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Select SDGs to find out how we are taking action in support of the UN Substinable Development Goals

Climate Strategy

ICL’s climate strategy is based on multiple facets that work together to reduce ICL’s own GHG emissions, mitigate climate risks and explore opportunities that come into being from the transition to a low carbon economy. ICL’s commitment to decarbonization has been officially confirmed by the Science Based Targets initiative (SBTi). ICL’s journey on the road to decarbonization has begun to bear fruits, as its sustainable solutions are already playing a part in a transitioning world. Resilient food production systems are critical, now more than ever, for food security. ICL’s vital role is expected to expand as climatic uncertainty impacts humanity’s global supply chains. Our Zero Hunger goal (SDG2) is now intertwined with Climate Action (SDG13) and ICL’s solutions for energy storage supporting Affordable and Clean Energy (SDG 7) have a direct connection to Climate Action as well. \

ICL is a leading global specialty minerals company. Our capabilities can be an important enabler for the transition to a low carbon economy through development of innovative products and services. Industry is also a major consumer of fossil fuel-derived energy and thus an emitter of greenhouse gasses with an imperative to transition to net zero. 

Our decarbonization roadmap runs throughout the whole organization. ICL’s Board of Directors and senior management adjust the Company’s climate strategy to align with the aims of the Paris Agreement. As we continue our journey towards a more sustainable future, on March 16, 2023, the Science Based Targets initiative (SBTi) officially confirmed ICL’s commitment to setting a decarbonization plan in accordance with SBTi. In its 2021 Corporate Responsibility (ESG) report, released in May of 2022, ICL committed to becoming carbon neutral by 2050 (Scope 1 and Scope 2 emissions). The Company’s sustainability goals include a 30% reduction in absolute Scope 1 and Scope 2 GHG emissions and a call for renewable energy to represent 50% of total energy consumption by 2040, each compared to a 2018 baseline. These targets will be adjusted to reflect our SBTi commitment as we advance in the process. 

Task Force on Climate-related Financial Disclosures (TCFD)

We have included our second Task Force on Climate-related Financial Disclosure in ICL’s 2022 Annual Report. Within it we identified the physical risks to our business and the risks and opportunities associated with the transition to a low carbon economy.

We progressed further in our efforts to better understand the potential impact of climate-related risks and opportunities on the Company as well as to further embed TCFD recommendations into our public disclosure. We reviewed and updated the ‘top-down’ approach undertaken in our first year in line with our approach to assess risks and opportunities. We introduced financial stress-tests to evaluate the possible impact of various climate scenarios. We integrated climate-related risks into our formal ERM processes and applied a ‘bottom-up’ approach to climate-related risk and opportunity identification and verification, ensuring that awareness of climate-related issues is raised across all our segments, business units, sites, and geographic locations. Read more about our TCFD on pp.89-104 of our 2022 Annual Report.

Governance

Board-level Oversight of Climate-related Issues

To achieve these targets new governance structures were constructed to streamline decision making and actions. ICL’s Board of Directors is responsible for setting ICL’s overall strategic direction, including on sustainability, climate and ESG related matters. The Board views climate change as a material component of Company strategy. It has appointed the Climate, Sustainability and Community Relations Committee (CSC Committee) to oversight climate-related issues, including, climate-change risk assessment and mitigation plans, installation of renewable energy facilities, site decarbonization plans, implementation of circular economy activities, achieving water saving targets, implementation of policies relating to environmental impact, etc. Each meeting of the CSC Committee includes reviewing updates regarding the Company’s latest ESG related events, ESG risk assessments, and ESG management systems, as well as policies and regulations when relevant. In addition, the CSC Committee holds annual discussions regarding, among others, climate risk and mitigation measures, TCFD disclosure, the Company’s ESG Report and ICL’s sustainability KPI matrix & targets.

Executive Engagement

The Global Executive Committee (GEC), comprised of the senior executive management, meets on a weekly basis and is responsible for overseeing the Company’s actions, policies, and initiatives, ensuring that all ICL’s ESG and climate related risks are being appropriately addressed and managed, as well as rendering decisions on various issues including sustainability, climate and ESG matters. 

We are taking a systematic approach to reduce our GHG emissions across our global operations. ESG KPIs and targets, including climate related targets, have been embedded in executive measures for success and financial performance-based benefits for key executives.

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Strategy

Informing Current Strategy and Initiatives

Climate risk and opportunities factors are incorporated into our business strategy and operations to improve our short-, medium-, and long-term resilience.

ICL teams, each with its expertise, work to mitigate climate risks, including reducing GHG emissions, and to explore the opportunities that can manifest in a low carbon economy.

ICL continues to innovate, seeking to establish best practices, work to eliminate process inefficiencies and optimize operations to mitigate greenhouse gas emissions. We are tackling both Scope 1 & 2 GHG emissions and are currently in a process of assessing our Scope 3 emissions. We have established a dedicated team to implement energy efficiency projects across our sites throughout the world, as part of our Ambition Creates Excellence (ACE) program. The team refocused its efforts on delivering lower carbon solutions globally, and it is working to implement GHG reduction measures, as well as circular economy and water efficiency measures, as part of our decarbonization road map. Measures include transitioning to lower carbon fuels for both on-site power generation and process heating, electrification and increasing energy efficiency through phase out of inefficient production technologies, streamlining production facilities, and improved efficiency of heat and steam consumption. We also seek opportunities to increase the use of renewable energy as part of ICL’s fuel mix.

In parallel, our Global Procurement Organization (GPO) and Sustainability Unit participate in the effort to purchase electricity produced by renewable energy, as well as support capital investments to install onsite renewable energy production at ICL’s sites. This has led to success in Europe, the US and Brazil, where most of the purchased electricity consumed by our sites in 2022 was derived from renewable energy origins. We are also engaging in extensive training to raise awareness among ICL’s suppliers regarding sustainability, transparency, and carbon emissions reduction, as part of the industry wide TfS initiative and ICL’s effort to evaluate and reduce its Scope 3 emissions.

We use ICL’s innovation-building internal accelerator program (called BIG) to promote our GHG reduction breakthroughs. ICL’s Research, Development, and Innovation (RD&I) organization is established both short-term and long-term goals for GHG emissions reduction technologies. Research, redesign, and implementation of low carbon solutions are currently being introduced to mitigate process-based and product-based emissions and to meet future demands. In the short term, our RD&I organization will use its existing infrastructure to challenge internal and external partners to introduce solutions, such as advanced fertilizers that increase nutrient use efficiency and reduce water consumption. For longer-term solutions, using our core RD&I capabilities, we are developing products that address market needs and megatrends. Our plant-based protein products as alternatives to meat-based options and Energy Storage Solutions (ESS) to address electrification and renewable energy trends are two leading examples. Through our Open Innovation platform, we seek collaboration with entrepreneurs, researchers, innovators, and startups to foster innovation in these areas. Another path is ICL Planet Startup Hub, an innovation Food Tech and Agtech external accelerator we created to access startups with disruptive technology and help them scale up and go to market using ICL’s knowledge, experience, and strengths.

Recent examples include the development of products, such as advanced fertilizers that increase nutrient use efficiency and reduce water consumption, and the production of plant-based proteins as alternatives to meat-based options.

Our global finance teams are integrating ESG-related KPIs and GHG emission reduction targets and measurement capabilities into our financial reporting and planning. This includes creating the necessary data infrastructure (data quality and data management) and management infrastructure to enable and support proper decision-making processes, along with an increase in the transparency of our ESG performance with rigorous financial methodologies and metrics. With the proper infrastructure in place, we have been able to take advantage of financial opportunities, such as the Sustainability Linked Loan (SLL) that we secured in 2021. ICL further expanded and increased its commitments to ESG by entering into a Sustainability-Linked Revolving Credit Facility Agreement for a $1.55Bn credit facility (“Sustainability-Linked RCF”). The ESG KPIs include a reduction in Absolute Scope 1 & 2 GHG Emissions. Read more about our SLL & Sustainability-Linked RCF.

Shaping Future Strategy

The impact of climate change is being recognized throughout ICL main processes, and we are aligning our responses and actions to meet the accelerating pace of climate change. Climate risks and opportunity factors are incorporated into our business strategy and operations to improve our short, medium, and long-term financial and operational resilience. In alignment with TCFD definitions, physical risks and opportunities are those that occur as a result of climate change manifestations, whether occurring as chronic long term climatic changes or as acute episodic extreme weather events. Transition risks and opportunities are those that occur as a result of the transition to a low carbon economy, including legal and/or regulatory risks such as carbon pricing mechanisms, market supply and demand, litigation and reputation, and changes in key areas of technology.

The ICL TCFD program is designed to complement and augment ICL’s existing climate strategy and associated risk management. ICL has applied forward-looking scenario analysis to identify physical and transitional climate related risks and opportunities that could have a material financial impact on its business over short (0-3 years), medium (3-10 years) and long (10+ years) term time frames.

The Company is also evaluating other climate-related risks for future disclosure. These time horizons are representative of timelines associated with our short-term climate-related targets, our medium-term 2030 commitments on emissions reduction and discussions for longer-term 2050 climate-related strategies.

Physical and Transitions Climate Risks and Opportunities

Over the past several years, climate change and GHG emissions have been of increasing concern worldwide. Laws and regulations that govern climate change and GHG emissions already have certain impacts on ICL Group’s operations and may present transition risks for both the short and long term. 

Physical impacts related to Climate change may also have significant impacts on industries and the economy. These impacts may include extreme heat, water availability and quality, changes to sea level and temperature, increases in the frequencies and intensities of storms and droughts, as well as changes in the availability of natural resources, which could also result in damage to facilities or equipment. These physical risks have the potential to financially disrupt operations, upstream raw material supply and downstream distribution. A few of ICL’s sites, including its Dead Sea site in Israel, are located in an area that has been impacted by floods in the past. Physical risk can also occur when transport barges are unable to operate on key waterways. Such events have occurred along the Rhine River where summer water levels have impeded the transport of raw materials. 

Transition Risks

Policy and Legal
  • Exposure to carbon trading schemes, cross-border tax mechanisms and carbon taxes on energy and supplies [Short-medium]
Technology
  • Increasing requirements to invest in renewable electricity generation, storage and purchasing, due to external policies and internal targets. [Medium]
  • Increased investment in site operational improvements, such as energy efficiencies and optimization of production processes. [Short-medium]
Reputation
  • Increased stakeholder concerns and activism regarding operational and product-related environmental performance [Short-medium]
Markets
  • Reduced demand for ICL products used in the fossil fuel industry [Medium-Long]
  • Decrease in market demand for products with high carbon footprints [Medium-Long]
  • Increase in temperature and volatile precipitation, which can impact growing conditions and crop mix or disrupt fieldwork during the planting and growing seasons, may cause reduced demand for commodity fertilizers, in benefit of specialty fertilizers [Medium]

Climate-Related Opportunities

Markets [Increase revenue]
  • Increased demand for energy storage solutions (including LFP batteries and electrolytes)
  • Increased demand for enhanced efficiency fertilizers
  • Increased demand for low carbon products
  • Increased market demand for meat/dairy substitutes
  • Increased demand for flame retardants in various market segments due to higher global temperatures and electric mobility
  • Increased demand for renewable energy applications (PV and fuel cells) requiring photovoltaic grade phosphoric acid
Resource Efficiency & Energy Source [Reduce operating cost]
  • Sourcing renewable energy
  • Increase in renewable energy generation leading to a reduction in emissions and operating costs
  • Increased electrification of industrial processes leading to a reduction in emissions and operating costs
  • ICL’s dedicated program for operational excellence and resource efficiency
  • Adding state of the art technology and upgrading processes to collect, analyze and manage GHG data from all operations

  • Green hydrogen production in primary location [Long -term]

Products and Services [Increase revenue and portfolio value]
  • ICL is increasing focus on energy storage solutions, including bromine, phosphates, and high purity phosphoric acid for energy storage
  • ICL’s products offerings include climate-resilient fertilizers and low carbon fertilizers
  • ICL product offerings include specialty fertilizers and other products that contribute to use-phase efficiencies
  • ICL is developing its alternative proteins portfolio
Resilience [increased liquidity, strengthening portfolio]
  • Investment into R&D for low-carbon fertilizers, as well as meat and dairy substitutes
  • Strengthening our offerings of specialty fertilizers which include low-carbon products, as well as products based on circular economy and products aligned with life cycle regulation
  • Access to “Green Financing” opportunities
  • Investment in high potential energy storage solutions (ESS)

Risk Management

ICL has a formal and uniform Enterprise Risk Management (ERM) policy and procedures.

One of the purposes of the ERM process is to prioritize and determine the Company’s response to mitigate a risk at an acceptable level. This includes identifying, mapping, recording, and monitoring treatment actions. Risk treatment actions can have two objectives: reduce the impact (i.e., mitigate the impact of the event); or reduce the likelihood (i.e., prevent the event from occurring).

ICL has a process in place to identify risks, areas of impacts, their causes, and potential consequences, including climate-related risks. The aim is to manage a comprehensive list of risks (a risk register) based on those potential events that might prevent, degrade, or delay the achievement of the Company’s objectives. The risk identification process includes an examination of events which, if they materialize, may compromise the achievement of the Company’s objectives. Identifying climate-related risks was accomplished by conducting interviews with key personnel, as well as evaluating climate-benchmark and external information on material risks to industry. This also included implementation of financial stress-tests models on multiple climate scenarios to evaluate potential financial impact. All risks are categorized under a global unified ICL Risk Universe and are evaluated under a unified metrics scale

Integrating climate-risk into overall risk management

The Company has integrated climate-related risk into its formal ERM processes, including into its risk governance structure and in various categories under the ICL Risk Universe. Physical risks have been integrated on all risk levels. In 2022, transition risks were assessed at the corporate and segment levels.

For further information see Enterprise Risk Management. 

For our full Task Force on Climate-related Financial Disclosure see pp.91-108 in ICL’s 2022 Annual Report.

Sustainability Reporting Disclosures:
Disclosure: SASB RT-CH-110a.2
Disclosure: TCFD Governance a.
Disclosure: TCFD Governance b.
Disclosure: TCFD Strategy a.
Disclosure: TCFD Strategy b.
Disclosure: TCFD Strategy c.
Disclosure: TCFD Risk Management a.
Disclosure: TCFD Risk Management b.
Disclosure: TCFD Risk Management c.