CREATING VALUE WITH SUSTAINABLE SUSTAINABILITY REPORT ... · Perkin Medal*. The highest honour given in America for outstanding work in industrial chemistry, his innovations led to

SUSTAINABILITY REPORT

2016IMPACTSCREATING VALUE WITH SUSTAINABLE

2

Reporting Standard

This report is written in accordance with the GRI G4 Reporting Principles (core option) guidelines and includes disclosure for our key manufacturing sites in Germany, Malaysia and the USA. Our objective is to provide an accurate account of our actions, giving consideration and emphasis to all relevant issues, whether positive or negative. This information and data mainly refers to the year ending 31 December 2016.

INTRODUCTION

04 Act Sustainably

06 Executive Message : Group Chief Executive

Officer & Chief Sustainability Officer

CORPORATE PROFILE

10 Operating Philosophy

12 Vision, Mission & Core Values

14 Ownership & Legal Form

15 Facts & Figures

16 Solutions & Industries

18 Product Stewardship

SUSTAINABILITY AGENDA

20 Sustainability Vision

22 Sustainability Approach

23 Sustainability Commitments

24 Stakeholder Engagements

26 Materiality

SUSTAINABLE IMPACTS

28 Innovating for Sustainable Impacts

32 Realising Results

32 Supply-Chain Impact

33 > Traceability in Palm Oils

35 > Farmers to Consumer

36 > Sourcing with Respect

38 Operation Impact

39 Business Impact

42 Community Impact

SUSTAINABILITY DASHBOARD

46 Habitability

55 Prosperity

60 Profitability

GRI G4 INDEX TABLE

3

CONTENT

4

ACT SUSTAINABLY TODAY TO ACHIEVE TANGIBLE RESULTS FOR FUTURE GENERATIONS

5

We stand at a crossroads in the world’s economy. While we are poised to create better standards of living for

more people than ever before, the consumption-based world that exists today cannot be sustained without causing environmental and economic disruption. Recognising this, our customers are increasingly demanding innovation and a significant commitment from their partners to proactively transform business models and entire value chains to deliver responsible long-term solutions.

The infinity symbol of our “Act Sustainably” logo represents just that - continuous innovation to meet the needs of today without compromising the needs of the future through creation of responsible products leveraging a sound business approach.

Representing the environment, society and the economy, where the three coloured bands converge is where we want to be: the equilibrium in balancing habitability, prosperity, and profitability.

Even before the term “sustainability” became commonplace, Emery Oleochemicals’ value system was strongly rooted in both entrepreneurial spirit and human values. This enabled us to look at being an effective business partner and an engaged community member. No enterprise can last as long as we have – over 177 years – without drawing from the inspiration and goals of our heirs, the next generation. This is the very definition of who we are – an organisation that intuitively co-innovates with strategic partners, including our employees, to create a new era of responsible growth that helps protect the planet and benefits everyone.

As one of the largest generations in US history is about to move into its prime spending years, our heirs - the millennials, will reshape the economy. Their unique experiences will change the way we buy and sell, forcing us to examine how we operate, our goals and our priorities for decades to come.

Though said many years ago by a member of our company’s founding family, Jack Emery’s almost prophetic words still ring true,

“It is important to work towards leaving the world a better place. Since we are fortunate, and can do something, it is our responsibilityto do it.”

Jack Emery

6

Being in business for over 177 years is a remarkable achievement by any measure.

Emery Oleochemicals’ history is filled with stories of successes, failures, assurances, uncertainties – experiences

that have shaped our corporate culture and values. We have journeyed through many changes in societal beliefs and technological advancements, witnessed the evolution of civil society and engaged with and influenced the chemistry that has gone on to touch all of us in so many ways each day. As an organisation – and more importantly – as a community, we have always looked at the needs of the future as our true north in our efforts to remain relevant and innovative.

“Creating Value with Sustainable Impact”, the theme of this year’s report, epitomises our interpretation as a winning combination of the entrepreneurial spirit with human values concerned about the way people live; the environment we inhabit, and the kind of communities created by such environment. As we continue to future-proof our business in the manufacture of sustainable chemical solutions, we aspire to deliver tangible results inside and outside our organisation.

In 2016, this aspiration is exemplified through initiatives such as the “greening” of our palm-based value chain using Big Data; voluntary labelling of products such as the European Union EcoLabel and USDA BioPreferred®; manufacture of bio-based performance solutions for maritime, and differentiated community programmes that meet critical local needs. These initiatives are in tandem with Emery Oleochemicals’ adoption of the United Nations’ 2030 Global Goals, enabling us to further economic and social inclusiveness through all of our partnerships so that we can, as a collective, address issues that have been defined as significant world challenges in modern times.

I believe that with the continual contribution of energy, passion and creativity, we will for years to come, inspire each other and stay focused on our true north - shaping the next generation of sustainable solutions for a better tomorrow, while protecting our employees, our customers and their products, our local communities, the environment, and ultimately, the longevity of our business.

Let’s dream big and let’s make a difference!

EXECUTIVE MESSAGE

7

"...we have always looked at the needs of the future as our true north in our efforts to remain relevant and innovative."

RAMESH KANA GROUP CHIEF EXECUTIVE OFFICER

& CHIEF SUSTAINABILITY OFFICER

8

MEETING THE NEEDS OF TODAY WITHOUT COMPROMISING THE NEEDS OF THE FUTURE

PROFILECORPORATE

9

10

We believe the very nature of our business of manufacturing natural-based solutions fundamentally guides our operation to deliver on our commitments as part of our ‘license to operate’.

From the people we work with to innovations in product development to caring for the community and the environment where our facilities are located, Emery Oleochemicals affirmed our pledge in 2015, to “actively contribute to achieving six United Nations Sustainable Development Goals (SDGs)” that are related to our business.

OPERATING PHILOSOPHY

GOAL 9 Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation.

GOAL 15 Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss.

GOAL 12 Ensure sustainable consumption and production patterns.

GOAL 17 Strengthen the means of implementation and revitalise the global partnership for sustainable development.

GOAL 8 Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.

GOAL 13 Take urgent action to combat climate change and its impacts.

For almost two centuries, we have continuously reinvented ourselves ensuring that we always set our sights on a wider horizon for the longer term, to find new avenues of growth, to refine the position of our business and our products, and to proactively advance our sphere of influence in the marketplace. Today, by staying focused on what matters to our partners, Emery Oleochemicals is a global natural-based specialty chemicals manufacturer, seeking to lead with next-generation solutions and best practices following the adoption of the SDGs in 2016.

Our operating philosophy

of “CREATING VALUE”

across our relationships

is the cornerstone to

Emery Oleochemicals

successfully delivering on

our vision.

11

12

VISION& MISSION

Our purpose drives us to go beyond the idea that we are simply a manufacturing company. Global in our goals and local in our engagement, Emery Oleochemicals’ roots in innovating for a purpose can be traced as far back as 1917 when our resident, and first-hired scientist, Dr. Ernest Twitchell was awarded the Perkin Medal*. The highest honour given in America for outstanding work in industrial chemistry, his innovations led to outstanding commercial development through discoveries that made the production of soap, cosmetics, rubber, candles, lubricants, textiles, plastics and sanforizing fabrics possible.

* (Cincinnati.com, Light a candle for Ernest Twitchell, December 10, 2014)

Our business is driven by our understanding that tomorrow's world will be shaped by all thatwe do today.

Dr. Ernest Twitchell

To become the World Leader In Value-added, Natural-based Chemicals

13

COREVALUES

Emery Oleochemicals’ four core values – competitive advantage, innovation, partnership and trust – are exemplified by our employees around the world as we pursue a sustainable future through our daily operations. By focusing on our core values combined with established business governance, we can ensure our company operates responsibly.

This allows us to remain committed to building an inspiring brand that embraces innovation, diversity and high quality across our entire product portfolio. In turn, this helps ensure the continued and mutual success of our employees, our business partners and our investors, while also positively impacting the communities in which we operate.

COMPETITIVEADVANTAGE

INNOVATION PARTNERSHIP TRUST

To become the World Leader In Value-added, Natural-based Chemicals

14

OWNERSHIP& LEGAL FORM

Headquartered in Malaysia, Emery Oleochemicals is equally owned by PTT Global Chemicals and

Sime Darby Plantation. Our shareholders provide strategic oversight to a senior leadership team at Emery that manages our global operations through regional offices in Germany, Malaysia and the USA.

USAEmery Oleochemicals LLC

4900 Este Avenue, Cincinnati,Ohio, USA,

45232

GERMANYEmery Oleochemicals

GmbHPaul Thomas Str. 56,40599 Düsseldorf,

Germany

MALAYSIAEmery Oleochemicals

(M) Sdn BhdLot 4, Jalan Perak, Kawasan Perusahaan Telok Panglima

Garang 42500 Selangor, Malaysia

EMERY OLEOCHEMICALSHEADQUARTERS

LOCATIONS

15

% of employees who are local citizens

% of women employed in managerial positions

8752016163 712

9052015164164 741741

10562014191191 865865

10142013194194 820820

9662012184184 782782

10412011198198 843843

TOTALWORKFORCE

US : 293

AP : 443

EU : 139

WORKFORCEBY REGION

NORTHAMERICA

2011

27438 236

2012

24433 211

2013

25235 217

2014

27238 234

2015

28441 243

2016

29342 251

EUROPE

2011

37477 297

2012

34072 268

2013

30762 245

2014

28356 227

2015

13239 93

2016

13941 98

ASIAPACIFIC

2011

39383 310

2012

38279 303

2013

45597 358

2014

50197 404

2015

48984 405

2016

44380 363

21%

2011

22%

2012

24%

2013

22%

2014

23%

2015

79% 78% 76% 78% 77%

218 211 247 233 209

823 755 767 826 696

20%

2016

80%

175

700

99.1%

2011

99.3%

2012

98.5%

2013

98%

2014

98.6%

2015

5.48% 6.31% 6.21% 5.49% 5.86%

98.5%

2016

5.14%

ManagerialPositions

Non-Managerial Positions

Number of employees in

WORKFORCE BY OTHERDEMOGRAPHICS



8752016163 712

9052015164164 741741

10562014191191 865865

10142013194194 820820

9662012184184 782782

10412011198198 843843

TOTALWORKFORCE

US : 293

AP : 443

EU : 139

WORKFORCEBY REGION

NORTHAMERICA

2011

27438 236

2012

24433 211

2013

25235 217

2014

27238 234

2015

28441 243

2016

29342 251

EUROPE

2011

37477 297

2012

34072 268

2013

30762 245

2014

28356 227

2015

13239 93

2016

13941 98

ASIAPACIFIC

2011

39383 310

2012

38279 303

2013

45597 358

2014

50197 404

2015

48984 405

2016

44380 363

21%

2011

22%

2012

24%

2013

22%

2014

23%

2015

79% 78% 76% 78% 77%

218 211 247 233 209

823 755 767 826 696

20%

2016

80%

175

700

99.1%

2011

99.3%

2012

98.5%

2013

98%

2014

98.6%

2015

5.48% 6.31% 6.21% 5.49% 5.86%

98.5%

2016

5.14%

ManagerialPositions




8752016163 712

9052015164164 741741

10562014191191 865865

10142013194194 820820

9662012184184 782782

10412011198198 843843

TOTALWORKFORCE

US : 293

AP : 443

EU : 139

WORKFORCEBY REGION

NORTHAMERICA

2011

27438 236

2012

24433 211

2013

25235 217

2014

27238 234

2015

28441 243

2016

29342 251

EUROPE

2011

37477 297

2012

34072 268

2013

30762 245

2014

28356 227

2015

13239 93

2016

13941 98

ASIAPACIFIC

2011

39383 310

2012

38279 303

2013

45597 358

2014

50197 404

2015

48984 405

2016

44380 363

21%

2011

22%

2012

24%

2013

22%

2014

23%

2015

79% 78% 76% 78% 77%

218 211 247 233 209

823 755 767 826 696

20%

2016

80%

175

700

99.1%

2011

99.3%

2012

98.5%

2013

98%

2014

98.6%

2015

5.48% 6.31% 6.21% 5.49% 5.86%

98.5%

2016

5.14%

ManagerialPositions


FACTS

& FIGURES

16

SOLUTIONS& INDUSTRIES

Emery Oleochemicals is a global and diversified natural-based specialty chemicals manufacturer – supplying

solutions (chemicals) typically used as base (raw) materials or in the manufacturing process of industrial and consumer end products. Utilising the unique properties of natural oils and fats in our proprietary technology processes, we can effectively innovate to meet the application needs of numerous high-growth sectors. Among others, our business focus includes the plastics, packaging, industrial lubricants, building and construction, automotive, home furnishings, agriculture, food and beverage, pharmaceutical, and home and personal care industries.

Spanning six business units, our solutions provide customers the opportunity to align environmental, societal and development needs with their own business success. Together, we can more effectively address many of the world’s most challenging problems, pertinent to meeting the SDGs, also known as “Transforming our World: the 2030 Agenda for Sustainable Development”. From combating climate change and protecting our oceans and forests to making cities more sustainable, our solutions are designed to additionally adhere to leading health and safety regulations.

• CREATIN

G

VA

LU

E

W

I T H O U R N AT U

RAL

- BA

SE

D S

OLUTIONS

Agro GreenGreen chemistry transforms natural-based renewable resources to create sustainable solutions for agriculture.

OleoBasicsYour preferred global solutions partner in high-performance, natural-based chemicals for common to niche applications.

Home & Personal WellnessRenewable solutions for cosmetics, hair,

dental and skin care, pharmaceuticals and detergents to inspire sustainable living.

Bio-LubricantsDriving innovations utilising natural-based fatty acids to create lubricant solutions for

outstanding performance and environmental safety.

Green Polymer AdditivesNatural-based solutions that provide

improved materials and processing e�ciencies for the plastics industry.

Eco-Friendly PolyolsShaping tomorrow’s comforts with

proprietary technologies in renewable chemicals for use in the manufacture of

flexible & rigid polyurethane foam. 6Business

Platforms

17

>3000products

Commodity Semi-Specialty

Specialty Chemicals

Global natural-based specialty chemicals

manufacturer

Crop Protection Livestock Farming Organic Farming Home & Garden Turfs and Ornamentals

Automotive Building &Construction

Furniture &Bedding

Packaging

Automotive Building &Construction

Toys & SportsEquipment

Coatings &Inks

Electronics Packaging

Body Care Cosmetics Detergents Hair Care Oral Care

Coatings &Adhesives

Food &Beverages

Paper Pharmaceuticals Textiles &Leathers

Automotive Greases IndustrialLubricants

Metal Workings Oilfields MarineLubricants

18

PRODUCTSTEWARDSHIP

Emery Oleochemicals’ product innovation initiatives are created in cutting-edge Technical Development Centres in Germany and the USA, supported by Product and Application Development Labs in Germany, the USA and Malaysia. This enables us to engage with

customers in exclusive or joint solutions development in the production of sustainable specialty chemical solutions, derived from renewable feedstock. This is in response to our overarching commitment to understand, manage and reduce the environmental impacts of our products.

Our product stewardship efforts are increasingly being influenced by the SDGs which have undeniably begun to shape the broader marketplace. Our in-house programmes focus on identifying and either preventing or minimising potential safety and environmental hazards throughout our products’ life cycle. Therefore, we conduct extensive testing of our products to identify and understand possible safety, health and environmental hazards and communicate them where necessary through data sheets that outline handling, storing, transporting and usage requirements.

As part of our standard business practices, Emery Oleochemicals ensures compliance with international laws and regulations related to industry best practices including:

• Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH)• US Environmental Protection Agency Pre-Manufacture Notice (PMN)• US Department of Agriculture BioPreferred® • European Union Ecolabel

Our natural-based products are also available in Halal and Kosher certified, and pharmaceutical, and Roundtable on Sustainable Palm Oil (RSPO) Mass Balance and Segregated grades.

AGENDASUSTAINABILITY

19

20

We believe the world needs solutions

for ongoing challenges like energy,

climate change, water, food, housing

(urbanisation) and health - the breadth

of issues we actively participate in

through the advanced manufacturing

of our natural-based chemicals that

are broadly used in industry. Our

company’s vision to become the world

leader in natural-based chemicals

is therefore predicated on achieving

partnerships and driving initiatives that

further create

A WORLD IN WHICH

SUSTAINABILITY IS A WAY OF LIFE.

21

To better future-proof our business, Emery Oleochemicals’ sustainability vision provides us the lens to view the outcomes of our product

development, operational efficiencies, talent management, partnerships and community impact. Supported by four pillars, our sustainability vision is pivotal to producing results from initiatives that are aligned to the six SDGs we have adopted into our global operations.

4Ensuring Sustainable Product Stewardship to o�er products that protect environmental and societal interest while contributing to profitability.

3Embedding Sustainable Supply Chains to transition sustainable practices into an e�cient and responsible supply chain management system.

2Future-Proofing Our Environment

to respect and protect the environment and biodiversity around us and strive to continuously reduce our ecological footprint.

1Being a Preferred Partner

to create, nurture and maintain strategic partnerships with key stakeholders to meet and advance sustainability agendas.

OUR SUSTAINABILITY PILLARS

Leading this charge is our Sustainability Steering Committee, helmed by our Group Chief Executive Officer and in his capacity also as the Chief Sustainability Officer. We periodically realign our leadership strategy, daily operations, policies and procedures to achieve our sustainability vision; instilling them into our corporate culture so that our employees embrace the same ideals.

SUSTAINABILITYVISION

22

SUSTAINABILITYAPPROACH

PEOPLEThink Sustainably

We adopt this mindset when making daily operational and

strategic decisions, always leading with the intention of adding value

to the environment, societyand business.

PROCESSDo Innovatively

Subsequently, we follow through our ideas and decisions with innovative

actions. Throughout the value chain, we have executed numerous creative

improvements and introduced various innovations in line with our sustainability goals, such as

sustainable sourcing, green product breakthroughs, carbon offsetting

initiatives, and more.

IMPACTInspire Change

We inspire other corporations to adopt responsible practices by

leading by example. For instance, we are outspoken advocates of RSPO-

certified derivatives; we continue to pursue initiatives that promote haze-free products that puts responsible

smallholders in the forefront of business opportunities.

TARGET

01Hone a “responsiblebusiness” model

A responsible business defines sustainability in a broader sense - people, planet and profit; we continue to hone our own business model to cater to the evolving sustainability needs of these three aspects.

Reduce sustainability risks undertaken by our partners and us

From feedstock to product, sustainability occurs throughout the entire supply chain and beyond.

TARGET

03TARGET

02

TARGET

04

Produce innovative and a�ordable sustainable derivatives and ingredients

Our products and solutions are designed to support our customers’ sustainability goals. When sustainability challenges arise, we work together with customers to overcome them.

Create a culture of responsible and sustainable practices for our internal and external stakeholders to meet our short-term and mid-term targets

We work to build a culture of integrity, mutual respect and social responsibility among our employees, customers, suppliers, investors, policymakers, NGOs, business partners and other key stakeholders.

Continuing our journey of adopting the SDG goals in 2016, Emery Oleochemicals’ approach to sustainability covers core areas, each with its accompanying action:

23

SUSTAINABILITYCOMMITMENTS

TARGET

01Hone a “responsiblebusiness” model

A responsible business defines sustainability in a broader sense - people, planet and profit; we continue to hone our own business model to cater to the evolving sustainability needs of these three aspects.

Reduce sustainability risks undertaken by our partners and us

From feedstock to product, sustainability occurs throughout the entire supply chain and beyond.

TARGET

03TARGET

02

TARGET

04

Produce innovative and a�ordable sustainable derivatives and ingredients

Our products and solutions are designed to support our customers’ sustainability goals. When sustainability challenges arise, we work together with customers to overcome them.

Create a culture of responsible and sustainable practices for our internal and external stakeholders to meet our short-term and mid-term targets

We work to build a culture of integrity, mutual respect and social responsibility among our employees, customers, suppliers, investors, policymakers, NGOs, business partners and other key stakeholders.

The diversity of our employees, customers, product portfolio and the communities we operate in allows us the breadth and reach to make a

difference. The alignment between Emery Oleochemicals’ corporate culture and that of societal needs speaks to the vested interest we have to achieve mutual success as we strive towards achieving our sustainability commitments. To this end, we have implemented sustainability targets to ensure that we stay on track:

24

STAKEHOLDERENGAGEMENTS

At Emery Oleochemicals, stakeholder engagements are an important endeavour to create strategic value. We

believe the right partnerships will enable all of us, as a collective, to deal with evolving business requirements as industry players look to address increased urbanization challenges. We are progressively playing the role of a ‘solutions provider’, and our engagements too have gradually become more sophisticated, informed and varied. From strengthened collaborative models of governance and decision-making across our value chain, there is an underlying expectation that advanced manufacturing will come to have the technological competence to be more responsive to our customers’ needs.

By engaging in active discourse, effective stakeholder engagement and collaboration ensures a degree of transparency and accountability in everything that we do. It is also a platform that has become an idea-generative, innovative, and collaborative exercise that additionally provides us insights into issues and concerns that our stakeholders have. Such open exchange of knowledge helps us enhance our business.

Diverse in its methods to best determine the effect of our actions and decisions, our engagement initiatives include dynamic dialogues, town hall sessions, site tours and suggestion schemes. One-on-one discussions are organised with certain stakeholders to seek direct feedback. The subject of sustainability and responsible supply chain practices are key topics in these engagement activities.

Best encapsulated by the SDG Goal 17: Partnerships for the Goals which emphasises that “this can only be realised with a strong commitment to global partnership and cooperation”, the inclusion of our stakeholders is vital to achieving our global sustainability objectives.

With access to subject matter experts ranging from academicians to non-governmental organisations to investors and industry counterparts, our shared global sustainability goals can serve to deliver mutually-beneficial outcomes for all stakeholders in our value chain.

25

Stakeholders Approach Key Sustainability Concerns

• Meetings

• Townhalls

• Site Tours

• Audits

• Dialogues

• Feedback Forms

• Suggestion Schemes

• Product & Service Quality• Environmental, Social & Community Impacts• Sustainability Certifications

Customers

• Ethics & Corporate Values• Corporate Governance

Shareholders

• Health & Safety• Talent Management• Labour Rights

Employees

• Creating Economic & Social OpportunitiesPolicymakers

• Supply Chain ManagementBusiness Partners

• Environmental & Social ImpactsCommunities

• Accountability & TransparencyNGOs

Examples of how we engage with stakeholders

26

MATERIALITY

Governance Ethics1: Corporate Governance2: Company ValuesCommunity Engagement3: Community Health and Safety4: Community Development

People5: Talent Management and Development6: Recruitment and Retention7: Compensation and Benefits

OHS8: Occupational Health and Safety

Product Stewardship9: Product Safety10: Responsible Selling

Supply Chain11: Responsible Sourcing12: Supply Chain Governance

Environment13: Climate Change and Energy14: Water and Biodiversity15: Waste

* Customers, Shareholders, Policymakers, Employees, Business Partners and Community

Low

Low

Med

Med

High

High

Importance to Emery Oleochemicals’ business

Imp

ort

ance

to

Sta

keh

old

ers*

Materiality helps us identify and prioritise the

issues that matter most across our whole value

chain – to our business and our stakeholders.

It provides the basis within which we evolve

our strategy and tailor our reporting to align

with the interests and needs of our audiences,

as well as those of Emery Oleochemicals.

MATERIALITY

MATRIX

The Materiality Matrix is one of the mechanisms we use to determine sustainability issues that are of importance to our various stakeholders.

The following questions guide us in our analysis:

• What sustainability areas are aligned with our vision and purpose, brand portfolio and even geography?

• To what extent do issues impact our business?

• How do our stakeholders view these issues and the extent of our influence?

• What is the importance of each issue to our key stakeholders?

The matrix has helped us define the following priorities according to our company stakeholders and business needs: Product Safety; Supply Chain Governance; Community Health & Safety; Corporate Governance; Occupational Health & Safety, and Responsible Selling. When benchmarking our materiality matrices with other industry counterparts, we found that these priorities are similar, and therefore, consistent with industry demands and best practices.

IMPACTSSUSTAINABLE

27

28

INNOVATING FOR SUSTAINABLEIMPACTS

IDEATION IMPACT

APPLICATIONTHOUGHT

LEADERSHIP

In our journey to adopt the global goals, we aspire to be a high performing, sustainable company that can transform the competitive landscape and encourage participants

in our value chain to change the way they think about products, technologies, processes, and business operation. Following our 2015 pledge to the SDGs, we went through a four-step business evaluation process:

When mapping our road ahead, we assessed challenges and goals at each stage, and identified new measures, or improved existing ones, to address those challenges while taking advantage of opportunities throughout our entire supply chain. From feedstock to products and thereafter, we seek to offer both immediate benefits as well as far-reaching influence in long-term global sustainability.

IDEATION IMPACT

APPLICATIONTHOUGHT

LEADERSHIP

IDEATION IMPACT

APPLICATIONTHOUGHT

LEADERSHIP

IDEATION

APPLICATION

29

In this first step, industry legal requirements and compliance regulations primarily guided us – which vary by country, by state or region. In a complex industry such as chemicals manufacturing, there are also first-mover advantages by fostering innovation informed by the evolving requirements of the marketplace. Additionally, by being at the forefront of compliance, we can better identify business opportunities and promote inclusive and sustainable industrialisation, while also steering innovation. To this end, our goal to increase efforts to fulfil regulatory compliance will allow us to obtain licenses to operate in more locations and application areas, thus driving our product innovation and stewardship even further.

Once we outlined all that was necessary to keep pace with regulations, and leverage them, we could move on to be more proactive about environmental issues. The drive to be more efficient extends from our advanced manufacturing facilities and our global offices to our entire value chain. At this stage, we work closely with suppliers, distributors, end-customers, regulatory bodies, employees, and various key stakeholders to apply our Ideation and therefore, to reinforce the adoption of the SDGs. By going beyond regulatory compliance, together we better mitigate risks and leverage opportunities in key sustainable development issues, such as responsible feedstock sourcing, water, energy and waste management, and supply chain management while also instilling a sustainability-focused mindset.

30

IDEATION IMPACT

APPLICATIONTHOUGHT

LEADERSHIP

IMPACT

As a leading manufacturer of natural-based chemicals, we determine our impact in the marketplace, in areas such as:

• waste minimisation during manufacturing processes and the “greening” of our operation

• our ability to innovate and provide customers with natural-based solutions that have less impact on the environment and people than conventional chemicals

• the adoption of best practices across our value chain for long-lasting impact on climate change through effective partnerships

At Emery Oleochemicals, we believe leadership and talent are critical for developing a greener industry. We see ourselves as leading the change by creating or collaborating in innovative sustainable development products and projects involving our suppliers and customers alike.

CorporateMALAYSIA

GovernmentMALAYSIA

United NationsMALAYSIA

CorporateASEAN

United NationsESCAP

CorporateGLOBAL

SecretariatASEAN

United Nations in Malaysia

31

IDEATION IMPACT

APPLICATIONTHOUGHT

LEADERSHIP

THOUGHT LEADERSHIP

Our aspiration is to progressively move up the sustainability ladder, and be strong advocates of sustainable manufacturing. We feel that this will continue to provide countless direct and indirect jobs in the regions around the world where we operate, and that this will also help propel economic growth in the market segments where we sell our products.

In the long term, Emery Oleochemicals seeks to establish best practices that can be emulated within the industry, to change existing paradigms and to implement innovations that lead to ‘next practices’. With engagements initiated out of our headquarters in Malaysia, we are proud to have had the opportunity to share our experience, present case studies or host knowledge exchange sessions in SDG related forums and events around the world including:

• Various side events at United Nations General Assembly (New York, USA)

• Private Sector Mechanism of the UN Committee on Food Security Session (Headquarters of the Food and Agriculture Organization (FAO) of the United Nations, Rome, Italy)

• Sustainable Development Goals Conference (Securities Commission Kuala Lumpur, Malaysia)

REALISING RESULTS

32

Supply chain sustainability

and responsible procurement

as an extension of our

operations, products and

services is regularly adapted

to support the realities of the

marketplace today while also

preparing us for the future.

We believe an effective

supply chain can also deliver

significant benefits including

reducing costs, establishing

environmental, social and

governance (ESG) in the

supply chain and promoting

social and economic

inclusiveness.

SUPPLY CHAIN

IMPACT1.

33

TRACEABILITY

IN PALM OIL1A

Palm oil is the world’s most widely consumed vegetable oil, and despite the negativity around this industry, demand is rising. This commodity is essential for economic development in Southeast Asia, particularly in Indonesia and Malaysia, which together produce over 80% of palm oil. Smallholders are critical, producing 40% of the palm oil, but they suffer from lower yields and the challenges that also come with being viewed as a contributor to the issue of haze.

Traceability, or knowing the source, of palm oil is an important factor in enabling responsible supply chains to help ensure that only oil produced from areas that are not complicit to social and environmental

abuses are used. Going beyond the current industry practice of tracing sources of palm oil to mill, in 2016 we conducted a pilot study to trace and map the various independent palm oil farmer as sources of the oil we procure. By gaining such ‘Big Data’ we are better able to ensure:

1. Direct sourcing of responsible palm oil.

2. Farmers we indirectly buy from are not practicing slash and burn tactics.

3. These farmers are also not financially disadvantaged by unscrupulous middle men or traders.

34

As part of Emery Oleochemicals’ efforts to engage with these smallholders, and provide them equal visibility in the procurement process, we developed a traceability digital application to assess their credibility as a sustainable operation particularly in relation to fires from ‘slash and burn’, called hotspots.

The pilot project engaged 118 smallholders and data was used to develop an online dashboard that provides critical information on these smallholders including identifying which are owned by women and men. This data helps drive inclusiveness for women in the agricultural space and identifies the exact location of their farm plot so that open source NASA satellite imagery of burning data can be overlaid to gauge if farmers are currently practicing, or have practiced, slash and burn tactics.

If there is a negative match to the NASA burning data, the identified smallholder will undergo immediate rectification measures, which will also ensure that they are removed from our supply chain until mandatory assessment over a period is satisfactory. Making use of big data in the palm plantation industry has been instrumental to the more effective tracking of those responsible for the haze.

TRACEABILITY

DIGITAL

APPLICATION

35

Working with selected smallholder farmers, and in partnership with a leading local mobile service provider, the “digital wallet” was introduced to facilitate trading and tracking of their business in real-time. With the goal of connecting farmers to their direct customers, pilot participants were incentivised in kicking this programme off, ensuring their monetary investment into the scheme were negated.

DIGITAL MARKETPLACE FOR

FARMERS TO CONSUMER (F2C)1B

• Data sample: 118 smallholders• Male/Female identified• Satellite of last 8 days for fires/smoke• Smallholders are confirmed not generating fires/smoke.

Clusters of Smallholder Locations

Male/Female & Hotspots

Classification by Long/Lat

Smallholder Locations v. Fires

36

Business practices including human rights, labour, corruption and industry certification of our suppliers are assessed by an independent, third-party partner, covering the year 2016.Comparing the 2016 results to 2015 when we first began this practice, the 2016 supplier SRG Self-Assessment exercise surpassed the completion results of the first year by 32% and less time was needed to achieve this performance; signalling a proactive and positive uptake to this exercise.

A total of 104 suppliers were requested to complete the SRG self-assessment via an online sustainability platform and was completed by 99 suppliers, leading to an overall completion rate of 95%. No adverse findings were identified.

SOURCING

WITH RESPECT1C

Completed95%

Global

Incomplete4%

Declined1%

104 Suppliers • Registered : 95 (91%)

Completed98%

NorthAmerica

Incomplete2%


Completed93%

Asia Pacific

1

Declined7%


Completed88%Europe

Incomplete12%


Completed100%

Asia Pacific

2


Yes42%

Does your organisation have a whistle blowing policy?

In compliancewith local &

national laws44%

No14%

Yes47%

Does your organisation have a human rights policy?


national laws48%

No5%

Yes54%

Does your organisation have an anti-corruption and bribery policy?


national laws42%

No2%

Yes43%

Does your organisation have a policy of anti-competitive practices?


national laws43%

No14%

Has your organisation adopted anenvironmental policy?

Yes59%


national laws35%

No6%

Has your organisation received any significant environmental fines

in the reporting period?

No86%

NotAvailable6%

Yes8%

Is your organisation compliant withnational employment laws

on working hours?

Yes100%


on minimum age?


on right to association?

Yes100%

Yes100%

Yes65%

Does your organisation have a non-discriminationor equal opportunity policy?


national laws34%

No1%

Yes72%

Does your organisation have a health and safety policy?


national laws27%

No1%

ISO 14001

25%Completed

RSPO

22%Global

RSPO

36%Asia Pacific

RSPO

43%Europe

RSPO

6%North America

Others33

Palm Oil20

Transportation14

Toller/Sub Manufacturer

4

Tallow3

Energy3

OVERALL COMPLETIONSTATUS

CORRUPTION

37

Completed95%

Global

Incomplete4%

Declined1%


Completed98%

NorthAmerica

Incomplete2%


Completed93%

Asia Pacific

1

Declined7%


Completed88%Europe

Incomplete12%


Completed100%

Asia Pacific

2


Yes42%



national laws44%

No14%

Yes47%



national laws48%

No5%

Yes54%



national laws42%

No2%

Yes43%



national laws43%

No14%


Yes59%


national laws35%

No6%



No86%

NotAvailable6%

Yes8%


on working hours?

Yes100%


on minimum age?



Yes100%

Yes100%

Yes65%



national laws34%

No1%

Yes72%



national laws27%

No1%

ISO 14001

25%Completed

RSPO

22%Global

RSPO

36%Asia Pacific

RSPO

43%Europe

RSPO

6%North America

Others33

Palm Oil20

Transportation14


4

Tallow3

Energy3

Completed95%

Global

Incomplete4%

Declined1%


Completed98%

NorthAmerica

Incomplete2%


Completed93%

Asia Pacific

1

Declined7%


Completed88%Europe

Incomplete12%


Completed100%

Asia Pacific

2


Yes42%



national laws44%

No14%

Yes47%



national laws48%

No5%

Yes54%



national laws42%

No2%

Yes43%



national laws43%

No14%


Yes59%


national laws35%

No6%



No86%

NotAvailable6%

Yes8%


on working hours?

Yes100%


on minimum age?



Yes100%

Yes100%

Yes65%



national laws34%

No1%

Yes72%



national laws27%

No1%

ISO 14001

25%Completed

RSPO

22%Global

RSPO

36%Asia Pacific

RSPO

43%Europe

RSPO

6%North America

Others33

Palm Oil20

Transportation14


4

Tallow3

Energy3

LABOUR

ENVIRONMENT HUMAN RIGHTS

Completed95%

Global

Incomplete4%

Declined1%


Completed98%

NorthAmerica

Incomplete2%


Completed93%

Asia Pacific

1

Declined7%


Completed88%Europe

Incomplete12%


Completed100%

Asia Pacific

2


Yes42%



national laws44%

No14%

Yes47%



national laws48%

No5%

Yes54%



national laws42%

No2%

Yes43%



national laws43%

No14%


Yes59%


national laws35%

No6%



No86%

NotAvailable6%

Yes8%


on working hours?

Yes100%


on minimum age?



Yes100%

Yes100%

Yes65%



national laws34%

No1%

Yes72%



national laws27%

No1%

ISO 14001

25%Completed

RSPO

22%Global

RSPO

36%Asia Pacific

RSPO

43%Europe

RSPO

6%North America

Others33

Palm Oil20

Transportation14


4

Tallow3

Energy3

RESPONDENTS BY CATEGORY

Completed95%

Global

Incomplete4%

Declined1%


Completed98%

NorthAmerica

Incomplete2%


Completed93%

Asia Pacific

1

Declined7%


Completed88%Europe

Incomplete12%


Completed100%

Asia Pacific

2


Yes42%



national laws44%

No14%

Yes47%



national laws48%

No5%

Yes54%



national laws42%

No2%

Yes43%



national laws43%

No14%


Yes59%


national laws35%

No6%



No86%

NotAvailable6%

Yes8%


on working hours?

Yes100%


on minimum age?



Yes100%

Yes100%

Yes65%



national laws34%

No1%

Yes72%



national laws27%

No1%

ISO 14001

25%Completed

RSPO

22%Global

RSPO

36%Asia Pacific

RSPO

43%Europe

RSPO

6%North America

Others33

Palm Oil20

Transportation14


4

Tallow3

Energy3

SUPPLIER CERTIFICATIONS

38

Our Loxstedt facility has been progressively working towards achieving the site’s energy efficiency goals, inspired by the highly successful modern geothermal heating (and cooling) technology implemented in its Technical Development Centre in 2013. To address losses of electrical energy from old multi-type gas and oil burners, new state-of-the-art gas boilers with separate actuators for gas and ventilation were installed.

These boilers enabled site operators to better manage specific load conditions with the optimised ratio for best combustion. A new electronic control linked to the distributed control system (DCS) was additionally fitted, and with the new frequency converters for the combustion air blowers, the electrical energy losses have been reduced drastically. The project also increased the reliability and performance of the boilers.

OPERATION IMPACT :

ENERGY EFFICIENCY2.

We utilize renewable

resources both as raw

materials for our products

and increasingly, in the form

of the utilities we use to

operate our manufacturing

facilities. Motivated by our

stakeholders, we actively

pursue the research and

development of practical

and economical end-of-

life scenarios for products

manufactured using our

natural-based chemicals.

Therefore, the inclusion of

our sustainability principles

and goals is integral to driving

innovations in sustainable

products.

BUSINESS IMPACT :

SUSTAINABLE PRODUCT

INNOVATIONS

3.

39

40

Providing high-performance characteristics such as excellent lubricity, favourable low temperature behaviour and high viscosity index, several of our DEHYLUB® Esters are listed on the EEL Lubricant Substance Classification (LuSC) List. This confirms compliance with strict standards for bio-degradability, bio-accumulation, toxicity and renewable content. EEL is managed by the European Commission and is a voluntary labelling standard developed by industry and environmental experts. It is also part of a wider sustainability initiative by the European Union to protect the environment.

In addition to its broad application range, several of Emery Oleochemicals’ DEHYLUB® Esters also allow our Bio-Lubricants business to participate in key industries. We do so by providing the marketplace with sustainable alternatives for various applications where petrochemical-based esters are not able to be used, such as oil-to-sea interfaces.

EUROPEAN ECOLABEL (EEL)

FOR DEHYLUB® ESTERS3A

Known in the industry as ‘VGP’, the Vessel General Permit is designed to address environmental impact due to the increased amount of international sea transport.

Governing incidental discharges into waters of the United States from commercial vessels greater than 24 meters (79 feet) in length and for ballast water from commercial vessels of all sizes, the VGP requires vessels navigating waters in the United States to use Environmentally Acceptable Lubricants (EAL) in all oil-to-sea interfaces.

The EPA accepts several national labelling programmes, including the EEL, allowing formulators to achieve

automatic VGP compliance by using ingredients on the LuSC list. Guided by this regulatory requirement that has influenced the development and production of marine lubricants, we continue to work with customers to formulate products that deliver on both performance and environmental needs and minimise the industry’s collective impact on the environment.

Maritime industry addresses impact of oil-to-sea interfaces through United States’ Environmental Protection Agency (EPA) Vessel General Permit

WireRopes

Stabilisers / Hydraulics

Bow thrusters

Compressor Lubes

Stern Tubes Gear Oil for

transmission & thrusters

41

Emery Oleochemicals’ Eco-Friendly Polyols business participates in the voluntary labelling of the bio-based content for its EMEROX® Polyols under the U.S. Department of Agriculture’s (USDA) BioPreferred® Programme. The USDA Certified Biobased Product label, displayed only on products certified by the USDA, is designed to provide useful information about its bio-based content and sustainable attributes to consumers who are looking for such items. This label assures consumers that the product contains a verified amount of renewable biological ingredients (referred to as bio-based content), are third-party certified and is strictly monitored by the USDA.To date, nineteen products in the EMEROX® Polyols portfolio have achieved the USDA Certified Biobased Label having tested between 48% and 99% bio-content. Certification for all EMEROX® Polyols products are on-going as part of Emery Oleochemicals’ sustainability objectives.

Depending on the grade and application, foam production can have high yield loss. Therefore, there is keen interest in the industry to find methods of reintroducing the scrap foam back into the foam process, especially for difficult to re-bond grades of foam which could end up in a landfill.

Emery Oleochemicals’ Eco-Friendly Polyols business offers a closed-loop foam recycling programme that provides quantifiable environmental stewardship for post-industrial foam. Designed as an alternative to landfilling of difficult to re-bond scrap, the INFIGREEN® recycled content polyols are a higher-valued, environmentally-responsible solution that was commercialised in 2015. This award-winning, proprietary technology process was the first of its kind for aromatic polyether/ester polyols and consists of a range of

INFIGREEN® Polyols products manufactured via glycolysis polyol process of polyurethane scrap foam.

The closed-loop process ensures that the foam producer’s scrap is converted back to polyol and returned for reprocessing into foam manufacturing which also helps minimise issues of variability and formulation change. INFIGREEN® Polyols are well-suited for a broad range of flexible foam and rigid foam applications.

USDA CERTIFIED BIOBASED

LABEL FOR EMEROX® POLYOLS

CLOSED-LOOP FOAM RECYCLING

AIDS LANDFILL REDUCTION

3B

3C

DID YOU KNOW?

The USDA programme’s purpose is to spur economic development, create new jobs and increase the purchase and use of bio-based products thereby reducing the country’s reliance on conventional petroleum-based products. It also aims to increase the use of renewable agricultural resources, and contribute to reducing adverse environmental and health impacts.

ScrapFoam

TransEsterification

ProprietaryProcessing

FoamProduction

Glycol

OptionalClosed

Loop

Polyols

Cincinnati, USA

42

Several Emery Oleochemicals’ employees and their family members joined together in September 2016 to participate in the Greater Cincinnati’s Susan G. Komen Race for the Cure®. It was a poignant day to celebrate women who are currently fighting their battle with breast cancer, those who have been cancer free for months or years now, and to remember those who were lost but definitely not forgotten.

In honouring women impacted by breast cancer, a twenty strong TEAM EMERY joined

in solidarity on the 5K run / walk along with hundreds of other supporters. In addition to participating in the race event, many of our Cincinnati employees made individual donations to this charity which was then matched by the company. It was a wonderful team-building event and a strong testament to our belief that when we come together as colleagues and as human beings who care about an issue that impacts many women around the world, we can accomplish great things!

COMMUNITY

IMPACT4.

SUSAN G. KOMEN RACE FOR

THE CURE® CHARITY :A Day of Celebration & Remembrance

Loxstedt, Germany

43

Organised by the Loxstedt municipality to preserve the environment and raise awareness on the same, the “Loxstedt turns the climate wheel” initiative was rolled out to reduce the CO₂ output in the area. Measured by every individual choosing to cycle to work, each kilometre was a baseline to CO₂ reduction. About 93 individuals in the town participated in this programme that also saw them getting more involved in their personal wellbeing through cycling, while actively reducing environmental impact associated with vehicle travel. Generating a saving of more than 7 tons of CO₂, they were joined by 31 Emery Oleochemicals Loxstedt employees.

Michael Bolhoefer (designation, second from right) covered 2.920 kilometres, travelling eight months by bike to the office - the longest distance clocked amongst all participants. Holger Rasch (First municipal council and district manager of Loxstedt, third from right) visited our Loxstedt facility to recognise Michael’s contribution in a ceremony hosted by Jörn Ellerbrake (Managing Director Europe & General Manager, Loxstedt, far right).

LOXSTEDT TURNS

THE CLIMATE WHEELClimate protection action with local municipality

Loxstedt, Germany

44

It began as an innocent comment, almost in jest. While discussing the Loxstedt municipality campaign, colleagues discussed the probability of cycling from Loxstedt to Düsseldorf, some 400 kilometres away, to attend a meeting.

Challenged by Jörn Ellerbrake (Managing Director Europe & General Manager, Loxstedt) who agreed to host a congratulatory barbecue for a successful ride, seven bikers participated in this activity. Kicking off on the 8th of July from the Loxstedt facility, three cyclists joined the group for the first 45 km, and the remaining four, Matthias Hof, Tanja Lüdtke, Kevin Henschel and Björn Eicker journeyed the entire route to Düsseldorf.

Almost the entire company was there when the team began their journey. Enroute, they were not so fortunate with the weather having to deal with heavy rains and searing heat. Arriving in Düsseldorf on Sunday afternoon, the cyclists were feted to a good meal and much merriment by colleagues, and said “Next year we will cycle in the opposite direction!”

A 400KM CHALLENGE,

FOR A MEETING!

From left to right.: Thomas Pape, Jens Latislaus, Cord Röscher, Kevin Henschel, Björn Eicker, Tanja Lüdtke, Matthias Hof

Total ride of 415 km, cycling at 25 km/h average speed:

1st day, 8th July : • Flag-off at 9:00am from Loxstedt office• First break after 90 km• Arrived in Dinklagen after 132 km

2nd day, 9th July : • First break after 60 km• 166 km, 15 of that uphill to Schwerte

3rd day, 10th July : • 116 km across the Ruhr area• Arrive at 3pm to Düsseldorf office

DASHBOARDSUSTAINABILITY

45

HABITABILITY

46

Our company values reflect various elements of the SDGs: among other endeavors, we want to embrace gender and cultural equality, guarantee the health and safety of our employees and partners, treat colleagues and stakeholders with fairness and respect, and protect people and the environment.

47

Comprehensive environmental impact assessments are conducted at every location

where Emery Oleochemicals has its business operation. We apply very high environmental protection standards in our production processes and continuously improve them to conserve resources and reduce emissions. To effectively do so, our manufacturing sites adopt a risk management model to reduce the risk of adverse environmental and social impacts and are ISO14001 certified.

As part of our aspirations to go beyond fundamental practices, we undertook additional steps to realise our sustainability goals. Specifically, in the area of energy, it entails combining efficient energy resource utilisation, focusing on climate protection needs, improving the safety of our sites and leveraging competitive economic advantages. While the results of our Sustainability Dashboard show an increase in the company’s total GHG emission - contributed by the increased use of indirect (imported) energy; more importantly, it is the growing usage of biogas as ‘direct energy’ in our manufacturing processes that indicate we are on the right track to becoming energy efficient.

The reduction of GHG emissions from ‘direct energy’ was made possible with the implementation of clean energy technology enhancements that enabled :

• the use of renewable energy for boilers

• improved steam boiler combustion and insulation efficiency

• the switch to cleaner refrigerants• the optimisation of motor power

consumption

Site-specific projects included:

• Germany : Refitting of a steam boiler tower

• Malaysia : Commence biogas utilisation on-site at boiler

• USA : replaced many sodium vapour and fluorescent light fixtures with LED including an entire storage facility

In addition to recognizing the cost advantage to improving our sites’ energy utilization, we continue to improve upon our comprehensive energy management systems through analysis and the periodic review of our energy performance.

48

ENERGY CONSUMPTION WITHIN THE ORGANISATION

Total fuel consumption from non-renewable sources

ENVIRONMENTAL

MATERIALS USED BY WEIGHT

341

299

34

38

228

220

4152014

2013 549

5222012

2011 529

2014

2013

2012

2011

3092015 2015

2952016 2016

Total estimated weight of materials used (’000 mT)

Total estimated weight used that are recycled/renewable input materials (’000 mT)

Natural Gas (‘000 m3) Electricity (‘000 kWh)

Total fuel consumption from non-renewablesources in giga-joules (GJ)

117,378

144,410 148,803

2014

128,318

2015

155,185

201620132012

74,637

2011

175,177

147,214

173,917

206,657

2014

203,547

2015

209,802

2016201320122011

2.26 1.57106

533

2014

267

2015201320122011

136

2016

Not monitored in 2011 & 2012

4,775,447

6,246,673

5,344,999

2015

5,495,3572016

2014

2013Light fuel oil or Kerosene [Diesel or Gasoil] (‘000 liters)

49

ENERGY CONSUMPTION WITHIN THE ORGANISATION

Renewable sources energy consumption within organisation

Total energy consumption (’000 kWH)

772

1,151 1,064

2014

1,056

201520132012

2015

2014

2013

2012

2011

1,600,861

2016 1,900,851

2,057,981

2,016,739

1,712,193

1,278,457

68

2011

1,779

2016

37,044

23,436

2014

25,722

20152013

35,570

2016

Not monitored in 2011 & 2012

Total fuel consumption from renewable sources (’000 Nm3) Renewable energy, Biogas/ Biomass (GJ)

Natural Gas88.44%

Biogas 0.52%Electricity

11.04%

EnergyConsumption

Portfolio 2016

• 2012 Guidelines to Defra / DECC’s GHG Conversion Factors for Company Reporting

• Methodology Paper for Emission Factors, Pg 25, Table 11

• www.iea.org/countries/stats/docs/statistics_manual.pdf

• www.convert-me.com/en/convert/energy/cmsgas.html?u=cmsgas&v=144%2C409%2C731

• www.epa.gov/cleanenergy/documents/egridzips/eGRID2012V1_0_year09_SummaryTables.pdf

• www.umweltbundesamt.de/energie-e/politik.htm

REPORT STANDARDS,

METHODOLOGIES, AND

ASSUMPTIONS USED

50

TOTAL WATER WITHDRAWAL BY SOURCE (‘000 m3)

2015

1,114

2014

1,437

2016

1,025

20122011 2013

2015

4,407

2014

4,032

2016

3,648

3,7983,882 3,731

2015

1,114

2014

1,437

2016

1,025

20122011 2013

2015

4,407

2014

4,032

2016

3,648

3,7983,882 3,731

Ground Water ('000 m3)

Total ('000 m3)

Volume of recycled water Water used in our cooling towers are continuously recycled, contributing to more effective resource management in our operation. In 2016, we saw a reduction of about 760,000 m³ in water withdrawal across all our manufacturing

sites. Only treated wastewater is discharged, which has bolstered our progress in sustainability.

51

Ground Water ('000 m3)

Total ('000 m3)

Use of renewable energy for boilers

Improved steam boiler combustion

and insulation e�ciency

Switching to cleaner

refrigerants

Motor power consumption optimisation

4212011

2002012

2822014

3092015

2292013

3092016

Direct Greenhouse Gas (Ghg) Emissions (Scope 1) (CO2, HFC, PFC, NOx) (’000 tCO2)

2422011

1162012

1362014

1302015

1432016

1182013

Energy Indirect Ghg Emissions (Scope 2) (’000 tCO2)

Total Ghg Emissions (’000 tCO2)

6642011

4322012

4792014

4392015

4552013

4522016 Amount of Ozone - Depleting Substances

(kg)

3382011

3062012

1,9002014

5,2192015

4,5002016

4402013

WE REDUCED OUR TOTAL GHG EMISSIONS THROUGHCONCENTRATED EFFORTS INCLUDING :

Use of renewable energy for boilers

Improved steam boiler combustion

and insulation e�ciency

Switching to cleaner

refrigerants

Motor power consumption optimisation

4212011

2002012

2822014

3092015

2292013

3092016

Direct Greenhouse Gas (Ghg) Emissions (Scope 1) (CO2, HFC, PFC, NOx) (’000 tCO2)

2422011

1162012

1362014

1302015

1432016

1182013

Energy Indirect Ghg Emissions (Scope 2) (’000 tCO2)

Total Ghg Emissions (’000 tCO2)

6642011

4322012

4792014

4392015

4552013

4522016 Amount of Ozone - Depleting Substances

(kg)

3382011

3062012

1,9002014

5,2192015

4,5002016

4402013

USA :Continued projects to replaced many sodium vapor and florescent light fixtures with LED including entire storeroom.

MALAYSIA :Biogas utilization at Rika HP Boiler #1.

GERMANY : Re-fit of steam boiler 5.

EMISSIONS (‘000 TCO₂)

52

NOx, SOx AND OTHER SIGNIFICANT AIR EMISSIONS

2011 2012 2013 2014 2015 2016

104 83

593

109 97 100

NOx (mT)

2011 2012 2013 2014 2015 2016

0.78

HFC/PFC (mT)

2011 2012 2013 2014 2015 2016

0.900.72

631

0.97 1.00 0.93

SOx (mT)

2011 2012 2013 2014 2015 2016

8

6

28

15 14

12

Dust (mT)

2011 2012 2013 2014 2015 2016

27

3334

26 2624

VOC (mT)

4.14

2.61

0.88

00.10

53

TOTAL WATER DISCHARGE BY QUALITY AND DESTINATION

5,073

14,559

7,464

4,538

2,758

2015

4,1802016

2014

2013

2012

2011

1,904

4,764

3,867

2,639

1,802

2015

1,6972016

2014

2013

2012

2011

2011 2012 2013 2014 2015 2016

1,1491,1481,230

1,044

1,6341,805

Treated Wastewater (’000 m3)

2011 2012 2013 2014 2015 2016

0

385

475

0 014

Untreated Wastewater (’000 m3)

Chemical Oxygen Demand (mT)

Biological Oxygen Demand (mT)

54

TOTAL WEIGHT OF WASTE BY TYPE AND DISPOSAL METHOD

2015

2014

2013

2012

2011

7,634,413

680,432680,432

11,382,845

10,290,139

7,145,124

2016 9,880,556

2011 2012 2013 2014 2015 2016

22,378

20,77415,967 18,867

21,185

20,409

Total General Waste Generated (mT)

2011 2012 2013 2014 2015 2016

8,682

13,361

8,276 9,315

21,182

20,382

Total General Waste Recycled (mT)

2011 2012 2013 2014 2015 2016

422401

272

580

172

462

Total Hazardous Waste Disposed (mT)

2011 2012 2013 2014 2015 2016

1,929

7,767

17,212

3,2415,271 5,194

Non Hazardous Waste To Landfill (mT)

2011 2012 2013 2014 2015 2016

1,9852,005

2,514

1,619

178373

Total Hazardous Waste Recycled (mT)

Amount of Energy Produced from Biogas (kWH)

PROSPERITYThe long-term success of any company is dependent on its employees. Therefore, the well-being of Emery Oleochemicals’ employees is never compromised in the running of our business.

55

56

LABOUR PRACTICES

AND DECENT WORK

As a global business entity, our employees have the opportunity to work in an international environment with varied and challenging career opportunities for experts in different disciplines. We offer jobs with fair compensation, a high international occupational health and safety level and good social protection. Our employees receive health coverage (medical, dental, life and disability insurance) offered through a remuneration and benefits philosophy that provide market-competitive packages for our employees.

We also make sure that our employees have the necessary skills to implement the company’s strategy, believing that only by creating empowered employees, a meaningful work environment is attainable. By being purposeful and responsible in their work spaces, this allows Emery Oleochemicals to continuously create value inside and outside the organisation.

Therefore, professional and personal development is as integral to achieving our business goals as is investing in procedures that enhance the image of our company as an excellent workplace and an attractive employer. In 2016, our employee development focused largely on technical skills for the non-managerial workforce.

All management-level employees are required to submit an annual due diligence report on the areas under their supervision, in the form of a Letter of Representation, that checks for compliance with the company’s code of ethics and values.

Our entire operation is consistently audited internally and by shareholders, to ensure that we are in line with our zero-tolerance policy towards corruption. We have had no incidences of corruption since we began publishing our sustainability report in 2012.

EMPLOYEE ATTRITION

Total workforce attrition

6.4% 5.6% 10.0%10.3% 11.5%

8.1% 8.7% 15.5% 12.0%

6.0% 4.9% 9.0% 9.6% 9.9% 11.4%

15.9% 12.3%

2011 2012 2013 2014

10.9%

2015 2016

Women workforce attrition

2011 2012 2013 2014 2015 2016

Men workforce attrition

2011 2012 2013 2014 2015 2016

57

TRAINING & DEVELOPMENT

78% 86% 84% 86% 100% 92%

Percentage of Employees with Regular Performance and Development Plans

2011 2012 2013 2014 2015 2016

19,628 20,990 21,969

16,019

11,234

2011 2012 2013 2014 2015 2016

Total training hours

14,438

15,595

19,40117,155

11,446

8,195

2011 2012 2013 2014 2015 2016

Total training hours for sta� (Non-managers)

10,758

* Excluding EU except for 2016

* Excluding EU except for 2016

4,035

6,762

2,9113,927

2,339

2011 2012 2013 2014 2015 2016

Total training hours for managers

3,680

58

HEALTH

AND SAFETY

Our manufacturing facilities operate on strict health, safety and environmental standards, which are superior to industry standards or laws and regulations determined by the local authorities. As our vision is to be a global leader in an industry with a manufacturing component, it is vital that Health, Safety and the Environment (HSE) practices are integrated across our entire business.

In accordance with our HSE Policy, our occupational health and safety activities are managed with the guiding principle of continual improvement. The practices applied in the management and development of occupational health and safety are determined in the Group’s EHS Management System which is based on ISO standards and which, in addition to occupational health and safety, also comprises environmental affairs.

Regular HSE committee meetings are conducted at each Emery Oleochemicals’ manufacturing facility where issues such as safety enhancements, accident prevention and general improvements in HSE are discussed. Comprising managerial and non-managerial personnel, the committee monitors, assesses and works to improve health and safety at the workplace. By additionally empowering employees to actively participate in the management of sustainability risks, we are able to rely on them to ensure that every consideration is given to the HSE aspect at Emery Oleochemicals’ facilities.

59

2011

3.2%

2012

3.3%

2013

3.1%

2014

3.1%

2015

6.8%

2016

3.2%

Sickness Absence Frequency(% Average)

1.33

0.86

0.41

2.47

1.87

2011 2012 2013 2014 2015 2016

Total Recordable Injury Rate (TRIR)Number of injuries per 100 employees

1.98

0.20

0

0.21

0.55

0.48

2011 2012 2013 2014 2015 2016

Total Recordable Injury Frequency (TRIF)Number of injuries per 100 employees

0.56

18

5

1.15

5.89

3.35

2011 2012 2013 2014 2015 2016

Injury Absence Frequency Number of days per 100 employees

7.52

Worked Hours

(in millons)

1.94

1.85

1.93 3.02

1.73

2.15

2011

2012

2013 2014 2015 2016

Work RelatedFatal Accidents2011

2012

2016

2015

2013

2014

1

0

0 0

0

0

2011

2012

2013 2014 2015 2016

PROFITABILITY

60

Global NorthAmerica

AsiaPacific

Europe

621,732million

261,226million 251,764

million

108,742*million

2016 FINANCIAL DATA

NET REVENUE (USD)

* Decrease in Europe net revenue due to divestment of Düsseldorf Germany plant in September 2015

GRI G4INDEX TABLE

61

62

This report is produced based on ‘in accordance’ - Core GRI G4 Reporting Principles, for the year 2016 and covers disclosure for the listed entities below:

Code Description Page

GRI G4

INDEX TABLE

G4-1 Provide a statement from the most senior decision-maker of the organisation about the relevance of sustainability to the 6 organisation and the organisations strategy for addressing sustainability.

G4-2 Provide a description of key impacts, risks & opportunities. 11, 21, 22, 23, 28

G4-3 Report the name of the organisation. 14

G4-4 Report the primary brands, products & services. 17

G4-5 Report the location of the organisations HQ. 14

G4-6 Report the number of countries where the organisation operates and names of countries where either the organisation 14 has significant operations or that are specifically relevant to the sustainability topics covered in the report.

G4-7 Report the nature of ownership and legal form. 14

G4-8 Report the markets served (including geographic breakdown, sectors served and types of customers and beneficiaries). 17

G4-9 Report the scale of the organisation including : 15 • Total number of employees • Total number of operations • Net sales • Quantity of products or services provided

G4-10 • Report the total number of permanent employees by employment type and gender. 15 • Report the total workforce by region and gender.

G4-12 Describe the organisations supply chain. 32, 36

G4-14 Report whether and how the precautionary approach or principle is addressed by the organisation. 18

G4-15 List externally developed economic, environmental and social charters, principles, or other initiatives to which the 10 organisation subscribes or which it endorses.

G4-16 List memberships of associations in which the organisation : 31 • Participates in projects or committees • Views membership as strategic

G4-18 a) Explain the process for defining the report content and the Aspect Boundaries. 28,29,30 b) Explain how the organisation has implemented the Reporting Principles for Defining Report Content.

G4-19 List all the material Aspects identified in the process for defining report content. 26

GG4-20 For each material Aspect, report the Aspect Boundary within the organisation as follows : 26 • Report whether the Aspect is material within the organisation • Report any specific limitation regarding the Aspect Boundary within the organisation

G4-21 For each material Aspect, report the Aspect Boundary outside the organisation as follows : 26 • Report whether the Aspect is material outside of the organisation • If the Aspect is material outside the organisation, identify the elements for which the Aspect is material

G4-24 Provide a list of stakeholder groups engaged by the organisation. 24

G4-25 Report the basis for identification and selection of stakeholders with whom to engage. 25 G4-26 Report the organisation’s approach to stakeholder engagement, including frequency of engagement by type and by 25 stakeholder group and an indication of whether any of the engagement was undertaken specifically as part of the report preparation process.

G4-27 Report key topics and concerns that have been raised through stakeholder engagement, and how the organisation has 25 responded to those key topics and concerns, including through its reporting.

G4-28 Reporting period for information provided. 2

G4-29 Date of the most recent previous report. 2

G4-30 Reporting cycle. 2

G4-31 Provide the contact point for questions regarding the report or its contents. 64

G4-32 a) Report the ‘in accordance’ option the organisation has chosen. 2

63


G4-34 Report the governance structure of the organisation, including committees of the highest governance body. 21 Identify any committees responsible for decision making on economic, environmental and social impacts.

G4-37 Report processes for consultation between stakeholders and the highest governance body on economic, environmental and 21 social topics. If consultation is delegated, describe to whom and any feedback processes to the highest governance body.

G4-38 Report the composition of the highest governance body and its committees. 21

G4-42 Report the highest governance body’s and senior executives roles in the development, approval, and updating of 21 organisations purpose, value or mission statements, strategies, policies and goals related to economic, environmental and social impacts.

G4-45 a) Report the highest governance body’s role in the identification and management of economic, environmental and 21 social impacts, risks and opportunities. b) Report whether stakeholder consultation is used to support the highest governance body’s identification and management of economic, environmental and social impacts, risks and opportunities.

G4-46 Report the highest governance body’s role in reviewing the effectiveness of the organisation’s risk management processes 21 for economic, environmental and social topics.

G4-56 Describe the organisation’s values, principles, standards and norms of behavior such as codes of conduct and codes of ethics. 13

EC6 a) Report the percentage of senior management at significant locations of operation that are hired from the local 15 community. b) Report the definition of ‘senior management’ used. c) Report the organisation’s geographical definition of ‘local’. d) Report the definition used for ‘significant locations of operation’.

EN1 a) Report the total weight or volume of materials that are used to produce and package the organisation’s primary 48 products and services during the reporting period, by : - Non-renewable materials used - Renewable materials used

EN3 a) Report total fuel consumption from non-renewable sources in joules or multiples, including fuel types used. 48, 49 b) Report total fuel consumption from renewable fuel sources in joules or multiples, including fuel types used. c) Report in joules, watt-hours or multiples, the total: - Electricity consumption - Steam consumption e) Report total energy consumption in joules or multiples. f) Report standards, methodologies, and assumptions used. g) Report the source of the conversion factors used.

EN8 a) Report the total volume of water withdrawn from the following sources : 50 - Ground water - Waste water from another organisation - Municipal water supplies or other water utilities b) Report standards, methodologies, and assumptions used.

EN9 a) Report the total number of water sources significantly affected by withdrawal by type : 50 - Size of water source - Whether or not the source is designated as a protected area (nationally or internationally) b) Report standards, methodologies, and assumptions used.

EN15 a) Report gross direct (Scope 1) GHG emissions in metric tons of CO2 equivalent, independent of any GHG trades, such 51 as purchases, sales, or transfers of offsets or allowances. b) Report gases included in the calculation (whether CO2, CH4, N2O, HFCs, PFCs, SF6, NF3, or all). e) Report standards, methodologies, and assumptions used.

EN16 a) Report gross energy indirect (Scope 2) GHG emissions in metric tons of CO2 equivalent, independent of any GHG 51 trades, such as purchases, sales, or transfers of offsets or allowances. b) Report gases included in the calculation, if available. d) Report standards, methodologies, and assumptions used.

EN19 a) Report the amount of GHG emissions reductions achieved as a direct result of initiatives to reduce emissions, 51 in metric tons of CO2 equivalent. b) Report gases included in the calculation (whether CO2, CH4, N2O, HFCs, PFCs, SF6, NF3, or all). d) Report standards, methodologies, and assumptions used.

EN20 a) Report production, imports, and exports of ODS in metric tons of CFC-11 equivalent. 52 c) Report standards, methodologies, and assumptions used.

64

For further enquiries please contact :

Mr. Michael Cox, Global Sustainability Lead, Global Corporate Sustainability, Emery OleochemicalsT : +1 513 762 2696E : [email protected]

Contact Point


GRI G4

INDEX TABLE

EN21 a) Report the amount of significant air emissions, in kilograms or multiples for each of the following: 52 - NOX - SOX - Volatile organic compounds (VOC) - Other standard categories of air emissions identified in relevant regulations b) Report standards, methodologies, and assumptions used. EN22 a) Report the total volume of planned and unplanned water discharges by: 53 - Destination - Quality of the water including treatment method b) Report standards, methodologies, and assumptions used.

EN23 a) Report the total weight of hazardous and non-hazardous waste, by the following disposal methods: 54 - Recycling - Landfill b) Report how the waste disposal method has been determined: - Disposed of directly by the organisation or otherwise directly confirmed

EN25 a) Report the total weight for each of the following: 54 - Hazardous waste treated b) Report the percentage of hazardous waste shipped internationally.

EN27 a) Report quantitatively the extent to which environmental impacts of products and services have been mitigated during 18 the reporting period. LA1 b) Report the total number and rate of employee turnover during the reporting period, by age group, 56 gender and region.

LA6 a) Report types of injury, injury rate (IR), occupational diseases rate (ODR), lost day rate (LDR), absentee rate (AR) and 59 work-related fatalities, for the total workforce (that is, total employees plus supervised workers).

LA9 a) Report the average hours of training that the organisation’s employees have undertaken during the reporting period, by: 57 - Gender - Employee category

LA11 a) Report the percentage of total employees by gender and by employee category who received a regular performance 57 and career development review during the reporting period.

SO3 a) Report the total number and percentage of operations assessed for risks related to corruption. 56 b) Report the significant risks related to corruption identified through the risk assessment.

Documents

CREATING VALUE WITH SUSTAINABLE SUSTAINABILITY REPORT ... · Perkin Medal*. The highest honour given in America for outstanding work in industrial chemistry, his innovations led to