Solvay : 2020 Integrated Report

Essential

and 2020

Integrated Report

Stronger

Our SolvaLite™ composites are up to 40% lighter than metal, allowing manufacturers to create

lighter and more energy-efficient vehicles that contribute to reducing CO2 emissions.

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Contents €963M

Solvay's Udel® PSU is a polymer used in a variety of membrane filtration applications, such as renal dialysis, water treatment, and bioprocessing. An estimated 3 million people worldwide are being treated with hemodialysis

1 - 2020 at a glance  2

About this report  3 Presidents' messages  4

Nicolas Boël,

Chairman of the Board of Directors  4

Ilham Kadri,

President of the Executive Committee and CEO  6

Key figures  8

10 Highlights of 2020  10

2 - Accelerating our strategy  13

G.R.O.W strategy in action  14 Accelerating our transformation  19 Solvay One Planet sustainability roadmap  24 Innovate to fuel our growth  32

3 - Steadfast governance  36

Strong governance bodies  37

Compensation policy  40

Materiality analysis  42

Risk management  43

Sustainability from Board to shop floor  46

4 - Ready for the rebound  48

In step with global business trends  49 Sustainable value creation model  62 Value chain  64

2020 Scorecard  66 Ratings  70

2021 Outlook  71

Free cash flow to Solvay shareholders from continuing operations

• 9

€15M

collected by

Solvay Solidarity Fund

• 95

3.75*

Dividend

in € per share

• 9

5 - Essential for all  72

Markets  73 Case studies  85

Progressing with our stakeholders  92 Bonding stories

Bonding for a Better life:

Our commitment to responsible capitalism  94

Bonding with communities:

A Citizen Day dedicated to virtual education  100

Bonding to advance circular batteries of the future: Partnership with Veolia and Renault  104

Bonding with customers to reduce emissions: Our collaboration with Givaudan  108

This report is also available online with additional, interactive features.

• reports.solvay.com/ integrated-report/2020

For greater insight into the Group, visit our corporate website: www.solvay.com

*Recommended to the Shareholders meeting on May 11, 2021

membranes made from our products.

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About this report

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2020 at a glance

Our Rhovanil® Natural CW is the natural vanillin reference for food and flavor applications. Bio-sourced from natural raw materials, it provides the pure and sweet vanillin note characteristic of vanilla.

Solvay in 2020

Solvay's 2020 Integrated report highlights how, facing an unprecedented crisis, we demonstrated that we are ESSENTIAL to customers, employees, and local communities, and brought our Purpose - We bond people, ideas and elements to reinvent progress - to life. We advanced our G.R.O.W. strategy by accelerating our transformation into ONE more efficient and agile Group and stepping up our sustainability commitments. We focused on cash management, prioritizing costs control and investing selectively, generating a record level of cash. This enabled us to emerge STRONGER from the crisis. By focusing on our customers and their needs, and improving earnings quality, we have been preparing for the rebound; we are managing the short term while investing in a strong innovation pipeline for growth.

The report tells the story of Solvay during this year, providing details on how we addressed the crisis together with employees, customers, shareholders and partners. Through dedicated "stories", the report showcases how we bonded with our stakeholders, listened to their expectations, and worked with them to find solutions that help fight climate change, preserve natural resources and improve quality of life. It also looks at the challenges the Group faces and the steps we are taking to address them.

Moving ahead on our integrated management journey

Solvay's fifth Integrated Report reflects our progress on

an integrated management journey that began in 2012 when the Group introduced an integrated thinking approach to strengthen the connection between its businesses, sustainability and finance. Since then, our business and product portfolio decisions have been made with both economic value creation and sustainability in mind. We also build on our stakeholders' feedback to improve our report over the years.

In November 2020, we went one step further. Our CEO signed a commitment with the World Economic Forum International Business Council (IBC) to pilot a new set of metrics for stakeholder capitalism aligned with the Manifesto published at Davos in 2020. Solvay already discloses most of the core sustainability information and accounting metrics in the WEF report "Measuring Stakeholder Capitalism - Towards Common Metrics and Consistent Reporting of Sustainable Value Creation".

Our Integrated Report over the years

2016 2017 2018 2019

Solvay's first	Presentation of	Clarification of	Introduction
Annual Inte-	our portfolio	our Business	of our Purpose,
grated Report:	transformation;	model; stories	G.R.O.W.
it is fully digital	it highlights the	on how we	strategy
and includes	value created	engage with	and Solvay
the GRI content.	for our stake-	stakeholders.	One Planet
	holders.		sustainability
			roadmap.

2020 Integrated Report

As part of the Group's integrated management journey, Solvay's Integrated Report is the result of a close collaboration between the Communications, Investor Relations and Sustainable Development functions. The 2020 Integrated Report has been approved by the Executive Committee.

Solvay's Integrated report is fully digital and aligned on the guiding principles and content elements of Integrated Reporting, as defined by the International Integrated Reporting Council (IIRC). The Management report provides further details and is available as a downloadable document (Annual Report).

Scope of this report

Solvay's 2020 Integrated Report provides material information on Solvay for the year ending December 31, 2020. Based on the International Integrated Reporting Council (IIRC) principles and elements of content, it builds on last year's report, integrating feedback from our stakeholders, including recognized bodies such as the World Business Council for Sustainable Development (WBCSD). It is aligned with the GRI Standards and the WBCSD's ESG Disclosure Handbook. Solvay has been reporting alignment to the TCFD recommendations for four years.

Solvay bases its materiality analysis on the SASB Materiality Map® list of material aspects and prioritization criteria, and discloses most of the sustainability disclosure topics and accounting metrics listed in the SASB Chemicals Sustainability Accounting Standard version of October 2018. The report contents also serve as a progress report on the implementation of the ten principles of the UN Global Compact and the Sustainable Development Goals (SDGs).

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2020 made us proud to be Solvay

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"Solvay is a caring company, which sought to soften the consequences of the crisis for its employees and reward them for their exceptional efforts."

by Nicolas Boël, Chairman of the Board of Directors

Looking back at 2020, beyond the superlatives which have been widely used to describe an "unprecedented" year, I observed that the crisis brought about pressing challenges on three fronts, prompting our Group to pursue a threefold mission.

First, Solvay needed to continue operating, in the face of an overwhelming health and subsequent economic crisis, which were the most severe our Group had witnessed since World War II. Second, we wanted to generate cash to be able to face the crisis, keep implementing our G.R.O.W. strategy and continue our transformation. Third, in a context of global lockdown, with some 10,000 employees working from home, a sizable portion of our workforce on furlough and tremendous pressure on everybody, it was imperative that we maintain

the bonds that unite us and define us as a company.

We all adapted, fast, with dedication and agility. The Board of Directors played its part, modernizing its ways of collaborating as a team. We increased the frequency of our meetings and made them more focused, more informative: our objective was to decrease the organization's level of anxiety and stress by bonding more intensely, by exchanging more information and taking quick decisions. We concentrated on what was essential

• and we have consequently reached in my opinion a very high level of trust and collaboration. We fulfilled our mandates with diligence, earnestly and constructively challenging the projects presented for our review - it was positive energy.

The same positive energy prevailed across the entire organization. And it paid off, as you saw in our financial results, which allowed Solvay to create value for its shareholders while at the same time protecting and rewarding its employees and investing for the future. Solvay is staying true to its dividend policy, even in these extraordinary circumstances. Our Group indeed proposed to maintain the 2020 dividend at €3.75 per share. On behalf of the Board of Directors, I want to express my sincere gratitude to the people of Solvay for outstanding results and for their unrivalled engagement through this multifaceted crisis.

Solvay is a caring company, which sought to soften the consequences of the crisis for its employees and reward them for their exceptional efforts. To support those who suffered the severest hardship, we have taken solidarity to a new level, building on Solvay's roots and on our historical track record of responsible capitalism. The Solvay Solidarity Fund collected

a total of €15 million from Solvay employees, from the Group's leadership team who relinquished 15% of their salaries, from Board members and from shareholders. I extend once again my

deepest gratitude to all. Together, we are alleviating the suffering of employees and their families; together, we are even saving lives in our communities, as we for instance activated the Fund to the benefit of the new Covid section in the hospital located next to our plant in Devnya, Bulgaria. In India, we mobilized the SSF to help guar farmers, whose livelihood was jeopardised by the crisis. In total, the Fund provided financial support worldwide to 1,600 families last year.

I would say that we are emerging from 2020 feeling proud of Solvay, even perhaps a little more so than in previous years. I certainly am, and I observe it around me among the different stakeholder groups who bond to constitute the Solvay people. We have made decisions - some of them were difficult, with an impact on the organization and consequently, employment. But we always balanced safety, business, financial performance, communities and welfare. Speed and agility were indispensable, but not forced upon us: we acted quickly because we all concurred it was the just thing to do. That gave us the strength to face and overcome daily challenges while at the same time preparing Solvay for the future.

Nicolas Boël

Chairman of the Board of Directors

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We reinvented progress in 2020

Within days, teams had transformed Solvay facilities to churn out urgently-needed,life-saving products. Solvay donated over 700,000 liters of hydrogen peroxide; 350,000 facemasks; 114,000 pieces of Personal Protective Equipment; 1,000,000 bottles of disinfectant gel; materials to produce over 6,700 reusable face shields… The page compiling our colleagues' initiatives was buzzing with an uninterrupted flow of generous news, acting as an emotional reminder that our activities are essential to the world. Governments concurred - and asked us to keep operating through all lockdowns, worldwide.

As a final illustration of our ability to prepare for the future while at the same time navigating the crisis, we unveiled in 2020 our new sustainability ambition, Solvay One Planet, which is inspired by the United Nations Sustainable Development Goals. It features ten measurable commitments in three key focus areas: climate, resources and better life, which we presented to investors at a dedicated ESG webinar on October 2, 2020. We are for instance eliminating the use of coal for energy production, accelerating the circular economy and making paid parental leave accessible to all employees, worldwide, irrespective of gender or sexual orientation.

2020 was the year we unveiled our Company Purpose… and literally just a few weeks after our inspiring inauguration, the tidal wave of Coronavirus submerged the world. With today's hindsight,

I embrace this concomitance gratefully, because the outbreak and its consequences - albeit dramatic

• allowed us to live our Purpose in full: "We bond people, ideas and elements to reinvent progress" was our beacon, our North Star. We demonstrated

by Ilham Kadri, President of the Executive Committee and CEO

that we were essential to the world and we actually capitalized on the crisis, accelerating reforms to unleash our company's full potential. Today, I can proudly assert that we have emerged stronger.

As an industrialist, I am first and foremost satisfied to see that Solvay has become a safer workplace: last year, fewer colleagues than ever before sustained an injury requiring medical treatment.

2020 also turned out to be the most opportune year to nurture our special bonds with our customers, if only to keep the supply chain operating smoothly, even though half of the globe was under lockdown. But we went beyond: we remained at their service, we adapted to their unprecedented challenges, we proposed solutions and even won new customers! One touching anecdote illustrates our state of mind - our customer obsession - which prevailed at the time: when Boeing was asked by the US government to manufacture face shields to protect lives, they turned to Solvay for support and high performing materials. It is no coincidence: our ambition is to be the first ones our customers call, always. Many of them actually called us to share their worries as they were facing starkly declining markets - which in turn prompted us to quickly adapt.

We took immediate measures to rein in our own production and furloughed a large portion of our workforce. At the same time, because we cherish our bonds with our employees, we immediately put in place a safety net to limit the social impact of the general slowdown. With the generous support of our Group leaders, our employees and our shareholders, we also created the Solvay Solidarity Fund to alleviate the hardship endured by the most severely hit. We kept in constant contact, with some 10,000 people working from home, through regular surveys and frequent webcasts open to all, during which I explained how we were navigating the crisis. On those occasions, our employees also expressed particular pride in our ability to support our communities.

Our reactiveness as well as our ability to bond with our stakeholders allowed us to navigate the crisis successfully, which is reflected in our financial performance: 2020 was a year in which Solvay achieved an unprecedented level of Free cash flow. This made it possible, in turn, to remunerate our shareholders and pay a special reward to our employees, while at the same time unlocking investments for the future and maintaining our R&I effort.

"Today, I can

proudly assert that we have emerged stronger."

Two innovations which we brought to the market in 2020 were particularly noteworthy in times of Covid: Amni® Virus-Bac OFF, a solution to make textile yarn permanently antiviral and antibacterial, hence blocking the retransmission of viruses.

And our ActizoneTM disinfection technology protects surfaces for 24 hours, killing more than 99.9% of bacteria and viruses, including the flu and human coronavirus. Looking further and beyond, we were proud to announce the creation of a hydrogen platform that will bring together all of our innovative material and chemical solutions to advance the emerging green hydrogen and fuel cells economy, where we see a potential addressable market of €3 billion for the Solvay group.

The Hydrogen platform as well as its Batteries and Thermoplastic Composites (TPC) peers are instrumental in Solvay's G.R.O.W. strategy, which we have begun deploying resolutely in 2020

• even though the crisis has prompted us to defer the Growth perspectives of our "G" segment. As part of our strategy, we have further accelerated the simplification of our portfolio with seven divestment operations totalling some €1.8 billion in net sales - including Polyamides. In the first quarter of 2020,
  we also aligned the structure of our GBUs, where relevant, to their new missions as set in our G.R.O.W. ambition. Furthermore, we have undertaken preparations for a sweeping reorganization of our business support activities, called WeShape, which was effectively launched at the outset of 2021.

I am particularly proud that we raised the bar once again,

as we aligned with the Science Based Targets initiative and decided to reduce our Greenhouse gas emissions twice as fast than under our previous goal for 2030, effectively closing up with

a Paris Agreement trajectory. We more than lived up to our commitments last year, as we substituted coal for cleaner energies in two important production sites. Our emissions fell by 20%, including an 8% structural decrease (unrelated to the global economic slowdown) since 2018, which is more than twice the annual average dictated by the Paris Agreement.

We are honored to see our sustainability achievements acknowledged by independent observers. Yet we must keep progressing, with objectivity and transparency. We at Solvay acknowledge that we are in some instances not yet where

we want to be, and we are activating all the levers we have at our hand to find solutions where needed. Even more importantly, we know for certain that we are part of the solution to create a better world for our children. Chemistry is the mother of all industries and we are present in every value chain; our innovation is instrumental to separate, combine and recombine elements, making products and materials more durable and reusable. Without us, there will be no green hydrogen, no zero emission cars or no circular economy.

We are consequently certain that the combination of our agility in times of crisis, our ability to reinvent ourselves and to develop innovative solutions, all inspired by an engaging purpose, opens fabulous opportunities to create sustainable shared value for all - for our clients, our employees, our shareholders and for the generations to come.

Ilham Kadri

President of the Executive Committee and CEO

Bonding for a better planet:

Our sustainability performance in 2020

Watch the video

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