| Material Impacts, Risks and Opportunities in Respect of "Water and Marine Resources" | ||||||
|---|---|---|---|---|---|---|
| Type | Description | Time horizon1 | Location2 | Policies | Actions | Targets |
| Water withdrawals | ||||||
| Impact (potential negative) | The production of raw materials, refined materials, and intermediates involves water withdrawal. Covestro is linked to a potential negative impact on water scarcity through these activities. The water withdrawal can lead to multiple effects: decreased availability of drinking water, reduced flow rates affecting aquatic ecosystems, lowered groundwater levels resulting in decreased availability of drinking water, and subsidence in certain geological settings causing infrastructure damage. Additional impacts include saltwater intrusion in coastal areas and reduced dilution capacity resulting in poor water quality. | S, M | 1 | HSEQ management system, ESRS S2; Supplier Code of Conduct | ||
| Impact (potential negative) | Covestro operates in areas experiencing water stress, where unsustainable water withdrawal occurs. Through these operations, Covestro contributes to a potential negative impact on water resources. The unsustainable use of water in these water-scarce areas can lead to reduced agricultural productivity and potential conflicts over limited water resources, affecting access to food and water. | M, L | 2 | Risk-based water program; HSEQ management system | Covestro Water Program | |
| Impact (potential negative) | Water withdrawal occurs in Covestro's downstream value chain. Covestro is linked to a potential negative impact on water scarcity through these activities. The water withdrawal can lead to multiple effects: decreased availability of drinking water, reduced flow rates affecting aquatic ecosystems, lowered groundwater levels resulting in decreased availability of drinking water, and subsidence in certain geological settings causing infrastructure damage. Additional impacts include saltwater intrusion in coastal areas and reduced dilution capacity resulting in poor water quality. | S, M | 3 | HSEQ management system | ||
1 Time horizon broken down into short-term (S), medium-term (M) and long-term (L).
2 Location within the value chain divided into upstream value chain (1), own operations (2), and downstream value chain (3).
For further information, please refer to “Impact, Risk and Opportunity Management.”
For further information, please refer to “Strategy – Interests and Views of Stakeholders.”
Covestro takes a holistic view of water as a resource. The company uses water mostly for cooling and in production. The availability of and access to clean water is vital for our production sites. That is why water withdrawal is our main focus. However, we take not only our water withdrawal and the related problems of water scarcity and quality into consideration, but also the wastewater we generate together with growing concern about the pollution of this resource and the potential consequences for people and the environment. For this reason, our wastewater is subject to stringent monitoring and analysis in accordance with the applicable local legal requirements before it is discharged into disposal channels.
The basis for our activities in this area is our Corporate Commitment on Water. However, our production sites face a number of different situations to which we respond with a risk-based Water Program. This enables us to concentrate on those sites which currently face a risk or will do so in the future and to identify site-specific solutions. This is intended to strengthen the effectiveness of the Water Program and increase resilience for future challenges at our sites. In this context, we consider the water issue holistically, but also look in particular at the availability of and access to clean water.
In addition, the matter of water is also part of our integrated HSEQ management system, which sets out minimum standards at all Covestro sites. Our corporate Health, Safety, Environment and Energy, and Quality (HSEQ) policy commits us to working continuously on reducing environmental impacts resulting from our activities, products, and services. This also includes the protection of the oceans.
For further information, please refer to “ESRS E2: Pollution.”
The availability of and access to clean water are vital for our production sites. As part of our Corporate Commitment on Water, we initiated and have continuously refined a global risk assessment covering water availability, quality, and accessibility at all of our production sites.
Responsibility for the Water Program has been assigned to the corporate Group Health, Safety, Environment and Reliability (HSER) function, which reports to the Chief Technology Officer. The relevant sites are responsible for implementing locally defined goals and measures.
Areas with water stress were determined using the latest available data of the Aqueduct Water Risk Atlas of the World Resources Institute (WRI), based in Washington, D.C. (United States). In addition to physical risks such as water stress, our water risk assessment also includes potential regulatory risks at our production sites. Regulatory risks comprise, for example, access to drinking water or drinking water directives and other legal requirements. We also use other recognized tools to this end, such as the Water Risk Filter of the World Wide Fund for Nature (WWF).
In order to establish a suitable format to enhance understanding of the local and future water situation, a water dashboard, which also covers physical water risks, was created in the previous year and shared with our production sites. By analyzing the local water management at the sites, risks can be spotted at an early stage and potential for improvement can be identified. To drive water management and water protection, we have also set up a platform for regularly exchanging information and sharing best practice.
In 2023, we began the roll-out of a new context-based Covestro Water Program that aims to address water risks strategically and systematically. This program concentrates specifically on sites that are currently located in areas with water stress or could be located in such areas in the future, based on data from the World Resources Institute (WRI). The Program not only assesses direct and long-term water-related challenges such as water scarcity, pollution, and flooding, but also contributes to developing a better understanding of how this could impact the continuity and efficiency of operations at our production sites. By understanding the interactions between a site and the local watershed, the initiative can identify specific risks and opportunities, leading to the development of customized medium- and long-term action plans that may include the definition of local water-related targets. In addition, we conducted a criticality assessment in the reporting year to mitigate risk relating to water in order to determine a clear prioritization approach in the development and implementation of actions. To ensure effective implementation, the necessary resources are provided at both Group and site level. The Program is to be rolled out by 2030 and underscores our commitment to sustainable water management in areas with water stress.
We have currently not set any targets in accordance with ESRS for this target. As the Water Program progresses, we will get more insights into the matter and examine on an ongoing basis whether it makes sense to set Group-wide targets. Regardless of that, as a general rule, we strive to minimize the use of water and to use it several times and recycle it wherever possible.
We record our water figures to include all consolidated companies.* All nonconsolidated companies in the scope of consolidation were considered in accordance with the rights and obligations of the Covestro Group. In this process, we incorporate data from all environmentally relevant Covestro sites, i.e., all production sites and relevant administrative sites. Compared to the previous year, there were some changes relating to environmentally relevant sites, including one site closure, one sale, and the addition of a newly opened production site. Where these changes influence comparability of the metrics with the previous year, this is explained separately. In order to meet the disclosure deadlines, the sites estimate the environmental data for the last weeks of the current fiscal year using established extrapolation methods (e.g., on the basis of operations planning, averages, or data from the prior-year months) to ensure that data reporting is as precise as possible and close to the actual values for the year. If, however, in the course of the following year, we become aware of material deviations based on internally defined thresholds, the figures in question are corrected retroactively. This was not required in fiscal 2025 for the preceding fiscal year 2024.
Overall water withdrawal by the Group amounted to 250 million m3 in the reporting year (previous year: 247 million m3). The majority of the total volume of water used by Covestro is once-through cooling water. This water is used only for cooling and does not come into contact with products. After use, the cooling water is normally returned to its original source. Other quantities are disposed of as wastewater, which is discharged with or without treatment, depending on the wastewater quality and in accordance with the applicable environmental standard. The remaining quantity is used by Covestro. Typically, this includes evaporation losses from cooling towers or the water contained in products.
Sites in current areas with water stress account for 7% (previous year: 7%) of our total water withdrawal.
ESRS E3 Water and Marine Resources in principle also provides for qualitative and quantitative disclosures on anticipated financial effects from material water and marine resources-related risks and opportunities. In accordance with ESRS 1 Appendix C, as amended by delegated act 2025/1416 on July 11, 2025, Covestro continued to apply the phased-in approach to implementing the disclosure requirements in the reporting year. According to this expedient, the disclosures specified will not have to be made until the 2027 reporting year.