Environmental & Social Information • Mar 24, 2014
Environmental & Social Information
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Croda at a Glance 01 Our Highlights
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Our strategy must consider the 'global drivers' that have an input into, and impact upon, our whole value chain. In response to these global drivers, during 2013 we redefined our Material Areas to focus our sustainability strategy on the 10 areas that matter most to us now and in the future:
& GOVERNANCE
37 Delivering Sustainability 38 GRI Index 40 Glossary & Contact Us
GRI Profiles: 2.1, 2.5, 2.7, 2.8, 2.10, 3.1, 3.3, 3.6-3.8
GRI Indicator: EC1
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This report covers the sustainability performance of the Croda Group for the period 1 January 2013 to 31 December 2013.
The scope of this report is all wholly owned operations, plus those operations where we have significant management influence due to a majority shareholding. Unless otherwise stated, data provided throughout this report is for continuing operations.
We acquired the entire share capital of Istituto Di Ricerche Biotechnologiche (IRB) in July 2012 and a majority 65% stake in Sipo in July 2013. Both of these operations have now been brought into the scope of this report.
We also acquired the assets of Specialty Products business of Arizona Chemical in May 2013, and those of Innovachem LLC in December 2012. These assets have been integrated into our existing business structure and are, therefore, not separately reportable operations within this report.
We are a global leader in manufacturing and marketing speciality chemicals, which makes us the name behind the high-performance ingredients that go into some of the biggest, most successful brands in the world; we deliver innovation our customers can build on.
Page reference for related information P10
For further information see our Annual Report & Accounts (AR&A) £
* Continuing operations
**Continuing operations before exceptional items, acquisition costs and amortisation/write off of intangible assets arising on acquisition
Steve Foots, Group Chief Executive
I am pleased to report that we have yet again made excellent progress against our sustainability targets. More and more, as customer and consumer demand for sustainable ingredients continues to increase, our strategic emphasis on sustainability is becoming an important differentiator for our Business and a means of generating growth.
Our very first product was Lanolin, which is created as a result of washing sheep fleece for the wool industry, making it a very natural and sustainable ingredient. Almost 90 years later, we are still working closely with wool producers to improve the efficiency of Lanolin extraction.
Our approach to sustainability has evolved, especially since our first Corporate Social Responsibility Report in 2007, but it has remained a central element of everything we do.
Sourcing renewable raw materials, developing the integrity of our manufacturing processes, producing innovative ingredients with sustainable benefits, and looking after our people and the communities in which we operate are our key areas of focus.
hours supporting local communities
We understand that business success requires a balanced approach that looks simultaneously at environmental, social and economic impacts, and we are pleased that this focus has been recognised externally. As well as maintaining our high ranking in the Global 100 Most Sustainable Corporations in the World and FTSE4Good status, we received a number of new accreditations:
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We also made excellent progress against our 2013 targets, including:
During 2013, we reviewed our sustainability strategy and established 10 new Material Areas and longer-term objectives. This was in response to an in-depth analysis of the Business in the Community 'Forces for Change' report, which we used as a framework to identify the global drivers that will influence the way we do business and the positive contributions we can make. P05
As a knowledge business, we depend on the expertise of our people and we work hard to attract, recruit and retain the best. I am once again pleased to report that our retention rates remain very high, and our people continue to show their commitment to long-term careers with Croda through, for example, increasing participation in our companysponsored employee share ownership schemes. P28
As we continue to expand our Business across the world, particularly with new manufacturing sites and Research & Development Centres in emerging markets, the impact of our operations on local communities is, as it always has been, a major factor in our sustainability strategy. Croda people continue to give their time and efforts to social and educational projects, with a particular focus on increasing scientific skills through our Group-wide volunteering scheme, 1% Club. P34
I would like to take this opportunity to thank my colleagues for their continued hard work and dedication to making Croda a sustainable business. As we all continue on our sustainability journey, one thing remains the same: for everyone at Croda it is our responsibility, both individually and as a team, to ensure that we continue to do business the right way.
Steve Foots Group Chief Executive
GRI Indicator: EC2 GRI Profiles: 1.1, 1.2, 2.10, 4.10
Where & How We Operate Our Responsibility Business Model & Risk Corporate Stakeholder Engagement Our Future Targets
Croda is not a consumer brand, but we are a consumer driven brand. We work hard to anticipate and understand consumer needs and desires, so that we can create the ingredients that our customers rely on to perform: from hair and beauty, to crop protection, pharmaceuticals, lubricants, engine oils and more.
Our Business is split into three segments aligned to our target markets: Consumer Care, Performance Technologies and Industrial Chemicals. In all three, our focus is on developing and delivering innovative ingredients. These can be the active ingredients with unique performance claims, or they can be the element that gives our customers' finished products the right feel or function. Often, the Croda element of a finished product is a small percentage, but it will be that percentage that makes the difference.
Growth is supported across the three business segments by our Research & Development teams and our Technology Investment Group (TIG) that exists to identify and integrate new technology. See AR&A £
Whether driven by our own business ethics, consumer demand or government policy, sustainability spans every area of our Business and is embedded into our management structure.
We are fully committed to:
GRI Profile: 2.2
Our chemistry and raw material sources support consumer demands, and wider stakeholder calls, for products with better ecological and environmental profiles. This expertise, alongside our close customer relationships, is delivering sustainable products with outstanding product performance to the markets in which we operate. Just two examples of this are:
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Our leading position in the use of renewable raw materials puts us in an excellent position to benefit from the growing trend for natural consumer products.
OUR SUSTAINABLE APPROACH OUR MATERIALITY OUR MANAGEMENT & GOVERNANCE
Chief Executive's Statement Who We Are & What We Do Where & How We Operate Our Responsibility Business Model & Risk Corporate Stakeholder Engagement Our Future Targets
Our Business success is driven by 'customer intimacy', by which we mean understanding the needs of our customers and their consumers, to enable us to deliver the innovations they rely on to build strong brands.
Customer intimacy comes from close collaborations and we facilitate this by positioning our operations close to where our customers are. We also drive our Business growth by harnessing market opportunities stemming from the three 'mega trends' we have identified: ingredient sustainability, beauty and ageing, and health and wellbeing.
To take advantage of these opportunities and the global drivers addressed within our 10 Material Areas, during 2013 we invested heavily in bespoke facilities, expertise and our global teams. This includes the creation and expansion of three Research & Development Centres and two new Customer Training Centres. P05
As we move closer to our customers across the world, expanding within existing and emerging markets, we must continue to manage our Business across the triple bottom line, as a product or service can only be considered truly sustainable when the demands of economy, environment and society are met. We will continually work to align our operations with this strategy in the following ways:
Set consistent safety and environmental impact standards across our global operations, in order to provide a safe and healthy working environment.
Value a diverse and inclusive workforce and provide tailored development opportunities to enable all employees to reach their full potential.
Our Responsibility Business Model & Risk Corporate Stakeholder Engagement Our Future Targets
In 2011, we established our Materiality Matrix, mapping the most significant sustainability issues to our Business success against their importance to our stakeholders. This evolved in 2012, and in 2013 we held a Strategy Review to progress a longer-term sustainability programme aligned with our Business strategy.
The Review used the Business in the Community (BITC) 'Forces for Change' (FFC) framework to identify global drivers that will challenge our Business and sustainability strategy. Preparation took place across our Business, with input on the potential opportunities and risks that the global drivers present to our future business success provided by: our Group Executive Committee, senior Leadership Development Group, regional middle management 2020 networks, and current and past Graduate Trainees from across the globe.
Croda is both impacted by and has an impact on global drivers:
Our Strategy Review identified the six global drivers that are the most important to our Business and that have an input into and impact upon our whole value chain. They are a challenge to our Business, but also an opportunity for future growth:
GRI Profiles: 3.5, 3.11
GRI Indicator: EC2
These areas of materiality address the most significant global drivers to our Business. They are an evolution of our 2012 Material Issues that were the focus of our targets during 2013, which enables us to integrate and consistently report progress in the pages that follow. Reaching across every area of our Business, these new or developed 10 Material Areas are now at the core of our longer-term sustainability activity.
| Environmental Impact Minimise the impact of our operations |
Developed P10 |
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|---|---|---|
| Policy & Regulation Proactively engage in the enhancement of policy and regulation |
New P15 |
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| Product Design Deliver the most innovative and sustainable ingredients to our customers |
Developed P16 |
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| Product Stewardship Ensure that the ingredients we produce contribute positively to the environment and society throughout their lifecycle |
Developed P19 |
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| Process Safety & Stewardship Foster the development of safety and quality systems associated with all of our processes |
Developed P22 |
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| Health, Safety & Wellbeing Empower employees to have health, safety and wellbeing at the forefront of their thinking |
Developed P25 |
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| Talent Acquisition & Management Be an employer of choice |
Developed P28 |
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| Corporate Knowledge Safeguard our knowledge and expertise |
New P32 |
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| Diversity & Inclusion Embrace and empower all individuals |
New P33 |
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| Community Education & Involvement Support the communities in which we operate, with a primary focus on encouraging young people to work within science and technology |
Developed P34 |
Corporate Stakeholder Engagement Our Future Targets
Sustainability can be seen as a lens through which we view our whole business model. Another such lens is risk. The fundamental risks to our Business are those that, if we did not successfully manage them, would mean that we don't have a business at all. They refer to our ability to operate a sustainable, safe and legal business.
£ See AR&A
Effective risk management helps us to:
We already have well-established mitigation measures to address our fundamental business risks and we will continue to evolve these as required. Our 10 Material Areas address the risks and opportunities presented by the global drivers and the three market mega trends that we have identified. Together, managing our Business risks and our Material Areas will help us to mitigate potential threats and maximise opportunities for future growth. P05
You can see just how firmly we embed sustainability from our business model. Sustainability reaches across:
This holistic approach is supported at all levels of our Company, from the top down. Ultimate responsibility rests with our Board of Directors and Group Executive Committee, and implementation plans are discussed at all regional and business board meetings. P37
The external influences that are crucial to our Business operations Employees
Talented individuals working as one team across the globe
The right processes and premises in the right places Stakeholder Feedback
The ongoing process of understanding shareholder, customer and consumer needs
Capturing leading-edge technologies, knowledge and expertise, and building rich protected ingredient portfolios
Moving ever closer to our customers, in terms of location, knowledge and understanding, to better respond to their needs
Sourcing renewable raw materials, developing responsible manufacturing processes, and looking after our people and the communities in which we operate Investment
Centred on niche markets, new technology capture, expansion in emerging markets and developing our people
Constant investment and innovation, supported by the right people, using the right processes and materials in the right places
Delivering greater value: to our shareholders with a commitment to financial growth and high returns; to our customers through high-quality innovative ingredients; across sustainability in the way we operate and in the ingredients we produce
We must consider and take necessary action to meet the needs and expectations of our stakeholders. By understanding the sustainability issues that are of greatest concern to them, we can make sure that we focus on the issues that will be most important to the future of our Business, and our longterm sustainable growth, through the management of our Material Areas.
It is critical that we continue to broaden our communication with all of our internal and external stakeholders. This dialogue takes many forms and encompasses a very diverse audience.
During 2013, key stakeholder engagement activities included:
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• We held 111 meetings with local businesses or business representatives.
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Darrel Webber, Secretary General of RSPO P18
Our underlying approach to sustainability focuses on establishing clear objectives and performance targets aligned to our Material Areas.
subsequent acquisitions within three years of final completion through relevant management training
programmes
To ensure that all Process Risk Reviews are compliant with our internal quality targets by the
end of 2018
08 Croda Sustainability Report 2013
Chief Executive's Statement Who We Are & What We Do Where & How We Operate Our Responsibility Business Model & Risk Corporate Stakeholder Engagement Our Future Targets
To have a Behavioural Safety Improvement Programme at every manufacturing site by the end of 2014
To develop and implement, during 2014, a programme that raises awareness of potential health and wellbeing issues that could affect our employees
To ensure that a risk assessment is conducted at every manufacturing site, during 2014, to understand and mitigate against any potential issues that the ageing of our workforce presents
Talent Acquisition & Management All employees to have a formal annual appraisal by the end of 2015
To implement a redefined Graduate Development Programme for our 2016 recruits
To launch a suite of career management tools, by the end of 2016, to support employees in realising their potential
To have conducted our third global employee engagement survey by the end of 2020
Knowledge
To complete a feasibility study on the implementation of a global knowledge transfer process by the end of 2015 Corporate
Diversity & Inclusion
To further enhance our whistleblowing procedures through the launch of an independent reporting hotline and website by the end of 2014
To ensure that we have completed a pilot programme of unconscious bias training with a cross-section of our middle and senior managers by the end of 2015
To ensure that all locations have appropriate policies and activities to support, value and respect diversity in their workforce by the end of 2016
Community Education & Involvement
To ensure that at least 5% of employees at all operations with a Research & Development Centre or significant engineering team receive Education Ambassador training by the end of 2014
To support our 1% Club Champions from across the world through the launch of a communications network during 2014
Following a review of the UK STEM education programme, to facilitate the implementation of at least two programmes at new locations tailored to meet local needs by the end of 2014
To increase internal and external awareness of our community education activities to enable all countries in which we operate to participate by the end of 2015
To have the capability to engage with young people at all stages of their education by 2020
The world is increasingly fragile. Climate change, as evidenced by extreme weather and growing scarcity of natural resources, such as water and fertile land availability, are affecting the way we live and the way global businesses operate.
We are an ethical and responsible business. This means continuing to minimise our impact on the environment by constantly looking at what we can do across our operations, particularly our manufacturing sites. As a natural continuation of our responsible sourcing commitments, we must also show our understanding of the impact we have on biodiversity and take action to reduce any negative effects of our operations.
reduction in VOC emissions* 30.9
626 tonnes
reduction per year in CO2 emissions at our Atlas Point manufacturing site following the installation of solar panels
*compared to 2010
Product Design Product Stewardship Process Safety & Stewardship Health, Safety & Wellbeing Talent Acquisition & Management
Corporate Knowledge Diversity & Inclusion
Community Education & Involvement
OUR MANAGEMENT & GOVERNANCE
Last year, our environmental strategy and targets were focused on three broad areas:
All of these areas continue to be of huge importance to our sustainability strategy and they are now grouped together under our Environmental Impact Material Area.
It is our aim to continue to:
During 2013, we made a substantial reduction in our VOC emissions, which was primarily the result of reducing the usage of solvents at the small number of our manufacturing sites that handle such substances. The biggest contribution came from moving a solvent handling process from our UK Rawcliffe Bridge manufacturing site to a more efficient, modernised site 80 miles away in Leek. We made additional, more modest improvements at other sites, notably Shiga in Japan.
Progress Against
| Target | ||
|---|---|---|
| 2013 | 212,275 | |
| 2012 | 248,124 | |
| 2011 | 280,025 | |
| 2010 (Baseline Year) | 307,154 | Exceeded |
Our North American manufacturing sites continue to lead the way in this area, with sustained, substantial reductions at Mill Hall and Atlas Point. At Mill Hall, innovative use of waste streams continues to make a positive impact, whilst at Atlas Point a new outlet has allowed considerable calorific value to be extracted for power generation from the site's solid waste. Our Spanish manufacturing site, Mevisa, also made an important contribution to us exceeding our 20% reduction target.
| Target | |||
|---|---|---|---|
| 2013 | 2,853 | ||
| 2012 | 2,419 | ||
| 2011 | 2,779 | ||
| 2010 (Baseline Year) | 4,870 | Exceeded |
In 2013, this North American manufacturing site achieved a 37% reduction in waste to landfill through: increasing the use of solid waste as fuel to 75%; site-wide communications to increase
awareness of recycling opportunities; and providing more recycling bins clearly labelled with approved content. The site has also held regular performance audits.
Progress against our target to reduce total Group energy consumption by 5% by 2015 was affected by the decommissioning of our gas turbine generator, mid-way through 2013, at our Gouda manufacturing site in the Netherlands. This is in preparation for a new biofuel-driven Combined Heat and Power (CHP) project currently in progress, which will have a large positive impact once operating, but means that in the meantime we need to purchase more electricity from the Dutch grid, increasing total energy consumption.
In addition, we saw significant increases in energy consumption at our Mill Hall site in North America and Chocques site in France, which were largely due to changes in the mix of the ingredients they make. Energy reduction programmes remain in place at all sites, with the overall aim of meeting our 2015 target.
With the commissioning of a CHP project at Atlas Point in 2012, we have made dramatic progress towards our target to have 25% of the Group's total energy requirements generated from non-fossil fuel sources by 2015. This will be achieved from the promise of even more power as the Atlas Point operation, and other investments, are optimised during 2014.
Other key contributors to the success of our increased use of non-fossil fuel energy have been:
| Leek, UK | Has fully commissioned its CHP unit, which runs on co-product waste. |
|---|---|
| Hull, UK | Makes a dependable annual contribution from its wind turbine. |
| Chocques, France | Purchases steam raised from a municipal waste incinerator. |
The electricity drawn by all of our manufacturing sites from national grids is supplied by a variety of sources, some of which are non-fossil. This contributes to our indirect supply of non-fossil fuel, but we are committed to investing in our own direct supply of non-fossil fuel.
In 2013, our Atlas Point site invested \$2.3 million in solar panels, the latest development in the site's ongoing \$100 million upgrade. The solar panels sit on 2.5 acres of land and generate 5% of the site's electricity, which is equivalent to the average power consumed by 130 homes. They will also reduce the site's CO2 emissions by more than 626Te per year.
This project follows the site's investment into obtaining methane gas down a pipeline from a landfill site 3.5 miles away. The landfill gas now provides approximately 60% of the energy needs of Atlas Point's manufacturing operations and is recognised as one of the country's cleanest and most efficient energy projects.
GRI Indicators: EC2, EN3, EN4, EN26
Policy & Regulation Product Design Product Stewardship Process Safety & Stewardship Health, Safety & Wellbeing Talent Acquisition & Management Corporate Knowledge Diversity & Inclusion Community Education & Involvement
The main contribution to our significant water savings during 2013 came from our Mevisa manufacturing site, which has reduced its abstraction of water from the local aquifer by more efficient recycling and installing improved cooling equipment. In 2012, we also highlighted a new purification and recycling project, which is now being commissioned at our Gouda site, with the potential to save 1 million tonnes of water a year and totally eliminate their use of ground water.
To fulfil our groundwater saving plan, in 2013 we identified the potential for a water reuse facility at our Shiga manufacturing site in Japan. This will involve:
The initiative should result in a significant 30% reduction in groundwater use.
2011 99.1
In 2013, we continued our journey to meet our challenging 2015 target of achieving 100% compliance with effluent discharge consents, with a reduction in the number of occasions when our waste water discharges did not fully comply across our 18 manufacturing sites, compared to our 2010 baseline year. Each of these instances has separately been investigated and is now being rectified.
2010 (Baseline Year) 98.9 On Target
Stringent Government standards and regulations in China have led to our Sipo manufacturing site, in the Sichuan Province of the country, developing the most advanced waste water monitoring of any of our manufacturing sites. Instrumentation continually monitors the quality of effluent leaving the site and relays, in real time, the concentration of contaminants to the Government. It is likely that other countries will move toward this standard in the future, so the experience gained with the instrumentation at Sipo will be valuable for our other manufacturing sites.
Due to ongoing energy reduction projects that are yet to be completed and changes in production patterns at key manufacturing sites, we saw an increase in total energy use in 2013 compared to 2012. Whilst this has had a negative effect on our total gross GHG emissions, 734.4Te eq CO2 per £1m EBITDA in 2013, compared to 701.7Te eq CO2 in 2012, our increased use of non-fossil fuel during the year means our net Scope 1 GHG emissions have reduced from 142,450Te in 2012 to 123,768Te, a reduction of 13%.
We are committed to our energy reduction programme and are proud of our achievements so far in increasing our usage of non-fossil fuel and reductions in VOCs.
| 2013 | 145,420 | 64,694 | |||
|---|---|---|---|---|---|
| 2012 | 144,431 | 47,235 | |||
| 2011 | 136,739 | 48,155 | |||
| 2010 | 151,959 | 54,230 | |||
| Scope 1 | Scope 2 |
| 2013 | 123,768 | |||
|---|---|---|---|---|
| 2012 | 142,450 | |||
| 2011 | 134,457 | |||
| 2010 | 149,893 | |||
Net Scope 1 Emissions
GRI Indicators: EC2, EN8, EN9, EN16, EN21, EN26
We take the stewardship of our own land very seriously and foster the development of flora and fauna at relevant sites with significant green space.
In 2013, we carried out biodiversity surveys at three of our estates, which identified the presence of different types of habitats and plants, bird and animal species. They also made recommendations for biodiversity opportunities, such as: preventing scrub areas from extending into grassland and so adding to the diverse mosaic of habitats; and establishing informal bird-feeding sites.
For 2014, we have identified a new target to begin pilot stewardship plans at two of these estates, Cowick Hall and Hull in the UK. It is hoped that this will have a measurable impact on biodiversity by the end of 2016 and it will also demonstrate our commitment to looking after our own estates.
We also recognise that we must consider the impact of our products on biodiversity. For instance, the extraction of key ingredient echinacoside from the plant requires a three-year soil cultivation of echinacea angustifolia before harvesting. IRB, a member of the Croda Group since 2012, has developed a 'biotechnology' method of obtaining echinacoside using stem cell technology with the following sustainable benefits: P16
• Higher safety: non-genetically modified cells are grown in a sterile environment, which eliminates contaminants such as pesticides, heavy metals and aflatoxins.
• Superior standardisation: the process results in batch-to-batch reproducibility and a higher concentration of active substances.
• Eco-sustainability: there is no need to collect wild plants or set up field cultivations; a totally eco-friendly approach, saving water and land use.
In 2006, local school children helped to plant the first trees of what has become a 55 acre woodland at our Cowick Hall Headquarters in Yorkshire, UK. The project was part of the Woodland Trust's 'Tree For All' initiative and, today, the woodland is a thriving area rich in wildlife and biodiversity.
Benefiting from 2013 solar panel, CHP and water recycling projects, and focusing on Scope 3 GHG emissions
Looking to the future, we are set to benefit from the installation of our 800kW solar panel array at Atlas Point, the commissioning of the new biofuel-driven CHP unit at our Gouda manufacturing site, and from our water purification and recycling projects at Gouda and Shiga. We are also carrying out feasibility studies to explore the use of biomass as a heat source at two of our manufacturing sites and ways of reducing the amount of aqueous organic material we send to effluent treatment plants.
To answer the increasing customer and investor call for reporting on Scope 3 GHG emissions, it is also our intention to implement a programme to track such data by the end of 2015. This will include relevant Scope 3 data such as fuel transportation, air miles and inferred emissions from the transportation of products, raw materials and intermediates.
OUR MATERIALITY Environmental Impact Policy & Regulation Product Design Product Stewardship Process Safety & Stewardship Health, Safety & Wellbeing Talent Acquisition & Management Corporate Knowledge Diversity & Inclusion Community Education & Involvement
New Material Area
On a daily basis, we safeguard our employees, our customers, our supply chain and our communities by ensuring that we are compliant with policy and regulation requirements across the markets and countries in which we operate.
To embrace the challenges of a constantly changing environment, where population is increasing as resources are decreasing, policy and regulation are becoming more demanding at national, international and industry level.
In light of concerns over the use of hydrolysed wheat proteins in cosmetics, we have provided extensive data to the Cosmetics Ingredients Review (CIR) Expert Panel in North America, effectively demonstrating that these wheat proteins are safe. Following this, we will now be talking directly to the CIR in 2014.
In June, the Scientific Committee on Consumer Safety (SCCS) published their long-awaited opinion that it is safe to use up to 25% titanium dioxide (TiO2 in nano form in cosmetic products. Our Sun Care and Biotechnology team was heavily involved in providing data to support this debate and all of our sun care products meet the criteria set by the SCCS.
Through collaboration with relevant technical committees and industry associations, we can ensure that we contribute to, and keep ahead of, future changes affecting our Business
At Croda, we have a track record of actively working to increase quality standards in our industry:
This is demonstrated by our current work to ensure that our recent acquisitions in China and Italy meet ISO 9001, ISO 14000 and OHSAS 18001 by the end of 2016, and that all subsequent acquisitions meet these standards within three years, where relevant.
This is demonstrated by our close partnerships with the bodies that establish standards, regulations and legislation. By sharing our knowledge and expertise, we are helping to develop and raise global quality standards, whilst proactively preparing ourselves to comply with new policies. This also increases barriers to entry for competitors seeking to move into our markets.
We continue to have many active and leading roles in discussions relating to our Business, including the following:
In 2014, our target will be to continue entering into constructive collaborations in order to ensure that we have an impact on, as well as being prepared for the impacts of, the policies and regulations that are relevant to our Business. We must make sure that we are at the forefront of developments in our industry and use our knowledge to give us a competitive lead.
Croda Sustainability Report 2013 15
There is an increasing focus on, and understanding of, the ingredients that go into the goods used across the world, and more and more consumers want to know that the products they use are sustainable.
At Croda, natural ingredients are at the heart of our products, with the majority of our raw materials coming from renewable natural sources.
When we design new ingredients, we aim to use raw materials that will eliminate or minimise impacts on environmental issues, and we use scientific innovation to maximise the environmental and social benefits delivered during use. We are aware of the role we must play in protecting biodiversity and addressing the effects of climate change; it is a crucial part of being a responsible manufacturer.
manufacturing sites now certified to supply Sustainable Palm Oil Derivatives against the RSPO Mass Balance model 4
103 new products launched
is the average score of our new products against the 12 Principles of Green Chemistry 10 out of 12
Environmental Impact Policy & Regulation Product Design Product Stewardship Process Safety & Stewardship Health, Safety & Wellbeing Talent Acquisition & Management Corporate Knowledge Diversity & Inclusion Community Education & Involvement
The focus on sustainable raw materials and manufacturing methods is continuing to grow, with increasing demands from customers and consumers. With our long heritage in naturally derived products stretching back to the launch of our first product, Lanolin, sustainability is firmly embedded in our innovations and we are determined to lead our sector in this area.
We are committed to:
We continued our strategy of assessing the sustainability profile of our new products against the 12 Principles of Green Chemistry and saw some notable improvements against 2012:
The nature and requirements of the industries in which our customers operate play a critical role in enabling us to focus on developing ingredients with high renewable content. We continue to make good progress across all of our industry sectors, with 28% of the 103 products launched in 2013 being derived from 99% or more renewable content.
GRI Indicators: EN1, EN26
*Health Care: no new products launched in 2013
Two of the products we launched in 2013 that illustrate our commitment to sustainable manufacture and performance are:
CrodaTherm™ Offers better performance, safety and sustainability than current non-renewable technologies.
CrodaTherm is our new range of phase change materials, used to store and/or release large quantities of energy as materials change from solid to liquid and vice versa. They can be used at low temperatures, such as in refrigeration and shipping medical equipment; ambient temperatures, such as in air conditioning, building materials and textiles; and high temperatures, for energy storage and electronics.
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NatraSense™ Provides all the cleaning performance of high-foaming surfactants, in a low foaming, 100% plant-based format.
The major benefit of NatraSense is that it matches, or exceeds the performance of traditional petrochemical foam control agents, used in everything from fabric care and bathroom cleaners to dishwasher detergents.
We are a leader in natural specialities, with 65.2% of our raw materials coming from renewable, natural sources in 2013. This figure has stayed close to 70% for the past four years that we have been reporting it, which puts us in an excellent position to benefit from the growing trend in natural based consumer products.
An important part of our Product Design strategy, and a key priority for Croda, involves responsibly addressing the social and environmental issues associated with palm oil (PO) and palm kernel oil (PKO). For us, this means forming close partnerships with the complex PO and PKO derivatives supply chains.
We are playing a leading role in driving the change to Sustainable Palm Oil (SPO), because we produce the widest range of Personal Care ingredients globally and touch the majority of cosmetic formulations.
promote 'the production and use of sustainable palm oil for People, Planet and Prosperity'. It is a non-profit organisation comprising of PO growers, processors and traders, consumer goods manufacturers, environmental non-government organisations (NGOs), social NGOs, banks, investors and retailers.
methodology to provide our customers with the data to purchase GreenPalm certificates. The subsequently published RSPO calculations aligns to our approach.
During 2013, Darrel Webber, Secretary General of RSPO said:
"RSPO commends Croda's efforts in moving towards sourcing for physical certified sustainable palm oil. We acknowledge the complexity of the palm oil supply chain, especially when it involves the palm oil and palm kernel oil derivatives market. Thus, Croda's initiatives are indeed an affirmative step towards the right direction, playing a significant role in the collective efforts to transform markets and make sustainable palm oil the norm."
We have always purchased low volumes of pure PO and PKO and last year saw our total consumption drop by almost 90% to just 38 tonnes, for which we supported SPO by purchasing GreenPalm certificates. However, and despite these low volumes, we will be seeking to source this as segregated material during 2014.
Our Singapore manufacturing site became certified to handle PO/PKO derivatives via RSPO's Mass Balance process. This was an important, progressive step in developing the physical supply chain of certified SPO derivatives. The process is designed to address supply chain logistical issues due to the inability to connect derivative buyers and sellers. Certified SPO is drawn into the physical supply chain and traced through an audited process to the finished product, which gives our customers a direct link to supporting volumes of certified SPO. It helps address the large volumes of SPO that can remain unsold and it will help create the momentum to derivative material being available via RSPO's segregated process.
Our manufacturing sites at Rawcliffe Bridge in the UK, and Mill Hall and Atlas Point in North America gained approval to manufacture certified SPO products to the RSPO Mass Balance process. Out of our 14 manufacturing sites handling PO/PKO derivatives globally, these three and Singapore consume 70% of our total volume, demonstating our commitment to drive SPO forward.
During 2014, we will continue to monitor our new products against the 12 Principles of Green Chemistry, whilst considering our new additional 13th element that looks at the environmental benefits of our products in use.
In 2014, we anticipate that two more of our manufacturing sites, in Spain and Brazil, will achieve RSPO certification, taking our total to six sites handling 85% of the PO derivatives that we use. By 2015, all of our manufacturing sites handling PO, PKO and their derivatives will have RSPO supply chain certification. We are working very proactively to widen this out to our entire PO supply chains, so that by 2017 all of the palm oil within our ingredients will be 100% SPO. This is supply chain permitting as it requires the collaboration of growers, millers, crushers and numerous suppliers to source sustainably across many different industries.
Environmental Impact Policy & Regulation Product Design Product Stewardship Process Safety & Stewardship Health, Safety & Wellbeing Talent Acquisition & Management Corporate Knowledge Diversity & Inclusion Community Education & Involvement OUR MANAGEMENT & GOVERNANCE
2013 Targets
analysis completed in 2012
of Conduct during 2013
Product Stewardship refers to the environmental, health and safety impact of the ingredients we sell to our customers throughout their lifecycles and, therefore, throughout the supply chain. It is an integral part of the responsibility that comes with producing chemicals and as such it affects every part of our operations, from sourcing our raw materials in an increasingly fragile environment, to environmentally
Ingredient Sustainability database in accordance with the gap
• Further engage with our major suppliers on our Supplier Code
• Following a detailed audit of product stewardship across the Group, ensure that best practice is communicated and any appropriate improvement actions are taken by the end of 2014
Product quality is at the heart of responsible stewardship. We must be able to achieve consistently high standards wherever we manufacture our ingredients in order to deliver the performance our customers expect and claim, and to ensure the safety and satisfaction of consumers. So strong is our commitment to quality that we are actively helping to raise global standards through our work with organisations like the European Commission and the European Federation for Cosmetic Ingredients (EFfCI). P07
• Gain EFfCI GMP certification for our remaining five manufacturing sites that produce cosmetic ingredients and EXCiPACT certification for six manufacturing sites producing pharmaceutical excipients by the end of 2015
500 listings in our Ingredient Sustainability database
To gather high-quality sustainability data on all our major ingredients, and to drive product quality and consistency
We are exceptionally well informed about the sustainability of our ingredients and our business processes, as demonstrated by our extremely high product stewardship credentials. It means that we:
We are committed to providing uniform ingredient quality and performance across the globe to protect our customers' brand integrity and for the safety of the consumer. We also recognise that, wherever in the world we manufacture our ingredients, our customers need to be assured that they will receive the same, consistently high quality standards via a secure transportation operation.
By the end of 2013 we had 500 of our ingredients in our Ingredient Sustainability database and had begun collecting the data against the 10 metrics that we will measure them on:
Closely linked to this, and as part of the European Commission's objective to stimulate the market for renewable or 'bio-based' products, we have been involved in a technical working group to assist the development of:
During 2013, we were proud to be recognised by the Carbon Disclosure Project (CDP) for our leadership in climate change transparency; an integral part of our continued commitment to sustainability. It was 10 years ago when the CDP pioneered the global disclosure system for companies to report their environmental impacts and strategies to investors. This system has evolved significantly, supporting multinational purchasers to build more sustainable supply chains. Today, we engage with a number of major customers in providing environmental data relating to the ingredients we supply to them.
Our listing on the CDP Climate Disclosure Leadership Index signifies our excellence in internal data management and our understanding of the climate change risks and opportunities that affect our Business, including greenhouse gas emissions and their reduction targets. P13
In 2013, we recieved the Henkel Beauty Care Sustainability Award for delivering lifecycle assessment data for several ingredients they purchase from us. This data allowed Henkel to establish better and validated lifecycle assessment models for their own beauty care products, so together we are achieving more with less environmental and social impact.
GRI Indicators: EN26, PR1, PR3
Environmental Impact Policy & Regulation Product Design Product Stewardship Process Safety & Stewardship Health, Safety & Wellbeing Talent Acquisition & Management Corporate Knowledge
Diversity & Inclusion Community Education & Involvement
The European Federation for Cosmetic Ingredients (EFfCI) first produced its Good Manufacturing Practice (GMP) Guide in 2004, followed by its voluntary Certification Standard in 2010 to assure customers of product quality and, ultimately, safety. We have actively helped to develop the Standard and Guide to keep it up to date with on-going quality and GMP developments, with the current edition released in 2012. By the end of 2013, 11 of our manufacturing sites were EFfCI GMP certified, which:
We have been amongst the first to achieve EFfCI GMP certification in Brazil, India, Japan and North America.
In 2013, two UK operations, our manufacturing site in Rawcliffe Bridge and our Thorne distribution warehouse, received EXCiPACT™ certification. EXCiPACT is a voluntary international scheme that provides independent third-party certification of manufacturers, suppliers and distributors of pharmaceutical ingredients. Building on the ISO9001 framework, it aims to:
The Authorised Economic Operator (AEO) standard provides customers with the highest level of assurance that their goods will be delivered reliably, safely, consistently and on time. A globally recognised European standard, it gives our shipments a seal of approval that can potentially avoid long delays at ports. During 2013, our four UK manufacturing sites, two warehouses, Cowick Hall Head Office and Hesslewood Finance Centre, along with our Netherlands manufacturing site, achieved the AEO standard. By the end of 2014 all of our remaining European sites and warehouses will also have AEO.
A stronger focus than ever on ingredient sustainability, safety, quality and consistency throughout the supply chain
During 2014, we will continue our strategy of gathering ingredient sustainability data to help fulfil our responsibility to reduce any negative impacts of our products throughout their lifecycle. We intend to develop a streamlined business process for populating our Ingredient Sustainability database with the 10 key pieces of information per ingredient.
Our strategy of driving quality, safety and consistency will also move forward. Our aim is to achieve EFfCI GMP certification at our two remaining sites manufacturing cosmetic ingredients by the end of 2014, and five more of our operations producing pharmaceutical excipients are on target to achieve EXCiPACT certification by the end of 2015. We will also continue to review our approach to product stewardship and share best practice across the Group, ensuring that any appropriate improvement actions are taken by the end of 2014.
In 2013, we identified that we must go further than our current communication with suppliers to ensure that those who represent 80% of our direct and indirect spend fully understand our Supplier Code of Conduct. We will now be communicating our expectations and adherence to our Code through face-to-face meetings with suppliers to ensure complete clarity. This is of growing significance as traceability becomes an increasingly important factor for our customers and consumers. It is also an essential part of our product stewardship responsibilities, which goes wider than our own actions to take in those of the whole supply chain.
We have a clear responsibility to protect our people, the communities in which we operate and our infrastructure. The consequences of not doing so represent the most significant risk to our Business, stakeholders and people.
However, the benefits that arise from carefully managed process safety and process stewardship are extensive, having a direct impact on our business growth, reputation and sustainability.
As a manufacturer of speciality chemicals, with seven of our global facilities classed as major hazard sites, we are committed to an ongoing, robust programme of process safety management and stewardship across our operations. It is how we protect our Business and how we ensure the excellent quality that our stakeholders demand of us.
of all critical actions arising from Process Risk Assessments 100
completed on time
Global Incident Investigation training implemented a
year ahead of schedule
Croda Hazard Study Leaders' Academy programme endorsed by the University of Derby
Talent Acquisition & Management Corporate Knowledge Diversity & Inclusion Community Education & Involvement
Since 2006, our strategy has been to strengthen our robust Process Safety Management System, which is aligned with the OHSAS 18001 Health and Safety Management System. We have achieved this year on year, with a particular focus on new acquisitions, through the support of:
We have recognised for a long time that success in this area could only be achieved if activities are endorsed, and actively promoted and carried out at all levels in our Business. Comprehensive training has been essential in achieving this, which includes:
From the very top of our organisation, all of our people recognise the differences between personal and process safety and the need to pursue excellence in both.
GRI Indicators: LA10, LA11
To support our sustainable approach to risk management and review across process safety and stewardship, and to develop a Group-wide team of Hazard Study Leaders, in 2011 we launched our own internal Academy. In 2013, the Academy achieved external postgraduate certification from the University of Derby in the UK, providing a truly aspirational goal for our young engineers.
At Croda, we have identified and registered 139 of our chemical processes as requiring hazard and risk assessment. Each of these is subjected to a seven-stage hazard study, the last stage of which is to conduct a Process Risk Assessment (PRA) within a strict five-year cycle. This allows us to evaluate whether they present an intolerable risk to the Business and whether we need to pursue mitigating actions.
We also carry out the following checks and measures to ensure that process safety is continually monitored and reviewed, with the data being used to inform training needs and drive improvement:
During 2013, and one year ahead of schedule, we completed our target to develop and implement a training programme to improve incident investigation. A common methodology was developed by an independent expert and a training course delivered to a cross section of SHE managers, operation leaders and Quality Assurance professionals from across the Business. The training will be cascaded down to all manufacturing sites globally, and the methodology will be reviewed and developed on a regular basis.
Operators, maintenance technicians and first-line managers based at our manufacturing sites globally are at the heart of process safety and stewardship. They are the people who can recognise when a process may cause harm, so in 2013 our Mill Hall site in North America developed its Basis of Safety training programme to ensure that they are competent to do just that.
A Basis of Safety summary document was prepared for each process, listing the potential incidents and safeguards to operate the process safely. Following this, all key site personnel were trained on the Basis of Safety document and required to pass a competency assurance test for each of the processes they are responsible for.
With our robust Process Safety Management System at the core of Product Safety & Stewardship, we now have a target to ensure that it is fully in place at all of our manufacturing sites by the end of 2016 and embedded at any subsequent acquisitions within three years of final completion. This will be achieved through relevant management training programmes and it will also mean that all of our current chemical processes will have gone through a PRA by 2018.
As a result of the Basis of Safety work carried out across the Group, especially at Mill Hall, we have identified that this document will become the main vehicle for communicating to operations staff how our high-hazard processes are run safely. By the end of 2016, we will have rewritten Basis of Safety documents for all 139 of our processes.
Building on the success of our SHEQ management system, we are now also in the process of developing a complementary internal Group Quality Policy and Manual, which will be issued to every manufacturing site by the end of 2014.
OUR MATERIALITY Environmental Impact Policy & Regulation Product Design Product Stewardship Process Safety & Stewardship Health, Safety & Wellbeing Talent Acquisition & Management Corporate Knowledge Diversity & Inclusion Community Education & Involvement OUR SUSTAINABLE APPROACH OUR MANAGEMENT & GOVERNANCE
As a global manufacturer, we have a responsibility to take care of all our employees across our global operations and we set ourselves extremely high standards, particularly in personal safety management where our aspirational goal is zero harm. We also recognise that our approach must continually evolve in response to global trends, for instance, the ageing population in the developed world. An ageing workforce is positive in terms of diversity, but also a risk at our
manufacturing sites due to potential physical restrictions; a challenge we are addressing using established ergonomic assessment techniques.
No one should expect to be injured when working at one of our operations, but health and safety at Croda goes further than legal requirements to encompass the total wellbeing of our people. We are continuing to invest in initiatives with this in mind. First and foremost this is the right thing to do, but it also makes good business sense; when employees and contractors are safe and healthy, absence is reduced and potential loss of reputation due to serious breaches in policy and regulation is eliminated.
Development of bespoke Behavioural Safety Programmes across our manufacturing sites
Croda Sustainability Report 2013 Our two North American manufacturing sites have been awarded OSHA's coveted VPP* status
*Voluntary Protection Program (VPP), the highest award from Occupational Health & Safety Advisory Services (OSHA)
To provide a safe working environment where our people can safeguard themselves and their colleagues from harm and are actively encouraged to adopt healthy lifestyles
The health and safety of our employees remains a top priority for us and we continually strive to improve upon our injury rate for the optimum protection of our workforce. To help us achieve this, our existing three-point strategy remains in place:
To have a behavioural based safety programme in place at each site.
We have now extended our Health & Safety Material Area to include Wellbeing, signalling our intent to actively invest in the general wellbeing of our employees, often over and above legal health and safety requirements.
Our key indicator of occupational safety is the LTI rate. We define this as the number of injuries that result in an absence from work of one day or more (for many other companies it is three days or more). We then divide this figure by the total number of hours worked in the year and multiply by 100,000, which is approximately the number of hours worked in a lifetime.
Our corporate target is to have a sustainable, combined rate of less than 0.20. After achieving an LTI rate of well below the industry average during 2012*, our performance with regard to both employee performance and contractor performance was disappointing in 2013. Whilst the Group rate remains below average**, results were particularly poor in Asia where we are now taking active measures to improve contractor selection and management. We remain convinced that a focused effort on our three-point strategy will result in a sustainable improvement over the coming months and years.
In 2012, our Rawcliffe Bridge manufacturing site in the UK developed an interactive Behavioural Safety Programme, which focused on the ways line managers and supervisors communicate unsafe and safe behaviours to their teams.
The Programme was very well received, and in 2013 we carried out further coaching to help individuals apply the techniques they had learned. In line with our new target to have a Behavioural Safety Improvement Programme at every site by the end of 2014, last year we also shared the best practice from Rawcliffe Bridge and are encouraging other sites to develop a similar approach.
Another example is from our Sederma manufacturing site in France where, following a safety climate survey, the team took action to improve the perception of risk by introducing frequent safety and quality communications sessions for all employees, and increasing the standard of monthly workplace risk assessments.
We aim to prevent all work-based injuries and illnesses through effective training of our people and careful management of risk.
LA6, LA7, LA11
**Most recent Cefic Responsible Care™ data GRI Indicators:
Environmental Impact Policy & Regulation Product Design Product Stewardship Process Safety & Stewardship Health, Safety & Wellbeing
Talent Acquisition & Management Corporate Knowledge
Diversity & Inclusion Community Education & Involvement
The Wellbeing element of this Material Area recognises that health and safety goes wider than safeguarding against injury and incident. We must work together to create a safe and healthy working environment, which contributes to having an engaged workforce, so that we continue to do the best job possible.
At the start of 2013, we set a target for all of our operations to undertake health promotion activities during the year, which received an excellent global response, building on existing programmes at many of our operations.
| 'Cycle to Work' schemes | ||
|---|---|---|
| Annual health checks | ||
| Promotion of sports activities | ||
| First aid training for employees | ||
| Improved desk equipment | ||
| Health promotional emails | ||
| Health talks focused on nutrition and healthy living |
||
| Free fruit baskets | ||
| GRI Profile: 2.8 LA7 |
GRI Indicator: |
For the past four years we have run Wellness Fairs at our three North American operations to help promote the benefits of healthy living to our employees. Local fitness centres, nutrition counsellors, chiropractors and massage therapists have all attended the Fairs. Various screenings have also taken place, including thyroid, skin damage, blood pressure, BMI and lung function tests, along with free flu vaccinations.
As a result of reviewing our strategy against the global drivers, we have established a new target for 2014: to conduct a risk assessment at every manufacturing site to help us understand and mitigate any potential issues that the ageing of our workforce may present. This is something that is already being considered at some sites, but given the continued increase in retirement age it is important that we look at the global picture. P05
During 2014, in addition to our behavioural safety target that encourages people to think before they act, we will also be developing and implementing a programme to raise awareness of potential health and wellbeing issues that could affect our employees. It demonstrates our serious commitment to the wellbeing, as well as the safety, of all our employees.
Talent Acquisition & Management
Our Business is only as good as our people. First, we need to find 'the talent'; the people with the right mix of skills in the places where we need them. As a scientific knowledge business, this increasingly means tackling issues such as the lack of the skills we require in emerging markets and the increasing global competition for graduates with science, technology, engineering and maths (STEM) qualifications. P35
We then need to attract talented people to work for us, stay with us and develop rewarding careers with us. How do we do this? By being an employer of choice, which means offering the right balance of remuneration, rewards and opportunities. If we get all this right, we can capture and keep hold of the critical knowledge that we rely on to drive innovation and growth, to continue building a committed global workforce that will help us to achieve even greater success.
Non-UK employees enrolled in our sharesave schemes increased from
All regions now have a
Graduate Development Programme
GRI Profiles: 4.16, 4.17 GRI Indicator: LA10
Environmental Impact Policy & Regulation Product Design Product Stewardship Process Safety & Stewardship Health, Safety & Wellbeing Talent Acquisition & Management Corporate Knowledge
Diversity & Inclusion Community Education & Involvement
Our Business depends upon the expertise and dedication of our people. We work hard to recruit the best and to source the specialist knowledge we require, so once we have found the right people we want them to develop and grow within Croda. Our strategy is to better understand the needs, motivations and abilities of our employees, and prospective employees, so that we can:
Recruiting the Best During 2013, we continued to invest in our very successful Graduate Development Programme, meeting our target for all regions to have a programme of local graduate and trainee recruitment by the end of the year.
We attended careers fairs and held promotional activities at universities across the world, including events that were new to us in China and Sao Paulo, Brazil. Graduate residential training also took place for the first time in Latin America, and for the second time in Asia. Both of these training programmes have been adapted from our successful European and North American programmes to ensure that our global graduates benefit from consistent messaging, content and development experience.
Steve Laugher, an independent training expert who helps us to deliver the Croda GDP, gives his views on the programme's success:
"As Croda has grown as a company, so has their Graduate Development Programme. New modules have been introduced, which are relevant to the needs of the Business to ensure that there are highly developed individuals ready to take on the challenges that the next stages of Croda's growth will present.
"Testimony to this is the number of current Senior Managers that have been through the GDP, and those that are now driving business right through the Company.
"The Programme is designed to offer the graduate the opportunity to take on stretching and advanced high-profile projects. The training elements provide a level of information that asks the graduate to take a 'step up' from their current awareness of business and aim for higher achievements than in many other organisations."
Our Graduate Development Programme has been running for over 25 years and has supported over 300 graduates through their early years at Croda.
When someone leaves us, it has a huge impact on our Business in terms of potential critical knowledge loss, the cost of recruiting and training a replacement, and the negative effect it can have on teams and departments. So talent retention is a key part of our strategy and it is something that we do well; most of our senior people have come up through the Business and we only have 4% annual turnover from resignations. P32
With retention firmly in mind, last year we continued to develop our Company share ownership scheme, Sharesave. We met our target and exceeded expectations in driving awareness through advertising and promotion, giving all employees the opportunity to make an informed decision about whether to join a scheme. The result was an increase in global share scheme membership from 55% in 2012 to 65% in 2013.
In 2013, we also continued preparations for our first global employee engagement survey, which will take place in 2014. This will help us to be more proactive in identifying potential employee turnover issues, individual concerns and employment trends, so that we can better manage our workforce and recruitment planning.
Investing in our people to build on their knowledge, skills and abilities is important because:
In 2013, we continued to work towards our target of all employees having a formal appraisal by the end of 2015. This involved fine-tuning our online Aspire appraisal system, which provides an invaluable source of information regarding job performance, aspirations, mobility and training needs to feed into our Talent Review Process.
Early 2013 saw the start of our global Talent Review Process. This is an essential part of the way we manage talent, as is our new Development Centre process that we also defined and implemented in 2013. Our aim is to more closely link our talent management process and promotion decisions. We recognise that if, and only if, we have a clear view of talent in our Business, we can ensure that promotion decisions are objective, fair and are right for our Business.
Both Aspire and our Talent Review Process are essential, not only for us to be able to identify and develop talent, but also for our employees to feel invested in, valued and respected.
managers from around the world were involved 160in the review discussions
"I think the talent review process forces us, as managers, to take a step back and really think about each person within our organisation. It makes us take the time to review each individual's performance, their capability and their specific development needs. Through this process we can build a more sustainable organisation by:
In our first Development Centre we held one-to-one evaluations with 10 individuals to ascertain whether they would be ready to move onto a higher graded role within 12-18 months. The process identified who would be ready for promotion in the short, medium and long term with the right support. All participants received internal and external feedback that they can practically implement.
Diversity & Inclusion
Environmental Impact Policy & Regulation Product Design Product Stewardship Process Safety & Stewardship Health, Safety & Wellbeing Talent Acquisition & Management Corporate Knowledge
Community Education & Involvement
During 2013, we ran the first global Croda 2020 Network as part of our Leadership Development Portfolio. The Croda 2020 Network aims to develop and showcase those who have the potential to be leaders and global specialists during the decade of 2020. The Network is split into the three regional groups of Europe, Americas and Asia and in its first year 46 employees joined. Each year, a new intake will be invited to complete a formal year-long programme, with the skills learnt and experiences gained being built upon throughout their careers.
Our 1% Club allows all employees to volunteer 1% of their annual working time to support community and education activities. In emerging markets, as well as in developed markets, 1% Club members are actively working to build the skills our Business relies on within the communities in which we operate. P36
For example, last year in India we:
gave students from technical and management institutes the opportunity to work on short-term projects as a part of their internship;
welcomed students from local science and technical colleges to our manufacturing site to give them an insight into the industry; and
P35
In 2013, we also widened our UK STEM initiative to other countries where we are working to inspire the next generation of Croda people. All of these activities help to develop the skills and experience of our people, whilst supporting community education.
In 2014, we will continue working towards our objective of being an employer of choice, providing a rewarding environment for talented individuals to progress their careers with us. We want employees to achieve their full potential, and to do so with Croda.
With this in mind, we intend to launch a suite of career management tools by the end of 2016. This includes the slightly delayed launch of our online learning zone that will offer a range of personal skills training, product training and job-related development modules to our global workforce from early 2014. The aim is to enable our people to understand how they can develop their skills and take an active role in managing their own careers.
In 2014, we will be conducting our first global employee engagement survey and we are already making plans for more; our target is to have conducted our third survey by the end of 2020, resulting in a set of leading indicators of employee engagement that we can track over time.
We are also working to implement a redefined Graduate Development Programme (GDP) for our 2016 recruits. Our current GDP was established 25 years ago and, although it has evolved, we welcome the chance to review whether it is still fit for purpose to take in the needs of younger generations and our changing business.
2013 Global Croda 2020 Network with our Group Executive Committee
Environmental Impact Policy & Regulation Product Design Product Stewardship Process Safety & Stewardship Health, Safety & Wellbeing Talent Acquisition & Management Corporate Knowledge Diversity & Inclusion Community Education & Involvement
In a world where employees are increasingly mobile and the rate of innovation is on the increase, keeping hold of the critical knowledge that helps to generate profit is more difficult, and more important, than ever.
Put simply, corporate knowledge is 'what we know'; about everything from our technologies and products, to our customers and markets. It can be in people's heads, on computers or filed away in a cupboard. The challenge for any business is how to identify, hold onto, share and develop that critical knowledge to create competitive advantage.
32,000 Over customer reports in client
relationship management system, C2G
45
of our marketing, engineering and technical experts communicate on our social media network, The Hive
We can avoid knowledge loss as people retire or move on in their careers by being more effective in how we transfer our expertise
As a speciality chemical company, we employ a huge variety of people who are all experts in their individual job roles. These people drive the innovation that creates our growth and many of them are with us for a large part of their career, becoming not only experts within our Business, but also recognised specialists within their occupation. Our employee retention rates are very high and something that we strive for as a means of keeping critical knowledge within our Business. We must recognise, however, that some employees will move on in their careers and all will inevitably retire. So this new Material Area addresses how we manage knowledge. P30
During 2013, we highlighted the three key areas of corporate knowledge that will be critical to our future growth success:
With innovation and technology constantly changing and developing, to stay competitive we must continue to capture new knowledge through our acquisitions and recruitment strategies. Bringing in new talent will be crucial to our future success.
Once we have knowledge in our Business, we must keep it there. Many of our employees develop a unique understanding of their specialist field and how this relates to a business such as ours. We must recognise and reward this expertise, whilst also using today's technology to capture this knowledge as people retire or pursue other opportunities elsewhere. P29
In a world where knowledge is accessible at people's fingertips and shared at the click of a button, we must advance our systems to capture expertise and fully capitalise on it. This means transferring our knowledge across our Business, sharing and re-using it to the best effects and avoiding any duplication of effort.
Identify how to optimise critical knowledge capture and share it in our Business where it can create profit
We already have internal systems in place to store information and share ideas, so during 2014 we will review the use of these tools and conduct a feasibility study on the implementation of a global knowledge transfer process. This will standardise the sharing of critical knowledge across the Business and the transfer of information to better capture, protect and exploit it in order to drive future growth.
OUR MANAGEMENT & GOVERNANCE
Environmental Impact Policy & Regulation Product Design Product Stewardship Process Safety & Stewardship Health, Safety & Wellbeing Talent Acquisition & Management Corporate Knowledge Diversity & Inclusion Community Education & Involvement
We live in a changing world. Significant population growth in emerging markets is shifting economic growth, workforce demographics in developed economies are changing, and the gap in health, wealth and living standards is getting bigger. We are embracing these changes by highlighting Diversity & Inclusion as a new Material Area in our
sustainability strategy, focusing on supporting, valuing and respecting diversity in our workforce, and ensuring that all employees feel empowered and included.
• To ensure that our policies remain consistent with the spirit and intent of the ILO Declaration on fundamental Principles and Rights at Work, where applicable to business
Diversity & Inclusion is not just about complying with policy, it is about creating a culture of mutual respect for mutual benefit
At Croda, diversity and inclusion is not something we do because we are required to. We do it because it is:
When we all feel respected and that our opinion counts, we enjoy greater career satisfaction, feel invested in and have more opportunity to fulfil our potential.
Greater diversity in our teams can lead to new, better ways of working and thinking, driving ideas and innovations. It also allows us to better represent the diversity of the communities in which we operate.
As a Material Area, Diversity & Inclusion underlines our commitment to creating a diverse workforce that feels accepted and included. We have a comprehensive diversity policy in place and understanding perceptions relating to gender has been a recent area of focus for us. Through asking qualitative and quantitative questions to a selection of our European employees, we have been able to obtain rich, detailed and sometimes very personal insights into the perceptions around gender and equality within our European business.
See AR&A £
Analysis of the results has highlighted that we must find a way to remove inhibitors to female progression, making the playing field more equal while adhering to objective fair processes. The top recommendations from the survey were:
We are committed to pursuing cultural change and building diversity and inclusion into everything we do, our gender survey has been a key part of driving this. We are now acting on the results of the survey and widening our approach to include the whole breadth of diversity and inclusion. The first global employee engagement survey that takes place in 2014 will play a critical role in indicating how included our workforce feels.
In 2014, we will enhance our whistleblowing policy and procedures to include an independent reporting hotline and website, making it easier for our employees to challenge and question. As a direct result of our gender survey, we will also be running a pilot programme of unconscious bias training with a cross-section of our middle and senior managers to help avoid stereotyping and unfounded perceptions impacting on the effectiveness of our people management processes.
By the end of 2016 we intend for all our locations to have appropriate policies and activities in place to support, value and respect diversity in their workforce. This goes beyond our ongoing commitment to ensure that our policies remain consistent with the spirit and intent of the ILO Declaration on Fundamental Principles and Rights at Work.
In a changing world where transparency and access to information are expected, and trust in business is more uncertain, good relationships with our neighbours are more important than ever before.
Our 'social licence to operate' is based on the relationships we have with communities local to our operations. These relationships also have an impact on the people who work for and with us, and on their families and wider communities.
As well as the impact we have on these communities, we recognise that we can bring value to them; not just by providing employment and buying goods and services, but also by actively improving skills, knowledge and lives through our community education and involvement projects. Indeed, as our focus continues to shift towards emerging markets, community education will be particularly vital in ensuring that we have access to the skill sets our Business needs for growth.
402
reported meetings with local community and stakeholder groups
4,387
1% Club hours were volunteered
equivalent to over £77,000 in-kind donations
Environmental Impact Policy & Regulation Product Design Product Stewardship Process Safety & Stewardship Health, Safety & Wellbeing Talent Acquisition & Management Corporate Knowledge Diversity & Inclusion Community Education & Involvement
When we consider our impact on local communities, we have two areas of focus:
Community education, which aims to raise the profile of science, technology, engineering and maths (STEM) by providing relevant, targeted support to schools, colleges and universities in our local communities. In doing so, we can improve the learning and career prospects of local populations, enhance our reputation and develop the vital employee skills that we depend on for future growth.
Community involvement, which demonstrates that we are investing in local communities, turning talk into action, by responding both proactively and reactively to local needs and delivering real benefits. Through this, we can also enhance the performance and morale of our employees, support the recruitment needs of our Business and ensure that we have a positive impact wherever we are in the world. P30
None of this is possible without effective communication and we strongly believe that the only way to understand and act on any local concerns regarding our operations, and to identify joint improvement opportunities, is through open dialogue. We must be connected and transparent if we are to engender trust and respect.
During 2013, the vast majority of our operations with 30 or more employees met their target to hold at least two face-to-face dialogue sessions with each of our key stakeholder groups: local authorities, councils, governments and emergency services; local businesses or their representative groups; and local schools, colleges and universities.
In many cases, locations well exceeded the target of six meetings in total, with the average number of meetings recorded across our larger operations being 16 for 2013. This is a very satisfying improvement on the average of seven meetings per location in 2012 and illustrates our continued commitment to an open dialogue with the communities in which we operate. A total of 402 stakeholder meetings were recorded in 2013 across all of our operations.
As a knowledge industry, we have a duty and a passion to encourage and enthuse young people about the benefits of a scientific education. As part of this, in 2013, 15 out of 19 of our Research & Development (R&D) Centres and locations with a significant engineering team implemented local education programmes.
We also recognise that education goes wider than STEM, and we are working to encourage future generations to learn about other areas and functions in our Business such as HR, IT, sales and marketing through work experience and school visits.
All of our global operations understand the value of science education and continue to raise awareness in their local communities. This includes the UK STEM Team, a rotating group of junior managers in its third year of operation, which has been working hard to support other regions as they enhance their own education programmes through the ongoing development of web and paper based toolkits.
In 2013, the UK STEM Team reached 1,428 students in 59 schools. Initiatives have been wide and varied: from lessons about the chemistry behind sunscreens and how to make foam, to talking about the huge variety of careers available in science.
A key part of the UK STEM Team's work has been to create a broader pool of Education Ambassadors, and in 2013 we developed and delivered a training programme for new Ambassadors across both the UK and Latin America. As well as supporting the local community, our Education Ambassadors also benefit from the personal and professional development opportunities that being part of the STEM Team offers. We are also well on our way to ensuring that at least 5% of all our employees at R&D Centres and locations with significant engineering teams receive this training by the end of 2014.
High school students learning about the importance of sun protection at the Republic of Argentina School
Undergraduates at the University of Ostwestfalen-Lippe in Germany taking part in a workshop on raw materials and formulating
Our community involvement activities are as diverse as the locations in which we operate. Rather than having one headline company charity, we achieve this diversity in our community activities by giving our employees the flexibility to respond to their local community needs. This is delivered with the support of our local management teams and our Group-wide, employee-led volunteering programme, 1% Club.
1% Club enables all of our employees to use 1% of their annual working time to support local community-based activities. That equates to around three days a year for full-time employees. This not only supports local communities, but also helps boost staff morale and offers valuable opportunities for personal and team development.
As part of our aim to reinforce community involvement fitting to local culture, a group of employees at Croda India have come together to form a team named PRAYAS, meaning 'an honest effort' in Sanskrit. Last year, the team were active in a huge variety of projects, including:
In October 2013, Croda Argentina organised a 'Crops and Agriculture' training session for 50 pupils at Las Tunas Primary School in Buenos Aires. During the session, Croda Crop Care Account Manager, Gabriel Amato, gave a presentation about growing fruit and vegetables and the importance of healthy eating. Afterwards, the children were given pots to plant tomato, basil, corn and parsley seeds, and they were also given packets of seeds to take home.
Throughout 2013, over 20 of our Gouda employees in the Netherlands helped out with a variety of community projects, from school trips and sporting activities, to organising trips for the elderly and carrying out repair work for the Salvation Army. Process Engineer, Thaddeus Anim-Somuah, even took a trip to the North West of England to give interactive presentations at schools and colleges on the basics of chemical engineering.
2013 saw the 10th anniversary of 1% Club, following its initial launch in the UK. Now global, it continues to allow our employees to make a huge contribution to local communities around the world. However, we have known groups of employees who struggle to take part in the scheme, which was not adequately addressed with our 2013 target. In 2014, we will develop the community engagement pages on our intranet that were built in 2013 and launch an internal communications campaign, spearheaded by our 1% Club Champions at each of our operations. The primary aim will be to get the message across that the scheme is open to all and to enthuse our employees to take part. We will also work with local management to understand and support the reduction of any barriers to involvement.
Our community education work, supported by 1% Club, aims to increase external and internal awareness of our work in STEM, enabling employees in all the countries where we operate to take part in education activities by the end of 2015. This will involve rolling out our Education Ambassador training programme to all R&D operations and sites where we have a significant engineering team. By 2020, we also intend to broaden our activities to ensure that we have tools to capture students at each touch point in their education life span: interest in the subject at 7 to 11 years, commitment to education at 14 to 18 years and career choice at 18 to 21 years.
These activities will ensure that we are maximising the positive impact we can have on local communities, and at the same time, boost employee morale and development and increase the talent pool of future Croda employees.
OUR MATERIALITY OUR MANAGEMENT & GOVERNANCE Delivering Sustainability GRI Index Glossary & Contact Us
Since 1925, a dedicated and diverse senior management team has been at the heart of Croda, driving business growth and informing our environmental and social agenda. They are now part of a 75-strong team that is directly involved in developing and implementing our sustainability programme across the Business.
Our two most senior decision making bodies, the Board of Directors and Group Executive Committee, govern and are ultimately responsible for our economic, environmental and social performance. As such, they play an active role in ensuring that sustainability is an integral element of our Business strategy.
However, responsibility for shaping and delivering our sustainability strategy does not just lie with our leaders; it stretches right across our Business. Sustainability truly is down to each and every Croda employee, which is reflected in our internal 'Our Responsibility' brand.
Our Vice President of Sustainability manages our Global Sustainability Team, reporting to our Group Chief Executive and leading our Global CSR Steering Committee, with an Executive Sponsor who acts as Chair. Experts from specific areas of the Business sit on the committee as Materiality Owners and four Regional Representatives are supported by Regional Steering Committees that play a 360˚ role, cascading details of our activities globally and reporting back on the delivery of our strategy.
Each of our 48 reporting operations has a Sustainability Champion who communicates the different needs of their regions and reports progress against our performance targets.
Our approach to sustainability is influenced by global drivers, which affect the way we do business both now and in the future. To ensure that these feed into our strategy and to keep sustainability at the forefront of our business thinking, the Group Executive Committee receives quarterly performance reports and is involved in an annual CSR Strategy Review Meeting. The Board of Directors also receives a quarterly summary report alongside those from other corporate functions including: SHEQ, HR, IT, Legal, and Finance and Treasury. P05
The primary aim of the Global CSR Steering Committee, working with the Board of Directors and Group Executive Committee, is to establish clear objectives and performance targets aligned to global drivers through our Material Areas. P08 See AR&A £
"Customers and consumers are putting an ever-greater value on sustainability, which means there is a strong commercial justification for increasing our sustainability credentials in every area of our Business, as we have been doing."
Martin Flower, Chairman
During 2013, a review of the GRI 3.0 Strategy and Profile Disclosures and Performance Indicators was conducted. As a result, we continue to report at a self-declared Level B for the reporting period 1 January to 31 December 2013.
| GRI Disclosure | Description | Content Level |
Sustainability Report Page(s) |
Annual Report & Accounts Page(s) |
More Online |
|---|---|---|---|---|---|
| Profile Disclosures | |||||
| 1.1-1.2 | Strategy and analysis | 2 | 2-5, 24-28 | ||
| 2.1-2.10 | Organisational profile | Inside front cover, 2-4, 27 |
Inside front cover, 5-7, 10-11 |
||
| 3.1-3.4 | Report profile and contact | Inside front cover, 40 | |||
| 3.5-3.11 | Report scope and boundary | Inside front cover, 5 | |||
| 3.12-3.13 | GRI content index and assurance | 38-39 | |||
| 4.1-4.10 | Governance | 2, 4, 6, 37 | 34-73 | ||
| 4.11-4.13 | Commitments to external initiatives | 6-7 | 24-27 | ||
| 4.14-4.17 | Stakeholder engagement | 7, 28-36 | |||
| Economic Performance Indicators | |||||
| Management Approach | Inside front cover, 2-7 | 2-23 | |||
| EC1 | Direct economic value generated and distributed | Inside front cover | Inside front cover, 2-23, 82-84 |
||
| EC2 | Financial implications and other risks relating to climate change | 2, 5-6, 10-14 | 24-27 | ||
| EC3 | Coverage of the organisation's defined benefit plan obligations | 99-103 | |||
| EC4 | Significant financial assistance received from government | ||||
| Environmental Performance Indicators | |||||
| Management Approach | 10-14 | ||||
| EN1 | Materials used | 17 | 10-11, 30 | ||
| EN3 | Direct energy consumption by primary source | 11-12 | 29 | ||
| EN4 | Indirect energy consumption by primary source | 11-12 | 29 | ||
| EN8 | Total water withdrawal by source | 13 | 29 | ||
| EN9 | Water sources significantly affected by withdrawal of water | 13 | |||
| EN11 | Land in or near protected areas or areas of high biodiversity | 14 | |||
| EN12 | Significant impacts on biodiversity | 14 | |||
| EN15 | IUCN Red List species in areas affected by operations | ||||
| EN16 | Direct and indirect greenhouse gas emissions | 13 | 29 | ||
| EN20 | NOx, SOx and other air emissions | 11 | 29 | ||
| EN21 | Total water discharge | 13 | |||
| EN22 | Total weight of waste | 11 | 29 | ||
| EN23 | Significant spills | ||||
| EN26 | Initiatives to mitigate environmental impacts of products and services |
10-14, 16-21 | 29-30 | ||
| EN28 | Monetary value of significant fines |
| GRI Disclosure | Description | Content Level |
Sustainability Report Page(s) |
Annual Report & Accounts Page(s) |
More Online |
|---|---|---|---|---|---|
| Labour Practices & Decent Work Performance Indicators | |||||
| Management Approach | 13-16, 22-28 | 75 | |||
| LA1 | Workforce by employment type, contract and region | 33 | 10-11 | ||
| LA2 | Employee turnover | 30 | 23 | ||
| LA6 | Percentage of workforce represented in health and safety committees |
7, 26 | |||
| LA7 | Rates of injury and illness and number of work related fatalities | 24, 26-27 | |||
| LA10 | Training per year per employee | 23, 28-31 | 32 | ||
| LA11 | Programmes for skills management and lifelong learning | 23-24, 26, 29-32 | 31-32 | ||
| Human Rights Performance Indicators | |||||
| Management Approach | 28-31, 33 | ||||
| HR5 | Operations in which the right to exercise freedom of association or collective bargaining may be at risk |
33 | |||
| HR6 | Operations at risk of incidents of child labour | 33 | |||
| HR7 | Operations at risk of forced or compulsory labour | 33 | |||
| Society Performance Indicators | |||||
| Management Approach | 34-36 | 33 | |||
| SO1 | Programmes to assess impacts on communities | 34-36 | 33 | ||
| SO2 | Business units analysed for corruption risks | ||||
| SO3 | Employees trained in anti-corruption policies and procedures | ||||
| SO6 | Value of financial and in-kind contributions to political parties | ||||
| SO7 | Number of legal actions for anti-competitive behaviour | ||||
| Product Responsibility Performance Indicators | |||||
| Management Approach | 16-21 | ||||
| PR1 | Life cycle analysis on health and safety of products | 20-21 | |||
| PR2 | Non-compliance with regulations and codes for health and safety of products |
||||
| PR3 | Information required by procedures | 20-21 | |||
| PR4 | Non-compliance for information and labelling | ||||
| PR6 | Adherence to marketing communications laws and standards | ||||
| PR7 | Non-compliance to marketing communications laws and standards |
||||
| PR8 | Substantiated complaints for breaches of customer privacy or data loss |
||||
| PR9 | Regulatory non-compliance |
| ASTM | American Society for Testing and Materials | |
|---|---|---|
| BITC | Business in The Community | |
| BSI | British Standards Institute | |
| CDP | Carbon Disclosure Project | |
| Cefic | The European Chemical Industry Council | |
| CEN | European Committee for Standardisation | |
| CHP | Combined Heat and Power | |
| CIA | Chemical Industries Association | |
| CIR | Cosmetics Ingredients Review | |
| CO2 | Carbon Dioxide | |
| CSPA | Consumer Speciality Products Association | |
| CSR | Corporate Social Responsibility | |
| EBITDA | Earnings before interest, taxes, depreciation and amortisation |
|
| EFfCI | European Federation for Cosmetic Ingredients | |
| FFC | Forces for Change | |
| GDP | Graduate Development Programme | |
| GHG | Greenhouse Gas | |
| GJ | Gigajoule | |
| GMP | Good Manufacturing Processes | |
| GRI | Global Reporting Initiative | |
| HR | Human Resources | |
| ILO | International Labour Organisation | |
| IPEC | International Pharmaceutical Excipient Council | |
| IRB | Istituto Di Ricerche Biotecnologiche | |
| ISO | International Organisation for Standardisation | |
| IT | Information Technology | |
| kg | Kilogram | |
| kW | Kilowatt | |
| m3 | Metre cubed | |
| NGO | Non-Governmental Organisation | |
| NSAPI | National Skills Academy for the Process Industries | |
| OSHA VPP | Occupational Safety & Health Administration, Voluntary Protection Programme |
GRI Profile: 3.4
Designed: www.origincreative.co.uk
The information in this publication is believed to be accurate at the date of its publication and is given in good faith but no representation or warranty as to its completeness or accuracy is made. Suggestions in this publication are merely opinions. Some statements and in particular forward-looking statements, by their nature, involve risks and uncertainties because they relate to events and depend on circumstances that will or may occur in the future and actual results may differ from those expressed in such statements as they depend on a variety of factors outside the control of Croda International Plc. No part of this publication should be treated as an invitation or inducement to invest in the shares of Croda International Plc and should not be relied upon when making investment decisions.
Cowick Hall Snaith Goole East Yorkshire DN14 9AA England
Tel +44 (0)1405 860551 Fax +44 (0)1405 861767 www.croda.com/csr
Sustainability Report 2013
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