Less petrochemicals, more innovation.

In 2021, the construction chemicals manufacturer Sika was not yet able to present robust climate targets, despite high emissions compared to other Swiss companies. In the course of our dialogue, however, Sika has consolidated its CO2 measurement and developed a comprehensive reduction plan. If the company sticks to its chosen path and succeeds in the needed innovations, it can support its customer in the construction sector to transition to a low-carbon economy while strengthening its own position in the market.

As a major supplier to the construction sector, which is responsible for 40 percent of global CO2 emissions, Sika has a key role to play. But the company, which is based in Zug, Switzerland, and has seen strong growth and record sales in recent years thanks to the global construction boom, was unable to present robust climate plans in 2021. Climate data experts lacked trust in the published CO2 data and predicted a critical climate scenario for the company due to the lack of CO2 reduction plans. In response, the SVVK-ASIR and its partner Columbia Threadneedle initiated a two-year dialogue with Sika.

Sika makes up ground

During the dialogue, important progress was made. Three of the four targets set at the beginning were achieved, a good result. The first objective called for the disclosure of Scope 3 emissions, which make up the bulk of Sika's CO2 emissions (98%), the lion's share of which is attributable to purchased raw materials. Calculating these is no trivial task with a widespread supply chain of 18,000 suppliers, but it is the basis for a credible decarbonization plan. In November 2022, the company completed the calculation and set ambitious CO2 targets for its total emissions. It committed to net zero by 2050, and to signal fast action, it set a financial incentive by linking variable executive compensation to emissions reductions.

The most difficult road still lies ahead

Over the past three years Sika has significantly improved the reliability of its CO2 data and set ambitious climate targets. Now Sika is about to reach the next milestone: the external validation of its CO2 targets by SBTi, the Science-based Targets Initiative. SBTi validation is an important signal of a robust climate plan for investors. However, the most difficult and important part of the journey still lies ahead and involves the main sources of its emissions: Its raw materials, cement, and petrochemicals, are extremely CO2-intensive. Sika is driving forward the search for alternatives, for example, the use of low carbon cement or of chemicals derived from plant-based oils, such as used cooking oil, instead of crude oil. A third element is the recycling of Sika products at the end of their life cycle. This transformation is still in its infancy and requires close collaboration with suppliers and customers.

The prospect of growth

Sika has recognized the topic of sustainability as an opportunity and a potential for growth. In order to drive innovation and gradually adapt, the company also evaluates its existing product range according to twelve sustainability aspects. All new product launches must make a positive contribution, e.g. lower CO2 emissions than a comparable product. This is a welcome development and underpins the company's ambition to be a key partner for its customers on the road to net zero.