RESILIENT SUSTAINABLE GROWTH - Synthomer plc Sustainability Report 2020
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Our Environmental, Social and Governance approach This 2020 Sustainability Report is primarily Contents 1 Chief Executive Officer’s introduction a report on our performance in 2020, as 3 Synthomer at a glance summarised in our 2020 Annual Report. At the 5 Corporate Development President’s introduction same time, we wanted to take the opportunity 6 Vision 2030 Roadmap to share with our stakeholders our ambition 8 Strategy and Business for the next decade of our ESG strategy, Vision 11 Governance and Compliance 14 People 2030, and the short to medium-term milestones 19 Health and Safety we have set ourselves on the way, including 22 Environment 27 Sustainable Value Chain interim goals for 2022. 31 Progress against our six pillar 2020 targets and objectives The majority of the information in the report 32 Short-term targets and objectives 2022 therefore relates to our progress up to 2020; 33 Annex future objectives are highlighted in boxes 33 Disclaimer, scores, membership of associations marked 2022 or 2030 where relevant. 34 Environmental Performance Summary 37 GRI content index 43 Glossary Further information on This report meets the requirements of the Global Reporting Initiative (GRI), and has been prepared in accordance with the GRI Standards: Core option. GRI disclosure references are the Group is available indicated in the margin of the report, and the GRI content index can be found in the annex, through our website at on pages 37-42. (GRI 102-54) www.synthomer.com
Chief Executive Officer’s introduction Building sustainability DELIVERING RESILIENT SUSTAINABLE GROWTH IN AN UNPRECEDENTED ENVIRONMENT Our business has transformed in 2020 – and so has the context in Calum MacLean Chief Executive Officer which we operate. This year, Synthomer acquired OMNOVA, significantly increasing our global reach and our ability to create innovative and sustainable polymer solutions for the benefit of customers and society. At the same time we, like all our stakeholders, have become even more aware of the Environmental, Social and Governance (ESG) issues that face the world, and that will influence the future success of our business. An integrated business with ESG at its core The integration of OMNOVA and Synthomer has given us an important opportunity to make sure that we reflect the needs and concerns of our stakeholders while creating a structure that can deliver resilient, sustainable growth – which means delivering on the ESG issues that underpin our future success. As a priority for the integration, we have embedded a common ESG structure across the entire Synthomer Group. We are building sustainability into all aspects of the business, including innovation, manufacturing and business management. We have developed a set of Group-wide core values, which align with our purpose and which support our sustainability agenda. And we have developed our new ‘Vision 2030 Roadmap’ for sustainability, which sets our goals for the next decade on our route to meeting our long-term 2050 net zero emissions commitment. Vision 2030: our roadmap for the critical decade ahead Vision 2030 is the result of an extensive review process within our business. It sets targets for our key ESG issues, including in the areas of diversity and inclusion, carbon and climate change, and supply chain assurance, which are our three ESG priorities for 2021. It also commits us to delivering top quartile performance for personal and process safety, which is central to our culture and values. We believe that Vision 2030, which is designed to align with the UN Sustainable Development Goals, will help guide us through the next critical decade, supported by a series of shorter-term milestone targets. From next year, we will report our performance against our 2030 targets in our Sustainability and Annual Reports. This year’s Sustainability Report primarily reports our progress in the 2020 financial year, although we include some forward-looking references where we believe they will help stakeholders understand our future direction. 1 Synthomer plc Sustainability Report 2020
Chief Executive Officer’s introduction continued Reflecting on 2020: staying focused on safety A foundation for responsible growth Managing our business through the COVID-19 pandemic was I am confident that the ESG foundations we have laid in 2020 will serve a significant challenge for all our stakeholders in 2020. We took early us well as an integrated business, and will help build stakeholder trust decisions to protect our employees and supply chains and to balance and drive business performance. To deliver on them, we will all need the needs of our stakeholders fairly. To maintain Synthomer’s strong to work together and put our Synthomer values into action, so we can liquidity, cash flow and financial position we reduced 2020 capital deliver on our purpose: creating innovative and sustainable polymer expenditure, did not pay a final dividend for 2019 and suspended solutions for the benefit of customers and society. (GRI 102-14) senior management/Board salary reviews. It was pleasing that due to the resilience and performance of the business we were able to reinstate a 2020 final dividend having earlier repaid UK Government Calum MacLean furlough support. Chief Executive Officer For the most part we were able to operate our global network of 38 sites as normal. However, the integration of OMNOVA has had a noticeable effect on our health and safety performance. The 2020 full year recordable injury rate resulting from the combination of both companies was 0.36 per 100,000 hours worked, while the equivalent legacy Synthomer performance was 0.20. Aligning our health and safety processes was a key focus in 2020 and will continue in 2021. This will help us towards our ultimate goal of zero accidents or incidents and to have no adverse impact on the health of people who work in or live near our operations, or on the health of those who use our products. THE TEN KEY GOALS OF OUR VISION 2030 ROADMAP TOP QUARTILE SAFETY PERFORMANCE 10% REDUCTION IN SCOPE 3 EMISSIONS While aiming for zero harm, we will deliver top quartile performance We will reduce our upstream Scope 3 emissions intensity by 10% for personal and process safety: by 2030 vs. 2019. • RCR = 0.20/100,000 hours for employees/contractors • PSER = 0.10/100,000 hours 80% RENEWABLE ELECTRICITY USE We will source 80% of our electricity from renewables by 2030. 70% EMPLOYEE PARTICIPATION We will also improve energy efficiency through technology benchmarking. IN ENGAGEMENT SURVEYS We will achieve a 70% participation rate in employee engagement MANAGE AND MINIMISE WATER USE surveys, both globally and at country level, and continuously update We will rigorously manage and minimise water consumption in leadership action plans. all locations and, by 2030, put sustainable water management programmes in place in water-stressed areas and our highest 50% GENDER DIVERSITY IN NEW HIRES consumption sites. We will increase diversity and inclusion in our organisation with a target of 50% of new hires in leadership, management and AT LEAST 60% OF NEW PRODUCTS professional roles being women. WITH ENHANCED SUSTAINABILITY BENEFITS SUPPORT COMMUNITIES By 2030, at least 60% of our new product launches will have enhanced sustainability benefits as measured by our Project We will provide volunteer support and financial contributions in Sustainability Impact Scorecard. excess of £1 million per year to advance education, public health, diversity and environmental stewardship. 80% OF OUR PROCUREMENT SPEND 40% REDUCTION IN TO HAVE A SUSTAINABILITY RATING SCOPE 1 AND 2 EMISSIONS By 2030, 80% of our raw material procurement spend will be covered by a sustainability rating (50% by 2025). On the path to net zero by 2050, we will reduce our greenhouse gas emissions intensity by 40% (Scopes 1 and 2) by 2030 vs. 2019. 2 Synthomer plc Sustainability Report 2020
Synthomer at a glance Who we are Everything is driven by our purpose We are resolutely focused on sustainability Synthomer is a global differentiated Our purpose is to create innovative and making improvements to our approach to chemicals company and one of the world’s sustainable polymer solutions for Environmental, Social and Governance (ESG) leading suppliers of sustainable water-based the benefit of customers and society. issues, and we measure our progress against polymer solutions. With strong geographic Everything we do is driven by internationally recognised standards. While we and end market diversity combined with this purpose. are proud of the progress we have made so increasing product differentiation, Synthomer far, we recognise there is more to be done in holds leadership positions in a wide range Our purpose underpins how we this important area and are determined to of markets including coatings, construction, approach sustainability deliver on our targets and objectives. textiles, paper, adhesives, healthcare and Sustainability is an increasing priority oil and gas. for Synthomer, our stakeholders and the Synthomer plc is a FTSE 250 company whole of society. Our water-based polymers listed on the UK Stock Exchange and has allow markets to replace higher carbon its operational headquarters in London, UK. containing solvent-based products that (GRI 102-1, 102-3) also contain high levels of volatile organic compounds (VOCs). This substitution drives ead more Our main shareholder R stronger growth in our business and helps structure is set out on page 119 of our customers comply with stringent the 2020 Annual Report. (GRI 102-5) sustainability regulations. Key (GRI 102-4, 102-7) Employees Countries Headquarters Sales Performance Elastomers 4,600 20 Functional Solutions Industrial Specialities Production sites Technical centres 38 6 Acrylate Monomers Volume Sales volume from products less than 5 years old 1,638ktes 22% 3 Synthomer plc Sustainability Report 2020
Synthomer at a glance continued What we produce (GRI 102-2, 102-6, 102-7) Performance Elastomers Functional Solutions Industrial Specialities Our Performance Elastomers business focuses Functional Solutions focuses on coatings, Industrial Specialities focuses on speciality on the healthcare, carpet and paper markets construction, adhesives and technical textiles chemical additives and non-water-based through our water-based Nitrile Butadiene markets through our acrylic and vinylic chemistry for a broad range of applications, Rubber (NBR) latex and Styrene Butadiene water-based dispersions. Following the from polymer additives and polymer Rubber (SBR) latex products. In addition to its acquisition, we have fully integrated the manufacture to emerging materials. existing portfolio, our acquisition of OMNOVA OMNOVA CAST (Coatings, Adhesives and Following the acquisition, we have integrated has expanded the Division’s scope to include Surface Treatment) and Oil and Gas the OMNOVA Laminates and Films and the Performance Materials and Elastomeric businesses into Functional Solutions. Coated Fabrics businesses into the Division. Modifiers product lines. Volume Volume Volume 896.0ktes 2019: 849.1ktes 591.2ktes 2019: 487.4ktes 91.1ktes 2019: 67.3ktes Market position Market position Market position No 2 producer globally in NBR latex. Top five global water-based polymer producer, Leading positions in selected niche No 1 producer in European SBR latex. with leadership positions in dispersions in speciality chemical markets globally. No 1 producer globally of High Solids SBR. Europe, the Middle East and Asia. Acrylate Monomers We separated Acrylate Monomers out of Industrial Specialities in 2020 so we can apply greater management focus to this business. Based at our site in Sokolov (Czech Republic), the Division is focused on the supply of acrylate monomers to our European Functional Solutions Division and third-party customers. The Division produced 59.9ktes in 2020 (2019: 61.9ktes). While Synthomer has the internal global demand to consume 100% of our output at Sokolov, the plant serves and is committed to meeting European external customer demand for logistical and commercial reasons. Strong geographic and end market diversity underpins our business model and resilient performance: 4 1 1 4 1 3 3 3 Volume Volume Geography Geography End End market market (ktes) (by revenue) (by revenue) 2 2 2 1. Performance Elastomers 54.7% 1. EMEA 56.0% 1. Performance Elastomers 41.8% 2. Functional Solutions 36.1% 2. Asia 27.5% Healthcare22.8% 3. Industrial Specialities 5.5% 3. North America 16.5% Carpet, Compounds and Foam 11.9% 4. Acrylate Monomers 3.7% Paper7.1% 2. Functional Solutions 38.8% Coatings14.8% Construction8.5% Textiles7.5% Adhesives6.6% Oil and Gas 1.4% 3. Industrial Specialities 16.2% Polymer Additives 9.1% Laminates and Films 5.7% Coated Fabrics 1.4% 4. Acrylate Monomers 3.2% 4 Synthomer plc Sustainability Report 2020
Corporate Development President’s introduction Embedding world-class safety Alongside what we do, we are also focused on building ESG considerations into how we do it. Here, safety is paramount. Over the last six years we have been building towards world-class health and safety performance (see page 19). We have moved quickly to embed those standards across our integrated business since our acquisition of OMNOVA. Moving to renewable energy and addressing our carbon footprint At the same time, we are moving large parts of our network to renewable electricity (see page 23). In 2020 we have achieved a reduction of 8.5% in Scope 1 and 2 greenhouse gas emissions. We have taken the decision to end our use of coal-derived energy by 2021 with the closure of our Sokolov coal power station, and we have introduced management incentives to reduce our carbon and climate change impacts. An increasingly diverse business We have made clear progress across our global employee base and in graduate and young talent recruitment (see page 15), and the composition of our Board meets the recommendations of the Hampton‑Alexander and Parker reviews. Female representation on our Executive Committee and direct reports has improved from 8% to 17%, but clearly there remains much more to be done to meet our targets of 20% in 2021, 25% by 2022 and 33% by 2025. Tim Hughes President – Corporate Development Focus on sustainable sourcing Our new Sustainable Procurement Strategy, agreed in 2020, will see a drive towards supply chain assurance verification and increased use of sustainable products and services through our partnerships with suppliers. About this report BUILDING ON A STRONG ESG PLATFORM This report is primarily focused on our performance in 2020 – but it also reflects some progress in increasing the amount and transparency AND SETTING OUR COURSE FOR 2030 of our disclosures. To make sure we have a solid foundation for future reporting, we have used Global Reporting Initiative (GRI) Standards, This year has seen a significant step change in our approach to ESG. and we have applied them to the whole Synthomer Group, including The environmental challenges facing the world are increasingly urgent, OMNOVA. Further, we are now able to include disclosure of Scope 3 and it has never been so important for business to play a full part in greenhouse gas emissions data for the first time, which means we addressing them. At the same time, our integration with OMNOVA has can report all Scopes (1, 2 and 3) based on verified data. We are also given us an opportunity to embed a single set of values and a unified working towards further disclosures in line with the recommendations ESG strategy across a truly global Synthomer business. As Calum of the Task Force on Climate-related Financial Disclosures (TCFD), describes in his statement on page 1, this has meant that 2020 has which we support. We are conducting scenario assessments in 2021 seen us build on our previous ESG work to create a new platform for which will help us evaluate moving to science-based targets in 2022. ESG performance and reporting, which from next year will support our The way ahead for Synthomer new Vision 2030 Roadmap. Our Vision 2030 Roadmap builds on the progress we have made in Our platform for future ESG progress 2020 and the years leading up to it – and takes us much further. It is We are a manufacturing business, and the things we make are at the the most comprehensive strategy Synthomer has ever had for ESG core of our ability to make a contribution on ESG issues. As a global performance, and from next year will form the basis for reporting our leader in sustainable water-based polymer solutions, our products progress against internationally recognised standards, and the eliminate the use of over 500ktes of solvents which contain volatile challenges we face on the way. organic compounds (VOCs). This puts our business at the heart We believe it reflects our resolute focus on sustainability and of a global trend away from VOCs, driven by increasingly stringent ESG improvements and we are determined to deliver on it. environmental regulations. And, as we continue to invest in innovation, we will be able to supply more customers with more sustainable products. This speaks to Synthomer’s purpose: ‘to create innovative Tim Hughes and sustainable polymer solutions for the benefit of customers President – Corporate Development and society’. 5 Synthomer plc Sustainability Report 2020
VISION 2030 70% EMPLOYEE PARTICIPATION IN EMPLOYEE ROADMAP ENGAGEMENT SURVEYS We will achieve a 70% participation rate in employee engagement surveys, Following an extensive Company-wide review Synthomer is both globally and at country level, and continuously update leadership pleased to introduce its Vision 2030 Roadmap for sustainability. action plans. Ambitious, measurable and achievable, the goals are aligned with Read more on page 15. the United Nations Sustainable Development Goals (SDGs) which mature in 2030. These stretching targets will define our current and future sustainability programme. 50% GENDER DIVERSITY IN NEW HIRES We will increase diversity and inclusion in our organisation with a target of 50% of new hires in leadership, management and professional roles being women. Read more on pages 16 and 17. ea t y H lth fe and Sa Pe o p l e TOP QUARTILE SAFETY PERFORMANCE SUPPORT While aiming for zero harm, we will deliver top quartile performance for personal and COMMUNITIES process safety: We will provide volunteer support and • RCR = 0.20/100,000 hours for financial contributions in excess of employees/contractors £1 million per year to advance education, • PSER = 0.10/100,000 hours public health, diversity and environmental stewardship. Read more on pages 19 to 21. Read more on page 18. 6 Synthomer plc Sustainability Report 2020
40% REDUCTION IN SCOPE 1 AND 2 EMISSIONS On the path to net zero by 2050, we will reduce our greenhouse gas emissions intensity by 40% (Scopes 1 and 2) vs. 2019. Read more on pages 8 to 10. 80% RENEWABLE AT LEAST 60% OF 10% REDUCTION IN NEW PRODUCTS SCOPE 3 EMISSIONS ELECTRICITY USE WITH ENHANCED We will reduce our upstream Scope 3 emissions intensity by 10% vs. 2019. We will source 80% of our electricity from renewables. We will also improve SUSTAINABILITY Read more on pages 8 to 10. energy efficiency through technology benchmarking. BENEFITS Read more on pages 22 to 24. At least 60% of our new product launches will have enhanced sustainability benefits as measured by our Project Sustainability Impact Scorecard. Read more on pages 27 to 30. St s es te in ra g y a nd Bus En vironment MANAGE AND in Su ha ai MINIMISE WATER USE st na C ble Value We will rigorously manage and minimise water consumption in all locations, and put sustainable water management programmes in place in water-stressed areas and our highest consumption sites. 80% OF OUR Read more on page 26. PROCUREMENT SPEND TO HAVE A SUSTAINABILITY RATING 80% of our raw material procurement spend will be covered by a sustainability rating (50% by 2025). Read more on pages 27 to 30. 7 Synthomer plc Sustainability Report 2020
Environmental, Social and Governance (ESG) – review of our six pillars 1. Strategy and Business Sustainability is embedded across the entire Group and requires the engagement of all stakeholders. To clearly identify our material areas, define our objectives and achieve our long-term goals, our actions are channelled through six pillars, and three priorities for 2021. We made significant progress quantifying, improving and communicating the sustainability of all our activities in 2020. Synthomer focuses its sustainability programme around six pillars – Strategy and Our approach (GRI 103-1, 103-2, 103-3) Business, Governance and Compliance, People, Health and Safety, Environment and Safety, Health and Environment (SHE) are the Sustainable Value Chain. In this report we review each of the six pillars, beginning with heart of Synthomer‘s core values. Our ultimate Strategy and Business. goal is to have zero accidents or incidents and no adverse impact on the health of those who Our three strategic priorities for 2021 are carbon and climate change (see Environment work in or live near our operations or use our pillar), diversity and inclusion (see People pillar) and supply chain assurance products. We care about the environment as (see Sustainable Value Chain pillar), which are introduced below. These priorities we care about our people’s health, while complement our personal and process safety commitment which remains central minimising any environmental burden created to our culture and values. by our activities. As a chemical company that uses natural resources – mainly energy and water – in its STRATEGY AND GOVERNANCE AND production processes, climate change is a BUSINESS COMPLIANCE core priority. We are aiming to respond to the climate emergency by significantly reducing our Scope 1 and 2 greenhouse gas emissions by no less than 20% by the end of 2022 and 40% by 2030, as well as delivering our net zero 2050 roadmap in alignment with the Paris Climate Agreement. Employing more than 4,600 people across the globe, Synthomer contributes to improved social conditions in all geographies. PEOPLE HEALTH AND Synthomer’s Diversity and Inclusion Plan sets out our commitment to further SAFETY expand ethnic, gender, age and cultural diversity and welcome it in an inclusive way, believing this is the path to build a socially sustainable organisation. Launched in 2020, Synthomer’s Sustainable Procurement Policy and Strategy clearly sets out our ambition to work with our upstream partners, ultimately ensuring that there are no supply outages due to environmental or ENVIRONMENT SUSTAINABLE social aspects covered by this policy. We are working continuously to minimise risks and VALUE CHAIN catch opportunities while contributing to a more sustainable and secure supply chain. More and more, society is driving towards zero waste, reducing, re-using and recycling as much as possible. Synthomer operates in a variety of markets with a diversity of water-based chemistries, exhibiting a wide spectrum of requirements. Our goal is to move towards a circular economy, reducing the impact of our activities and working together with our customers to offer sustainable solutions with increased performance and manage the end of life of our products. 8 Synthomer plc Sustainability Report 2020
1. Strategy and Business continued ESG covers a broad range of topics, so our materiality assessment allows us to respond to the issues that matter most to our stakeholders. We reviewed our materiality assessment in 2021 to reflect the impact of the OMNOVA acquisition and the increasing priority of ESG issues. Building sustainable solutions Sustainability risks and opportunities Starting to report against TCFD in 2021, The development of sustainable solutions (GRI 102-11, GRI 102-15) we will also develop knowledge to minimise is intrinsically associated with three factors, Through the expansion of our risk assessment our environmental footprint, establishing namely, reducing the use of resources, framework to climate-related risks and a roadmap based on a below 2ºC scenario lowering environmental footprint and opportunities we are committed to gain option and assessing the impact on the managing product life cycle. knowledge and develop sound tools to ensure businesses arising from technology shifts that our businesses will be resilient against and the financial impact of carbon pricing. One of Synthomer’s strategic priorities has climate change. always been to minimise the use of natural Alignment with SDGs (GRI 102-12) resources by increasing the efficiency of We have already incorporated the potential Our actions are aligned with the UN SDGs our production activities. We remain vigilant impact of corporate responsibility issues in the material to our business and those towards to new opportunities to improve energy and Group’s risk management processes and our which Synthomer can have a major impact. water efficiency and reduce waste, and we investment decisions consider potential We highlight the SDGs related to natural actively look for new ways to enhance consequences for all stakeholders, including resources used in our operations as well as circularity of these resources. employees, customers and suppliers, as well those to which our activity imparts a higher as the environment. benefit to people and society. Reducing direct and indirect operational greenhouse gas emissions (Scope 1 and 2), in addition to reducing Scope 3 supply chain Most relevant UN SDGs for the delivery of Synthomer 2030 goals originated emissions, are strategic action points for Synthomer, intimately related to business strategies. To accomplish our net zero goal by 2050 at the latest, potential areas for improvement which are linked to our climate actions include: • using technology and innovation, to develop products based on alternative low carbon intensive raw materials and more efficient processes; • assessing R&D projects and capex expenditures against our sustainability criteria; • defining science-based targets to align our longer-term strategy to the global goals in alignment with the Paris Agreement; • considering the need to incorporate carbon pricing within our capital planning processes; • establishing partnerships with our suppliers to reduce the carbon burden of our existing raw materials; • assessing the viability and resource requirements to undertake Life Cycle Assessments for key products – considering at least cradle to gate footprint; and • addressing end of life product management for each market where we operate. Growing in a sustainable way (GRI 102-10) FUTURE ACTIVITIES We recognised the impact that our acquisition of OMNOVA had on the Company’s overall By 2021 sustainability profile and have integrated the • Report against Task Force on Climate-related Financial Disclosures two legacy companies using a consistent ESG • Assess all operations and projects against sustainability criteria approach. Synthomer’s sustainability agenda • Maintain Silver EcoVadis level as a minimum for enlarged Group takes 2019 as our baseline year to define our new, short-term, targets between now and the By 2022 end of 2022. • Evaluate alignment of our net zero programme to Science Based Targets initiative Synthomer took the acquisition as an opportunity to consider sustainability as a business imperative and a decision factor in all processes and projects. 9 Synthomer plc Sustainability Report 2020
Environmental, Social and Governance (ESG) – review of our six pillars 1. Strategy and Business – Stakeholder engagement and materiality assessment (GRI 102-21, 102-40, 102-42, 102-43 and 102-44) Updating our materiality assessment We introduced a new category called We confirmed all 24 aspects, including the We reviewed our key stakeholder groups ‘Digitalisation’, since it represents an three new ones, are relevant material aspects and assessed how the Group engaged with increasing opportunity to reduce our carbon (scoring high or very high as regards internal those groups. We also reviewed the areas footprint as we learn lessons from the and external importance) for continued focus. of sustainability that are materially significant COVID-19 pandemic and take advantage The outcome of our assessment shows there to our work to align with the GRI Standards. of our Pathway business transformation. is a strong alignment between stakeholders In all, we found direct influence and and the Group on most of the topics, with Synthomer’s activity relating to product engagement were maintained with seven emphasis on those with highest priority. life cycle is now incorporated within the new stakeholder groups: customers, employees, ‘Circular economy’ topic. Our Sustainability Steering Committee suppliers, shareholders, legislators, reviewed the additional concerns and authorities and local communities. An online survey was designed to collect suggestions from this survey, to identify stakeholders’ feedback. This survey asked Of the initial set of materiality topics we potential new focus areas for target action. for views on these 24 sustainability topics, first identified in 2018, 21 of 22 remained covering topics directly influenced by Although no significant shifts were observed unchanged or were slightly modified. Synthomer’s operations as well as topics since 2018, Community engagement and We incorporated ‘Quality’ into ‘Customer linked to the value chain both downstream Circular economy will have additional satisfaction and engagement’ and added and upstream. attention in the future. three new topics. The online survey was submitted to nearly The most material topics are already Following our acquisition of OMNOVA and 400 individuals, including representatives considered in the corresponding stronger presence in North America, we of all the stakeholder groups identified, sustainability pillars, as well as in our focused on ‘Communication and training’, across all the geographic regions where the short and medium-term objectives. to ensure clear understanding of our Company operates. The stakeholders asked procedures, targets and achievements. to participate in the survey were selected by Synthomer following close contact with the respective stakeholder groups. Materiality assessment chart Materiality assessment (GRI 102‑44, GRI 102-46, GRI 102-47) 13 Strategy and Business Very important 3 14 1 Sustainable growth 2 2 Risk management 1 7 3 Ethics and integrity 18 22 4 Digitalisation 9 15 5 23 Governance and Compliance 5 Responsible and involved management 16 8 10 6 Stakeholder involvement and engagement 20 17 7 Compliance 19 8 Communication and training Importance to stakeholders 6 21 People 11 9 Employment conditions 24 10 Diversity and Inclusion 12 11 Talent development 12 Community engagement 4 Health and Safety 13 Occupational health and safety 14 Process safety Environment 15 Energy management and reduction 16 Water stewardship 17 Greenhouse gases reduction 18 Waste generation and minimisation Sustainable Value Chain Important 19 Responsible procurement 20 Technology and innovation 21 Manufacturing excellence 22 Product safety 23 Customer satisfaction and engagement Important Very important 24 Circular economy Importance to Company 10 Synthomer plc Sustainability Report 2020
2. Governance and Compliance Management approach (GRI 103-1, 103-2, 103-3) Ensuring and demonstrating a high standard of CODE OF CONDUCT effective and compliant corporate governance The Group’s Code of Conduct, together with our Core Values, reflects how we work together is a key priority of the Group and expectation internally and with our stakeholders. It exemplifies our beliefs and values of a diverse and of our stakeholders. open culture, and sets out how we expect our employees to work in a responsible and Synthomer plc has regard to matters set out in sustainable manner. It further provides our employees with the tools to guide them in making Section 172(1) of the Companies Act 2006 and decisions based on integrity, honesty and mutual respect. during its last financial year has complied, in all material respects, with the 2018 UK Corporate Governance Code. Significant progress was made in 2020 in terms of the diversity of the Synthomer Board, which follows the Hampton-Alexander COMPLIANCE recommendations and the Parker Review on gender and ethnic representation. An externally The Group is committed to maintaining an effective Compliance Framework to protect it facilitated Board evaluation also began during from the risks of breaches of laws, rules and regulations, including judicial/regulatory action 2020 which concluded that the Board and its and reputational damage. We continually improve our Compliance Framework, and in 2020 Committees are run in an effective and appointed a Head of Global Compliance dedicated to identifying, assessing, managing and collaborative manner and suit the current mitigating ethics and compliance risks. governance needs and company obligations. The evaluation did identify some areas of development which include succession planning, diversity and inclusion and responding to the increasing ESG agenda and particularly climate change. These will CORE VALUES all be areas for specific focus in 2021. SHE – We always have time to work safely. Innovation – We welcome change and new ideas. Teamwork – We are stronger as ONE team. Integrity – We act with integrity and show respect. Accountability – We deliver on our promises. SYNTHOMER A ccountabi l i ty CORE VALUES I nnovati on SHE Integrity Teamwork 11 Synthomer plc Sustainability Report 2020
Environmental, Social and Governance (ESG) – review of our six pillars 2. Governance and Compliance continued Code of Conduct and Ethics Helpline The Group is committed to ensuring that 2020 also saw significant developments in (GRI 102-16, 102-17) slavery and human trafficking is not taking the Group’s e-learning capabilities, with the We published our current Code of Conduct place in any of its supply chains, as set out in launch of an improved in-house Learning in 2018 in 13 languages, supported by our most recent Modern Slavery Statement Management System (LMS), as a platform for Group-wide training and an externally available here: www.synthomer.com/company/ hosting e-learning content. Consequently, in hosted ethics helpline. corporateresponsibility/grouppolicies/. 2020, we saw the launch of a new e-learning module relating to facilitation of tax evasion The training received very positive feedback. Bribery, corruption and under the UK Criminal Finances Act 2017, A recent survey across the enlarged Group anti-competitive behaviour together with the finalising of two new reinforced the outcome of our 2019 ‘Your The Group’s bribery, corruption and competition e-learning modules on Bribery and Corruption Voice’ employee survey which demonstrated law policies are key aspects of the Group’s and Anti-Competitive Practices, which were that most employees understand the Code Code of Conduct and have featured heavily in launched at the start of 2021. The LMS also of Conduct and how it applies to their role. the scenario-based Code of Conduct training enhances the Group’s ability to record training The survey also showed that employees know that has been held Group-wide. In addition, (e-learning and face-to-face/online), to track how to report suspected unethical and/or during 2020, enhanced competition law training completion, and to escalate incidences of unlawful behaviour. continued to be given to employees more highly required training not being completed in exposed to competition law risk, and we have During 2020, no material issues were a timely manner. The development of e-learning continued to improve our online ‘toolboxes’ reported under the established Ethics modules for Code of Conduct and GDPR/data for competition law and bribery and corruption. Helpline (whistleblowing) procedure. (GRI 419-1) protection was purposefully delayed in 2020 Due diligence processes also continue to be as a consequence of the OMNOVA acquisition, In 2020, the Group also relaunched its Core in place to manage risks related to bribery and mainly due to the positive feedback received Values highlighting, amongst other things, corruption, for example in connection with the about the training and the opportunity it Integrity and Accountability as foundations appointment of agents and/or distributors, provided to interact with legacy OMNOVA of the Synthomer way of working, and the to ensure we are partnering with third parties colleagues. E-learning modules on these topics importance of the Code of Conduct in who share in Synthomer’s commitment to are currently being developed for roll-out guiding employees in ensuring they always do business legally and ethically. during 2022. act in accordance with these values. Compliance training (GRI 205-2) Human rights During 2020, face-to-face/online scenario- In 2020, a Procurement Excellence team was based workshops continued to be held established alongside the publishing of a new across the Group to reinforce the importance Sustainable Procurement Policy and Strategy, of applying the highest ethical standards as set which included compliance with human rights out in the Code of Conduct. This included the as one of its key focus areas. legacy OMNOVA management team following the acquisition. FUTURE ACTIVITIES By 2022 • Continue to roll out training and e-learning • Implement lessons learned from Compliance Programme Review • Launch new ‘dawn raid’ guidance • Board evaluation process 12 Synthomer plc Sustainability Report 2020
2. Governance and Compliance – Sustainability governance (GRI 102-20) The Sustainability Steering Committee is responsible for the development of the Group’s Sustainability main bodies sustainability strategy and coordination of sustainability-related activities across the Board of Directors oversees ESG agenda organisation. Formed in 2018, it is a cross- functional group comprising representatives from all key functions and businesses including Corporate Development, Human Resources, Procurement, Technology & Innovation and SHE, alongside the Divisional Presidents. In order to Executive Committee manage the increasing interest and opportunity in sustainability the Group added additional The Executive Committee is responsible for delivering our ESG strategy and policy resource in 2020. commitments and reviews sustainability-related topics on a monthly basis. The CEO has ultimate responsibility for delivering the ESG strategy and commitments. Over the past year, we have strengthened our internal network of people to drive sustainability. This diversified group is our Sustainability Delivery Board and, like our Committee, represents functions and divisions from across the global organisation. Sustainability Steering Committee It ensures proper communication to all levels of the organisation and captures any Through its highest level representation, the Sustainability Steering Committee is opportunities to improve our approach. It is responsible for defining our ESG targets and roadmap, monitoring the progress of the also the Delivery Board’s responsibility to workstreams and liaising with our Executive Committee and Board of Directors. address internal and external stakeholders’ needs and coordinate cross-functional workstreams, set up to meet the targets set out by the Sustainability Steering Committee. The Sustainability Steering Committee meets quarterly and is chaired by the Group Sustainability Delivery Board Sustainability Director. The Committee reports directly to our Executive Committee, Our Sustainability Delivery Board comprises our sustainability champions from our ensuring effective two-way communication functions and businesses. The Board is responsible for managing cross-functional at the highest levels of our organisation to workstreams throughout the organisation to deliver our ESG agenda. embed our material sustainability topics into It makes recommendations to the Sustainability Steering Committee and is also the Group’s strategy and businesses. responsible for monitoring the sustainability-related KPIs. The Executive Committee meets monthly Progress is followed up on a monthly basis and meetings are hosted by the and is responsible for ensuring effective Sustainability Director. delivery of the agreed strategy and meeting the policy commitments. The Board of Directors routinely reviews ESG topics with increasing focus on carbon and “AT SYNTHOMER, SUSTAINABILITY IS A JOURNEY climate change, diversity and inclusion and supply chain assurance as ESG priority areas. WE MAKE TOGETHER. THE ENGAGEMENT OF ALL Full details of Synthomer’s governance COLLEAGUES ALLOWS OUR ESG AGENDA TO structures can be found on pages 82 to 89 of the 2020 Annual Report. (GRI 102-18) DEVELOP FAST IN ITS MULTIPLE DIMENSIONS.” Susana Carvalho Group Sustainability Director 13 Synthomer plc Sustainability Report 2020
Environmental, Social and Governance (ESG) – review of our six pillars 3. People – Our people and communities Management approach (GRI 103-1, 103-2, 103-3) Synthomer remains committed to developing EMPLOYEE ENGAGEMENT our people to help them fulfil their potential, We aim to create a high performing and engaged workforce by implementing employee and in engaging with our communities in engagement strategies that align our employees with our Core Values and ensure that we a positive manner. listen to, develop and recognise all employees. The Global HR Vice President remains responsible for implementing programmes of work to deliver on the Group strategy, including those linked to leadership and succession management, supported by divisional and regional HR leads. He reports to the Executive Committee through the President – DIVERSITY AND INCLUSION Performance Elastomers, M&A and Global HR. We value the difference everyone brings and are committed to creating a diverse and inclusive Our strategic People objectives are as follows: workplace, where people are supported to make their best contribution in creating a vibrant, successful business. Build a sustainable talent pipeline: strengthen our talent pipeline with diverse and highly skilled employees, and continuously drive improvements in our talent practices, ensuring that we have the right people with the right skills in the right role at the right time. Strengthen leadership capability: develop SUPPORT COMMUNITIES empowered leaders at all levels of Synthomer; Through our ‘We Care’ initiative and Synthomer Foundation in the USA, leaders who act as role models, coach and we are continuously strengthening our engagement with local communities. develop their teams and lead the way in successfully driving our business strategy. Drive organisational effectiveness: operate efficient and effective organisational structures and people processes, to drive towards functional excellence and to strengthen our capability to successfully manage business transformation in an agile way. Establish a winning workplace culture: establish an inclusive culture where our people feel valued, engaged, empowered and able to use their strengths to enable Synthomer to thrive. Our People agenda has made further progress in 2020, with our new Core Values launched and embedded, a new diversity and inclusion strategy launched, new global communications and development initiatives, and the integration of the OMNOVA business and alignment of key HR processes and activities. 14 Synthomer plc Sustainability Report 2020
3. People – Employee engagement (GRI 102-8, 102-41, 401-1, 404-1, 404-3) Who we are 4,600+ More than 4,600 employees 100% ~100% full time employees 100% ~100% under permanent contract 10.2% turnover 7.1% new hires 67% under collective bargaining agreements 1,272 employees received a full written 17.9 training hours per employee in 2020 appraisal: 83.4% of the target population (23.3 in 2019, 19.8 in 2018) Our Core Values Leadership development and training Supporting employees during Employee engagement was at the heart of Our third European and Asian Graduate the COVID-19 pandemic developing our new values; over 200 of our Programme took place in 2020 with seven Some employees were required to work employees from across our organisation new programme participants in Europe and from home for long periods of time due to contributed to the redesign by completing four in Asia. In total, this adds up to more than the COVID-19 pandemic. Different measures surveys or attending a focus group and more 30 Graduates. Over 90% of candidates in were deployed to support their physical and than 600 attended values virtual workshops. Asia and Europe have moved into post- mental well-being, as follows: programme roles. We also set up a Steering Group, which • In Malaysia, frequent newsletters were included three Executive Committee members. We also continued High Potential Programmes delivered including regular business The whole Executive Committee was also across all regions of the organisation. updates and tips on how to work from closely involved to ensure that our values were home effectively. Virtual exercise classes Our early career talents have continued to fully aligned to and integrated with our business were held to socially interact, catch up represent Synthomer externally by publishing strategy. The Committee’s support also and exercise. ‘Grab Some Help!’ provided articles and giving speeches at conferences. ensured that the values received very clear and virtual workshops and remote To strengthen our talent pipeline, we developed visible senior leadership sponsorship. psychological support for employees. a new global Talent Toolkit and established • In Germany, virtual coffee breaks and Listening to our employees a harmonised framework for our annual virtual social events were designed to keep Alex Catto, the Non-Executive Director with talent reviews. people connected whilst working remotely. responsibility for ‘Employee Voice’ on the Board, Our Excellence Academy saw 12 individuals • In the UK our ‘Be Supported: Virtual visited UK sites and had virtual calls with the participate in a new programme to provide Working’ initiative provided training and USA and Italy, to meet employees and review fundamental skills and knowledge in how support for team managers and employees their issues. Feedback was provided to to improve safety and productivity on our working from home. the Board. manufacturing facilities. The programme • Our global Learning and Development The Board receives regular feedback on the delivered almost 50 hours of learning over team has developed a series of learning employee discussions and on our people a five month period. modules, such as ‘Working from Home’, strategy, and has had a detailed report on ‘Embracing New Ways of Working’ and Recognition the results of the 2019 Your Voice Employee ‘Working or Leading Virtually’. Our OMNOVA colleagues celebrated their Engagement Survey and the progress second year as a NorthCoast 99 workplace, a against actions defined. programme that honours great Northeast Ohio In 2021 we intend to run a second Your Voice Employee Engagement Survey following the workplaces for top talent. The recognition project to compete for this award was FUTURE ACTIVITIES survey we ran in 2019. managed – and led – by a group of our employees. As well as recognising our By 2021 business as a great place to work, the process • Deploy new global Human Resources of competing for this award has provided information system invaluable learning in support of the • Repeat and extend coverage of continuous improvement that we strive for. the ‘Your Voice’ Employee Engagement Survey • Review and expand the Board Employee Voice Strategy By 2030 • Achieve 70% participation rate in employee engagement surveys, both globally and at country level, and continuously update leadership action plans 15 Synthomer plc Sustainability Report 2020
Environmental, Social and Governance (ESG) – review of our six pillars 3. People – Diversity and inclusion (GRI 108-1, 405-1) At Synthomer we see D&I as a Our drivers for action Our D&I vision and strategy • Core Values fundamental part of our Core Values Our strategy is organised under D&I is a part of our Core Values. D&I is one of the three 2021 priorities of our three core pillars: Showing respect regardless of a person’s ESG agenda to which we are fully committed. Raising awareness The acquisition of OMNOVA has increased background is an important part of creating • We educate the organisation on the number of people we employ outside of an inclusive culture and a thriving business. the dimensions and benefits of D&I. Europe, with significantly more employees in • Business case • Key action areas include: the USA, China, and Thailand. We have also There is a growing body of research developing a strategy and business added a site in Portugal to our European about why D&I is important. A diverse and case, anchoring D&I in our business footprint and increased our presence in France. inclusive environment is strongly linked to activity and unconscious bias. We now have sites in 24 countries across the performance, D&I is good business. USA, Europe, and Asia. As we grow, we • Employee focus Strengthening culture continue to be a truly global business with a There was a clear message from • We build and nurture an inclusive culturally diverse employee base from across our employees through the Employee workplace culture. the world. Engagement Survey, the Core Values • Key action areas include: Survey and other channels, that D&I Core Values, inclusive leadership is important. and flexible working. • External focus D&I is receiving increased focus in the Growing talent media, with investors and society in • We attract, develop and retain general, which is reflected in legislation a diverse range of talent. and formal reporting requirements. • Key action areas include: Talent acquisition, learning and development and networks. Our strategy is underpinned by communication and engagement plans and measurement and monitoring. Our D&I governance structure A new structure was launched in 2020 to ensure delivery against our objectives D&I Steering Committee Executive Team This small senior group provides sponsorship and advocacy and The Executive Team signs off D&I plans and concrete initiatives. oversees tangible delivery. Its members are the Chair of the This ensures governance and role modelling across Synthomer Board, the Executive Team Sponsor and the Head of HR. the organisation. D&I Leadership Team This cross-business group sets the strategy, agrees on annual plans and designs/delivers D&I initiatives. Employee resource groups Potential local D&I teams Independent groups with clear terms of reference and link to and Country groups where there is scale and appetite. support from the Global D&I Leadership Team. Could also be local/regional D&I champions. 16 Synthomer plc Sustainability Report 2020
3. People – Diversity and inclusion continued (GRI 108-1, 405-1) Where we are Additional 2020 activities Hampton-Alexander Review of 33% female We launched ‘Engender’, a new networking representation on FTSE 350 boards by the Board and resource group for women in Synthomer, end of 2020. with virtual events commencing in Quarter 4 Women represent 17% of senior leaders 3 6 2020 and a full programme planned for 2021. A review of ‘family friendly’ policies in 2020 (a significant increase from 8% at the end of 2019). However, we have not yet reached Female Male across our major employee locations – the UK, the Hampton-Alexander Review target of 33% Germany, Malaysia and the USA – has resulted and, in particular, recognise that there are in a number of improvements that create a suite no women on our Executive Committee. Senior management of policies that are all in line with regional best Across our whole organisation women practices. We are pleased to be supporting account for 21% of our workforce, with greater prospective and new parents – including those 8 40 who are adopting – with progressive policies that reflect the changing nature of family life. representation at more senior leadership levels. One member of our Board is from an ethnically Female Male diverse background and therefore we meet D&I metrics are now included in our new global the target for Board representation set by talent management process. the Parker Review. In total, 14% of our senior Other employees Caroline Johnstone was appointed Chair of leadership population represent colleagues the Company on 16 December 2020, our first from a diverse ethnic background, with 948 3,603 female Chair. Cynthia Dubin also joined the Board in 2020 and we now have three women representation across all functions and business areas. Female Male on our Board, meeting the target set by the “WE BELIEVE THAT DIVERSITY AND INCLUSION DRIVES Board INNOVATION AND IMPROVED BUSINESS PERFORMANCE – Ethnically 1 WE SEEK TO RECRUIT, RETAIN AND DEVELOP THE VERY BEST diverse background Non-ethnically diverse background 8 TALENT, REGARDLESS OF BACKGROUND, TO DRIVE BUSINESS SUCCESS. DIVERSE PERSPECTIVES ARE TRULY VALUED AT Senior management SYNTHOMER AND ALLOW US TO MAKE BETTER, MORE Ethnically 6 INFORMED DECISIONS. CREATING AND MAINTAINING AN diverse background Non-ethnically diverse background 42 INCLUSIVE CULTURE WHERE EVERYONE FEELS VALUED IS ALSO SIMPLY THE RIGHT THING TO DO.” Rob Tupker President – Functional Solutions and Executive Team Sponsor for D&I FUTURE ACTIVITIES By 2021 • 20% female representation in senior leadership • Implement the 2021 Synthomer Diversity and Inclusion Plan By 2022 • 25% female representation in senior leadership By 2025 • 33% female representation in senior leadership • 20% ethnic diversity in senior leadership By 2030 • 50% of new hires in leadership, management and professional roles being women 17 Synthomer plc Sustainability Report 2020
Environmental, Social and Governance (ESG) – review of our six pillars 3. People – Support communities (GRI 413-1) Synthomer has engaged with its communities supplies, she approached a family member who in various ways around the world. 2020 was works for Synthomer with a request for help. a challenging year for volunteering due to We were able to source a supply of gloves and COVID-19 restrictions, but our sites continued also help with the significant challenge of getting to positively interact with their local communities. the consignment from Malaysia to an extremely remote location in rural Tanzania. The volunteers’ group in Sintra (Portugal) is active in three areas: social, environment and education. For the last ten years, they have been engaging with the communities On the environmental side, several colleagues The US Synthomer Foundation was founded in activities such as painting, cleaning fields volunteered to take part in the ‘Broom Day’ some 60 years ago as a funded endowment in the woods, performing sessions on in Marl (Germany), an annual event with the goal to benefit US communities. chemistry, waste and safety in elementary to clean up the neighbourhood. The volunteers schools, supporting activities with the from the Marl office split into three groups and elderly population, making donations of cleaned the surrounding pavements and green food or gathering and donating clothes spaces on planned routes. In all, volunteers – to homeless people. including our employees – helped collect 9.8 tonnes of litter. Whether providing grants to non-profit Support during the COVID-19 pandemic organisations or volunteering with employees In Malaysia Synthomer donated protective through our We Care initiative, we are dedicated gowns and N95 face masks to the Kluang to making a positive impact in the communities General Hospital. In addition to the Company where we operate throughout the USA. In 2020, donation, a group of Kluang employees the Foundation awarded nearly $1.2 million to independently gathered donations in the non-profit organisations in the USA which form of personal protective equipment provide services that improve the quality of life (PPE) and food supplies for the hospital. through education, health and human service, civic initiatives and the arts. In Italy, Synthomer donated 450,000 medical gloves to the municipal Papa Giovanni XXIII The Synthomer Foundation accounts for the Hospital in Bergamo, Italy. The hospital is donations of our USA operations and in 2020 situated in the heart of the Lombardy region we highlight the following activities: Our Global of Italy which has been severely affected by the Technology Centre in Akron (USA) donated COVID-19 pandemic. Our Filago plant, which laboratory-grade glassware to Kent State produces Nitrile latex for the medical glove University. We were delighted to support the industry, is situated just 17km from the hospital. local community and help the next generation of Science, Technology, Engineering and In Germany we donated used but functional Mathematics (STEM) students in their academic laptops to the Aloysius elementary school journey. Colleagues from Roebuck (USA) in Marl. The laptops were prepared with participated in the ‘Bags of Love’ charity project updated software by the Synthomer IT team and donated gift bags to housebound seniors and then donated to the school, which in their community for Valentine’s Day. The bags passed the devices to pupils who used them included Valentine’s cards, books and for their home schooling. pharmacy items and were given to elderly community members who are housebound “OUR FOUNDATION HAS A due to mobility limitations. Synthomer has been taking part in this annual project for several RICH COMMUNITY HISTORY FUTURE ACTIVITIES years and cooperates with ‘United Way of the Piedmont’ and ‘Meals on Wheels’ to provide OF ENHANCING THE QUALITY By 2021 the bags to their recipients. OF LIFE FOR THOSE IN NEED. • Draw on the experience of the Synthomer Foundation to expand Colleagues in Malaysia have supported IT’S BEEN AN HONOUR TO community support activities a rural hospital in Tanzania with a donation of medical gloves. This initiative was started LEAD THIS EFFORT FOR By 2030 by a medical student at Glasgow University, who volunteered at the Kilimatinde Hospital in NEARLY THREE DECADES.” • Provide volunteer support and financial Tanzania during her final year project in 2019. Theresa Carter contributions in excess of £1 million per Seeing the serious shortage of essential medical President – The Synthomer Foundation year to advance education, public health, diversity and environmental stewardship 18 Synthomer plc Sustainability Report 2020
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