Innovating for a Sustainable Future - Sustainability Report 2012 - Croda
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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
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%
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
W y & Cli t Our men 04 05 Sustainable Business ualit on vir Q CSR Activities En r rs Our Sustainability Approach Ai bou igh CONTENTS Our Ne ub ity Four Pillars BUSINESS OVERVIEW m m Co 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 Tar tsility 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 9 ee 4. Process Safety Management 2 gio s na nt CSR Activities Environment Health & 5.Responsible Corporate Occupational Employees Health & Safety Community ent Safety Sourcing Stakeholders e lR nm rtm ep Environment Health & Responsible Corporate Employees Community Employees Responsible Sourcing Enviro epa Safety Sourcing Stakeholders res 10 6. Recruitment & Retention enta CSR D 1 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
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
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
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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