from renewable sources.
At our Hengchang plant in China, a mechanical vapor recompression unit was commissioned and a coal-to-gas fuel switch was co-orchestrated with the
steam supplier.
At our Spinetta site in Italy, new add-ons were made to the innovative clean technology developed in-house and commissioned in 2019 and have led to
a new decrease of 0.1 Mt
CO
2
eq in CF
4
emissions in 2023
4.2. Energy
GRI DISCLOSURES 3-3 302-1 302-2 302-3 302-4
SDG 7 13
4.2.1. Definitions
The different components of Syensqo’s energy consumption are converted into primary energy sources as follows:
· Fuels, using the net calorific values.
· Steam purchased, taking into account the boiler efficiency reference value for the type of fuel used to generate the steam, for example 90% efficiency
based on the net calorific value for natural gas.
· Electricity purchased, assuming an average efficiency of 39.5% for all types of power production, except for nuclear power (33%), hydro (100%), solar
(100%) and wind (100%), based on net calorific value (source: International Energy Agency – IEA).
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4.2.2. Management approach
Syensqo industrial activities generally have a relatively low energy content as a percentage of the sales price, as is the case for fluorinated polymers, for
example.
The Group considers it particularly important to swiftly transition our energy consumption toward zero- or low-carbon sources, in conjunction with energy
efficiency and without compromising competitiveness or supply security. We have therefore implemented the following strategic initiatives and practices:
· Star Factory program, to create and manage energy transition roadmaps for each site covered.
· Team of energy transition experts in Syensqo’s Industrial function to support the creation of roadmaps for each site and the development of projects
worldwide, taking into account the specifics of each site’s local energy market.
· Technological leadership in processes and high-performance industrial operations to minimize energy consumption.
· Diversification and flexible use of the different types and sources of primary energy.
· Periodic review of the condition of industrial sites’ energy assets and connections.
· Strategic supply coverage, with long-term partnerships and medium- to long-term contracts, and price-hedging protection mechanisms when needed.
In 2023, Star Factory reached 75% coverage of Syensqo’s total energy consumption.
4.2.3. Indicators
PRIMARY ENERGY PURCHASE FOR CONSUMPTION FROM NON-RENEWABLE AND RENEWABLE SOURCES
Units 2023 2022
Solid fuels PJ 0 0
Liquid fuels PJ 0.1 0.1
Gaseous fuels PJ 17.0 18.1
Total non-renewable energy sources PJ 17.1 18.1
Renewable energy sources PJ 0.6 0.5
Primary energy purchased for consumption PJ 17.6 18.6
For 2022 and 2023, the total is different than the sum due to round ups.
Primary energy consumption decreased by 6%. This decrease is linked to lower activity levels.
SECONDARY ENERGY PURCHASED FOR CONSUMPTION
Units 2023 2022
Electricity PJ 5.5 5.7
Heating PJ 0 0
Cooling PJ 0 0
Steam PJ 4.0 4.8
Total PJ 9.5 10.4
For 2022, the total is different than the sum due to round ups.
The decrease of secondary energy purchased for consumption in 2023 from 2022 is due to lower activity.
ENERGY SOLD
Units 2023 2022
Electricity PJ 2.3 2.1
Heating PJ 0 0
Cooling PJ 0 0
Steam PJ 4.4 4.7
Total PJ 6.7 6.8
In 2023 our sales of energy decreased slightly compared to 2022.
TOTAL RENEWABLE ENERGY
Units 2023 2022
Energy produced from renewable energy sources PJ 0.5 0.5
Renewable electricity purchased PJ 2.8 2.6
Renewable steam purchased PJ 0.4 0.4
Renewable electricity sold PJ 0 0
Total renewable energy consumption PJ 3.7 3.5
In 2023, 50% of the electricity purchased and consumed on our sites worldwide was from renewable sources such as solar and wind. In the US and China,
the ratio was 100%.
4.2.4. Key achievements
In 2023, we increased our consumption of biogas to 145 GWh and 18% of the energy consumed is from renewable energy sources.
4.3. Biodiversity
GRI DISCLOSURE 3-3 304-1 304-2 304-3 304-4
SDG 13, 14, 15
4.3.1. Definitions
To assess the sensitivity of Syensqo sites toward biodiversity, we use two international reference tools that help us understand and assess biodiversity-
related risks at Syensqo’s operational locations:
· The Integrated Biodiversity Assessment Tool (IBAT), a web-based map and reporting tool developed by the IBAT Alliance (BirdLife International,
Conservation International), the UN Environment Programme World Conservation Monitoring Centre (UNEP-WCMC) and the International Union for
Conservation of Nature (IUCN). The IBAT tools provide integrated access to three of the world’s most authoritative global biodiversity datasets:
- The World Database on Protected Areas (WDPA). The IUCN defines a Protected Area as a “clearly defined geographical space, recognized,
dedicated and managed, through legal or other effective means, to achieve the long-term conservation of nature with associated ecosystem
services and cultural values.”
- Key Biodiversity Areas (KBAs), which are sites recognized as significantly contributing to the global persistence of biodiversity in terrestrial,
freshwater and marine ecosystems.
- The IUCN Red List of Threatened Species. Vulnerable, endangered and critically endangered species are considered to potentially be on the
path to global extinction.
· The Worldwide Fund for Nature (WWF) Biodiversity Risk Filter, a web-based tool covering physical and reputational biodiversity-related risks that may
affect our operational sites. These risks are evaluated through databases that provide 33 different indicators covering several aspects of biodiversity.
Afinal score is then calculated for each location, ranging from zero (very low risk) to five (very high risk).
· Calculation of the Syensqo Group’s pressure on biodiversity is performed along the value chain, from cradle-to-gate (from resource extraction to
the factory gate, before it is transported to the consumer). This is a global approach based on a Life Cycle Impact Assessment (LCIA) methodology.
This method translates emissions and resource extractions into a limited number of environmental impact scores, through what are known as
characterization factors. This results in the following “midpoint impact categories”: global warming potential; water use; freshwater ecotoxicity;
freshwater eutrophication; photochemical oxidation; terrestrial acidification; terrestrial ecotoxicity; marine ecotoxicity; and land use.
The potential damage to nature is then calculated by midpoint-to-endpoint factors using the ReCiPe 2016 method. Damage to freshwater, marine and
terrestrial species refers to the aggregated local loss of species over space and time.
4.3.2. Management approach
Local biodiversity
We screened 83 sites with both the IBAT and WWF tools to assess their biodiversity risks. On the basis of the results of these analyses, and considering
other criteria, such as climate change, environmental impact and strategic dimensions, we prioritized 17 sites for which to develop biodiversity roadmaps.
The first step in the development of each site’s roadmap is to identify a vision for the site based on the long-term goals we want to achieve. The second
step is to identify all possible actions that would support nature conservation and the restoration of biodiversity. This involves identifying all of the
stakeholders involved in each action, such as employees, local communities, nature conservation associations and universities, as well as defining a
timeline, indicators and a budget to complete each action. The final step is to prioritize the actions, planification and governance allocation.
Local assessment of biodiversity-related risks related to Syensqo’s operations is fully integrated into the Star Factory program. Through Star Factory, sites
are developing a biodiversity roadmap as part of the sustainability workstream of the program.
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Syensqo joined the Wildlife Habitat Council (WHC), an international NGO that works with businesses to encourage, promote and certify biodiversity
conservation, to enhance our nature ambitions. The partnership helps us to better focus our efforts on biodiversity and identify areas for improvement,
both at our sites and in collaboration with local stakeholders. As a leading international nature conservation NGO, the WHC has supported Syensqo in
developing and implementing concrete actions to protect species and habitats that are locally relevant, practical and deliver impact through biodiversity
restoration and enhancement at a local level.
Global biodiversity
Using the environmental profiles of our products, and looking at their life cycle from raw materials to the gate of our manufacturing sites, we were able to
identify the areas of our portfolio that put the most pressure on biodiversity. We found that greenhouse gas emissions, freshwater eutrophication, marine
ecotoxicity and soil acidification represent more than 85% of the drivers affecting biodiversity.
4.3.3. Indicators
Local biodiversity
Assessing 83 sites for biodiversity risks using the IBAT and WWF tools revealed that:
· 44 of the 83 sites (52%) were within 5km of a protected area.
· 16 of the 83 sites (19%) were within 5km of a Key Biodiversity Area.
· More than 6,000 vulnerable, endangered and critically endangered species are potentially present within 50km of our sites.
IBAT AND WWF RESULTS FOR 17 PRIORITY SITES
Site Number of protected
areas within 5km
Number of Key
Biodiversity Areas
within 5km
Number of endangered
species within 50km
WWF biodiversity-
related risk score
Augusta, GA 2 1 36 5
Bangpoo 0 1 203 4
Baton Rouge 1 0 26 3.5
Changshu 0 0 104 4.5
Clamecy 2 0 46 4.5
Mount Pleasant, TN 0 0 62 4.5
Oestringen 16 1 87 4.5
Oldbury 8 0 44 4.5
Panoli 0 0 128 2.5
Piedmont, SC 1 1 38 4.5
Roha 0 0 158 5
Saint Fons Spécialités 0 0 69 3.5
Spinetta Marengo 0 0 67 3.5
Tavaux 4 1 74 4.5
West Deptford, NJ 5 0 90 2.5
Willow Island, WV 1 0 34 4
Zhangjiagang 0 0 105 4.5
Global biodiversity
GLOBAL PRESSURE ON BIODIVERSITY
Units 2023 2022
Species potentially affected (*) Number 33 32
Of which:
Global warming potential % 41 46
Marine ecotoxicity % 22 19
Eutrophication % 15 14
Acidication % 9 11
Land use % 9 5
Other (water, terrestrial ecotox, etc.) % 4 4
(*) calculated on the volume of sales
For 2022, the sum differs from 100% due to round ups.
The increase in the impact observed in 2023 is mainly explained by the upgrade of the life cycle assessment methods and databases, as well as refinement
of the model for palm oil (sourcing of raw materials). Overall, Syensqo’s pressure on biodiversity increased slightly, with 33 potentially affected species in
2023 despite lower production volumes. Syensqo is willing to work on the improvement of our biodiversity assessment method in 2024.
4.3.4. Key achievements
We have developed local biodiversity roadmaps at 15 sites and have started implementing them at seven of these sites.
Number of roadmaps developed Number of roadmaps under implementation
15 7
Several types of nature conservation and restoration projects have been carried out: the planting of trees or other vegetation; the creation of a garden;
the installation of insect hotels, hives, bird nests and other similar projects; and the removal of invasive species. These projects have been performed by
site employees with the support of local experts to account for local specificities. Several sites have also organized biodiversity awareness sessions for
their employees.
Syensqo will continue to develop and implement local biodiversity initiatives.
4.4. Air quality
GRI DISCLOSURES 3-3 305-6 305-7
SDG 3 15
4.4.1. Definitions
Nitrogen oxide (NOx) emissions, conventionally expressed as nitrogen dioxide (NO
2
), comprise the emissions of nitrogen monoxide (NO) and nitrogen
dioxide (NO
2
). NOx is reported due to its impact on acidification. NOx emissions from Syensqo’s operations result mainly from the combustion of natural
gas into gas-fired boilers and CHP (Combined Heat Power) units. Emissions of nitrous oxide (N
2
O) are excluded from this definition, as they have no
impact on acidification. The impact of our N
2
O emissions is taken into account when assessing Syensqo’s contribution to climate change.
Sulfur oxide (SOx) emissions, conventionally expressed as sulfur dioxide (SO
2
), comprise the emissions of sulfur dioxide (SO
2
) and sulfur trioxide (SO
3
).
Non-methane volatile organic compounds (NMVOCs) emissions, expressed in metric tons per year, are the summed emissions of all VOCs (Volatile
Organic Compounds) other than methane. According to the EU Solvent Directive 1999/13/EC, VOCs are compounds with a standard boiling point below
or equal to 250°C.
Ozone-depleting substances (ODS) are expressed as their summed CFC-11 equivalent, which is defined as the metric tons of ODSs weighted by their
Ozone Depletion Potential (ODP).
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4.4.2. Management approach
Air quality is managed through the health, safety and environment management systems deployed by our sites, in line with their regulatory requirements.
Sites report on at least the substances they are allowed to emit according to their exploitation permit. Syensqo works in close cooperation with local
stakeholders to improve air quality at local and regional levels.
4.4.3. Indicators
ABSOLUTE AIR EMISSIONS
Units 2023 2022
Nitrogen oxides – NOx Metric tons 613 638
Sulfur oxides – SOx Metric tons 1,029 940
Non-methane volatile organic compounds – NMVOC Metric tons 1,406 1,521
Ozone-depleting substances – ODS Metric tons eq. CFC-11 3.29
4.52
(1)
(1) For 2022, figures for ozone-depleting substances have been restated due to a reporting error.
The 2023 emissions of nitrogen oxides decreased by 25 Mt or 3.9% compared to 2022. No major reason could be detected as the global change is the
resultant effect of many positive and negative changes on our plants.
Sulfur oxides emissions have increased by 89 Mt or 9.5%. This increase is almost entirely due to higher emissions on our Atequiza (Mexico) site, where the
off-gases from the production of a sulfur-containing compound are flared. A project for the valorization of the sulfur containing off-gas has been defined
and will be implemented in 2028-2030.
Compared to 2022, the NMVOC emissions have dropped by 115 Mt or 7.6%. This result is mainly explained by lower production rates compared to
2022, although positive achievements were obtained by our Spinetta site in Italy, due to the further abatement of CF
4
emissions (-19 t) and lower fugitive
emissions (-8 t) from its Algofren plant, through an improved leak detection and repair LDAR program. Other decreases and increases were due to the
lower production volumes – for example at Saint-Fons, France – or higher production volumes – for example at Panoli, India.
The 2022 ODS value for Syensqo had to be restated from 5.94 to 4.52 teq CFC-11. This change is entirely due to a reporting error made by our site at
Orange (US, Texas) on its CFC-113 emissions.
Compared to the restated 2022 value, the emissions from ozone depleting substances have further decreased by 1.23 teq CFC-11 or 27%, from which
0.31 teq CFC-11 came from lower fugitive R22 emissions from Spinetta, due to a more efficient LDAR program.
4.5. Waste
GRI DISCLOSURES 3-3
306-1 306-2 306-3 306-4 306-5 416-1
SDG 3 6 12 14 15
4.5.1. Definitions
Industrial waste is defined as the waste resulting from our regular manufacturing and research activities. It does not include domestic waste or waste from
demolition or construction projects. Syensqo has no mining waste.
All our waste volumes are expressed as dry matter. For EU sites, hazardous industrial waste (HIW) is defined according to Appendix III of the Waste
Framework Directive (2008/98/EC). For non-EU countries, classification follows local legislation. Non-sustainably treated waste comprises waste that is
landfilled or incinerated without energy recovery.
In 2023, our internal waste reporting rules were simplified for European and North American sites. Incineration with energy recovery applies de facto to
all waste streams leaving our facilities with the R1 (Europe) or H050 (North America) labels. The manifests provided by the waste management companies
are used as evidence. For all other countries, it is still required that the waste stream has a minimum lower calorific value of 11.6 MJ/kg, and that the
incinerator is equipped with an energy recovery system, such as a boiler, or that the material is used in an industrial furnace, such as a cement plant, as
a supplemental fuel.
4.5.2. Management approach
For industrial waste, and hazardous industrial waste in particular, Syensqo’s focus is on switching to more sustainable disposal methods that avoid landfill
or incineration without energy recovery and therefore promote material or thermal recovery. For non-hazardous, mostly mineral, waste, Syensqo is
launching material recovery initiatives aligned with our ambition to contribute to the circular economy.
4.5.3. Indicators
WASTE PRODUCTION
Units 2023 2022
Non-hazardous industrial waste (NHIW) 1,000 tons* 49.4 52.6
Hazardous industrial waste (HIW) 1,000 tons* 41.3 46.0
Total industrial waste 1,000 tons* 90.7 98.6
Hazardous industrial waste not treated in a sustainable way 1,000 tons* 8.2 10.2
Non-hazardous industrial waste not treated in a sustainable way 1,000 tons* 26.9 29.7
Total industrial waste not treated in a sustainable way (NSIW) 1,000 tons* 35.1 39.9
* Metric tons of dry waste.
The amount of non-hazardous industrial Waste (NHIW) decreased by 3.2 kt or 6.1% compared to 2022. For NHIW, the decrease at Group level is due
to reductions at several sites (Baton Rouge, Changsu, Melle, Mt. Pleasant and Marietta), which are more than off-setting the increases at Winona, West
Deptford and Greenville.
Hazardous Industrial Waste (HIW) has decreased by 4.7 kt or 10.2% compared to 2022. For HIW, the global decrease is the resultant effect of significant
reductions at several sites (Willow Island, Tavaux, Saint-Fons, Ospiate, Spinetta, Zhenjiang Songl and Zhangjiagang Feixiang) which are more than off-
setting the increases in our sites Panoli and Atequiza.
The value of our non-sustainable industrial waste (NSIW) indicator, on which we have a target, has dropped by 4.8 kt or 12%. This decrease is partly due
to the unfavorable economic context, although some initiatives at site level have led to significant and structural improvements.
For instance, in Borger (US), two programs have been launched in 2022 to recycle monomer waste and reduce the amount of plastic waste sent to
landfill. In 2023, the amount of monomer waste generated, and the amount of landfilled plastic waste have been reduced by 88% and 91%, respectively,
compared to 2021.
In West Deptford (US), a project has been implemented aiming at reducing the amount of inorganic sludges generated by the process. As a result the
project did deliver a structural reduction of solid waste to landfill by 222t in 2023 compared to 2022.
Our facility in Tavaux (France) was able to reduce the amount of suspended solids in its effluents by 300t/year, which are currently sent for settling into
external basins.
4.6. Water and wastewater
GRI DISCLOSURES 3-3 303-01 303-02 303-03 303-4 303-5
SDG 3 6 12 14 15
4.6.1. Definitions
Water management encompasses the management of water flows and water quality, from extraction from the natural environment to restitution in the
same or another part of the environment.
Freshwater withdrawal, measured in millions of cubic meters per year, is the amount of incoming freshwater purchased from third parties, such as drinking
water from the public network, or pumped by Syensqo from freshwater systems, such as rivers and lakes, and from groundwater sources, such as aquifers.
Water pumped by Syensqo but resold to third parties is included in our freshwater withdrawal.
Freshwater consumption, also expressed in millions of cubic meters per year, is calculated as the sum of losses of different kinds (evaporative, non-
evaporative, sales of end product, disposal of waste streams).
Areas subject to hydric stress are identified using the screening tool made available by the WWF, known as the Water Risk Filter.
Chemical oxygen demand (COD), expressed as metric tons of oxygen, is the amount of oxygen-reducing substances, mainly dissolved organic matter,
discharged into aqueous receivers. In addition to nitrogen and phosphorus species, COD also contributes to aquatic eutrophication.
4.6.2. Management approach
Syensqo has a company-wide approach to water that includes limiting freshwater withdrawal and consumption, particularly in locations subject to hydric
stress, and ensuring that the water quality remains good in bodies of water in which effluents are discharged, so that the impact on downstream users
and natural biota is minimized. Specifically, we focus on reducing the impact of freshwater withdrawal and chemical oxygen demand releases.
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The water balance of the Group for 2023 is shown in the table below.
Water input from (Mm
3
) Water discharge to (Mm
3
)
Surface water (freshwater) 12.7 Surface water (freshwater) 27.2
Surface water (non-freshwater) 0.0 Surface water (non-freshwater) 0.04
Groundwater (freshwater) 45.6 Groundwater (freshwater) 0.0
Groundwater (non-freshwater) 4.1 Groundwater (non-freshwater) 0.43
Sea water 0.0 Sea water 0.04
Third party (freshwater) 19.4 Third party (freshwater) 12.4
Third party (non-freshwater) 3.5 Third party (non-freshwater) 43.4
Other sources (miscellaneous) 4.7 Losses (total) 5.8
TOTAL 90.0 TOTAL 89.3
4.6.3. Indicators
FRESHWATER WITHDRAWAL
Units 2023 2022
Freshwater withdrawal Million cubic meters 77.7 86.9
Total water withdrawal
a
Million cubic meters 90.0
101.1
Water used for process
b
Million cubic meters 26.6
20.6
Water used for cooling (once-through) Million cubic meters 48.8
65.4
Water used for cooling (closed-loop)
c
Million cubic meters 344
218
Water used for other uses (including domestic) Million cubic meters 3.7 4.0
Water in transit (not used) Million cubic meters 7.5 6.9
(a) Sum of freshwater / non-freshwater and including water purchased from third parties.
(b) Process water is defined as water needed for our production processes, excluding cooling water.
(c) Water turning around in semi-open cooling water systems.
The freshwater withdrawal from the Group was 77.7 million cubic meters, from which 10.2 million cubic meters was sold to other companies. Compared
to 2022, the freshwater withdrawal decreased by 9.2 million cubic meters or 11%. The biggest reductions took place on our sites of Saint-Fons Spécialités
in France (4.4 million cubic meters) and Spinetta in Italy (3.5 million cubic meters). In Saint-Fons, the decrease is due to significantly lower production
volumes. In Spinetta, the improvement comes from better management of its wells and the closing of the Plastomers production unit.
Our water reduction projects have also contributed to further reducing our freshwater withdrawal. In our Tavaux site in France, a structural reduction of
0.46 million cubic meters was achieved by cooling loop optimizations at the energy and PVDF units. In Feixiang (China) an improvement of 0.1 million
cubic meters was obtained through the recycling of process water from different workshops, which is reused as make-up water for cooling towers.
The table below shows the number and percentage of sites located in areas subject to hydric stress and gives the freshwater withdrawal and freshwater
consumption for these in 2023 compared to the areas not subject to hydric stress.
2023 Units Areas subject to
water stress*
Areas not subject
to water stress
All areas
Production sites* Number 15 51 66
Freshwater withdrawal Million cubic meters 2.6 75.1 77.7
Freshwater consumption Million cubic meters 0.90 4.88 5.78
(*) For 2023, the sites in areas subject to hydric stress have been determined using the Water Risk Filter tool (WRF). Only sites with a scarcity index (BRC1) above three have been
taken into account. All research & innovation centers have been excluded from this assessment. This screening model provides potential risks which are only based on the site’s
location.
The results from the WRF tool have been completed by a local assessment (through a survey and discussions with the sites) in order to determine the
sites which are really facing a hydric stress situation and for which mitigation plans have to be developed.
EMISSIONS TO WATER
Units 2023 2022
Chemical oxygen demand (COD) metric tons O
2
2,072
2,588
(1)
(1) For 2022, the chemical oxygen demand figure has been restated due to a reporting error.
The 2022 COD value for Syensqo had to be restated from 2,669 metric tons O
2
to 2,588 metric tons O
2
. This change was due to a calculation error made
by our site of Changsu (China). At the level of Syensqo, the environmental pressure due to our chemical oxygen demand (COD) releases decreased by
516 metric tons of O
2
(20%). The biggest part of this improvement (293 metric tons of O
2
) comes from the site of Willow Island (USA), where the WWTP
displayed an improved efficiency facing a different product mix compared to 2022.
5. SUSTAINABLE GROWTH
5.1. Product design and life cycle management
GRI DISCLOSURE 3-3 416-1
SDG 12, 13
5.1.1. Definitions
Syensqo’s Sustainable Portfolio Management focuses on sustainable business solutions. The SPM methodology is designed to boost Syensqo’s business
performance and deliver higher growth, by letting decision makers know how our products contribute to sustainability in relation to two factors:
· The environmental footprint related to their production and associated risks and opportunities, based on cradle-to-gate Life Cycle Assessments (from
resource extraction to the factory gate, before it is transported to the consumer).
· How their applications create benefits or challenges from a market perspective, based on a qualitative assessment using a cradle-to-cradle scope.
Life Cycle Assessment (LCA) is a tool for compiling inputs and outputs, along with an evaluation of the potential environmental impacts of a product
system throughout its life cycle. LCA methodologies follow international standards, namely ISO 14040, ISO 14044 and ISO 14046 norms.
A sustainable solution is defined by Syensqo’s Sustainable Portfolio Management tool as a product in a given application that makes a greater social and
environmental contribution to the customer’s performance and, at the same time, demonstrates a lower environmental impact in its production phase.
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5.1.2. Management approach
SPM assessments are performed every year in order to capture the most recent signals from the market and cover more than 80% of Group revenue.
The Sustainable Portfolio Management tool is widely adopted by Syensqo’s 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 Leadership
Committee.
· The SPM tool is used to evaluate merger and acquisition projects, to determine whether an investment is feasible in light of Sustainable Portfolio
targets.
· Investment decisions (capital expenditure above €7 million and acquisitions) made by the Executive Leadership Committee or the Board of Directors
include a sustainability aspect that involves an exhaustive SPM analysis of the potential investment.
· All research and innovation projects are evaluated using SPM.
· SPM is used in marketing and sales 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 Syensqo and the customer.
The SPM tool is consistent with the Product Sustainability Assessment (PSA) guidance provided by the WBCSD, a framework developed by leading
chemical companies regrouping a broadening community of practices from all sectors.
Syensqo’s Life Cycle Assessments are managed by a dedicated corporate team with direct links to all business units and services. Having a dedicated
LCA team makes it possible to maintain a high level of staff competency and coordinate updates of the main methodologies used, based on best
practice. Core LCA activity is based on recognized tools, software and databases, and we also have our own database, specific to Syensqo’s business
and innovation segments, in material science or battery development, for instance.
The LCA team is also called upon to support business activity concerning customer relations, by sharing environmental and LCA data on products
to enhance understanding and environmental impact assessments along the value chain, from cradle to grave or recycling. Examples include the
automotive sector, the construction sector and Product Carbon Footprint declarations for our customers.
Taking part in world class Life Cycle Assessment platforms
To maintain a high level of LCA expertise, we participate in the following collaborative platforms:
· International Reference Centre for the Life Cycle Assessment and Sustainable Transition: Syensqo is an industrial partner of CIRAIG, ensuring access to
high level research and expertise on Life Cycle Assessment methodologies.
· Association Chimie du Végétal (ACDV): Syensqo is a member of this association in France focused on the use of bio-sourced materials in chemistry.
· SCORELCA: this association was created in March 2012 to promote collaboration between industrial, institutional and scientific actors, and to foster
positive developments in environmental quantification methods, particularly in Life Cycle Assessments, to be shared and recognized at European and
international levels.
· World Business Council for Sustainable Development (WBCSD): Syensqo takes part in Life Cycle Assessment projects and Product Carbon Footprint
working groups organized by the WBCSD.
· SETAC: Syensqo is member of the SETAC LCA steering committee, an incubator for developing life cycle assessment to advance the science, practice
and application of LCAs to reduce resource consumption and environmental burdens associated with products, packaging, processes or activities.
5.1.3. Indicators
In 2023, extensive cradle-to-gate Life Cycle Assessments were performed for 92.6% of our products, by sales share, placed on the market. Syensqo’s LCA
team manages a product database representing more than 1,100 different chemicals and materials, which is continuously updated to include the most
recent industrial or innovation data. Following the spin-off from Solvay, Syensqo will continue to shift our portfolio toward opportunities that grow our
sustainable solutions.
REVENUE BREAKDOWN BY SPM HEAT MAP CATEGORIES
Units 2023 2022 restated 2022
Solutions % 60 59 64
Potentials % 7 8 9
Transitions % 9 10
10
Challenges % 12 13 6
Not evaluated % 12 11 12
Figures are rounded up to the %.
Climate urgency materializes in all sectors and in the automotive market the transition from internal combustion engine (ICE) vehicles to battery electric
vehicles (BEV) is accelerating quickly. Several governments have committed to phasing out sales of new ICE passenger cars by 2030-2035 and some
major car manufacturers have committed to shift to zero-emission vehicles by 2030.
In order to take these clear ESG market signals into account, applications specifically related to internal combustion engines for passenger cars have
been reclassified as Challenges, from 2023. This reclassification led to a decrease of 5% in Solutions. This decrease is partly compensated by stronger
operational performance and sales to battery electric vehicle applications. Overall, the proportion of sales from sustainable solutions reduced by more
than three percentage points between 2022 and 2023.
In order to clearly separate the impact of ESG market signals (i.e. a decrease of more than 5% in Solutions) from the yearly growth in sustainable solutions
sales (i.e. an increase of almost 2% in Solutions), 2022 revenue breakdown was restated based on the 2023 SPM heat map categorization of applications.
SPM SOLUTIONS: SALES BY MAIN IMPACT CATEGORY
Units 2023 2022
Climate € billion 1.2 1.3
Resources € billion 3.5 4.2
Better life € billion 1.5 2.1
Total Solutions net sales € billion 4.1 5
The total Solutions net sales figure is inferior to the sum of impact categories because products may have multiple impacts. For example, composite
materials used in planes make the plane lighter, allowing lower greenhouse gas emissions (climate impact), but they also increase the plane’s lifespan
(resources impact).
EXTERNAL VALIDATION
Arthur D. Little (ADL), our partner in developing and improving our SPM methodology, has performed an in-depth verification of our market alignment
assessment results. In 2023, ADL screened every Product Application Combination in the database and 50 PACs were selected for deeper review,
covering approximately 16% of Syensqo’s global sales.
Discussions with Arthur D. Little revealed that we reached the same conclusion for 33 PACs out of the sample of 50, representing an agreement rate
of 66%. For seven PACs (14%), Arthur D. Little came to a more negative conclusion than Syensqo. For four PACs (8%), Arthur D. Little reached a more
positive conclusion than Syensqo. For six PACs (12%), Arthur D. Little did not reach a final conclusion. For these six fluoropolymer-related PACs, Arthur D.
Little identified market signals suggesting that Syensqo should conduct a deep dive analysis, as results are inconclusive at application level.
5.2. EU taxonomy reporting
The EU taxonomy (2020/852) is a classification system, establishing a list of environmentally sustainable economic activities. It is intended to play an
important role in helping the EU scale up sustainable investment and implement the European Green Deal. The EU taxonomy would provide companies,
investors and policymakers with appropriate definitions under which economic activities can be considered environmentally sustainable. In order to be
taxonomy-eligible, an economic activity must contribute substantially to at least one of the six environmental objectives – climate mitigation, climate
adaptation, water, circular economy, pollution prevention and biodiversity – and do no significant harm to the others.
In order to be taxonomy-aligned, an economic activity needs first to be eligible as described above, and then fulfill the following criteria:
· The economic activity must make a substantial contribution to one or more of the climate and environmental objectives relevant to that activity.
· The activity should do no significant harm to the other remaining objectives.
· The activity should fulfill the minimum social safeguard standards based on OECD and UN guidelines.
Our calculation of the share of 2023 Syensqo sales eligible for and aligned with the EU taxonomy is based on our best interpretation of the EU taxonomy
texts, including the 2023 version of the Technical Annex of the Taxonomy Report.
Figures reported for plastics in primary form correspond to our Specialty Polymers business. Syensqo’s portfolio of Specialty Polymers is described on
the Syensqo website.
Enabling economic activities, as referred to in Article 10(1), point (i), of Regulation (EU) 2020/852, do not substantially contribute to climate change
mitigation on their own. Such activities play a crucial role in the decarbonization of the economy by directly enabling other activities to be carried out at
a low carbon level of environmental performance.
We identified eligible enabling activities using our Sustainable Portfolio Management methodology, taking into account product and application
combinations identified as “climate solutions,” as described above. This enables us to avoid double counting, as double counting is neutralized in the
Sustainable Portfolio Management reporting of Solutions for each impact category, as described above. Possible double counting between transition
activities and enabling activities are detailed in the table.
Some of our activities, such as polymer membranes in batteries, may be eligible both as transitional and enabling activities. To avoid double-counting
we count them only once in the total of eligible activities.
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The basis on which the turnover, capital expenditure and operating expenditure were calculated is explained in the Financial Statements chapter of this
report, note F1: revenue and segment information. Sales include revenues from non-core activities.
Capital expenditures and operating expenditures corresponding to enabling activities are not yet available. The eligible share of investments depends
on the estimation of the corresponding eligible share of future sales. The allocation rules chosen mean that we estimate that 1% of turnover required 1%
of capital expenditure and 1% of operational expenditure.
We also believe that the share of Group capital expenditure dedicated to research and innovation should be considered as eligible as it aims to improve
our product portfolio to become more sustainable. This means that our total eligible capital expenditures is the sum of eligible capital expenditures
from our transition activities and the estimation of capital expenditures from eligible enabling activities. Similarly, the total eligible operating expenses
is calculated as the sum of eligible operational expenditure from transition activities, the operational expenditures estimated for enabling activities and
the amount dedicated to the operational expenditures spent on research and development.
Regarding reporting on our aligned activities, our only manufacturing activity eligible as “transition activities” is polymers, and is not considered aligned
for its turnover as it does not meet the technical criteria. The activities eligible as “enabling activities” were also not considered for their turnover as we
cannot demonstrate that they fulfill the “do no significant harm” criteria for water, biodiversity, circular economy or pollution. About the calculation of
the share of capital expenditures aligned with the EU taxonomy, we consider the capital expenditures spent by the Group on research and innovation.
Following a similar reasoning, the calculation of operational expenditures aligned with the EU taxonomy mainly considers the share of operational
expenditures spent on research and development.
Activities NACE codes
2023 share
of sales
2023 share of
capital
expenditures
2023 share of
operational
expenditures
Eligible as transitional activities
Manufacture of plastics in primary forms C.20.1.6 41.6% 57.4% 33.9%
Total eligible as transitional activities 41.6% 57.4% 33.9%
Eligible as enabling activities
3.4. Manufacture of batteries C27.2 3.3% 3.3% 3.3%
Total of eligible activities 41.6% 57.4% 33.9%
Aligned as transitional activities
Manufacture of plastics in primary forms C.20.1.6 0% 1.9% NA
Total aligned as transitional activities 0% 1.9% NA
Aligned as R&I activities
Research & innovation 0% 1.4% 2.1%
Total of aligned activities as R&I activities 0% 1.9% 2.1%
Total of aligned activities 0% 1.9% 2.1%
NA: not available. Work is ongoing to adapt databases to be able to extract capital expenditures and operational expenditures corresponding to
selected projects, and to allocate the share of the capital expenditures of each project that corresponds with eligibility criteria for enabling activities.
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EU TAXONOMY INDICATORS: 2023 TURNOVER
Economic activities NACE codes Turnover Proportion of
turnover
Climate change
mitigation
Climate change
adaptation
Water & marine resources Circular
economy
Pollution Biodiversity &
ecosystems
Minimum
safeguards
Proportion of taxonomy
aligned turnover
Million € In % Yes/No/
Insufcient data
Yes/No/
Insufcient data
Yes/No/
Insufcient data
Yes/No/
Insufcient data
Yes/No/
Insufcient data
Yes/No/
Insufcient data
Yes/No/
Insufcient data
In %
A. TAXONOMY LISTED ACTIVITIES
A.1 Eligible as transitional activities
Manufacture of plastics in
primary forms
C.20.1.6 2,936 41.6 Yes Yes Insufcient data Insufcient data Insufcient data Insufcient data Yes 0
Total eligible as
transitional activities
A.2 Eligible activities as enabling activities
3.4. Manufacture of
batteries
C27.2 234 3.3 Yes Yes Insufcient data Insufcient data Insufcient data Insufcient data Yes 0
Sum A.1 + A.2
2,936 41.6 Yes Yes Insufficient data Insufficient data Insufficient data Insufficient data Yes 0
B. TAXONOMY NON-ELIGIBLE ACTIVITIES
Turnover from non-
eligible activities
4,129 58.4
Total 7,065 100
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EU TAXONOMY INDICATORS: 2023 CAPITAL EXPENDITURES
Economic activities NACE codes Capital
expenditures
Proportion of capital
expenditures
Climate change mitigation Climate change
adaptation
Water & marine
resources
Circular
economy
Pollution Biodiversity &
ecosystems
Minimum
safeguards
Proportion of taxonomy
aligned capital expenditures
Million € In % Yes/No/
Insufficient data
Yes/No/
Insufficient data
Yes/No/
Insufficient data
Yes/No/
Insufficient data
Yes/No/
Insufficient data
Yes/No/
Insufficient data
Yes/No/
Insufficient data
in %
A. TAXONOMY LISTED ACTIVITIES
A.1 Eligible as transitional
activities
Manufacture of plastics in
primary forms
C.20.1.6 487 57.4 Yes Yes Insufcient data Insufcient data Insufcient data Insufcient data Yes 0
Research & innovation 16 1.9 1.9
Total eligible as transitional
activities
A.2 Eligible activities as
enabling activities
3.4. Manufacture of
batteries
C27.2 234* 3.3 Yes Yes Insufficient data Insufficient data Insufficient data Insufficient data Yes 0
Sum A.1 + A.2 487 57.4 1.9
B. TAXONOMY NON-ELIGIBLE ACTIVITIES
Capital expenditures from
non-eligible activities
361 42.6
Total 848 100
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EU TAXONOMY INDICATORS: 2023 OPERATIONAL EXPENDITURES
Economic activities NACE codes Operational
expenditures
Proportion of
Operational
expenditures
Climate
change
mitigation
Climate
change
adaptation
Water &
marine
resources
Circular economy Pollution Biodiversity &
ecosystems
Circular economy
Y/N
Minimum
safeguards
Proportion of
taxonomy aligned
operational
expenditures
Million € In % Yes/No/
Insufcient
data
Yes/No/
Insufcient
data
Yes/No/
Insufcient
data
Yes/No/
Insufcient data
Yes/No/
Insufcient data
Yes/No/
Insufcient data
Yes/No/
Insufcient
data
In %
A. TAXONOMY LISTED ACTIVITIES
A.1 Eligible as transitional activities
Manufacture of plastics in primary
forms
C.20.1.6 1,779
33.9 Yes Yes Insufficient data Insufficient data Insufficient data Insufficient data Yes
0
Research & innovation
110 2.1
2.1
Total eligible as transitional
activities
A.2 Eligible activities as enabling activities
3.4. Manufacture of batteries C27.2
234* 3.3 Yes Yes Insufficient data Insufficient data Insufficient data Insufficient data Yes
0
Sum A.1 + A.2 1,779 33.9
2.1
B. TAXONOMY NON-ELIGIBLE ACTIVITIES
Operational expenditures from non-
eligible activities
3,471 66.1
TOTAL
5,250 100
* Manufacture of batteries turnover
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5.3. Circular economy
SDG 12, 13
5.3.1. Definitions
Circular economy is a new approach to business that aims to decouple economic growth from consumption of natural resources. Syensqo’s Circular
Economy Business Solution Program is underpinned by a transition to renewable energy sources. It is based on three principles:
· Designing products that increase the longevity of reusable materials.
· Shifting our product portfolio to bio-based feedstocks, recycled-based feedstock and CO
2
-captured-based feedstock.
· Retaining the value of the products and materials currently in use by enabling product recycling (process additives and technology) or recyclability by
design.
· We use the following definitions:
· Products enabling increased durability: products designed to increase the longevity and durability of other products further down in the value chain in
such a way that encourages longer use than the industry standard and at scale, without compromising circularity at the end of the product’s functional
life.
· Renewable resources: materials that are continually replenished at a rate equal to or greater than the rate of depletion.
· Renewable energy: energy produced from renewable resources, namely solar, wind, hydroelectric power, biomass or geothermal. Energy provided by
technological waste, such as solid recovered fuels, is not considered. Sales of energy to third parties are not included.
· Products enabling recycling: products designed to increase the recycling yield, with regard to quality and quantity.
The measurement of products based on recycled or renewable materials and renewable energy is weighted by applying a factor of 85% to renewable
materials and 15% to renewable energy, according to the average manufacturing cost weight. A similar approach has been defined at the research and
innovation level to monitor the contribution of innovation projects to Syensqo’s circularity ambition.
5.3.2. Management approach
As a company committed to the transition to a circular economy, we aim to increase by 50% our percentage of sales of products contributing to the
circular economy, reaching 18% in 2030 (from 12% in 2021).
We define sales of products contributing to the circular economy as revenues generated with products and solutions that meet the following specific
requirements:
· Designed to increase the lifespan of end-products, in such a way that encourages longer use than the industry standard in practice and at scale, for
example design with durable material choices, and in such a way that does not compromise circular treatment at the end of functional life.
· Made of bio-based, recycled-based and CO
2
-captured carbon based raw materials, or produced with renewable energy.
· Innovative with regard to the recycling of materials in closed and open loops, and business models: designed to increase the recycling yield (quantity
and quality) of the customer’s products.
The transformation of Syensqo into a more circular economy model is embedded in our business strategy. We are working individually, with customers,
suppliers and partners to identify opportunities where the Group can leverage our capabilities and contribution.
Syensqo is the Chemical Strategic Partner of the Ellen MacArthur Foundation, contributing to accelerating the transition toward a circular economy.
Chemistry, as a science and an industry, is a tremendously relevant and powerful enabler of material transformation and reuse.
Indicators
We monitor our progress in sales of products contributing to the circular economy in accordance with the three principles of Syensqo’s circular business
solutions, outlined above.
Units 2023 2022 2021
Sales of products contributing to circular economy (% group sales) % 13 12 12
Sales of products based on recycled or bio-based resources or produced
with renewable energy
%
8 8 7
Sales of products increasing longevity % 4 5 5
Sales of products enabling recycling % 0 0 0
For this purpose:
The Syensqo One Planet KPI “
Share of sales products contributing to the circularity economy” is calculated by adding:
· Sales of products increasing durability in the use phase downstream in the value chain.
· Sales of products based on recycled or renewable materials (85%) and renewable energy (15%).
· Sales of products enabling recycling at the end of life downstream in the value chain.
Potential double counting is avoided by considering the above mentioned order of priority.
Syensqo notably measures final products’ circularity based on their renewable content. As of now, we calculate the renewable content using the mass
of renewable reactants (as shown in our bills of materials) over the mass of the final product. This approach has been reviewed by Ellen MacArthur
Foundation’s Circulytics team and has been applied consistently over the years. We identified limits in accuracy to this approach as the cumulated mass
of all reactants might be higher than the final mass of products for some products (due to evaporation processes, waste and by-product generation).
Therefore, for year 2024, we will incrementally adopt the Renewable Carbon Index calculation approach, that will allow us to measure the molar content
of renewable carbon from reactants included in the final product over the molar content of total carbon from the final product. This will help us bring the
accuracy of renewable content measurement to the highest standard.
Syensqo, through its collaboration with WBCSD is also part of the Global Circularity Protocol that aims to establish by 2026 a harmonized framework to
measure, manage and disclose circularity performance.
5.3.3. Key achievements
In 2023 we continue to advance our transformation to enable a circular economy.
In April of 2023 the Biomatech platform, focused on renewable material and biotechnology, signed a strategic partnership with Ginkgo Bioworks for the
development of new biopolymers, strengthening our position in biotechnology and ability to meet our customers’ needs in this field.
We launched our ECHO line of products offering a diverse range of circular materials. The portfolio offers new mass balance grades, Udel
®
PSU,
ReCycle MB and Radel
®
PPSU being the first sulfone compliant materials certified under the widely recognized International Sustainability and Carbon
Certification PLUS (ISCC PLUS) scheme of accreditation. These products provide the same level of performance to the electronics and automotive
markets with an increased circular and renewable content.
The Naternal™ product line was launched, our new brand of bio-based biodegradable polymers for biodegradable-by-design hair and skin care
solutions.
Also launched in 2023 was the UP range of circular mass balance solutions that utilize upcycled circular raw materials. A key example of this is Merataine
CBS UP, which utilizes raw materials derived from wood waste and methanol from carbon capture. Contributing to circularity and providing lower carbon
footprint products to our customers.
5.4. Hazardous materials
GRI DISCLOSURES 2-23 3-3 403-7 416-1
SDG 3 12 14 15
5.4.1. Definitions
Product stewardship means managing risks throughout a product’s entire life cycle, from the design stage to end of life. Risks include the possibility
of injury or impact on health for a third party, or damage to third party property arising from the misuse of Syensqo products in a customer’s plant or
use in an application for which the product is not designed. Risk management is particularly important for products used in sensitive applications like
healthcare, food and feed applications.
5.4.2. Management approach
Syensqo’s Responsible Care policy requires the Group to:
· Maintain a comprehensive understanding of each product’s hazards, risks and impacts related to all life cycle steps and intended applications.
· Manage product knowledge so as to comply with local requirements on product information, while ensuring worldwide consistency.
· Keep records of all necessary and required product safety information to ensure availability throughout the full life cycle, beyond the commercialization
period.
· Send standardized product safety data sheets to customers alongside the first delivery and when required by local regulations. This key information
is consistently maintained and distributed worldwide for all products to all customers, in compliance with local regulations and in the local languages.
In line with our Responsible Care commitment, we are constantly improving our knowledge of how Syensqo products are used and the associated
risks. The extensive knowledge this represents allows Syensqo to characterize and manage risks related to product handling and to prioritize mitigation
actions related to potential inappropriate use. The management of Safety Data Sheets reflects this commitment to ensuring the information on hazards
associated with our products is readily available to our employees and customers.
Syensqo ensures that our product portfolio complies with all the relevant regional and national chemical regulations, such as REACH (Registration,
Evaluation, Authorization and Restriction of Chemical Substances) in the European Union, UK REACH in the United Kingdom, K-REACH in South Korea,
KKDIK in Turkey, MEE 12 in China and TSCA in the United States.
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In addition, Syensqo has a strategy to decrease the use of Substances of Very High Concern (SVHC) in marketed products and more broadly throughout
the entire value chain. We consider the SVHCs on the EU REACH authorization list (annex XIV) and EU REACH candidate list, but we also go beyond this
by including several lists coming from other countries (e.g. POP Stockholm Convention or Harmful Substances Prohibited from Manufacturing – ISHA,
Korea), following an internal process in our operations worldwide. Specifically, we have set up our own reference list of SVHCs, the Syensqo-SVHC and
Substance Requiring Attention (SRA). This was established in 2015 and includes three categories:
· Black list Syensqo-SVHCs: already undergoing a regulatory phase out process with a known deadline in at least one country or zone, or a restriction for
uses relevant to Syensqo.
· Red list Syensqo-SVHCs: currently included in regulatory lists of substances that could enter into a process of special authorization or restriction in the
medium term.
· Yellow list S-SRAs: substances requiring specific attention, such as substances under scrutiny by authorities, NGOs, scientists and industries due to their
known hazardous properties or potential effects.
Risk studies and Analysis of Safer Alternatives (ASA) for red and black Syensqo-SVHCs placed on the market are underway, and substances are replaced
with safer alternatives where feasible.
New ASA covering newly identified listed SVHC should be performed within one year. All current Analysis of Safer Alternatives should be reviewed every
three years. We intend to be 100% aligned with these objectives within three years.
5.4.3. Indicators
Safety data sheets
Syensqo currently places over 10,425 products on the market and produces safety data sheets (SDS) in 41 languages, as well as specific SDS for
63countries. Product Stewardship programs give adequate information and technical assistance to customers, ensuring a good understanding of
products and how to safely use and handle them. Each of our Global Business Units are responsible for ensuring that SDS are revised at least once every
three years, or every time it is needed. Syensqo manages product information centrally and as legislation continues to evolve the Group learns more
about the conditions under which products are used, so as to record and assess any associated risks.
To make sure that customers are receiving new and updated Safety Data Sheets, and to limit the quantity of paper printed, Syensqo uses an automatic
system to send SDS by email. In 2023, this automated shipping function was activated for 100% of Syensqo sales. This automatic delivery of the SDS was
successful for 97.4% of shipments, where SDS were available for the delivery country and the customer’s email address was also available. When errors
occurred, SDS were emailed manually.
Product registration
REACH is an advanced European framework regulation requiring companies to have detailed knowledge of substances, their hazards and risks during
use. This knowledge must be collected and organized into reliable and systematic safety information that includes all uses and risks incurred along the
value chain. Syensqo fully complies with the extensive REACH requirements for product registrations. We have registered 600 dossiers and are lead or
sole registrant for 195 substances.
Regular updates of dossiers are performed according to REACH obligations, either as new information becomes available or at the request of the
European Chemical Agency (ECHA). In accordance with the Cefic Action Plan program, we are also committed to improving the quality of REACH
dossiers. In 2023, we updated 91 dossiers.
In addition, Syensqo continues to adapt to new product regulations in many countries, notably to cope with emerging, REACH-like regulations in non-
European countries. More specifically we have:
· Registered 13 dossiers in 2019 and 23 in 2021 in the framework of Korean REACH, and identified 13 potential lead dossiers for the next registration
deadline in 2024.
· Reported 435 potential substances or polymers to be registered in the framework of KKDIK Reach Turkey by the appropriate deadline, which was
modified by the MoEUCC according to specific tonnage bands. So far, we have registered 34 dossiers.
· Successfully completed by the end of 2023 134 active grandfathering registrations, eight registrations, 10 inquiries, one PPORD and 1,700 Downstream
User Import Notifications (DUIN) within the relevant regulatory deadlines, including four new registrations in 2023 in the UK-REACH framework.
· Submitted one simplified registration in 2023 in the new Chinese MEE order N°12 framework.
· Submitted two Prior Manufacturing Notices in the US in 2023.
Safer alternatives for marketed products: SVHC according to the EU REACH legislation
Syensqo is closely monitoring the SVHC on the EU REACH Candidate list and EU REACH Authorization list (annex XIV) by identifying all marketed
products containing a concentration above 0.1% of those substances, sold not only in the EU but worldwide.
Units 2023
(1a)
2022
(1b)
SVHCs EU-REACH
(1)
contained in marketed products above 0.1% on a worldwide scope
Number 38 30
Analysis of safer alternatives required
(2)
Number 18 34
Of which completed % 56 68
Of which effective replacement achieved % 11 9
(1) According to the EU REACH authorization list (annex XIV – latest version, April 12, 2022) and EU REACH Candidate list (dated January 17, 2023).
(1a) The period covered is April 2022 to March 2023.
(1b)The period covered is June 2021 to May 2022.
(2) Analysis of Safer Alternatives for potential substitution for an SVHC. A substance may be present in more than one product. ASA are required for any newly identified SVHC
within one year orif they were carried out more than three years ago. This new scope takes into account the revision process. We intend to be 100% aligned with these objectives
within three years.
In 2023, 10 ASA have been performed or reviewed:
· Two led to effective replacement, either through SVHC substitution or reduction below the required threshold, or through stopping production.
· Four are ongoing, meaning that an alternative has been identified and discussed with customers for implementation. For example:
- NMP: substitution has been performed through the creation of a new product proposed to customers, but customers are not willing to switch
for the moment.
· Four have resulted in no available alternatives, either because no substitute is available, or because an alternative has not been requested due to the
application in the final product.
Safer alternatives for marketed products: beyond legislative requirements
We go beyond what is required by regulation, screening our own broader internal reference list of substances of Very High Concern (S-SVHCs, as
described above) for our products marketed worldwide.
Units 2023
(1a)
2022
(1b)
All Syensqo-SVHCs
(1)
contained in marketed products above 0.1% on a worldwide scope
Number 100 77
Analysis of safer alternatives required
(2)
Number 43 68
Of which completed % 67 57
Of which effective replacement achieved % 12 6
(1) According to the black and red Syensqo-SVHC lists. Red and Black list Syensqo-SVHCs have been reviewed to exclude PFAS that do not comply with Syensqo SVHC definition
(CMR, ED, PBT, vPvB, PMT, vPvM, respiratory sensitizer). 2022 figures have been restated in accordance with this new definition.
(1a) The period covered is April 2022 to March 2023.
(1b) The period covered is June 2021 to May 2022.
(2) Analysis of Safer Alternatives for potential substitution for an SVHC. A substance may be present in more than one product. ASA are required for any newly identified SVHC
within one year orif they have been done more than three years ago. This new scope allows us to take into account the revision process. We intend to be 100% aligned with
these objectives within three years.
In 2023, 29 ASA were performed or reviewed:
· Five led to effective replacement, either through SVHC substitution or reduction below required threshold, or through stopping production.
· 10 are ongoing, meaning that an alternative has been identified and implementation has been discussed with customers.
· 14 resulted in no available alternatives, either because no substitute is available, or because an alternative has not been requested due to the application
in the final product.
Syensqo’s commitment to phase out substances of very high concern
Syensqo’s target is to phase out all substances of very high concern present in marketed products at a quantity of more than 0.1% by 2030, whenever
feasible.
Moreover, Syensqo has been innovating to find alternatives for the PFAS substances that may trigger concern, which is why our focus has been on
phasing out the use of fluorosurfactants. We have already phased out fluorosurfactants from a significant part of our manufacturing processes and as
announced in 2022, we are working to complete this transition across our product lines by 2026 at the latest.
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Thanks to substantial investments in research and innovation, Syensqo was able to develop a non-fluorosurfactant technology, which is a new
polymerization process enabling us to manufacture a wide range of specialized fluoropolymers without the need of fluorosurfactants or any replacement
surfactant.
This new technology enables Syensqo to develop a more sustainable and future proof range of fluoropolymers as essential inputs for the production of
rechargeable EV batteries, sealings in new energy vehicles, special lubrication for safety applications, gaskets and sealings in extreme service conditions,
solar panels, hydrogen membranes, wind turbines and semiconductors, which rely on these products’ specific properties.
6. BETTER LIFE
6.1. Employee health and safety
GRI DISCLOSURES 2-25 3-3 403-1 403-2 403-3 403-4 403-5 403-6 403-7 403-8 403-9 403-10
SDG 3
6.1.1. Definitions
Employee health and safety management encompasses occupational safety, industrial hygiene and occupational health.
Occupational safety is about preventing work-related injuries. Accidents are mostly linked to falls at the same level, human energy, such as pushing,
pulling or striking an object, and exposure while opening a line or system. Industrial hygiene management encompasses the assessment, monitoring
and management of workers’ potential exposures to ergonomic, chemical and physical hazards. Occupational health includes all the preventive actions
undertaken to protect and promote physical and psychological health at work, both collectively and for each individual Syensqo employee.
Syensqo uses the Occupational Safety and Health Administration (OSHA) definitions of occupational accidents in order to comply with GRI and enable
comparisons outside Syensqo. These are as follows:
· Occupational accident: a work-related unexpected and undesirable event resulting in damage or harm, namely injury or illness. Accidents on the way
to or from home are not considered as work-related unless the worker was traveling for Syensqo at the time of the accident.
· Lost Time Injury or Illness (LTII): a work-related injury or illness that results in a work interruption of one or more days, not including the day of the
accident.
· Lost Time Injury and Illness Rate (LTIIR): the number of LTIIs resulting from an accident per 200,000 work hours.
· Reportable Injury and Illness (RII): work-related injury or illness resulting from an accident with severity above first aid, according to US OSHA 29 CFR
1904.
· Reportable Injury and Illness rate (RIIR): the number of reportable injuries or illnesses per 200,000 work hours.
6.1.2. Management approach
Syensqo requirements for implementing management systems on our sites are covered under section 3.3. Health, safety and environment management.
The occupational health and safety management systems cover all Syensqo employees, while external visitors, parcel delivery people and transport
drivers not performing loading or unloading onsite fall outside the scope. In addition, our safety management system applies to contractors.
Hazard identification and risk assessments are performed according to Group procedures, which define minimum requirements for methods and the
hierarchy of controls. They cover the following topics or activities:
· Chemical hazard communication
· Chemical risk assessment and management
· Hearing conservation (noise exposure management)
· Prevention of legionellosis
· Managing asbestos in buildings and facilities
· Respiratory protection equipment
· Group requirements for occupational health
· Minimum safety requirements for lifting
· Working at height
· Working on powered systems
· Line breaking
· Working in confined spaces
· Working in an explosive atmosphere
· Lifting
· Excavation
· Traffic
· Personal protective equipment (PPE)
· Work permits
· Management of change (MOC)
· Contractor management
All procedures contain training requirements, guidelines and on-boarding presentations for use in implementation on our sites. Quality, evaluations and
process improvements are ensured through the sites’ management systems. Site reporting processes identify unsafe situations, near-misses, incidents or
accidents, as well as those cases with potentially high severity, and also set guidelines for investigating incidents and taking corrective actions.
Industrial hygiene (IH) ensures hazards are identified and eliminated. Risk assessments are performed in collaboration with occupational health experts.
Occupational physicians perform risk-based medical surveillance, provide advice on improving and adapting working conditions, and promote physical
and mental health. All these processes contribute to managing and minimizing risks at work.
On the shop floor, workers collaborate with industrial hygienists on risk assessments using the Syensqo Occupational Risk Assessment Tool for Employees
(SOCRATES). This tool gives widespread, easy access to IH methods, tools and databases, consistently performs and documents IH risk assessments and
enhances traceability of an individual’s potential exposures throughout their working life. Workers are informed of their work-related risks by supervisors,
industrial hygienists and occupational physicians or nurses. SOCRATES risk profiles are accessible to occupational health advisors through a user-friendly
digital portal.
Formal joint management-worker health and safety committees are established on our sites according to country legislation. Syensqo also contributes
to complementary health insurance, for which the terms vary according to the country.
Initiatives to promote health are taken at site level, in collaboration with local physicians and nurses. Examples of such initiatives include nutritional
advice, cardiovascular prevention programs, ergonomics, general check-ups and fitness sessions led by trainers.
6.1.3. Indicators
Improvements in occupational health and safety indicators result from the safety culture approach implemented to protect everyone working at Syensqo.
This approach is explained in the Risk Management chapter of this Annual Integrated Report.
The reporting scope covers all sites under Syensqo’s operational control for which the Group manages and monitors safety performance. This includes
our manufacturing, research and innovation and administrative sites, as well as a series of closed sites with limited activities, and covers Syensqo
employees and contractors working on these sites.
NUMBER OF ACCIDENTS
Units 2023 2022 2021
Fatal accidents – Employees Number 0 1 0
Fatal accidents – Contractors Number 0 0 0
H-RII – Employees Number 4 5 12
H-RII – Contractors Number 0 1 3
H-RII – Employees and contractors Number 4 6 15
RII – Employees Number 41 48 50
RII – Contractors Number 5 12 12
RII – Employees and Contractors Number 46 60 62
LTII – Employees Number 13 20 22
LTII – Contractors Number 2 6 5
LTII – Employees and contractors Number 15 26 27
HOURS WORKED
Units 2023 2022 2021
Work hours – Employees Hour 23,979,072 21,112,912 20,912,724
Work hours – Contractors Hour 8,351,256 7,417,481 6,924,523
Work hours – Employees and contractors Hour 32,330,328 28,530,393 27,837,247
Employees’ work hours are based on the average of the monthly active internal workforce (headcount) multiplied by the coefficient of 2,000 hours for all
countries and sites. Contractors’ actual work hours are reported monthly by all sites.
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ACCIDENT FREQUENCY RATES
Units 2023 2022 2021
H-RIIR – Employees Accidents per 200,000 hours worked 0.03 0.05 0.11
H-RIIR – Contractors Accidents per 200,000 hours worked 0.0 0.03 0.09
H-RIIR – Employees and contractors Accidents per 200,000 hours worked 0.02 0.04 0.11
RIIR – Employees 0.34 0.45 0.48
RIIR – Contractors 0.12 0.32 0.35
RIIR – Employees and Contractors 0.28
0.42
(1)
0.45
LTIIR – Employees Accidents per 200,000 hours worked 0.12 0.19 0.21
LTIIR – Contractors Accidents per 200,000 hours worked 0.02 0.16 0.14
LTIIR – Employees and contractors Accidents per 200,000 hours worked 0.09 0.18 0.19
(1) 2022 RIIR – Employees and contractors is different that the value published in “supplement of the registration document of Syensqo in November 2023” due to changes in the
2022 headcount figures and in the rules of split between Syensqo and the “new” Solvay Group as explained in the section 2.2 basis of preparation.
Note: RIIR was introduced during 2020, making 2021 the first full year of application of the OSHA metrics.
This performance is the result of the following actions implemented in 2023:
· Ensuring that both site and Group safety results were communicated to front-line workers, in order to increase awareness of the shift in performance.
· Site leadership, including front-line leaders, spending more time in the field.
· Providing support, through physical presence, on selected sites, to help identify risks and provide coaching.
· Re-energizing campaigns relating to the Syensqo Life Saving Rules, including interactive trainings and required field assessments.
· Sites must share their HSE performance and commitments at Syensqo’s Executive Leadership Team meetings.
Industrial hygiene (IH)
A key aspect of our approach to protecting health is the systematic assessment and management of workers’ potential exposure to ergonomic, chemical
and physical hazards. Global industrial hygiene (IH) procedures define minimum requirements for Syensqo’s IH risk assessments and management
strategies, including the hierarchy of controls. The IH program encompasses:
· Comprehensive chemical inventories established and reviewed at site level, with screening and priority ranking of substances that carry potential health
impacts.
· Syensqo Acceptable Exposure Limits (SAELs) developed internally for insufficient or outdated established Occupational Exposure Limits (OELs).
· Occupational Exposure Banding (OEB) in cases where no established OEL exists or there is limited toxicological data. Syensqo’s OEB approach
provides a simple, quick and easy-to-understand hazard ranking.
· Implementation of SOCRATES for qualitative exposure assessment:
- Widespread and easy access to IH methods, tools and databases.
- Consistent performance and documentation of IH risk assessments.
- Enhanced traceability of an individual’s potential exposures throughout their working life.
· Established KPIs that allow for identification and tracking of the completion of site chemical and noise risk assessments.
Occupational health
Key indicators for occupational health are:
· Occupational diseases: the incidence rate and causes of disease are used to define preventive and corrective actions.
· Advanced risk-based medical surveillance rate: used to assess that our medical surveillance is effective.
· Human biomonitoring indicators: used where applicable to assess chemical exposure and suggest preventive actions.
· Stress prevention and well-being at work (see chapter 6.2.2 of this Annual Integrated Report): used to identify the main causal factors and launch action
plans at site and Group levels.
· Health promotion: promoting a healthy lifestyle at work and beyond.
RECOGNIZED OCCUPATIONAL ILLNESSES
Units 2023 2022 2021
Occupational illness frequency rate (OIFR) Per million hours worked 0 0.047 0.096
OIFR is the total number of recognized occupational illnesses recorded per million hours worked. It covers Syensqo workers who are active, retired or
have left the company and takes into account all the occupational diseases recognized in the year, not only short- or mid-latency diseases as reported
in previous years.
RECORDABLE OCCUPATIONAL ILLNESSES BY TYPE
Units 2023 2022 2021
Hearing disorders Number 1 0 0
Musculoskeletal diseases Number 0 0 1
Other non-carcinogenic diseases Number 0 0 0
Asbestos-related diseases and cancers Number 1 1 2
Other cancers Number 0 0 1
Not specied/Unknown Number 0 0 0
Total Number 2 1 4
The figures in the table above relate to recordable work-related illnesses contracted by Syensqo employees who are active, retired or have left the
company.
Advanced Risk-Based Medical Surveillance
A site is considered as performing Advanced Risk-Based Medical Surveillance if all the following criteria are fulfilled:
· The Chemical Risk Assessment completion rate is at least 70%. This is the ratio of the total number of Chemical Risk Assessments, both inhalation and
dermal, completed by the site within the last five years, to the total number of Chemical Risk Assessments to be conducted based on the Chemical Risk
Assessment List established by the site. In previous years, this requirement was a much lower 40%.
· The site regularly communicates identified potential occupational risks to the medical service provider.
· At least 70% of the employees scheduled for Risk-Based Medical Surveillance during the year have completed their medical visit.
In 2023, 47.5% of our manufacturing and research and innovation sites fulfilled all the above criteria.
Human biomonitoring of exposure
Human biomonitoring (HBM) of exposure involves measuring the concentration of a substance or its metabolites in human fluids, such as blood or urine.
It can be used to assess exposure to specific chemicals and helps to verify whether protective measures are effective.
In 2023, seven sites performed HBM of exposure, for 21 different chemicals (substances or groups of substances).
HUMAN BIOMONITORING (HBM) OF EXPOSURE
Units 2023 2022
Sites performing HBM of exposure Number
7
10
Sites with at least one result above the Biological Limit Value (BLV) Number 0 0
For sites that return results above the biological limit values, action plans are put in place to reduce the exposure levels.
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Health promotion
In 2023, communication material on health promotion was deployed to all our sites. Topics included healthy nutrition, physical activity, sleep and recovery,
alcohol abuse and tobacco cessation. At 89.7% of our sites, health and well-being topics were covered during our Health and Safety Days events. In
addition, survey results show that 95.6% of our sites report active promotion and support for the health and well-being activities listed below:
Health and well-being topics during the Health and Safety Days
Permanent multidisciplinary committee that sets and follows actions on Well-being at Work
Training sessions on Well-being at Work for employees
Training sessions on Well-being at Work for leaders
Promotion of physical activity
Promotion of balanced nutrition
Promotion of good sleep and recovery
Prevention of cardiovascular risk
Prevention of tobacco consumption
Prevention of addictions
Prevention and screening for cancer
Seasonal u annual campaign
6.1.4. Key achievements
The results of the November 2022 Pulse and DEI survey that aimed to identify the factors influencing well-being were communicated to the sites through
medical professionals. Well-being at Work workshops for leaders, facilitated by certified psychologists, were deployed globally from January to May,
with 622 leaders participating.
A multidisciplinary working group that included representatives from the Industrial Hygiene domain and the Occupational Health domain promoted the
implementation of ergonomic standards.
6.2. Employee engagement and well-being
GRI DISCLOSURES 2-30 3-3 401-2 403-4 407-1
SDG 3 8
6.2.1. Definitions
Employee engagement is the level of commitment, passion and loyalty an employee has toward their work, team and company. Syensqo believes that
engagement increases performance through higher productivity and employee retention, and that engagement is fostered by fair labor practices and
well-being at work.
A constructive relationship with employees and their representatives, built on trust, is considered the basis for fair labor practices at Syensqo. This
relationship reflects the Group’s commitment to respect employees’ fundamental human rights and guarantee their social rights.
Well-being at work is a holistic concept which relates to all aspects of the quality of working life that ensure workers are safe, physically and mentally
healthy, satisfied, engaged and efficient. It addresses recognition and support, work-life balance, employee growth and development, and good
communication and collaboration, based on International Labor Organization and World Health Organization definitions.
6.2.2. Management approach
ONE Pulse
Employee engagement is measured through confidential surveys open to all employees. This includes global surveys as well as local initiatives, such as
“Voice of the People” surveys. The results of our surveys enable the Group, local management and all operational managers to identify strengths and
areas where the working environment and employee experience can be improved.
In 2023, we continued our series of short surveys, known as ONE Pulse surveys. Available in 14 languages, the ONE Pulse surveys enable us to listen to
the feedback and opinions of Syensqo employees around the world. This not only promotes a feedback culture, where everyone can safely share their
opinions and have open conversations with their team and leaders, but also helps to improve employee experience at work. Our objective was to equip
leaders at all levels in the organization with insights about the well-being and experience of their teams, foster open dialogue and ensure continuous
improvement throughout the year.
Better Life at Work
A multidisciplinary committee on Better Life at Work (BLAW) is in place to define and promote a well-being at work (WBAW) program, including
representatives from our HR, Occupational Medicine, HSE and Sustainable Development Functions, and an employee representative. Syensqo’s Chief
People Officer serves as the Sponsor. Regarding labor relations, discussions and activities are held at four levels: site, country, European and Group.
Our Better Life at Work program focuses on three pillars:
· Governance: promoting similar well-being support at all Syensqo sites.
· Observatory: the Better Life at Work Observatory includes indicators gathered from HR that are easily accessible to managers. This includes hard data
such as absenteeism, turnover, diversity, HSE data relating to accidents, the Pulse surveys and burnout figures.
· Positive actions: workshops for managers on leading with a well-being mindset were deployed in the first semester of 2023, in collaboration with
Empreinte Humaine, with 622 people participating. All employees also had access to this training on our intranet. We continue to provide our employee
assistance program, which offers mental health support when needed for all employees and their families. We also offer a supportive network of
Syensqo Occupational Physicians and nurses.
Global Forum
In 2015, Solvay created a global employee representative body, the Solvay Global Forum (SGF), composed of nine employee representatives from the
company’s main areas of operation: Europe, the US, China, Brazil, India and South Korea. Video conferences, bringing together the Solvay Global Forum
and the Group’s top management, were held quarterly, providing an opportunity to comment on and discuss the Group’s quarterly results and to keep
everyone informed of the main new projects. Two agreements were signed with the Solvay Global Forum: Global Performance Sharing 2023 and Solvay
Cares, the latter of which extended maternity and co-parent leave to 16 weeks.In December 2021, Solvay also launched a Global employee shareholding
initiative, that the Solvay Global Forum wished to be an inclusive, simple and meaningful way to create sustainable shared value for all.
Following the announcement of the Power of 2 project on March 15, 2022, aimed at splitting the Solvay Group into two separate Groups, a Memorandum
of Understanding (MoU) was signed with the European Works Council (EWC) on May 31, 2022, supporting the information and consultation process
related to the organizational transformation of the Solvay Group. One provision in the MoU referred to the Solvay Global Forum (SGF), stating that:
“In case of substantial change of the scope and/or structure of the Group, the parties will remain committed to build on the long-standing positive
collaboration and commitment to the values of this agreement. At the time of the change, the parties will convene with the common goal to continue
the Solvay Global Forum Agreement in the new entities, achieving the ownership and support from all stakeholders. Subject to the parties’ agreement
this Solvay Global Forum Agreement will then be considered for its remaining duration in the new entities.”
In accordance with this provision, an endorsement to the SGF was signed by all parties, leading to the creation of the Global Forum of Syensqo, with an
adapted number of seats (six), which takes into account Syensqo’s new footprint. Employee representatives come from the US, Europe, China and India.
European Works Council (EWC)
In 2023, the EWC and the EWC Select Committee met physically or virtually on several occasions with senior Group management, to help steer the
evolution of the company. The main topics discussed were the Power of 2 project, reorganizations and transformations, the evolution of working
conditions with the extension of mobile working, the Group Sustainable Development strategy and Solvay’s financial results.
In the MoU referred to above, a provision related to the EWC stated that: “The two new companies will install a European Works Council as soon as
possible in accordance with the applicable legislation.” In accordance with this provision, the EWC for Syensqo was established and an agreement
signed by all parties on November 23, 2023, during a plenary meeting, meaning that Syensqo had a functioning EWC from the moment of the spin-off.
Solvay Cares
In February 2017 Solvay signed a global agreement guaranteeing a minimum level of welfare and healthcare protection for all Solvay Group employees
worldwide, for companies in which Solvay SA owns a share, directly or indirectly, of more than 50%. Solvay Cares was fully deployed in 2019 and aims to
provide four major benefits:
· Full income protection during parental leave, with 16 weeks for both parents.
· A minimum coverage of 75% of medical fees in the event of hospitalization or severe illness.
· Disability insurance in the event of lasting incapacity.
· Life insurance, including coverage for the family or partner.
An addendum to the agreement was signed in December 2021, introducing more flexibility for parents to enjoy parental leave according to family needs,
and adding the Employee Well-being Support program, through which we committed to giving all employees access to confidential mental health
support, starting in December 2021. From January 2023, globally aligned standards of the Employee Well-being Support Program will apply, ensuring
coverage not only for the employee, but also for all members of the employee’s household.
In September 2023, a new provision called “caregivers leave” was introduced. This enables employees to deal with situations relating to support or care
for a loved one that require a response during working hours.
The Solvay Cares program has been fully endorsed by Syensqo and all provisions are applicable to Syensqo employees.
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The IndustriALL Global Union Framework Agreement
On December 17, 2013, Solvay signed a Corporate Social and Environmental Agreement for the whole Group with IndustriALL Global Union. This
agreement is based on International Labor Organization standards and the principles of the United Nations Global Compact. It served as a tangible
expression of Solvay’s determination to ensure that basic labor rights and the Group’s social standards in the areas of health, safety and environmental
protection were respected at all of our sites.
In March 2022, we renewed our Global Framework Agreement with IndustriALL. We strengthened the content of the agreement in several important
areas, including teleworking rights, EU due diligence and UN binding treaty relating to the supply chain, just transition, skills transfer, and workers’ rights
to health and safety. With this renewed and strengthened agreement, Solvay committed to respecting the international social standards defined by
the International Labor Organization and the principles of the UN Global Compact, including in countries that have not ratified it, as well as the OECD
Guidelines for Multinational Enterprises.
The four-year agreement includes serious commitments on due diligence along the supply chain. The agreement establishes a new working group of
workers and management to investigate suppliers’ respect for core labor rights and seek remediation where problems are found. Solvay also committed
to suspending contracts with suppliers that failed to remedy human rights and environmental abuses following warnings.
In 2023, IndustriALL representatives, together with Solvay management, visited three of our German subsidiaries to assess labor relations. It was an
opportunity to confirm the positive working atmosphere, safety situation and industrial relations, and to identify areas for improvement.
Syensqo remains committed to the values of the Global Framework Agreement and will sign a similar agreement with IndustriALL in the first quarter of
2024.
6.2.3. Indicators
With regard to engagement and well-being at work, two recurring surveys were launched worldwide between March and September 2023, collecting an
average of over 8,200 responses, or a response rate of around 63%.
Each survey is made up of between 10 to 12 questions measuring well-being, safety and other dimensions related to employee experience, such as
relationships with managers, remote working, Syensqo behaviors and workload.
In the 2023 surveys, employees were asked how they were feeling. The percentage of respondents feeling “OK or better” was over 75% on average,
remaining relatively stable as compared to last year. In addition to our Employee Assistance Program, Syensqo has put together a guide for managers
to help them better support their teams and a flyer for all employees, available in multiple languages. These provide guidance and suggestions about
where to turn for help and encouragement, in order to better support those employees who reported feeling “Less than OK.”
DURING THE LAST FOUR WEEKS, IN GENERAL, HOW HAVE YOU BEEN FEELING?
Units Apr. 2022 Sep. 2022 Mar. 2023 Sep. 2023
OK or better % 67 79 74 79
Less than OK % 33 21 26 21
We also included two engagement questions in our Pulse survey annually. This revealed that about 75% of employees were satisfied with Syensqo as an
employer and that about 70% would recommend the company as a great place to work.
Employee Representation Indicator
All Syensqo employees are covered by a collective agreement. This is the Solvay Cares collective agreement with global employee representative body
the Global Forum of Syensqo.
Trade unions are present at a majority of Syensqo sites around the world. Union membership is estimated at 20% in Europe, 38% in South America, 33%
in North America and 72% in Asia.
6.2.4. Key achievements
During a year of huge transformation, thanks to the Career Catalyst Program, our employees were able to invest time to reflect about their jobs, their
strengths, network, new soft and technical learnings. The program involves thoughtful self-assessment, creating a career vision, and developing skills to
reach the next step, to inspire our employees and encourage them to consider potential career opportunities in regards with the Group transformation.
6.3. Diversity and inclusion
GRI DISCLOSURES 3-3 405-1 405-2
SDG 5 8
6.3.1. Definitions
Syensqo defines diversity, equity and inclusion in the following way:
· Diversity: the representation of various identities and differences of individuals in a group.
· Equity: creating equal access to opportunity by recognizing the existence of advantages for some and barriers for others; promoting justice, impartiality
and fairness within procedures, processes and distribution of resources by institutions and systems.
· Inclusion: actively and intentionally engaging people with different identities and enabling them to feel valued, able to fully contribute and be welcomed
within a given setting.
Management categories are defined on the basis of the Hay Job Evaluation Methodology:
· Senior management: Hay points 924 and above.
· Middle management: Hay points from 531 to 923.
· Junior management: Hay points from 304 to 530.
For the diversity and inclusion indicators, the active internal workforce on December 31, 2023, has been considered.
6.3.2. Management approach
We have identified nine action plans to foster diversity, equity and inclusion by 2025:
· Diversity:
- Accelerate gender parity at all mid and senior levels.
- Make our workplace more appropriate for people with disabilities.
- Develop resource groups to encourage employees to bring their “whole self” to work.
· Equity:
- Assess if there are undesired pay gaps and close them.
- Ensure fair recruitment: all mid and senior level job openings to have a shortlist comprising 50% of under-represented groups, including
women.
- Ensure equitable access to career opportunities and development: set up mentor/mentee programs, starting with under-represented groups.
· Inclusion:
- Build an inclusive employee experience: set up an Inclusion Index and improve our score.
- Assessment and development program for Syensqo leaders to grow and nurture an inclusive mindset.
- Build a culture in which individuals feel empowered to speak out or speak up when they experience or witness non-inclusive behaviors.
6.3.3. Indicators
At Group level, we have identified five areas of focus for diversity, which receive specific attention and monitoring to ensure consistent improvement
across the organization:
· Improving the gender mix at all levels of the organization.
· Leveraging the generational mix to optimize learning, knowledge and experience.
· Developing national and cultural talent that mirrors growth opportunities.
· Enriching the team mix by leveraging experiences and backgrounds.
· Measuring the ratio of base salary of women to men by management categories in our largest countries of operation.
Country- and site-specific actions are also crafted in response to the local context, through Syensqo’s sustainability network and best practices.
WOMEN IN SENIOR AND MIDDLE MANAGEMENT
Unit 2023 2022
Senior and middle management %
28
25
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GENDER DIVERSITY BY EMPLOYEE CATEGORY
Units 2023 2022
Women in senior management % 18 15
Women in middle management % 29 26
Women in junior management % 35 34
Women in non-managerial positions % 18 18
Total women in Syensqo % 24 23
AGE GROUP BY EMPLOYEE CATEGORY
Units 2023 2022
Senior management Headcount 194 188
Percentage under 30 years old % 0 0
Percentage between 30 and 49 years old % 35 25
Percentage 50 years old and older % 65 75
Middle management Headcount 1,836 1,736
Percentage under 30 years old % 0 0
Percentage between 30 and 49 years old % 52 51
Percentage 50 years old and older % 48 49
Junior management Headcount 3,389 3,135
Percentage under 30 years old % 11 10
Percentage between 30 and 49 years old % 65 65
Percentage 50 years old and older % 24 25
Non-managerial Headcount 7,683 7,560
Percentage under 30 years old % 12 12
Percentage between 30 and 49 years old % 55 55
Percentage 50 years old and older % 33 33
SYENSQO’S WORKFORCE BY AGE
Units 2023 2022
Under 30 years old Number 1,277 1,219
Between 30 and 49 years old Number 7,433 7,114
50 years old and older Number 4,392 4,286
Total headcount Number 13,102
12,619
(1)
(1) For 2022, Syensqo total headcount has been restated due to retroactive changes on employee data. This led to a reduction of 30 people in total headcount.
According to the table above, the age structure at Syensqo is currently:
· 34% older than 50
· 56% between the ages of 30 and 49
· 10% younger than 30
RATIO OF BASIC SALARY OF WOMEN TO MEN BY MANAGEMENT CATEGORY
The table below represents the ratio of unadjusted (without correction for seniority) average pay between male and female employees, where the
average pay of male employees is 1.00:
Country Junior management Middle management Senior management
Belgium 1.07 1.05 0.96
Brazil 1.00 0.92 ND**
China 1.04 1.03 ND**
France 0.97 0.97 0.97
Italy 0.99 0.98 0.91
US 0.98 0.99 0.94
**ND = not disclosed: too few data points in one or two measurement groups to make a statistically meaningful measurement.
6.3.4. Key achievements
This year we set our objectives according to audience, in order to deepen the breadth and depth of our action.
Engage our leaders to become role models
As initiated in 2022 with Solvay, we continued in Syensqo the roll out of our Inclusive Leadership Workshops. These four-hour interactive sessions give
leaders an opportunity to deepen their understanding of the definitions of diversity, equity and inclusion, and identity layering or micro aggressions,
before reflecting on the business case and therefore increasing their own individual buy-in. Finally, they set themselves concrete goals based on a
self-assessment. We exceeded our internal target: more than 600 leaders from the combined legacy Solvay and Syensqo have now participated in our
Inclusive Leadership Workshop. In parallel we added a DEI e-learning curriculum to the onboarding of new mid and senior managers.
Design custom initiatives for our shop floor
Acknowledging that DEI initiatives are not “one size fits all,” we started to develop bespoke localized content for our industrial sites. This included
developing a card game designed to create a space for meaningful conversations and bonding around the topic of diversity, equity and inclusion. This
initiative is being piloted and localized for a broader roll out in 2024. We also embedded DEI in the people and capabilities pillar of the Star Factory
program. Within this framework, DEI and well-being forums were held to present resources and share best practices, which were then translated into
concrete roadmap goals and objectives by our sites.
Continue to offer our employees learning and bonding opportunities
We hit our target set in 2021 (Solvay at that time) to send at least 20% of our junior female managers to complete the “Ambition Challenge,” celebrating
500 alumni of this three-month external development program created by our partner The A Effect. We revamped our e-learning path and held a
successful first edition of our DEI Learning Day, with 340 people participating. We released two new toolkits: Creating Inclusive Workplaces, which
focuses on our facilities, and the DEI toolkit for teams, which presents facts, resources and talking points in the form of a calendar, for the 12 months of
the year.
Nurture and empower our Employee Resource Groups (ERGs)
In 2023 we celebrated the official launch of our ninth ERG: Voice Of Asia. Its mission is to build bridges between Western and Asian cultures, to foster
mutual understanding and unlock value. Our existing ERGs continued their journeys and also celebrated achievements:
· Global expansion of the Young Professionals Network.
· Black History Month and, for the first time, recognition of Dr. Martin Luther King’s birthday as a holiday, led by the African-American Group.
· New partners for Alliance LGBTQ+, with Out and Equal and the Gender Cool project to support the new Transgender & Gender Non-Conforming
Support Group.
· Disability Awareness Month and the launch of a digital accessibility diagnostic for Abled and Disabled Allies Partnering Together.
· Creation of a video series to tackle career blind spots for the X Factor, our group empowering women.
· Eighty ERG members participated in group mentoring offered by members of the entities’ leadership team, creating opportunities to share experiences
and gain exposure.
Overall, our ERGs had more than 3,200 members in 2023, a 20% increase compared to 2022.
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Commitment and plan for ensuring a living wage
We joined the UN Global Compact “Forward Faster” initiative on living wage, which calls on companies to publicly declare their commitments and
highlight the actions they will take to meet the target of ensuring 100% of employees across the organization earn a living wage by 2030. Syensqo has
committed to reaching this target by 2026. To make it happen, we launched a cross functional task force in 2023, including employee representatives, and
piloted the living wage analysis in three countries, which represent more than a third of our workforce. We also identified a global partner, the Fair Wage
Network, who provided us with the external living wage benchmarks and supported us in establishing the methodology. Learning points and conclusions
from the pilot projects will be further analyzed in 2024, in order to create a plan for roll-out to the rest of the organization.
6.4. Recruitment, development and retention
GRI DISCLOSURES 2-7 2-8 3-3 401-1 401-2 404-1 404-2 404-3
SDG 8
6.4.1. Definitions
Recruitment, development and retention provide data linked to talent management. This relates to how Syensqo is attracting, retaining and developing
talent and includes details on career management and access to training, coaching and mentoring that enables each employee to take the lead in
developing their career and reaching their full potential.
Headcount refers to employees that have a contract with Syensqo and are classified as active, as they have a position in the organizational chart. Full-
time equivalent (FTE) corresponds to the working time capacity of active employees. Apprentices, trainees and students are excluded from our figures.
6.4.2. Management approach
Recruitment and retention
Of the 1,942 positions recruited externally in 2023, 964 were filled by employees aged below 30.
Learning and development
AVERAGE HOURS OF TRAINING PER EMPLOYEE
By management level Units 2023 2022
Executive manager
Hours 11h 27mns 8h 21mns
Senior manager Hours 13h 26mns 12h 14mns
Middle manager Hours 13h 59mns 11h 58mns
Junior manager Hours 13h 37mns 13h 11mns
Non-managerial Hours 15h 17mns 12h 36mns
AVERAGE TRAINING HOURS
By gender Units 2023 2022
Women Hours 14h 16mns 12h 08mns
Men Hours 14h 45mns 12h 34mns
Total 14h 38mns 12h 28mns
Performance and development cycle
The performance and development cycle applies to the entire managerial population. It is also used by about 4,270 non-managerial employees,
representing 27% of the non-managerial population. Local performance and development tools and processes are available for the population not
covered by the performance and development cycle online tool.
6.4.3. Indicators
In 2023, Syensqo’s total headcount was 13,102 active employees. The number of full-time equivalent (FTE) employees was 13,046.5. Apprentices, trainees
and students are excluded from this figure.
SYENSQO’S WORKFORCE BY REGION
Units 2023 2022
Europe Number 4,927 4,712
Women % 26 26
Permanent staff % 99 98
Asia-Pacic and rest of the world Number 2,746 2,684
Women % 24 23
Permanent staff % 82 79
North America Number 4,976 4,765
Women % 21 20
Permanent staff % 100 100
Latin America Number 453 457
Women % 29 27
Permanent staff % 97 95
Total headcount Number 13,102 12,619
Women % 24 23
Permanent staff % 96 95
SYENSQO’S WORKFORCE
Units 2023 2022
By contract and by gender
Permanent contract Number 12,525 11,933
of which women % 23 23
Temporary contract Number 577 687
of which women % 33 25
By employment type
Full-time contract Number 12,885 12,406
of which women % 23 22
Part-time contract Number 217 212
of which women % 67 71
By employment category
Senior manager Number 194 188
Middle managers Number 1,836 1,736
Junior manager Number 3,389 3,135
Non-managerial Number 7,683 7,560
Total headcount Number 13,102 12,619
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HIRINGS
Units 2023 2022
By region
Asia and rest of the world Number 284 309
Europe Number 636 764
North America Number 935 1,085
Latin America Number 86 76
By gender
Male Number 1,282 1,556
Female Number 576 617
By age
<30 Number 962 1,012
30-49 Number 735 971
>49 Number 167 194
Total hirings Number 1,942 2,234
ALL LEAVES
Units 2023 2022
By region
Asia and rest of the world Number 141 205
Europe Number 349 423
North America Number 616 615
Latin America Number 39 58
By gender
Male Number 874 956
Female Number 269 343
By age
<30 Number 228 234
30-49 Number 491 615
>49 Number 426 451
Total leaves Number 1,145 1,300
Note: the summation may not coincide in all metrics, as we have more selection options than those mentioned. Such as “others,” and “not assigned,”
among others.
VOLUNTARY LEAVES
Units 2023 2022
By region
Asia and rest of the world
Number 74 107
Europe
Number 137 181
North America
Number 278 322
Latin America
Number 20 20
By gender
Male
Number 385 468
Female
Number 123 161
By age
<30
Number 119 134
30-49
Number 306 388
>49
Number 84 108
Total voluntary leaves
Number 508 630
6.4.4. Key achievements
In 2023, the company focused on accelerating development of the skills needed by Syensqo both now and in the future. We also focused on expanding
the use of learning technologies to offer learning opportunities to all Syensqo employees. Some examples include:
Developing key capabilities through our Academies:
· In 2023, our Leadership Academy continued to develop adaptable, collaborative and human-centered leaders to support company growth and
transformation. Through the Leadership Academy, we offered learning journeys for all levels of leaders, in eight different languages. It is future-focused
and utilizes innovative learning technology to support learning applications. In 2023, 411 leaders participated in the Leadership Academy journey.
· Our Sales Academy helps our sales teams to strengthen their skills. Our efforts to continue developing our commercial offensive in 2023 included
rolling out 21 different courses, both e-learning and instructor-led sessions, to more than 1,280 salespeople.
· Functional Academies support the development of technical and functional skills, through e-learning and instructor-led courses.
· Helping employees to own and drive their development and career:
· Syensqo offers all employees access to guided self-reflection and practical resources to accelerate their career through the Career Catalyst Program.
The program, which was available during 2023, helps employees shape their career vision and skilling strategies through digital learning content and
live sessions. In 2023, 119 employees participated in the program.
· Employees have access to a pool of mentors, and can also develop by contributing to a project.
· Leveraging digital learning technology:
· In 2023, Syensqo employees spent a total of 3,984 hours on developing their skills using our digital learning platform ELearn More. This equates to an
average of 2.3 hours per participant.
· Language development remains available to all employees, as well as to their families, through the digital tool Rosetta Stone, which offers instruction
in 14 languages. In 2023, 742 employees and their family members made use of this resource.
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6.5. Corporate citizenship
GRI DISCLOSURES 3-3 413-1
SDG 5 17
6.5.1. Definition
Syensqo’s Corporate Citizenship approach is our way of making a lasting, positive difference in society, not just through our scientific innovations, but
also through our commitment to service and giving.
6.5.2. Management approach
Syensqo remains deeply committed to philanthropic endeavors through our contributions to worldwide societal challenges, supporting a wide range of
initiatives around the world. Our corporate citizenship policy is centered around three pillars: protecting the planet, nurturing innovation and fostering
education. The projects supported in each of these three categories are closely aligned with our business. This includes our active involvement in several
flagship endeavors that truly reflect the way we partner with our stakeholders. Our philanthropic efforts have international reach but are also designed to
benefit local communities around Syensqo sites as well as our employees.
6.5.3. Indicators
Citizen Day 2023
Citizen Day gives Syensqo employees around the world the opportunity to engage in actions with local communities. The event was created by our CEO,
Ilham Kadri, in 2019. It aims to reinforce our purpose – we are explorers creating breakthroughs that advance humanity – and encourage employees to
act as one team for one planet.
The transfer of knowledge, skills and experience for generations to come was the theme of our Citizen Day in 2023. The event provided a unique
opportunity for Syensqo employees to come together and take actions to pass on their expertise to fellow colleagues and local communities.
Key figures from Citizen Day 2023 include:
· 11,200 participations, of which 4,100 where external people from local communities taking part in our open days, volunteering or mentoring events.
· More than 60 activities globally.
· 32 participating sites.
Citizen Day activities took place at global, site, team and individual levels, and in both virtual and in-person formats. We also encouraged employees to
give back to local communities in various ways, including through mentoring, open door events and volunteering.
Local societal actions in 2023
Syensqo defines societal actions as “a volunteer activity developed by a site, a business unit or at corporate level, having a positive societal impact on at
least one of the United Nations Sustainable Development Goals.”
In 2023, on the basis of voluntary reporting, 61 sites reported that more than 6,500 participants had taken part in societal actions, while noting that an
employee may have participated in several actions. The total amount donated through societal actions is around €330,000, on the basis of voluntary
reporting
Number of sites reporting participation Number of participations Donation (k€)
APAC 13 614 77
EMEA 18 2,414 51
LATAM 3 171 1
NAM 27 3,378 202
In the Asia Pacific (APAC) zone, in addition to financial support, several actions were dedicated to education, support for elderly people, and nature
protection and restoration.
In the Europe, Middle East and Africa (EMEA) zone, various actions were oriented toward the education of young pupils in schools and universities, to
help them understand the career opportunities and challenges in the chemical industry.
In the Latin America (LATAM) zone, several actions were focused on educational campaigns for young people as well as donations of clothes and
equipment to communities.
In the North America (NAM) zone, numerous activities were related to donations and funding for local activities. Several career days and science,
technology, engineering and mathematics (STEM)-oriented education activities were also organized by the sites, as well as food drives and volunteering
activities.
6.5.4. Major projects
Solidarity Fund support
In 2023, Syensqo supported employees and local communities in need through the Solidarity Fund, assisting more than 67 projects in 16 different
countries, since the launch of the Fund in 2020. Originally set up to help employees cope with hardship caused by the Covid-19 pandemic, the Fund
now also addresses other kinds of hardship. Our major focus in 2023 was on supporting those affected by natural disasters around the world. We also
continued to support those impacted by the war in Ukraine. We donated around €1.9 million to a number of initiatives organized at global and site levels,
such as:
· Supporting emergency efforts in Turkey, Syria and Morocco, aiding those affected by devastating earthquakes. The organizations we provided
assistance to are the International Blue Crescent Relief and the Development Foundation (CBI) for Syria, and AHBAP and AFAD for Turkey. Through
these organizations, the Fund provided help to medical teams and those who lost their homes.
· Continuing to support Ukraine, extending resources to organizations supporting refugees, and providing medical assistance and frontline aid. In
this ongoing conflict, we aim to come to the aid of those affected by this crisis. For example, in Belgium, the Fund supported the Bonjour Belgique
initiative, led by Bibliothèque Sans Frontières, to aid Ukrainian refugees in their integration.
Ellen MacArthur Foundation
In December 2023, Syensqo signed a renewed partnership with the Ellen MacArthur Foundation, continuing the partnership originally established with
Solvay in 2018. For more information see page 175.
Sustainable Guar Initiative (SGI)
Sourced predominantly from the Rajasthan region in India and used as a thickening agent, stabilizer and binder in a variety of industries, the guar
gum derived from the guar bean has many applications, making it a highly sought after ingredient. However, increased industrial demand has raised
environmental challenges. Climate variability and climate change, water scarcity, soil erosion and deforestation are just some of the environmental
concerns related to guar farming.
As the world’s leading producer of guar derivatives, Syensqo has partnered with our customers L’Oréal, Henkel and Procter & Gamble, along with
NGO Technoserve, to make guar cultivation in Rajasthan more sustainable. The initiative ensures that guar farmers can earn a better living, and lead
healthier lives, while enabling us to obtain higher quality guar, and our customers to benefit from improved supply security, which is highly valued by
final consumers. The initiative also empowers women through training focused on hygiene, health, nutrition and digital literacy. Since the launch of the
initiative in 2015, we have enrolled 12,000 farmers, including over 3,500 women, across 60 villages.
We have also taken additional steps to advance this initiative by embedding blockchain in the SGI program. Blockchain is helping to strengthen the value
chain by providing transactional transparency and provenance tracking.
Awards for young STEM PhD graduates encouraging them to contribute to societal progress
On an annual basis we offer an award for PhD graduates who have successfully defended their thesis the previous year in the Faculty of Sciences or
Engineering School of the Université Libre de Bruxelles (ULB) or of the Vrije Universiteit Brussel (VUB).
Our aim in awarding this prize is to encourage young people to train and undertake research in the fields of science and technology, where research
is essential for the development of current and future industrial activities. Our intent is to stimulate the inventiveness of talented PhD graduates and
encourage them to think of ways their work can contribute to societal progress.
Since the beginning in 1989, nearly 600 students have applied for the award. At our awards ceremony in October 2023, we celebrated the five PhD
laureates from the 2022 session.
CommonLit: making literacy education in the US accessible for everyone
CommonLit is an American nonprofit EdTech organization dedicated to ensuring that all students, regardless of background and socioeconomic status,
graduate with the reading, writing, communication and problem-solving skills they need to be successful in university and later life. To accomplish this
goal, CommonLit has developed an innovative digital literacy program that helps teachers advance their students’ literacy through a high-quality digital
curriculum, analytic dashboards that track student growth and personalized support for students.
Syensqo supports CommonLit’s work with financial commitments made through the Epic Foundation, a global organization connecting nonprofits
creating solutions to today’s pressing challenges with individuals and businesses who want to drive positive change. This important three-year investment
will support schools in 55 zip codes in the US, and goes hand-in-hand with our broader commitment to invest in local communities and support science
careers.
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GirLS are leading the way!
Girls Leading in Science (GirLS) is the name of a special competition initiated by women scientists from Syensqo Research and Innovation in Belgium. It
aims to inspire young people, and more specifically girls, to pursue higher education in a scientific or technological field.
Conducted in two stages, the competition consists of a pre-selection phase and a final. During the 2023 pre-selection, 39 students were chosen based
on short video submissions in which they discussed a scientific or technical subject of their choice. Submissions were received from all three regions of
Belgium.
The 2023 contestants had to demonstrate their creativity and scientific skills while brainstorming in groups on a fascinating theme: “solving the ecological
crisis thanks to biodiversity.” The candidates with the best project and the best-proposed solution were offered a grant to continue their future education
in STEM. The winning team was composed of two girls and three boys.
6.6. Critical incident risk management
GRI DISCLOSURE 2-27 3-3 307-1
SDG 3 12
6.6.1. Definitions
Syensqo’s reporting of Process Safety Incidents is aligned with the globally harmonized metrics from the ICCA (International Council of Chemical
Associations) and Cefic (European Chemical Industry Council). The Process Safety Incident rate (PSI rate) corresponds to the number of Process Safety
Incidents per 100 full-time equivalent employees, including employees and contractors and assuming 2,000 working hours per worker, per year for
employees, and actual work hours reported monthly by all sites for contractors. This rate is monitored and enables benchmarking with peers.
Perimeter:
· For the Process Safety Incident, it applies to production sites and research and innovation center sites under operational control where a process risk
may be identified. This is an operational perimeter excluding all sites that are not in the “Process scope”: administrative sites, business, engineering,
corporate, environmental rehabilitation, etc., but also external warehouses, quarries and mines, among others.
Severity:
· High or catastrophic severity incident: reversible injuries offsite, or irreversible injuries onsite, or reversible environmental damage offsite, or damage to
equipment with direct cost above €2 million.
· Medium severity incident: first aid injuries offsite, reversible injuries onsite, or operating permit limits exceedance, fire, explosion, rupture of a piece of
equipment with damage above €2,500, or chemical release with amount above the ICCA thresholds.
Chemical release:
· Low and medium process safety events involve a release of chemicals from a chemical process which meets the consequence thresholds as defined by
ICCA Globally Harmonized Process Safety Metrics.
Transport Safety Incidents are incidents occurring during the movement of a chemical product such as:
· Loading or unloading at a Syensqo site.
· Circulating inside a Syensqo site in a vehicle, on the way in or out of the site.
· Circulating on public roads, rail, air, inland waterways or sea.
· Loading or unloading at an offsite location, if Syensqo or a logistics provider contracted by Syensqo is performing the loading or unloading.
6.6.2. Management approach
Process safety
Process Safety Management is a management system for designing and operating industrial processes that handle large quantities of hazardous
chemicals. For preventing and controlling incidents in industrial processes, Syensqo applies the Process Safety Management Principles on all industrial
sites, regardless of whether the site is covered by regulatory requirements.
Key elements are:
· Completion of Process Hazard Analyses to identify high-risk situations. These are performed on each unit with a unique risk matrix to quantify the risk
level of every potential accidental scenario, combining severity and probability factors.
· Activation of an Emergency Response Plan in case of severe incidents on site. Relevant internal and external parties are informed through the application
of Syensqo’s crisis management procedure. If needed, the Corporate Crisis Cell (crisis alert duty 24/7) is also activated.
· Systematic analysis of each incident is carried out as soon as possible, in order to identify root causes and implement preventive actions to avoid similar
incidents in the future.
· Central reporting of Process Safety Incidents. The incident severity – medium, high or catastrophic – is assessed by applying internal criteria, including
consequences onsite or offsite, damage to the immediate vicinity and quantity of spilled material.
· Publication of process safety bulletins for significant incidents, distributed to all sites. These bulletins are used by the sites as support materials for safety
talks to increase the process safety knowledge of employees.
Transport safety
The major goal of the Transport Safety Management system is a reduction in incidents that could lead to catastrophic consequences. The main elements
are:
· Regulatory watch and compliance with applicable transport regulations
· Training
· Selection process for Logistics Service Providers, based on hazard and risk assessment
· Operational management of day-to-day transport operations, including loading and unloading
· Emergency preparedness and response for levels 1, 2 and 3
· Incident reporting and investigation
· Auditing
6.6.3. Indicators
Process safety
Syensqo’s target is to avoid any high- or catastrophic-severity incidents and to reduce the Process Safety Incident rate.
Units 2023 2022
Process Safety Incident rate
Medium- or higher-severity incidents per 200,000 hours
worked
0.68 0.74
Process safety incidents with medium, high or catastrophic
severity
Number 92 94
1
1
The 2022 process safety incidents with medium, high or catastrophic severity has been restated in accordance with the denition.
Employees’ work hours are based on the average of the monthly active internal workforce (headcount) multiplied by the coefficient of 2,000 hours for all
countries and sites. Contractors’ actual work hours are reported monthly by all sites.
Units 2023 2022
Process safety incidents
2
(medium, high, catastrophic) with environmental consequences (medium, high
or catastrophic)
Number 16 17
– with reportable operating permit limit exceedance, and with a chemical release (low, medium) Number 5 9
– without reportable operating permit limit exceedance Number 11 8
In 2023, 16 process incidents with release to the environment were reported. Among these, five generated reportable cases of having exceeded an
operating permit limit.
Transport safety
All medium, high and catastrophic transport safety incidents must be reported in the corporate reporting tool, with a detailed description and
classification. Root cause analysis, including actions to prevent recurrence and lessons-learned bulletins are mandatory for all high- and catastrophic-
severity incidents, and for medium-severity incidents resulting in a fire or an explosion, as well as for HSPos (High Severity Potential) incidents. These
are low- or medium-severity incidents or near misses that might have been worse (high or catastrophic) if the circumstances had been slightly different.
TRANSPORT SAFETY INCIDENTS
Units 2023 2022
Medium severity Number 0 4
High severity Number 0 0
Catastrophic Number 0 2
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7. GRI CONTENT INDEX
7.1. Statement of use and GRI 1 used
Syensqo has reported in accordance with the GRI Standards for the period January 1, 2023, to December 31, 2023.
GRI 1 used: GRI 1 Foundation 2021.
Applicable GRI Sector Standards: not applicable.
7.2. GRI 2: general disclosures 2021
THE ORGANIZATION AND ITS REPORTING PRACTICES
Disclosure Location Omission
2-1 Organizational details Financial statements: note F1 – revenue and segment information, page 254
Note F40 – list of companies included in the consolidation scope, page 340
2-2 Entities included in the organization’s
sustainability reporting
Extra-nancial statements: 2.1. Reporting frameworks, page 150
Financial statements: Note F40 – list of companies included in the
consolidation scope, page 340
2.3 Reporting period, frequency and contact
point
Reporting period: from January 1, 2023, to December 31, 2023
Frequency: yearly and aligned on nancial reporting
Contact point: investor[email protected]
Publication date: April 16, 2024
2.4 Restatements of information Financial Statements: Consolidated Financial Statements: Main events and
changes in consolidation scope during the year, page 236
Extra-nancial statements: 2.1. Reporting frameworks, page 150
2.2 Reporting scope and boundaries
2-5 External assurance Auditor’s report for the extra-nancial statements, page 348
ACTIVITIES AND WORKERS
Disclosure Location Omission
2-6 Activities, value chain and other business
relationships
Sustainable value creation: Our business model
Performance: segments overview, page 16
2-7 Employees Extra-nancial statements: 2.1. Reporting frameworks
Extra-nancial statements: 6.4. Recruitment, development and retention,
page 218
2-8 Workers who are not employees Extra-nancial statements: 6.4. Recruitment, development and retention,
page 218
GOVERNANCE
Disclosure Location Omission
2-9 Governance structure and composition Corporate Governance Statement: Board of Directors and Board
Committees, page 95
2-10 Nomination and selection of the highest
governance body
Corporate Governance Statement: Board of Directors and Board
Committees, page 95
Charter of Corporate Governance
https://www.syensqo.com/en/investors/corporate-governance
2-11 Chair of the highest governance body Corporate Governance Statement: Board of Directors and Board
Committees, page 95
2-12 Role of the highest governance body in
overseeing the management of impacts
Charter of Corporate Governance
https://www.syensqo.com/en/investors/corporate-governance/board-
directors
2-13 Delegation of responsibility for manag-
ing impacts
Corporate Governance Statement, page 90
2-14 Role of the highest governance body in
sustainability reporting
About this report, page 00
Declaration by the persons responsible, page 392
2-15 Conicts of interest Corporate Governance Statement: Functioning of the Board of Directors,
page 99
Corporate Governance Statement: Introduction, page 90
Charter of Corporate Governance
https://www.syensqo.com/en/investors/corporate-governance/board-
directors
2-16 Communication of critical concerns Corporate Governance Statement: Functioning of the Board of Directors,
page 99
2-17 Collective knowledge of the highest
governance body
Corporate Governance Statement: Induction and continuous Board training,
page 100
2-18 Evaluation of the performance of the
highest governance body
Corporate Governance Statement: Evaluation, page 99
2-19 Remuneration policies Corporate Governance Statement: Compensation report, page 106
2-20 Process to determine remuneration Corporate Governance Statement: Compensation report, page 106
2-21 Annual total compensation ratio Corporate Governance Statement: Compensation report, page 106
STRATEGY, POLICIES AND PRACTICES
Disclosure Location Omission
2-22 Statement on sustainable development
strategy
Advancing humanity: Our sustainability ambition, page 52
2-23 Policy commitments Extra-nancial statements: 3.2. Management of the legal, ethics and
regulatory framework, page 164
Extra-nancial statements: 5.4. Hazardous materials, page 205
2-24 Embedding policy commitments Extra-nancial statements: 6.6. Critical incident risk management, page 224
Extra-nancial statements: 3.1 Syensqo One Planet Ambition, page 163
2-25 Processes to remediate negative impacts Extra-nancial statements: 6.1. Health, safety and environment management,
page 170
2-26 Mechanisms for seeking advice and
raising concerns
Extra-nancial statements: 3.2. Management of the legal, ethics and
regulatory framework, page 164
2-27 Compliance with laws and regulations Extra-nancial statements: 3.2. Management of the legal, ethics and
regulatory framework, page 164
Extra-nancial statements: 6.6. Critical incident risk management, page 224
2-28 Membership associations Extra-nancial statements: 3.7. Membership of associations, page 176
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STAKEHOLDER ENGAGEMENT
Disclosure Location Omission
2-29 Approach to stakeholder engagement Advancing humanity: Engaging with stakeholders, page 68
2-30 Collective bargaining agreements Extra-nancial statements: 6.2. Employee engagement and well-being,
page 212
7.3. GRI 3: material topics 2021
Disclosure Location Omission
3-1 Process to determine material topics Extra-nancial statements: 2.3. Materiality analysis, page 152
3-2 List of material topics Extra-nancial statements: 2.3. Materiality analysis, page 152
MANAGEMENT OF THE LEGAL, ETHICS AND REGULATORY FRAMEWORK
Source Disclosure Location Omission
GRI 3: Material topics 2021 3-3 Management of material topics Extra-nancial statements: 3.2. Management of
the legal, ethics and regulatory framework,
page 164
GRI 205: Anti-corruption 2016 205-1 Operations assessed for risks
related to corruption
Risk management: Compliance and business
integrity, page 134
GRI 205: Anti-corruption 2016 205-2 Communication and training
about anti-corruption policies and
procedures
Extra-nancial statements: 3.2. Management of
the legal, ethics and regulatory framework,
page 164
GRI 205: Anti-corruption 2016 205-3 Conrmed incidents of
corruption and actions taken
Risk management: Litigation, page 145
Extra-nancial statements: 3.2. Management of
the legal, ethics and regulatory framework,
page 164
GRI 206: Anti-competitive
behavior 2016
206-1 Legal actions for anti-competitive
behavior, antitrust and monopoly
practices
Risk management: Litigation, page 145
GRI 406: Non-discrimination
2016
406-1 Incidents of discrimination and
corrective actions taken
Extra-nancial statements: 3.2. Management of
the legal, ethics and regulatory framework,
page 164
GRI 412: Human rights
assessment 2016
412-1 Operations that have been
subject to human rights reviews or
impact assessments
Extra-nancial statements: 3.2. Management of
the legal, ethics and regulatory framework,
page 164
GRI 412: Human rights
assessment 2016
412-2 Employee training on human
rights policies or procedures
Extra-nancial statements: 3.2. Management of
the legal, ethics and regulatory framework,
page 164
GRI 415: Public policy 2016 415-1 Political contributions Extra-nancial statements: 3.2. Management of
the legal, ethics and regulatory framework,
page 164
GRI 419: Socioeconomic
compliance 2016
419-1 Non-compliance with laws and
regulations in the social and economic
area
Risk management: Litigation, page 145
GREENHOUSE GAS EMISSIONS
Source Disclosure Location Omission
GRI 3: Material topics 2021 3-3 Management of material topics Extra-nancial statements: 4.1. Greenhouse gas
emissions, page 181
GRI 305: Emissions 2016 305-1 Direct (Scope 1) GHG emissions Extra-nancial statements: 4.1. Greenhouse gas
emissions, page 181
GRI 305: Emissions 2016 305-2 Energy indirect (Scope 2) GHG
emissions
Extra-nancial statements: 4.1. Greenhouse gas
emissions, page 181
GRI 305: Emissions 2016 305-3 Other indirect (Scope 3) GHG
emissions
Extra-nancial statements: 4.1. Greenhouse gas
emissions, page 181
GRI 305: Emissions 2016 305-4 GHG emissions intensity Extra-nancial statements: 4.1. Greenhouse gas
emissions, page 181
GRI 305: Emissions 2016 305-5 Reduction of GHG emissions Extra-nancial statements: 4.1. Greenhouse gas
emissions, page 181
BIODIVERSITY
Source Disclosure Location Omission
GRI 3: Material topics 2021 3-3 Management of material topics Extra-nancial statements: 4.3. Biodiversity,
page 187
GRI 304: Biodiversity 2016 304-1 Operational sites owned, leased,
or managed in or adjacent to protected
areas and areas of high biodiversity
value, outside protected areas
Extra-nancial statements: 4.3. Biodiversity,
page 187
GRI 304: Biodiversity 2016 304-2 Signicant impacts of activities,
products and services
on biodiversity
Extra-nancial statements: 4.3. Biodiversity,
page 187
GRI 304: Biodiversity 2016 304-3 Habitats protected or restored Extra-nancial statements: 4.3. Biodiversity,
page 187
GRI 304: Biodiversity 2016 304-4 IUCN Red List species and
national conservation list species with
habitats in areas affected by operations
Extra-nancial statements: 4.3. Biodiversity,
page 187
PRODUCT DESIGN AND LIFE CYCLE MANAGEMENT
Source Disclosure Location Omission
GRI 3: Material topics 2021 3-3 Management of material topics Extra-nancial statements: 5.1. Product design
and life cycle management, page 193
GRI 416: Customer health and
safety 2016
416-1 Assessment of the health and
safety impacts of product and service
categories
Extra-nancial statements: 5.1. Product design
and life cycle management, page 193
Extra-nancial statements: 4.5. Waste, page 190
Extra-nancial statements: 5.4. Hazardous
materials, page 205
GRI 416: Customer health and
safety 2016
416-2 Incidents of non-compliance
concerning the health and safety
impacts of products and services
Risk management: Environmental impacts and
controversies, page 130
Syensqo Products based on circular sourcing Extra-nancial statements: 5.3. Circular economy,
page 204
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AIR QUALITY
Source Disclosure Location Omission
GRI 3: Material topics 2021 3-3 Management of material topics Extra-nancial statements: 4.4. Air quality,
page 189
GRI 305: Emissions 2016 Disclosure 305-6 Emissions of
ozone-depleting substances (ODS)
Extra-nancial statements: 4.4. Air quality,
page 189
GRI 305: Emissions 2016 305-7 Nitrogen oxides (NOx), sulfur
oxides (SOx) and other signicant air
emissions
Extra-nancial statements: 4.4. Air quality,
page 189
Requirement omitted:
hazardous air
pollutants, particulate
matter
Reason: information
unavailable/incomplete
Explanation: sites re-
port data according to
national requirements;
this does not allow
consolidation. There
is no internationally
recognized reference
list or methodology.
We are working on a
global list to report on
and expect to be able
to report in 2025.
WATER AND WASTEWATER
Source Disclosure Location Omission
GRI 3: Material topics 2021 3-3 Management of material topics Extra-nancial statements: 4.6. Water and
wastewater, page 191
GRI 303: Water and efuents
2018
303-1 Interactions with water as a
shared resource
Extra-nancial statements: 4.6. Water and
wastewater, page 191
GRI 303: Water and efuents
2018
303-2 Management of water discharge-
related impacts
Extra-nancial statements: 4.6. Water and
wastewater, page 191
GRI 303: Water and efuents
2018
303-3 Water withdrawal Extra-nancial statements: 4.6. Water and
wastewater, page 191
GRI 303: Water and efuents
2018
303-4 Water discharge Extra-nancial statements: 4.6. Water and
wastewater, page 191
GRI 303: Water and efuents
2018
303-5 Water consumption Extra-nancial statements: 4.6 Water and
wastewater, page 191
WASTE
Source Disclosure Location Omission
GRI 3: Material topics 2021 3-3 Management of material topics Extra-nancial statements: 4.5. Waste page 190
GRI 306: Waste 2020 306-1 Waste generation and signicant
waste-related impacts
Extra-nancial statements: 4.5. Waste, page 190
GRI 306: Waste 2020 306-2 Management of signicant
waste-related impacts
Extra-nancial statements: 4.5. Waste, page 190
GRI 306: Waste 2020 306-3 Waste generated Extra-nancial statements: 4.5. Waste, page 190
GRI 306: Waste 2020 306-4 Waste diverted from disposal Extra-nancial statements: 4.5. Waste, page 190
GRI 306: Waste 2020 306-5 Waste directed to disposal Extra-nancial statements: 4.5. Waste, page 190
EMPLOYEE HEALTH AND SAFETY
Source Disclosure Location Omission
GRI 3: Material topics 2021 3-3 Management of material topics Extra-nancial statements: 6.1. Employee health
and safety, page 208
GRI 403: Occupational health
and safety 2018
403-1 Occupational health and safety
management system
Extra-nancial statements: 6.1. Employee health
and safety, page 208
GRI 403: Occupational health
and safety 2018
403-2 Hazard identication, risk
assessment and incident investigation
Extra-nancial statements: 6.1. Employee health
and safety, page 208
GRI 403: Occupational health
and safety 2018
403-3 Occupational health services Extra-nancial statements: 6.1. Employee health
and safety, page 208
GRI 403: Occupational health
and safety 2018
403-4 Worker participation,
consultation and communication on
occupational health and safety
Extra-nancial statements: 6.1. Employee health
and safety, page 208
Extra-nancial statements: 6.2. Employee
engagement and well-being, page 212
GRI 403: Occupational health
and safety 2018
403-5 Worker training on occupational
health and safety
Extra-nancial statements: 6.1. Employee health
and safety, page 208
GRI 403: Occupational health
and safety 2018
403-6 Promotion of worker health Extra-nancial statements: 6.1. Employee health
and safety, page 208
GRI 403: Occupational health
and safety 2018
403-7 Prevention and mitigation of
occupational health and safety impacts
directly linked by business relationships
Extra-nancial statements: 6.1. Employee health
and safety, page 208
GRI 403: Occupational health
and safety 2018
403-8 Workers covered by an
occupational health and safety
management system
Extra-nancial statements: 6.1. Employee health
and safety, page 208
GRI 403: Occupational health
and safety 2018
403-9 Work-related injuries Extra-nancial statements: 6.1. Employee health
and safety, page 208
GRI 403: Occupational health
and safety 2018
403-10 Work-related ill health Extra-nancial statements: 6.1. Employee health
and safety, page 208
EMPLOYEE ENGAGEMENT AND WELL-BEING
Source Disclosure Location Omission
GRI 3: Material topics 2021 3-3 Management of material topics Extra-nancial statements: 6.2. Employee
engagement and well-being, page 212
GRI 401: Employment 2016 401-2 Benets provided to full-time
employees that are not provided to
temporary or part-time employees
Extra-nancial statements: 6.2. Employee
engagement and well-being, page 212
Extra-nancial statements: 6.4. Recruitment,
development and retention, page 218
GRI 402: Labor/Management
relations 2016
402-1 Minimum notice periods
regarding operational changes
Not applicable:
the minimum notice
periods are based
on local legislations
and local collective
agreements.
GRI 407: Freedom of association
and collective bargaining 2016
407-1 Operations and suppliers
in which the right to freedom of
association and collective bargaining
may be at risk
Extra-nancial statements: 6.2. Employee
engagement and well-being, page 212
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DIVERSITY AND INCLUSION
Source Disclosure Location Omission
GRI 3: Material topics 2021 3-3 Management of material topics Extra-nancial statements: 6.3. Diversity and
inclusion, page 215
GRI 405: Diversity and equal
opportunity 2016
405-1 Diversity of governance bodies
and employees
Extra-nancial statements: 6.3. Diversity and
inclusion, page 215
GRI 405: Diversity and equal
opportunity 2016
405-2 Ratio of basic salary and remu-
neration of women to men
Extra-nancial statements: 6.3. Diversity and
inclusion, page 215
CORPORATE CITIZENSHIP
Source Disclosure Location Omission
GRI 3: Material topics 2021 3-3 Management of material topics Extra-nancial statements: 6.5. Corporate
citizenship, page 222
GRI 413: Local communities
2016
413-1 Operations with local community
engagement, impact assessments and
development programs
Extra-nancial statements: 6.5. Corporate
citizenship, page 222
GRI 413: Local communities
2016
413-2 Operations with signicant actual
and potential negative impacts on local
communities
Risk management: Environmental impacts and
controversies, page 130
HAZARDOUS MATERIALS
Source Disclosure Location Omission
GRI 3: Material topics 2021 3-3 Management of material topics Extra-nancial statements: 5.4. Hazardous
materials, page 205
GRI 403: Occupational health
and safety 2018
403-7 Prevention and mitigation of
occupational health and safety impacts
directly linked by business relationships
Extra-nancial statements: 5.4. Hazardous
materials, page 205
Extra-nancial statements: 6.1. Employee health
and safety, page 208
Syensqo Safer alternatives for marketed
products
Extra-nancial statements: 5.4. Hazardous
materials, page 205
CRITICAL INCIDENT RISK MANAGEMENT
Source Disclosure Location Omission
GRI 3: Material topics 2021 3-3 Management of material topics Extra-nancial statements: 6.6. Critical incident
risk management, page 224
GRI 307: Environmental
compliance 2016
307-1 Non-compliance with
environmental laws and regulations
Extra-nancial statements: 6.6. Critical incident
risk management, page 224
7.4. Other topics included in this report
ENERGY
Source Disclosure Location Omission
GRI 3: Material topics 2021 3-3 Management of material topics Extra-nancial statements: 4.2. Energy, page 185
GRI 302: Energy 2016 302-1 Energy consumption within the
organization
Extra-nancial statements: 4.2. Energy, page 185
GRI 302: Energy 2016 302-2 Energy consumption outside of
the organization
Extra-nancial statements: 4.2. Energy, page 185
GRI 302: Energy 2016 302-3 Energy intensity Extra-nancial statements: 4.2. Energy, page 185
GRI 302: Energy 2016 302-4 Reduction of energy
consumption
Extra-nancial statements: 4.2. Energy, page 185
RECRUITMENT, DEVELOPMENT AND RETENTION
Source Disclosure Location Omission
GRI 3: Material topics 2021 3-3 Management of material topics Extra-nancial statements: 6.4. Recruitment,
development and retention, page 218
GRI 401: Employment 2016 401-1 New employee hires and
employee turnover
Extra-nancial statements: 6.4. Recruitment,
development and retention, page 218
GRI 401: Employment 2016 401-2 Benets provided to full-time
employees that are not provided to
temporary or part-time employees
Extra-nancial statements: 6.4. Recruitment,
development and retention, page 218
GRI 404: Training and education
2016
404-1 Average hours of training per
year per employee
Extra-nancial statements: 6.4. Recruitment,
development and retention, page 218
GRI 404: Training and education
2016
404-2 Programs for upgrading
employee skills and transition
assistance programs
Extra-nancial statements: 6.4. Recruitment,
development and retention, page 218
GRI 404: Training and education
2016
404-3 Percentage of employees
receiving regular performance and
career development reviews
Extra-nancial statements: 6.4. Recruitment,
development and retention, page 218
SUPPLY CHAIN AND PROCUREMENT
Source Disclosure Location Omission
GRI 3: Material topics 2021 3-3 Management of material topics Extra-nancial statements: 3.5. Supply chain and
procurement, page 173
GRI 308: Supplier environmental
assessment 2016
308-1 New suppliers that were
screened using environmental criteria
Extra-nancial statements: 3.5. Supply chain and
procurement, page 173
GRI 308: Supplier environmental
assessment 2016
308-2 Negative environmental impacts
in the supply chain and actions taken
Extra-nancial statements: 3.5. Supply chain and
procurement, page 173
GRI 407: Freedom of association
and collective bargaining 2016
407-1 Operations and suppliers
in which the right to freedom of
association and collective bargaining
may be at risk
Extra-nancial statements: 3.5. Supply chain and
procurement, page 173
GRI 414: Supplier social
assessment 2016
414-1 New suppliers that were
screened using social criteria
Extra-nancial statements: 3.5. Supply chain and
procurement, page 173
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FINANCIAL
STATEMENTS
236 1. Consolidated financial statements
236 Main events and changes in the
consolidation scope
239 Consolidated income statement
240 Consolidated statement of comprehensive
income
241 Consolidated statement of cash flows
243 Consolidated statement of financial position
244 Consolidated statement of changes in
equity
246 2. Notes to the consolidated financial
statements
246 IFRS general accounting policies
248 3. Principles of consolidation
252 Critical accounting judgements and key
sources of estimation uncertainty
253 Non-IFRS (underlying) metrics
254 Notes to the consolidated income statement
271 Notes to the consolidated statement of
comprehensive income
273 Notes to the consolidated statement of cash
flows
277 Notes to the consolidated statement of
financial position
334 Other required disclosures
344 4. Summary of financial statements of
Syensqo SA
345 Balance sheet of Syensqo SA (summary)
346 Income statement of Syensqo SA (summary)
346 Profit available for distribution
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CONSOLIDATED INCOME STATEMENT
In € million Notes 2023 2022
Sales
(F1)
- of which revenue from non-core activities
(F3)
- of which net sales
Cost of goods sold
-4,690 -5,519
Gross margin 2,375 2,604
Commercial costs
-296 -222
Administrative costs
-521 -622
Research and development costs
-339 -312
Other operating gains (and losses)
(F4)
-141 -152
Earnings from associates and joint ventures
(F23)
Results from portfolio management and major restructuring
(F5)
-388 -31
Results from legacy remediation and major litigations
(F5)
-168 -182
EBIT 547 1,098
Cost of borrowings
(F6)
-190 -133
Interest on loans and short-term deposits
(F6)
Other gains (and losses) on net indebtedness
(F6)
-31 -37
Cost of discounting provisions
(F6)
-28 17
Result from equity instruments measured at fair value
Profit/(loss) for the year before taxes 389 966
Income taxes
(F7)
-192 -2
Profit/(loss) for the year 197 964
attributable to:
- Syensqo share 193 950
- non-controlling interests 3 14
Basic earnings per share (€)
(F8)
Diluted earnings per share (€)
(F8)
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
In € million
Notes 2023 2022
Profit/(loss) for the year 197 964
Other comprehensive income
Gains and (losses) on hedging instruments in a cash flow hedge
(F9)
-50 9
Currency translation di
fferences
(F9)
-169 168
Share of other comprehensive income of associates and joint ventures
(F9)
-6 -8
Recyclable components -225 170
Gains and (losses) on equity instruments measured at fair value through other comprehensive income
(F9)
-6 -25
Remeasurements of the net defined benefit liability
(F9)
-35 -65
Share of other comprehensive income of associates and joint ventures
(F9)
Non-recyclable components -41 -90
Income tax relating to recyclable and non-recyclable components
(F9)
Other comprehensive income/(loss), net of related tax effects (F9) -238 73
Comprehensive income/(loss) for the year -41 1,037
attributable to:
- Syensqo share -42 1,024
- non-controlling interests 1 13
CONSOLIDATED STATEMENT OF CASH FLOWS
In € million
Notes 2023 2022
Profit/(loss) for the year 197 964
Adjustments to profit/(loss) for the year 1,472 936
- Depreciation, amortization and impairments
(F10)
- Earnings from associates and joint ventures
(F23)
-25 -16
- Other non-operating and non-cash items
(F11)
-62 6
- Additions and reversals of employee benefits and provisions
(F14)
- Net financial charges & gains and losses on investments at fair value through P&L 158 132
- Income tax expense/income
(F12)
Changes in working capital
(F13)
Use of provisions and payments for employee benefits
(F14)
-134 -121
Additional voluntary contributions (pension plans)
(F14)
-86 -
Dividends received from associates and joint ventures
(F23)
Income taxes paid (excluding income taxes paid on sale of investments)
(F12)
-288 -182
Cash flow from operating activities 1,275 1,336
of which cash flow related to portfolio management and excluded from Free Cash Flow -105 -6
Acquisition (-) of subsidiaries
(F15)
-2 -
Acquisition (-) of investments – Other
(F15)
-14 -3
Loan repayments from associates and non-consolidated companies 172 102
of which with remaining Solvay Group 172 102
Sale (+) of subsidiaries and investments
(F15)
Acquisition (-) of property, plant and equipment
(F15)
-762 -522
of which capital expenditures required for the Partial Demerger and excluded from Free Cash Flow (F15) -54 -
Acquisition (-) of intangible assets
(F15)
-88 -69
Sale (+) of property, plant and equipment and intangible assets
(F15)
Dividends from equity instruments measured at fair value 1 2
Change in internal bank accounts with remaining Solvay Group
(F16)
-570 -227
Changes in non-current financial assets -1 1
Cash flow from investing activities -1,231 -644
Repayment of perpetual hybrid bond (capital injections from non-controlling interests) 7 -
Acquisition (-) / sale (+) of treasury shares 3 -
Increase in borrowings
(F33)
of which from remaining Solvay Group 771 355
Repayment of borrowings
(F33)
-3,208 -410
of which to remaining Solvay Group -2,270 -125
Changes in other financial assets
(F33)
-4 26
Payment of lease liabilities
(F33)
-53 -51
Net interests paid -119 -97
Coupons paid on perpetual hybrid bonds
(F27)
Dividends paid to non-controlling interests -8 -8
Dividends paid to Solvay Group
(F17)
-436 -237
Dividends received from Solvay Group
(F17)
Other transactions with Solvay Group
(F17)
Acquisition of non-controlling interests - -
Other
(F18)
-9 -19
Cash flow from financing activities 890 -576
Net change in cash and cash equivalents 934 116
Currency translation di
fferences -28 -10
Opening cash balance 244 139
Closing cash balance
(F33) 1,150 244
SYENSQO 2023
FINANCIAL STATEMENTS
_243
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
242_
Prior to the Partial Demerger, changes in receivables or liabilities from the cash pooling agreements, as well as proceeds from and repayments of loans
with the Remaining Solvay Group were included in the line items “Increase / Repayment of borrowings” in the cash flows from financing activities of the
consolidated statements of cash flows and the related amount is provided in dedicated lines. When an intercompany bank account, that is part of the
cash pool, was in a structural asset position for Syensqo, the related changes were reflected in cash flows from investing activities.
Transactions with the Remaining Solvay Group that are treated as contributions from or distributions to shareholders are included in the consolidated
statements of cash flows. Such transactions result from the inclusion of expenses or income in the consolidated financial statements such as taxes of
Mixed Entities, restructuring costs, employee benefit charges, charges for usage of shared assets, that are considered to be immediately settled by the
Remaining Solvay Group.
In the consolidated statements of cash flows such expenses or income results respectively in cash outflows or inflows presented as part of the cash flow
from operating activities and they are offset by the contributions from or distributions to shareholders presented as “Other transactions with Solvay
Group” in the cash flows from financing activities.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
In € million
Notes December 31, 2023 December 31, 2022
ASSETS
Intangible assets
(F19)
Goodwill
(F20, F24)
Property, plant and equipment
(F21)
Right-of-use assets
(F22)
Equity instruments measured at fair value
(F32)
Investments in associates and joint ventures
(F23)
Other investments 19 4
Deferred tax assets
(F7)
Loans to remaining Solvay Group
(F32)
Other loans and other assets 196 89
Other financial instruments
(F33)
Non-current assets 9,108 8,910
Inventories
(F25)
Trade receivables
(F32)
Income tax receivables 52 20
Other financial instruments with third parties
(F32)
IBA (*) receivables with remaining Solvay Group
(F16)
Other receivables
(F26)
Loans to remaining Solvay Group
(F32)
Cash and cash equivalents
(F33)
Current assets 3,786 4,723
Total assets 12,894 13,633
EQUITY & LIABILITIES
Share capital
(F27)
Share premiums 1,022 -
Other reserves 5,193 -
Owner’s net investment - 4,922
Non-controlling interests
(F28)
Total equity 7,608 4,946
Provisions for employee benefits
(F30)
Other provisions
(F31)
Deferred tax liabilities
(F7)
Borrowings from remaining Solvay Group
(F32)
Other non-current financial debt
(F33)
Other liabilities 76 23
Non-current liabilities 3,442 2,948
Other provisions
(F31)
Borrowings and IBA (*) liabilities from remaining Solvay Group
(F32)
Other current financial debt
(F33)
Trade payables
(F32)
Income tax payables 58 85
Other liabilities
(F34)
Current liabilities 1,844 5,739
Total equity and liabilities 12,894 13,633
(*) IBA = Internal bank accounts
SYENSQO 2023
FINANCIAL STATEMENTS
_245
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
244_
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity attributable to equity holders of the parent
Revaluation reserve (fair value)
In € million
Notes Share
capital
Share
premiums
Treasury
shares
Perpetual
hybrid
bonds
Invested equity
attributable to Syensqo /
Retained earnings
Currency translation
differences
Equity instruments measured at fair
value through other comprehensive
income
Cash flow
hedges
Defined benefit pension
plan
Total other
reserves
Non-controlling
interests
Total equity
December 31,
2021
Profit for the year - - - - 950 - - - - 950 14 964
Items of other
comprehensive
income
(F9)
Comprehensive
income
Transactions with
Solvay Group
Cost of share
based payment
plans
Dividends - - - - - - - - - - -8 -8
Acquisition (-) /
sale (+) of trea-
sury shares
Other - - - - 35 - 0 - - 35 0 35
December 31,
2022
Profit for the year - - - - 193 - - - - 193 3 197
Items of other
comprehensive
income
(F9)
Comprehensive
income
Capital increase - - - - - - - - - - 7 7
Transactions with
Solvay Group
Allocation of
invested equity
according to the
legal structure
Cost of share-
based payment
plans
Dividends - - - - - - - - - - -8 -8
Acquisition (-) /
sale (+) of trea-
sury shares
Other - - - - 0 - - - - 0 - 0
December 31,
2023
Prior to the Partial Demerger, Syensqo did not constitute a group with a parent company in accordance with IFRS 10 Consolidated Financial Statements. Therefore, share capital, share premium, treasury shares and retained earnings for the year ended December 31, 2022, were presented as invested equity attributable to Syensqo.
SYENSQO 2023
FINANCIAL STATEMENTS
_247
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
246_
SYENSQO 2023
FINANCIAL STATEMENTS
_249
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
248_
SYENSQO 2023
FINANCIAL STATEMENTS
_251
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
250_
SYENSQO 2023
FINANCIAL STATEMENTS
_253
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
252_
SYENSQO 2023
FINANCIAL STATEMENTS
_255
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
254_
SYENSQO 2023
FINANCIAL STATEMENTS
_257
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
256_
SYENSQO 2023
FINANCIAL STATEMENTS
_259
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
258_
SYENSQO 2023
FINANCIAL STATEMENTS
_261
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
260_
SYENSQO 2023
FINANCIAL STATEMENTS
_263
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
262_
SYENSQO 2023
FINANCIAL STATEMENTS
_265
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
264_
SYENSQO 2023
FINANCIAL STATEMENTS
_267
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
266_
SYENSQO 2023
FINANCIAL STATEMENTS
_269
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
268_
SYENSQO 2023
FINANCIAL STATEMENTS
_271
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
270_
SYENSQO 2023
FINANCIAL STATEMENTS
_273
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
272_
SYENSQO 2023
FINANCIAL STATEMENTS
_275
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
274_
SYENSQO 2023
FINANCIAL STATEMENTS
_277
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
276_
SYENSQO 2023
FINANCIAL STATEMENTS
_279
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
278_
SYENSQO 2023
FINANCIAL STATEMENTS
_281
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
280_
SYENSQO 2023
FINANCIAL STATEMENTS
_283
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
282_
SYENSQO 2023
FINANCIAL STATEMENTS
_285
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
284_
Total
SYENSQO 2023
FINANCIAL STATEMENTS
_287
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
286_
SYENSQO 2023
FINANCIAL STATEMENTS
_289
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
288_
SYENSQO 2023
FINANCIAL STATEMENTS
_291
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
290_
SYENSQO 2023
FINANCIAL STATEMENTS
_293
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
292_
SYENSQO 2023
FINANCIAL STATEMENTS
_295
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
294_
SYENSQO 2023
FINANCIAL STATEMENTS
_297
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
296_
SYENSQO 2023
FINANCIAL STATEMENTS
_299
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
298_
SYENSQO 2023
FINANCIAL STATEMENTS
_301
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
300_
SYENSQO 2023
FINANCIAL STATEMENTS
_303
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
302_
SYENSQO 2023
FINANCIAL STATEMENTS
_305
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
304_
SYENSQO 2023
FINANCIAL STATEMENTS
_307
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
306_
SYENSQO 2023
FINANCIAL STATEMENTS
_309
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
308_
SYENSQO 2023
FINANCIAL STATEMENTS
_311
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
310_
Provisions In % Provisions ongoing
SYENSQO 2023
FINANCIAL STATEMENTS
_313
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
312_
SYENSQO 2023
FINANCIAL STATEMENTS
_315
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
314_
SYENSQO 2023
FINANCIAL STATEMENTS
_317
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
316_
SYENSQO 2023
FINANCIAL STATEMENTS
_319
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
318_
Total
SYENSQO 2023
FINANCIAL STATEMENTS
_321
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
320_
SYENSQO 2023
FINANCIAL STATEMENTS
_323
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
322_
(1)
SYENSQO 2023
FINANCIAL STATEMENTS
_325
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
324_
SYENSQO 2023
FINANCIAL STATEMENTS
_327
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
326_
SYENSQO 2023
FINANCIAL STATEMENTS
_329
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
328_
Not past
Less than
Between
Between
More than
SYENSQO 2023
FINANCIAL STATEMENTS
_331
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
330_
SYENSQO 2023
FINANCIAL STATEMENTS
_333
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
332_
SYENSQO 2023
FINANCIAL STATEMENTS
_335
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
334_
SYENSQO 2023
FINANCIAL STATEMENTS
_337
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
336_
SYENSQO 2023
FINANCIAL STATEMENTS
_339
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
338_
SYENSQO 2023
FINANCIAL STATEMENTS
_341
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
340_
SYENSQO 2023
FINANCIAL STATEMENTS
_343
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
342_
SYENSQO 2023
FINANCIAL STATEMENTS
_345
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
344_
BALANCE SHEET OF SYENSQO SA (SUMMARY)
In € million December 31, 2023
ASSETS
Fixed assets 8,458
Start-up expenses and intangible assets 36
Tangible assets 73
Financial assets 8,349
Current assets 3,216
Inventories
Trade receivables 539
Other receivables 1,859
Short-term investments and cash equivalents 804
Accrued income and deferred charges 13
Total assets 11,673
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity 8,031
Capital 1,352
Share premiums 1,022
Reserves 1,866
Net income carried forward 3,792
Provisions and deferred taxes 91
Financial debt 1,612
– due in more than one year 1,601
– due within one year 11
Trade payables 70
Other liabilities 1,859
Accrued charges and deferred income 11
Total shareholders' equity and liabilities 11,673
At the end of December 2023, total assets amount to €11,673 million. They consist of:
· Fixed assets for €8,458 million, mainly for the Financial assets (€8,349 million) transferred from Solvay SA upon the Partial Demerger.
· Current assets for €3,216 million, including: Trade receivables (€539 million), Other receivables (€1,859 million) for current accounts and amounts due
from subsidiaries and Cash at bank and in hand (€804 million).
The Shareholders equity of €8,031 million results from net assets for €8,502 million contributed by Solvay SA via the Partial Demerger, the loss of the year
of €(300) million and the dividend proposed for distribution in 2024 of €(172) million.
The financial debt totals €1,612 million and it is mainly related to the 2027 Senior Bonds (€500 million), the Hybrid Bonds (€500 million) and other drawn
credit facilities (€600 million).
Other liabilities of €1,859 million are mainly related to current accounts payable to subsidiaries (€1,542 million), the payable for the dividend (€172 million)
and taxes, payroll and social security debts (€122 million).
ANNUAL INTEGRATED REPORT
FINANCIAL STATEMENTS
346_
INCOME STATEMENT OF SYENSQO SA (SUMMARY)
In € million 2023 2022
Sales
Other operating income 239
Operating expenses -389
Operating profit/(loss) -150
Financial income and expenses -148
Profit/(loss) for the year before taxes -298
Income taxes -1
Profit/(loss) for the year -300
Profit/(loss) for the year available for distribution -300
For 2023, due to the limited period of activity, the net result of Syensqo SA is a loss amounting to €(300) million.
This result includes:
· the operating loss of €(150) million, mainly explained by non-recurring operating expenses of €(151) million, related to provisions and costs associated
with the separation from Solvay;
· financial gains and losses of €(148) million, mainly resulting from the impairment of investments.
PROFIT AVAILABLE FOR DISTRIBUTION
In € million 2023 2022
Profit/(loss) for the year available for distribution -300
– Carried forward 4,263
Total available to the General Shareholders' Meeting 3,963
Appropriation
– Gross dividend 172
– Carried forward 3,792
Total 3,963
SYENSQO 2023
DECLARATIONS
_347
DECLARATIONS
SYENSQO 2023
DECLARATIONS
_349
ANNUAL INTEGRATED REPORT
DECLARATIONS
348_
Besloten vennootschap
Société à responsabilité limitée
RPR Brussel
- RPM Bruxelles - BTW-TVA BE0446.334.711-IBAN N° BE71 2100 9059 0069
*handelend in naam van een vennootschap:/agissant au nom d'une société
A member firm of Ernst & Young Global Limited
EY Bedrijfsrevisoren
EY Réviseurs d’Entreprises
Kouterveldstraat 7b bus 001
B - 1831 Diegem
Tel: +32 (0) 2 774 91 11
ey.com
Independent auditor’s report to the general meeting of Syensqo SA for the
year ended 31 December 2023
In the context of the statutory audit of the Consolidated Financial Statements) of Syensqo SA (the
“Company”) and its subsidiaries (together the “Group”)
, we report to you as statutory auditor. This
report includes our opinion on consolidated statement of financial position as at 31 December 2023,
the consolidated income statement, the consolidated statement of comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the year
ended 31 December 2023 and the disclosures including material accounting policy information (all
elements together the “Consolidated Financial Statements”) as well as our report on other legal and
regulatory requirements. These two reports are considered one report and are inseparable
.
We have been appointed as statutory auditor by the founders of the Company on 27 February 2023,
being the date of incorporation. Our mandate expires at the shareholders’ meeting that will deliberate
on the Consolidated Financial Statements for the year ending 31 December 2025. We performed the
audit of the Consolidated Financial Statements of the Group for one year.
Report on the audit of the Consolidated Financial Statements
Unqualified opinion
We have audited the Consolidated Financial
Statements of Syensqo SA, that comprise of
consolidated statement of financial position on
31 December 2023, the consolidated income
statement, the consolidated statement of
comprehensive income, the consolidated
statement of changes in equity and the
consolidated statement of cash flows for the year
of the year and the disclosures, including material
accounting policy information, which show a
consolidated balance sheet total of
€ 12.894 million and of which the consolidated
income statement shows a profit for the year of
€ 197 million.
In our opinion, the Consolidated Financial
Statements give a true and fair view of the
consolidated net equity and financial position as
at 31 December 2023, and of its consolidated
results for the year then ended, prepared in
accordance with the International Financial
Reporting Standards as adopted by the European
Union (“IFRS”) and with applicable legal and
regulatory requirements in Belgium.
Basis for the unqualified opinion
We conducted our audit in accordance with
International Standards on Auditing (“ISA’s”)
applicable in Belgium. In addition, we have applied
the ISA's approved by the International Auditing
and Assurance Standards Board (“IAASB”) that
apply at the current year-end date and have not
yet been approved at national level. Our
responsibilities under those standards are further
described in the “Our responsibilities for the audit
of the Consolidated Financial Statements” section
of our report.
We have complied with all ethical requirements
that are relevant to our audit of the Consolidated
Financial Statements in Belgium, including those
with respect to independence.
We have obtained from the Board of Directors and
the officials of the Company the explanations and
information necessary for the performance of our
audit and we believe that the audit evidence we
have obtained is sufficient and appropriate to
provide a basis for our opinion.
Emphasis of certain matters
Without qualifying our opinion, we draw the
attention to the Note “chapter 1. Basis of
preparation” of the Consolidated Financial
Statements, where the Company describes the
basis of preparation relating to the comparatives
for the year ended 31 December 2022 and the
2023 results prior to the partial demerger date of
8 December 2023. As a result and as described in
this Note, the application of judgments, including
how the entities formerly within the Solvay Group
were combined, affected the reported amounts.
Audit report dated 11 April 2024 on the Consolidated Financial Statements
of Syensqo SA as of and
for the year ended 31 December 2023 (continued)
2
Key audit matters
Key audit matters are those matters that, in our
professional judgment, were of most significance
in our audit of the Consolidated Financial
Statements of the current reporting period.
These matters were addressed in the context of
our audit of the Consolidated Financial
Statements as a whole and in forming our opinion
thereon, and consequently we do not provide a
separate opinion on these matters.
Defined benefit obligations
Description of the key audit matter
The defined benefit obligations mainly relate to
post-employment pension plans and amount to
€ 189 million as at 31 December 2023, and are
disclosed in note F30 of the Consolidated
Financial Statements. It consists of gross defined
benefit obligations (€ 2.042 million) offset
partially by plan assets (€ 1.853 million). The
largest plans in 2023 are in the United Kingdom,
the United States, France and Belgium and
represents 96% of the total defined benefit
obligations of the Group.
This area is important to our audit because of the
magnitude of the amounts, management’s
judgment involved in determining actuarial
assumptions (more in particular discount rates
and inflation rates) and plan assets’ fair values and
the technical expertise required to evaluate these
obligations and properly reflect the impacts in the
Consolidated Financial Statements in accordance
with IAS 19 “Employee Benefits”.
Summary of the procedures performed
• We obtained an understanding of the Group
estimation process to evaluate the defined-
benefit obligations and plan assets as well as
the related management review controls;
• We assessed the design of the internal
controls established by the Group to manage
the underlying participant data and to ensure
that the amendments to the plans are
properly and timely reflected in the
Consolidated Financial Statements;
• We reconciled, on a sample basis, the fair
value of the plan assets to external
confirmations;
• We assessed the expertise, independence and
integrity of the external actuaries engaged by
the Group;
• With the assistance of our internal actuarial
specialists, we assessed the actuarial report
prepared by the external actuaries engaged
by the Group to ensure that the main changes
to the plans were properly considered in the
actuarial calculations;
• We compared, on a sample basis, the input
data used for the calculation of the provisions
by the external actuary (such as population,
age, years of service, wage,…) with source
information of the human resources
department of the Group;
• We assessed the appropriateness of the key
actuarial assumptions (discount rates and
inflation rates) with the assistance of our
internal actuarial specialists;
• We validated that the actuarial calculations
are properly recorded in the Consolidated
Financial Statements in accordance with
IAS19;
• We assessed the roll-forward of the provisions
to understand the changes in the valuation of
the provisions compared to last year;
• We assessed the adequacy and completeness
of the disclosures presented in the note F30
of the Consolidated Financial Statement based
on the requirements of IAS19.
Impairment of goodwill and other non-current
assets of the CGU’s Technology Solutions,
Composite Materials, Aroma Performance and
Oil & Gas
Description of the key audit matter
Following the Group’s past acquisitions, significant
goodwill has arisen, amounting to € 2.560 million
as at 31 December 2023, which represents 20%
of the consolidated total assets.
As described in notes F20 (Goodwill and business
combinations) and F24 (Impairment), the
Company reviews the carrying amounts of its cash
generating units (“CGU’s”) annually or more
frequently if impairment indicators are present.
SYENSQO 2023
DECLARATIONS
_351
ANNUAL INTEGRATED REPORT
DECLARATIONS
350_
Audit report dated 11 April 2024 on the Consolidated Financial Statements
of Syensqo SA as of and
for the year ended 31 December 2023 (continued)
3
Based on the headroom that exists per CGU as
well as sensitivity analyses performed on the
valuation and assumptions used in the impairment
assessment, we have determined the impairment
of goodwill and other non-current assets to be a
focus area of our audit of the following CGU’s:
Technology Solutions, Composite Materials,
Aroma Performance and Oil & Gas.
The impairment assessment involves a
comparison of the estimated value in use of the
CGU to its carrying amount. The assessment is a
judgmental process which requires estimates
concerning the projected future cash flows
associated with the CGU, the weighted average
cost of capital (“WACC”) and the growth rate of
revenue and costs to be applied in determining
the value in use. This area is important to our
audit because of the magnitude of the amounts,
the judgments, and the technical expertise
required to perform the impairment testing of
long-term assets.
Summary of the procedures performed
• We obtained an understanding of the Group
impairment testing and processes;
• We evaluated and challenged management
determination of CGU's and allocation of
goodwill to those CGU’s for the purpose of
impairment testing;
• We evaluated the discount rate by comparison
to (i) peer-group information, (ii) the Group’s
cost of capital and (iii) relevant risk factors;
and the long term growth rate by comparing
with shadow computation performed by our
valuation experts.
• We assessed the mathematical accuracy and
conformity with IAS36 of the valuation model
used by the Group
• We tested the reasonableness of projected
cash flows considering the Group’s historic
forecasting accuracy and compared these
projections with the budget approved by the
Board of Directors and the mid-term plan,
including with respect to the impact of climate
change and the alignment with the Syensqo
One Planet objectives;
• We included our internal valuation specialist
on our team to analyze and test the valuation
model and the abovementioned critical
assumptions used in the valuation model as
well as the reasonableness of impairment loss
booked during the period;
• We analyzed and tested the sensitivity
analysis prepared by management, to
understand the impact of reasonable changes
in the key assumptions on the available
headroom for the four CGU’s;
• We assessed the Group reconciliation of the
value in use derived from the impairment
tests to the market capitalization;
• We considered additional impairment or
reversal of impairment indicators and triggers
by reading minutes of the board of directors’
meetings, and we held regular discussions
with the management and the audit
committee;
• We assessed the appropriateness and
completeness of the disclosures in the Notes
to the Consolidated Financial Statements in
accordance with IAS 36.
Responsibilities of the Board of Directors
for the preparation of the Consolidated
Financial Statements
The Board of Directors is responsible for the
preparation of the Consolidated Financial
Statements that give a true and fair view in
accordance with IFRS and with applicable legal
and regulatory requirements in Belgium and for
such internal controls relevant to the preparation
of the Consolidated Financial Statements that are
free from material misstatement, whether due to
fraud or error.
As part of the preparation of Consolidated
Financial Statements, the Board of Directors is
responsible for assessing the Company’s ability to
continue as a going concern, and provide, if
applicable, information on matters impacting
going concern, The Board of Directors should
prepare the financial statements using the going
concern basis of accounting, unless the Board of
Directors either intends to liquidate the Company
or to cease business operations, or has no realistic
alternative but to do so.
Audit report dated 11 April 2024 on the Consolidated Financial Statements
of Syensqo SA as of and
for the year ended 31 December 2023 (continued)
4
Our responsibilities for the audit of the
Consolidated Financial Statements
Our objectives are to obtain reasonable assurance
whether the Consolidated Financial Statements
are free from material misstatement, whether due
to fraud or error, and to express an opinion on
these Consolidated Financial Statements based on
our audit. Reasonable assurance is a high level of
assurance, but not a guarantee that an audit
conducted in accordance with the ISA’s will always
detect a material misstatement when it exists.
Misstatements can arise from fraud or error and
considered material if, individually or in the
aggregate, they could reasonably be expected to
influence the economic decisions of users taken
on the basis of these Consolidated Financial
Statements.
In performing our audit, we comply with the legal,
regulatory and normative framework that applies
to the audit of the Consolidated Financial
Statements in Belgium. However, a statutory
audit does not provide assurance about the future
viability of the Company and the Group, nor about
the efficiency or effectiveness with which the
board of directors has taken or will undertake the
Company's and the Group’s business operations.
Our responsibilities with regards to the going
concern assumption used by the board of
directors are described below.
As part of an audit in accordance with ISA’s, we
exercise professional judgment and we maintain
professional skepticism throughout the audit. We
also perform the following tasks:
• identification and assessment of the risks of
material misstatement of the Consolidated
Financial Statements, whether due to fraud or
error, the planning and execution of audit
procedures to respond to these risks and
obtain audit evidence which is sufficient and
appropriate to provide a basis for our opinion.
The risk of not detecting material
misstatements resulting from fraud is higher
than when such misstatements result from
errors, since fraud may involve collusion,
forgery, intentional omissions,
misrepresentations, or the override of
internal control;
• obtaining insight in the system of internal
controls that are relevant for the audit and
with the objective to design audit procedures
that are appropriate in the circumstances, but
not for the purpose of expressing an opinion
on the effectiveness of the Company’s
internal control;
• evaluating the selected and applied
accounting policies, and evaluating the
reasonability of the accounting estimates and
related disclosures made by the Board of
Directors as well as the underlying
information given by the Board of Directors;
• conclude on the appropriateness of the Board
of Directors’ use of the going-concern basis of
accounting, and based on the audit evidence
obtained, whether or not a material
uncertainty exists related to events or
conditions that may cast significant doubt on
the Company’s or Group’s ability to continue
as a going concern. If we conclude that a
material uncertainty exists, we are required to
draw attention in our auditor’s report to the
related disclosures in the Consolidated
Financial Statements or, if such disclosures
are inadequate, to modify our opinion. Our
conclusions are based on audit evidence
obtained up to the date of the auditor’s
report. However, future events or conditions
may cause the Company to cease to continue
as a going-concern;
• evaluating the overall presentation, structure
and content of the Consolidated Financial
Statements, and evaluating whether the
Consolidated Financial Statements reflect a
true and fair view of the underlying
transactions and events.
We communicate with the Audit Committee within
the Board of Directors regarding, among other
matters, the planned scope and timing of the
audit and significant audit findings, including any
significant deficiencies in internal control that we
identify during our audit.
Because we are ultimately responsible for the
opinion, we are also responsible for directing,
supervising and performing the audits of the
subsidiaries. In this respect we have determined
the nature and extent of the audit procedures to
be carried out for group entities.
SYENSQO 2023
DECLARATIONS
_353
ANNUAL INTEGRATED REPORT
DECLARATIONS
352_
Audit report dated 11 April 2024 on the Consolidated Financial Statements
of Syensqo SA as of and
for the year ended 31 December 2023 (continued)
5
We provide the Audit Committee within the Board
of Directors with a statement that we have
complied with relevant ethical requirements
regarding independence, and to communicate
with them all relationships and other matters that
may reasonably be thought to bear on our
independence, and where applicable, related
safeguards.
From the matters communicated with the Audit
Committee within the Board of Directors, we
determine those matters that were of most
significance in the audit of the Consolidated
Financial Statements of the current period and
are therefore the key audit matters. We describe
these matters in our report, unless the law or
regulations prohibit this.
Report on other legal and regulatory requirements
Responsibilities of the Board of Directors
The Board of Directors is responsible for the
preparation and the content of the Board of
Directors’ report on the Consolidated Financial
Statements, the non-financial information
attached to the Board of Directors’ report, and
other information included in the annual report.
Responsibilities of the auditor
In the context of our mandate and in accordance
with the additional standard to the ISA’s
applicable in Belgium, it is our responsibility to
verify, in all material respects, the Board of
Directors’ report on the Consolidated Financial
Statements, the non-financial information
attached to the Board of Directors’ report, and
other information included in the annual report,
as well as to report on these matters.
Aspects relating to Board of Directors’
report and other information included in
the annual report
In our opinion, after carrying out specific
procedures on the Board of Directors’ report, the
Board of Directors’ report is consistent with the
Consolidated Financial Statements and has been
prepared in accordance with article 3:32 of the
Code of companies and associations.
In the context of our audit of the Consolidated
Financial Statements, we are also responsible to
consider whether, based on the information that
we became aware of during the performance of
our audit, the Board of Directors’ report and
other information included in the annual report,
being:
• Accelerating innovation
• Our sustainability ambition
contain any material inconsistencies or contains
information that is inaccurate or otherwise
misleading. In light of the work performed, there
are no material inconsistencies to be reported.
The non–financial information required by article
3:32, § 2, of the Code of companies and
associations has been included in the Board of
Directors’ report on the Consolidated Financial
Statements. The Company has prepared this non-
financial information based on Global Reporting
Initiatives standards (“GRI”). However, in
accordance with article 3:80 § 1, 5° of the Code
of companies and associations, we do not express
any opinion on the question whether this non-
financial information has been established in
accordance with the GRI framework. As requested
by the Company, we have issued a separate
reasonable and limited assurance report on a
selection of sustainability indicators in
accordance with the International Standard on
Assurance Engagements ISAE 3000. We do not
express any assurance on the sustainability
indicators not covered by our separate
reasonable and limited assurance report.
Independence matters
Our audit firm and our network have not
performed any services that are not compatible
with the audit of the Consolidated Financial
Statements and have remained independent of
the Company during the course of our mandate.
The fees related to additional services which are
compatible with the audit of the Consolidated
Financial Statements as referred to in article 3:65
of the Code of companies and associations were
duly itemized and valued in the notes to the
Consolidated Financial Statements (chapter
corporate governance).
Audit report dated 11 April 2024 on the Consolidated Financial Statements
of Syensqo SA as of and
for the year ended 31 December 2023 (continued)
6
European single electronic format
(“ESEF”)
In accordance with the standard on the audit of
the conformity of the financial statements with
the European single electronic format
(hereinafter "ESEF"), we have carried out the
audit of the compliance of the ESEF format with
the regulatory technical standards set by the
European Delegated Regulation No 2019/815 of
17 December 2018 (hereinafter: "Delegated
Regulation").
The board of directors is responsible for the
preparation, in accordance with the ESEF
requirements, of the consolidated financial
statements in the form of an electronic file in
ESEF format (hereinafter 'the digital consolidated
financial statements') included in the annual
financial report available on the portal of the
FSMA (https://www.fsma.be/en/data-portal).
It is our responsibility to obtain sufficient and
appropriate supporting evidence to conclude that
the format and markup language of the digital
consolidated financial statements comply in all
material respects with the ESEF requirements
under the Delegated Regulation.
Based on the work performed by us, we conclude
that the format and tagging of information in the
digital consolidated financial statements of
Syensqo SA per 31 December 2023 included in
the annual financial report available on the portal
of the FSMA (https://www.fsma.be/en/data-
portal) are, in all material respects, in accordance
with the ESEF requirements under the Delegated
Regulation.
Other communications.
• This report is consistent with our
supplementary declaration to the Audit
Committee as specified in article 11 of the
regulation (EU) nr. 537/2014.
Diegem, 11 April 2024
EY Bedrijfsrevisoren BV
Statutory auditor
Represented by
Marie Kaisin *
Partner
*Acting on behalf of a BV/SRL
24MK0024
SYENSQO 2023
DECLARATIONS
_355
ANNUAL INTEGRATED REPORT
DECLARATIONS
354_
Besloten vennootschap
Société à responsabilité limitée
RPR Brussel
- RPM Bruxelles - BTW-TVA BE0446.334.711-IBAN N° BE71 2100 9059 0069
*handelend in naam van een vennootschap:/agissant au nom d'une société
A member firm of Ernst & Young Global Limited
EY Bedrijfsrevisoren
EY Réviseurs d’Entreprises
Kouterveldstraat 7B 001
B - 1831 Diegem
Tel: +32 (0) 2 774 91 11
ey.com
Independent auditor’s assurance report
Scope
We have been engaged by Syensqo SA (hereafter the “Company” or “Syensqo”) to perform a
reasonable assurance engagement in accordance with the International Standard on Assurance
Engagements Other Than Audits or Reviews of Historical Financial Information (“ISAE 3000 revised”),
hereafter referred to as “the Engagement 1”, to report on Syensqo SA’s sustainability indicators listed
in Appendix A (“Subject Matter A”), and included in the accompanying annual report 2023 (the
“Report”) for the period from 1 January 2023 to 31 December 2023.
We have also been engagement by Syensqo SA to perform a limited assurance engagement in
accordance with ISAE 3000 revised, hereafter referred to as “the Engagement 2”, to report, on
Syensqo SA’s sustainability indicators listed in Appendix B (“Subject Matter B”), and included in the
accompanying annual report 2023 (the “Report”) for the period from 1 January 2023
to 31 December 2023.
Together, the sustainability indicators in Appendix A (“Subject Matter A”) and B (“Subject Matter B”)
are referred to as “the Subject Matters”.
Other than as described in the preceding paragraphs, which set out the scope of our engagement, we
did not perform assurance procedures on the remaining information included in the Report, and
accordingly, we do not express an opinion on this information.
Criteria applied by Syensqo SA
In preparing the Subject Matters, Syensqo SA applied the Value Reporting Foundation Integrated
Reporting principles, certain of the Global Reporting Initiative (“GRI”) Standards, and certain of the
World Business Council for Sustainable Development (“WBCSD”) disclosures of the ESG Disclosure
Handbook, as well as a set of own reporting criteria as disclosed in the Glossary and throughout the
Report (“the Criteria”).
Syensqo’s responsibilities
Syensqo’s management is responsible for selecting the Criteria, and for presenting, in all material
respect, the Subject Matters in accordance with those Criteria. This responsibility includes establishing
and maintaining internal controls, maintaining adequate records and making estimates that are
relevant to the preparation of the subject matter, such that it is free from material misstatement,
whether due to fraud or error.
EY’s responsibilities under a reasonable assurance engagement
Our responsibility is to express a reasonable assurance opinion on the presentation of Syensqo SA’s
sustainability indicators listed in Appendix A based on the evidence we have obtained.
2
We conducted our reasonable engagement in accordance with the International Standard on Assurance
Engagements Other Than Audits or Reviews of Historical Financial Information (“ISAE 3000 revised”).
Those standards require that we plan and perform our engagement to obtain reasonable assurance
about whether, in all material respects, the Subject Matter is presented in accordance with the Criteria,
and to issue a report. The nature, timing, and extent of the procedures selected depend on our
judgment, including an assessment of the risk of material misstatement, whether due to fraud or error.
A reasonable assurance engagement undertaken in accordance with ISAE 3000 revised involves
assessing the suitability of the Company’s use of the Criteria as the basis for the preparation of the
Subject Matter A, assessing the risks of material misstatement whether due to fraud or error,
responding to the assessed risks as necessary in the circumstances, and evaluating the overall
presentation of the Subject Matter A.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
reasonable assurance opinion.
EY’s responsibilities under a limited assurance engagement
Our responsibility is to express a limited assurance conclusion on the presentation of Syensqo SA’s
sustainability indicators listed in Appendix B based on the evidence we have obtained.
We conducted our limited assurance engagement in accordance with the International Standard on
Assurance Engagements Other Than Audits or Reviews of Historical Financial Information (“ISAE 3000
revised”). Those standards require that we plan and perform our engagement to express a conclusion
on whether we are aware of any material modifications that need to be made to the Subject Matter B in
order for it to be in accordance with the Criteria, and to issue a report. The nature, timing, and extent
of the procedures selected depend on our judgment, including an assessment of the risk of material
misstatement, whether due to fraud or error.
A limited assurance engagement undertaken in accordance with ISAE 3000 revised involves assessing
the suitability of the Company’s use of the Criteria as the basis for the preparation of the Subject
Matter B, assessing the risks of material misstatement whether due to fraud or error, responding to the
assessed risks as necessary in the circumstances, and evaluating the overall presentation of the
Subject Matter B.
A limited assurance engagement is more limited in scope than a reasonable assurance engagement in
relation to the risk assessment procedures, including an understanding of internal control, and the
procedures performed in response to the assessed risks. A limited assurance engagement consists of
making inquiries, primarily of persons responsible for preparing the Subject Matter and related
information and applying analytical and other appropriate procedures. A higher level of assurance, i.e.
reasonable assurance, would have required more extensive procedures.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
limited assurance conclusion.
SYENSQO 2023
DECLARATIONS
_357
ANNUAL INTEGRATED REPORT
DECLARATIONS
356_
3
Our Independence and Quality Control
We have maintained our independence and confirm that we have met the requirements of the Code of
Ethics for Professional Accountants issued by the International Ethics Standards Board for
Accountants, and have the required competencies and experience to conduct this assurance
engagement.
Our firm applies International Standard on Quality Management 1, which requires us to design,
implement and operate a system of quality management including policies or procedures regarding
compliance with ethical requirements, professional standards and applicable legal and regulatory
requirements.
Description of procedures performed
Reasonable assurance engagement
Procedures performed in a reasonable assurance engagement vary in nature and timing from, and are
more extensive than for a limited assurance engagement. Consequently the level of assurance obtained
in a reasonable assurance engagement is substantially higher than the assurance that would have been
obtained had a limited assurance engagement been performed.
Although we considered the design of management’s internal controls when determining the nature and
extent of our procedures, our assurance engagement was not designed to provide assurance on internal
controls. Our procedures did not include testing controls or performing procedures relating to checking
aggregation or calculation of data within IT systems.
Our procedures included amongst other:
• Obtaining an understanding of the reporting processes for Subject Matter A;
• Evaluating the consistent application of the Criteria;
• Assessing the appropriateness of the Company’s own reporting criteria in terms of its relevance,
completeness, reliability, impartiality and clarity;
• Interviewing relevant staff at local level responsible for data collection, reporting and calculation of
Subject Matter A;
• Interviewing management and relevant staff at corporate level responsible for consolidating and
carrying out internal control procedures on Subject Matter A;
• Interviewing relevant staff responsible for reporting Subject Matter A in the Report;
4
• Determining the nature and extent of the procedures for each of the locations contributing to
Subject Matter A. Based on the site scoping, 9 sites (Atequiza Jalsic, Baton Rouge (LA), Lisbon,
Mount Pleasant2 (TN), Piedmont, Spinetta, Tavaux, Zhangjiagang FE, Zhenjiang Songl) were
selected to validate the data and evaluate the design and implementation of data collection and
calculation processes as well as validation procedures related to Subject Matter A. For the remaining
locations contributing to the sustainability indicators listed in Appendix A, procedures were carried
out centrally to review the reasonableness of the data collection, data calculation, and data validation
procedures;
• Obtaining information that Subject Matter A reconciles with underlying records of the Company;
• Obtaining internal and external documentation that reconciles with Subject Matter A;
• Performing an analytical review of the data and trends in Subject Matter A for consolidation at
corporate level and the data reported by the sites;
• Performing tests of details and tracing the input information to supporting invoices or other
evidence;
• Evaluating the overall presentation of Subject Matter A in the Report.
We also performed such other procedures as we considered necessary in the circumstances.
Limited assurance engagement
Procedures performed in a limited assurance engagement vary in nature and timing from, and are less
extensive than for a reasonable assurance engagement. Consequently the level of assurance obtained in
a limited assurance engagement is substantially lower than the assurance that would have been obtained
had a reasonable assurance engagement been performed.
A limited assurance engagement consists of making enquiries, primarily of persons responsible for
preparing the Subject Matter B and related information, and applying analytical and other appropriate
procedures.
Although we considered the effectiveness of management’s internal controls when determining the
nature and extent of our procedures, our assurance engagement was not designed to provide assurance
on internal controls. Our procedures did not include testing controls or performing procedures relating
to checking aggregation or calculation of data within IT systems.
Our procedures included amongst other:
• Obtaining an understanding of the reporting processes for Subject Matter B;
• Evaluating the consistent application of the Criteria;
• Assessing the appropriateness of the Company’s own reporting criteria in terms of its relevance,
completeness, reliability, impartiality and clarity;
SYENSQO 2023
DECLARATIONS
_359
ANNUAL INTEGRATED REPORT
DECLARATIONS
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5
• Interviewing relevant staff at local level responsible for data collection, reporting and calculation of
Subject Matter B;
• Interviewing management and relevant staff at corporate level responsible for consolidating and
carrying out internal control procedures on Subject Matter B;
• Interviewing relevant staff responsible for reporting Subject Matter B in the Report;
• Determining the nature and extent of the review procedures for each of the locations contributing
to Subject Matter B. Based on the site scoping, 9 sites (Atequiza Jalsic, Baton Rouge (LA), Lisbon,
Mount Pleasant2 (TN), Piedmont, Spinetta, Tavaux, Zhangjiagang FE, Zhenjiang Songl) were visited
to validate the data and evaluate the design and implementation of data collection and calculation
processes as well as validation procedures related to Subject Matter B. For the remaining locations
contributing to the sustainability indicators listed in Appendix B, procedures were carried out
centrally to review the reasonableness of the data collection, data calculation, and data validation
procedures;
• Obtaining information that Subject Matter A reconciles with underlying records of the Company;
• Obtaining internal and external documentation that reconciles with Subject Matter B;
• Performing an analytical review of the data and trends in Subject Matter B for consolidation at
corporate level and the data reported by the sites;
• Performing limited tests of details and tracing the input information to supporting invoices or other
evidence;
• Evaluating the overall presentation of Subject Matter B in the Report.
We also performed such other procedures as we considered necessary in the circumstances.
Conclusion and Opinion
Reasonable assurance engagement opinion
In our opinion, the Syensqo SA’s sustainability indicators listed in Appendix A for the period from
1 January 2023 to 31 December 2023 are presented in all material respects, in accordance with the
Criteria.
6
Limited assurance engagement conclusion
Based on our limited assurance engagement, nothing has come to our attention that makes us to
believe that Syensqo SA’s sustainability indicators listed in Appendix B for the period from
1 January 2023 to 31 December 2023, are not presented, in all material respects, in accordance with
the Criteria.
Diegem, 11 April 2024
EY Réviseurs d’Entreprises SRL
Represented by
Marie Kaisin*
Partner
* Acting on behalf of an SRL
24MK0025
SYENSQO 2023
DECLARATIONS
_361
ANNUAL INTEGRATED REPORT
DECLARATIONS
360_
7
Appendix A
Domain Topic Sustainability indicators
Level of
Assurance
CLIMATE
GHG emissions
Emissions increase or reduction at constant scope
year on year
Reasonable
GHG emissions
Direct CO2 emissions (Scope 1)
Reasonable
GHG emissions
Indirect CO2 emissions (Scope 2)
Reasonable
GHG emissions
Other greenhouse gas emissions not according to
Kyoto (Scope 1)
Reasonable
GHG emissions
Other greenhouse gas emissions according to Kyoto
Protocol (Scope 1)
Reasonable
GHG emissions
Total direct and indirect emissions (Scopes 1 & 2)
Reasonable
GHG emissions
Scope 3 emissions – all categories
Reasonable
Energy
Phase-out of coal use in total energy production
Reasonable
Biodiversity
Pressure of Syensqo products on biodiversity
Reasonable
RESOURCES
Water & wastewater
Freshwater withdrawal
Reasonable
Waste
Non-hazardous industrial waste
Reasonable
Waste
Hazardous industrial waste
Reasonable
Waste
Total industrial waste
Reasonable
8
Waste
Non-hazardous industrial waste not treated in a
sustainable way
Reasonable
Waste
Hazardous industrial waste not treated in a
sustainable way
Reasonable
Waste
Total industrial waste not treated in a sustainable way
Reasonable
Waste
Mining waste
Reasonable
Sustainable business
solutions
Product portfolio assessed Reasonable
Sustainable business
solutions
Sustainable solutions - % Group sales Reasonable
BETTER LIFE
Employee health &
Safety (occupational
safety – OS)
RIIR - Reportable Injuries and Illnesses Rate Reasonable
Employee health &
Safety (occupational
safety – OS)
LTIIR – Lost Time Injuries and Illnesses Rate Reasonable
Employee health &
Safety (occupational
safety – OS)
Fatal accidents of Syensqo employees and contractors Reasonable
Diversity & inclusion
Total headcount
Reasonable
Diversity & inclusion
Percentage of women in the Group
Reasonable
Diversity & inclusion
Percentage of women in senior and middle
management
Reasonable
SYENSQO 2023
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_363
ANNUAL INTEGRATED REPORT
DECLARATIONS
362_
9
Appendix B
Domain Topic Sustainability indicators
Level of
Assurance
CLIMATE
Energy
Primary Energy consumption
Limited
Energy
Renewable energy consumption
Limited
Circular economy
Percentage of sales aligned with circular economy
principles
Limited
RESOURCES
Water & wastewater
Chemical oxygen demand (COD)
Limited
Hazardous materials
Substance of very high concern (SVHC) according to
REACH criteria present in products sold
Limited
Hazardous materials
Percentage of completion of Analysis of Safer
Alternatives program for marketed substances
Limited
Air quality
Nitrogen oxides emissions – NOx
Limited
Air quality
Sulphur oxides emissions – SOx
Limited
Air quality
Non-methane volatile organic compounds emissions –
NMVOC
Limited
Air quality
Ozone depleting substances - ODP
Limited
Sustainable business
solutions
SPM organic growth Limited
Diversity & inclusion
Headcount by employee category (senior manager,
middle manager, junior manager, non-manager)
Limited
Process accident &
safety (PS)
Process safety incident rate Limited
10
BETTER LIFE
Process accident &
safety (PS)
Number of incidents (Medium, High, Catastrophic) Limited
Process accident &
safety (PS)
Number of incidents (Medium, High, Catastrophic) with
environmental consequences
Limited
Process accident &
safety (PS)
Number of incidents (Medium, High, Catastrophic) with
environmental consequences in which the limits of the
operating permit were exceeded
Limited
Employee
Engagement and
wellbeing
Coverage by collective agreement Limited
Management of the
legal ethics and
Regulatory
framework
Total claims made Limited
Management of the
legal ethics and
Regulatory
framework
Total claims closed including cases for which there was
insufficient information or cases that were misdirected
or referred
Limited
Management of the
legal ethics and
Regulatory
framework
Unsubstantiated claims among resolved cases Limited
Management of the
legal ethics and
Regulatory
framework
Substantiated claims among resolved cases Limited
ANNUAL INTEGRATED REPORT
DECLARATIONS
364_
Declaration
by the persons responsible
The Board of Directors hereby declares that, to the best of its knowledge:
· The financial statements, prepared in accordance with International Financial Reporting Standards (“IFRS”), give a true and fair view of the assets,
liabilities, financial position and earnings of the issuer and of the entities included in the consolidation;
· The extra-financial statements are prepared in accordance with the GRI standards and the Integrated Reporting Framework;
· The management report includes an accurate review of the business developments, earnings, and financial position of the issuer and of the entities
included in the consolidation, as well as a description of the main risks and uncertainties that these entities face.
Ilham Kadri
Chair of the Executive Leadership Team and Chief Executive Officer
Rosemary Thorne
Chair of the Board of Directors
SYENSQO 2023
GLOSSARY
_365
Glossary
Additional voluntary contributions related to employee benefits plan
Contributions to plan assets in excess of mandatory contributions to employee benefits plans. These payments are discretionary and are driven by the
objective of value creation. These voluntary contributions are excluded from free cash flow as they are deleveraging in nature as a reimbursement of
debt.
Adjustments
Each of these adjustments made to the IFRS results is considered to be significant in nature and/or value. Excluding these items from the profit metrics
provides readers with relevant additional information on the Group’s underlying performance over time because it is consistent with how the business’
performance is reported to the Board of Directors and the Executive Committee. These adjustments consist of:
· Results from portfolio management and major restructurings;
· Results from legacy remediation and major litigations;
· Amortization of intangible assets resulting from Purchase Price Allocation (PPA) and inventory step-up in gross margin;
· Net financial results related to changes in discount rates, coupons of hybrid bonds deducted from equity under IFRS and debt management impacts
(mainly including gains/(losses) related to the early repayment of debt;
· Adjustments of equity earnings for impairment gains or losses and unrealized foreign exchange gains or losses on debt;
· Results from equity instruments measured at fair value;
· Gains and losses, related to the management of the CO2 hedges not accounted for as Cash Flow Hedge, deferred in adjustments until the maturity
of the economic hedge;
· Remeasurement of the long-term incentive plans related to Solvay Group shares and of the related hedging instruments;
· Tax effects related to the items listed above and tax expense or income of prior years;
· All adjustments listed above apply to both continuing and discontinuing operations, and include the impacts on non-controlling interests.
Basic earnings per share
Net income (Syensqo’s share) divided by the weighted average number of shares, after deducting own shares purchased to cover stock option programs.
Capital expenditure (capex)
Cash paid for the acquisition of tangible and intangible assets presented in cash flows from investing activities, and cash paid on the lease liabilities
(excluding interests paid), presented in cash flows from financing activities. This indicator is used to manage capital employed in the Group.
CARECHEM
Carechem 24 is a multilingual telephone advice service providing access to a team of trained responders 24hours a day, 365days a year. Carechem
24provides companies all over the world with emergency product support during a hazardous materials incident.
Cash conversion
Is a ratio used to measure the conversion of EBITDA into cash. It is defined as (Underlying EBITDA + Capex from continuing operations) / Underlying
EBITDA.
CGU
Cash-generating unit.
Code of conduct
Syensqo is committed to responsible behavior and integrity, taking into account the sustainable growth of its business and its good reputation in the
communities in which it operates.
CTA
Currency Translation Adjustment.
Diluted earnings per share
Net income (Syensqo’s share) divided by the weighted average number of shares adjusted for effects of dilution.
Discontinued operations
Component of the Group which the Group has disposed of or which is classified as held for sale, and:
· Represents a separate major line of business or geographical area of operations;
· Is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations;
· Is a subsidiary acquired exclusively with a view to resale.
SYENSQO 2023
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GLOSSARY
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Dividend yield (gross)
Gross dividend divided by the closing share price on December 31.
Dividend yield (net)
Net dividend divided by the closing share price on December 31.
DJ EURO STOXX
Dow Jones Euro Stoxx is a pan-European stock index which includes the 326most important shares of the general Dow Jones index, belonging to eleven
countries of the Eurozone.
DJ STOXX
Dow Jones Stoxx is a European stock index composed of the665 most important European shares.
EBIT
Earnings before interest and taxes. Performance indicator that is a measure of the Group’s operating profitability irrespective of the funding’s structure.
EBITDA
Earnings before interest and taxes, depreciation and amortization. The Group has included EBITDA as an alternative performance indicator because
management believes that the measure provides useful information to assess the Group’s operating profitability as well as the Group’s ability to generate
operating cash flows.
Eco-profile
A description of the magnitude and significance of the environmentally relevant inputs and outputs (including, as appropriate, raw materials, intermediate
products, emissions and waste) associated with a product throughout its lifecycle.
Environmental protection agency
TheU.S. Environmental Protection Agency (EPA or USEPA) is an agency of the United States federal government which was created for the purpose of
protecting human health and the environment by writing and enforcing regulations based on laws passed by Congress.
Equity per share
Equity (Syensqo share) divided by the number of outstanding shares at year end (issued shares - treasury shares).
EURONEXT
Global operator of financial markets and provider of trading technologies.
Free cash flow
Cash flows from operating activities (excluding cash flows linked to acquisitions or disposals of subsidiaries, cash outflows of Voluntary Pension Contributions, as
they are deleveraging in nature as a reimbursement of debt and cash flows related to internal management of portfolio such as one-off external costs of internal
carve-out and related taxes...), cash flows from investing activities (excluding cash flows from or related to the acquisitions and disposals of subsidiaries), and
other investments, and excluding loans to associates and non-consolidated investments, and recognition of factored receivables), payment of lease liabilities,
and increase/decrease of borrowings related to environmental remediation. Prior to the adoption of IFRS16, operating lease payments were included within
free cash flow. Following the application of IFRS16, because leases are generally considered to be operating in nature, free cash flow incorporates the payment
of the lease liability (excluding the interest expense). Excluding this item in the free cash flow would result in a significant improvement of free cash flow
compared to prior periods, whereas the operations themselves have not been affected by the implementation of IFRS16. It is a measure of cash generation,
working capital efficiency and capital discipline of the Group.
Free cash flow conversion
Calculated as the ratio between the free cash flow to Syensqo shareholders of the last rolling 12months (before netting of dividends paid to non-
controlling interest) and underlying EBITDA of the last rolling 12months.
Free cash flow to Syensqo shareholders
Free cash flow after payment of net interests, coupons of perpetual hybrid bonds, dividends to non-controlling interests and capital injections and
capital reimbursements from/to non-controlling interests. This represents the cash flow available to Syensqo shareholders, to pay their dividend and/or
to reduce the net financial debt.
FTSEUROFIRST 300
The FTSEurofirst 300 Index tracks the equity performance across the region of the 300 largest companies ranked by market capitalization in the
FTSEDeveloped Europe Index.
GBU
Global business unit.
Gearing ratio
Underlying net debt / total equity.
GRI
GRI (Global Reporting Initiative) is the independent, international organization that helps businesses and other organizations take responsibility for their
impacts, by providing them with the global common language to communicate those impacts. GRI provides the world’s most widely used standards for
sustainability reporting – the GRI Standards.
IBA
Internal bank accounts
ICCA
International Council of Chemistry Associations.
IFRS
International Financial Reporting Standards.
Integrated reporting
This is a process founded on integrated thinking, which results in a periodic integrated report by an organization about value creation over time and
related communications regarding aspects of value creation.
ISO 9001
The ISO 9001 standard defines a set of requirements for the establishment of a system of quality management in an organization, whatever its size and
activity.
ISO 14001
The ISO 14001 family addresses various aspects of environmental management. It provides practical tools for companies and organizations looking to
identify and control their environmental impact and constantly improve their environmental performance.
ISO 14040
The ISO 14040 standard covers life cycle assessment (LCA) studies and life cycle inventory (LCI) studies.
ISO 26 000
The ISO 26000 is a global standard which provides guidelines for organizations that wish to operate in a socially responsible manner. The standard was
published in 2010 after five years of negotiations among a large number of stakeholders worldwide. Representatives of governments, NGOs, industry,
consumer groups, and the world of work were involved in its development. It therefore represents an international consensus.
LCA
Life Cycle Assessment.
Leverage ratio
Net debt / underlying EBITDA of the last 12months. Underlying leverage ratio = underlying net debt / underlying EBITDA of the last 12 months.
Loss prevention process
Loss prevention aims at maintaining production flow and profitability of the plants by providing risk mitigation. It also contributes to increasing the
protection of people and the environment.
LTII
Lost Time Injury or Illness: A Work Related Injury or Illness that results in a work interruption of one or more days, not including the day of the accident.
LTIIR
Lost Time Injury and Illness Rate: number of Lost Time Injury and Illnesses resulting from accident per 200,000work hours.
Mandatory contributions to employee benefits plans
For funded plans, contributions to plan assets corresponding to amounts required to be paid during the respective period, in accordance with agreements
with trustees or regulation, as well as, for unfunded plans, benefits paid to beneficiaries.
Materiality
Organizations are faced with a wide range of sustainability matters on which they could report. The relevant topics pertain to the undertaking’s material
actual or potential, positive or negative impacts on people or the environment over the short-, medium- and long-term., or if it generates risks or
opportunities that affect (or could reasonably be expected to affect) the undertaking’s financial position, financial performance, cash flows, access to
finance or cost of capital over the short, medium or long term. Sustainability matters relevant from one or both dimensions merit inclusion in the annual
report. Materiality is the threshold at which aspects become sufficiently important that they should be reported.
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Natural currency hedge
A natural currency hedge is an investment that reduces the undesired risk by matching cash in and outflows.
Near miss
accident or collision narrowly avoided.
Net cost of borrowings
Cost of borrowings netted with interest on loans and short-term deposits, as well as other gains (losses) on net indebtedness.
Net financial charges
Net cost of borrowings, and costs of discounting provisions (namely, related to post-employment benefits and Health Safety and Environmental liabilities).
Net financial debt (IFRS)
(IFRS) net debt = Non-current financial debt + current financial debt – cash & cash equivalents – other financial instruments (current and non-current).
Underlying net debt reclassifies as debt 100% of the hybrid perpetual bonds, considered as equity under IFRS. It is a key measure of the strength of the
Group’s financial position and is widely used by credit rating agencies.
Net pricing
The difference between the change in sales prices versus the change in variable costs.
Net sales
Sales of goods and value added services corresponding to Syensqo’s know-how and core business. Net sales exclude Revenue from non- core activities.
Net working capital
Includes inventories, trade receivables and other current receivables, netted with trade payables and other current liabilities.
Occupational accident
Accident which occurred during the execution of a work contract with Syensqo. Accidents on the way to/from home are not considered as work related
except if at the time of the accident, the worker was traveling for Syensqo.
OCI
Other Comprehensive Income.
OECD
Organisation for Economic Co-operation and Development.
OHSAS 18001
OHSAS18001 is an international occupational health and safety management system specification.
Open innovation
Innovation that is enriched with outside expertise, through partnerships with the academic world and by shareholdings in start-ups, either directly or via
investment funds.
Operational deleveraging
Reduction of liabilities (net debt or provisions) through operational performance only, i.e. excluding impacts from acquisitions and divestitures, as well as
remeasurement impacts (changes of foreign exchange, inflation, mortality and discount rates).
Organic growth
Growth of Net sales or underlying EBITDA excluding scope changes (related to small M&A not leading to restatements) and forex conversion effects.
The calculation is made by rebasing the prior period at the business scope and forex conversion rate of the current period.
OSHA
United States Occupational Safety and Health Administration.
PP
Unit of percentage points, used to express the evolution of ratios.
PPA
Purchase Price Allocation (PPA) accounting impacts related to acquisitions, primarily for Rhodia and Cytec.
Pricing power
The ability to create positive net pricing.
Product stewardship
A responsible approach in managing risks throughout the entire life cycle of a product, from the design stage to the end of life.
PSM
Process safety management.
PSU
Performance Share Unit.
REACH
REACH is the European Community Regulation on chemicals and their safe use (EC 1907/2006). It deals with the registration, evaluation, authorization,
and restriction of chemical substances. The law entered into force on June1, 2007.
Research & innovation
Research & development costs recognized in the income statement and as capital expenditure before deduction of related subsidies, royalties and
depreciation and amortization expense. It measures the total cash effort in research & innovation, regardless of whether the costs were expensed or
capitalized.
Research & innovation intensity
Ratio of research & innovation / net sales.
Responsible care
®
Responsible Care
®
is the global chemical industry’s unique initiative to improve health, environmental performance, enhance security, and to communicate
with stakeholders about products and processes.
Result from legacy remediation and major litigations
It includes:
· The remediation costs not generated by on-going production facilities (shut-down of sites, discontinued productions, previous years’ pollution), and
· The impact of significant litigations.
Results from portfolio management and major restructuring
It includes:
· Gains and losses on the sale of subsidiaries, joint operations, joint ventures, and associates that do not qualify as discontinued operations;
· Acquisition costs of new businesses;
· One-off operating costs related to internal management of portfolio (carve-out of major lines of businesses);
· Gains and losses on the sale of real estate not directly linked to an operating activity;
· Restructuring charges driven by portfolio management and by major reorganization of business activities, including impairment losses resulting from
the shutdown of an activity or a plant;
· Impairment losses resulting from testing of Cash Generating Units (CGUs).
It excludes non-cash accounting impact from amortization and depreciation resulting from the purchase price allocation (PPA) from acquisitions.
Revenue from non-core activities
Revenues primarily comprising commodity and utility trading transactions and other revenue, considered to not correspond to Syensqo’s know-how and
core business.
RII
Reportable Injury & Illness: work-related injury or illness resulting from an accident with severity above first aid, according to US OSHA 29 CFR 1904.
RIIR
Reportable Injury & Illness rate: number of reportable injury or illness per 200,000work hours.
ROCE
Return on Capital Employed, calculated as the ratio between underlying EBIT (before adjustment for the amortization of PPA) and capital employed.
Capital employed consists of net working capital, tangible and intangible assets, goodwill, rights-of-use assets, investments in associates & joint ventures
and other investments, and is taken as the average of the situation at the end of the last 4 quarters.
ROE
Return on equity.
SAELs
Syensqo Acceptable Exposure Limits.
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Safety data sheets
Safety Data Sheets are the main tool for ensuring that manufacturers and importers communicate enough information along the supply chain to allow
safe use of their substances and mixtures.
SBTi
Science Based target initiative
SDG
United Nations Sustainable Development Goals.
Seveso regulations
The Control of Major Accident Hazards Involving Dangerous Substances Regulations. These regulations (often referred to as “COMAH Regulations” or
“Seveso Regulations”) give effect to European Directive 96/82/EC. They apply only to locations where significant quantities of dangerous substances
are stored.
SOCRATES
Global tool for industrial hygiene management.
SOP
Stock Option Plan.
SPM
The Sustainable Portfolio Management is a fact-based tool that evaluates the risk & opportunities of our portfolio. It considers the social & environmental
impact of our operations and the sustainability market signals, even weak ones, to anticipate their impact and develop the right answers in a timely way.
It is designed to guide business decisions and priorities for value creation.
SVHC
Substance of Very High Concern (SVHC) is a chemical substance, the utilization of which within the European Union has been proposed to become
subject to legal authorization under the REACH regulation.
TCFD
Task Force on Climate-related Financial Disclosure.
Underlying
Underlying results are deemed to provide a more comparable indication of Syensqo’s fundamental performance over the reference periods. They are
defined as the IFRS figures adjusted for the “Adjustments” as defined above. They provide readers with additional information on the Group’s underlying
performance over time as well as the financial position and they are consistent with how the business’ performance and financial position are reported
to the Board of Directors and the Executive Committee.
Underlying net debt
Underlying net debt reclassifies as debt 100% of the perpetual hybrid bonds, considered as equity under IFRS.
Underlying tax rate
Income taxes / (Result before taxes – Earnings from associates & joint ventures) – all determined on an Underlying basis. The adjustment of the
denominator regarding associates and joint ventures is made as these contributions are already net of income taxes. This provides an indication of the
tax rate across the Group.
Velocity
Total number of shares traded during the year divided by the total number of listed shares, using the Euronext definition.
Velocity adjusted by free float
Velocity adjusted as a function of the percentage of the listed shares held by the public, using the Euronext definition.
Voluntary pension contributions
Contributions to plan assets in excess of Mandatory Contributions to employee benefits plans. These payments are discretionary and are driven by the
objective of value creation. These voluntary contributions are excluded from free cash flow as they are deleveraging in nature as a reimbursement of
debt.
WACC
Weighted Average Cost of Capital.
WBCSD
World Business Council for Sustainable Development.
YOY
Year on year comparison.
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Shareholders’diary
MAY 16, 2024
First quarter 2024 results
MAY 23, 2024
Ordinary General Shareholders’ meeting
MAY 29, 2024
Ex-coupon date
MAY 31, 2024
Final dividend: payment date
AUGUST 1, 2024
First half 2024 results
NOVEMBER 5, 2024
Nine months 2024 results
Layout, concept and production: WordAppeal, France / Printing: Cousto, Belgium / Publication management: Syensqo Communications
Credits: @Syensqo, iStock
Ce rapport est également disponible en français. Dit jaarverslag is ook beschikbaar in het Nederlands.
Printed on FSC paper.
