Carbon Verification

Croda International Plc were responsible for the preparation of the GHG emissions assertions and the internal management controls governing the data collection, collation and GHG calculations performed.
Carbon Smart were responsible for carrying out a limited verification assessment in accordance with the ISO 14064-3:2006 ‘Greenhouse gases - Part 3: Specification with guidance for the validation and verification of greenhouse gas assertions’ and providing an independently expressed conclusion on the reported GHG emissions totals and performance, for each of the data sources included in the scope of this verification exercise.

The boundary of the verification process included 19 manufacturing sites, 39 non-manufacturing sites and 10 Incotec sites over which Croda International Plc have operational control, across 37 countries.

GHG sources included in the verification process:

• Scope 1: Natural gas; landfill gas; biogas; light fuel oil; heavy fuel oil; gasoline; diesel; propane/LPG; energy from waste oil; biodiesel

• Scope 2: Electricity; steam; renewables; district heating

• Scope 3: Raw materials; water supply and treatment; legal services; capital goods; well to tank fuels; well to tank electricity; electricity transmission and distribution (T&D), waste; air travel; car travel; other travel; employee commuting, upstream transportation and distribution

• Outside of scopes: Biogenic portion of vehicles fuels; biofuels

• Excluded from scope: VOCs

• Types of GHGs included, as applicable: CO₂e, CO₂, N₂O, CH₄, HFCs, PFCs and SF₆

tCO2e	Scope 1	Scope 2 (location based)	Scope 2  (market-based)	Scope 3	Outside of scopes	Scope 1 + 2 Intensity
2015	130,492	71,727	-	768,844	27,309	187 tCO2e/£m  turnover
2016	128,550	67,350	-	770,991	28,885	158 tCO2e/£m  turnover
2017	134,562	66,432	48,055	899,368	23,012	150 tCO2e/£m  turnover
2018	153,211	6 7 , 1 7 6	45,974	942,134	23,012	150 tCO2e/£m turnover

Croda’s GHG inventory has been completed in accordance with the World Resources Institute (WRI)/World Business Council for Sustainable Development (WBCSD) Greenhouse Gas Protocol, Corporate Accounting and Reporting Standard, Revised Edition (for Scope 1 and 2) and WRI/WBCSD Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard (for Scope 3); and adheres to the best practice reporting principles of relevance, completeness, consistency, transparency and accuracy.

Carbon Smart conducted the verification engagement in two separate phases: in late 2018 through an initial phase of engagement with material sites and throughout January/ February 2019 for the final data set. We used the appropriate verification planning, validation, GHG assessment and evaluation steps in accordance with the requirements of ISO 14064:3, and in adherence to the standard’s principles of independence, ethical conduct, fair presentation and due professional care.

The objectives of the verification engagement were to ensure Croda’s GHG assertion is free of material misstatements to an acceptable materiality threshold of 5% at the GHG source level and organisational level; and to ensure the GHG inventory provides the relevant material information required by stakeholders for the purpose of decision making.

Our verification conclusions are based on the following activities:

• Agreement on the level of verification, objectives, criteria, organisational scope and materiality thresholds
• Review of the processes and procedures for establishing the organisational and operational boundary, ensuring relevance in emissions reporting across scope 1, 2 and 3 emissions sources
• Development of the verification project plan and data sampling plan (based on risk and materiality)
• Assessment of the GHG data collection system and controls through interviews by phone and face-to-face
• Assessment of the data collection process from raw data comparison with primary evidence, through to local and global collation in GHG aggregation worksheets. This step included assessment of estimations and extrapolation systems in place and their underlying assumptions
• Review of new online data collection systems and third-party supply chain impact tools
• Review of the appropriateness and application of the methodologies and calculations used for conversion of activity data to CO2e emissions; including restatement for new hybrid scope 3 approach
• Review of the change in scope 1, 2 and 3 emissions between years and against baseline 2015
• Evaluation of the internal quality assurance procedures and results
• Our activities included a site visit to Croda International Plc’s Head Office, and manufacturing sites in Mevisa, Spain and Mill Hall, USA.

• Prepared in accordance with Croda International Plc's relevant internal GHG emissions reporting methodologies, which adhere to the internationally recognised WRI/WBCSD Greenhouse Gas Protocol GHG corporate and scope 3 standards
• Materially correct and a fair representation of their GHG emissions
• Prepared in adherence to the best practice reporting principles of relevance, completeness, consistency, transparency and accuracy
• Worthy of the award of limited verification

We can confirm our independence, ethics and competence as follows:

• We are independently appointed by Croda International plc and no member of the verification team has a business reason for bias with regard to the limited verification engagement
• We have complied with the ethical requirements relevant for the performance of the ISO14064:3 engagement in respect of professional experience in environmental reporting and assurance. We have acted with the integrity, objectivity, professional competence, due care and confidentiality to be expected of a professional services provider and the rigor of our work is sufficient to the level required by the ISO 14064:3 standard
• Our team have extensive experience in GHG reporting to WRI/WBCSD GHG Corporate Accounting and Reporting Standard (revised) standard and ISO 14064:3.
• Carbon Smart applies quality control and management approaches equivalent to ISO 9001 International Standard and as encompassed in the Carbon Smart Quality and Ethics Policies. Our commitment to ethical conduct is appropriate for that required for environmental and sustainability professionals in respect of conducting the verification engagement. 

In future Croda International Plc should:

• Improve the communication with environmental representatives at sites by addressing best practice in data collection, aggregation and storage in the internal systems to help facilitate the quarterly reporting process and further increase transparency for verification.
• Encourage environmental representatives to better document the changes at the site throughout the reporting year by keeping a log of checks performed on the data and reasons for the deviations identified.
• Continue extending the current hybrid scope 3 emissions reporting methods to incorporate additional exploration of raw materials categories and improve precision.

Croda International Plc have received limited verification for reporting years ending 31st December 2015, 2016, 2017 and 2018 for the following:

• Scope 1, 2 and 3 emissions and intensity metric (tCO2e/£m turnover)
• Scope 1, 2 and 3 year-on-year performance change relative to baseline