Looking to Create More Value for Customers with Less Environmental Impact
Sustainability is a key component of the long-term growth strategy for the chemicals company Sika as it provides solutions to the construction, manufacturing, and transportation industries.
The specialty chemicals company Sika is committed to providing sustainable solutions to the construction, manufacturing, and transportation industries. It works to help companies that use its products reduce their resource consumption. Sustainability is also a guiding principle of the firm’s growth strategy.
Helping Customers Reduce Their Carbon Footprint
Sika strives to have all its products developed with a “sustainable solutions” perspective, which encompasses Sika’s goal of being a pioneer in the delivery of a comprehensive portfolio of solutions that can deliver both higher performance for customers and improved sustainability on the environmental and social fronts. Its technology enables the construction, manufacturing, and transportation industries to make progress with their efforts to use less water and reduce their need for heating, ventilation, and air conditioning systems, while working toward Sika’s overall goal of having a climate-neutral impact.
Twenty-five percent of the company’s sales come from products developed in the past five years, when sustainability has been a primary focus. Sustainability is a key goal of all its current product development, and 70 percent of the products Sika offers today can deliver sustainability benefits. The firm is working to reach 80 percent within the next few years. Examples of its sustainable solutions include the following:
• Bio-based concrete: Regular concrete includes components chemically produced from oil-based raw materials. Sika’s ViscoCrete replaces those materials with renewable vegetable substances that are waste from sugar production. In addition to the ecological benefits, this product can perform its construction functions better than traditional concrete.
• Bio-based mortars: Sika’s PARNATUR is the first easy-to-spray thermal and phonic insulation hemp-based mortar. Hemp concrete is a 100 percent natural solution with a high CO2 storage coefficient, and it is fully recyclable.
• Waterproofing: Sika delivers waterproofing solutions that can help buildings increase their energy efficiency, lower their carbon footprint, reduce their greenhouse gas emissions, and minimize waste.
• Flooring: Sika provides flooring systems that use less energy and resources than other flooring systems, thereby helping buildings to reduce their carbon footprint.
Determined to Deliver More Value with Less Impact
In looking to reduce the environmental and social consequences of its own operations, Sika has a sustainability strategy called “More Value—Less Impact” with six targeted goals. The first three relate to the environment. These goals are to improve climate performance, reduce energy consumption, and minimize water usage and waste generation. Two of the goals are social and entail improving community engagement and occupational safety. The final goal covers delivering more sustainable solutions that make an environmental and social impact. The company has already made significant progress toward reaching these goals, while being candid when it falls short and explaining what it plans to do to remain on track with its long-term sustainability objectives.
• Climate performance: In 2021, the firm achieved a 10.1 percent reduction of CO2 emissions per ton of products sold.
• Energy consumption: Because of the inclusion of fuel for leased vehicles in its calculations, the firm experienced a 7.7 percent increase in energy consumption per ton sold in 2021. Still, it was on track with a 15.1 percent decline in this metric from its 2019 baseline. By 2023, the firm wants to decrease its energy consumption by 15 percent per ton sold and increase the share of electricity it obtains from renewable energy sources.
• Waste generation and water consumption: In 2021, the firm generated 9.6 percent less waste per ton sold, and 33.9 percent of its waste was recycled. It also used 9.7 percent less water per ton sold.
• Community engagement: Last year, 1,392 of Sika employees’ working days were dedicated to volunteerism, a 24.4 percent increase from 2019. In local communities, 242 projects were carried out, and 44,188 people benefited from the firm’s community engagement program.
• Occupational safety: The firm experienced 256 lost-time accidents in 2021. That was an 11.3 percent increase from 2020. Still, the firm saw a slight decline—1.9 percent—in lost-time accidents from 2019. By 2023, the firm is striving to have a 50 percent reduction in the lost time that its employees and contractors experience from workplace accidents.
• Sustainable solutions: As noted above, the firm works to have all its products developed with a “sustainable solutions” perspective, as it looks to offer a suite of products that deliver higher performance and improved sustainability on the environmental and social fronts.
A Corporate Culture and Structure That Fosters Sustainability.
In 2021, Sika named a new chief innovation and sustainability officer, who is also a member of the firm’s management group. Part of that person’s mission is to integrate sustainability into all levels of the organization and to be a vocal leader for sustainability in the industry. Managers throughout the firm are involved in all the details of planning for and measuring the firm’s progress toward its sustainability goals. With its long-term planning, Sika is working to define a carbon reduction pathway that will help the firm contribute to the United Nations’ goal for the world to reach net-zero by 2050.
Sustainable Development Goals
The Sands Capital six investment criteria tend to lead us to businesses that are innovators or vital facilitators of change in industries undergoing significant transformation. Sika is one of many portfolio businesses that create impact by addressing at least one major social or environmental challenge identified by the United Nations Sustainable Development Goals (SDGs). Sika’s efforts support SDG 3, Good Health and Well-Being; SDG 6, Clean Water and Sanitation; SDG 8, Decent Work and Economic Growth; SDG 11, Sustainable Cities and Communities; SDG 12, Responsible Consumption and Production; and SDG 13, Climate Action.
Source for all information and data: Sustainability Strategy (sika.com).
The business profiled was selected based on its reported alignment with one or more U.N. Sustainable Development Goals. The views expressed are the opinion of Sands Capital and are not intended as a forecast, a guarantee of future results, investment recommendations, or an offer to buy or sell any securities. The views expressed were current as of the date indicated and are subject to change. This material may contain forward-looking statements, which are subject to uncertainty and contingencies outside of Sands Capital’s control. Readers should not place undue reliance upon these forward-looking statements. There is no guarantee that Sands Capital will meet its stated goals. Past performance is not indicative of future results. All investments are subject to market risk, including the possible loss of principal. Differences in account size, timing of transactions and market conditions prevailing at the time of investment may lead to different results, and clients may lose money. A company’s fundamentals or earnings growth is no guarantee that its share price will increase. The specific securities identified and described do not represent all of the securities purchased, sold, or recommended for advisory clients. There is no assurance that any security will continue to be owned by Sands Capital. All investments are subject to market risk, including the possible loss of principal. You should not assume that any investment is or will be profitable. Company logos and website images are used for illustrative purposes only and were obtained directly from the company websites. Company logos and website images are trademarks or registered trademarks of their respective owners and use of a logo does not imply any connection between Sands Capital and the company. GIPS® Reports and additional disclosures for the related composites may be found at https://www.sandscapital.com/GIPS-Report. PT#20220186