Contents

SUSTAINABILITY

Ǵ
absolute water withdrawal
25.2%
woman in management
at LANXESS water risk sites

Ǵ69%
CO2 emissions
Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

Commitment to Sustainable Transformation

Even in challenging times, our commitment to sustainability does not change. We see it as a long-term transformation
WKDW{ZHGULYHIRUZDUGDFFRUGLQJWRDFOHDUURDGPDSsHYHQLQSKDVHVRIJHRSROLWLFDOLQVWDELOLW\3URJUHVVLQWKHƭHOGRI
sustainability makes our company more resilient and promotes our future viability, so that we can successfully master
challenges and crises.

Our mission is the transformation to circular, climate-neu- › With 2030 Agenda for Sustainable Development, › The term “Responsible Care®” stands for the
tral value creation – which must also be fair and safe. the United Nations has established the basis for chemical industry’s goal of achieving progress with
Thinking and acting sustainably and in an integrated global economic progress in harmony with social safety and environmental protection, regardless of
PDQQHUVXSSRUWVRXUEXVLQHVVJRDOVLQDYDULHW\RIGLƫHUHQW justice and within the Earth’s ecological limits. WKHOHJDOVSHFLƭFDWLRQV:HKDYHGRFXPHQWHGRXU
ZD\VsIURPKLJKHUUHVRXUFHHưFLHQF\WRJRRGUHODWLRQ- 7KHVSHFLƭFJRDOVRIWKH$JHQGDDUHVHWRXWLQWKH commitment to the visions and ethical concerns of
ships with our stakeholders, increased risk awareness, and Sustainable Development Goals (SDGs). this initiative from the International Council of Chem-
permanently advantageous cost structures. The quality of › The U.N. Global Compact is the world’s biggest and ical Associations (ICCA) by signing the Responsible
our company is also demonstrated by the social impact most important initiative for responsible corporate Care® Global Charter.
of our entrepreneurial activities. Our facilities, locations, governance. Based on ten universal principles, it › Among the internationally recognized principles of
DQGSURGXFWVPXVWKDYHDPHDVXUDEOHVXVWDLQDEOHEHQHƭW pursues the vision of an inclusive and sustainable business activity to which we are committed are the
for the community. JOREDOHFRQRP\IRUWKHEHQHƭWRIDOOSHRSOHFRPPX- employment standards of the International Labour
nities, and markets. As a signatory, we recognize Organization, an agency of the United Nations. These
Internationally recognized standards and frameworks give these principles as inalienable rights. are aimed at upholding globally recognized social
XVYDOXDEOHJXLGDQFHLQWKLVWUDQVIRUPDWLRQSURFHVV standards and thereby improving working and living
conditions for all people.

11 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

The Ten Principles of the U.N. Global Compact The 17 Sustainable Development Goals

Human rights

Businesses should …
1 … support and respect the protection of
internationally proclaimed human rights.
2 … make sure they are not complicit in human
rights abuses.

Labor

Businesses should …
3 … uphold the freedom of association and the
HƫHFWLYHUHFRJQLWLRQRIWKHULJKWWRFROOHFWLYH
bargaining.
4 … uphold the elimination of all forms of forced
and compulsory labor.
5 …XSKROGWKHHƫHFWLYHDEROLWLRQRIFKLOGODERU
6 … uphold the elimination of discrimination
in respect of employment and occupation.

As “Agenda 2030,” the Sustainable Development Goals

Environment in particular provide important guidance. We must under-
Businesses should … stand precisely how our priorities – formulated in the mate-
rial topics – relate to the priorities of the international
7 … support a precautionary approach to
environmental challenges. community. The analysis of our impact on the SDGs has
shown that we are creating societal value and have a
8 … undertake initiatives to promote greater
positive impact on many SDGs. At the same time, however,
environmental responsibility.
the challenges are also made clear – for example in the
9 … HQFRXUDJHWKHGHYHORSPHQWDQGGLƫXVLRQ
ƭHOGVRIFOLPDWHSURWHFWLRQDQGRFFXSDWLRQDOVDIHW\
of environmentally friendly technologies.

Further information on our contributions and the

Anti-corruption
HƫHFWVRIRXUEXVLQHVVDFWLYLW\LQUHODWLRQWRWKH6'*V
Businesses should …
10 … work against corruption in all its forms, including
extortion and bribery.

12 Annual Report 2022 | LANXESS

 Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

 Audited 
disclosures of SUSTAINABILITY MANAGEMENT LOCATED The LANXESS climate targets are in line with the
NFR

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the LANXESS AT BOARD OF MANAGEMENT LEVEL Paris Climate Agreement. The Science Based Targets
Group that initiative (SBTi), a joint initiative of the climate change
are included 
in the 2022 Sustainability-Related Committees and Board of Management Responsibilities mitigation organization CDP, the U.N. Global Compact,
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QRQƭQDQFLDO the World Resources Institute and the World Wide

Group report
Sustainability Committee Fund for Nature, validated our climate targets for Scope
All Board of Management members DQGDQGFRQƭUPHGWKDW/$1;(66LVKHOSLQJWR
limit global warming to a maximum of 1.5 degrees
Celsius. To measure climate-relevant emissions, we
Sub-committees
FROOHFWGDWDRQHPLVVLRQVRIJUHHQKRXVHJDVHVGHƭQHG
Climate & Energy +HDOWK6DIHW\  Value Chain People & Stakeholder in the Kyoto Protocol and calculate their greenhouse
Environment &LUFXODULW\{  Governance Expectations HƫHFWLQFRPSDULVRQWRFDUERQGLR[LGH
Product and Reporting
Stewardship Standards
2. Furthermore, we have set ourselves the target of carry-
'U+XEHUW)LQN 'U+XEHUW)LQN Dr. Anno Dr. Anno Michael Pontzen ing only climate-neutral products in our portfolio and
Borkowsky Borkowsky1 quantifying the carbon footprint of all our products by
2050 (see targets table).
1) Until the end of March
Dr. Stephanie Coßmann
Other key aspects of sustainable action in our view are
compliance with and the continual development of our

In order to more consistently pursue our sustainability
NFR
› “Value Chain Circularity & Product Stewardship” values, rules and standards as well as forward-looking
targets, we established a new committee structure at sub-committee – promotion of sustainable products risk management.
the beginning of 2021. The top decision-making body and value chains
is the Sustainability Committee, which manages all › “People & Governance” sub-committee – coordina- Further information on corporate governance at
key issues relating to sustainability. Its members include tion of issues of LANXESS’s corporate and social LANXESS
all members of the Board of Management. Five sub-com- responsibility
mittees report to the Sustainability Committee, which deal › “Stakeholder Expectations and Reporting Standards” Further information on risk management at LANXESS
with various focal points of our sustainability strategy and VXEFRPPLWWHHsIXOƭOOPHQWRIH[WHUQDOUHSRUWLQJ
DUHHDFKKHDGHGE\D%RDUGRI0DQDJHPHQWPHPEHU standards and stakeholder management We also guarantee responsible business activity with our
integrated management system, on which we report in
› “Climate & Energy” sub-committee – implementation The “Value Chain Circularity & Product Stewardship” detail in the “Safe and Sustainable Sites” section.
of the LANXESS “Climate neutral 2040” climate sub-committee and the “Sustainability Committee”
program DGRSWHGWZRQHZVXVWDLQDELOLW\WRSLFVLQWKHUHSRUWLQJ\HDU
› p+HDOWK6DIHW\ (QYLURQPHQWqVXEFRPPLWWHHs
development of safe production sites 1. LANXESS wants to make its entire supply chain
climate-neutral. The indirect emissions in the upstream
and downstream supply chain (Scope 3) are to be
eliminated by 2050.
13 Annual Report 2022 | LANXESS
Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

DIALOG FOR THE FUTURE is another important dialog forum for LANXESS. The  SYSTEMATIC PRIORITIZATION

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WBCSD is a global, CEO-led organization committed to OF SUSTAINABILITY TOPICS
The successful transformation of our industry along the accelerating the pace of change toward a more sustain-
entire value chain is possible only in continuous exchange able world. As part of our membership, we are among the Everything LANXESS does must have due regard for our
and close cooperation with our stakeholders. Relevant founding members of the Circular Cars Initiative (CCI) and strategic guidelines, the relevant interests of our stake-
stakeholders for LANXESS are groups, institutions, and the Circular Electronics Partnership (CEP). The CCI is a KROGHUVDQGWKHPDWHULDOHƫHFWVRIRXUDFWLRQVRQRXU
individuals with whom we maintain a direct or indirect partnership between stakeholders from the automobility company and society. A materiality analysis in line with the
relationship through our business activities and who there- HFRV\VWHP HJLQGXVWU\SROLF\PDNHUVDQGƯHHWSXUFKDV- requirements of the Global Reporting Initiative (GRI) helps
fore have an interest in our actions. Our main stakeholder ers) to eliminate or minimize total lifecycle emissions. us to systematically prioritize the wide range of action
groups are customers, capital market representatives, 7KH&(3LVWKHƭUVWSULYDWHVHFWRUDOOLDQFHIRUFLUFXODU DUHDVDQGXVHUHVRXUFHVDVHƫHFWLYHO\DVSRVVLEOH,WLV
suppliers, the media, and representatives from politics, electronics. In the context of national and international EDVHGRQIRXUSULQFLSOHVVXVWDLQDELOLW\FRQWH[WPDWHULDOLW\
public authorities, and non-government organizations regulatory requirements such as those of the German completeness, and inclusion of stakeholders.
(NGOs). Act on Corporate Due Diligence in Supply Chains, we
also organized a stakeholder roundtable on the topic of In 2021, we the responded to the ongoing, dynamic trans-
We are in intensive exchange and contribute actively to “Sustainable Delivery – the Supply Chain of the Future” formation with an extensive materiality analysis. As a result,
dialog and cooperation formats, especially with regard to in 2022. With representatives of politics, science, busi- we condensed the number of our sustainability topics
the major transformation issues climate protection and ness and environmental organizations, we discussed how IURPVHYHQWRƭYHVKDUSHQLQJWKHIRFXVRQLPSRUWDQWQHZ
circular economy. For example, LANXESS is one of only LANXESS follows the legal requirements. There was also WRSLFVVXFKDVWKHFLUFXODUHFRQRP\7KHƭYHPDLQWRSLFV
a few companies from the chemicals industry that is a valuable input on selected sustainability topics and on the ZHUHFRQƭUPHGE\WKH6XVWDLQDELOLW\&RPPLWWHHfollowing
founding member of the BDI Circular Economy initiative, compatibility of ecology and business. a review in the reporting year and, after close examination,
a platform for dialog between business, politics, science provided our relevant management framework again in
and society in order to jointly develop tools to promote Globally, we are now also involved in the International 7KH\DOVRLQƯXHQFHWKHVWUXFWXUHRIRXUH[WHUQDO
the market for recycled raw materials and unlock poten- 6XVWDLQDELOLW\DQG&DUERQ&HUWLƭFDWLRQ ,6&& LQLWLDWLYH reporting on the topic of corporate responsibility. Our
tial for waste prevention. Meanwhile, the collaborative This multi-stakeholder initiative is governed by an associ- review of the material topics in the reporting year also
project “Circular economy as a driver of innovation for a ation with more than 175 members. We will support the considers the double materiality perspective. This shows
FOLPDWHQHXWUDODQGUHVRXUFHHưFLHQWHFRQRP\q &(:,  further development of the ISCC standards on the road KRZRXUDFWLYLWLHVLPSDFWGLƫHUHQWVXVWDLQDELOLW\DVSHFWV
which is funded by the German Federal Ministry for the to a sustainable, climate-neutral and circular economy. (“inside-out perspective”) and how sustainability topics,
Environment, Nature Conservation and Nuclear Safety, VXFKDVFOLPDWHFKDQJHLQƯXHQFH/$1;(66 pRXWVLGHLQ
is focusing on the building and automotive sectors. The Further information on the topics and dialog forums perspective”).
World Business Council for Sustainable Development for each relevant stakeholder group
(WBCSD), which we joined at the beginning of 2020,

14 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information


Material Topics

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Circular and Sustain- Safe and Sustainable Climate Action and Good Governance and Sustainable
able Sourcing Sites (QHUJ\(ưFLHQF\ § Energized Employees Products

Our increasingly circular value LANXESS manufactures For us, climate action based We aim to be an attractive em- We systematically evaluate the
chains start from a diverse, sus- sustainable products at RQHưFLHQWHQHUJ\XVHLVWKH ployer and to develop peoples’ sustainability of our portfolio
tainable raw material portfolio. competitive and sustainable right thing to do for society and full potential throughout their and consider sustainability
We engage with our suppliers chemical sites. Continuous DOVRDNH\WRGHOLYHULQJƭQDQFLDO professional life. To this end, criteria in the development of
and relevant stakeholders process improvements and performance in the long term. we create a motivating working products and applications. We
to improve the working and investments are fundamental In 2040, LANXESS is to be a environment for all employees, have long-term relationships
environmental conditions in IRURXU{VXFFHVV:HFDUH climate-neutral company. striving for high engagement with our customers, drive
WKH{JOREDOVXSSO\FKDLQV DERXW{WKH{FRPPXQLWLHVRI and impact. We nurture and innovation together and help
ZKLFKRXUVLWHV{DUHD{SDUW promote a value-based, perfor- them to make their business
mance-orientated culture. sustainable.

 
In addition to our materiality analysis, we came up with a As part of our management of opportunities and risks, :HKDYHIRUPXODWHGVSHFLƭFJRDOVIRUDOONH\WRSLFV6RPH

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GHƭQLWLRQRIPDWHULDOLW\IRUWKHQRQƭQDQFLDO*URXSUHSRUW{s we have implemented a wide range of risk-mitigating RIWKHYDULDEOHFRPSHQVDWLRQRIWKHƭUVWDQGVHFRQG
the contents of which are integrated into this section of PHDVXUHV:LWKUHJDUGWRWKHDVSHFWVGHƭQHGDVUHOHYDQW management level below the Board of Management
WKH$QQXDO5HSRUWDQGGLVWLQFWO\LGHQWLƭHGsLQDFFRU- IRUWKHQRQƭQDQFLDO*URXSUHSRUWDQHWULVNDQDO\VLVVKRZV therefore depends on the extent to which certain targets
dance with Section 289c, Paragraph 3, Sentence 1 of no material risks in connection with our own business for CONJe emissions in Scope 1 and Scope 2 and for the
WKH*HUPDQ&RPPHUFLDO&RGH +*% 7KHQRQƭQDQFLDO activities or with business relationships, products, and lost time injury frequency rate (LTIFR) are achieved. The
report contains disclosures that are necessary in order VHUYLFHVWKDWDUHYHU\OLNHO\WRKDYHVHULRXVQHJDWLYHHƫHFWV Sustainability Committee systematically examined the
to understand the business performance, the business H[LVWLQJJRDOVDQGLQGLFDWRUVƯHVKHGWKHVHRXWZKHUH
UHVXOWVWKHSRVLWLRQRIWKH*URXSDQGWKHHƫHFWVRIRXU Further information on the opportunity and risk QHFHVVDU\DQGDOVRGHƭQHGQHZJRDOVLQWKHUHSRUWLQJ
DFWLYLWLHVRQQRQƭQDQFLDODVSHFWV)RUXVWKLVPHDQV management system year. In connection with the Scope 3 target, for exam-
environmental issues, employee and social issues, human ple, these include the Net Zero Value Chain initiative, the
rights, and anti-corruption, as shown in the “About this elimination of indirect emissions in the upstream and
Report” section on page 254. downstream value chain by 2050, and innovations and
adjustments with regard to diversity.

15 Annual Report 2022 | LANXESS

 Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

LANXESS Sustainability Goals

Topic Goal Indicator Deadline Status quo 2022 SDG Page


1, 8
Circular and Sustainable Sourcing
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Establishment of a systematic Status inquiry to identify relevant suppliers with Share of suppliers evaluated 2023 The risk analysis is in operation, and all suppliers from North America and Germany have 20–22
sustainability risk analysis to high risk level been integrated into the system. It has been successfully linked with external sources for risk
evaluate all suppliers assessment. The connection of suppliers from elsewhere in Europe and the rest of the world
is scheduled for early 2023. The global launch of the necessary system was planned for
2021 and has been delayed.
,GHQWLƭFDWLRQDQGUHGXFWLRQRI 'LƫHUHQWLDWLRQRIULVNVFRUHE\JRRGVJURXSFRXQWU\ Sustainability risk score 2023 The risk tool is available and enables a risk overview via the supplier databases in North 20–22
sustainability risks in the supply (levels 1(6)) America and Germany. Following a bottom-up approach, GPL developed a manual
chain calculation method with TfS guiding principles in order to analyze suppliers with a low
VXVWDLQDELOLW\VFRUHRUQRQHDWDOO+HUHWRRWKHJOREDOUROORXWKDVEHHQGHOD\HGIURP
2021 to early 2023 for system-related reasons.
Circular raw materials Development of a process to track, monitor and Development of a process 2022 A process and a calculation tool have been developed to track, monitor and report on 21–22
continuously improve the proportion of renewable the proportion of bio-based, circular, renewable and recycled raw materials.
raw materials in our products

3, 4, 6, 8, 9,
Safe and Sustainable Sites 12, 13

Uniform standards and Integration of all sites into the global matrix Degree of coverage in Ongoing $VRI'HFHPEHURXUPDWUL[FHUWLƭFDWHFRYHUHGFHUWLƭDEOHFRPSDQLHVZLWK 23–25
processes worldwide FHUWLƭFDWH ,62DQG,62 relation to sites 74 sites in 22 countries. In relation to the number of employees, this equates to 86%
FRYHUDJHRIRXUPDWUL[FHUWLƭFDWH QRWLQFOXGLQJWKHQHZO\DFTXLUHGVLWHVLQDQG
over 90%). Due to the changes in our site portfolio in recent years, we still have some site
FHUWLƭFDWHVDQGDUHJLRQFHUWLƭFDWHZKLFKZLOODOVREHWUDQVIHUUHGWRRXUPDWUL[FHUWLƭFDWH
$VRIWKHUHSRUWLQJGDWHDWRWDORI QRWLQFOXGLQJVLWHVDFTXLUHGLQRYHU RI
RXUVLWHVKDG,62FHUWLƭFDWLRQ
Global process safety Continuous reduction in incidents relating to Number of reportable Ongoing 7KHUHDUHHLJKWUHOHYDQWLQFLGHQWVRIZKLFKƭYHFODVVLƭHGDVUHSRUWDEOH 23
facility and process safety incidents relating to facility
and process safety

Continuous reduction in environmental incidents Number of reportable Ongoing There were no relevant environmental incidents. 23
environmental incidents
Continuous reduction in transportation incidents Number of reportable Ongoing There were no relevant transportation incidents. 25–26
transportation

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 Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

LANXESS Sustainability Goals

Topic Goal Indicator Deadline Status quo 2022 SDG Page

 Water consumption 5HGXFWLRQRIVSHFLƭFZDWHUFRQVXPSWLRQ Water consumption in cubic Ongoing )RUFRQWLQXLQJRSHUDWLRQVWKHVSHFLƭFZDWHUFRQVXPSWLRQDPRXQWHGWRFXELFPHWHUV 26–27
by 2% per year meters per thousand euros WKRXVDQGHXURV s\HDURQ\HDU ,QFOXGLQJWKH+30EXVLQHVVXQLWWKHVSHFLƭFZDWHU
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of sales consumption amounted to 1.24 cubic meters/thousand euros (–26% year-on-year).

Wastewater Reduction of total organic carbon (TOC) Kilograms per thousand Ongoing )RUFRQWLQXLQJRSHUDWLRQVWKHVSHFLƭF72&DPRXQWHGWRNLORJUDPVWKRXVDQGHXURV 27–28
by 2% per year euros of sales s\HDURQ\HDU ,QFOXGLQJWKH+30EXVLQHVVXQLWWKHVSHFLƭF72&DPRXQWHGWR
{NLORJUDPVWKRXVDQGHXURV s\HDURQ\HDU 
Water risk sites Introduction of a water stewardship program Percentage of sites that 2023 The implementation of the developed standard began in 2021 and continued in 2022. 26–27
have introduced a water
stewardship program
Reduction of absolute water withdrawal Absolute water withdrawal 2023 For continuing operations, absolute water withdrawal at water risk sites has already been 26–27
by 15% compared with base year 2019 in cubic meters UHGXFHGE\FRPSDUHGZLWKWKHEDVH\HDU,QFOXGLQJWKH+30EXVLQHVVXQLW
absolute water withdrawal at risk sites has been reduced by 16.8% compared with the
base year 2019.

3, 7, 8, 12,
&OLPDWH$FWLRQDQG(QHUJ\(ưFLHQF\ 13

Emissions Reduction of CONJe emissions by 65% versus 2004 Absolute CONJe emissions End of 2025 In continuing operations, absolute CONJe emissions amounted to 1,994 thousand metric 32–35
(establishment of LANXESS; 6.5 million metric tons (Scope 1 and 2) WRQV,QFOXGLQJWKH+30EXVLQHVVXQLWWKHƭJXUHZDVWKRXVDQGPHWULFWRQVRI&2NJe.
of CONJe) (market-based method) This constitutes a reduction of 69% for continuing operations and 62% including the
+30EXVLQHVVXQLWYHUVXVZKHQWKHFRPSDQ\ZDVIRXQGHG
Reduction of emissions of non-methane volatile Absolute NMVOC emissions End of 2025 For continuing operations, this constitutes a reduction of 89% compared with the base year. 32–35
organic compounds (NMVOC) by 25% compared ,QFOXGLQJWKH+30EXVLQHVVXQLWWKHUHGXFWLRQFRPSDUHGZLWKWKHEDVH\HDUZDV
to base year 2015
Reduction of CONJe emissions by 80% versus 2004 Absolute CONJe emissions End of 2030 – 32–35
(establishment of LANXESS; 6.5 million metric tons (Scope 1 and 2)
of CONJe) (market-based method)
Climate neutrality for the entire Group Absolute CONJe emissions End of 2040 – 32–35
(Scope 1 and 2)
(market-based method)

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 Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

LANXESS Sustainability Goals

Topic Goal Indicator Deadline Status quo 2022 SDG Page

 3, 4, 5, 8
Good Governance and Energized Employees
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+5UHWHQWLRQ +LJKHPSOR\HHUHWHQWLRQ9ROXQWDU\WXUQRYHUUDWH Turnover rate on the basis of Ongoing The turnover rate on the basis of resignations was 4.5% in continuing operations. 49–51
below 3.5% resignations until the end of ,QFOXGLQJWKH+30EXVLQHVVXQLWLWZDV SUHYLRXV\HDU 
2023
+5GHYHORSPHQW At least 80% of apprentices hired after completing Proportion of apprentices Ongoing  SUHYLRXV\HDU RIDSSUHQWLFHVZHUHKLUHG 45
their training hired in Germany until the end of
2023
Employee welfare/ 95% of countries in which we operate have derived Proportion of countries that End of 2022 $WWKHHQGRIWKHSURSRUWLRQZDV SUHYLRXV\HDU  48–49
work-life balance DQGLPSOHPHQWHGVSHFLƭFJXLGHOLQHVDQGRUFRUUH- have derived and imple-
VSRQGLQJPRGHOVIRUƯH[LEOHZRUNLQJFRQGLWLRQVIURP PHQWHGVSHFLƭFJXLGHOLQHV
our global “Xwork” principles and/or corresponding
PRGHOVIRUƯH[LEOHZRUNLQJ
conditions from our global
“Xwork” principles
Diversity and inclusion At least one female Board of Management member Proportion of women on the Mid-2022 7KHSURSRUWLRQRIZRPHQRQ-XQHZDV SUHYLRXV\HDU +RZHYHU 42–43
Board of Management Frederique van Baarle is to become Labor Relations Director no later than April 1, 2023,
so there will be a female Board of Management member again.
,QFUHDVHWKHSURSRUWLRQRIZRPHQLQWKHƭUVWOHYHO Proportion of women in the Mid-2022 The proportion of women on June 30, 2022, was 22.0%. 42–43
below the Board of Management to 15% ƭUVWOHYHOEHORZWKH%RDUGRI
Management
,QFUHDVHWKHSURSRUWLRQRIZRPHQLQWKHƭUVWOHYHO Proportion of women in the Mid-2027 In continuing operations, the proportion of women on December 31, 2022, was 18.4%. 42–43
below the Board of Management to 25% ƭUVWOHYHOEHORZWKH%RDUGRI ,QFOXGLQJWKH+30EXVLQHVVXQLWWKHƭJXUHZDV SUHYLRXV\HDU 
Management
Increase the proportion of women in the second level Proportion of women in Mid-2022 The proportion of women on June 30, 2022, was 25.2%. 42–43
below the Board of Management to 25% the second level below the
Board of Management
Increase the proportion of women in the second level Proportion of women in Mid-2027 In continuing operations, the proportion of women on December 31, 2022, was 25.1%. 42–43
below the Board of Management to 28% the second level below the ,QFOXGLQJWKH+30EXVLQHVVXQLWWKHƭJXUHZDV SUHYLRXV\HDU 
Board of Management
At least 30% female and 40% non-German Proportion of female and Ongoing :LWKDWRWDORI SUHYLRXV\HDU SDUWLFLSDQWVLQWKHSURSRUWLRQVDPRXQWHGWR 42–43
participants in LANXESS corporate talent programs non-German participants in until the end of  SUHYLRXV\HDU IHPDOHDQG SUHYLRXV\HDU QRQ*HUPDQSDUWLFLSDQWV
LANXESS corporate talent 2022 ([FOXGLQJ+30WKHUHZHUHSDUWLFLSDQWVRIZKLFKIHPDOHDQGQRQ*HUPDQ
programs participants.
Increase proportion of women in management Proportion of women in End of 2030 ,QFRQWLQXLQJRSHUDWLRQVWKHSURSRUWLRQRIZRPHQZDV,QFOXGLQJWKH+30EXVLQHVV 42–43
to 30% management XQLWWKHƭJXUHZDV SUHYLRXV\HDU 
Occupational safety Continuous decrease in the LTIFR by > 50% LTIFR End of 2025 7KH/7,)5ZDVLQFRQWLQXLQJRSHUDWLRQV,QFOXGLQJWKH+30EXVLQHVVXQLW 55
(reference LTIFR of 2.0 in 2016) the LTIFR was 0.6.

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Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

LANXESS Sustainability Goals

Topic Goal Indicator Deadline Status quo 2022 SDG Page

Sustainable Products 3, 12, 13

Active portfolio management Development of a strategy plan for all end products Development of a strategy 2023 The strategy plan covers 70% of the relevant products. 58–61
from a sustainability perspective with more than 0.1% critical substances plan
Inspection and, if necessary, optimization of the Proportion of inspected/ 2026 The proportion of inspected/updated dossiers is 31.6%. 57
quality of all registration dossiers that were prepared updated dossiers
LQDFFRUGDQFHZLWKWKH5($&+5HJXODWLRQXQGHU
WKH{JXLGDQFHRI/$1;(66
Long-term, continuous develop- Developing innovative products based on the needs Number of product-related Ongoing until 140 projects in the reporting year were aimed at developing new/improving existing 61–62
ment of products, applications, and expectations of our customers projects 2025 products and applications.
and processes
Continuous further development of our production Number of process-related Ongoing until 83 projects in the reporting year concerned process technology issues with a view to 32–33
processes in order to maintain competitiveness and projects 2025 UHGXFLQJFRVWVLPSURYLQJHưFLHQF\RULQFUHDVLQJFDSDFLW\
DFKLHYHRXUFOLPDWHDQGHQHUJ\HưFLHQF\WDUJHWV
Long-term customer relationship Improvement in customer satisfaction and Customer loyalty index 2022 In the 2022 survey, the customer loyalty index score was 71. 62–63
PDLQWHQDQFHRIFXVWRPHUOR\DOW\FXVWRPHU score The survey is carried out every two years.
loyalty index > 75

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CIRCULAR AND SUSTAINABLE America, continues to cause delays and put strain on KDYHVSHFLƭHGVWDQGDUGL]HGZRUNƯRZVLQWKHFRQWH[WRI

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SOURCING the supply chain. Restrictions in connection with China’s procurement in more detail in a process description.
zero-COVID policy are likewise making goods transport
15 
At LANXESS, raw materials, other materials, equipment WRDQGIURP$VLDPRUHGLưFXOW In accordance with the principles of the United Nations
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and services are subject to globally standardized require- Global Compact, the International Labour Organization
thousand ments with regard to safety and environmental protec- Energy (ILO), Responsible Care® and other CSR codes, we expect
suppliers tion. Their procurement is the responsibility of our Global Gas prices and thus prices for the entire energy sector our suppliers to comply with national and other applicable
Group-wide Procurement & Logistics (GPL) Group function, the head increased in North America, but above all in Europe, laws and regulations for environmental protection, health
of which reports directly to the Board of Management particularly due to the war in Ukraine. Russia’s invasion and safety at work and with regard to labor and recruitment
PHPEHU'U+XEHUW)LQN,QFORVHFRRUGLQDWLRQZLWKRXU and the subsequent sanctions imposed by the West, practices. Acceptance of the requirements of our Business
business units, this administrative unit organizes Group- ZKLFKDOVRDƫHFWHGFRDODQGRLOFDXVHGJDVSULFHVWR Partner Code of Conduct is an essential prerequisite for
wide procurement, establishes corresponding guidelines, rise to more than ten times the average prices of the last all suppliers wishing to work with us.
and initiates measures to promote purchasing synergies decade and also led to an explosion in electricity prices in
and sustainable behavior by our suppliers. all European countries. Since the French nuclear power In the interests of safe processing at our production facili-
plants cannot supply much energy, the European markets ties, there is a particular focus on the procurement of raw
The ongoing bottlenecks in global supply chains remained remain very strained, and the huge volatility of the very materials. For this reason, suppliers must submit up-to-
a challenge in the reporting year and resulted in rising high prices persists. The Asian energy markets, which date information to ensure that the raw materials comply
UDZPDWHULDOSULFHV,QDGGLWLRQVXEVWDQWLDOƯXFWXDWLRQVLQ DUHFKLHƯ\VHUYHGE\FRDODQGOLTXHƭHGQDWXUDOJDV /1*  with all relevant legislation for chemicals. In the case of
electricity and gas prices had an impact on our production DUHEHLQJVXEVLGL]HGORFDOO\DQGDUHDOVREHQHƭWLQJIURP raw material deliveries from non-European suppliers, our
costs, especially in Europe. In China, the government-or- cheaper Russian coal and oil deliveries, which gives them purchasing department, together with the Production,
dered power rationing at several of our sites resulted in advantages in terms of pricing and ability to supply. Since Technology, Safety & Environment (PTSE) Group function,
interruptions to production. WKLVPDFURHFRQRPLFGHYHORSPHQWDƫHFWHGDOOPDUNHW FODULƭHVZKLFKREOLJDWLRQVKDYHWREHIXOƭOOHGXQGHUWKH
participants, we were unable to pass on the cost increase 5($&+5HJXODWLRQ
Logistics to our customers.
Costs also continued to increase in 2022 due to the rise in
energy and fuel prices in Europe. The sales and marketing In 2022, procurement transactions with over 15,000
teams of our business units incorporated this cost increase suppliers were processed. A global procurement guide-
into price negotiations with customers. The shortage of OLQHIRUWKHHQWLUH*URXSGHƭQHVRXUHPSOR\HHVoFRQGXFW
truck drivers, especially in Europe, Great Britain and when dealing with suppliers and their employees. We

20 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

 
Our organic raw materials are currently still based primarily We strive to promote sustainability, increase transparency It is also encouraging to see that our suppliers’ average

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on fossil sources. We are striving to increase the propor- throughout our supply chain, and thereby further minimize EcoVadis sustainability assessment of 50.1 points is above
tion of sustainable raw materials. The market for sustain- procurement risks. This is why LANXESS is a founding the EcoVadis benchmark of 44.7 points. With regard to
able raw materials is undergoing long-term development. member of the “Together for Sustainability” (TfS) initia- our suppliers’ weak points, no trend could be discerned in
To make progress, we are already working with multiple tive. TfS has established itself in the chemicals industry 2022 again. We had no reason in the year under review
major partners and testing the materials and products that as the clear standard for a sustainable supply chain. The to end our collaboration with suppliers due to sustain-
they are researching or have already brought to market. focus here is on environmental protection, workers’ rights ability aspects.
A realistic scenario is that we will increasingly bring indi- and human rights including the prevention of child labor,
vidual products based on sustainable raw materials to labor standards, occupational safety, business ethics and With regard to the migration of a database-supported
market before this is possible for the entire product range. sustainable procurement practices. risk analysis system into our SAP system, we success-
+RZHYHUWKHXVHRIELREDVHGRUJDQLFUDZPDWHULDOVDOVR fully completed the test phase in the reporting year. The
HQWDLOVFKDOOHQJHVDQGSRWHQWLDOFRQƯLFWV)RUH[DPSOHWKH Because the assessment results and audit reports are global rollout is now taking place in parallel with a general
production of food must always take priority over the use shared within the initiative, we had more than 13,000 update of the SAP system. In North America, this was
of biomass to manufacture chemical products. Therefore, sustainability assessments and around 790 audit reports already completed in 2021; Germany followed in the
we proceed with caution when purchasing bio-based raw available to us as of the end of 2022. Suppliers whose second quarter of 2022. The risk analysis system allows
materials and ensure that the biomass we use is produced sustainability-related activities have been assessed in us to retrieve supplier-related data from around 300,000
in a renewable manner and is not competing with food TfS audits or assessments represent 72% of our rele- sources and in various qualitative dimensions – such as
production. vant procurement volume. The relevant procurement UHJXODWRU\HQYLURQPHQWDOVRFLDORUƭQDQFLDOsLQUHDOWLPH
volume comprises all suppliers from which we procure
Our inorganic raw materials are primarily obtained more than €20,000 of goods or services per year. The TotalEnergies is supplying the specialty chemicals
from the biological cycle, e.g. nitrogen from the air or TfS sustainability assessment is also incorporated into our company LANXESS with biocircular styrene. Unlike
sodium chloride from seawater. These raw materials are strategy process, which must be applied to every contract conventional styrene, the raw material used by TotalEn-
renewable in principle, but not necessarily sustainable, negotiation or renewal with a purchasing volume of more ergies is based on tall oil, which is derived from a tree
as their extraction requires high energy usage in the than €5 million. In addition to the XCORE strategy process, resin and is a by-product of pulp production. LANXESS
form of electricity. In order to reduce their carbon foot- we established the SCORE process in our purchasing uses the styrene to produce sustainable ion exchange
print, more renewable energies will have to be used for departments worldwide. This process is similar to the resins. These products are used for water treatment and
WKHLUH[WUDFWLRQ+HUHWRRZHDUHHQJDJHGLQVWUDWHJLF XCORE process, but is geared toward purchasing volumes IRUWKHSDUWLDOVRIWHQLQJRIGULQNLQJZDWHULQZDWHUƭOWHUV
partnerships with our suppliers in order to achieve this. between €1 million and €5 million or over €250,000 in
Further information can be found under “Sustainable regions outside Europe.
Products.”

21 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information


Overall Scores of Our Suppliers at EcoVadis

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%
4.0 13.0 17.0 26.0 23.0 13.0 4.0
2022
2021
2.5 7.2 14.3 25.0 28.2 16.3 6.1 0.4

Scale (in points):

0–24 25–34 35–44 45–54 55–64 65–74 75–84 85–100

Detailed Scores of Our Suppliers at EcoVadis

%

6.0 15.0 15.0 20.0 19.0 14.0 9.0 2.0

(QYLURQPHQWDO 2022
aspects 2021
3.9 8.5 12.8 21.0 19.3 20.4 11.2 2.9

4.0 11.0 14.0 25.0 26.0 15.0 5.0

:RUNLQJFRQGLWLRQV 2022
DQGKXPDQULJKWV 2021
2.2 5.1 12.3 21.5 35.4 15.9 6.9 0.7

8.9 20.1 12.0 21.0 24.0 11.0 3.0

Ethical aspects 2022
2021
6.8 10.4 14.5 20.6 27.7 15.4 4.2 0.4

12.0 29.0 16.0 22.0 12.0 6.0 3.0

6XVWDLQDEOH 2022
SURFXUHPHQW 2021
9.0 22.5 19.3 23.3 13.3 8.1 3.6 0.9

6FDOH LQSRLQWV 
0–24 25–34 35–44 45–54 55–64 65–74 75–84 85–100

 
7KHVXVWDLQDEOHRULJLQRIWKHVW\UHQHLVFHUWLƭHGLQDFFRU- In addition to styrene, the specialty chemicals company of which comprises sustainable n-butyraldehyde. The
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dance with the mass balance approach of the ISCC PLUS already sources many other sustainable equivalents of FRPSRVLWH7HSH[6FRSHEOXHLVEDVHGRQƯD[DQGSRO\-
VWDQGDUG p,QWHUQDWLRQDO6XVWDLQDELOLW\DQG&DUERQ&HUWLƭ- fossil raw materials. Biocircular acrylonitrile is used for lactic acid. And the high-performance plastic Durethan
cation”). This is an important requirement, as LANXESS another type of ion exchange resin. The preservative Scopeblue uses biocircular cyclohexane and waste glass.
RƫHUVLWVSURGXFWVLQDFFRUGDQFHZLWKWKLVFHUWLƭFDWLRQ Preventol is also available with various fatty acid mixtures
standard as well and therefore relies on the same trans- EDVHGRQVXQƯRZHURLO7KHLQWHUPHGLDWH7ULPHWK\ORO-
parency for its raw materials. propane Scopeblue is available in a version about half

22 Annual Report 2022 | LANXESS

 Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

 
SAFE AND SUSTAINABLE SITES +DQGOLQJFKHPLFDOVXEVWDQFHVDQGZRUNLQJZLWKWHFKQLFDO damage and security-relevant incidents such as theft are

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equipment involves health and safety risks. We identify documented. Each event is carefully analyzed in order

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Our commitment is to make our production safe and these risks and potential threats systematically worldwide to draw conclusions as to how we can avoid similar inci-
sustainable in every respect, thus ensuring our long-term – for new and existing plants – and minimize them by dents in the future. All measures count toward our goal of
competitiveness. Our Production, Technology, Safety & LPSOHPHQWLQJGHƭQHGSUHYHQWLYHDQGSURWHFWLYHPHDVXUHV continuously reducing the number of events. The number
Environment (PTSE) Group function, the head of which Experts examine implementation of LANXESS guide- of major process safety incidents in the 2022 reporting
reports directly to the Board of Management member Dr. lines and local regulations for safe operation of our plants year was in the single digits.
+XEHUW)LQNLVUHVSRQVLEOHIRUWKLV376(GHYHORSVDQG on-site via targeted spot checks in audits whose frequency

35
maintains company-wide standards that ensure respon- LVJHDUHGWRZDUGWKHUHVSHFWLYHULVNSURƭOH&RPSOLDQFH We are continuing the systematic digitalization of produc-
VLEOHXVHRIFKHPLFDOVDW/$1;(667KH\GHƭQHUHTXLUH- ZLWKVDIHW\VWDQGDUGVPXVWEHUHJXODUO\YHULƭHGZRUOGZLGH tion, including by digitizing our paper-based operational
ments and govern responsibilities for health protection, for every plant via audit opinions. In 2022, a total of 35 management and maintenance checklists. Tablets are
HSE (Health, environmental protection, handling of chemicals, plant SURGXFWLRQIDFLOLWLHV SUHYLRXV\HDU ZHUHH[DPLQHG now in use that are directly connected to the central
Safety, Environ- safety and safety precautions in the workplace. Contin- LQWKHFRQWH[WRI+6(FRPSOLDQFHFKHFNV KHDOWKVDIHW\ ,7{V\VWHPVDW/$1;(66DQGHQDEOHUHDOWLPHDFFHVVWR
ment) checks uous training of our employees and regular audit-based DQGHQYLURQPHQW LQFOXGLQJ SUHYLRXV\HDU LQ data. The solution includes the end-to-end integration of
at production reviews of our health, safety and environmental manage- *HUPDQ\(LJKW+6(FRPSOLDQFHFKHFNVSODQQHGRXWVLGH digital data processing in the work process and ensures
facilities
ment systems are aimed to ensure that the requirements Germany and three planned in Germany were postponed that data is archived correctly and automatically. Thanks
are incorporated into our processes systematically and to 2023, partly as a result of the coronavirus pandemic in to the clear, complete data, we can now directly derive
sustainably. &KLQD,QZHFRQGXFWHG+6(JDSDQDO\VHVDWVL[ necessary measures and implement them immediately.
sites acquired in connection with migrations. 7KLVQRWRQO\LQFUHDVHVZRUNHưFLHQF\LQSURGXFWLRQDQG
Uniform standards in production maintenance, but also avoids duplication of work.
LANXESS operates a total of 57 production sites and We use an electronic reporting system to record acci-
KDVDSUHVHQFHLQFRXQWULHV LQYHVWPHQWVƩDV dents and events worldwide in line with uniform regula- Integrated management system
of December 31, 2022). Our wide range of products WLRQV2Q)HEUXDU\{{WKHQHZ,QWHOH[,QFLGHQW A centrally organized management system at LANXESS
UHTXLUHVWKHXVHRIPDQ\GLƫHUHQWFKHPLFDODQGWHFKQLFDO Management System replaced its predecessor IRS (Inci- provides for the necessary global management structures

57
processes. Uniform standards for planning, building and dent Reporting System). By way of digitalization, the new, in all business processes in order to ensure responsible
operating plants ensure a high level of process, plant and PRUHDJLOHDQGƯH[LEOHV\VWHPSURYLGHVDSODWIRUPIRU business activities. Globally, we base our actions on the
occupational safety. greater data and process safety and better functional- international standards ISO 9001 and ISO 14001 for
production sites ity on mobile devices. Injuries, transportation accidents, quality and environmental management and ISO 50001
in 18 countries near-accidents, environmental incidents, instances of for energy management.

23 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

Input/Output Analysis1)

Indirect Direct VOC Greenhouse

greenhouse greenhouse emissions gas emissions
gas emissions gas emissions 0.6 kt from biomass
(Scope 2) (Scope 1) (climate neutral)
1,1512) kt 843 kt 298 kt

Coal, gas, oil Employees Volume sold Steam

10.4 PJ 3)
2,754 kt 5.1 PJ
13,126

Biomass Electricity, steam, cooling

3.3 PJ 11.7 PJ Safety
4)
LTIFR RIR5)
0.5 0.5 Waste Cooling water
707.5 kt 142.7 million m3
Strategic raw materials +6(FRPSOLDQFHFKHFNV
3,550 kt

Infrastructure
Production wastewater
57 production sites in 18 countries
Total water withdrawal 14.2 million m3
178.3 million m3

Upstream supply chain LANXESS plant Downstream supply chain

(Scope 3 6,793 kt, indirect emissions) (Scope 3 4,367 kt, indirect emissions)

1) Continued operations 4) /7,)5UDWHRIRFFXSDWLRQDODFFLGHQWVZLWKDQLQFDSDFLW\FHUWLƭFDWHSHUSODQQHG

 &DOFXODWHGDFFRUGLQJWRWKHPDUNHWEDVHGPHWKRGRIWKH*+*3URWRFRO million hours worked resulting in calendar days lost following the day of the accident
 &RUHZRUNIRUFHRIWKHFRUHFRPSDQLHVDVRI'HFHPEHU{{ (day of the accident does not count), calculated for all employees at all sites
(including temporary workers for Germany, NAFTA, China, and India).
5) Number of incidents per 200,000 working hours that have to be reported
DFFRUGLQJWR26+$UXOHV

24 Annual Report 2022 | LANXESS

 Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

  
&RQƭUPDWLRQRIFRPSOLDQFHZLWKWKHVWDQGDUGV,62 Theseo and International Flavors & Fragrances Inc. (IFF) Global hazardous-goods and

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DQG,62LVSURYLGHGLQJOREDOPDWUL[FHUWLƭFDWHV DQGWKHLUFHUWLƭFDWHV transport-safety management system
7KLVDSSURDFKEULQJVDZKROHUDQJHRIEHQHƭWV With a global hazardous-goods and transport-safety
$VRI'HFHPEHURXUPDWUL[FHUWLƭFDWHFRYHUHG management system, we ensure that we minimize or
› a high degree of standardization of processes FHUWLƭDEOHFRPSDQLHV FRPSDQLHVZLWKVWDƫDQGLQ entirely avoid hazards. We coordinate, monitor and review
› uniform in-house guidelines and instructions which LANXESS has a stake of over 50%) with a total implementation of relevant hazardous-goods and trans-
›
86%
WUDQVSDUHQWHưFLHQWDQGHƫHFWLYHSURFHVVHVDQG of 74 sites in 22 countries. In relation to the number of port-safety regulations as well as in-house regulations
controls employees, this equates to 86% coverage (not including FHQWUDOO\LQDGHSDUWPHQWWKDWLVVSHFLƭFDOO\UHVSRQVLEOH
› considerably reduced external expense for the WKHQHZO\DFTXLUHGVLWHVLQDQGRYHU  for this.
PDWUL[FHUWLƭFDWH maintenance and optimization of the management
coverage system, for the integration of additional management In addition, we have had LANXESS AG and all major &HQWUDOFODVVLƭFDWLRQRIRXUSURGXFWVLQOLQHZLWKLQWHUQD-
systems (e.g. ISO 50001, sustainability standards), *URXSFRPSDQLHVFHUWLƭHGLQDFFRUGDQFHZLWK,62 tional, regional and local hazardous-goods regulations
and for the integration of new sites or business units for energy management in Germany and Belgium. The ensures that applicable laws are interpreted uniformly
RQO\H[FHSWLRQVDUH,0'1DWXUDO6ROXWLRQV*PE+DQG while taking regional and local aspects into account. Clas-
We ensure that progress in integrating new sites into our &KH0RQGLV*PE+ERWKRIZKRVHHQHUJ\FRQVXPSWLRQ VLƭFDWLRQGHWHUPLQHVVXFKWKLQJVDVWKHW\SHRIFRQWDLQ-
management system and its performance are regularly is below the minimum threshold for the performance ment (packaging and tanks), marking and labeling, the
reviewed worldwide by independent external experts. of mandatory energy audits in accordance with EDL-G permitted modes of transport and transportation routes
In 2022, we successfully passed the surveillance audit (German Energy Services Act), as well as the newly DVZHOODVPHDVXUHVWKDWRSHUDWLRQDOVWDƫPXVWWDNHLID
LQDFFRUGDQFHZLWKWKHVWDQGDUGV,62DQG DFTXLUHG7KHVHR*HUPDQ\*PE+LQ:LHWPDUVFKHQ$V WUDQVSRUWDWLRQHYHQWRFFXUV7KHFRUUHVSRQGLQJFODVVLƭ-
DQGWKHUHFHUWLƭFDWLRQDXGLWLQDFFRUGDQFH of December 31, 2022, the energy management system cation data is stored in the central safety-data system for
ZLWK,62,QWKHUHSRUWLQJ\HDUWKHSURGXF- had reached coverage of 99% in these two countries in chemicals at LANXESS. In connection with the introduc-
tion sites in Charleston, U.S., and Baxenden, Great Britain relation to the number of employees. IAB Ionenaustaus- tion of the new enterprise resource planning system, more
(formerly Chemtura), IMD Natural Solutions, Dortmund, FKHU*PE+KDVLWVRZQFHUWLƭFDWH2XWVLGH*HUPDQ\ than 11,000 products and raw materials of LANXESS
and LANXESS Kimya Ticaret Limited Sirketi, Istanbul, were and Belgium, we are continuing to pursue our strategy of Deutschland, Saltigo, LANXESS Organometallics and
DGGHGWRWKHPDWUL[FHUWLƭFDWH0RVWRIWKHVLWHVWDNHQRQ UHJLRQDODQGORFDOFHUWLƭFDWLRQV,Q*UHDW%ULWDLQRXUVLWHV Theseo were migrated to the central system in 2022. The
with the acquisition of Chemtura were already integrated DUHFHUWLƭHGLQDFFRUGDQFHZLWK(626 (QHUJ\6DYLQJV integration of Emerald Kalama Chemical was begun and
LQWRWKHPDWUL[FHUWLƭFDWHV1HDUO\DOORIWKHRWKHUVLWHVKDYH Opportunity Scheme), for example. an interface successfully implemented in order to populate
DOUHDG\EHHQFHUWLƭHGLQDFFRUGDQFHZLWK,62DQG both the old LANXESS system and the new ERP system
,62)RUWKHWLPHEHLQJWKH\KROGWKHVHFHUWLƭFD- In addition, individual LANXESS Group companies and with logistically relevant data from the central safety-data
tions separately. We are planning to gradually integrate VLWHVKDYHRWKHUVSHFLƭFPDQDJHPHQWV\VWHPVDQGFHUWL- system. This will prevent duplicate data management and
WKHVHVLWHVLQWRRXUPDWUL[FHUWLƭFDWH7KHVDPHDSSOLHV ƭFDWLRQVVXFKDV,6&&5& 5& 5HVSRQVLEOH ensure consistent data in the individual systems.
to the sites acquired from Emerald Kalama Chemical, Care®), ISO 45001, and IATF 16949.

25 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

  
7RFRXQWHUWKHGHƭFLHQFLHVLQORDGVHFXULQJRIJHQHUDO LANXESS is aware of water’s ecological and social to make improvements at the LANXESS water risk sites.

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cargo, the PTSE and GPL Group functions have worked VLJQLƭFDQFHEH\RQGZDWHUoVLPSRUWDQFHDVDQHFRQRPLF The sites are assessed using a customized, extensive
closely together to develop a load-securing standard for resource. Access to water and sanitary facilities is a human ZDWHUULVNDQDO\VLV)RUƭVFDO\HDUZHLGHQWLƭHGD
LANXESS, which has proven successful in numerous right. Water availability and quality are global challenges WRWDORIIRXUORFDWLRQVDVZDWHUULVNVLWHV-KDJDGLDDQG
ƭHOGWHVWVDQGLQSUDFWLFH$IWHUWKHLQWHUUXSWLRQRIWKH that we can and must address locally. We are therefore Nagda, India; Latina, Italy; and Qingdao, China. The sites
pandemic, implementation resumed in 2022 at the site committed to the responsible use of water. In our own have not changed since the program began.
in Bushy Park, U.S. business activities and beyond, we use our products to
advance the United Nation’s Sustainable Development We believe we are on track to achieve our target to reduce
Environmental responsibility *RDO 6'* pFOHDQZDWHUDQGVDQLWDWLRQIRUDOOq absolute water withdrawal at water risk sites by 15% by
The preservation of natural resources – for example by 7KHSURGXFWVRIRXU/LTXLG3XULƭFDWLRQ7HFKQRORJLHV  EDVH\HDU &RPSDUHGWRWKHIRXU
XVLQJUDZPDWHULDOVDVHưFLHQWO\DVSRVVLEOHsDQGLGHQWLƭ- business unit in particular make a major contribution. sites have already reduced water withdrawal by 17.3%.
cation of further potential are ongoing tasks in the context For example, the Lewatit® ion exchange resin is used in Prioritized savings projects are all in the pilot phase or
of our environmental responsibility and expertise. We are the processing and reuse of process water and removes already complete. For example, water withdrawal has
IRFXVHGƭUVWO\RQUHVSRQVLEOHXVHRIZDWHUDVDUHVRXUFH unwanted substances. already been reduced by a technical optimization of the
which includes both water consumption and water quality. cooling towers in Latina and by various water saving
6HFRQGO\ZHHQGHDYRUWRIXOƭOORXUHFRORJLFDOUHVSRQVL- One of the most important indicators in discussions measures in Qingdao. At the two Indian sites, Jhagadia
bility with regard to waste. The clear focus is compliance around water is water stress. Our annual analysis of all and Nagda, rainwater projects were implemented with the
with all legal requirements. In line with circular economy, LANXESS production sites using the WRI Aqueduct Tool local community. In addition, we concluded gap analyses
LANXESS strives to enforce the waste hierarchy – preven- showed that – taking all portfolio changes of the current regarding the local water stewardship programs at all
tion, reuse, disposal – around the world. ƭVFDO\HDULQWRDFFRXQWsRIRXUSURGXFWLRQVLWHVDUHLQ water risk sites in the reporting year, and are seeing good
water-stress areas. These sites accounted for around 2% progress. The water stewardship programs are to be fully
LANXESS Water Program: of our total water withdrawal in 2022. Around 90% of our initiated by 2023.
Good progress continues water withdrawal takes place in areas with low water stress.
As a chemicals company, we rely on water for our produc- Sparing use of water
tion. We use it mainly for cooling (80%), as an input mate- In order to further drive our dedication to the protection +DQGOLQJVFDUFHZDWHUUHVRXUFHVLQDFRQVFLRXVDQGFDUH-
rial in chemical processes (18%) or in the form of steam of water as a resource, we launched our global LANXESS ful manner is an investment in the future. In order to break
(2%). In addition, rivers are an important transportation :DWHU3URJUDPLQ,QDGGLWLRQWRWKHJOREDOHư- the link between our growth and water consumption and
tool, particularly for our networked sites in Germany. ciency targets for water consumption and total organic potential stresses from wastewater discharge, we have
carbon (TOC) in wastewater, the program primarily aims set ambitious targets at Group level. We are aiming for

26 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

  
DQDQQXDOUHGXFWLRQRIERWKVSHFLƭFZDWHUFRQVXPSWLRQ The comparison of water withdrawal and water consump- Sustainable waste management

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DQGVSHFLƭFWRWDORUJDQLFFDUERQ 72& LQZDVWHZDWHU tion shows that, while large volumes of water are with- We aim to avoid hazardous as well as non-hazardous
ƯRZVE\ drawn (e.g. once-through cooling water), this water is later waste as far as possible and decouple our business growth
returned to the water cycle in the same quality. In 2022, DQGZDVWHSURGXFWLRQ5LJRURXVPDWHULDOƯRZPDQDJH-
Water Withdrawal & Consumption in cubic meters/ LANXESS’s water consumption is calculated by subtract- PHQWIURPUDZPDWHULDOLQSXWWRƭQLVKHGSURGXFWLVDLPHG
in million cubic meters thousand euros of sales
ing the volume of treated and untreated wastewater and DWHQVXULQJWKDWZHXVHUHVRXUFHVDVHưFLHQWO\DVSRVVLEOH
Water withdrawal (absolute) Water consumption (absolute) water volumes (e.g. sold steam) sold to third parties from and minimize our waste volumes.
In relation to sales (total water consumption)
the water withdrawal (including purchased steam).
800 3.0 2XUEXVLQHVVXQLWVDQGVLWHVVWULYHWRLQFUHDVHHưFLHQF\
2.30 2.16 2.18
In the reporting year, both our water withdrawal and water and are working constantly on various research projects for
600 1.68 2.0
1.36 consumption decreased considerably due to the decon- the prevention, reduction and recycling of waste. In turn,
400 1.0 VROLGDWLRQRIWKH+30EXVLQHVVXQLW:HDFKLHYHGRXU our networked sites enable us to re-use many waste and
222.3 222.9 209.6 217.0 WDUJHWRIUHGXFLQJVSHFLƭFZDWHUFRQVXPSWLRQE\DWOHDVW VHFRQGDU\ƯRZVDVDUDZPDWHULDOGLUHFWO\LQQHLJKERULQJ
178.3
200 0.0 2% in the reporting year. plants – both our own as well as those of other chemicals
15.7 14.7 13.3 12.7 11.0
companies – to create closed loops and thus avoid the
2018 2019 2020 2021 20221), 2) The volume of treated wastewater declined year-on-year. generation of waste.
7KLVLVPDLQO\GXHWRWKHGHFRQVROLGDWLRQRIWKH+30
1) Continuing operations
2) LANXESS total: Water withdrawal: 226.8, business unit. As a responsible company, we consider ,QƭVFDO\HDU/$1;(66UDPSHGXSLWVDFWLYLWLHV
:DWHUFRQVXPSWLRQVSHFLƭF
numerous water quality indicators in addition to wastewater with regard to waste. Various working groups conducted
volumes in order to derive improvement measures. One potential and market analyses to look at new on-site and
Wastewater Discharge (treated) of the most important parameters is TOC (total organic RƫVLWHUHF\FOLQJRSWLRQVSDUWQHUVKLSVIRULQQRYDWLYHFKHP-
in million cubic meters in cubic meters/ FDUERQ ,QƭVFDO\HDUWKHVSHFLƭF72&DIWHUZDVWH- ical recycling processes or the further standardization of
thousand euros of sales
Absolute In relation to sales water treatment decreased to 0.12 kilograms/thousand waste reporting. The goal is to increase the circularity of
HXURV SUHYLRXV\HDUNLORJUDPVWKRXVDQGHXURV  waste streams.
3.97 3.95
80 4.0 Because of this and the increase in sales, we achieved
the reduction target of 2%. 7KHDPRXQWRIZDVWHJHQHUDWHGKDVGHFUHDVHGVLJQLƭ-
60 2.59 3.0 cantly compared to the previous year. This is due on the
2.13³)
1.76
Further information on our use of water can be found one hand to the portfolio change and on the other hand
40 2.0
27.1 26.9 in our “Water” Background Paper. to an adjusted declaration of aqueous waste streams
15.8 16.1³) 14.2
20 1.0 at our site in El Dorado, U.S., on the basis of updated
reporting standards. From reporting year 2022, the site’s
2018 2019 2020 2021 20221), 2)

1) Continuing operations
2) /$1;(66WRWDO:DVWHZDWHUGLVFKDUJH WUHDWHG VSHFLƭF
3) Figure restated

27 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

  
slightly polluted wastewater is reported as wastewater. This was due, on the one hand, to the redeclaration in Systematic recording of key data

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The remaining wastewater still accounts for the biggest (O{'RUDGRDQGRQWKHRWKHUKDQGWRPRUHGHWDLOHGUHSRUW- To record key data on safety and environmental protec-
share of our waste. ing at the sites in the Lower Rhine region. Through the tion systematically worldwide, we use an electronic data-
LQFUHDVHGHƫRUWVZLWKUHJDUGWRZDVWHDQGLPSURYHGGDWD entry system. This enables us to calculate a wide range
Waste for Disposalƿ provision from the site utility company, a large volume of RI+6(SHUIRUPDQFHGDWDIRUHDFKEXVLQHVVXQLWDQGVLWH
% (LANXESS total) ZDVWHZDVUHFODVVLƭHGIURPRWKHUIRUPVRIGLVSRVDOWRWKH worldwide, which is used as a valid data pool for strategic
8.4 (10.4)
other categories. decisions as well as internal and external reporting. In addi-
9.7 (10.3) tion, it maps the progress that we make with our global
Material recycling
Total Waste sustainability targets. Data is gathered only at production
Incinerated waste
3.9 (3.8) in thousand metric tons in kilograms of waste/
with energy
thousand euros of sales
sites where we have equity interest of more than 50%.
recovery
6.4 (6.2) Absolute In relation to sales 'XHWRWKHSODQQHGGHFRQVROLGDWLRQRIWKH+30EXVLQHVV
Incinerated waste
without energy unit, we are disclosing this data separately.
recovery 6,400 360
/DQGƭOOHGZDVWHV
Other forms of disposal 5,600 315 3ULFHZDWHUKRXVH&RRSHUV*PE+:LUWVFKDIWVSU×IXQJV-
71.7 (69.3) gesellschaft audited our environmental and safety perfor-
4,800 263.1 270
252.7 mance data and the requisite data-gathering processes
1) Continuing operations 231.4
4,000 225
ZLWKOLPLWHGDVVXUDQFHIRUƭVFDO\HDU
Using the previous year’s method, the waste volume of 178.2
continuing operations would have increased by roughly 3,200 180 7KHQRQƭQDQFLDOSHUIRUPDQFHLQGLFDWRUV“CONJe emis-
5%. sions (Scope 1 and Scope 2) and energy” as well as the
2,400 135
1,795.1
“lost time injury frequency rate (LTIFR)” are management-
1,718.8 87.5
:HJURXSZDVWHLQWRƭYHFDWHJRULHVHDFKGLYLGHGLQWR 1,600 1,412.2 1,346.3 90
relevant performance indicators. Therefore, they are part of
hazardous and non-hazardous waste. The chart shows the “reasonable assurance”DXGLWRIWKHFRQVROLGDWHGƭQDQ-
707.5
each category’s share (in %) of total waste. 800 45 cial statements and the combined management report.

In reporting year 2022, the share of recovered waste 2018 2019 2020 2021 20221), 2)
(material recycling/energy recovery) increased by
1) Continuing operations
{SHUFHQWDJHSRLQWV\HDURQ\HDUWRDWRWDORI7KH  /$1;(66WRWDO7RWDOZDVWHVSHFLƭF
share of other forms of disposal decreased by around
{SHUFHQWDJHSRLQWVFRPSDUHGWRWKHSUHYLRXV\HDU

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 Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

 
Environmental and Safety Performance Data* Emissions to air in thousand metric tons
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Total greenhouse gas emissions CONJe
2020 2021 2022 2022
(GRI 305-1, GRI 305-2) 2,533 2,591 1,994 472
Continuing +30 Direct (Scope 1)8) 1,263 1,284 843 392
operations business unit
Indirect (Scope 2, marked-based)9) 1,270 1,307 1,151 80
Safety
Ozone-depleting substances (GRI 305-6) 0.004 0.004 0.004 0.000
Occupational injuries to LANXESS employees
NOX, SOX and other emissions (GRI 305-7)
resulting in at least one day’s absence (LTIFR1)) 1.0 0.9 0.5 1.1
NOX10) 2.1 1.4 0.9 0.4
Volume sold in thousand metric tons
2)
4,256 4,754 2,754 1,541
SONJ11) 0.9 0.9 0.3 0.3
Energy consumption in petajoules (10ƿǃ joules) 3)
24.4 28.6 a)
25.4 2.8
CO 2.1 3.2 2.6 0.1
Direct energy sources (GRI 302-1)
1+Nj 0.02 0.03 0.01 0.01
Non-renewable 9.5 11.2 10.4 1.1
NMVOC12) 1.2 0.8 0.6 0.1
Renewable (biomass) 2.4 3.3 3.3 0.0
Waste in thousand metric tons
Indirect energy sources (GRI 302-1)4)
Total weight of waste (GRI 306-3) 1,412.2 1,346.3 707.5 30.8
Electricity consumption 5.8 6.3 4.7 1.5
Incineration with energy recovery 77.1 70.7 68.3 7.5
+HDWDQGVWHDPFRQVXPSWLRQ 6.0 7.05a) 6.3 0.2
Incineration without energy recovery 30.5 28.7 27.6 0.3
Energy consumption for cooling 0.55 0.54 0.55 0.00
/DQGƭOOLQJ 52.1 52.4 45.0 1.0
Other 0.15 0.11 0.12 0.00
Material recovery 47.9 60.5 59.1 17.9
Water and wastewater in million cubic meters
Other forms of disposal 1,204.6 1,134.0 507.5 4.1
Total water withdrawal (GRI 303-3) 209.6 217.0 178.3 48.5
Type of waste
Surface water 48.4 57.5 28.1 45.7
+D]DUGRXV 566.4 664.8 626.9 6.4
Groundwater 4.3 4.6 4.5 0.0
Non-hazardous 845.8 681.5 80.6 24.4
Third-party wastewater 1.2 1.1 1.2 0.0
Third-party water 155.7 153.8 144.5 2.8 Explanations concerning our environmental and safety performance data
* The aggregate data refer to all LANXESS production sites in which the company holds equity interest of more than 50%.
Total water withdrawal in water-stress
$VDUHVXOWRIWKHDFTXLVLWLRQRI,QWHUQDWLRQDO)ODYRUV )UDJUDQFHV,QF DVRI-XO\ WKHHQYLURQPHQWDOƭJXUHVIRU
areas, 4.213) (GRI 303-3) 4.7 4.5 4.1 0.1 the production site Institute were included pro rata.
Volume of once-through cooling water, 188.413) / 7,)5UDWHRIRFFXSDWLRQDODFFLGHQWVZLWKDQLQFDSDFLW\FHUWLƭFDWHSHUSODQQHGPLOOLRQKRXUVZRUNHGUHVXOWLQJLQFDOHQGDUGD\VORVW
(GRI 303-4) 169.7 176.4 142.7 45.7 following the day of the accident (day of the accident does not count), calculated for all employees at all sites (including temporary
workers for Germany, NAFTA, China, and India).
Total wastewater discharge (GRI 303-4) 2) Products sold internally to another LANXESS company or externally (excluding commercial products).
Wastewater discharge (treated) 15.8 16.1a) 14.2 1.4 3) The energy volumes given were calculated on the basis of typical substance values. They do not include energy contained in raw materials.
4) Presented as a balance sheet, whereby the volume of energy sold is subtracted from the volume of energy purchased.
Wastewater discharge (untreated) 178.8 187.4 152.2 45.9 & KHPLFDOR[\JHQGHPDQG &2' LVFDOFXODWHGDVIROORZV>&2'@ >72&@ &2'NW QRWLQFOXGLQJ%8+30 
Total wastewater discharge by destination + HDY\PHWDOV DUVHQLFFDGPLXPFKURPLXPFRSSHUPHUFXU\QLFNHOOHDGWLQ]LQF 
(GRI 303-4) 7) According to GRI 303-5, total water consumption is calculated by subtracting the total water discharge from the total water withdrawal.
8) All Scope 1 greenhouse gases are calculated as CONJe. The emission factors used for fuels are based on calculations by the U.S. EPA
Surface water 191.5 155.5 46.9 *+*(PLVVLRQ)DFWRUV+XE6HSWHPEHU DQGRQWKH,3&&*XLGHOLQHVIRU1DWLRQDO*UHHQKRXVH*DV,QYHQWRULHV  
Groundwater 0.0 0.7 0.0 ,QDFFRUGDQFHZLWKWKH*+*3URWRFRO  VLQFHWKHIDFWRUVIRUFDOFXODWLQJ&2NJe have been based on the global warming
SRWHQWLDO WLPHKRUL]RQ\HDUV GHƭQHGLQWKH,3&&6L[WK$VVHVVPHQW5HSRUW $5 SUHYLRXVO\,3&&6HFRQG$VVHVVPHQW
Seawater 0.4 0.4 0.0 5HSRUW 6$5 ,QDFFRUGDQFHZLWKWKH*+*3URWRFROWKH&2NJ emissions from the combustion of biomass are shown separately
Third-party water 11.5 9.8 0.4 DQGDUHQRWLQFOXGHGLQWKH6FRSHHPLVVLRQV7KHIROORZLQJHPLVVLRQVZHUHSURGXFHGGXULQJWKHUHSRUWLQJSHULRGNW&2NJ,
NW&2NJNW&2NJNW&2NJNW&2NJ QRWLQFOXGLQJ%8+30 7KHPDWHULDOFRPSRVLWLRQRI
Wastewater emissions (after treatment)
the biomass is partially based on assumptions/estimates.
in thousand metric tons 9) All Scope 2 greenhouse gases are calculated as CONJe. In 2022, the conversion factors used were provided by the energy producers.
Total nitrogen 0.4 0.5 0.4 0.0 :KHUHWKHVHZHUHQRWDYDLODEOHIDFWRUVIURPWKH,($ ,QWHUQDWLRQDO(QHUJ\$JHQF\ IURPZHUHXVHGIRUƭVFDO\HDUIURP
2019 for 2021 and from 2018 for 2020. CONJ6FRSHHPLVVLRQVIRU ORFDWLRQEDVHGPHWKRG NW QRWLQFOXGLQJ%8+30 
Total organic carbon (TOC)5) 1.2 1.3 1.0 0.1 CONJ6FRSHHPLVVLRQVIRU ORFDWLRQEDVHGPHWKRG NW LQFOXGLQJ%8+30 
+HDY\PHWDOV6) 0.0021 0.0023 0.0019 0.0001 10) Nitrogen oxide (NOX) calculated as NONJ (excluding NNJO; nitrous oxide).
11) Sulfur dioxide (SONJ 62Nj calculated as SONJ.
Total water consumption in million cubic meters
12) Total VOC (volatile organic compounds) excluding methane and acetone.
(GRI 303-5)7) 13.3 12.7 11.0 1.4 13) LANXESS total.
D 9DOXHVUHVWDWHGGXHWRVXSSOHPHQWDU\QRWLƭFDWLRQVRUFKDQJHLQFDOFXODWLRQPHWKRG

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Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

  
Corporate citizenship of our sites (“community investment”) or in corporate Social Activities by Type of Investment1)

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Our understanding of sustainable sites also includes being objectives such as image, sales and income while also %
a strong and reliable partner for the people locally and generating social value (“commercial initiative”). 4
6
in the respective region and taking social responsibility.
Our commitment is based on our corporate expertise and ,Q WRWDO URXJKO\  PLOOLRQ SUHYLRXV\HDU URXJKO\
objectives and focused on education, climate protection, {PLOOLRQ SHRSOHEHQHƭWHGIURPRXUSURMHFWVLQ
ZDWHUDQGFXOWXUH2XUJRDOVLQDOOWKHVHDUHDVDUHLGHQWLFDO We use a system of performance indicators to measure 90
the social impact of our activities above and beyond the
Charitable gift
› Mobilizing resources and people for social QXPEHURISHRSOHZKREHQHƭW,QZHSHUIRUPHG
Commercial initiative
commitment an impact assessment for all (100%) of the projects we
Community investment
› Achieving positive impacts on the company, FDUULHGRXWWDNLQJLQWRDFFRXQWSRVLWLYHHƫHFWVLQWKHDUHD
the environment and society DURXQGWKHVLWHDQGSRVLWLYHHQYLURQPHQWDOHƫHFWVRQRXU
1) Number of projects: 138
EXVLQHVV6SHFLƭFIHHGEDFNIURPSHRSOHZKREHQHƭWIURP
As a company, we aim to play a positive part in improving our projects is a key factor in this context. We regard these
living conditions, education, training and equal opportuni- indicators as relevant benchmarks, with which we manage Impact Dimensions of Evaluated Activities
and Projects
ties as well as health and safety. In addition, we are working our measures in an impact-oriented manner. % 1001)
to attract talented persons, engage in extensive dialog with
Impact on the community
our stakeholders, have a positive impact on employee Social Activities by Topic1) HJTXDOLW\RIOLIHZHOOEHLQJRUVNLOOV 89

motivation and constantly improve our reputation. %

8 Impact on the environment

'LUHFWHQYLURQPHQWDOHƫHFWVRULPSDFW 55
We provided around €1.3 million globally for our projects 5 RQDWWLWXGHWRZDUGWKHHQYLURQPHQW
LQ SUHYLRXV\HDUDURXQGbPLOOLRQ 7KHUHJLRQDO Education
12 Impact on our business
focal points of our activities in the reporting year were the Culture HJDWWUDFWLYHQHVVDVDQHPSOR\HU
93
EMEA (particularly Germany) and Americas (number of Climate protection
LPSURYHGVWDNHKROGHUUHODWLRQVDQG
4 SHUFHSWLRQ
projects) regions. Water
71  1XPEHURISURMHFWV
Other
We select projects involving social engagement according
to whether they pursue purely charitable ends (“charitable
gift”) or whether we are investing in the social environment
1) Number of projects: 138

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Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

  
Commitment to education, climate In Japan, we strove to educate schoolchildren about As part of our cultural commitment, we have been spon-

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protection, water and culture climate change and its impact. Our newly developed soring the international literature festival lit.Cologne as a
Under the LANXESS education initiative, starting in 2008, “Climate Class and Science Experiment Workshop” lead partner since 2010 and the Kölner Philharmonie for
we have initiated more than 500 projects at our sites program started in 2022, providing opportunities to several years. The Ozawa International Chamber Music
worldwide to get young people interested in the natu- OHDUQDERXWWKHHQYLURQPHQWDQGWKHƭJKWDJDLQVWFOLPDWH Academy in Japan, which we have likewise supported
ral sciences at an early age. In 2022, we supported a FKDQJH,QWKHUHSRUWLQJ\HDUZHRƫHUHGWKUHHZRUNVKRS for twelve years, gives talented young musicians from all
preparatory seminar for 20 schoolchildren from North for children in grades one through six. In Brazil, the “Juntos RYHU$VLDWKHRSSRUWXQLW\RIƭUVWFODVVPXVLFDOWUDLQLQJ
5KLQH:HVWSKDOLDZKRKDGTXDOLƭHGWRWDNHSDUWLQWKH pelo clima 2022/Together for the Climate 2022” proj-
54th International Chemistry Olympiad in China, with a ect saw elementary schoolers learn about ecological i Ukraine war:
sum of €10,000. challenges and how they can help to solve them on an LANXESS donates €200,000
environmental activity trail. In light of the dramatic events in Ukraine, LANXESS
In Brazil, we implemented the “Formare 2022” program has supported humanitarian aid. In the reporting
together with the Iochpe Foundation, which prepares In 2022, LANXESS India also assisted the local commu- year, the company donated €200,000 to “Aktion
young people from low-income backgrounds for the world nity in Jhagadia, in the state of Gujarat, and the surround- 'HXWVFKODQG+LOIWqDJURXSLQJRIPRUHWKDQ{DLG
RIZRUNDQGKHOSVWKHPORRNIRUWKHLUƭUVWMRE7KHSURJUDP ing villages with the installation of solar-powered street- organizations. The alliance is currently active in
is conducted in partnership with companies that provide lights. They not only illuminate the villages but also help Ukraine and its neighboring countries. It has links
their employees as volunteer educators. For example, ten to make the roads safer. WRORFDORUJDQL]DWLRQVDQGVXSSRUWVIDPLOLHVƯHHLQJ
young people from Porto Feliz were chosen to be prepared the war – in Ukraine and at the stops on their journey.
for vocational training for the role of “Production Operator In order to meet the demand for water in the arid Nagda
in the Chemical Industry.” region in Madhya Pradesh, India, our Indian company
implemented a rainwater-collection project aimed at rais-
In another project, LANXESS helped municipal schools in ing the water table. A similar project was also carried out
Nagda, India, to set up digital classrooms with interactive in Jhagadia. Moreover, the eighth “Clean Water for Better
e-learning tool and a digital library. The schoolchildren also Life” research competition was held for students in China.
have access to a chemistry lab complete with instruments.

31 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

 
CLIMATE ACTION AND In light of this, it was therefore time to set new, ambitious WDUJHWVIRUWKHUHGXFWLRQRIHPLVVLRQVDQGFRQƭUPHGWKDW

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ENERGY EFFICIENCY PHGLXPDQGORQJWHUPWDUJHWVDQGWKXVIXOƭOORXUUHVSRQ- LANXESS is supporting the objective of limiting global
VLELOLW\DVDJOREDOVSHFLDOW\FKHPLFDOVFRPSDQ\/$1;(66 warming to a maximum of 1.5 degrees Celsius. At the

With the Paris Climate Agreement, the international is to be climate neutral in terms of our Scope 1 and VDPHWLPHWKH6%7LDOVRFRQƭUPHGRXU6FRSH{HPLVVLRQV
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community committed to limiting global warming to less 2 emissions by 2040. By 2030, we aim to reduce the reduction target as ambitious. To measure climate-relevant
than two degrees Celsius above the pre-industrial level. greenhouse gas emissions achieved in 2018 by more emissions, we collect data on emissions of greenhouse
At the Climate Change Conference in Glasgow in Novem- than half to around 1.3 million metric tons of CONJe. We JDVHVGHƭQHGLQWKH.\RWR3URWRFRODQGFDOFXODWHWKHLU
EHUWKLVDPELWLRQZDVIRUWKHƭUVWWLPHEDFNHGXS will thus have achieved an 80% reduction compared to JUHHQKRXVHHƫHFWLQFRPSDULVRQWRFDUERQGLR[LGH
with concrete reduction requirements for greenhouse gas the emissions when LANXESS was founded.
emissions. By 2030, for example, global CONJ emissions i Initiatives for our journey to
must be cut by 45% versus 2010, and net-zero emissions In the reporting year, LANXESS set a target for indirect climate neutrality
must be achieved by 2050. Meanwhile, in Germany, the emissions from the upstream and downstream supply “Climate Neutral 2040” (Scope 1+2)
“Climate Protection Plan 2050” currently sets out the FKDLQ 6FRSH IRUWKHƭUVWWLPH7KH*URXSLQWHQGVWR › Implement climate protection projects that
interim goal of cutting greenhouse gas emissions by make the entire supply chain climate-neutral by 2050. generate major reductions.
2030 by 55% compared with the base year of 1990. This encompasses indirect emissions associated with › Decoupling growth and emissions.
Industry is expected to contribute to this with a reduction purchased raw materials, logistics and end products. By › Strengthen process and technological
of between 49% and 51%. As of this year, LANXESS has 2030, Scope 3 emissions are to be cut by 40% – from innovations.
joined the growing list of companies that have set them- 27.0 million metric tons to 16,500 million metric tons › Compensate remaining emissions.
selves science-based targets to limit global warming to of CONJ equivalents – compared with the reference year
1.5 degrees Celsius. The validation of our commitment 2015. To achieve its Scope 3 targets, LANXESS has “Net Zero Value Chain” (Scope 3)
by the Science Based Targets initiative (SBTi) indicates launched the “Net Zero Value Chain” initiative. › Purchase sustainable raw materials.
that we are on the right track. › Transition to green logistics.
The LANXESS climate targets for Scope 1 and Scope 2 › 2ƫHUPRUHFOLPDWHQHXWUDOSURGXFWVDQG
Since it was founded, LANXESS has made substantial emissions are in line with the Paris Climate Agreement. solutions with a low carbon footprint.
progress towards its goal of becoming more environmen- The Science Based Targets initiative (SBTi), a joint initia-
tally friendly. Between 2004 and 2018, we halved our tive of the climate change mitigation organizations CDP,
greenhouse gas emissions from around 6.5 million metric the U.N. Global Compact, the World Resources Institute
tons of CONJe to about 3.2 million tons. and the World Wide Fund for Nature, validated the Group

32 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

  
“Climate Neutral 2040”: Clear strategy Decoupling growth and emissions By implementing the above measures, we want to

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to lower direct emissions (long-term target) decrease our annual emissions to less than 300,000
We are taking a multi-pronged approach to achieve our LANXESS is growing. But despite increasing production, metric tons by 2040. We plan to neutralize the remaining
WDUJHW emissions of greenhouse gases in our individual business HPLVVLRQVYLDDSSURSULDWHRƫVHWWLQJPHDVXUHV,QWKLVZD\
XQLWVDUHVHWWRVKULQN,QDGGLWLRQWRWHFKQRORJLFDOHư- ZHZLOOQRWRQO\PDNHDVLJQLƭFDQWFRQWULEXWLRQWRFOLPDWH
Launch climate protection projects FLHQF\FKDQJHGJRYHUQDQFHLQVWUXPHQWVSOD\DVLJQLƭFDQW protection in the years to come but also become an even
(medium-term target) UROHDFRPSDQ\oVFDUERQIRRWSULQWEHFRPHVDQLQYHVWPHQW more sustainable partner for our customers.
2YHUWKHQH[WIHZ\HDUVVHYHUDOPHDVXUHVZLOOVLJQLƭFDQWO\ criterion that impacts organic growth and acquisitions.
lower greenhouse gases. This gives business units that achieve better than average “Net Zero Value Chain” program:
UHGXFWLRQVLQJUHHQKRXVHJDVHPLVVLRQVDGLUHFWƭQDQ- Clear strategy to lower indirect
For example, we are switching the energy supply in Jhaga- cial advantage. In 2020, the Board of Management and emissions
dia to a mix of biomass and solar power. This is expected the Supervisory Board also decided that the reduction In the reporting year, LANXESS also developed a clear
to cut our CONJe emissions by a further 150,000 metric in CONJe will be used as an assessment criterion for the strategy to lower indirect emissions and launched the
tons from 2024. As of the reporting date, the percent of compensation system for managers and the Board of Net Zero Value Chain program. This aims to make the
renewable energies at the Jhagadia site was 37%, while Management in the future. entire LANXESS supply chain climate-neutral. The indirect
the Nagda site achieved around 88%. We already operate emissions in the upstream and downstream supply chain
DKLJKO\HưFLHQWFRJHQHUDWLRQSODQWHQWLUHO\ZLWKELRPDVV Strengthen process and technological innovations (Scope 3) are to be eliminated by 2050. The “Net Zero
in Porto Feliz, Brazil. We are also planning to phase out (long-term target) 9DOXH&KDLQqLQLWLDWLYHLVEDVHGRQWKUHHSLOODUV
the use of coal-based energy at our major production We are revising many of our existing production processes
sites in Germany. in order be climate neutral by 2040. For example, we plan › Transition of raw materials purchasing to increasingly
to continue improving our network structures, e.g. when it sustainable raw materials that are bio-based, origi-
Through these projects and other measures, we want FRPHVWRKHDWH[FKDQJHEHWZHHQSODQWVDQGDLUSXULƭFD- nate from a recycling process or are produced with
to decrease our CONJe emissions to 2.3 million metric WLRQ+RZHYHURWKHUSURFHGXUHVPXVWƭUVWEHGHYHORSHG renewable energy.
tons by 2025. on a large industrial scale. We will therefore focus our › Greater consideration of carbon footprint when
research activities more closely on climate-neutral process selecting means of transport.
and technological innovation. › Expansion of our range of climate-neutral products
and solutions with a low carbon footprint.

33 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

  i 
In the coming years and decades, climate change will CDP gives LANXESS top score Greenhouse Gas Emissions (Scope 2)

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KDYHVLJQLƭFDQWJOREDOFRQVHTXHQFHVIRUFRPSDQLHVoEXVL- For more than a decade, we have been participat- in thousand metric tons of CO ² equivalents
in CO² equivalents/
ness activities. This year, LANXESS therefore continued to ing in the international climate protection initiative Absolute thousand euros of sales
work on an extensive risk analysis, based on three climate CDP (formerly the Carbon Disclosure Project), each In relation to sales

categories. We perform this scenario analysis globally for year sharing data and information on climate pro- 6,000 0.30
all locations and assess the risks that could arise in the tection and the reduction of emissions. As one of
0.25
short, medium and long terms. 283 companies worldwide, we again received the 5,000 0.25
0.22
best possible score of “A” in the “climate” category 0.21
4,000 0.20
Uncertainty over emissions trading in the assessment for 2022, which puts LANXESS 0.17
In Europe, twelve of our plants are subject to European among the top 2% of the more than 15,000 com- 0.14
3,000 0.15
emissions trading. Trading with CONJ emissions rights, panies rated by CDP. These gratifying results gave us
NQRZQDVFHUWLƭFDWHVLVLQWHQGHGWRUHGXFHHPLVVLRQV encouragement to continue systematically pursuing 2,000 1,687 0.10
1,491
1,270 1,307
of the environmentally harmful gas CONJFRVWHƫHFWLYHO\ our climate protection strategy. In the reporting year, 1,151
Because all of our plants covered by emissions trading are we also received a very respectable A– from CDP 1,000 0.05

state-of-the-art and compete at the international level, we IRURXUZDWHUVHFXULW\HƫRUWV

H[SHFWWRUHFHLYHHQRXJKFHUWLƭFDWHVIURPIUHHDOORFDWLRQ 2018 2019 2020 2021 20221), 2)
to cover the expected CONJ emissions by the end of the 1) Continuing operations
fourth trading period in 2030. At present, however, we Greenhouse Gas Emissions (Scope 1)  /$1;(66WRWDO6FRSHVSHFLƭF
in thousand metric tons of CO ² equivalents
FDQQRWSUHFLVHO\HVWLPDWHWKHHƫHFWVRIFKDQJHVWRWKH in CO² equivalents/
EU emissions trading system planned under the Green Absolute thousand euros of sales Greenhouse Gas Emissions (Scope 3)
In relation to sales
Deal. Since 2021, the introduction of the Fuel Emissions in thousand metric tons of CO² equivalents
Trading Act (n-ETS) has resulted in additional costs, which 6,000 0.30 Scope 3 (absolute)
suppliers include in the natural gas price. We cannot yet 5,000 0.25 30,000
0.22
precisely estimate further costs due to the Scope expan- 0.21 0.21 22,862
4,000 0.20 19,087
sion planned from 2023. 0.17 20,000 16,876
14,499
3,000 0.15 11,160
0.10
2,000 0.10 10,000
1,490 1,459
1,263 1,284
843
1,000 0.05
2018 2019 2020 2021 20221), 2)
1) Continuing operations
2018 2019 2020 2021 20221), 2)
2) LANXESS total: 14,652
1) Continuing operations
 /$1;(66WRWDO6FRSHVSHFLƭF

34 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

 
,QRXUDEVROXWH6FRSHHPLVVLRQVZHUHVLJQLƭ- ,QƭVFDO\HDUZHDOVRUHJLVWHUHGVLJQLƭFDQWO\ORZHU ,QƭVFDO\HDUDEVROXWHDQGVSHFLƭF92&HPLVVLRQV

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cantly lower than the previous year’s level, among other Scope 3 emissions due to the portfolio change and a GHFUHDVHGDJDLQGXHWRWKHGHFRQVROLGDWLRQRIWKH+30
things this is due to the change in our portfolio. Moreover, declining production volume. business unit.
the transition from coal to biomass at our Indian sites

continues apace and is making a major contribution to Other atmospheric emissions Systematic energy management

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the reduction of the CONJƭJXUHV7KLVLVFRXQWHUHGE\WKH $KLJKOHYHORIHQHUJ\HưFLHQF\LPSURYHVQRWMXVWRXUHPLV-
full-year consolidation of the sites from the acquisitions VOC Emissions sions footprint but also our cost position, thus ultimately
in metric tons in VOC, kilograms/
of Emerald Kalama Chemical and Theseo, which were thousand euros of sales
making LANXESS more competitive. Our global energy
only included pro rata in 2021. Because of our altered Absolute PDQDJHPHQWSURPRWHVSURMHFWVWKDWLQFUHDVHHQHUJ\Hư-
In relation to sales
portfolio, the transition to biomass and increased sales, the FLHQF\LQRXUSODQWV,QHDFKEXVLQHVVXQLWHQHUJ\RưFHUV
VSHFLƭF6FRSHHPLVVLRQVDOVRGHFUHDVHG\HDURQ\HDU 10.0 0.8 ensure the ongoing improvement of energy-related perfor-
8.0 0.6
mance. Technical experts from the central departments
For continuing operations, Scope 2 emissions are KHOSWKHORFDOWHDPVWRLGHQWLI\DQGLPSOHPHQWHƫHFWLYH
DOVRVLJQLƭFDQWO\EHORZWKHSUHYLRXV\HDUoVOHYHO7KLV 6.0 0.4 SURMHFWVWRLQFUHDVHHưFLHQF\
development is based mainly on the deconsolidation of the 0.20
4.0 0.10 0.10 0.11 0.2
+30EXVLQHVVXQLWEXWDOVRDORZHUSURGXFWLRQYROXPH 0.07 :LWKWKLVHưFLHQF\LPSURYHPHQWWDUJHWZHKDYHWDNHQ
2.0 1.2
0.8
0.0 SDUWLQWKH(QHUJ\(ưFLHQF\1HWZRUNV,QLWLDWLYHHVWDE-
0.7 0.7 0.6
7KHVSHFLƭFƭJXUHFRQWLQXHVWRGHFOLQHGXHWRWKHSRUWIROLR lished by the German federal government and leading
change and the increased sales. 2018 2019 2020 2021 20221), 2) industry associations, with several German sites since
1) Continuing operations 2017. For example, our Mannheim site also participated
 /$1;(66WRWDO92&VSHFLƭF in the ChePap 2 network in the reporting year, the Bitter-
feld site in the Bitterfeld-Wolfen 2.0 network.

i LANXESS supports the KlimaWirtschaft Foundation

A forward-looking energy and climate policy frame- for climate protection and to support the problem-solv-
work is a prerequisite for German industry to remain ing skills of German companies. In collaboration with
competitive. Since June 2021, LANXESS has there- {LQGXVWULDOFRPSDQLHVWKH)RXQGDWLRQ$JRUD(Q-
IRUHEHHQRQHRIWKHƭUVWWZRUHSUHVHQWDWLYHVRIWKH ergiewende and Roland Berger compiled twelve rec-
chemical industry to support the KlimaWirtschaft ommendations for action at the start of 2021. We are
Foundation, an initiative of chairmen, CEOs and family convinced that our many years of experience in climate
businesses. The foundation’s aim is to call on politi- PDQDJHPHQWZLOOEHEHQHƭFLDOWRWKH)RXQGDWLRQ
FLDQVWRHVWDEOLVKHƫHFWLYHPDUNHWEDVHGFRQGLWLRQV klimawirtschaft.org

35 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

 
Energy Consumption (Balance Sheet) Direct and Indirect Energy Consumption by Region1)

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in petajoules in gigajoules/ in petajoules/%
thousand euros of sales 18,3%
Absolute
In relation to sales
100%
90 7.5

75 6.0
81,7%
4.18 3.98 4.00
60 3.78 4.5
3.14
45 3.0 North America Germany
28.5 27.1 28.61) 5.6 PJ 4,2% 12.1 PJ
30 24.4 25.4 1.5 2,9% 45,4% 24,9% 10,0%
54,6%

15 0.0
65,1%

2018 2019 2020 2021 20222), 3) 93,0%

EMEA $VLD3DFLƭF
Latin America
(excluding Germany)
1) Figure restated 1.6 PJ 2.9 PJ
2) Continuing operations 3.3 PJ
 /$1;(66WRWDO(QHUJ\VSHFLƭF

%RWKRXUDEVROXWHDQGRXUVSHFLƭFHQHUJ\FRQVXPSWLRQ
GHFOLQHGLQ%HVLGHVWKHHƫHFWRIWKHDOWHUHGSRUW-
IROLRORZHUSURGXFWLRQYROXPHVDQGHưFLHQF\PHDVXUHV
also helped to reduce energy consumption.
Direct energy sources
Direct energy sources (biomass)
An analysis of energy consumption by region shows stark Indirect energy sources

UHJLRQDOGLƫHUHQFHVERWKLQWKHDPRXQWRIHQHUJ\DQGWKH 1) Continuing operations

types of energy source.

direct and indirect energy sources. In the Latin America We are particularly endeavoring to transition from road

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Since the German sites account for the largest share of DQG$VLD3DFLƭFUHJLRQVWKHODUJHVKDUHRIELRPDVVEDVHG transport to intermodal transport options. In this context,
production volume, the most energy is also consumed direct energy sources is particularly notable. we are currently making targeted investments in digital
there. At the networked sites in the Lower Rhine region, solutions that tell us the status of ship transports early

the site utility company mostly provides indirect energy Sustainable logistics on so that we can plan the subsequent land transport
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sources. LANXESS operates most sites in the U.S., We select our transportation solutions individually world- with means of transport with the lowest possible emis-
where according to the balance sheet only direct energy wide in line with the principles of safety, punctuality and sions in a forward-looking manner. Furthermore, we plan
sources are used. In EMEA, there is a balanced mix of FRVWHưFLHQF\,QGRLQJVRZHDOVRWDNHLQWRDFFRXQWWKH to make increasing use of comparatively low-emission
CONJ emissions resulting from transportation. combined-transport options, where most of the distance

36 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information


involved is covered by train, barge or sea vessel, thus §
GOOD GOVERNANCE AND We also ensure responsible business activities with our

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NHHSLQJLQLWLDODQGƭQDOMRXUQH\VE\URDGWRDQDEVROXWH ENERGIZED EMPLOYEES committee structureJHDUHGWRZDUGHƫHFWLYHVXVWDLQ-
PLQLPXP+RZHYHULQFUHDVHGXVHRIUDLOPHDQVWKDW ability management and with our integrated manage-
combined transport is even an option for long-distance  Good governance ment system that provides for the necessary global struc-

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connections to China. /$1;(66oVFRUSRUDWHFXOWXUHLVEDVHGRQƭYHFHQWUDO tures in all business processes.
YDOXHVUHVSHFWRZQHUVKLSWUXVWSURIHVVLRQDOLVPDQG

To transport our rail freight in Germany, we continue to integrity. These values apply always and everywhere – and Compliance organization

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use the TÜV SÜD-tested Eco-Plus service of the logistics to all employees. We seek to foster a corporate culture in For LANXESS, responsible corporate governance partic-
company DB Cargo. The power required for transporta- which responsible and morally irreproachable actions and ularly implies compliance with legal and internal stan-
tion is obtained from regenerative energy sources. As striving for performance do not contradict but complement dards and ethical principles to which all employees must
a result, we can reduce our CONJ emissions in national each other. adhere. Our global compliance organization – comprising
rail transportation by approximately 80% compared with WKH*URXS&RPSOLDQFH2ưFHUWKHUHJLRQDO&RPSOLDQFH
conventional options. Our central values, supplemented by operational guide- 2ưFHUVDQGDQHWZRUNRIORFDO&RPSOLDQFH2ưFHUV
lines and organizational structures – summed up as good – supports all areas of the company in implementing
Further information on our climate strategy can be corporate governance – enable our employees to act appropriate measures to counter unlawful or unethical
found in the “Climate” Background Paper. responsibly in their day-to-day work and thus turn a rela- conduct within the LANXESS Group at an early stage
WLYHO\DEVWUDFWFRQFHSWLQWRDVSHFLƭFFRUSRUDWHVXFFHVV and to prevent misconduct. The compliance organization
factor. At LANXESS, good corporate governance is is also available to all employees as a point of contact
embodied by a values-based and safety-conscious for any compliance-related issues. The direct reporting
FRUSRUDWHFXOWXUHHƫHFWLYHPDQDJHPHQWV\VWHPVDQG OLQHIURPWKH*URXS&RPSOLDQFH2ưFHUWRWKH%RDUGRI
a commitment to internationally recognized principles of Management guarantees that the Board of Management
responsible management, such as the principles of the members receive regular information.
U.N. Global Compact.

37 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

 
Clear Rules Provide Guidance process instructions, etc. The applicable directives, stan-

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dard operating procedures and guidelines are accessible
Cor- Principles of responsible business operations to all employees. Employees are also regularly informed
porate and sustainable development of new and updated regulations relevant to them.
Policy

Human rights
&RGHRI&RQGXFWDSSOLFDEOHWKURXJKRXWWKH
In line with our values and operational guidelines, we are
Compliance Code Group requiring compliance with valid laws
and international principles
committed in our markets and supply chains to promot-
ing respect for human rights at all times and systemat-
ically preventing child and forced labor, for example. At
'HWDLOHG*URXSZLGHUHJXODWLRQV
Group directives FRQFHUQLQJVSHFLƭFDUHDVRI LANXESS, human rights and ethical principles apply
compliance without restriction, even if they are not stipulated in the
legislation of individual countries. Our target is formu-
ODWHGZLWKFRUUHVSRQGLQJFODULW\LQDOODUHDVRYHUZKLFK
5HJXODWLRQVGHƭQHGDW
Standard operating procedures, LANXESS has control, there should be no breaches of
process instructions operational level
human rights. We have included all relevant information
on our commitment and on the measures established
in the Group to protect human rights in the “LANXESS
3RVLWLRQRQ+XPDQ5LJKWVq


Internal guidelines and regulations value over the long term. The code covers issues such Direct responsibility for ensuring that human rights are
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Our Corporate Policy lays out principles of responsi- as human rights, cartel and antitrust law, anti-corruption, respected at all times lies with the respective manage-
ble business operations and sustainable development data protection, occupational, product and plant safety, ment at our sites, supported by our global compliance
DQGGHƭQHVRXUJHQHUDOFRUSRUDWHSKLORVRSK\DQGWKH and environmental protection. organization and by the regional and local Compliance
expected conduct of all employees in relation to our 2ưFHUV$W*URXSOHYHOKXPDQULJKWVDUHVXEMHFWWRUHJX-
stakeholders. Other Group directives or Group-wide standards, such lar evaluation as part of our risk management system.
DVWKH+6(GLUHFWLYHVDQGWKHDQWLFRUUXSWLRQVWDQGDUG )RUH[DPSOHZHFRQGXFWVSHFLƭFULVNDVVHVVPHQWVLQ
The LANXESS Code of Conduct, which is applicable GHƭQHWKHVSHFLƭFDSSOLFDWLRQRIUHJXODWLRQVLQWKHLQGL- all national companies with regard to the potential risk of
throughout the Group, requires all our employees – across vidual areas of compliance covered by the code and are human rights violations. The general risk potential across
all organizational units, regions and hierarchy levels – to ELQGLQJIRURXUVWDƫWKURXJKRXWWKH*URXS2QWKHEDVLV the Group is determined annually, and national companies
behave lawfully and with integrity. Through correct and of these LANXESS directives, more detailed regulations with elevated risk potential are subjected to an additional,
proper conduct, each employee is responsible for helping WKDWDOVRWDNHDFFRXQWRIORFDOUHTXLUHPHQWVDUHGHƭQHGDW comprehensive risk assessment at least every three years.
to prevent harm to LANXESS and increase the company’s the operational level in standard operating procedures and This accounts for all fundamental risks of human rights

38 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

  
violations. The risk assessments are coordinated by Group We have no reports or knowledge of any systematic as compliance with human rights, including with regard

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headquarters and carried out by the responsible depart- discrimination against LANXESS employees on the basis to child labor and forced labor. In the reporting year, we
PHQWVDWQDWLRQDOOHYHO7KHDVVHVVPHQWVFRQƭUPWKDW of skin color, age, gender, sexual orientation, origin, reli- received no indications of human rights violations by
there is a high level of awareness of the subject and that gion, physical and mental abilities, trade union member- our suppliers. We have structures in place to follow up
functioning mechanisms have been established to prevent ship or political opinion. In individual cases, misconduct individual indications of rights violations as part of our
violations of human rights. by employees in respect of colleagues or third parties was established processes.
UHSRUWHG:HZLOOQRWWROHUDWHYHULƭHGPLVFRQGXFWDQGLW
Furthermore, all organizational units at LANXESS and will result in appropriate disciplinary measures up to and We have also established the necessary sales-related
their business activities are subject to regular internal and including dismissal. SURFHVVHVWRIXOƭOORXUUHVSRQVLELOLWLHV7KLVSDUWLFXODUO\
external audits. It goes without saying that these activities includes our processes for central product monitoring
also include monitoring respect for human rights and – We also expect our suppliers to commit to values and and for trade compliance, especially with regard to regu-
if necessary – the introduction of suitable measures to rules, especially the principles of the U.N. Global Compact lations for preventing dual use. We also systematically
guarantee this. and the ILO Labour Standards, and to establish adequate evaluate the impact of our products on people as part of
systems for ensuring legally compliant and responsible our portfolio analysis.
Our Code of Conduct includes unambiguous instructions behavior. When we select new suppliers, it is essential
regarding the respect of human rights. The code, which all for us that they acknowledge the principles on respect All acquisitions of companies, interests in companies, or
new employees receive with their employment contract, is for human rights contained in our Business Partner Code businesses are subject to a careful due diligence process
also an aspect of general training measures. In addition, of Conduct or have established their own comparable to ensure that human rights are also respected by the
ZHKROGWUDLQLQJVHVVLRQVJHDUHGWRZDUGVSHFLƭFVHOHFWHG regulations and management systems in line with the target company.
human rights issues such as occupational safety. In the U.N. Global Compact.
event of suspected human rights violations, our employ- Thanks to our long-standing, proven mechanisms for
ees and external third parties can report them in various In addition, we promote responsible action in the supply compliance with human rights due diligence obligations
ZD\V)RUH[DPSOHWKH&RPSOLDQFH+HOSGHVNDQGWKH chain with our involvement in the Together for Sustain- – both in our business operations and in the supply chain
“SpeakUp” reporting system can be used to notify the ability (TfS) initiative, which we operate jointly with other – we believe we are well prepared for the regulatory devel-
compliance organization – also anonymously if they wish. international chemical companies. Under this initiative, opments formalizing the protection of human rights in
FRPSDQLHVWKDWVXSSO\VLJQLƭFDQWJRRGVDQGVHUYLFHV many regions of the world. Our “People & Governance”
are regularly assessed in the context of TfS audits. sub-committee has taken on the task of closely examining
These supplier assessments also cover compliance with the growing legal requirements in an interdisciplinary
aspects of our Business Partner Code of Conduct, such team of experts and coordinating the necessary measures.

39 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

  
Anti-corruption LANXESS must not grant advantages of any kind to public The Corporate Audit function examines the implemen-

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By signing the U.N. Global Compact, we have undertaken VHUYDQWVRURWKHURưFLDOVLQ*HUPDQ\RUDEURDG:KHQ tation of and adherence to our compliance principles in
to actively counter all forms of corruption. This undertaking commissioning service providers who have contact with the LANXESS Group. This also includes reviewing the
is also contained within the LANXESS Code of Conduct, RưFLDOVRQEHKDOIRI/$1;(66HPSOR\HHVPXVWOLNHZLVH measures to prevent corruption. The annual audit plan-
wherein we make all employees aware of this topic. Our ensure compliance with the prohibition on corruption. It ning, which covers all business units, follows a risk-based
WDUJHWLVFOHDUQRLQFLGHQWV3UHYHQWLRQRIFRUUXSWLRQLV is one of LANXESS’s basic principles not to support any approach, which also considers the exposure to corruption.
part of our general compliance management system. In political parties or groups. LANXESS is involved in large
the reporting year, the existing guideline on incentives was industrial associations, which we regard as fundamental ,QƭVFDO\HDUZHUHFHLYHGQRUHSRUWVRURWKHU
revised and replaced with the new Group-wide anti-cor- to representing our interests. We disclose contributions indications of cases of active corruption by LANXESS
UXSWLRQVWDQGDUG7KLVGHƭQHVRUJDQL]DWLRQDOPHDVXUHV and spending on political activities transparently. HPSOR\HHV9HULƭHGFDVHVRI/$1;(66HPSOR\HHVEHLQJ
and regulations for setting up the compliance manage- bribed lead to appropriate disciplinary actions up to and
ment system as well as responsibilities for implementa- Donations require approval from the Corporate Commu- including dismissal as well as consideration of further
tion, support and continuous monitoring of the system. nications central function – depending on the value – legal steps. In the reporting year, we received no reports
The respective site management, supported here too by or from the Chairman of the Board of Management of or indications of such cases.
our global compliance organization and by regional and LANXESS AG, in both cases after prior consultation with
ORFDOFRPSOLDQFHRưFHUVLVUHVSRQVLEOHIRUSUHYHQWLQJ the compliance organization. We also communicate our clear expectations for the
instances of corruption at all times. prevention of corruption to our suppliers and service
To enhance our employees’ awareness of these rules providers in our Business Partner Code of Conduct. It
A Group-wide standard provides clear guidance regarding of conduct, the issue of corruption is regularly covered makes the clear demand that our suppliers must not
incentives. Our employees are prohibited, either directly or E\FRPSOLDQFHWUDLQLQJ,QDGGLWLRQZHKROGVSHFLƭF engage in bribery, fraud or extortion. It is essential for us
LQFRQQHFWLRQZLWKWKHLUSURIHVVLRQDOGXWLHVIURPRƫHULQJ anti-corruption training aimed at exposed professional that they acknowledge the principles contained in the
personal advantages to the employees of other companies groups and countries. In the reporting year, we recorded Business Partner Code of Conduct or have established
Over – in particular when initiating, awarding or handling an more than 6,000 participations in compliance training their own comparable standards. If suppliers or service

6,000 order or assignment. Our employees are likewise prohib-

ited from accepting such advantages or requesting them
sessions worldwide. If there are indications of compliance
violations, our employees and external third parties can
providers do not comply with these principles, this may
lead to the termination of the contractual relationship.
participations
IRUWKHPVHOYHV,IDQHPSOR\HHLVRƫHUHGVXFKJLIWVWKH\ contact the compliance organization – anonymously if they
in compliance
training must immediately notify their supervisor or the compliance wish. Our Group-wide “SpeakUp” reporting system allows
sessions organization. Exceptions may be made for customary all employees or external third parties to report potential
occasional or promotional gifts that are symbolic in nature violations in writing or by telephone in over 20 languages
and of low value. and guarantees secure and anonymous communication
between the compliance organization and the individuals
making the reports.

40 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

Employees LANXESS HR Strategy

LANXESS works consistently to be a sustainable and
enduringly successful chemicals company. Our success
is based on the personal commitment of each individual Enabling growth Developing Making HR work Acting as partners
employees and PRUHHưFLHQW
employee and high-performing, diverse teams. Our goal is managers
to enable our employees to shape their professional lives
actively and to create a safe, productive and motivating Support for sustain- Promotion of cross- &UHDWLRQRIHưFLHQWDQG Increased communi-
environment. This makes us attractive to applicants of all able growth through functional and cross- VWDQGDUGL]HGJOREDO+5 cation within and out-
ages and skill levels and enables us to counter demo- long-term and strategic divisional career processes, supported by VLGHWKH+5GHSDUWPHQW
workforce planning development through consistent digitalization. for more transparency
graphic change and the shortage of skilled workers while as well as a global extensive training and and more targeted
also promoting a diverse workforce in which everybody recruiting strategy and learning concepts LGHQWLƭFDWLRQRIWKH
systemically supported and holistic talent needs of the various
feels included.
recruiting activities. management. Group functions and
business units.
$Q+5VWUDWHJ\EDVHGRQIRXUSLOODUVKHOSVXVWRDFKLHYH
our goal. We are continuously enhancing it in order to
appropriately support our employees at all times in the
diverse and sometimes complex change processes at In times of constant change, a strong corporate culture 7KLVFRPPXQLFDWLRQLVH[HPSOLƭHGE\WKH/$1;(66
LANXESS. In times of profound social and business trans- is especially important. The motto for “Performance women’s network WInX (Women Initiative LANXESS),
formation processes, change management is generally Culture Day 2022” was “We Win as a Team” – because which was established internationally in the reporting
growing in importance. Another major driver of change we can only master the growing challenges together. The year after the successful pilot phase in Germany in 2021
is the consistent digitalization of our business processes. activities were intended to highlight the important role of ( see also page 43 +HDOWKZDVDQRWKHUSULRULW\IRU
The continued M&A activities in the reporting year also diversity and inclusion, openness to other perspectives +5ZRUNLQ1XPHURXVDFWLYLWLHVDQGRƫHULQJV
required our employees to deal with organizational, and feedback, and cross-divisional and cross-hierarchical ZHUHGHYRWHGWRWKHWRSLFRQOLQHDQGRƱLQH see
cultural and personal changes. communication ( see page 51). DOVRSDJH{).

Information on life and work at LANXESS can also be

found in our “Working at LANXESS” Background Paper.

41 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

85
Number of Employees

Headcount Full-time equivalents Number of new employees

19,271 19,016.3

15,479 15,258.0 15,177 14,945.0

14,756 14,531.0 14,866 14,636.0

nationalities at
1,051
1,130
LANXESS
868 842

508

2018 2019 2020 2021 2022

7KHƭJXUHVIRULQWKLVWDEOHDQGEHORZLQFOXGHWKH+LJK3HUIRUPDQFH0DWHULDOVEXVLQHVVXQLW)RUWKHGLVFRQWLQXHGRSHUDWLRQV
RIWKH/HDWKHUEXVLQHVVXQLWDUHLQFOXGHG$OOƭJXUHVUHODWHWRWKHFRUHZRUNIRUFH7KHƭJXUHVIRULQFOXGH$5/$1;(2

 
Diversity and inclusion DOO+5SURFHVVHV' ,FRPSOLDQW:HWDNHDKROLVWLFYLHZ employees with disabilities. The program included a talk by

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We value diversity and regard it as a strategic advantage. of D&I, focusing on aspects such as gender, nationality, motivation expert Janis McDavid on the topic of inclusion.
Therefore, we aim to enhance diversity at LANXESS and age, disability and sexual orientation.
XVHLWVSRVLWLYHHƫHFWVIRURXUFRPSDQ\DQGHPSOR\HHV$ Ratio of Disabled Employees at German Companies
corporate culture that is open equally to all people helps us In the reporting year, we particularly campaigned to raise
2018 2019 2020 2021 2022
WREHFRPHPRUHLQQRYDWLYHDQGHưFLHQWDQGWRDWWUDFWDQG awareness of unconscious bias. For example, we initi-
Ratio in % 5.7 5.9 6.2 6.2 6.8
retain promising talents. Recognizing and appreciating ated various learning opportunities that look at uncon-
diversity is therefore ingrained in our values, our guiding VFLRXVSDWWHUQVRIWKRXJKWDQGRƫHUHGp8QFRQVFLRXV%LDV

principles as well as our leadership principles. e-Learning” in various languages. Gender diversity remains an important focus topic for

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us – with the clear target of increasing the proportion

We continued to follow our strategic “Diversity & Inclusion” Our second “Global Diversity & Inclusion Day,” which we of women in the company. In addition, the German Act
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(D&I) concept for promoting diversity, equal opportunities hosted in November to mark the International Day for Toler- on Equal Participation of Women and Men in Executive
and inclusion in 2022. We are working steadily to make ance, was mainly about raising awareness of the needs of Positions in the Private and the Public Sector commits us

42 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information


to set targets in Germany for aspects such as the propor- Proportion of Women at least 30% by the end of 2030. At the end of 2022,

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tion of women at the two management levels below the % the proportion of women in management was 25.2%
Board of Management and to determine the target date SUHYLRXV\HDU 
for attainment.
Total workforce 20.5
Further D&I targets can be found in the targets table

The targets set in 2017, which were supposed to be on page 18.
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Non-managerial 19.1
achieved by June 30, 2022, stipulated female represen-
WDWLRQRIDWOHDVWRQWKHƭUVWOHYHOEHORZWKH%RDUGRI Networks can make an important contribution to the
Management and 25% on the second level. Both targets Management positions 25.2 promotion of diversity, equal opportunities and inclu-
ZHUHDFKLHYHG:LWKIHPDOHUHSUHVHQWDWLRQRIDW sion. WInX – our global “Women Initiative LANXESS” –
WKHƭUVWPDQDJHPHQWOHYHODQGDWWKHVHFRQG connects women LANXESS across national borders. As
management level, we actually exceeded our own targets. part of this initiative, participants were able to network at
virtual, hybrid and in-person events around the world. With

Dr. Stephanie Coßmann resigned as a member of the 2027, the proportion of female employees must therefore a “Male Ally Workshop,” the German women’s network

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Board of Management and Labor Relations Director of DPRXQWWRDWOHDVWDWWKHƭUVWOHYHODQGDWWKH showed that the engagement of male employees is also
LANXESS AG as of March 31, 2022, having been on the second level below the Board of Management. important for gender diversity and equality. The workshop
Board of Management since January 1, 2020. Contrary to JDYHULVHWRWKHp+H)RU:,Q;qQHWZRUNJURXSIRUPHQ
the original target, which had already been achieved in the We have also set further targets above and beyond the who are committed to supporting the women’s network
interim, the Board of Management therefore had no female OHJDOUHTXLUHPHQWV$PRQJRWKHUWKLQJVZHZDQWWKH in the future.
members as of the reporting date on June 30, 2022. proportion of women in management positions to be
+RZHYHUWKHFRPSDQ\oV6XSHUYLVRU\%RDUGGHFLGHGLQ
November 2022 to appoint Frederique van Baarle as Proportion of Women on the Board of Management and at the Top Management Levels
another female member of the Board of Management of Proportion of women1) 2018 2019 2020 2021 20222) Goal Target date
/$1;(66$*ZLWKHƫHFWIURPQRODWHUWKDQ$SULO First level below the June 30,
Board of Management 13.8% 20.9% 16.7% 18.2% 22.5% 25% 2027
Second level below the June 30,
In April of the reporting year, the Board of Management Board of Management 19.2% 25.1% 23.4% 25.7% 24.8% 28% 2027
adopted new targets for the proportion of women at the Board of Management June 30,
two management levels below the Board. By June 30, (number of women) 0 0 1 1 0 –3) 2027

 )LJXUHVDVRI'HFHPEHU{RIWKHUHVSHFWLYHUHSRUWLQJ\HDU
2) Year when new target was set.
3) The Second Act on Equal Participation of Men and Women in Management Positions applies here, according to a target is no longer required for the
Board of Management and the statutory requirement applies instead.
7KHVLJQLƭFDQWLQFUHDVHLQWKHSURSRUWLRQRIZRPHQDWWKHƭUVWWZRPDQDJHPHQWOHYHOVEHORZWKH%RDUGRI0DQDJHPHQWLQLVSDUWO\GXHWRDFKDQJHLQWKHIXQFWLRQDO
UHSRUWLQJVWUXFWXUHWRRXU&KLHI)LQDQFLDO2ưFHU0LFKDHO3RQW]HQ7KHSURSRUWLRQRIZRPHQGHFUHDVHGVOLJKWO\LQGXHWRRUJDQL]DWLRQDOFKDQJHV

43 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

Recruiting New Employees by Age Group, Gender and Region

,QWKHUHSRUWLQJ\HDUZHDJDLQVDZDQLQWHQVLƭFDWLRQRI
EMEA Germany North America Latin America $VLD3DFLƭF Total
the competition for talent in our core markets. The signif- (excl. Germany)
icant development toward an employees’ market and the
demographic challenges make recruiting an important
Age group f m f m f m f m f m
strategic issue. We have therefore further reinforced our
< 30 12 45 30 107 24 69 15 15 19 40 376
recruiting teams and focused on active sourcing. Special- 30–49 30 66 61 180 24 117 12 13 35 82 620
ized LANXESS recruitment teams work in the U.S., China, Ʃ  3 13 5 28 23 53 3 1 129
India and Europe. In order to approach interesting candi- Total 45 124 96 315 71 239 27 28 57 123 1,125
Region total 169 411 310 55 180
dates in both an active and a targeted manner, we have
our own pool of active sourcing specialists, with whom %
ZHODUJHO\UHSODFHGH[WHUQDO+5VHUYLFHSURYLGHUVLQWKH Age group f m f m f m f m f m
< 30 33.1 21.2 14.0 12.7 42.1 41.8 32.6 25.9 51.0 33.9 21.0
reporting year.
30–49 13.8 9.0 9.3 7.3 12.5 15.7 8.9 3.2 10.0 6.7 8.7
Ʃ  2.1 1.8 0.9 0.9 8.9 6.4 4.5 0.3 2.1
Our recruitment process is highly digitalized. The software Total 11.3 7.4 6.6 5.0 14.0 13.8 13.0 4.6 12.5 7.5 7.5
platform covers all processes from onboarding to the sign- Region total 8.2 5.3 13.8 6.7 8.6
ing of employment contracts. It helps to make approaching 'LVFORVXUHVDSSO\WRWKHFRUHZRUNIRUFHQRWLQFOXGLQJFRQYHUVLRQRIWHPSRUDU\WRSHUPDQHQWHPSOR\HHVDQGDFTXLVLWLRQV7KHWRWDOLQWKHWDEOHGHYLDWHVVOLJKWO\IURPWKHƭJ-
and acquiring new talent standardized, transparent and XUHVWDWHGLQWKHWH[WEHFDXVHWKHWDEOHRQO\LQFOXGHVHPSOR\HHVRIPDOHRUIHPDOHJHQGHU,QZHKLUHGƭYHSHRSOHZKRLQGLFDWHGWKHLUJHQGHUDVpRWKHUXQGHFODUHG
unknown.” Including temporary employees, the number of new employees increases to 1,714 (all genders included).
candidate-focused. In EMEA, a video application tool was
also piloted in the reporting year.
'HVSLWHWKHGLưFXOWODERUPDUNHWVLWXDWLRQZHWKXVƭOOHGD specialist and managerial tasks and can gather valuable
We continue to invest in a clear employer brand in order record number of vacancies in the reporting year. A total of experience in Germany and abroad. In addition to an
to highlight the advantages of LANXESS as a global and 1,130 new employees joined the Group in the reporting HQJLQHHULQJRULHQWDWLRQ/$1;(66DOVRRƫHUVDWWUDFWLYH
socially responsible employer. Our employer brand centers year (1,714 including temporary employees). The new areas of activity for economics graduates. Our young
on authenticity and diversity. We communicate this brand HPSOR\HHVSUHGRPLQDQWO\ƭOOHGWHFKQLFDOSRVLWLRQV talent receive diverse practical learning opportunities as
via social media, where we share a mix of company, prod- well as targeted training and opportunities for internal
XFWDQG+5LQIRUPDWLRQLQRUGHUWRVSDUNHQWKXVLDVPIRU Our international graduate trainee program is a fundamen- networking. In 2022, we acquired 21 new talents (10
our company among talented people from various func- tal tool for securing talent in Germany. Exceptionally well women, 11 men) despite the challenging situation on
tions. In the reporting year, we ran over 40 social media TXDOLƭHGPDVWHUoVJUDGXDWHVDUHSUHSDUHGIRUFKDOOHQJLQJ the apprenticeship market.
campaigns.

44 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

  
Vocational training PDQDJHPHQWDVVLVWDQWV7KLVRƫHULQJLVDLPHGDWSHRSOH

NFR

NFR

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Training young people has always been hugely important who cannot take on a full-time apprenticeship – e.g.
to us, both in order to safeguard the company’s future and because they have children or act as a relative’s career.
as part of our social responsibility. Vocational training is The apprenticeship can be completed at a reduced 30 Apprentice ratio1)

7.3%
WKHEDVLVRIRXUVWUDWHJ\RIGHYHORSLQJVSHFLDOLVWVWDƫIRU hours a week, without the duration of the apprenticeship
the German sites from within our own ranks. increasing.

It is our aim to retain at least 80% of our apprentices after Apprentices by Career Path1)
successful completion of their training. We reached this %

target again in the reporting year with a retention ratio of 6FLHQWLƭF 5

(including 8 students on  7KLVƭJXUHLVWKHUDWLRRIDSSUHQWLFHVDW/$1;(66'HXWVFKODQG7KHQXPEHU
 SUHYLRXV\HDU  combined vocational of LANXESS Deutschland employees undertaking an apprenticeship is
training and study courses) 19
expressed as a percentage of the core workforce of LANXESS Deutschland
( employees with a permanent, full- or part-time employment contract) plus
182 apprentices on eight technical, scientific and Technical the apprentices of LANXESS Deutschland.
(including 5 students on
commercial career paths and young talent in seven dual- combined vocational
study programs started their apprenticeships at LANXESS training and study courses)

'HXWVFKODQG*PE+RQ6HSWHPEHU7KHSURSRU- Commercial
tion of female career starters was 7% in the reporting year (including 12 students on
76
combined vocational
SUHYLRXV\HDU 7DNLQJWKHQHZLQWDNHLQWRDFFRXQW training and study courses) 2XWVLGH*HUPDQ\ZHRƫHUDSSUHQWLFHVKLSSURJUDPVLQ
615 apprentices are employed at LANXESS Deutschland several European countries, as well as Canada, Brazil
1) LANXESS in Germany
*PE+ DVRI'HFHPEHU 7KHSURSRUWLRQRI and India, for example, in order to cover our requirement
female apprentices across all years is around 7.5%. We for young talent in those countries. In addition to our
LQYHVWHGDURXQGbPLOOLRQ SUHYLRXV\HDUbPLOOLRQ  Hire Rate of Apprentices and Students on Combined regular apprenticeship activities, we cooperated with
in the vocational training of young talent in 2022. Work and Bachelor’s Degree Courses at LANXESS1) the Iochpe Foundation in Brazil for the second time.
%
Through this cooperation, we again enabled ten young
7UDLQLQJZLOOUHPDLQDNH\SLOODURIRXU+5SROLF\LQWKH 100
88
people from disadvantaged backgrounds to take part in a
84 85 83 85
years ahead. We are importantly demonstrating this with nine-month training course at our production site in Porto
80
QHZPRGHUQRƫHULQJV)RUH[DPSOHZHLQLWLDWHGYDULRXV Feliz. In India, the government supports an apprenticeship
special campaigns to recruit apprentices. Candidates 60 program to give more young people the opportunity to
were able to sample working in LANXESS workshops at DFTXLUHTXDOLƭFDWLRQVUHTXLUHGWRZRUNLQWKHFKHPLFDO
40
the “Technik Check” event and then complete the hiring industry. Within this framework, a total of 30 apprentices
SURFHVVZLWKLQDGD\)RUWKHƭUVWWLPHLQDSLORWSURMHFWLQ 20 worked for us at the LANXESS sites in Nagda and Jhaga-
2022, two apprentices were hired as part-time industrial dia in the reporting year.
2018 2019 2020 2021 2022

1) LANXESS in Germany

45 Annual Report 2022 | LANXESS

 Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

Strategic workforce planning In order to make the immense knowledge of our older GHULYHRXUUHTXLUHPHQWIRUQHZVWDƫ7KHDQDO\VLVLQFOXGHV
The increasing average age of our employees in conjunc- employees available to subsequent generations, we data on retirements as well as voluntary turnover, with
tion with the scarcity of young talent in some regions successfully piloted a knowledge transfer program in the data used for the analysis varying country by country.
PHDQVWKDWWKHFRPSHWLWLRQIRUTXDOLƭHGHPSOR\HHVLV 2021 and rolled it out in the reporting year. It aims to 2XUDLPLVDOZD\VWRLGHQWLI\VWDƫVKRUWDJHVDWDQHDUO\
JURZLQJƭHUFHU7KHUHIRUHZHKDYHEHHQLQYHVWLQJLQRXU identify important departing knowledge carriers at an early stage. We also engaged with other qualitative aspects in
own apprenticeship and management trainee programs stage, systematically record their often implicit knowledge, the reporting year. For example, there was a workshop
for years in order to cover our requirements for specialist and ensure its structured transfer to subsequent gener- in which managers from P&T discussed the skills that
VWDƫFKLHƯ\IURPRXURZQUDQNVLQWKHIXWXUH:HRƫHU ations – in both analog and digital format. The knowl- employees will need in the future in order to tailor our
attractive opportunities development in order to increase edge transfer program comprises various measures such OHDUQLQJDQGGHYHORSPHQWRƫHULQJVDFFRUGLQJO\
retention among the young talent. The personnel confer- DVH[SHUWGHEULHƭQJVOHDUQLQJWDQGHPVDQGDGLJLWDO
ences introduced in 2020 for the production and tech- SODQWVSHFLƭFNQRZOHGJHGDWDEDVH7KLVp3ODQW:LNLq Further information on learning and development can
nology (P&T) workforce have become successfully estab- ZDVODXQFKHGDWD/$1;(66SODQWIRUWKHƭUVWWLPHLQ be found on page 51–56.

15,177 lished and a proven planning instrument. They take place

annually and serve the purpose of strengthening rotations
2022 and is available to all employees of this plant as
an intuitive reference work.

5HPXQHUDWLRQDQGEHQHƭWV

NFR
LANXESS and development in operations in particular. In order to 2XUUHPXQHUDWLRQSROLF\RƫHUVIDLUDQGFRPSHWLWLYHUHPX-
employees cater more closely to the personnel needs and challenges :HXVHRXUJOREDOVWUDWHJLF+5SODQQLQJSURFHVVWRVLPX- QHUDWLRQZRUOGZLGHFKLHƯ\EDVHGRQUHOHYDQWH[WHUQDO
worldwide RI3 7YDULRXVZRUNVWUHDPVZHUHODXQFKHGLQZKLFK+5 late the long-term development of our global workforce. benchmarks, level of professional experience and quality
and Business jointly devise solutions for talent acquisition, We use a planning tool to simulate the development of of work, regardless of the gender of the employees. We
UHWHQWLRQDQGGHYHORSPHQWVSHFLƭFDOO\LQ3 7 our workforce given various assumptions, from which we UHJXODUO\UHDVVHVVWKHƭ[HGDQQXDOVDODU\RIRXUQRQSD\
scale employees on the basis of these factors in our annual
Employees by Age Group, Gender and Region1) salary review. Salary increases for our pay-scale employees
EMEA Germany North America Latin America $VLD3DFLƭF Total follow the applicable collective agreements. The remuner-
(excl. Germany) ation ratio of women and men is reviewed regularly and
analyzed including other factors.
Age group f m f m f m f m f m
< 30 37 218 213 844 62 176 47 56 45 115 1,813
30–49 218 746 684 2,512 204 756 137 402 359 1,237 7,254
Ʃ  149 712 584 3,006 267 830 30 143 73 314 6,108
Total 404 1,676 1,481 6,361 533 1,762 214 601 477 1,666 15,175
Region total 2,080 7,842 2,295 815 2,143

 ,QWRWDOZHKDGHPSOR\HHVLQWKHUHSRUWLQJ\HDU7KHGLƫHUHQFHRIWZRHPSOR\HHVLVEHFDXVHWZRHPSOR\HHVLQGLFDWHGWKHLUJHQGHU
DVpRWKHUXQGHFODUHGXQGHƭQHGq

46 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information


Remuneration Ratio of Women to Men As part of the transparent remuneration in line with market ,QDGGLWLRQZHRƫHUDORQJWHUPLQFHQWLYHSURJUDPIRU

NFR
% FRQGLWLRQV/$1;(66RƫHUVLWVHPSOR\HHVERQXVV\VWHPV our managers in Germany. There are similar programs
100
geared toward the company’s long-term success. In total, in the U.S. and India. The Long-Term Stock Performance
101 86 SUHYLRXV\HDU86%) of LANXESS employees world- Plan (LTSP) consists of four tranches commenced each
Executive level
103 wide participated in our variable compensation systems. year and tracks the performance of the LANXESS share
Management level FRPSDUHGZLWK)76(XURƭUVW(XUR]RQH&KHPLFDOV
95
– Middle management level
99 The central performance-based compensation component Index, over a period of four years in each case. In addition,
is the Annual Performance Payment (APP), which we there is a Share Ownership Guideline (SOG) for the Board
– Junior management level 93
96 provide above the pay scale and in most countries within of Management and our top-level managers in order to
WKHSD\VFDOHRQWRSRIƭ[HGSD\7KLVERQXVSD\PHQW emphasize trust in the strategy and long-term success of
Non-management level 99
103 is linked to our key controlling indicator, so requires the LANXESS ( see “Compensation Report,” page 14).
*URXSoVDWWDLQPHQWRIDGHƭQHG(%,7'$WDUJHW)XUWKHU 100% of those eligible participated in the current LTSP
Base salary Total remuneration individual targets in areas such as safety and sustainability program in 2022.
additionally apply to top management. In 2022, we shared
DURXQGbPLOOLRQRIRXUSURƭWVIRUƭVFDO\HDU $QRWKHUFRUHHOHPHQWRIRXURƫHULQJLVWKHFRPSDQ\
7KHGLƫHUHQFHEHWZHHQWKHDYHUDJHUHPXQHUDWLRQIRU with our employees worldwide. pension plan for plugging potential gaps in provision in old
men and women at LANXESS is less than ± 7% for all DJH7KHGHVLJQRIWKHFRPSDQ\SHQVLRQSODQGLƫHUVIURP
LQGLYLGXDOOHYHOV7KHVHVDODU\GLƫHUHQFHVDUHLQƯXHQFHG With the Individual Performance Payment (IPP), manag- country to country depending on the state pension system.
E\IXUWKHUQRQJHQGHUVSHFLƭFYDULDEOHVsVXFKDVSURIHV- ers can also reward employees’ extraordinary individual LANXESS’s pension commitments often go beyond what
VLRQDOH[SHULHQFHVDODU\GLƫHUHQFHVGXHWRJHRJUDSK\RU achievements during the year in a prompt and unbureau- is required by law. They are funded by employer and/
IXQFWLRQRUGLƫHULQJZRUNKLVWRULHV:KHQWKHZDJHJDS cratic way. Around €11PLOOLRQZDVDZDUGHGLQƭVFDO\HDU or employee contributions. In Germany, employees can
is broken down by age group – as a proxy variable for 2022, around €8 million of which in Germany. At present, voluntarily increase their pension and receive an additional
SURIHVVLRQDOH[SHULHQFHsWKHGLƫHUHQFHEHWZHHQPHQDQG around 84% of our employees worldwide are entitled grant from LANXESS. 73% of employees participate in the
ZRPHQLVHYHQVPDOOHU7KHFOHDUJRDORIRXU+5SROLF\ to receive the IPP. In relation to this, they also receive a supplementary component of the current pension plan.
LVWRKDYHQRGLƫHUHQFHVLQSD\RQWKHEDVLVRIJHQGHU prompt assessment of their performance and their career 2WKHURƫHULQJVIDFLOLWDWHWKHWUDQVLWLRQLQWRUHWLUHPHQW
Our Diversity & Inclusion measures also contribute to this prospects. such as the long-term account for pay-scale employees
( see page 42). in Germany. The participation rate here remained at a
high level of around 90%.

47 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

:RUNLQJFRQGLWLRQVDQGEHQHƭWV LANXESS Employee Structure by Employment Type, Gender and Region

,QDGGLWLRQWRIDLUPRQHWDU\UHPXQHUDWLRQƯH[LEOHZRUNLQJ DOVRLQFOXGLQJHPSOR\HHVRQƭ[HGWHUPFRQWUDFWV 1)
FRQGLWLRQVDQGEHQHƭWVDUHEHFRPLQJLQFUHDVLQJO\LPSRUW- EMEA Germany North America Latin America $VLD3DFLƭF Total
ant. As components of total remuneration at LANXESS, (excl. Germany)

they make a material contribution to the wellbeing and

Contract f m f m f m f m f m
productivity of our workforce. It is important to us that the
Permanent contract 404 1,676 1,481 6,361 533 1,762 214 601 477 1,666 15,175
EHQHƭWVJUDQWHGVXSSRUWRXUFRUSRUDWHWDUJHWVYDOXHVDQG Full-time 339 1,554 992 5,065 526 1,762 214 601 471 1,666 13,190
culture and address the relevant needs of our employees. Part-time 65 122 489 1,296 7 6 1,985
:KHQGHVLJQLQJWKHVHEHQHƭWVZHRIWHQJRIXUWKHUWKDQ Temporary contract 23 35 139 721 6 10 26 28 15 51 1,054
Full-time 22 34 104 680 3 7 17 22 13 50 952
the respective statutory framework. In addition, we always
Part-time 1 1 35 41 3 3 9 6 2 1 102
aim to account for individual needs and life situations in
Total 427 1,711 1,620 7,082 539 1,772 240 629 492 1,717 16,229
the best possible manner.
 ,QWRWDOZHKDGHPSOR\HHVLQWKHUHSRUWLQJ\HDU LQFOXGLQJWHPSRUDU\HPSOR\HHV 7KHGLƫHUHQFHRIHLJKWHPSOR\HHVLVEHFDXVHHLJKWHPSOR\HHVLQGLFDWHG
WKHLUJHQGHUDVpRWKHUXQGHFODUHGXQGHƭQHGq,QƭVFDO\HDUZHDOVRHPSOR\HGDWRWDORIWHPSRUDU\VWDƫPHPEHUV ZRPHQPHQDQGRQHSHUVRQ
All services apply to our core workforce. Even so, some “undeclared”) at our German companies.

LQGLYLGXDOVHUYLFHVLQWKHUHJLRQVPD\KDYHGLƫHULQJVWUXF-
 
tures and be locally adapted to the needs of our employ- With the statement, we want to recognize the lessons working previously existed, such as Korea and Australia,

NFB
NFR
ees. Our core workforce includes all employees with a learned from the coronavirus pandemic and the increased have also published internal guidelines.
permanent full-time or part-time employment contract. remote working of some of our employees during this time.
$VRI'HFHPEHUWKLVZDV SUHYLRXV\HDU We have seen that, while many tasks can be carried out 7KHpƯH[LWLPHqPRGHOGHULYHGIRU*HUPDQ\IURPWKH;ZRUN
94%) of our total workforce worldwide. at home, in particular creative activities and team interac- principles aims to enable employees in senior manage-
WLRQVLQWKHRưFHDUHLQGLVSHQVDEOHIRURXUMRLQWVXFFHVV ment to work part-time in an intelligent way. In the Flexi-95

,QOLQHZLWKRXURưFHEDVHGHPSOR\HHVoGHVLUHIRUPRUH and the welfare of our employees. In our view, therefore, model, the level of employment is reduced to 95% with
NFR

ƯH[LEOHZRUNLQJDQGZRUNLQJWLPHPRGHOVDVZHOODV an average of up to eight days of remote working per a corresponding adjustment to remuneration, meaning
greater transparency regarding existing options, we intro- PRQWKLQDGGLWLRQWRZRUNLQJLQWKHRưFHLVFRPSDWLEOH WKDWDIXOOWLPHZRUNHULVHQWLWOHGWRH[WUDGD\VRƫSHU
GXFHGDQGFRPPXQLFDWHGJOREDOƯH[LELOLW\SULQFLSOHVEDFN with our business interests – providing, of course, that year. Corresponding models with levels of employment
in 2018 under the heading “Xwork – Flexible Work.” A the tasks are suitable for remote working. Guidelines to of 90% and 85% are also possible. Flexitime has been
VLJQLƭFDQWDVSHFWRIWKLVƯH[LELOLW\IRURXURưFHEDVHG WKLVHƫHFWZHUHDGRSWHGLQWKH86DQG*UHDW%ULWDLQ available to all non-pay-scale employees since the start
employees is the ability to work remotely. We laid the among other countries, in 2021. In 2022, additional of 2021. In 2022, there were 179 participants, of which
IRXQGDWLRQIRUFRXQWU\VSHFLƭFJXLGHOLQHVZLWKDJOREDO countries (e.g. India and CEE) adjusted their guidelines 49 in senior management.
statement on remote working adopted and released by on remote working on the basis of the global statement.
the entire LANXESS leadership team in September 2021. Countries in which no LANXESS guidelines on remote

48 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information


These and other measures count toward our goal of deriv- worldwide. Therefore, at our sites outside Europe, we are PLG:HWKXVRƫHURXUSD\VFDOHHPSOR\HHVDGGL-

NFR
LQJDQGLPSOHPHQWLQJVSHFLƭFJXLGHOLQHVDQGFRUUHVSRQG- assessing whether we can introduce or expand country tional protection against the risks and strains that arise for
LQJPRGHOVIRUƯH[LEOHZRUNLQJIURPRXUJOREDOp;ZRUNq VSHFLƭFPRGHOVIRURXUHPSOR\HHV,Q%UD]LODQGWKH86 WKRVHDƫHFWHGDQGWKHLUIDPLOLHVZKHQFDUHLVUHTXLUHGEXW
principles in 95% of all countries in which we operate by IRUH[DPSOHZHRƫHUSDUHQWDOOHDYHSURJUDPVWKDWJR are not covered by statutory long-term care insurance. The
the end of 2022. At the end of 2022, the coverage ratio beyond the respective legal requirements and allow our costs of the additional insurance cover are borne entirely
ZDV SUHYLRXV\HDU ZKLFKPHDQVZHKDYH employees to spend time with their children on full pay. by LANXESS. Since the beginning of 2022, CareFlex has
achieved our goal. also been available to our managerial employees. The
2SWLRQVIRU&KLOGFDUH0DWHUQLW\3DWHUQLW\/HDYH VXSSRUWRƫHULQJVIRUHPSOR\HHVZHUHSUHVHQWHGDJDLQ
2SWLRQVIRU)OH[LEOH:RUNLQJ+RXUV DQG&DUH0RGHOV:RUOGZLGH GXULQJp:RUNSODFH+HDOWKDQG6DIHW\:HHNqDQGDOVR
%
DQG0RELOH:RUNLQJ:RUOGZLGH 100
SURPRWHGWRWKHZRUNIRUFHGXULQJp0HQWDO+HDOWK:HHNq
% 100
Childcare 59

)OH[LEOHZRUNLQJKRXUVDQGPRGHOV 92 3DLGPDWHUQLW\OHDYH 1) 78 Commitment and loyalty

 Committed and motivated employees are the key to
0RELOHZRUNLQJDUUDQJHPHQWVDQG 3DLGSDWHUQLW\OHDYH1) 72

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99 long-term corporate success. Accordingly, we pay
KRPHRưFH
Breast feeding/lactation facilities
RUEHQHƭWV
28 special attention to encouraging the commitment of our
3DLGIDPLO\FDUHJLYHUOHDYH2) 81 employees. Good management helps here, as do personal
development prospects and company values with which
1) Beyond legal requirements.
Work/life balance has become even more important under 2) Besides parental leave.
the employees can identify. All these factors shape the
WKHSHUVLVWHQWO\GLưFXOWFRQGLWLRQVRIWKHFRURQDYLUXV Coverage is shown in percent for each initiative with regard LANXESS corporate culture, which we actively strengthen
to the countries and the total number of employees.
pandemic. In 2022, we therefore made our employees and develop with regard to the constant new challenges
LQ*HUPDQ\DQXPEHURIQHZRƫHUVUHJDUGLQJFKLOGFDUH in our markets.
such as two additional daycare center locations. A total of Against a backdrop of demographic change, care is a
7% of the workforce in Germany aged between 20 and major issue in Germany. The centerpiece of the LANXESS Since 2021, internally trained culture coaches have made
ZHUHRQSDUHQWDOOHDYHIRUDWLPH2IWKLVƭJXUH care model is caregiver leave, which allows our employ- an important contribution here. They start and supervise
were fathers. 99% of the employees who ended a parental ees to reduce their working hours by more than their pay cultural initiatives in their own area and can be involved
leave period in 2022 returned to a job at LANXESS, 97% GXULQJWKHFDUHSHULRGDQGWRZRUNRƫWKHKRXUVFRPPHQ- in major change processes. Regular performance culture
of which still worked in the company at the end of 2022. surate with the pay they received after their return. Care- touchpoints serve communication on cultural issues. For
JLYHUOHDYHDQGWLPHRƫKDYHEHHQXVHGE\PRUHWKDQ example, the cross-location Performance Culture Network
7KHOHJDOO\GHƭQHGIUDPHZRUNIRUPDWHUQLW\ULJKWVDQG employees in Germany since the LANXESS care model in Germany meets online once a month for a critical
parental leave taken for granted in Germany and similar was introduced. In addition, the supplementary long-term discussion of culture issues.
models in the European Union are by no means standard care insurance “CareFlex” was launched in Germany in

49 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information


Regular and structured feedback is another important Early Turnover Resulting from Voluntary Resignations by Age Group, Gender and Region

NFR
element of our corporate culture. To this end, we use %
GLƫHUHQWVXUYH\IRUPDWVWRDOORZIHHGEDFNUHODWLQJWRWKH EMEA Germany North America Latin America $VLD3DFLƭF Total
satisfaction and commitment of the various employee (excl. Germany)
% Abs.
groups. Among other things, we regularly conduct Group-
Age group f m f m f m f m f m
wide surveys – most recently in 2020. In the reporting
< 30 5.5 4.2 2.3 3.1 10.5 9.7 6.5 10.3 8.1 5.1 4.6 82
year, we carried out surveys in several European countries 30–49 5.1 3.7 0.5 0.7 3.6 4.2 3.0 0.5 4.0 1.5 1.9 134
as well as in Canada, India, China and Brazil. Ʃ  1.2 0.2 1.9 1.6 0.3 0.6 34
Total 3.3 2.7 0.5 0.8 3.5 3.5 3.4 1.3 3.7 1.5 1.7 250
Development of Turnover Over Time Region total 2.8 0.7 3.5 1.8 2.0
% Region total
(absolute) 58 57 78 15 42
Total turnover
Turnover resulting from voluntary resignations
(DUO\WXUQRYHUSHUFHQWDJHRIHPSOR\HHVZKROHIWRXUFRPSDQ\RIWKHLURZQDFFRUGZLWKLQWKUHH\HDUVRIEHLQJKLUHG

10.0
9.0 7.7 Turnover Resulting from Voluntary Resignations by Age Group, Gender and Region
8.0 7.0 %
6.5 6.4
7.0 EMEA Germany North America Latin America $VLD3DFLƭF Total
5.2 (excl. Germany)
6.0
4.4 % Abs.
5.0
3.1 3.4 Age group f m f m f m f m f m
4.0 3.0
2.2 < 30 11.0 6.6 4.7 7.6 19.3 14.5 8.7 12.1 18.8 11.9 8.9 159
3.0
30–49 12.9 7.5 3.3 3.2 9.9 9.4 6.7 1.5 7.4 4.6 5.2 370
2.0 Ʃ  4.1 3.9 2.0 1.0 5.0 3.9 0.7 1.5 1.6 2.1 128
1.0 Total 9.5 5.8 3.0 2.7 8.5 7.3 6.2 2.3 7.5 4.5 4.4 657
Region total 6.5 2.8 7.5 3.3 5.2
2018 20191) 2020 2021 2022 Region total
(absolute) 135 217 169 27 109
1) The turnover rate is the sum of departures (from the Group) in the last twelve
months divided by the average of the headcounts at the end of the last four
quarters. It therefore includes employer- and employee-initiated departures as
ZHOODVUHWLUHPHQW6LQFHƭVFDO\HDUWHPSRUDU\DEVHQFHVHJGXHWR
parental leave or lengthy illness, are no longer counted as departures. :HDUHDOVRVHHLQJVLJQLƭFDQWO\LQFUHDVLQJLQWHUHVWDPRQJ RƫHULQJVDQGƯH[LEOHZRUNLQJRSWLRQVDURXQGWKHZRUOG
RXUZRUNIRUFHLQKHDOWKUHODWHGRƫHULQJVDQGLQWHUQDO ,QWKHSDVWƭVFDO\HDUZHDOVRRƫHUHGRXUHPSOR\HHVQHZ
networks as well as in the opportunity to get involved networks and, at our Performance Culture Days, the oppor-
for the environment and society within the company. tunity to play a role in wider society, e.g. via targeted, local
Accordingly, we have further expanded our health-related environmental campaigns ( see pages 49, 53 and 54).

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Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information


The turnover rate on the basis of resignations is an import- Total Turnover by Age Group, Gender and Region

NFR
ant indicator of our employees’ commitment. Our goal is
EMEA Germany North America Latin America $VLD3DFLƭF Total
to continuously keep this ratio below 3.5% until the end of (excl. Germany)
2023. In the reporting year, the global voluntary turnover
UDWHZDV SUHYLRXV\HDU PHDQLQJWKDWZH Age group f m f m f m f m f m
< 30 6 16 12 68 12 30 4 8 7 17 180
unfortunately missed our target for this year. The reten-
30–49 30 61 24 88 24 94 9 12 31 66 439
tion of employees, especially talented ones, is a growing Ʃ  10 69 41 241 28 103 1 10 4 26 533
challenge, as the labor market is clearly becoming an Total 46 146 77 397 64 227 14 30 42 109 1,152
HPSOR\HHVoPDUNHW,QWHUPVRI+5VWUDWHJ\LWLVWKHUHIRUH
%
LQFUHDVLQJO\LPSRUWDQWWRNHHSVSHFLDOLVWVWDƫZLWKLQWKH Age group f m f m f m f m f m
company. Accordingly, we are also intensifying our internal < 30 16.6 7.5 5.6 8.1 21.1 18.2 8.7 13.8 18.8 14.4 10.1
employer branding, for example by tailoring it individually 30–49 13.8 8.3 3.6 3.6 12.5 12.6 6.7 3.0 8.8 5.4 6.1

WRWKHGLƫHUHQWDJHJURXSVLQWKHFRPSDQ\:HDOVRLQVSLUH Ʃ  6.9 9.5 7.0 8.0 10.8 12.5 3.6 6.6 6.0 8.5 8.7
Total 11.5 8.7 5.3 6.3 12.6 13.1 6.7 4.9 9.2 6.6 7.7
a strong sense of belonging among our workforce with
Region total 9.3 6.1 13.0 5.4 7.2
various opportunities for internal networking, which we
are increasing in a targeted manner.
)XUWKHUPRUHZHZRQWKH+5([FHOOHQFH$ZDUGIRURXU order to ensure our employees’ continued development
In Germany, the voluntary turnover rate was 2.8% (previ- knowledge management concept ( see page 46) in even during the pandemic. In 2022, we carried out some
RXV\HDU 7KHSHUFHQWDJHRIHPSOR\HHVZKROHIW the reporting year. training face-to face again, but also continued to develop
our company of their own accord within three years of virtual formats. The experience of the last few years has
being hired (early turnover) stood at an average of 1.7% Employee development and shown us that hybrid formats yield the best results. After
ZRUOGZLGHLQWKHUHSRUWLQJ\HDU SUHYLRXV\HDU  talent management its successful launch in 2021, our digital learning plat-
Only by constantly investing in training our employees form “LinkedIn Learning” was rolled out internationally in
We rate our performance in relevant rankings and and imparting clear, globally binding values and standards the reporting year. This means that our employees now
competitions as a further sign of our employees’ satis- can we as a company keep on using the opportunities EHQHƭWIURPmore than 18,000 additional digital learning
faction and the attraction of LANXESS as an employer. of changing markets successfully. Wide-ranging leader- opportunities for their professional and interdisciplinary
In Brazil, LANXESS was recognized as the best employer VKLSDQG+5GHYHORSPHQWWRROVHQDEOHDQGPRWLYDWHRXU development and the strengthening of future skills.
in the chemical and petrochemical industry for the third employees to act on the basis of our values, rethink issues,
time in a row, while our Indian subsidiary received the implement them quickly and devise solutions in a team. Globally, more than 95% of our workforce received train-
SUHVWLJLRXVp*UHDW3ODFHWR:RUNqFHUWLƭFDWLRQDQGWKH ing, including both basic and safety training, as well as
*ROGHQ3HDFRFN+5([FHOOHQFH$ZDUG,Q&KLQDZH In 2021, our priorities in Learning & Development lay further education to further their careers and skills in
ZHUHUHFRJQL]HGDVDWRSHPSOR\HUIRURXU+5ZRUN LQWKHYLUWXDOL]DWLRQRIRXUH[LVWLQJRƫHULQJVDQGLQWKH 2022. On average, our employees again received at least
introduction of further digital learning opportunities in 15 hours of training.

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Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

We also virtualized our leadership training and were thus  Our commitment to increasing diversity at LANXESS It remains our aim to build up local management with

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able to provide it unchanged at times when physical meet- LVUHƯHFWHGLQDVSHFLƭFWDUJHWIRUWKHFRPSRVLWLRQRI specialist knowledge and expertise and assign challenging
ings in larger groups were practically impossible. The aim the three talent programs. Every year, the programs’ tasks to suitable employees at our international sites. At
of the programs is to embed our leadership principles participants should be at least 30% female and 40% sites outside Germany, 88% of our leadership positions
more deeply worldwide and to strengthen our leadership non-German. With a total of 134 participants in 2022, are currently held by local employees.
culture. Depending on the experience of the participants, WKHSURSRUWLRQVDPRXQWHGWR SUHYLRXV\HDU 
basic leadership techniques are conveyed, refreshed and IHPDOHDQG SUHYLRXV\HDU QRQ*HUPDQ Occupational health and safety
translated into individual measures. Since management participants (because the programs can last for up to 2XURFFXSDWLRQDOKHDOWKPDQDJHPHQW 2+0 DLPVWR
SUDFWLFHGLƫHUVGHSHQGLQJRQWKHFRXQWU\DQGFXOWXUDO 18 months, double counting cannot be ruled out). We create a safe and healthy working environment, to raise
environment, our training programs also take cultural have therefore exceeded our target regarding intercul- all employees’ awareness of their own health and to moti-
GLƫHUHQFHVLQWRDFFRXQWDQGLQFOXGHWKHUHTXLUHPHQWV tural diversity, while missing the target for gender equality, vate them to act on their own initiative and adopt healthy
of digital management. although we improved year-on-year. In order to achieve the behaviors in their professional and private lives.
30% mark in terms of equality in 2023, we are planning

With our global, cross-divisional and cross-hierarchical DGGLWLRQDOPHDVXUHV7KHVHLQFOXGHRƫHULQJVHVSHFLDOO\IRU 7RPDUNWKH:RUOG'D\IRU6DIHW\DQG+HDOWKDW:RUN
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“compass,” “eXplorer” and “navigator” talent programs, women in the areas of training, coaching, mentoring and in April 2022, we organized a series of health-related
we support particularly high-performing employees, retain networking and various campaigns to raise awareness of activities around the world, including presentations on
them within the company and identify suitable succes- gender equality. When it comes to nominating talent, we topics such as stress management, regeneration and
sors for key positions at an early stage. “Compass” for will also make sure to identify enough female candidates. sleep, a cooking course for healthy nutrition, and ergo-
HPSOR\HHVDWWKHVWDUWRIWKHLUFDUHHURƫHUVJXLGDQFHIRU nomics training. In addition, the health teams adopted
their future career path. The format encourages practical International deployments are another key component global health principles as an integral part of the LANXESS
development measures. The core element is a Develop- RIRXUV\VWHPDWLF+5GHYHORSPHQW$WWKHHQGRI corporate culture. At the same time, internal communica-
ment Center. “eXplorer” is aimed at employees who have 39 employees – i. e. around 1% of our specialist and tion campaigns, videos with case studies and a dedicated
the potential to develop toward major leadership roles PDQDJHULDOVWDƫsZHUHGHSOR\HGRXWVLGHWKHLUFRQWUDFWXDO LQWUDQHWSDJHZLWKFRQWDFWGHWDLOVDQGRƫHUVZHUHDOVR
at LANXESS in the next few years. Key topics include country as expatriates. Since the middle of this year, we launched.
dealing with complexity, new forms of collaboration and KDYHDOVRRƫHUHGVWD\VDEURDGRIXSWRVL[PRQWKVDVD
digital and agile leadership principles. In 2022, around development tool in addition to our existing deployment Mental health was another priority in 2022. There was
50 colleagues from twelve countries met at the “eXplorer programs. We thus intend to make deployments available therefore a global mental health week at the beginning
Summit” in Cologne to learn and network together. The to a greater number of employees. of October, during which employees were able to try out
“navigator” program is aimed at managers with the poten- RƫHULQJVVXFKDVEXVLQHVV\RJDDQGEUHDWKLQJH[HUFLVHV
tial to lead a business unit or Group function.

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Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information


,Q*HUPDQ\RFFXSDWLRQDOKHDOWKPDQDJHPHQW 2+0  In occupational health promotion, the priorities in 2022 aim to reduce the lost time injury frequency rate (LTIFR,

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ZRUNVLQWKUHHDFWLRQDUHDV were in the areas of “exercise,” “mental health and addic- NQRZQDV0$4>pDFFLGHQWVSHUPLOOLRQKRXUVZRUNHGq@LQ
tion at the workplace” and “sleep/regeneration.” Germany) by more than half by the end of 2025 compared
› Company integration management (CIM) for to the reference year of 2016 (LTIFR 2.0).
employees with long-term illnesses :HDOVRRƫHURXUZRUNIRUFHZLGHUDQJLQJPHDVXUHVWR
› 'LYLVLRQVSHFLƭF2+0ZLWKVWUXFWXUHGPDQDJHPHQW promote health and wellbeing at our international sites. As ever, the work of the Xact team is focused on stabiliz-
approach for the respective plants and departments In addition to the physical aspects, the topic of mental ing and fostering a positive culture of safety and greater
› 2FFXSDWLRQDOKHDOWKSURPRWLRQZLWKRƫHULQJVIRUDOO health is continuously growing in importance. Findings alignment toward behavior-based safety. To this end, we
employees from neuroscience show that mindfulness-based stress developed a systematic process called the Safety Culture
UHGXFWLRQFDQSURWHFWDJDLQVWWKHHƫHFWVRIFKURQLFVWUHVV Development (SCD) Process, which was launched globally
All three action areas were worked on systematically in the and improve wellbeing as well as teamwork. Mindfulness in 2019.
reporting year and strengthened in line with the compa- is likewise of great importance for the safety culture. Since
ny’s overarching health goals. In company integration )HEUXDU\ZHKDYHWKHUHIRUHRƫHUHGRXUHPSOR\-  The six-stage process is centered on a full-day, focus group

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management, cooperation began with an external service ees worldwide the global “mindful@LXS program” as workshop led by the Xact team. In this workshop, represen-
provider for case management, aiming to uniform quality an online mindfulness program. In the reporting year, tatives of all hierarchy levels engage in an in-depth discus-
standards at all LANXESS locations and to provide the the program was also adapted to the needs and the sion on the safety culture in their own plant. In this way,
growing number of entitled employees with professional shift scheduling of the plants and piloted. Many teams we can identify the individual strengths and weaknesses
advice and permanent reintegration soon after recovery. were also individually supported with mindfulness-based of the respective plant and initiate targeted improvements.
workshops. Once again, there was also a wide range of To boost sustainability, a follow-up workshop a few months
,QVWUHQJWKHQLQJWKHGLYLVLRQVSHFLƭF2+0ZDV health-related activities in the regions. For example, India later discusses how to implement measures at the plant.
DSDUWLFXODUSULRULW\,QWKHƭUVW\HDUWKUHHJURXSVZLWK organized a “stepathon challenge,” mediation workshops The Xact team collates and evaluates the results centrally
a total of around 270 employees took part in the new, and several dialog formats with regard to physical and in order to determine global, regional or department-spe-
targeted program. It was aimed primarily at prevention mental health. FLƭFWUHQGV,QWHUQDOFRPPXQLFDWLRQWUDLQLQJDQGSHUVRQDO
and is intended systematically embed the improvement attitudes to safety are the aspects with the greatest poten-

of health-promoting working conditions in the divisions. We address the topic of occupational safety with our global tial for improvement.
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To this end, the current situation in the individual divisions safety initiative Xact. It pursues the goal of gradually lifting
was analyzed with the managers and employees, internal the safety culture of LANXESS to a higher level. Starting
health groups established, employees trained as health with top management, all employees are expected to work
SURPRWHUVDQGLQLWLDOSODQWVSHFLƭFKHDOWKPHDVXUHVLPSOH- together to improve safety in the Group. We are doing this
mented, e.g. improved ergonomics and improved stress EHFDXVHZHƭUPO\EHOLHYHWKDWDOOLQGXVWULDODFFLGHQWVDUH
management at the workplace. DYRLGDEOH$VDVSHFLƭFWDUJHWIRURFFXSDWLRQDOVDIHW\ZH

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Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

 
Our Safety Culture Development Process Visible?”. It was introduced worldwide in six languages

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in early 2021 and is a key element of our communication
about safety. In order to make the content of the Xact
guidebook more visual, the global Xact-Community has
GHYHORSHGGLJLWDOƯDVKFDUGVLQZKLFKHPSOR\HHVSUHVHQW
Manage- Focus-group
their own examples and experiences in video statements
Shift Feedback Implement Follow-up
ment meetings workshop to the shifts (or video messages). Knowledge is imparted and consoli-
NLFNRƫ actions workshop
dated in interactive exercises. Three of a total of six digital
ƯDVKFDUGVKDYHDOUHDG\EHHQFUHDWHGDQGSURYLGHGWR
employees in eleven languages on local e-learning plat-
forms. More than 6,000 employees have already used
this learning opportunity.

Active, ongoing communication is a top priority for us

when it comes to matters relating to safety. The Xact pulse-
6–8 weeks 4–6 weeks 2–3 weeks Immediately 3–6 months check survey that we conducted among all LANXESS
employees again in 2022 is an important tool here. It gives
them an opportunity to express their personal experience

By the end of 2022, 59 of the roughly planned 140 cultural reasons for unsafe behavior. The characteristics of key aspects of safety at LANXESS. One aim of the

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focus-group workshops had been carried out in Germany, WKDWGHƭQHRXU/$1;(66VDIHW\FXOWXUHSOD\DIXQGDPHQWDO anonymous survey is to determine whether all employ-
Belgium, Brazil, the U.S. and China. Thanks to strict UROHKHUH7KHVHDUH ees receive positive feedback regarding safe work – as
hygiene precautions, we were able to carry out some of intended – and whether supervisors set an example when
the events in person again. We will continue them in 2023 › Safety leadership by example it comes to the LANXESS safety culture.
and roll them out to other regions, e.g. Italy. › Attitude to safety/taking responsibility
› Learning and sharing/error culture Despite the strain of the pandemic, 44% of the workforce
An interim evaluation shows that our employees appre- › Positive reinforcement of safe behavior WRRNSDUWLQWKHVXUYH\LQWKHSDVWƭVFDO\HDUIRUWKHƭUVW
ciate the fact that they can contribute personally, receive › Communication/feedback culture time including the colleagues from the new Flavors &
direct feedback from their colleagues and managers and Fragrances business unit. In addition to questions about
actively help to shape the safety culture in their own area The Xact initiative has summarized these cornerstones in the content of the Xact initiative, focal points in the report-
of activity. The greatest potential for improvement is in the DJXLGHERRNFDOOHGp+RZ&DQ6DIHW\&XOWXUH%H0DGH ing year included leadership by example and the avoid

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Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

  
DELOLW\RIDFFLGHQWV7KHUHVXOWVGLƫHUHGLQVRPHFDVHV WKLVZHSURYLGHSHUVRQDOVDIHW\EULHƭQJVIRUHPSOR\HHV Work-Related Injuries to LANXESS Employees

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substantially, depending on the region, organizational unit of our partner companies. Resulting in Absence from Work (LTIFR)
and hierarchy level. The question “Do you have enough
time to work safely?” was met with broad assent glob- Indicators for the assessment of occupational safety at 2.5
ally and across all areas and hierarchy levels. 70% of the /$1;(66DUHWKHUHFRUGDEOHLQFLGHQWUDWH 5,5QXPEHU
participants responded with “Yes, always” and 27% with of incidents per 200,000 working hours that have to 2.0
1.6
1.5
“Yes, mostly.” The majority of responses on the attitude be reported according to the Occupational Safety and 1.5
to safety and lived safety culture at LANXESS were also +HDOWK$GPLQLVWUDWLRQ>26+$@ DQGWKHORVWWLPHLQMXU\ 1.0
0.9
positive. Topics in need of improvement included lead- IUHTXHQF\UDWH /7,)5DFFLGHQWVSHUPLOOLRQKRXUVZRUNHG  1.0

ership by example, stress, and the implementation of for accidents with days lost. The LTIFR in 2022 was 0.5 0.5
0.5
+6(SURFHVVHVAsked whether supervisors give positive (as of January 26, 2023) and thus lower than the already
feedback for safe work, 16% responded with “never” or low level of the previous year and again within our medi-
2018 2019 2020 2021 20221), 2)
pUDUHO\q7KHƭJXUHLQ*HUPDQ\ZDVDERYHDYHUDJHDW. um-term target of < 1.0.
1) Continuing operations
The survey results with more than 420 comments give us
2) LANXESS total: 0.6
a good overview of the employees’ opinions. As in previous years, no fatal accidents occurred in the
reporting period. The RIR, which also includes accidents
In accordance with the safety guidelines at LANXESS, ZLWKQRGD\VORVWLQDFFRUGDQFHZLWK26+$UXOHVZDV :RUN5HODWHG,QMXULHVWR/$1;(66(PSOR\HHVWKDWDUH
every organizational unit, e.g. a plant, is required to carry (as of January 26, 2023) in 2022 and thus below the 5HSRUWDEOHLQ$FFRUGDQFHZLWK26+$5HJXODWLRQV 5,5

RXWUHJXODUULVNDVVHVVPHQWVDQGGHƭQHVXLWDEOHPHDVXUHV previous year’s level of 0.7. Companies have been taking

1.5
to protect against potential hazards. Employees are trained occupational safety increasingly seriously in recent years,
accordingly, and the training and the measures are so the number of reports of serious accidents has been
checked regularly. We thus meet the legal requirements declining continuously.
1.0
and protect employees, contractual partners and visitors 0.8 0.8
0.7
to the plant alike. $OODFFLGHQWVLQFOXGLQJVLJQLƭFDQWQHDUPLVVHVDUHV\VWHP- 0.6
0.5
atically analyzed with regard to their cause and possible 0.5
We also want to reach an improved shared understanding preventive measures. The results of these investigations
of occupational safety with service providers who perform are, for instance, incorporated into safety updates that
technical services for us, as well as including them in our are made available to the entire organization. We regard 2018 2019 2020 2021 20221), 2)
safety culture. For instance, our partners must demon- the sharp fall in the LTIFR in recent years as evidence
1) Continuing operations
strate that they maintain their own safety management that the structured transfer of knowledge and the many 2) LANXESS total: 0.6
system and have carried out all safety training that is occupational safety measures at LANXESS are having a
required of all employees who work for us. Regardless of SRVLWLYHHƫHFW

55 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

i CEO Safety Award and improved employee retention. The program the digitalization process at LANXESS. This dialog was
For us as a chemicals company, the safety of our was started because the high turnover of young continued in 2022, with regard to both the challenging
employees, plants and processes is the utmost prior- colleagues and a growing knowledge gap between economic situation and the further digitalization and intro-
ity. The international CEO Safety Award, which was H[SHULHQFHGDQGQHZHPSOR\HHVDW:HVW+LOOZDV duction of new IT systems.
bestowed for the fourth time in the reporting year, resulting in declining production volumes and poten-
recognizes particularly successful initiatives and tial safety risks. The program included the complete In the reporting year, the workforce in Germany elected
contributions to occupational safety at LANXESS. overhaul of the plant’s outdated documentation, the their representatives for the Works Council and the Mana-
An important criterion for the award is how easily introduction of new tools, the training of experienced gerial Employees’ Committee as scheduled. The large
the submitted contribution can be implemented and colleagues as coaches, the redesign of the employee number of re-elected candidates guarantees continuity
transferred to other sites. For example, we are not onboarding process, and the communication of the in committee work.
only anchoring occupational safety even deeper in LANXESS performance culture and the Xact safety
the minds of all employees, but also illustrating how culture at the site. Fair dealings with employee representatives and trade
important it is to learn from each other at LANXESS. unions are also a top priority for us outside Europe. At all
,QDGGLWLRQWHDPVIURPWKH+LJK3HUIRUPDQFH0DWH- our sites, we comply with International Labour Organiza-
In 2022, a plant team from the Lubricant Addi- rials business unit from Uerdingen, Germany, and tion (ILO) standards with respect to our employees’ free-
WLYHVEXVLQHVVXQLWLQ:HVW+LOO&DQDGDUHFHLYHG the Material Protection Products team in Jarinu, dom of association. Where possible and in compliance
the award for its improvement of the site’s organi- %UD]LOZHUHYLUWXDOO\FRQJUDWXODWHGDVƭQDOLVWVE\ with local laws and regulations, this includes regular
zation (“Fortifying the Facility”). The team worked CEO Matthias Zachert for the “Knowledge is Power/ exchange between local management and trade unions
for two years with no accidents with days lost, Make it Safe” project and the “3D Scans for Safety as well as binding, collectively agreed-upon regulations
increased the production volumes considerably Audits” project, respectively. on remuneration and working conditions.

Proportion of Employees Covered by Collective

Employee codetermination representative committees in Germany, Europe and world- Bargaining Agreements
%
Dialog with chemicals social partners – works coun- wide, provide information on our corporate objectives and 100
cils, trade unions and employer associations alike – as involve them in organizational changes at an early stage.
a principle of consultation in action is the global prac- Proportion of employees worldwide 61

tice at LANXESS. As part of this, we also respect the In 2020, we came to an agreement with the Central Works
freedom of association of our employees in accordance Council and the German Mining, Chemical and Energy Proportion of employees in Germany 92

with the International Labour Organization (ILO) and the Industrial Union (IGBCE) on jointly designing the work of
Global Compact and comply with collective bargaining the future. A key element of the agreement is the regular
agreements. We regularly seek dialog with employee communication between the parties on the design of

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Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

SUSTAINABLE PRODUCTS substances legislation before they are used or brought JXDUDQWHHOHJDOFRQGXFW7KH5($&+UHTXLUHPHQWVKDYH
to market. We regularly adapt our electronic safety data been continuously updated since 2007, so it is necessary
Product responsibility V\VWHPWRWDNHDFFRXQWRIQHZIHDWXUHVLQ*+6 *ORE- to regularly review and revise the registration dossiers. In
We see the constant improvement of product safety, which DOO\+DUPRQL]HG6\VWHPRI&ODVVLƭFDWLRQDQG/DEHOLQJ this context, we support the voluntary Action Plan of the
is enshrined as a core aspect of our corporate policy and RI&KHPLFDOV OHJLVODWLRQLQWKHGLƫHUHQWFRXQWULHV:H European Chemical Industry Council CEFIC (Conseil
in the Group-wide management system, as part of our thus ensure that risks for humans and the environment Européen des Fédérations de l’Industrie Chimique) and
product responsibility. We have undertaken to avoid risks are avoided in transport, storage, use and disposal. have undertaken to review and – if necessary – update
for humans and the environment across all phases of the RXU5($&+UHJLVWUDWLRQGRVVLHUVE\DWWKHODWHVW
product lifecycle through safe research, manufacturing, Complying with global chemicals control regulations Moreover, we welcome the opportunity provided by the
storage, logistics, use and disposal. across the whole value chain is an essential prerequisite European Commission to contribute to the planned
for the sale ability of our chemicals and chemical products. 5($&+UHYLVLRQLQDSXEOLFFRQVXOWDWLRQ
With regard to the safety of our products, our ambitions :HJRWRJUHDWHƫRUWWRHQVXUHFRPSUHKHQVLYHFRPSOL-
exceed the legal requirements in many areas. Exam- ance both for our own products and together with our $VWDWHPHQWRQWKH5($&+UHYLVLRQFDQEHIRXQGKHUH
ples of this include the creation of safety data sheets partners for their products, which are our raw materials,
even for non-hazardous substances and our roadmap for example. Particularly in the case of consumer appli- The safe use of our products, along both our own and
for a sustainable product portfolio. Our “Product Safety cations, we especially make sure that our products meet the downstream value chains, is another essential part of
Management at LANXESS” guideline stipulates how KLJKQDWLRQDODQGLQWHUQDWLRQDOVWDQGDUGVFHUWLƭFDWHV our product responsibility. Our business units help their
product responsibility is to be implemented throughout and quality seals. customers to use our products safely and in an eco-friendly
the Group and ensures collaboration between all of the way by way of training and advice and shed light on the
parties involved. The Production, Technology, Safety & Materials that we produce in the EU or import into the EU risks associated with use. In our electronic safety data
Environment (PTSE) Group function ensures that laws in quantities of more than one metric ton per year are regis- system, we provide our customers with safety data sheets
and regulations are complied with, resulting obligations WHUHGOLVWHGDQGHYDOXDWHGLQDFFRUGDQFHZLWKWKH5($&+ and extended safety data sheets for all substances and
DQGSUHYHQWLYHPHDVXUHVDUHGHULYHGDQGWKHLUHƫHFWLYH (Registration, Evaluation, Authorisation and Restriction of products handled regularly – in some cases including
implementation monitored. Chemicals) Regulation. We conduct workshops for our intermediates.
5($&+RưFHUVLQWKHEXVLQHVVXQLWVDWOHDVWWZLFHD\HDU
We classify and label hazardous products (substances and in order to present new developments, promote under-
mixtures) in packaged form in accordance with hazardous standing of the importance of product responsibility and

57 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

Portfolio development upstream value chain as well as our own production. Our this respect, only a small portion of the LANXESS portfolio
line with societal trends and needs, we aim to constantly DLPLVWRFRQWLQXRXVO\UHGXFHRXUSURGXFWVoLQƯXHQFHRQ is relevant here.
improve the sustainability performance of our product the climate, to use sustainable raw materials and to ensure
portfolio, to identify critical substances in products and that our products can be recycled. Safe and sustainable products
to substitute them or develop safe alternatives. Using the LANXESS Product Sustainability Monitor, we
$VDWKLUGSHUVSHFWLYHZHORRNDWWKHEHQHƭWRIRXUSURG- GLYLGHRXUSRUWIROLRLQWRIRXUFDWHJRULHV
For the management and long-term development of ucts in their application. A sustainable world needs not
our product portfolio, we follow an approach with three only sustainably manufactured products but also solutions › Energizers:3URGXFWVLQWKLVFDWHJRU\RƫHURXWVWDQG-
perspectives. This is based on the LANXESS Product for new concepts such as in the areas of climate protec- ing sustainability performance. They meet our
Sustainability Monitor. Using this analytical tool, we identify tion or circular economy. For example, additives make ambitious requirements for all criteria. They have
products that are produced in a particularly sustainable DVLJQLƭFDQWFRQWULEXWLRQWRH[WHQGLQJWKHXVHIXOOLIHRI no intrinsic properties that give cause for concern.
manner as well as products where we see potential for products or enabling materials to be recycled. Energizers are manufactured with a very low to low
improvement, and have been increasing the sustainability environmental impact. These products contribute to
performance of our portfolio for years. In the future, the EU taxonomy will be an additional, inde- at least one SDG and are experiencing increasing
pendent perspective. At present, for the chemical industry demand
7KHVHFRQGVLJQLƭFDQWSHUVSHFWLYHLVWKHSURGXFWFDUERQ LWFRQFHQWUDWHVFKLHƯ\RQWKHLGHQWLƭFDWLRQRIDFWLYLWLHV › Performers: Products that are sustainable accord-
footprint (PCF) and the circular potential of our products. associated with particularly high carbon emissions, i.e. ing to the current state of the art. They meet our
+HUHLWLVLPSRUWDQWWRXQGHUVWDQGDQGDFFRXQWIRUWKH on high-volume basic chemicals and plastic products. In ambitious sustainability requirements for many
criteria. Performers are manufactured with a low to
LANXESS Product Portfolio PHGLXPHQYLURQPHQWDOLPSDFWDQGKDYHDEHQHƭWWR
1 Safe and sustainable products
society.
LANXESS Product Sustainability Monitor
› Transitioners:3URGXFWVWKDWGRQRW\HWIXOƭOODOO
LANXESS sustainability requirements. We monitor
these products and actively steer them by way of
2 3
improvement measures and targeted innovation, for
Climate-neutral and circular products Products for climate protection and the
circular economy example to reduce their environmental impact and
Carbon footprint, sustainable raw materials, recyclability make these products more sustainable.
Solutions that enable sustainable concepts

58 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

› Roadmap: This category covers products with In 2022, we already generated 79% of our total sales with LANXESS Product Portfolio 2022
serious sustainability concerns, namely chemical SURGXFWVWKDWIXOƭOORXUVXVWDLQDELOLW\UHTXLUHPHQWV2QO\ %
end products with more than 0.1% by mass of 21% of our sales were attributable to products that did
4
substances with the properties of substances of very QRW \HW FRPSOHWHO\IXOƭOORXUVXVWDLQDELOLW\UHTXLUHPHQWV Energizer
17 29
KLJKFRQFHUQ 69+& :HPDQDJHWKHVHSURGXFWVLQ We generate only around 4% of our sales with roadmap Performer

our roadmap process, in which we examine in partic- products. The change in the shares is primarily due to Transitioner

ular whether critical substances in the respective WKHIDFWWKDW+LJK3HUIRUPDQFH0DWHULDOV +30 LVQR Roadmap

chemical end products could be replaced with safe longer reported under continuing operations. By 2023,
and sustainable alternatives. We do not market new ZHZDQWWRGHYHORSDVSHFLƭFDFWLRQSODQIRUDOOWKHVH
chemical end products in this category. products. As of the 2022 reporting date, the degree of 50
target attainment was already 70% – we are therefore on
track to achieve our target. 79% sustainable products

Criteria of the LANXESS Product Sustainability Monitor

Environmental Social Economical

Climate-neutral and circular products
We want to help transform the entire value creation system
Climate change LQWRDUHVRXUFHHưFLHQWDQGFOLPDWHQHXWUDOVRFLHW\2Q
the road to climate-neutral and circular products, we are
Water use and water risk
focusing on three partially overlapping action areas.
:DVWHHưFLHQF\
Three Elements for Climate-Neutral and Circular Products
Environmental risk
Climate-neutral products
+XPDQKHDOWKULVN
Carbon footprint
6XSSRUWRIWKH$JHQGD SURGXFWEHQHƭW (cradle-to-gate)

Demand trend

3URƭWDELOLW\ Sustainable Recycla-

raw bility
Legislative and reputational risk materials

Circular products

59 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

When selecting products, knowledge about the carbon LANXESS products are sold almost exclusively to industrial are sometimes very long periods between production
footprint is becoming increasingly important – both for us customers. Only they or customers even further down- DQGWKHHQGRIRXUSURGXFWVoOLIHF\FOHV$VWKHƭUVWVWHS
and for our customers. Our aim is to continuously reduce stream use them to produce end products for a wide range we are therefore focusing on what we as a company can
the PCF and thus our products’ negative impact on the of markets. For example, automotive suppliers use our FRQWURO:HDUHZRUNLQJWRHQVXUHWKHpUHF\FODELOLW\qRIDOO
climate. In a cradle-to-gate assessment, the PCF results high-performance plastics in components for lightweight our products so that they are suitable for environmentally
IURP automotive construction, which are ultimately built into friendly recycling. In order to understand which “recyclabil-
vehicles by car manufacturers. Our chemical end prod- ity” requirements to impose on our products, it is important
› Emissions from our own processes (Scope 1) ucts, which remain unchanged in the further value chain, WRDQDO\]HWKHIXQFWLRQRIRXUPROHFXOHVLQWKHLUƭQDOXVH
› Emissions from purchased energy (Scope 2) are only processed into end products by our customers. and in which cycles (biological or technical) they circulate.
› Emissions from purchased goods, upstream trans- With regard to completing cycles, this means that there
port and waste generation (Scope 3)
Allocation of LANXESS Products to Cycles According to Their Use (Examples)
$VDFRPSDQ\ZHFDQGLUHFWO\LQƯXHQFHRXU6FRSH
and Scope 2 emissions in particular. With our strategy for Materials Additives Active ingredients
climate neutrality in 2040, we have set ourselves ambi-
Plastics or intermediates for the Antioxidants or pigments that are Fertilizers, pesticides, insect re-
tious targets in this area ( see “Climate Action and manufacture of plastics that can be added to products and determine their pellents, disinfectants, additions
(QHUJ\(ưFLHQF\q). More important for the PCF than the used in diverse ways. They return to physical characteristics. When used in WRDQLPDOIHHGRUƯDYRULQJV These
technical cycles and are essential for a paints, plastics or other materials, they substances are used in agriculture or
Scope 1 and Scope 2 emissions are often the Scope 3 functioning circular economy. are part of technical cycles. If they are food production. They are degraded
emissions arising in connection with purchased goods, contained in cosmetics or food, they naturally when used and enter the
are added to the biological cycle via biological cycle.
i.e. our raw materials. In chemical production, they often wastewater.
account for more than 50% of the PCF. We are therefore
placing a strategic focus on the purchase of sustainable
raw materials with a reduced carbon footprint. The trans-
Aim: Aim: Aim:
formation away from conventional, often fossil-based raw Recyclable materials, suitable for Additives that are suitable for their Degradable active ingredients that
materials towards renewable resources not only leads to a return to technical cycles. relevant cycles. enter the biological cycle when used
reduction in greenhouse gas emissions but also makes our
value chains less dependent on certain limited resources
Technical cycle Biological cycle
( see “Circular and Sustainable Sourcing”).

60 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

Products for climate protection WRWKHHPLVVLRQRIJUHHQKRXVHJDVHV(OHFWULƭFDWLRQDQG protection solutions also extend their useful life many times
and the circular economy insulation play a key role here. We address all these topics over. If it is no longer possible to continue using products
A full picture of our product portfolio is obtained only with our product portfolio. and they reach the end of their lifecycle, it is important
ZKHQDVVHVVLQJWKHEHQHƭWDQGWKHSRVLWLYHHQYLURQPHQ- that they can be recycled in an environmentally friendly
WDOLPSDFWWKDWRXUSURGXFWVKDYHZKHQXVHG+HUHZH 7KHHƫHFWVRIFOLPDWHFKDQJHDUHDOUHDG\SODLQWRVHHLQ PDQQHU+HUHWRRWKHULJKWDGGLWLYHVKHOSWRFRPSOHWH
prioritize solutions that contribute to climate protection many regions of the world. Changing water cycles and the cycle. Both the correct use of additives and material
or enable a circular economy. thus new patterns of precipitation and evaporation are protection are among LANXESS’s core areas of expertise.
one consequence of climate change. In this respect,
Products that support climate protection are suitable for WKHFLUFXODWLRQRISURFHVVZDWHUDQGWKHSXULƭFDWLRQRI Product innovation
reducing greenhouse gas emissions and thus stopping drinking water are becoming important elements of local In 2022, our portfolio strategy was again shaped primarily
or slowing climate change (climate mitigation). A second ZDWHUVWUDWHJLHV2XU/LTXLG3XULƭFDWLRQ7HFKQRORJLHV E\VSHFLƭFSURGXFWDQGDSSOLFDWLRQGHYHORSPHQW:H
important group comprises products that support business unit provides support here with years of expe- put the needs and expectations of our customers at the
adaptations to climate change – i.e. help to cope with rience, a broad product range and innovative solutions. center here and frequently pursue projects together with
the negative consequences resulting from changes in the Another consequence of climate change is the increasing the customers concerned or other high-powered partners.
climate that have already materialized or are expected in threat of infectious diseases. Global warming is enabling
the future (climate adaptation). certain pathogens to advance and survive in not only In the reporting year, we expanded our Scopeblue series
tropical but also temperate zones. Other factors such as with innovative products. Details can be found under
The biggest drivers of climate change are the generation globalized passenger, livestock and goods transport help “Product Portfolio.”
of electricity and heat. The change from fossil fuels to these diseases to spread faster and farther. For years,
renewable energy requires a large number of new solu- we have therefore continuously enhanced our range of :HFRPSOHPHQWHGRXUDFWLYLWLHVLQWKHƭHOGRIHOHFWULF
tions, especially for wind power, photovoltaics and the disinfectants. mobility and batteries with work on iron oxides for lithium
necessary storage of energy in the form of batteries or iron phosphate electrodes (LFP). These are becoming
K\GURJHQ7KHWUDQVSRUWVHFWRUDQGHVSHFLDOO\URDGWUDưF For a functioning circular economy, it is not only the use increasingly widespread – including in Europe – as a
DUHRWKHUVLJQLƭFDQWFDXVHVRIFOLPDWHFKDQJH/LJKWZHLJKW of alternative raw materials and environmentally friendly VXVWDLQDEOHDQGFRVWHƫHFWLYHDOWHUQDWLYHWRFREDOWDQG
automotive construction with modern plastics harbors recycling at the end of the lifecycle that are important. nickel-containing active materials. Key precursors for LFP
potential to considerably reduce fuel consumption in vehi- Products are also required that help materials to be used include lithium carbonate, phosphorous chemicals and
cles with combustion engines. In recent years, electric for longer or enable materials to be reused at all. Partic- technical iron oxides such as Bayoxide from LANXESS.
mobility has also become established as an important ularly in the case of plastics, the product lifecycle can be Thanks to our world-class facility in Krefeld-Uerdingen, we
path to a sustainable future in road transport. Industry VLJQLƭFDQWO\H[WHQGHGZLWKDSSURSULDWHDGGLWLYHV:KHQ are one of the world’s biggest producers of iron oxides.
and the building sector are in third place when it comes renewable materials such as wood are used, material We are also among the leading producers of phosphorus

61 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

compounds. As a broad-based raw material supplier, their sustainability targets, since they can lower energy Valuing customer relationships
LANXESS can therefore reliably deliver the necessary XVDJHE\VZLWFKLQJIURPKRWƭOOLQJRUWXQQHOSDVWHXUL- Our customers’ satisfaction is not only an indicator of
precursors in order to cover the growing European ]DWLRQWRFROGƭOOLQJDQGUHGXFHWKHDPRXQWRISODVWLF our success, but above all also a requirement for it. We
demand for LFP. needed for packaging. Nagardo is based on glycolipids therefore work continuously on the meaningful and best
obtained from edible mushrooms, which were discovered possible consideration of customers’ constantly changing
:HKDYHGHYHORSHG(PHUDOG1+WRPDUNHWPDWXULW\DV in a comprehensive screening process encompassing needs in our product and process innovations. In addition,
DQLQQRYDWLYHƯDPHUHWDUGDQW7KLVQHZSKRVSKRUXVEDVHG more than 100,000 natural substances. It transpired that we aim to build on and consolidate our relationships with
product has been specially designed for use in high-perfor- WKH\RƫHUWKHNLQGRIHƫHFWLYHQHVVWKDWFDQEHIRXQGRQO\ our customers.
mance plastics and electric mobility. It exhibits very good in nature – all that is needed is a dosage as much as
ƯDPHUHWDUGDQWSURSHUWLHVLQFRPELQDWLRQZLWKRWKHUDGGL- 50 times smaller than is the case with commonly used Our direct interaction with customers resumed in the
WLYHVDQGHDVLO\SDVVHVWKHUHOHYDQWƭUHVDIHW\WHVWV9HUVD- synthetic preservatives. Nagardo is currently the most reporting year, having been still severely restricted by
tile formulations ensure that the mechanical properties HƫHFWLYHQDWXUDOSUHVHUYDWLYHIRUQRQDOFRKROLFEHYHUDJHV the coronavirus pandemic in 2021. Customer visits and
and other functional characteristics of the end products on the market. on-site care were possible again, as were face-to-face
DUHPDLQWDLQHG,QDGGLWLRQWKHDGGLWLYHRƫHUVH[FHOOHQW events and trade fairs. Overall, a balance has arisen
thermal stability and boasts a unique morphology. This innovation is also recognized by beverage industry between physical and virtual meetings that makes it possi-
professionals. For example, LANXESS received the 2022 ble to conserve resources while simultaneously maintain-
Another innovation, our natural preservative Nagardo, World Beverage Innovation Award in the “Best Beverage ing all-important personal contact. Successful new formats
has now also been launched in Europe following the Ingredient” category for Nagardo. These awards, launched such as webinars and technical expert sessions were
U.S., Australia, New Zealand, and Canada. We obtained by UK-based FoodBev Media Ltd., honored innovation and continued. Although personal customer service makes a
approval for use in non-alcoholic beverages the EU in the excellence across all categories in the global beverage substantial contribution to our success, virtual cooperation
reporting year and continue to expand the global footprint industry for the 20th time in the reporting year. KDVDOVRSURYHQXVHIXOWKDQNVWRKLJKHUƯH[LELOLW\DQGUHDFK
of Nagardo. DQGEHWWHUFRPSDWLELOLW\ZLWKFXVWRPHUVoƯH[LEOHZRUNLQJ
By acquiring the Microbial Control business from U.S. models, for example.
European beverage producers can now make use of a corporation International Flavors & Fragrances Inc. (IFF)
ORQJDZDLWHGQDWXUDOSUHVHUYDWLYHWKDWQRWRQO\HưFLHQWO\ in 2022 and through the acquisition of specialty chem- When forming our customer relationships, the top prior-
safeguards product quality but also enables them to icals manufacturer Emerald Kalama Chemical, U.S., in ities are customer satisfaction and avoiding customer
transform their product ranges and to meet consum- 2021, we continued to grow our innovation portfolio and complaints. Based on a central customer relationship
ers’ growing demand for natural ingredients. The use of supplemented it with important areas. management (CRM) system and a uniform complaint
Nagardo can also help beverage producers to achieve management platform, each of our business units has its

62 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

own market- and customer-oriented complaint manage- our ERP systems for changes in order data records, factor In terms of content, the survey aims to evaluate LANXESS’s
ment and optimization processes. Shared elements of in external information and compare it with dynamic spec- performance in comparison to the competition and to indi-
these processes include clear targets, for example in rela- LƭFDWLRQV2XUFXVWRPHUDGYLFHH[SHUWVFRQVWDQWO\REWDLQ cate whether customers would recommend LANXESS.
tion to the reduction of customer complaints or processing FRQVWDQWO\XSGDWHGLQIRUPDWLRQDERXWWKHNH\LQƯXHQFLQJ Customers were also asked if they intended to continue
times for customer complaints, as well as a corresponding factors and changes that Order Management, for exam- the business relationship in the future and to assess the
statistical analysis of the feedback received, and structured ple, has made to the orders – such as postponements of advantages resulting from this relationship.
monthly reporting to the management of the respective delivery dates or quantity changes. Our customer service
business unit. Various bodies and dialog forums, such as is therefore able to inform customers immediately and In the current 2022 survey, the customer retention index
the quarterly Marketing & Sales Community, also guar- promptly tackle any problems arising from the changes. (CRI) score was 71 and thus at the same level as that of
antee the regular exchange of experiences between our RXUFRPSHWLWRUV7KHVFRUHSDUWLFXODUO\UHƯHFWVWKHVWUDLQHG
business units and Group functions. In 2022, the Saltigo, Flavors & Fragrances and Material economic situation of the pandemic years, the general
Protection Products business units launched a LinkedIn global supply shortages in procurement, the drastic restric-
Our business units regularly review their complaint Showcase Page called “LANXESS Personal Care & tions in logistics, and the sharply increased raw material
management process to identify potential for improve- Cosmetics” in order to facilitate discussion about highly and energy prices.
ment. In 2022, for example, Polymer Additives took further HƫHFWLYHDQGVXVWDLQDEOHLQJUHGLHQWVLQFRVPHWLFDQG
steps to integrate complaints reporting from the acquisi- personal care products such as Saltidin®, Purox®B and The topic of “sustainability” was a particular focus of the
tions of Chemtura and Emerald Kalama Chemical and set Purox®6.$7+21vDQG1(2/21(v latest customer satisfaction survey, in which customers
up a new complaints tool, which has proven successful. gave us an excellent rating due among other things to
In response to the persistently strained material procure- The rollout of the sales software successfully introduce in our “Climate Neutral 2040” strategy.
ment situation, the Inorganic Pigments business unit has FRQWLQXHV,WHQDEOHVƯH[LEOHDFFHVVWRFXVWRPHU
introduced weekly update calls to keep its customers in information regardless of internet connection or techni- Based on the results of the latest customer satisfaction
the loop. FDOHTXLSPHQW7KLVEHQHƭWVRXUFXVWRPHUVEHFDXVHZH analysis, we have implemented targeted measures at
DUHEHWWHULQIRUPHGDERXWWKHLUVSHFLƭFQHHGVDQGRXU LANXESS and in the business units in order to remain a
,QRXUGLJLWDOL]DWLRQRƫHQVLYHZHXVHVRIWZDUHWRLPSURYH consultants because it is easier for them to stay informed. reliable and value-enhancing partner for our customers
WKHVSHHGDQGHưFLHQF\RIWKHFRPPXQLFDWLRQEHWZHHQ and thus to successfully retain them in the long term.
our customer service teams and their respective custom- Customer satisfaction surveys are essential for LANXESS
ers. In light of the large number of simultaneous orders, it in order to determine potential for improvement in
is a major challenge for our customer service employees customer relationships and to check whether customer
to keep track of changes across the entire order accep- requirements have changed. LANXESS conducts an
WDQFHSURGXFWLRQDQGGHOLYHU\SURFHVV+HUHZHDUH anonymous online survey of all relevant customers in all
assisted by software solutions that continuously search business units once every two years.

63 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

  
Reporting on the EU taxonomy In order to assess an economic activity, a two-step analysis Sales

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must be performed with regard to eligibility and alignment. The ratio relating to the relative share of sales with
Introduction According to the EU Taxonomy Regulation, economic taxonomy-eligible or taxonomy-aligned products is the
A central element in the European Union’s Green Deal is activities are taxonomy-eligible if they match the activity UDWLRRIWZRVDOHVƭJXUHV7KHQXPHUDWRULVWKHVXPRI
WKHVWUDWHJ\IRUVXVWDLQDEOHƭQDQFLQJ,WDLPVWRFKDQQHO descriptions in Annexes I and II of the Delegated Act of all sales that we have generated in the reporting year
ƭQDQFLQJƯRZVLQWRLQYHVWPHQWVWKDWVXSSRUWVXVWDLQDEOH June 2021 or the supplementary Delegated Act of March with taxonomy-eligible or taxonomy-aligned activities. The
GHYHORSPHQWLQWKHIXWXUH,QWKLVFRQWH[WDFODVVLƭFDWLRQ 2022 and potentially contribute to the achievement of denominator is the value of the external sales as reported
system for economic activities – the EU taxonomy – is to one of the six environmental objectives. To determine under “Sales” in the income statement of our consol-
help investors assess whether investments contribute to alignment, each activity must be assessed as to whether LGDWHGƭQDQFLDOVWDWHPHQWVLQWKH$QQXDO5HSRUWRQSDJH
political targets and obligations such as the Paris Agree- it makes a substantial contribution to any given objec- 155 pursuant to the relevant IAS/IFRS requirements
ment on climate change at the same time as meeting WLYHRIWKH(8WD[RQRP\ZKLOHGRLQJQRVLJQLƭFDQWKDUP DVSUHVHQWHGLQWKHQRWHVWRWKHFRQVROLGDWHGƭQDQFLDO
VSHFLƭHGHQYLURQPHQWDODQGVRFLDOVWDQGDUGV7RWKLVHQG '16+ WRDQ\RIWKHRWKHUREMHFWLYHV0RUHRYHUPLQLPXP statements.
WKH(8KDVGHƭQHGVL[FDWHJRULHVRUREMHFWLYHV safeguards for compliance with human rights including
ODERUDQGFRQVXPHUULJKWVDQGLQWKHƭHOGVRIEULEHU\DQG Capital expenditures and operational
1. Climate change mitigation corruption prevention, taxation and fair competition must expenditures
be guaranteed for each activity. We report the proportion of expenditures and expenses
2. Climate change adaptation incurred in connection with the operation and expansion
Reportable ratios of our plants in order to manufacture taxonomy-eligible
3. Sustainable use and protection of water and Companies that fall within the scope of the EU taxon- or taxonomy-aligned products as taxonomy-eligible or
marine resources RP\PXVWGLVFORVHWKHGHƭQHGVDOHVFDSLWDOH[SHQGLWXUH taxonomy-aligned capital expenditures and operational
(CapEx) and operating expenditure (OpEx) ratios for their expenditures. The relevant value chain begins with the
4. Transition to a circular economy share of taxonomy-eligible or taxonomy-aligned economic manufacture of products that are taxonomy-eligible
activities. These ratios must be itemized according to according to Annexes I and II of the Delegated Regulation.
5. Pollution prevention and control the respective taxonomy-eligible or taxonomy-aligned
economic activity. The disclosures must specify the envi- 5HOHYDQWFDSLWDOH[SHQGLWXUHVFRPSULVHƭUVWO\RXUFDSLWDO
6. Protection and restoration of biodiversity and ronmental objective to which this activity contributes and expenditures to maintain and upgrade our production
ecosystems whether it is a transitional or enabling economic activity. plants for taxonomy-eligible or taxonomy-aligned products,
including production plants added via business acquisi-
The relevance of an economic activity for one of these tions. The goodwill derived from this after the purchase
environmental objectives depends on how the activity price allocation and recognized in intangible assets is not
LQƯXHQFHVWKHUHVSHFWLYHHQYLURQPHQWDOREMHFWLYH part of the capital expenditures considered here.

64 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

  
Taxonomy-eligible activities the Climate Delegated Act. The data-gathering process of taxonomy-eligible capital expenditures and operating

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With regard to the environmental objectives “climate likewise took place centrally on the basis of consolidated expenditures. Since LANXESS does not pursue economic
change mitigation” and “climate change adaptation,” data and using centrally available, Group-wide information. activities in connection with natural gas or nuclear energy,
the Taxonomy Regulation covers activities of selected In this way, double counting of sales, capital expenditures LANXESS does not use the special templates introduced
economic sectors that are currently responsible for a and operational expenditures can also be ruled out. with the Complementary Delegated Act for activities in
WRWDORIDURXQGRI(XURSHDQJUHHQKRXVHJDV *+*  certain energy sectors.
emissions. All of these activities are described as “taxon- Economic activities that LANXESS classifies as
omy-eligible.” With regard to the “climate change mitiga- WD[RQRP\HOLJLEOH Taxonomy-aligned activities
tion” objective, the chemical industry is a “transformative From reporting year 2022, LANXESS is also required to
industry” because, among other things, basic chemicals › LANXESS produces high-quality plastics for a broad assess the taxonomy-alignment of the economic activities,
and plastics that are produced in very large quantities range of applications – from the automotive and elec- i.e. to analyze whether they make a substantial contribution
are labeled as transitional activities. This means that the trical/electronics industries to water treatment. These to the achievement of one or more environmental objec-
DFWLYLWLHVPDNHDUHOHYDQWFRQWULEXWLRQWRWKH(8oV*+* products correspond to activity 3.17 “Manufacture of WLYHVZKLOHGRLQJQRVLJQLƭFDQWKDUP '16+ WRRWKHU
emissions and thus have relevant reduction potential. SODVWLFVLQSULPDU\IRUPqGHƭQHGLQ$QQH[HV,DQG,,RI environmental objectives and whether they are carried
LANXESS – as a specialty chemicals company – is not the relevant Delegated Regulation. out in compliance with the minimum social safeguards.
focused on such products.
› Adipic acid is a precursor that is in very high demand Substantial contribution
Activities in other economic sectors that do not materi- in the plastics industry, e.g. for polyamides or polyure- All taxonomy-eligible economic activities at LANXESS
DOO\FRQWULEXWHWR*+*HPLVVLRQVLQWKH(8DUHFXUUHQWO\ thanes. This product is allocated to activity 3.14 "Manu- were individually assessed for compliance with the crite-
not covered by the Climate Delegated Act are therefore facture of organic basic chemicals". All other products ria for a substantial contribution to the two environmen-
deemed “taxonomy-non-eligible.” Criteria for the demon- described there are not manufactured by LANXESS. tal objectives “climate change mitigation” and “climate
stration of “enabling activities” – i.e. activities that in turn FKDQJHDGDSWDWLRQq7KHDQDO\VHVSHUIRUPHGLGHQWLƭHG
enable third parties to make their own material positive › LANXESS also produces components for battery economic activity 3.4 “Manufacture of batteries” as making
contribution to climate change mitigation – have not yet manufacturing, which fall under activity 3.4 “Manu- a substantial contribution to climate change mitigation,
EHHQGHƭQHGE\WKH(8IRURUJDQLFFKHPLFDOVDQGSODVWLFV IDFWXUHRIEDWWHULHVqGHƭQHGLQ$QQH[HV,DQG,,RIWKH as our battery components are intended for ion batteries,
relevant Delegated Regulation. which are mainly used for electric cars. Economic activity
In order to identify the taxonomy-eligible economic activ- 5.4 “Renewal of waste water collection and treatment”
ities at LANXESS, we analyzed all economic activities For reporting year 2022, economic activity 5.4 “Renewal KDVDSRVLWLYHHƫHFWEHFDXVHEDVHGRQDWZR\HDUWLPH
at central level. The respective products and activities RIZDVWHZDWHUFROOHFWLRQDQGWUHDWPHQWqZDVLGHQWLƭHGDV horizon, it achieves an energy saving of more than 20%
ZHUHDVVLJQHGWRWKHDFWLYLW\GHVFULSWLRQVDVVSHFLƭHGLQ another area of activity for the recognition and allocation compared to the starting point.

65 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

  
'RQRVLJQLƭFDQWKDUP p'16+q The production plant concerned is subject to the German 7KHFULWHULRQIRU'16+WRpWUDQVLWLRQWRDFLUFXODUHFRQ-

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Economic activities 3.4 “Manufacture of batteries” and Environmental Impact Assessment Act (UVPG), which omy” does not apply to the manufactured battery compo-
5.4 “Renewal of waste water collection and treatment” includes an assessment of the impact on water in accor- nents, as LANXESS does not manufacture batteries and
ZHUHDQDO\]HGDFFRUGLQJWRWKH'16+FULWHULD7RDVVHVV GDQFHZLWK'LUHFWLYH(&7KLV'16+FULWHULRQLV the recycling of batteries is therefore not one of the compa-
the “climate change adaptation” criterion, physical climate not applicable for economic activity 5.4 “Renewal of waste ny’s economic activities. We will continue to regularly
ULVNVDQGFOLPDWHWUHQGVZHUHLGHQWLƭHGDQGWKHLUUHOHYDQFH water collection and treatment” at LANXESS, because the review whether it is possible to reuse battery materials
for the corresponding site assessed. With regard to the waste water is not used for irrigation. and to use secondary raw materials for the manufacture
VXSSO\FKDLQZHDOVRLQFOXGHGWKHULVNVIURPJRRGVƯRZ of battery components.
and logistics for the activity. In addition, qualitative scenario The substances LANXESS uses to manufacture battery
analyses for 2020, 2030 and 2040 were carried out with FRPSRQHQWVDUHYHULƭHGDVSDUWRIWKH/$1;(66SURG- Minimum safeguards
several suitable climate projections such as Representa- uct portfolio assessment process ( see “Sustainable Requirements of minimum social safeguards generally
tive Concentration Pathway (RCP) 4.5 and 8.5. In order Products,” page 57) and comply with statutory require- apply Group-wide at LANXESS and are not limited to
WRFRXQWHUWKHLGHQWLƭHGFOLPDWHULVNVPHDVXUHVIRUWKH ments. This strategic management tool systematically individual economic activities.
relevant site were devised in line with the company’s over- assesses and improves the sustainability performance of
all climate strategy ( see “Climate Action and Energy the LANXESS product portfolio with regard to economic, In the reporting year, we continued our work in the project
(ưFLHQF\qSDJH). The management of climate risks is environmental and social aspects. It ensures that economic group for the German Act on Corporate Due Diligence
an integral part of the LANXESS risk management system DFWLYLW\GRHVQRWFDXVHDVLJQLƭFDQWLQFUHDVHLQWKH in Supply Chains, which reports to the “People & Gover-
and is based on the TCFD requirements. HPLVVLRQVRISROOXWDQWVWRDLUZDWHURUODQGDQGWKXVIXOƭOOV nance” sub-committee, incorporated the requirements
the “pollution prevention and control” criteria described in for minimum safeguards and formalized our processes
The economic activity was also evaluated with regard Appendix C of the Delegated Act of June 2021. Accord- DFFRUGLQJO\,QWKHƭHOGRIFRUSRUDWHJRYHUQDQFHZH
to harm to “sustainable use and protection of water and ingly, we also review the use of substances that go beyond have long-standing management systems for compli-
marine resources.” The focus was on preserving water the prohibitions of current legislation. ance with human rights ( VHHp+XPDQULJKWVqXQGHU
quality, avoiding water stress and assessing the impact “Good Corporate Governance,” page 38), for monitoring
on water, as addressed in the LANXESS Water Program At LANXESS, we meet the requirement of the criterion for our supply chain ( see “Procurement,” page 21), for
( see “Safe and Sustainable Sites,” page 26). '16+WRpSURWHFWLRQDQGUHVWRUDWLRQRIELRGLYHUVLW\DQG anti-corruption ( see “Anti-corruption” under “Good
HFRV\VWHPVqE\ZD\RI+6(FRPSOLDQFHFKHFNV KHDOWK Corporate Governance,” page 40), for taxes ( Tax
safety and environment see also “Safe and Sustain- Guideline) and for fair competition.
able Sites,” page 23 2XUVLWHVDUHFHUWLƭHGDFFRUGLQJ
to ISO 14001. For the single relevant site, evidence was Further information on corporate governance at
provided that it is not located in a biodiversity sensitive LANXESS.
area.

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Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

 
Results In accordance with the current scope of the taxonomy, only of business acquisitions, the share amounts to 1.0%. All

NFR

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Sales LQGLYLGXDOSUHFLVHO\GHƭQHGSODQWVRUEXVLQHVVXQLWVZLWKLQ taxonomy-aligned capital expenditures comprise additions
In the reporting year 2022, LANXESS generated 8% of its WKH/$1;(66*URXSDUHDƫHFWHG'HWDLOHGDQDO\VLVDOVR to property, plant and equipment.
external sales with products allocable to taxonomy-eligible VKRZVWKDWPRVWSODQWVRIWKHDƫHFWHGEXVLQHVVXQLWVDUH

activities. The remaining 92% of sales relate to products needed for the manufacture of taxonomy-eligible products Operational expenditures

NFR
that are not included in the taxonomy’s activity categories. for these business units to be considered as a whole. In accordance with the Taxonomy Regulation, the ratio’s
The share decreased considerably year-on-year because denominator must cover direct non-capitalized costs that
WKHWD[RQRP\HOLJLEOHVDOHVIURPWKH+LJK3HUIRUPDQFH Capital expenditures relate to research and development, building renovation
0DWHULDOV +30 EXVLQHVVDUHQRORQJHUUHSRUWHGXQGHU In the reporting year 2022, the numerator is the share of measures, short-term leases, maintenance and repair.
continuing operations. additions from these investments and business acquisi- Any other direct expenditures relating to the day-to-day
tions that relate to taxonomy-eligible activities. The denom- servicing of assets of property, plant and equipment by the
As LANXESS’s taxonomy-eligible sales result exclusively inator of the ratio is the sum of additions to property, plant company itself or by third parties must also be included.
from production, the company’s main business activity, we and equipment and intangible assets from investments
GLVFORVHWKHƭJXUHVDW*URXSOHYHODQGGRQRWRWKHUZLVH and acquisitions, adjusted for acquired goodwill, which At LANXESS, operational expenditures comprise all
present them in clusters. In the reporting year, LANXESS can be found in the QRWHVWRWKHFRQVROLGDWHGƭQDQ- non-capitalized costs incurred in the reporting period
JHQHUDWLQJWRWDOVDOHVRIb{PLOOLRQFODVVLƭHGDVWD[RQ- cial statements on pages 189 and 191. The recognition in connection with research and development and the
omy-eligible. The taxonomy-aligned sales in the reporting and measurement rules as presented in the notes to the maintenance of our plants and buildings. According to
year were less than 1%. FRQVROLGDWHGƭQDQFLDOVWDWHPHQWVDSSO\DFFRUGLQJO\ a Group directive, these also include direct expenditures
relating to day-to-day servicing, through which we ensure
Capital expenditures and operational In the reporting year, the share of taxonomy-eligible capital WKHFRQWLQXHGDQGHƫHFWLYHIXQFWLRQLQJRIVXFKDVVHWV
expenditures expenditures was 3%. Therefore, the share of taxono- Short-term leases or leases of low-value assets are not of
Apart from one investment measure for wastewater my-non-eligible activities in our capital expenditures is material importance for LANXESS ( see consolidated
treatment (5.4. “Renewal of waste water collection and 97%. Due to our extensive M&A activities, we also report ƭQDQFLDOVWDWHPHQWV).
WUHDWPHQWq ZLWKZKLFKZHDFKLHYHGVLJQLƭFDQWO\PRUH DQDGGLWLRQDOUDWLRWKDWZHDGMXVWIRUWKHLQƯXHQFHRIEXVL-
HQHUJ\HưFLHQWSUHWUHDWPHQWRIDZDVWHZDWHUƯRZFDSLWDO ness acquisitions. In this analysis perspective, the taxon-
expenditures and operational expenditures in connection RP\HOLJLEOHVKDUHLQFUHDVHVWRDQGQRZUHƯHFWVWKH
with the acquisition of products or for individual measures capital expenditures attributable in 2022 to plants that
that result in the reduction of greenhouse gas emissions manufacture the taxonomy-eligible products. The share of
are immaterial and amount less than 1% of CapEx and taxonomy-eligible capital expenditures amounts to 0.5% of
OpEx. RXUFDSLWDOH[SHQGLWXUHV$IWHUDGMXVWPHQWIRUWKHLQƯXHQFH

67 Annual Report 2022 | LANXESS

Contents To Our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

 
The operational expenditures in connection with research, The ratio’s numerator covers those expenses for the Capital Expenditures Adjusted for M&A1)

NFR

NFR
development and patents include for example costs for our reporting year 2022 that relate to taxonomy-eligible, % 1.0
4.3
VFLHQWLƭFGHSDUWPHQWVDQGODERUDWRULHV7KHVHH[SHQGL- sales-generating activities. The denominator covers all
tures are reported in the Notes on page 217 in accor- non-capitalizable expenses for research, development
dance with IAS 38.126 et seq. Maintenance includes and maintenance.
all operating expenses for maintenance measures, over-
94.7
hauls of production plants, the implementation of legal In the reporting year, the share of operational expendi-
requirements and plant downtimes in the relevant report- tures for taxonomy-eligible products amounted to 8% of
ing period, which according to our accounting guidelines the total operating expenditures. Therefore, the share of
cannot be capitalized and are therefore not a component taxonomy-non-eligible operating expenditures is 92%. Taxonomy-aligned
of capital expenditures. This also includes direct expenses The share of taxonomy-eligible operational expenditures Taxonomy-eligible

for maintenance materials as well as external and internal amounts to 0.1% of our operating expenditures. Taxonomy-non-eligible

maintenance services. Costs for building modernization 1) Voluntary information.

that cannot be capitalized are immaterial and are not
reported separately.

Key Data Pursuant to EU Taxonomy Regulation

%
Sales Capital expenditures Operational expenditures
0.2 0.5 2.1 0.1
7.7 8.0

92.1 97.4 91.9

Taxonomy-aligned
Taxonomy-eligible
Taxonomy-non-eligible

68 Annual Report 2022 | LANXESS

 Contents To our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

 Proportion of Sales from Products and Services Associated with Taxonomy-Aligned Economic Activities
NFR

DNSH criteria
Substantial constribution criteria (“'R1R6LJQLƭFDQW+DUP”)

Taxonomy- Taxonomy-
aligned aligned
Climate Climate Water and Biodiversity Climate Climate Water and Biodiversity proportion proportion Category Category
Absolute Proportion change change marine Circular and change change marine Circular and Minimum of net sales, of net sales, (enabling (transitional
Economic activities Code(s) net sales of net sales mitigation adaptation resources economy Pollution ecosystems mitigation adaptation resources economy Pollution ecosystems safeguards 2022 2021 activity) activity)
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) (17) (18) (19) (20) (21)
Currency % % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % % E T

A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities
(taxonomy-aligned)
3.4. Manufacture of batteries C.27.20 15,606,000 0.2% 100% 0% Y Y Y Y Y Y Y 0.2% E
Net sales of environmentally sustainable
activities (taxonomy-aligned) (A.1) 15,606,000 0.2% 100% 0% 0.2% 0%
A.2 Taxonomy-eligible but not environmentally
sustainable activities
(not taxonomy-aligned activities)
3.14. Manufacture of other organic basic chemicals C.20.14 92,891,390 1%
3.17. Manufacture of plastics in primary form C.20.16 529,397,339 7%
Net sales of taxonomy-eligible but not
environmentally sustainable activities
(not taxonomy-aligned activities) (A.2) 622,288,729 8% 0%
Total (A.1 + A.2) 637,894,729 8% 0.2%

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Net sales of taxonomy-non-eligible
activites (B) 7,450,334,872 92%
Total (A+B) 8,088,229,602 100%

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 Contents To our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

 Proportion of CapEx from Products and Services Associated with Taxonomy-Aligned Economic Activities
NFR

DNSH criteria
Substantial constribution criteria (“'R1R6LJQLƭFDQW+DUP”)

Taxonomy- Taxonomy-
aligned aligned
Climate Climate Water and Biodiversity Climate Climate Water and Biodiversity proportion proportion Category Category
Absolute Proportion change change marine Circular and change change marine Circular and Minimum of CapEx, of CapEx, (enabling (transitional
Economic activities Code(s) CapEx of CapEx mitigation adaptation resources economy Pollution ecosystems mitigation adaptation resources economy Pollution ecosystems safeguards 2022 2021 activity) activity)
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) (17) (18) (19) (20) (21)
Currency % % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % % E T

A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities
(taxonomy-aligned)
3.4. Manufacture of batteries C.27.20 1,785,300 0.2% 100% 0% Y Y Y Y Y Y Y 0.2% E
5.4. Renewal of water collection, treatment
and supply systems E.37.00 2,847,200 0.3% 100% 0% Y Y Y Y Y Y 0.3%
CapEx of environmentally sustainable activities
(taxonomy-aligned) (A.1) 4,632,500 0.5% 100% 0.5% 0%
A.2 Taxonomy-eligible but not environmentally
sustainable activities
(not taxonomy-aligned activities)
3.14. Manufacture of other organic basic chemicals C.20.14 1,937,634 0.2%
3.17. Manufacture of plastics in primary form C.20.16 17,076,191 2%
CapEx of taxonomy-eligible but not
environmentally sustainable activities
(not taxonomy-aligned activities) (A.2) 19,013,825 2% 0%
Total (A.1 + A.2) 23,646,325 3% 0.5%

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of taxonomy-non-eligible activites (B) 869,663,854 97%
Total (A+B) 893,310,179 100%

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 Contents To our Stockholders Strategy Sustainability LANXESS on the Capital Market Corporate Governance Management Report Financial Statements Further Information

 Proportion of OpEx from Products and Services Associated with Taxonomy-Aligned Economic Activities
NFR

DNSH criteria
Substantial constribution criteria (“'R1R6LJQLƭFDQW+DUP”)

Taxonomy- Taxonomy-
aligned aligned
Climate Climate Water and Biodiversity Climate Climate Water and Biodiversity proportion proportion Category Category
Absolute Proportion change change marine Circular and change change marine Circular and Minimum of OpEx, of OpEx, (enabling (transitional
Economic activities Code(s) OpEx of OpEx mitigation adaptation resources economy Pollution ecosystems mitigation adaptation resources economy Pollution ecosystems safeguards 2022 2021 activity) activity)
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) (17) (18) (19) (20) (21)
Currency % % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % % E T

A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities
(taxonomy-aligned)
3.4. Manufacture of batteries C.27.20 340,950 0.1% 100% 0% Y Y Y Y Y Y Y 0.1% E
5.4. Renewal of water collection, treatment
and supply systems E.37.00 4,300 0.0% 100% 0% Y Y Y Y Y Y 0.0%
OpEx of environmentally sustainable activities
(taxonomy-aligned) (A.1) 345,250 0.1% 100% 0.1% 0%
A.2 Taxonomy-eligible but not
environmentally sustainable activities
(not taxonomy-aligned activities)
3.14. Manufacture of other organic basic chemicals C.20.14 3,958,413 1%
3.17. Manufacture of plastics in primary form C.20.16 33,570,558 7%
OpEx of taxonomy-eligible but not
environmentally sustainable activities
(not taxonomy-aligned activities) (A.2) 37,528,971 8% 0%
Total (A.1 + A.2) 37,874,221 8% 0.1%

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of taxonomy-non-eligible activites (B) 430,341,390 92%
Total (A+B) 468,215,611 100%

71 Annual Report 2022 | LANXESS