Innovating for a Sustainable Future - Sustainability Report 2012 - Croda

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Innovating for a Sustainable Future - Sustainability Report 2012 - Croda
Innovating for a
Sustainable Future

Sustainability Report 2012
Innovating for a Sustainable Future - Sustainability Report 2012 - Croda
01

                                                                                                                                               Our Highlights

Introduction                            At Croda, we strive to create value for our
                                        shareholders by driving sales growth through
                                        successful new product development, moving ever
                                        closer to our customers and increasing our focus on
                                        fast growing markets. We are a business committed
                                        to financial growth, high returns, environmental
                                        protection and social progress. In today’s world, we
                                        recognise that people not only want to look and feel                                                                                                                                              Return on Sales 2008-2012 (%)
                                        good, they increasingly want to use top performing                                                                                                                                                25

                                        products made from renewable raw materials.                                                                                                                                                       20
                                                                                                                                                                                                                                          15
                                                                                                                                                                                                                                          10
                                                                                                                                                Ranked 25 in the Global Top 100
                                                                                                                                                          th
                                                                                                                                                                                                  From March 2012                         5

                                                                                                                                                Most Sustainable Corporations                                                             0
Reporting Parameters                    This report covers the sustainability performance
                                        of the Group for the period from 1 January 2012
                                                                                            We acquired Istituto Di Ricerche Biotecnologiche
                                                                                            (IRB) in July 2012 and in December we               and number one in the UK                                                                       2008 2009 2010   2011   2012
                                        to 31 December 2012.                                purchased the trade and assets of Innovachem
                                                                                            LLC. Due to the timing and nature of these
                                        The scope of this report covers all fully managed

                                                                                                                                                £1,051.9m                                         £255.4m
                                                                                            investments, their activities have not been
                                        operations. This includes all of those functions    included within this report. Performance data
                                        controlled by our Board and Group Executive         from our Cremona manufacturing site in Italy
                                        Committee, who are responsible for policies,        has also been excluded, due to its disposal in
                                        standards and performance.                          November 2012.
                                                                                                                                                Revenue*                                          Operating profit*
                                                                                                                                                2011: £1,028.0m   2.3%                            2011: £237.7m 7.4%
                                                                                            www.croda.com/csr

Contents                                Business Overview
                                        Our Highlights
                                        Chief Executive’s Statement
                                                                                     01
                                                                                     02
                                                                                            Employees
                                                                                            Recruitment & Retention
                                                                                            Compensation & Benefits
                                                                                                                                         22
                                                                                                                                         23
                                                                                                                                         24
                                                                                                                                                                                                               130.0p                                59.5p
                                        Our Business                                 03     HR Policies & Systems                        25                                                                    Earnings per share*                   Dividends per share
                                                                                            Talent Management & Employee                                                                                       2011: 120.1p 8.2%                     2011: 55.0p 8.2%
                                        Strategy & Governance                               Development                                  26
                                        Our Sustainability Approach                  04     Performance Management                       28
                                        Our Targets                                  06
                                                                                            Corporate Stakeholders                       29

                                                                                                                                                                         15.2                                   50                                   66.3
                                        Environment                                  08     Corporate Stakeholder Engagement             30
                                        Air Quality & Climate Change                 09     Ethical Supply Chain                         31
                                        Water Quality & Supply                       11
                                        Land Impact                                  12     Community                                    32
                                                                                            Community Communication                      33                              Energy from non-fossil                 Reduction in waste to                Materials used from
                                        Health & Safety                              13     Community Involvement                        34                              fuel sources*                          landfill since 2010*                 renewable sources
                                        Process Safety Management                    14     Community Education                          36
                                        Occupational Health & Safety                 15
                                                                                            GRI Index                                    38
                                        Responsible Sourcing                         17
                                        Renewable Raw Materials
                                        Responsible Palm Oil Sourcing
                                        Product Data Gathering
                                                                                     18
                                                                                     20
                                                                                     21
                                                                                            Contact Us and Glossary                      40
                                                                                                                                                                         75                                    92,668                                4,541
                                                                                                                                                                         Employee Save As You Earn              Training hours covering              Employee volunteering
                                                                                                                                                                         Scheme membership in the UK            85% of employees                     hours through our 1% Club
                                                                                                                                                                         and 48% of non-UK employees

                                                                                                                                                                         *Continuing operations

GRI Profiles: 2.1-2.10, 3.1, 3.6, 3.8   GRI Indicators: EC1, EN1, LA1
Innovating for a Sustainable Future - Sustainability Report 2012 - Croda
Our Operations

Locations                          Environment         Health &
                                                        Safety
                                                                    Responsible
                                                                     Sourcing
                                                                                     Corporate
                                                                                    Stakeholders
                                                                                                   Employees      Community
                                                                                                                                                                                                                                                   Environment   Health &    Responsible       Corporate        Employees     Community
                                                                                                                                                                                                                                                                  Safety      Sourcing        Stakeholders

We are a global organisation with 3,288                                                            Americas
employees across 34 countries. By being                                                                                                                                                                                                                                                                      Europe
                                                                                                               Employees                   Total Revenue
close to our customers around the world,                                                                                                                                                                                                                                                                                    Employees                      Total Revenue

                                                                                                   680
                                                                                                               20.7% of Group Total        36.4% of Group Total

                                                                                                                                      £383.4m
                                                                                                                                                                                                                                                                                                             1,989
                                                                                                                                                                                                                                                                                                                            60.5% of Group Total           41.2% of Group Total
we have a collaborative approach toEnvironment         Health &     Responsible      Corporate     Employees      Community

                                                                                                                                                                                                                                                                                                                                                     £433.4m
                                                        Safety       Sourcing       Stakeholders
                                                                                                                                                                                                                                                   Environment   Health &    Responsible       Corporate        Employees     Community
                                                                                                                                                                                                                                                                  Safety      Sourcing        Stakeholders

business, which allows us to respond
quickly and efficiently to unmet needs.                                                                                               3 Manufacturing Sites 8 Sales Offices
                                                                                                                                                                                                                                                                                                                                                      10 Manufacturing Sites 14 Sales Offices

Revenue & Value Added
Bought in Materials and Services                                            Value Added
£608.5m                                                                        £443.4m                                                                            Environment   Health &
                                                                                                                                                                                 Safety
                                                                                                                                                                                           Responsible
                                                                                                                                                                                            Sourcing
                                                                                                                                                                                                          Corporate
                                                                                                                                                                                                         Stakeholders
                                                                                                                                                                                                                         Employees     Community

                                                           To Employees           £175.0m
                                                                                                                                                                                                                        Asia Pacific
                                                      To Governments              £78.1m
              Revenue                                                                                                                                                                                                                Employees                              Total Revenue
             £1,051.9m                           To Providers of Capital          £79.0m

                                                                                                                                                                                                                        619
                                                                                                                                                                                                                                     18.8% of Group Total                   22.4% of Group Total

                                                                                                                                                                                                                                                                      £235.1m
                                                                                                                               Head Office                        Environment   Health &   Responsible    Corporate      Employees     Community

                                          Retained in the Business                £111.3m                                      Manufacturing Sites
                                                                                                                                                                                 Safety     Sourcing     Stakeholders

                                                                                                                               Sales Offices
                                                                                                                                                                                                                                                                      4 Manufacturing Sites 11 Sales Offices

Products & Markets

We are a supplier of speciality chemicals so, whilst our name is not seen on the high
street, millions of people throughout the world benefit on a daily basis from the many
thousands of consumer and commercial goods that incorporate our products.

  Consumer Care                                                  Performance Technologies                                     Industrial Chemicals                                                                   Employee Overview                                                                                                          Raw Materials by Source
  Revenue                                                         Revenue                                                        Revenue                                                                                Gender Split                                                       Age Profile
                                                                                                                                                                                                                                                                                                        11.1% 0.3% 6.7%

  £586.4m
  55.7% of Group Total
                                                                  £382.8m
                                                                  36.4% of Group Total
                                                                                                                                 £82.7m
                                                                                                                                 7.9% of Group Total
                                                                                                                                                                                                                        32%
                                                                                                                                                                                                                                                                                                             17-25 years                  26.7%
                                                                                                                                                                                                                                                                                                                                                   33.7%

                                                                                                                                                                                                                                                                                                             26-35 years
                                                                                                                                                                                                                                                Male                                                         36-45 years                                        Renewable
                                                                                                                                                                                                                                                                                   25.8%
  Operating Profit                                                Operating Profit                                               Operating Profit                                                                                              Female                                                        46-55 years                                       Non-renewable
                                                                                                                                                                                                                                                                                                             56-65 years

  £185.4m
  72.6% of Group Total
                                                                  £59.7m
                                                                  23.4% of Group Total
                                                                                                                                 £10.3m
                                                                                                                                 4.0% of Group Total
                                                                                                                                                                                                                                                                    68%
                                                                                                                                                                                                                                                                                                              66 years+

                                                                                                                                                                                                                                                                                                                                                                                    66.3%
                                                                                                                                                                                                                                                                                                                   29.4%
Innovating for a Sustainable Future - Sustainability Report 2012 - Croda
02                                                                                                                                                                                                                                                             03

     Chief Executive’s Statement                                                                     Our Business                                                                                                          CONTENTS

                                                                                                                                                                                                                           BUSINESS OVERVIEW

                                                                                                                                                                                                                           STRATEGY & GOVERNANCE

                                                                                                                                                                                                                           ENVIRONMENT

                                                                                                     Management & Governance                                                                                               Health & safety

                                                                                                                                                                                                                           Responsible sourcing

                                                                                                     Our management structure allows us to respond quickly and                                                             employees

                                                                                                     effectively to individual business challenges and opportunities.                                                      corporate stakeholders

                                                                                                                                                                                                                           community

                                                                                                                                                                                                                           gri index

                                                                                                                                                                                                                           CONTACT US AND GLOSSARY

                                                                                                     Our two senior decision making bodies
                                                                                                     are the Board of Directors (Board) and the         The Board of Directors                                  The Board Committees
     Sustainability is central to our culture and a key                                              Group Executive Committee. They are
                                                                                                                                                        Three Executive Directors                               Audit                    Nomination
     element of our strategy for growth. It is embedded in                                           ultimately responsible for our business
                                                                                                     performance, and work closely with a               Five Independent Non-Executive Directors                Remuneration
     all of our businesses and enthusiastically embraced                                             number of advisory committees to develop
                                                                                                     our business strategy and set
     by our employees around the world.                                                              performance targets.
                                                                                                     Our Regional and Business Boards, each             Group Executive Committee                              Executive Committees
                                                                                                     led by an Executive Committee member,
     We were delighted to receive recognition        consumption of water and cutting the            are responsible for localising and                 Chief Executive                                        Finance
     of our achievements in the latest report        quantities of waste that we send to landfill.   implementing strategy and delivering                                                                      Risk Management
     from Canadian company Corporate                 These are both areas where we have                                                                 Group Finance Director
                                                                                                     results. They, along with our Board and                                                                   Routine Business
     Knights, where we were ranked 25th in           made significant progress in the last two       Group Executive Committee, are                     Chief Technology Officer
     the Global Top 100 Most Sustainable             years.                                          supported by specialists who manage our            Group Counsel and Company Secretary                    Group SHE
     Corporations in the World. We were the                                                          corporate functions.
                                                     It is critical to our continuing business                                                          Five Regional Directors
     highest ranking UK based company in this
                                                     success that we have the ability to attract                                                        Global Operations President
     survey, providing independent testimony
                                                     and retain outstanding individuals: I am
     to the effectiveness of fully integrating                                                                                                          Group Financial Controller
                                                     pleased to report that our staff retention
     sustainability into our approach at all of
                                                     rates around the world are at record
     our operations, both manufacturing and
                                                     levels. The fact that we have a highly
     non-manufacturing.
                                                     motivated workforce who want to share in
     Our strong ‘green’ credentials are rooted       our success is reflected in that more than                                                         Regional & Business Boards                             Corporate Functions
     in our focus on the use of natural              75% of our UK based employees, and
     ingredients, with around 70% of our raw         48% of our non-UK workforce, participate                                                           Consumer Care Europe                                   CSR                      Business
     materials derived from renewable                in a Save As You Earn scheme. This                                                                                                                                                 Development
                                                                                                                                                        Performance Technologies                               SHE
     sources. As a leader in sustainable             performance was honoured for ‘Best
                                                                                                                                                        & Industrial Chemicals Europe                          HR                       Legal & Intellectual
     technologies, we take great pride in the        Overall Performance in Fostering Employee
                                                                                                                                                        North America                                                                   Property
     fact that so many of our products enhance       Share Ownership’ at the 2012 IFS ProShare                                                                                                                 IT
     the quality of life through their beneficial    Awards.                                                                                            Latin America                                          Finance & Treasury
     impact on human health, wellbeing and                                                                                                              Asia Pacific
                                                     Interaction with our local communities has                                                                                                                PSRA
     the wider environment.
                                                     always been a major part of our culture,
     During 2012, we made excellent progress         with community education a particular
     in reducing energy usage and increasing         focus as it allows us to promote the
     our use of non-fossil fuel across the           importance of studying science and
     business, with all of our manufacturing         business, which we hope will ultimately         Business Strategy                                 Business Sectors
     sites working proactively on energy             secure a gifted pool from which we can
     projects that have delivered exceptional        recruit in the future. As an alumnus of the
     results. One particular highlight was the       Croda Graduate Development                      Our purpose is to be a leading speciality         Our business is divided into three core segments:
     development of a £5.4 million renewable         Programme myself, I am keen to see              chemical company, providing innovative
     energy project at our Atlas Point               young talent come into our business. This       technologies that will give our customers what
     manufacturing site in North America.            is why I am particularly pleased to report      they need to be leaders in their own markets.      Consumer Care                     Performance Technologies             Industrial Chemicals
     Using gas from a nearby landfill site to fuel   the implementation of the scheme in Asia
                                                                                                     To achieve this, we focus on fast growing niche    Personal Care                     Coatings & Polymers                  • E xtract value
     a combined heat and power plant, this           during 2012, following the years of success
                                                                                                     markets and high margin businesses where
     innovative development will reduce our          we have had in Europe and North                                                                    Health Care                       Geo Technologies                     •C
                                                                                                                                                                                                                                 ost control
                                                                                                     we can utilise our global reach. We are driven
     dependence on fossil fuels and cut              America. By the end of 2013 it will also be                                                        Crop Care                         Home Care
                                                                                                     by strong megatrends in beauty and ageing,
     greenhouse gas emissions at the site.           available in Latin America to ensure that
                                                                                                     health and wellbeing, and the increasing           • New technology capture         Lubricants
                                                     we have a succession of future leaders
     We continue to place a strong emphasis                                                          importance of sustainability and                   • New product and                Polymer Additives
                                                     across our global operations.
     on minimising the environmental impact of                                                       environmental protection. Our continued focus         performance claims
     our operations through a range of               Steve Foots, Chief Executive                    on innovation and our heritage in naturally                                          • Niche market focus
                                                                                                                                                           innovation
     initiatives, such as reducing our                                                               derived products ensures that we are well                                            • Emerging market
                                                                                                     placed to deliver sustainable solutions.           • Emerging market                   development
                                                                                                                                                           development
                                                                                                                                                                                          • Specialisation of resource

     GRI Profiles: 1.1-1.2, 4.10                     GRI Indicator: EC2                              GRI Profiles: 4.1-4.4
Innovating for a Sustainable Future - Sustainability Report 2012 - Croda
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     Our Sustainability Approach

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                                                                                                                                                                                                                             ity                            Four Pillars                                                                                                                                                               BUSINESS OVERVIEW
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                                                                                                                                                                                                                                                            Material Area                                                                                                                                                              STRATEGY & GOVERNANCE

                                                                                                                                                                                                                                                                                                                                                                                                                                       ENVIRONMENT

                                                                                                                                                                                                                                                            Targets                                                                                                                                                                    Health & safety

                                                                                                                                                                                                                                                                                                                                                                                                                                       Responsible sourcing
                                                                                                                                                                                                                                                            Material Issues                                                                                                                                                            employees

                                                                                                                                                                                                                                                                                                                                                                                                                                       corporate stakeholders

                                                                                                                                                                                                                                                                                                                                                                                                                                       community

     Management & Governance                                                                                                                                                                                                             Materiality                                                                                                                                                                                   gri index

                                                                                                                                                                                                                                                                                                                                                                                                                                       CONTACT US AND GLOSSARY

     Sustainability underpins our business strategy, playing a                                                                                                                                                                           Our Materiality Matrix, established in 2011, maps the most
     holistic role across our business.                                                                                                                                                                                                  significant issues that will affect the long term success of our
                                                                                                                                                                                                                                         business against their importance to our stakeholders.
                                                                         Environment
     Implemented through our CSR activities, we                          Airdeveloping
                                                           Responsible for    Quality & andClimate     Change
                                                                                              supporting   the     We continually monitor and report progress                                                                            Managed through our Four Pillar approach, we                                         Group Executive Committee. As a result of this                             During 2012, particular focus was placed on two
     ensure that the Material Issues of our business       implementationWater
                                                                            of ourQuality    & Supply
                                                                                   sustainability strategy and     against our targets to the Group Executive                                                                            have six Material Areas and 18 Material Issues.                                      meeting in 2012, we have broadened our                                     Material Issues following a risk review;
     and key stakeholders are addressed as part of         targets, our CSR Steering Committee consists of         Committee. Our annual results, covering                                                                               CSR targets have been set with our Group                                             previous Landfill Waste Material Issue to Land                             responsible supply chain management and
     our sustainability strategy.                                        Landfill
                                                           four Pillar Owners who Waste
                                                                                    are senior managers with       economic, social and environmental                                                                                    Executive Committee to ensure that progress is                                       Impact in order to reflect our growing focus on                            consistent community engagement. Increased
                                                           expertise in one of our Four Pillars: Environment,      performance are communicated through our                                                                              made in addressing our Material Issues, which                                        biodiversity. We have also redefined Ethical                               communication and interaction with our
     Our CSR Department is a corporate function and
                                                           People, Partners and Neighbours. Reflecting our         Annual Report & Accounts, Sustainability Report,                                                                      ultimately supports our sustainability strategy.                                     Supply Chain to incorporate product stewardship                            suppliers, customers and community groups
     part of our dedicated CSR Steering Committee,                       Health & Safety
                                                           overall business management approach, we                online GRI response, CDP disclosure and on our                                                                                                                                                             and product quality, and all three Community                               through our management of Corporate
     who report directly into our Group Executive                                                                                                                                                                                        Our materiality and targets are reviewed on an
                                                           also have four Regional Representatives who are         website at www.croda.com. This open and                                                                                                                                                                    Material Issues have been revised to provide a                             Stakeholders and Community ensured that we
                                                           supported by Process     Safety    Management
     Committee and subsequently the Board. This is                                                                                                                                                                                       annual basis at a Strategic Review Meeting
                                                                         Regional CSR   Steering  Committees       transparent reporting ensures that our                                                                                                                                                                     better illustration of the community impact and                            can report progress in these areas.
     via an Executive Committee member who sits                                                                                                                                                                                          between the CSR Steering Committee and our
                                                           to ensure thatOccupational
                                                                          our sustainabilityHealth
                                                                                             strategy,&targets
                                                                                                          Safety   stakeholders are kept informed of our CSR                                                                                                                                                                  resulting business benefit.
     alongside the CSR Steering Committee Chairman.
                                                           and progress are communicated and supported             activities and can see how our sustainability
                                                           around the world.                                       strategy is safeguarding our future.

                                                                                                                                                                                                                                                                                                                                                                                         OurCRSeRspongseib
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     Sustainability Strategy                                               Employees                                                                                                                                                     Our Material Issues                                                                                                                             18 Material Issues

                                                                           Recruitment & Retention                                                                                                                                                                                                                                                                                       5                       6
     We manage our business across the tripleCompensation
                                               bottom line,  as a
                                                          & Benefits
                                                                                                                                                                                                                                                         Environment                                                                                                  4                   6 Material Areas
                                                                                                                                                                                                                                                                                                                                                                                                                                    7

     product or service can only be consideredHRtruly      sustainable
                                                      Policies & Systems                                                                                                                                                                  Environment    1.HealthAir
                                                                                                                                                                                                                                                            Safety
                                                                                                                                                                                                                                                                  &  Quality   & Climate
                                                                                                                                                                                                                                                                       Responsible
                                                                                                                                                                                                                                                                        Sourcing
                                                                                                                                                                                                                                                                                              Change
                                                                                                                                                                                                                                                                                      Corporate
                                                                                                                                                                                                                                                                                     Stakeholders
                                                                                                                                                                                                                                                                                                   Employees                  Community
                                                                                                                                                                                                                                                                                                                                                                                                                                                     8
                                                                                                                                                                                                                                                         2. Water Quality & Supply                                                                                                 ety
     when the demands of economy, environment             and society& Employee Development
                                                  Talent Management                                                                                                                                                                                                                                                                                                             Saf

                                                                                                                                                                                                                                                                                                                                                  3
                                                                                                                                                                                                                                                         3. Land Impact                                                                                                    lth&
                                                                                                                                                                                                                                                                                                                                                                          a             Steering Committe                            Em
                                                                                                                                                                                                                                                                                                                                                                        He          CSR
     are met. We will continually strive to align Performance
                                                  our operations       with
                                                                 Management                                                                                                                                                                              Health & Safety
                                                                                                                                                                                                                                                                                                                                                                                                         e                             pl

                                                                                                                                                                                                                                                                                                                                                                                                                                          oy
     this strategy.                                                                                                                                                                                                                                                                                                                                                                                                   Re

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                                                                                                                                                                                                                                                         4. Process Safety Management

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                                                                                                                                                                                                                                                                                                                                                                                    nt        CSR Activities
                                                                                                                                                                                                                       Environment         Health &
                                                                                                                                                                                                                                                         5.Responsible  Corporate
                                                                                                                                                                                                                                                              Occupational           Employees
                                                                                                                                                                                                                                                                            Health & Safety                                 Community

                                                                                                                                                                                                                                                                                                                                                           ent
                                                                                                                                                                                                                                            Safety          Sourcing   Stakeholders

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                                                                                                                                                                                                                                                         6. Recruitment & Retention

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     Our sustainability strategy is underpinned by our                                                                                                      Environment          Health &
                                                                                                                                                                                  Safety
                                                                                                                                                                                                       Responsible
                                                                                                                                                                                                        Sourcing
                                                                                                                                                                                                                           Corporate
                                                                                                                                                                                                                          Stakeholders
                                                                                                                                                                                                                                            Employees    Community
                                                                                                                                                                                                                                                         7. Compensation & Benefits
                                                                                                          Process Safety Management

                                                                                                                                                                                                                                                                                                                                                                                                                                        tives
     mission to:                                                                                                                                                                                                                                         8. HR Policies & Systems
                                                                                                          Responsible Palm Oil Sourcing                                                                                                                  9.	Talent Management & Employee                                                                                                 Strategy

                                                                                                                                                                                                                                                                                                                                                                                                                                                            s
                                                                                                                                                                                                                                                                                                                                                                                                                                                      holder
     •	continue innovating to improve our products        •	set consistent standards across all operations,   To ensure that our sustainability strategy is well                                                                                              Development

                                                                                                                                                                                                                                                                                                                                                                                                                                                                     18
        and processes by minimising their effect on the       so as to provide a safe and healthy         Product  Data Gathering
                                                                                                                informed,  we use our risk management                                                                                                    10.    Performance         Management

                                                                                                                                                                                                                                                                                                                                                                                                                                                  take
                                                                                                                                                                                                                       Environment         Health &         Responsible          Corporate             Employees            Community
        environment, whilst maximising the efficient          environment in which to work;                     framework, stakeholder engagement and                                                                                       Safety           Sourcing           Stakeholders

                                                                                                                                                                                                                                                                                                                                          11

                                                                                                                                                                                                                                                                                                                                                                                                                                                    S
        use of all resources;                              •	foster open and comprehensive dialogue with       strategic discussions with our Group Executive                                                                                           Community

                                                                                                                                                                                                                                                                                                                                                                                                                                                 te
                                                                                                                                                                                                                                                                                                                                                                                                                                              ora
     •	safeguard the responsible management of our           all stakeholders and work cooperatively to        Committee to define our Material      Issues. Health
                                                                                                                                                 Environment         &                                 Responsible         Corporate        Employees
                                                                                                                                                                                                                                                         11. Community Communication
                                                                                                                                                                                                                                                         Community

                                                                                                          Corporate    Stakeholders

                                                                                                                                                                                                                                                                                                                                                           Co

                                                                                                                                                                                                                                                                                                                                                                                                                                                                17
                                                                                                                                                               Safety                                   Sourcing          Stakeholders
                                                                                                                                                                                                                                                                                                                                                                                             P il l a r O w n e r s

                                                                                                                                                                                                                                                                                                                                                                                                                                            rp
                                                                                                                                                                                                                                                         12. Community Involvement

                                                                                                                                                                                                                                                                                                                                                                 m
                                                                                                                                     Environment         Health &            Responsible            Corporate              Employees       Community

                                                                                                                                                                                                                                                                                                                                                                                                                                          Co
        raw materials and products both up and down          address our Material Issues;                     Each Material Issue has a clear management                                                                                                                                                                                                             un

                                                                                                                                                                                                                                                                                                                                                                 m
                                                                                                                                                          Safety              Sourcing             Stakeholders
                                                                                                                                                                                                                                                                                                                                                                       ity
        our supply chain;                                                                                                                                                                                                                                13. Community Education                                                                                                                                             ng
                                                           •	provide development opportunities for all Corporate       Stakeholder
                                                                                                                  approach              Engagement
                                                                                                                            within the business to establish clear                                                                                                                                                                                                                                                      ou
                                                                                                                                                                                                                                                                                                                                                                                                                          rci
                                                                                                                                                                                                                                                                                                                                                                                                                       S
     •	invest in truly global and profitable innovation      employees to reach their full potential; and        strategy development, performance                                                                                                      Responsible Sourcing                                                                                                                                    sible
                                                                                                                                                                                                                                                                                                                                                                                                           Respon                                        1

                                                                                                                                                                                                                                                                                                                                                  12
                                                                                                           Ethicalmanagement
                                                                                                                   Supply Chain

                                                                                                                                                                                                                                                                                                                                                                                                                                                     6
        where we will have long term growth;               •	ensure fair and equitable employment                                and implementation                                                                                                     14. Renewable Raw Materials
                                                                                                                                                                                              Environment               Health &          Responsible      Corporate   Employees  Community
     •	comply with all legislative requirements and,         conditions, providing a stimulating working         responsibilities.                                                                                      Safety            Sourcing      15. Responsible Palm Oil Sourcing
                                                                                                                                                                                                                                                          Stakeholders
                                                                                                                                                                                                                                                                                                                                                                                                                                        15
        when appropriate, set our own more                   environment based on respect and                                                                                                                                                            16. Product Data Gathering                                                                                             13
        demanding standards;                                 partnership.         Community                                          Environment         Health &            Responsible            Corporate              Employees       Community
                                                                                                                                                                                                                                                         Corporate Stakeholders
                                                                                                                                                                                                                                                                                                                                                                                                                  14
                                                                                                                                                          Safety              Sourcing             Stakeholders
                                                                                                                                                                                                                                                         17. Corporate Stakeholder Engagement
                                                                                  Community Communication                                                      Environment                  Health &
                                                                                                                                                                                             Safety
                                                                                                                                                                                                                     Responsible
                                                                                                                                                                                                                      Sourcing
                                                                                                                                                                                                                                           Corporate
                                                                                                                                                                                                                                          Stakeholders
                                                                                                                                                                                                                                                         18. Ethical
                                                                                                                                                                                                                                                             Employees
                                                                                                                                                                                                                                                                       Supply Chain
                                                                                                                                                                                                                                                                           Community

                                                                             Community Involvement
                                                                             Community Education
                                                                                                                                                                                              Environment               Health &          Responsible       Corporate            Employees               Community
     GRI Profiles: 1.2, 4.8, 4.12, 4.17                    GRI Indicators: EC2, LA6                                                                                                                                      Safety
                                                                                                                                                                                                                                         GRI                1.2, 3.5
                                                                                                                                                                                                                                                Profiles:Stakeholders
                                                                                                                                                                                                                                          Sourcing
Innovating for a Sustainable Future - Sustainability Report 2012 - Croda
06                                                                                                                                                                                                                                                                                                                                                                                                                                                          07

              Our Targets                                                                                                                                                                                                                                                                                         Employees
                                                                                                                                                                                                                                                                                                                                                                                                                                CONTENTS

                                                                                                                                                                                                                                                                                                                                                                                                                                BUSINESS OVERVIEW
                                                                                                                                                                                                                              Environment       Health &          Responsible        Corporate      Employees     Community
                                                                                                                                                                                                                                                 Safety            Sourcing         Stakeholders
                                                                                                                                                                                                                                                                                                                                                                                                                                STRATEGY & GOVERNANCE
                                                                                                                                                                                                                                                                                                    Recruitment & Retention                     All regions to have a                To complete one global employee
              Our underlying approach to sustainability has focused on establishing clear commitments                                                                                                                                                                                                                                           programme of local graduate          engagement survey in 2014,
                                                                                                                                                                                                                                                                                                                                                                                                                                ENVIRONMENT

              and performance targets aligned to our Material Issues.                                                                                                                                                                                                                                                                           and trainee recruitment by
                                                                                                                                                                                                                                                                                                                                                the end of 2013
                                                                                                                                                                                                                                                                                                                                                                                     which will then be conducted at
                                                                                                                                                                                                                                                                                                                                                                                     least every third year
                                                                                                                                                                                                                                                                                                                                                                                                                                Health & safety

                                                                                                                                                                                                                                                                                                                                                                                                                                Responsible sourcing
                                                                                                                                                                                                                              Environment       Health &          Responsible        Corporate      Employees     Community
                                                                                                                                                                                                                                                 Safety            Sourcing         Stakeholders

              Environment
                            Environment
                            Health &
                             Safety
                                             Responsible
                                              Sourcing
                                                                Corporate
                                                               Stakeholders
                                                                                  Employees    Community
                                                                                                                                                                                                                                                                                                    Compensation & Benefits                     To ensure that all locations
                                                                                                                                                                                                                                                                                                                                                undertake health promotion
                                                                                                                                                                                                                                                                                                                                                                                     Develop company share scheme
                                                                                                                                                                                                                                                                                                                                                                                     membership by continuing to
                                                                                                                                                                                                                                                                                                                                                                                                                                employees

                                                                                                                                                                                                                                                                                                                                                                                                                                corporate stakeholders
                                                                                                                                                                                                                                                                                                                                                activities during 2013               improve advertisement, promotion

                                                                                                                                                                                                     10
               Air Quality &                                                                                                                                                                                                                                                                                                                                                         and availability to ensure that all        community
               Climate Change                                                                              Based on 2010, to reduce                                 To have 25% of the                                                                                                                                                                                               employees can make an informed
                                                                                                           total Group energy                                       Group’s total energy                                                                                                                                                                                             decision for the 2013 programme            gri index
                                                                                                           consumption by 5% by 2015                                requirements
                                                                                                                                                                                                                                                                                                                                                                                                                                CONTACT US AND GLOSSARY
              Environment   Health &
                             Safety
                                             Responsible
                                              Sourcing
                                                                Corporate
                                                               Stakeholders
                                                                                  Employees    Community
                                                                                                                                                                    generated from              Based on 2010, to reduce
                                                                                                                                                                    non-fossil fuel             total Group VOC emissions                                                                           HR Policies & Systems
                                                                                                                                                                                                                                                                                                                                                To ensure that our policies remain consistent with the spirit and intent
                                                                                                                                                                    sources by 2015             by 10% by 2015                                                                                                                                  of the ILO Declaration on Fundamental Principles and Rights at Work,
                                                                                                                                                                                                                                                                                                                                                where applicable to business

               Water Quality & Supply

                                                                                                                                                  100
                                                                                                                                                                                                                                                                                                    Talent Management &                         To make personal skills development accessible to             During 2013, support our talent management
                                                                                                           Based on 2010, to reduce total                                                       To achieve 100%                                                                                     Employee Development                        all through the development of a comprehensive                procedures by coaching and actively involving
                                                                                                           Group water consumption by                                                           compliance with effluent                                                                                                                        online learning zone by the end of 2013                       senior managers, and their teams, in the
                                                                                                           10% by 2015                                                                          discharge consents by 2015                                                                                                                                                                                    identification and effective management of talent
                                                                                          10
                                                                                                                                                                                                                                                                                                    Performance Management                      All employees to have a formal annual appraisal by the end of 2015

               Land Impact                                                                                                                                                            To complete pilot biodiversity surveys
                                                                                                                              Based on 2010, to reduce total
                                                                                                                              Group waste to landfill by 20%                          at two of our operations by the end of                                                                                      Corporate Stakeholders
                                                                                                20                            by 2015                                                 2013
                                                                                                                                                                                                                                  Environment              Health &
                                                                                                                                                                                                                                                            Safety
                                                                                                                                                                                                                                                                                Responsible
                                                                                                                                                                                                                                                                                 Sourcing
                                                                                                                                                                                                                                                                                                    Corporate
                                                                                                                                                                                                                                                                                                   Stakeholders
                                                                                                                                                                                                                                                                                                                        Employees

                                                                                                                                                                                                                                                                                                    Corporate Stakeholder
                                                                                                                                                                                                                                                                                                                                    Community

                                                                                                                                                                                                                                                                                                                                                Develop and implement a global action plan to further         Engage with our investor community during 2013 to
                                                                                                                                                                                                                                                                                                    Engagement                                  our engagement with respondents to our global and             obtain feedback on our sustainability performance
                                                                                                                                                                                                                                                                                                                                                regional customer surveys during 2013

                            Health & Safety
                                                                                                                                                                                                                                                                                                    Ethical Supply Chain
Environment    Health &       Responsible              Corporate              Employees       Community
                Safety         Sourcing               Stakeholders                                                                                                                                                                                                                                                                              Further engage with our            Following a detailed audit of             Gain EFfCI GMP certification for our
              Process Safety                                                                               At the end of every            At the end of every            To define a programme             To develop and Environment                      Health &             Responsible         Corporate           Employees   Community   major suppliers on our             product stewardship across the            remaining five manufacturing sites
                                                                                                                                                                                                                                                            Safety               Sourcing          Stakeholders

              Management                                                                                   quarter in 2013, have          quarter in 2013, have          that attains external             implement a training                                                                                                                 Supplier Code of Conduct           Group, ensure that best practice          that produce cosmetic ingredients
                                                                                                                                                                                                                                                                                                                                                during 2013                        is communicated and any                   and EXCiPACT certification for six

                                                                                      31
                                                                                                           100% of all Process Risk       no outstanding critical        post-graduate                     programme to
                                                                                                           Assessments reviewed           actions from Process           certification for members         improve incident                                                                                                                                                        appropriate improvement actions           manufacturing sites producing
                                                                                                           to stringent internal          Risk Assessments               of our internal Hazard            investigation through                                                                                                                                                   are taken by the end of 2014              pharmaceutical excipients by the
                                                                                                           quality standards at           overdue across the             Study Leaders’ Academy            the use of a common                                                                                                                                                                                               end of 2015
Environment    Health &
                Safety
                              Responsible
                               Sourcing
                                                       Corporate
                                                      Stakeholders
                                                                              Employees       Community
                                                                                                           least once every five          Group                          during 2013                       methodology by the
                                                                                                           years across the Group                                                                          end of 2014

                                                                                                                                                                                                                                                                                                                  Community
              Occupational Health & Safety                                                                                                                                                                    Environment   Health &
                                                                                                                                                                                                                             Safety
                                                                                                                                                                                                                                            Responsible
                                                                                                                                                                                                                                             Sourcing
                                                                                                                                                                                                                                                                  Corporate
                                                                                                                                                                                                                                                                 Stakeholders
                                                                                                                                                                                                                                                                                      Employees    Community

                                                                                                           Sustain the improvement since 2010 (0.39 per 100,000 hours) on the                                                                                                                       Community                                   To support our

                                                                                                                                                                                                                                                                                                                                                                                                    +                           +
                                                                                                           frequency of injuries to all personnel, to ultimately reduce the rate to                                                                                                                                                             manufacturing sites and
                                                                                                                                                                                                                                                                                                    Communication
                                                                                                           0.2 per 100,000 hours worked on a sustainable basis
                                                                                                                                                                                                       100,000                                                                                                                                  offices of more than 30
                                                                                                                                                                                                                                                                                                                                                employees in their efforts to
                                                                                                                                                                                                                                                                                                                                                hold a minimum of two
                                                                                                                                                                                                              Environment   Health &        Responsible           Corporate           Employees    Community
                                                                                                                                                                                                                                                                                                                                                face to face dialogue              local authorities,         local businesses or        local educational
                                                                                                                                                                                                                             Safety          Sourcing            Stakeholders
                                                                                                                                                                                                                                                                                                                                                sessions within each of our        councils, governments,     business representative    institutions (schools,
                            Responsible Sourcing                                                                                                                                                                                                                                                                                                key stakeholder groups:            emergency services;        groups; and                colleges, universities)

                                                                                                                                                                                                                                                                                                                                                                                                            1
 Health &     Responsible      Corporate               Employees          Community

                                                                                                                                                                                                 12
  Safety       Sourcing       Stakeholders

                Renewable Raw Materials                                                                    Monitor the sustainability of new products by measuring the renewable raw                                                                                                                Community Involvement                       To provide support to those teams within our business                                Establish communication
                                                                                                           material content and by assessing them against the 12 Principles of Green                                                                                                                                                            that have had a significantly lower than average                                     channels that will help to
                                                                                                           Chemistry during 2013                                                                                                                                                                                                                number of employees using any 1% Club time since its                                 share 1% Club news and
                                                                                                                                                                                                                                                                                                                                                global launch in 2010, with the intention of enabling                                best practice across the
                                                                                                                                                                                                                                                                                                                                                more employees in these locations to participate in the
 Health &
  Safety
                Responsible
              Responsible
               Sourcing
                                  Palm Employees
                          Corporate
                Oil Sourcing
                         Stakeholders
                                                                          Community
                                                                                                           Continue to work closely with
                                                                                                           suppliers and RSPO to seek ways
                                                                                                                                                    Ensure that the small quantity of
                                                                                                                                                    palm oil purchased directly
                                                                                                                                                                                                Where relevant, gain RSPO
                                                                                                                                                                                                certification to manufacture
                                                                                                                                                                                                                                                                                                                                                programme during 2013                                                      Club      Group in order to
                                                                                                                                                                                                                                                                                                                                                                                                                                     encourage participation

                                                                                                           to extend the range of sustainable       supports sustainable sourcing by            sustainable palm oil and palm
                                                                                                           palm oil and palm kernel oil             the end of 2013 under RSPO                  kernel oil derivatives at                                                                           Community Education                         To ensure that all              Develop an internal           To ensure that at least       Following a review of
                                                                                                           derivatives we manufacture               guidelines                                  additional manufacturing sites                                                                                                                  Research and                    Education Ambassador          5% of employees at all        the UK STEM
                                                                                                           during 2013                                                                                                                                                                                                                          Development Centres and         training programme to         operations with a             education
                                                                                                                                                                                                                                                                                                                                                locations with a significant    underpin community            Research and                  programme, facilitate
                                                                                                                                                                                                                                                                                                                                                engineering team have           education activity in all     Development Centre or         the implementation of
                Product Data Gathering                                                                                                                                                                                                                                                                                                          implemented an                  relevant local languages      significant engineering       at least two
                                                                                                           Gather product data at manufacturing site level to populate our Ingredient Sustainability database in
                                                                                                                                                                                                                                                                                                                                                education programme             by the end of 2013            team receive Education        programmes at new
                                                                                                           accordance with the gap analysis completed in 2012
                                                                                                                                                                                                                                                                                                                                                with local schools,                                           Ambassador training by        locations tailored to
                                                                                                                                                                                                                                                                                                                                                colleges or universities by                                   the end of 2014               meet local needs by
                                                                                                                                                                                                                                                                                                                                                the end of 2013                                                                             the end of 2014
Innovating for a Sustainable Future - Sustainability Report 2012 - Croda
08                                                                                                                                                                                                                                                                   09

     Environment                                                                                                                                                                                                                    CONTENTS

                                                                                                                                                                                                                                    BUSINESS OVERVIEW

                                                                                                                                                                                                                                    STRATEGY & GOVERNANCE

                                                                                                                                                                                                                                    ENVIRONMENT

               As an environmentally responsible company, we have established an effective                 Air Quality & Climate Change                                                                                             Health & safety

                                                                                                                                                                                                                                    Responsible sourcing
               means of managing the material business risks of Air Quality and Climate Change,
               Water Quality and Supply and Land Impact. From our baseline year of 2010, we set            To reduce the emissions of greenhouse gases to the                                                                       employees

     five year targets to focus our efforts as we continually work towards reducing greenhouse gas         environment from our manufacturing sites to ensure that                                                                  corporate stakeholders

     (GHG) emissions and our impact on the increasingly stressed resources of water and land.              we progress towards more sustainable operations                                                                          community

                                                                                                                                                                                                                                    gri index

                                                                                                                                                                                                                                    CONTACT US AND GLOSSARY

     2012 Targets                                          Key Highlights                                  Energy from Non-Fossil Fuel Sources                 Energy Usage for Continuing
                                                                                                           for Continuing Operations by Year (%)               Operations by Year (GJ)

                                                                            15.2
                                                                                                                13.6   14.1   13.8   15.1   15.2                      3,865 3,650 3,980 3,772 3,767

     Air Quality & Climate Change                                                                          30
                                                                                                           25
                                                                                                                                                               5000

     • Based on 2010, reduce total Group energy
                                                                                                           20                                                  4000
        consumption by 5% by 2015
                                                                                                           15
     • To have 25% of the Group’s total energy
                                                                                                           10                                                  3000
        requirements generated from non-fossil fuel
        sources by 2015                                                                                    5

     • Based on 2010, reduce total Group VOC emissions                                                    0                                                   2000
        by 10% by 2015                                     Group energy from non-fossil fuel sources
                                                                                                                2008 2009 2010       2011   2012                      2008 2009 2010     2011   2012

     Water Quality & Supply

                                                           572,000m                                   3
     • To create the capability of measuring the volume
        of aqueous effluent arising from our processes
        prior to its pre-treatment and its associated                                                      Strategy                                            This was driven by a number of energy
        content of organic material by the end of 2013                                                                                                         reduction projects across the Group, although it
                                                                                                           With the link between the emission of CO2 and
                                                                                                                                                               is also affected by a slight reduction in
     • Based on 2010, reduce total Group water                                                            climate change well established, we want to
                                                                                                                                                               production volumes.
        consumption by 10% by 2015                         Water reduction, equivalent to                  continue reducing the impact of our emissions.
                                                                                                           By focusing on two critical areas; reducing our     A multi-million pound project at our Atlas Point
     • To achieve 100% compliance with effluent
        discharge consents by 2015                         240 Olympic swimming pools*                     overall energy consumption and increasing the       manufacturing site in North America was our
                                                                                                           proportion of energy we consume from                flagship investment to reduce energy usage and

                                                                          5.4
     Land Impact†                                                                                          non-fossil fuel sources, we hope to progress
                                                                                                           towards more sustainable operations.
                                                                                                                                                               increase our use of renewable resources during
                                                                                                                                                               2012. Smaller scale programmes have also
     • Based on 2010, reduce total Group waste to                                                                                                             shown significant gains, with electricity
        landfill by 20% by 2015                                                                            Supported by our investments in captive power
                                                                                                                                                               consumption reduced by 22% at our Cikarang
                                                                                                           sources, the optimisation of plant equipment
                                                                                                                                                               manufacturing site in Indonesia as a result of
                                                                                                           and production processes, and the education
                                                                                                                                                               increased diligence and observation.
                                                                                                           and training of our employees, we are
                                                                                                           committed to minimising our impact in this area.    Progress has also been made to increase the
                                                                                                                                                               proportion of our energy originating from
                                                                                                           Our primary focus is on reducing our direct CO2
                                                                                                                                                               non-fossil fuel sources. During 2012, 15.2% of
                                                                                                           outputs since the contribution from our Volatile    our energy came from renewable sources                 Optimising Our Processes
                                                           Reduction in energy consumption*               Organic Compound (VOC) emissions is much
                                                                                                           less significant, although we continue to set VOC
                                                                                                                                                               compared to 13.8% in 2010. Whilst this is
                                                                                                                                                               influenced by external factors, such as the            During 2012, our Leek manufacturing site
                                                                                                           targets and review our performance in order to      sources feeding into national electricity grids, our
                                                                                                           minimise our impact wherever possible.                                                                     in the UK installed a combined heat and
                                                                                                                                                               investments in the optimisation of our wind            power plant (CHP), the first of its type at
                                                                                                           All of our manufacturing sites are required to      turbine and the installation of power generation       any of our operations. Whilst conventional

                                                           50
                                                                                                           develop an energy reduction plan, taking            units that run on alternative fuels ensure that this   electricity generation is inefficient, with
                                                                                                           advantage of alternative, non-fossil fuel sources   reduction is increasingly under our control.           more than half of the fuel’s energy wasted
                                                                                                           where practicable.                                  During 2012, we made further progress against          as heat, CHP plants capture this heat to
                                                                                                                                                               our target to reduce VOC emissions with the            improve the efficiency of the input fuel by
                                                                                                           2012 Performance
                                                                                                                                                               relocation of a manufacturing process from             more than 80%.
                                                                                                           Pleasing progress has been made against our
                                                           Reduction in waste sent to landfill,            2010 baseline, with our total energy
                                                                                                                                                               our Rawcliffe Bridge site in the UK to a new           Our CHP plant at Leek is made even more
                                                                                                                                                                                                                      sustainable by its fuel source, which is
                                                                                                                                                               more efficient manufacturing plant in Leek, also
                                                           equivalent to over 120 truck loads              consumption having now decreased by 5.4%.           in the UK.                                             based on renewable materials from our
                                                                                                                                                                                                                      manufacturing processes, reducing the
                                                                                                                                                                                                                      fossil fuel carbon emissions at this site by
                                                                                                                                                                                                                      more than 50%.

                                                           * Compared to 2010
     GRI Indicators: EN3, EN4, EN26                        †
                                                             Previously Landfill Waste                      GRI Indicators: EC2, EN3, EN4, EN16, EN20, EN26                                                                                     Continued
Innovating for a Sustainable Future - Sustainability Report 2012 - Croda
10                                                                                                                                                                                                                                                                                                                   11

     Environment                                                                                                                                                                                                                                                                     CONTENTS

                                                                                                                                                                                                                                                                                     BUSINESS OVERVIEW

                                                                                                                                                                                                                                                                                     STRATEGY & GOVERNANCE

                                                                                                                                                                                                                                                                                     ENVIRONMENT

     Air Quality & Climate Change                                                                                                                           Water Quality & Supply                                                                                                   Health & safety

                                                                                                                                                                                                                                                                                     Responsible sourcing

                                                                                                                                                            To minimise the environmental burden arising from water                                                                  employees

                                                                                                                                                            usage and waste water discharges from our                                                                                corporate stakeholders

                                                                                                                                                            manufacturing sites                                                                                                      community

                                                                                                                                                                                                                                                                                     gri index

                                                                                                                                                                                                                                                                                     CONTACT US AND GLOSSARY

     VOC Emissions for Continuing                                                                                                                           Water Usage for Continuing                            Water Discharge Compliance for
     Operations by Year (Tonnes)                                                                                                                            Operations by Year (million m³)                       Continuing Operations by Year (%)

            303   262   307   284    248                                                                                                                           7.88   7.25   7.63   6.92   7.06                      96.6   96.7   98.8   99.2   99.7
     400                                                                                                                                                    8                                                     100

     300                                                                                                                                                    7
                                                                                                                                                                                                                  95
     200                                                                                                                                                    6
                                                                                                                                                                                                                  90
     100                                                                                                                                                    5

     0                                                                                                                                                      4                                                     85

           2008 2009 2010     2011   2012                                                                                                                         2008 2009 2010        2011   2012                     2008 2009 2010        2011   2012

     Looking Ahead                                                                                                                                          Strategy                                              Meanwhile, a major water recovery project at          Gouda Goes Greener
                                                                                                                                                                                                                  our Gouda manufacturing site in Holland also
     We will continue to seek ways to optimise the                                                                                                          Fresh water resources are becoming
                                                                                                                                                                                                                  made significant progress, following a pilot
     operation of our three CHP plants during 2013                                                                                                          increasingly stressed as population and                                                                     Our Gouda manufacturing site in Holland
                                                                                                                                                                                                                  study that gained approval for the £1.7 million
     and beyond. The largest of these is located at                                                                                                         industrial activity increase. Whilst our operations                                                         currently consumes the Group’s largest
                                                                                                                                                                                                                  investment.
     our Gouda manufacturing site in Holland,                                                                                                               are not in regions where resources are under                                                                volume of water, using 2.75 million cubic
     where a project design is under development                                                                                                            immediate threat, many of our manufacturing           Our compliance with effluent discharge                metres in 2012. However, the site has
     following a feasibility trial, which demonstrated                                                                                                      sites use water for cooling and cleaning. As a        consents increased from 99.2% in 2011 to 99.7%        identified an opportunity to replace the
     how electricity and steam can be generated                                                                                                             result, we are committed to reducing our impact       in 2012. Whilst our target to create the capability   plant that treats groundwater for use as
     from the methane gas produced by the                                                                                                                   on this depleting resource.                           of measuring the volume of effluent arising from      boiler feed water with new technology
     anaerobic fermentation of by-products. This                                                                                                                                                                  our processes prior to its pre-treatment, and its     that purifies effluent. By using this
                                                                                                                                                            We measure the total volume of water used by                                                                method, and by moving cooling duty to a
     would enable us to significantly increase the                                                                                                                                                                associated content of organic material, has
                                                                                                                                                            our processes from all sources. Focusing on our                                                             closed cooling tower system, the use of
     proportion of non-fossil fuel used by the Group.                                                                                                                                                             been met ahead of schedule and is now being
                                                                                                                                                            sites that use the highest volumes, we strive to                                                            groundwater can be stopped completely.
                                                                                                                                                                                                                  used to inform our further improvement plans.
     As we continue to seek areas where we can                                                                                                              reduce our requirement as much as practicable.
     upgrade our plants to modern, more energy                                                                                                                                                                    Looking Ahead                                         This new process purifies the effluent by
                                                                                                                                                            By measuring the quantity of oxygen demand in                                                               separating solids through the use of
     efficient standards, a pilot study at one of our
                                                                                                                                                            effluent arising from our processes before            By continuing to focus on our manufacturing           membranes and removes salts by
     major manufacturing sites will be conducted
                                                                                                                                                            treatment, we are able to gain greater insight        sites that consume the most water, two of our         reverse osmosis. As a result, the existing
     during 2013, to identify whether any
                                                         No Such Thing as Waste                                                                             into our process efficiency. This will allow the      major users, Gouda in Holland and Shiga in            calcium pre-treatment stage required
     opportunities have been missed .
                                                                                                                                                            identification of improvement projects, leading       Japan, have developed projects that will              when using groundwater is eliminated,
                                                         Our Atlas Point manufacturing site in North    The project, which attracted a £318,000 state       to reduced expenditure on effluent treatments         conserve significant volumes. A pilot study at        reducing the amount of additional
                                                         America identified an opportunity to use       grant, has cost over £5.4 million and is            and supporting our target of 100% compliance          Gouda has demonstrated that savings of up to          chemicals in the process and the quantity
                                                         methane gas from a nearby landfill site to     expected to fulfill 55% of the site’s energy        with effluent discharge consents.                     one million cubic metres of water per annum           of salt discharged to the environment.
                                                         generate electricity and steam. A 3.5 mile     needs, delivering more than 85% of its                                                                    could be achieved. Meanwhile, Shiga is looking        Once operational at full site scale, more
                                                                                                                                                            2012 Performance
                                                         pipeline was laid in 2012 to connect the two   required electricity and more than 35% of its                                                             at how they can significantly reduce the amount       than one third of the current water
                                                         sites, feeding gas to two 1.1 megawatt CHP     steam load. It should also lift the proportion of   Our overall water usage has reduced by 7.5%           of water they use for cooling by using the water      volume used should be saved.
                                                         units and a new multi-fuel steam boiler.       the Group’s total energy consumption derived        since 2010, indicating that we are on track to        they abstract from the ground many times
                                                                                                        from non-fossil fuel sources to more than 23%.      meet our 2015 target.                                 before discharging it.

                                                                                                                                                            During 2012, improvements have been made to           The reasons for the 0.3% of effluent that did not
                                                                                                                                                            equipment and processes at our Mevisa                 comply with discharge consents during 2012 are
                                                                                                                                                            manufacturing site in Spain and our Jurong            now well understood and work will continue to
                                                                                                                                                            Island manufacturing site in Singapore. The           address each of these issues.
                                                                                                                                                            result has been a combined saving of
                                                                                                                                                            600,000m3.

     GRI Indicators: EC2, EC4, EN3, EN4, EN16, EN20, EN26                                                                                                   GRI Indicators: EN8, EN9, EN21, EN26
12                                                                                                                                                                                                                                                                                         13

     Environment
                                                                                                                                                                Health & Safety                                                                                  CONTENTS

                                                                                                                                                                                                                                                                 BUSINESS OVERVIEW

                                                                                                                                                                                                                                                                 STRATEGY & GOVERNANCE

                                                                                                                                                                                                                                                                 ENVIRONMENT

     Land Impact                                                                                                                                                           We recognise the major business risk associated with
                                                                                                                                                                                                                                                                 Health & safety

                                                                                                                                                                                                                                                                 Responsible sourcing
                                                                                                                                                                           the poor management of process risks, which is why
     To mitigate the environmental burden our activities place on                                                                                                          Process Safety Management is placed at the top of our
                                                                                                                                                                                                                                                                 employees

     land, water and air by seeking to preserve biodiversity and                                                                                                list of priorities. Occupational Health and Safety is just as
                                                                                                                                                                                                                                                                 corporate stakeholders

     phase out the disposal of waste to landfill                                                                                                                important, requiring the sustained commitment of all employees
                                                                                                                                                                                                                                                                 community

                                                                                                                                                                                                                                                                 gri index
                                                                                                                                                                to comply with legislation and our own high standards. We are                                    CONTACT US AND GLOSSARY

                                                                                                                                                                dedicated to developing a competent workforce who take
     Waste to Landfill for Continuing                                                                              Total Waste to Landfill for Atlas            responsibility for the safety of our operations.
     Operations by Year (Tonnes)                                                                                   Point (Tonnes)

             4,347 4,103 4,870 2,767 2,419                                                                                 1,164 1,083   962   715    659
     5,000                                                                                                          1250

     4,000                                                                                                          1000

     3,000                                                                                                          750

     2,000                                                                                                          500

     1,000                                                                                                          250

     0                                                                                                              0

             2008 2009 2010    2011   2012                                                                                 2008 2009 2010      2011   2012

     Strategy                                             By focusing on our sites with the largest              Waste Down, Quality Up
     As with other finite natural resources, land is
                                                          amounts of waste to landfill there have been a
                                                          number of successful initiatives, such as
                                                                                                                                                                2012 Targets                                            Key Highlights

                                                                                                                                                                                                                                               13
     under increasing strain and fauna and flora are                                                             Our Atlas Point manufacturing site in
                                                          improved quality controls at our Atlas Point
     under threat.                                                                                               North America has seen an impressive
                                                          manufacturing site in North America.
                                                                                                                 reduction in waste disposal to landfill over
     We recognise that the deposition of waste to
     landfill is not sustainable, permanently
                                                          The innovative use of waste streams at our Mill        the past two years, falling from 962           Process Safety Management
                                                          Hall manufacturing site in North America               tonnes in 2010 to 659 tonnes in 2012. This     • At the end of every quarter in 2012, have 100% of
     modifying land and potentially introducing           continues to make the most significant                 32% reduction has been the result of
     contamination to both air and water. As a result,                                                                                                             all process safety studies* reviewed at least once
                                                          contribution to our total reduction. Even without      targeting improvements in the site’s first        every five years across the Group
     a detailed list of all landfill waste arising from   this, a 19% decrease has been achieved from            pass quality (FPQ) rate, which has
     each of our manufacturing sites has been                                                                                                                   • At the end of every quarter in 2012, have no
                                                          the efforts of our other manufacturing sites,          increased from 82.0% to 99.4%.
     produced and the feasibility of eliminating,                                                                                                                  outstanding critical actions from process safety
                                                          which is just short of our 20% Group target.           This was achieved by establishing FPQ as
     reducing or recycling this waste is being studied.                                                                                                            studies* overdue across the Group
     We aspire to a goal of zero waste to landfill,       Looking Ahead                                          a priority goal both for individuals and the
                                                                                                                                                                • To establish a KPI that tracks the compliance of
     although we know cost and feasibility will be                                                               manufacturing site. Historical data on
                                                          Our reduction in total waste to landfill is a result                                                     Process Risk Reviews* with internal quality
     increasingly challenging.                                                                                   failures was gathered and analysed by
                                                          of the work and commitment at a number of our                                                            standards by the end of 2012
     We understand that our operations may have           manufacturing sites. To ensure that our targeted
                                                                                                                 production area and product, allowing
                                                                                                                 the root cause of each to be determined.
                                                                                                                                                                                                                        Point Quality Criteria for PRAs implemented
                                                                                                                                                                Occupational Health & Safety

                                                                                                                                                                                                                                                       1/2
     an impact upon local biodiversity and we take        performance is sustainable, we will continue to        Actions to address these were then
     the stewardship of our own land very seriously.      focus on the list of items that are still sent to      agreed and any relevant upgrades to            • Sustained year on year improvement on the
     Therefore, we will continue to review our impact     landfill and our manufacturing sites that have         equipment, amendments to operating                frequency of injuries to all personnel across all
     on land, water and air.                              achieved zero waste to landfill will be cited as       procedures and work instructions were             manufacturing sites and offices, to ultimately
                                                          examples for others to follow.                         made. By ensuring that all successful             reduce the rate to 0.2 per 100,000 hours worked
     2012 Performance
                                                                                                                 changes were embedded into normal                 on a sustainable basis
                                                          During 2013, our first thorough biodiversity
     We are proud to announce that our five year          surveys will be conducted at two of our UK             operations, the site expect to sustain this
     target to reduce waste to landfill by 20% has        based operations. These pilot surveys will             performance, which delivers an
     already been surpassed, with an impressive           examine the existing variety of species around         environmental, economic and
     reduction in our disposal standing at 50% by         these sites in order to highlight if any               consequently a social benefit as
     the end of 2012. Additionally, six of our            improvements could be made.                            manufacturing efficiency increases.
     manufacturing sites achieved zero waste to
     landfill during 2012.
                                                                                                                                                                                                                        Lost time injury rate well below the
                                                                                                                                                                                                                        industry average†

                                                                                                                                                                                                                        * Now referred to as Process Risk Assessments (PRA)
      GRI Indicators: EN12, EN22, EN26                                                                                                                                                                                  †
                                                                                                                                                                                                                          Most recent Cefic Responsible Care™ data
14                                                                                                                                                                                                                                                                                                                     15

     Health & Safety                                                                                                                                                                                                                                                                   CONTENTS

                                                                                                                                                                                                                                                                                       BUSINESS OVERVIEW

                                                                                                                                                                                                                                                                                       STRATEGY & GOVERNANCE

                                                                                                                                                                                                                                                                                       ENVIRONMENT

     Process Safety Management                                                                                                                                  Occupational Health & Safety                                                                                           Health & safety

                                                                                                                                                                                                                                                                                       Responsible sourcing

     To reduce risks associated with all of our chemical                                                                                                        To reduce the frequency of injuries to all of those who work at                                                        employees

     processes to a point deemed to be as low as reasonably                                                                                                     our operations to a level compatible with the top quartile of                                                          corporate stakeholders

     practicable (ALARP)                                                                                                                                        peer companies, with an aspirational goal of zero harm                                                                 community

                                                                                                                                                                                                                                                                                       gri index

                                                                                                                                                                                                                                                                                       CONTACT US AND GLOSSARY

 100
                                                                                                                                                                Lost Time Injury Rate per 100,000
                                                                                                                                                                Hours Worked*
                                                                                                                                                                           0.33       0.29       0.30
                                                                                                                                                                0.50

                                                                                                                                                                0.40

                                                                                                                                                                0.30

        of all Process Risk Reviews*                                                                                                                            0.20
        completed on time                                                                                                                                       0.10

                                                                                                                                                                     0

                                                                                                                                                                           2010       2011      2012
     * Now referred to as Process Risk Assessments                                                                                                              *Croda employees and contractors

     Strategy                                               Our target to have no outstanding critical actions     Quarterly KPI Monitoring                     Strategy                                            been sustained at 15 during 2011 and 2012.
                                                            from PRAs beyond their agreed completion date                                                                                                           Looking at the more traditional measure of a lost
     Process safety management has been identified                                                                                                              No one should expect to be injured when
                                                            was only missed on one occasion, which was             A new comprehensive set of balanced                                                              time injury rate of three or more days, employee
     as the most Material Issue for our business, with                                                                                                          working at one of our operations; this includes
                                                            the result of a third party supplier delay.            process safety Key Performance                                                                   injury numbers for 2012 were at a new low of 11,
     the potential to have the most significant impact                                                                                                          our contractors as well as our employees.
                                                                                                                   Indicators (KPIs) was implemented                                                                equivalent to a frequency rate of 0.19 injuries per
     on both our business and our stakeholders. We          During 2012, eight of our senior managers
                                                                                                                   across all of our manufacturing sites at     As we continually strive to improve upon our        100,000 hours worked. It is disappointing that
     commit significant time and resource to                joined the 10 who have received process safety
                                                                                                                   the beginning of 2012. These KPIs            injury rate, we have implemented a three point      contractor injury numbers have not consistently
     monitoring and assessing all processes capable         leadership training by the UK National Skills
                                                                                                                   include:                                     management approach: we focus our attention         fallen, this remains an area of continued focus.
     of causing fatalities in order to minimise the risks   Academy for the Process Industries (NSAPI).
                                                                                                                                                                on the manufacturing sites who consistently                                                               Top STAR Rating For Atlas Point
     that they pose.                                        The course provided essential background and           • efficiency of the Permit to Work system                                                       Looking at the performance of individual
                                                                                                                                                                show a below Group average performance; we
                                                            ensured that our leaders are well informed                on each site;                                                                                 manufacturing sites and regions, a significant
     By registering each of our 152 processes and                                                                                                               improve incident investigation methodology;                                                               Our Atlas Point manufacturing site in
                                                            when making decisions on the allocation of             • efficiency of the Management of                                                               improvement was seen in North America, whilst
     subjecting them to a seven stage hazard study                                                                                                              and we ensure that each site has an active                                                                North America has had an exemplary
                                                            operational investments. Meanwhile, those                 Change system on each site;                                                                   our operations in Asia maintained a satisfactory
     process, the last stage of which is to conduct a                                                                                                           behavioural safety programme.                                                                             year, achieving more than one million
                                                            responsible for process safety at each of our          • efficiency of systems for inspection of                                                       level. Additionally, our Rawcliffe Bridge
     Process Risk Assessment (PRA) within a strict five     operations have continued to meet regularly                                                                                                                                                                   hours worked without a lost time injury
                                                                                                                      safety critical equipment;                Our aspirational goal of zero harm drives our       manufacturing site in the UK made significant
     year cycle, we are able to evaluate whether they       through our Hazard Study Leaders Academy to                                                                                                                                                                   and receiving the top STAR rating in the
                                                                                                                   • demands on the final layer of control     safety culture and is the reason we base our        progress in this area, by providing training
     present an intolerable risk to the business and        learn from experts and share ideas.                                                                                                                                                                           OSHA VPP (Voluntary Protection
                                                                                                                      and protection of a process; and          performance on very strict criteria. This is the    around safe and unsafe behaviours in the
     pursue mitigating actions.                                                                                                                                                                                                                                           Programme) for the eighth consecutive
                                                                                                                   • rate of completion of actions arising     number of injuries that result in one day or more   workplace.
                                                            Looking Ahead                                                                                                                                                                                                 year.
     By proactively supporting those responsible for                                                                  from PRAs.                                lost time, or result in working restrictions, per
                                                                                                                                                                                                                    As we strive for our target of 0.2 injuries per
     process safety through our own Hazard Study            Training will remain one of our top priorities, with   Used on a quarterly basis to highlight       100,000 hours worked, which is the average                                                                Following a rigorous onsite evaluation by
                                                                                                                                                                                                                    100,000 hours worked, one area of focus has
     Leaders Academy, we can continue to improve            specialist courses offered to our employees            leading and lagging performance to the       number of hours in a working life.                                                                        OSHA, the department charged with the
                                                                                                                                                                                                                    been the quality of incident investigations as it
     the standard of our work. Members meet                 throughout 2013 and beyond. Further education          Group SHE Steering Committee, these                                                                                                                    enforcement of health and safety
                                                                                                                                                                2012 Performance                                    was felt that the depth of these reviews could be
     throughout the year with a remit to raise our risk     on the compliance of PRAs against our 13 point         indicators are designed to give an early                                                                                                               legislation in North America, the STAR
                                                                                                                                                                                                                    improved to arrive at genuine root causes. This
     assessment standards to the level where our            quality criteria will be delivered, whilst the         indication of where improvements can         Our injury rate remains well below the industry                                                           rating recognises operations that have
                                                                                                                                                                                                                    will lead to the identification of more sustainable
     operations are self-sustaining. Additional             fundamentals of process safety will be taught to       be made to members of our Group              average† at 0.30 injuries per 100,000 hours                                                               implemented exemplary health and
                                                                                                                                                                                                                    corrective and preventative action.
     coaching from internal and external experts is         our manufacturing site engineers and                   Executive Committee and Operational          worked during 2012.                                                                                       safety management systems, with injury
     provided to both Academy members and senior            managers.                                              Managing Directors.                                                                                                                                    and illness rates maintained below the
     managers from across the business.                                                                                                                         Considering the lost time injury measure of one                                                           national average for their industry. Atlas
                                                            NSAPI will be commissioned to run another              This preventative measure has proven         day or more, employee injury numbers have                                                                 Point is one of only four STAR rated sites
     2012 Performance                                       event for senior business managers and our             successful during its first year, allowing
                                                                                                                                                                                                                                                                          in the state of Delaware, demonstrating
                                                            Hazard Study Leaders Academy already has a             our senior business managers to react to
     By the end of 2012, all of our manufacturing sites                                                                                                                                                                                                                   our commitment to managing injury
                                                            number of meetings planned. We also hope to            potential areas of underperformance
     succeeded in reviewing the PRAs that were due                                                                                                                                                                                                                        prevention and safety promotion.
                                                            gain external post-graduate certification of our       before they became a major issue.
     within the five year cycle. The standard of these      Academy syllabus for our members to work
     PRAs showed an encouraging improvement,                towards.
     which was due to training on our 13 point quality
     criteria.

                                                                                                                                                                †
                                                                                                                                                                    Most recent Cefic Responsible Care™ data
                                                                                                                                                                                                                                                                                                   Continued
16                                                                                                                                                                                                                                                                          17

     Health & Safety                                                                                                                                         Responsible Sourcing                                                                 CONTENTS

                                                                                                                                                                                                                                                  BUSINESS OVERVIEW

                                                                                                                                                                                                                                                  STRATEGY & GOVERNANCE

                                                                                                                                                                                                                                                  ENVIRONMENT

     Occupational Health & Safety                                                                                                                                    The foundation of our business rests upon natural
                                                                                                                                                                                                                                                  Health & safety

                                                                                                                                                                                                                                                  Responsible sourcing
                                                                                                                                                                     ingredients, with such a large percentage of our raw                         employees
                                                                                                                                                                     materials originating from renewable sources. Our new                        corporate stakeholders
                                                                                                                                                             product developments also foster this principle, whilst meeting the                  community
                                                                                                                                                             demands of our customers and the stringent safety standards within                   gri index
                                                                                                                                                             our industry. This goes hand in hand with sustainable supply, which is               CONTACT US AND GLOSSARY

                                                                                                                                                             why we continue to be strong advocates for the responsible sourcing
     Lost Time and Restricted Work                       Lost Time and Restricted Work Injuries                                                              of palm oil and its derivatives. To ensure that we make fully informed
     Injuries of One Day or More                         of Three or More Days                                                                               decisions, we place growing importance on the management of the
     35
          25   30    30     23    24     19     21
                                                         30
                                                               20    23   25     19    21     15     15
                                                                                                                                                             increasing amounts of data regarding our products and processes.
     30                                                  25
     25
                                                         20
     20
                                                         15
     15
     10                                                  10

     5                                                   5
                                                                                                                                                             2012 Targets                                              Key Highlights
     0                                                   0

                                                                                                                                                                                                                                        66.3
          2006 2007 2008 2009 2010      2011   2012           2006 2007 2008 2009 2010       2011   2012

                 • Employees • Contractors                            • Employees • Contractors                                                              Renewable Raw Materials
                                                                                                                                                             • Monitor the sustainability of new products by
                                                                                                                                                                measuring the renewable raw material content
     Looking Ahead                                                                                                                                              and by assessing them against the 12 Principles of
                                                                                                                                                                Green Chemistry during 2012
     Early in 2013 a course will be provided by an                                                                                                                                                                                      of our raw materials originate
     external expert for a cross section of our SHE                                                                                                          Responsible Palm Oil Sourcing                                              from renewable sources,
     managers, operation leaders and Quality
     Assurance (QA) professionals. This will inform
                                                                                                                                                             • Work more closely with suppliers and RSPO to seek
                                                                                                                                                                ways to source sustainable palm oil and palm
                                                                                                                                                                                                                                        making us industry leaders
     the design of a new incident investigation

                                                                                                                                                                                                                                    100
                                                                                                                                                                kernel oil derivatives wherever possible during 2012
     methodology, which will be applied to SHE and
     QA functions across the business. We intend to                                                                                                          • Ensure that the small quantity of palm oil
     roll this out progressively during 2013 and 2014.                                                                                                          purchased directly is sourced sustainably by
                                                                                                                                                                seeking certification by the end of 2012 under RSPO
     The Behavioural Safety Programme developed                                                                                                                 guidelines
     at our Rawcliffe Bridge manufacturing site will
     be offered to additional operations during 2013,
     especially those who need to deal with
                                                                                                                                                             Product Data Gathering
     consistently below Group average                                                                                                                        • Complete a gap analysis for the products within
     performance.                                                                                                                                               our Ingredient Sustainability programme by the end                      of PO and PKO used in 2012
                                                                                                                                                                of 2012 to allow data gathering to start at
                                                              Behavioural Safety Pilot Study                                                                    manufacturing site level in 2013
                                                                                                                                                                                                                                        supported sustainable palm oil
                                                              During 2012, our Rawcliffe Bridge              the situation as real as possible and share

                                                                                                                                                                                                                       30
                                                              manufacturing site in the UK developed a       learning between colleagues.
                                                              highly interactive Behavioural Safety          Reflection – A classroom session was held
                                                              Programme. Focused on the interaction          to consolidate and reflect on the learning
                                                              between line managers and supervisors with     from the first two stages, ensuring that
                                                              their teams when communicating                 attendees are committed and feel confident                                                                                         of new products
                                                              observations of unsafe and safe behaviours,    in reacting to all issues in the future.                                                                                           originate from

                                                                                                                                                                                                                                 ≥99
                                                              the programme consisted of four stages:
                                                                                                             Coaching – An opportunity to ensure that the
                                                              Theory – A classroom event enabled             techniques attendees had learned were
                                                              managers to learn about leadership styles,     being applied and to offer additional support
                                                              personal reflection and understanding          in any areas they were finding challenging.
                                                              human factor failings.
                                                                                                             The nature of changing behaviours takes
                                                              Practical – Role play based on typical         time to have an effect, but the course was
                                                              violation scenarios was employed to practise   very well received, with further coaching
                                                              and reinforce the theory. This took place      planned during 2013 and the implementation
                                                              within the working environment, in the         of the programme at other operations.
                                                                                                                                                                                                                                            renewable raw materials
                                                              presence of the manager’s team, to make

      GRI Indicators: LA6, LA7                                                                                                                               GRI Indicator: EN26
18                                                                                                                                                                                                                                                                                                                               19

     Responsible Sourcing                                                                                                                                                                                                                                                                        CONTENTS

                                                                                                                                                                                                                                                                                                 BUSINESS OVERVIEW

                                                                                                                                                                                                                                                                                                 STRATEGY & GOVERNANCE

                                                                                                                                                                                                                                                                                                 ENVIRONMENT

     Renewable Raw Materials                                                                                                                                                                                                                                                                     Health & safety

                                                                                                                                                                                                                                                                                                 Responsible sourcing

     To ensure that our product portfolio is sustainable and to                                                                                                                                                                                                                                  employees

     dedicate new product development to meeting our customer                                                                                                                                                                                                                                    corporate stakeholders

     needs in this area                                                                                                                                                                                                                                                                          community

                                                                                                                                                                                                                                                                                                 gri index

                                                                                                                                                                                                                                                                                                 CONTACT US AND GLOSSARY

     Average Renewable Content in New Products by Industry Sector (%)

     100

     80

     60

     40

     20

     0

             Lubricants   Health Care   Personal Care   Industrial   Polymer     Home Care       Geo        Coatings &
                                                        Chemicals    Additives               Technologies    Polymers

     Strategy                                                                    Throughout 2012, we have continued to monitor       Sustainable, Efficacious Innovation          Looking Ahead
                                                                                 the percentage of renewable raw materials
     The focus on sustainable raw materials and                                                                                      We were delighted to announce the            Our strong ‘green’ credentials stem from our
                                                                                 within the new products we launched across our
     greener, cleaner, safer manufacturing methods                                                                                   acquisition of Italian based Istituto di     innovative use of renewable and natural raw
                                                                                 market sectors, even those where demand and
     is continuing to grow in the speciality chemicals                                                                               Ricerche Biotecnologiche SpA (IRB) in July   materials, alongside our continuing focus on
                                                                                 functionality makes this challenging.
     industry. Our heritage in naturally derived                                                                                     2012, the world leader in developing         sustainable production processes.
     products puts us at the forefront of this evolution,                        In total, 30% of our new products originated from   actives for Personal Care and Health Care    We will continue to monitor the renewable raw
     with sustainability embedded in our innovations                             99% or more renewable raw materials, with           applications from plant stem cells. This     material content of our products, and we remain
     since the launch of our first product, lanolin.                             over half of these products coming from 100%        innovative, sustainable and renewable        committed to enhancing the proportion of
                                                                                 renewable sources. It is often the required         raw material source complements the
     Adoption of the 12 Principles of Green Chemistry                                                                                                                             renewable raw materials in our new products
                                                                                 preservative that makes the difference between      product developments of our research
     by our research scientists ensures that our                                                                                                                                  through sustainable innovations, wherever
                                                                                 99% and 100%, but our sustainable product           team at Sederma, who launched our first
     products have little or no environmental impact                                                                                                                              possible.
                                                                                 innovation in this area is overcoming some of       product in this area, Resistem™, in 2011.
     and the highest safety credentials.                                         these difficulties. The average percentage of                                                    We also endeavour to continue assessing our
                                                                                 renewable materials across all the products we      IRB has an exclusive, versatile method to
     Our attention to the renewable raw material                                                                                                                                  new products against the 12 Principles of Green
                                                                                 launched in 2012 was 60.2%.                         use biotechnology for sourcing plant stem
     content of new products demonstrates our                                                                                                                                     Chemistry to ensure that our ingredients have a
                                                                                                                                     cell ingredients from small amounts of
     commitment to developing and manufacturing                                                                                                                                   minimal impact upon the environment.
                                                                                 New products from 100% renewable raw                leaf, flower and even seed tissue. This
     high performance products from sustainable                                  material sources include additions to our           process allows a truly sustainable path to   With the integration of IRB into the Group during
     sources wherever reasonably practicable. The                                NatraGem™ range of solubilisers and                 plant based active ingredients and           2012, we are looking forward to seeing a
     challenge remains in achieving this safely, whilst                          emulsifiers, our Priplast™ polyester polyol range   ensures a total absence of environmental     number of exciting new product developments
     meeting our customers’ needs on price and for                               and our NatraSense™ range of bio-based              contaminants. Comparative data against       launched under our Sederma brand in the near
     high performance.                                                           surfactants. These all match or outperform their    conventional agriculture shows a 99.9%       future.                                             Bio-Based Building Blocks                    Sustainable Construction
     2012 Performance                                                            petrochemical equivalents.                          decrease in water consumption,
                                                                                                                                                                                                                                      Our Coatings & Polymers team launched        During 2012, a unique carbon neutral
                                                                                                                                     guaranteed purity with negligible soil
     Our use of renewable raw materials continues to                             We also continued to measure our new products                                                                                                        another 100% bio-based polyester polyol      masonry brick was developed by Encos Ltd
                                                                                                                                     occupation and the total absence of
     be industry leading, with 66.3% of the materials                            against the 12 Principles of Green Chemistry. The                                                                                                    to our Priplast™ range in 2012.              using a product from our BioStack range.
                                                                                                                                     pesticides or other contaminants.
     used to manufacture our products across the                                 average score for 2012 was nine, with 16% of our                                                                                                     Like other products in the range, Priplast   Offering the ability to produce a high
     Group in 2012 originating from such sources.                                new products meeting all 12 principles.                                                                                                              3293 can be used in adhesives, coatings,     performing binder based on renewable
     The purchase of IRB during the year, a company                                                                                                                                                                                   foams, elastomers and engineering            biopolymer chemistry, this range provides
     specialising in plant cell biotechnology, further                                                                                                                                                                                plastics. It can also be included in         an innovative route to sustainable new
     strengthens our position in this area.                                                                                                                                                                                           polyurethane, offering protection against    products for the construction industry.
                                                                                                                                                                                                                                      high temperatures and UV rays. Priplast      Combined with Enco Ltd’s patented method
                                                                                                                                                                                                                                      impart excellent hydrolytic stability for    of manufacture, the production of these
                                                                                                                                                                                                                                      resistance against degradation caused by     new bricks consumes no water, eliminates
                                                                                                                                                                                                                                      acid, alkali and alcohol, allowing for       waste and uses 80% less energy
                                                                                                                                                                                                                                      countless application possibilities.         compared to the construction of traditional
                                                                                                                                                                                                                                                                                   clay bricks and brick slips.
         GRI Indicators: EN1, EN26, PR1                                                                                                                                           GRI Indicators: EN1, EN26, PR1
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