Strategy and Analysis

Chief Executive’s Statement

Our embedded approach to sustainability

At Croda, we have continually stated that we are passionate about sustainability, not because we have to be, but because we believe that it is the right thing to do and good for business. This hasn’t changed, but in recent years we have also seen our customers becoming more aware of the power of sustainability as a differentiator, both in the products they offer to their consumers and in the way they choose to work with their suppliers.

Our customers and their consumers, who increasingly demand that performance and responsible sourcing go hand in hand, are at the heart of our focus on sustainability. As such, sustainability is embedded in our strategic thinking and crucial to our organic and acquisition strategy. By listening to our industry, our customers and our own people, we make sure that we respond to customer and consumer demands, act on wider market opportunities, and go above and beyond to do the right thing.

We have also seen a major shift in the external perception of our sustainability credentials; we have gone from being a highly regarded follower, to being seen as a true leader in sustainability. Initiatives such as our work in responsibly sourced palm oil and our investment into non-ionic bio-surfactants show that we are driving the industry forward, as well as our Business. We are focused on maintaining this leadership position.

Our key sustainability achievements in 2016

Much of the work constructing our bio-ethylene oxide (bio-EO) plant at our Atlas Point manufacturing site in North America was completed during 2016. The plant will use 100% bioethanol derived from natural feedstocks and when it comes online in late 2017 will be the first bio-EO plant in the country, allowing for the production of 100% renewable surfactants. The plant will be powered using landfill gas.

This investment will give us a new and significant opportunity to support the growing number of customers across all of our core markets who are launching new sustainable products. It will also allow us to mitigate risk in a key North American supply chain as we move to a more sustainable, naturally derived feed stock. We also made a significant investment in power generation from bio-gas at our Gouda site in the Netherlands and to reduce water consumption from a stressed aquifer at our Mevisa site in Spain.

Some other key highlights from 2016:

  • We have continued to lead our industry with almost two thirds of our raw materials being derived from natural and renewable resources.
  • Through our progressive work to deliver certified sustainable palm oil, for which we have achieved peer recognition, we have worked closely with our suppliers and the Roundtable on Sustainable Palm Oil (RSPO) to achieve RSPO certification at 12 of our manufacturing sites. This activity has given us greater traceability of the palm oil derivatives we use and our work with Sedex across our raw material supply chains is providing increased transparency on other social and ethical practices.
  • Our New and Patented Products (NPPs) complied with an average of 11.6 of the 12 Principles of Green Chemistry. This industry recognised, independent standard continues to be used in the development of all of our products and aids us in communicating the intrinsic benefits of our existing predicts.
  • CDP awarded us an A- for our Forest Report on palm oil, putting us among just 15 others to achieve this score.

Looking Forward

Our approach to sustainability means that we are ideally positioned to help our customers achieve their current and future sustainability targets. We will continue to do this by meeting their demands for sustainable products through the raw materials we use and the way we create and make them.

We are placing a greater focus on the extrinsic benefits of our products. Working closely with our customers to find ‘green’ solutions will allow us to satisfy their unmet needs in a sustainable way: enabling them to reduce the amount of product they need to use, increase performance levels, reduce packaging and increase product life.

Our people are at the heart of our innovation in sustainability

We know that our people are fundamental to everything we do, their shared values and can-do attitude are the essence of the Croda culture, which we believe is a key business differentiator that plays a significant role in our continued success. In 2016, we continued to invest in our people and the communities in which we operate with over 102,000 recorded training hours during the year and more than £115,000 in-kind donations through our 1% Club employee volunteering programme, 48% of which focused on educational programmes.

All of our success in sustainability can be attributed to our people, those whose daily business practices ensure that we do business the right way. Our high-level steering team for sustainability, supported by regional teams driving action plans, is responsible for making sure we deliver against our sustainability targets. I would like to thank everyone across the Group for their daily contributions to our excellent performance in sustainability.

Steve Foots, Group Chief Executive

To continue to deliver improvement we must establish clear commitments and performance targets aligned to our 10 Material Areas and their longer-term objectives. By Material Areas we mean topics or issues with the potential to affect the long term success of our business, which includes the economies, environments and societies in which we operate. Targets have been set with our Group Executive Committee that support our sustainability strategy and ensure that progress is made in addressing our Material Areas.

Our Material Areas and targets are reviewed on an annual basis at a Strategic Review meeting between the Sustainability Steering Committee and our Group Executive Committee. As a result of this meeting, in 2015 our 10 Material Areas were further developed and have been linked with the risks in our Global Risk Framework (see GRI 102-11).  We will continue to review and develop the scope, objective and targets of each Material Area as the risks and opportunities in each area change.

Our 10 Material Areas are now as follows:

Material Area Long-term Objective Link to Key Risks 
Environmental Impact Minimise the impact of our operations Major environmental incident
Product Stewardship Ensure that the ingredients we produce contribute positively to the environment and society throughout their lifecycle   
Product Design Deliver the most innovative and sustainable ingredients to our customers Global Raw material security and sustainability
Quality Assurance To contribute to, and proactively seek, higher quality standards across product

and operational aspects of our Business to ensure consumer safety
Product Liability Chemical regulatory compliance
Process Safety Keeping our manufacturing sites safe and legally compliant Major safety incident
Occupational Health & Safety Empower employees to have health and safety at the forefront of their thinking Major safety incident
Our People Create an environment where people can thrive Employee recruitment, retention and motivation
Succession planning for senior positions
Diversity & Inclusion Embrace and empower all individuals  
Knowledge Management Safeguard our knowledge and expertise      Security of business information and assets
Education & Involvement
Support the communities in which we operate, with a primary focus on encouraging young people to work within science and technology  

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