Chief Executive’s Statement
We began 2020 with our usual optimism and confidence, not anticipating the events that were about to unfold and touch every one of us. It quickly became clear how the COVID-19 pandemic was rapidly going to change our lives and challenge many aspects of day-to-day business.
Confidence in Our Purpose
2020 has exemplified the resilience of our business model as well as confidence in, and commitment to, our Purpose. Our priorities have been to protect the health and safety of our employees and balance the needs of all our stakeholders fairly. We have not furloughed employees, reduced pay or utilised government liquidity facilities. All but two of our 19 principal manufacturing sites operated without material disruption throughout the pandemic and raw material supply chains remained secure. We have supported our customers and suppliers, given financial assistance to the communities close to our sites, and maintained our track record of paying regular dividends to shareholders. Through our actions, we aim to live up to our Purpose of using Smart science to improve livesTM.
Confidence in Our People
Our people and our culture truly define our sustainability. Throughout the year I saw, first-hand, the resilience and commitment of all our colleagues working from home and the continued engagement with customers and suppliers. Our global research and development (R&D) network adapted to changing working conditions to maintain our ongoing research and innovation. I would like to pay tribute to all our colleagues in operations maintaining our production and ensuring continued supply of the thousands of ingredients to all the industries we serve. We prioritised manufacture and supply of our ingredients into the many supply chains that contribute to combating COVID-19, from sanitisers to PPE and, crucially, our supply of novel excipients used in the manufacture of the Pfizer-BioNTech COVID-19 vaccine, playing a critical role in solving the biggest health emergency facing society today.
Reinforcing confidence in Our Commitment
2020 has reinforced our Commitment to be the most sustainable supplier of innovative ingredients; to create, make and sell solutions to tackle some of the biggest challenges the world is facing. I am very proud of Croda’s involvement in the battle to fight the most significant pandemic that we have seen in a generation. The application of our innovative capabilities is testament to the strong progress we have made towards creating industry-leading drug delivery systems, focused on developing speciality excipients and adjuvants to improve the effectiveness and stability of complex drug actives and vaccines. It is another example of why our Purpose, Smart science to improve livesTM, sits at the heart of our strategy and will continue to drive our priorities and ambitions in the years ahead. In setting out our 2030 ambition to be Climate, Land and People Positive we now publish interim goals against which we shall measure progress in our Company-wide commitment in delivering positive impact.
Confidence in our sustainable future
Our acquisition of Avanti Polar Lipids, Inc. around whose expertise we have built our contribution to the Pfizer-BioNTech COVID-19 vaccine, confirms our commitments to health and wellbeing and building a broad drug delivery business on a global scale. Acquiring Iberchem, a global fragrances and Flavours business significantly broadens and strengthens our footprint in Consumer Care and importantly aligns with our Purpose, taking us into new areas and opportunities where we can use smart science to improve peoples’ lives. We end 2020 with even greater optimism and confidence and, above all, collective pride in our business, our Purpose and Commitment to continue to make a positive impact. I would like to thank everyone across the Group for their ambition and commitment to leadership in sustainability.
Steve Foots, Group Chief Executive
To continuously improve we must establish clear commitments and performance targets aligned to our material areas and their longer-term objectives. We define material areas as topics or issues with the potential to affect the long-term success of our business, including 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.
|Material Area||Long-term Objective||Link to Key Risks|
||Aligned to United Nations Sustainable Development Goal (SDG) 13 of the same name and 7: Affordable and Clean Energy directing our efforts to combat climate change through reductions in scope 1,2 and 3 emissions.
||Failure to develop/deliver process innovation
|Community Education & Involvement
||Aligned to SDGs 2, 3 & 4. Encourage and help develop younger generations, with a focus on science, technology, engineering and maths; and maintaining a strong relationship with our local communities all over the world..|
||Aligned to SDGs 2, 3, 7 & 13. Fostering close relationships with our customers to identify and find innovative solutions for unmet needs globally.
|Diversity & Inclusion
||Aligned to SDG 5. Embracing the differences of a multi-skilled, multi-ethnic and multi-geographical workforce through an inclusive environment.
||Aligned to SDGs 6, 12, 14 & 15. Focusing on reducing our water consumption and minimising waste production across our operations, as well as maximising reuse
Major environmental incidentCompliance with environmental law (covers underlying contamination or new breach of regulations)
|Health, Safety & Wellbeing
||Aligned to SDGs 3 & 8. Protecting the health and safety of our employees and promoting wellbeing throughout the organisation
||Major safety incident|
||Aligned to SDGs 9 & 17. Retaining, protecting and effectively storing knowledge and data within the Company.
|Our People||SDGs 3 & 8. Attracting and developing people and ensuring equality of opportunities for all; ensuring we act as one global team to continue our growth and success.
||Employee recruitment, retention and motivation
Succession planning for senior positions
||Aligned to SDGs 3 & 8. Ensuring that our operations remain safe and legally compliant through effective leadership.||Major safety incident
||Aligned to SDGs 7, 8, 12 &14. Providing our customers with sustainable products through relentless innovation, using metrics such as bio-based raw material content, cradle-to-gate carbon footprint and the 12 Principles of Green Chemistry.
||Global Raw material security and sustainability
||Aligned to SDGs 2, 12 &15. Responsible sourcing of our raw materials, maximising our use of bio-based raw materials and land-use productivity, and ensuring the supply of safe and sustainable products through regulatory leadership
||Procurement/buying risk (e.g. inappropriate supplier selection; poor price negotiation which leads to material cost increases)
||Aligned to SDG 12. Supplying customers with high quality, trusted products on time and in full, minimising waste and ensuring consumer safety.
Chemical regulatory compliance
||Aligned to SDGs 8, 16 &17. Operating in a responsible and ethical manner through the entire value chain by engaging with our stakeholders and remaining transparent.
|| Ethics/governance compliance failure (e.g. competition law (anti-trust)/Bribery Act). Tax compliance failure (includes transfer pricing, and approach to tariffs/tariff barriers).
Information security failure.
| Supplier Partnership
||Aligned to SDGs 7, 8 & 12. Understanding and managing supply chain risk through sustainable procurement activities and close collaboration and engagement with suppliers.
||Third party supplier risks: ethical, reputational, sustainability of raw materials.
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