Sustainability Report 2021

www.croda.com

Introduction

Guided by
our Purpose,sustainability
together with
innovation will
drive our
future growth.
2021 has been an excellent year for Croda.
We made progress against our sustainability
commitments, delivered a record financial
performance and concluded our strategic
review, refocusing the business on fast
growth markets of the future.

www.croda.com

Our front coverZhi Yang Lee, Industrial Placement Student working
in our metal oxides laboratory, Ditton, UK.

Contents

Smart science to improve livesTM
Sustainability: Delivering
our Commitment

2

Innovation: Aligning new products andprocesses with our Commitment

4

Growth: Delivering positive impact forthe planet and society

6

Chief Executive’s statement

8

Showcasing our Commitment

9

Business model

10

Megatrends

12

Materiality

14

Management and governance16

Sustainability strategy

18

Climate Positive

20

Task Force on Climate-related
Financial Disclosures (TCFD)

25

Land Positive

26

People Positive

30

Fundamentals

34

Glossary43

Our strategy

Sustainability
We have made a bold Commitment to be Climate, Land andPeople Positive by 2030. By being the most sustainablesupplier of innovative ingredients, we will provide solutions
to some of the world’s biggest challenges while helping ourcustomers achieve their sustainability goals.
See Delivering our Commitment

P03

Innovation
Innovation is the lifeblood of our business and our successis dependent on our ability to deliver innovative solutions
to customers. Our approach to innovation combines ourown internal R&D with customer collaboration and open
innovation partnerships to accelerate the development of
disruptive technologies.
See Aligning new products and processes with our Commitment

P04

GrowthAs we deliver on our Commitment to be Climate, Land andPeople Positive by 2030 we will significantly grow our positive
impact toward meeting the SDG targets. In doing so we will
differentiate ourselves in the level of support given to ourcustomers to meet their sustainability targets, creating value
growth opportunities for them and our shareholders.
See Delivering positive impact for the planet and society

P07

Highlights
Sales

Adjusted PBT growth (constant currency)

Scope 1 & 2 emissions intensity (TeCO2e/£m)£1,889.6m+56.2%

193

Sales growth(constant currency)

Women in leadership positions

Safety(Total Recordable Injury Rate*)+43.2%

36.1%

0.73

IFRS profit before tax(PBT)

Organic raw materials frombio-based sources

Hectares of land saved overour 2019 baseline£411.5m

69%

33,7342020: £1,390.3m

2020: +1.1%

2020: £269.5m

2020: -4.8%

2020: 34.6%

2020: 67%

2020: 2642020: 0.58

2020: 16,455* TRIR excludes COVID-19 cases and includes acquisition impact

Croda International Plc
Sustainability Report 2021

1

69%

of raw materials frombio-based sources3rdmajor chemical company
to have a 1.5°C science-basedtarget validated and committed
to net zero by 2050

Our work with
Action for Sustainable
Derivatives and others,
to share knowledge,
expertise, technology
and financial resources
will continue to deliver
and amplify ourpositive impact.
Chris Sayner
Vice President – Customer Alliances

2

Croda International Plc
Sustainability Report 2021

GRI

Standard Numbers:
102-15 and 305-5

Delivering our Commitment

Chris Sayner and Julia Creasey talk industry
leadership, Partnerships for the Goals, andscience-based targets
One of the key outcomes of COP26 was

JC that it served to highlight the urgency withwhich we must tackle the climate
emergency, and the level of ambition andcommitment required across society if we are tolimit global temperature rises to 1.5°C, preventing
the most catastrophic effects of climate change.

Chris Sayner is Vice President – Customer
Alliances
Our Commitment is to be the most

CS sustainable supplier of innovative ingredients,
being Climate, Land and People Positive by
2030, delivering positive impact and measurable
contribution to the UN SDGs. This will be further
amplified by working throughout the supply chain.
The United Nations Sustainable Development
Goals (SDGs) provide a vital framework to connect
supply chains with suppliers upstream andcustomers downstream, synchronising efforts
and maximising positive impact.

Leading our sector in becoming only the third
major chemical company in the world to have a
1.5°C science-based target validated, we areturning ambition into action as we have developed
investment-ready decarbonisation roadmaps
across our manufacturing sites.
Through the combined efforts of our sites delivering
these projects, our R&D teams innovating todevelop low carbon alternative solutions, andsupply chain engagement, we will support ourcustomers on their decarbonisation journeys. The
in-use benefits of our ingredients will also help
consumers reduce their own carbon footprints.

Companies working together with validated
science-based targets for climate will enablemeasurable decarbonisation of whole supply chainson a cradle-to-grave basis.
Protection of the environment, nature andbiodiversity will be delivered by business which
understands its footprint through impact
assessment and dependencies.
Supporting health needs via products and activities
throughout the value chain is a prerequisite tosustainable business.
SDG 17, Partnerships for the Goals, calls for
multi-stakeholder partnerships. Our collaborative
work with Action for Sustainable Derivatives,
Together for Sustainability, the UNGC, CISLBusiness Transformation Group and others, toshare knowledge, expertise, technology andfinancial resources will continue to deliver andamplify our positive impact.

Julia Creasey is Sustainability Director
As part of the Race to Zero campaign we must
look beyond 2030, and as an organisation we havecommitted to be net zero by 2050. Collaboration
across industry, communities and technology
providers will be required to ensure solutions suchas hydrogen power and carbon capture can be
implemented, alongside using biotechnology todevelop alternative solutions to meet ourcustomers’ needs.

Natura&Co awards: Winner Best Raw
Material Supplier2021 saw us win the Best Raw Material Supplier award from Natura for ourcontinued focus on sustainable supply chains and specific focus on Roundtableon Sustainable Palm Oil (RSPO) materials and certification.
These supplier awards aim to improve supply chain performance throughcollaboration with key strategic partners, ensuring that suppliers share anddemonstrate the values and beliefs of Natura. As part of the award, suppliers
undergo a rigorous assessment against many criteria, including environmental
and social. With the purchase of Avon and the creation of the Natura&Co
group (Natura, The Body Shop, Avon and Aésop) this programme is now
called EMBRACE.

GRIStandard Numbers:
102-15

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Sustainability Report 2021

3

Aligning new products and processes with our Commitment

Kim Carmichael and Ian Tooley
discuss the benefits of carbon
reduction for customers
Innovating novel ingredients to meet our

IT 2030 Commitment is at the heart of Croda’s
strategy. We need to ensure that new
products coming into our portfolio are alreadymeeting the required criteria against our 2030
sustainability targets. This is particularly important
given the innovation cycle times involved, as
products in our laboratories today will likely reachpeak impact through sales to our customers
around 2030.
Kim Carmichael is Decarbonisation andProcess Technology Director
Further transforming the way we

KC manufacture our products will play animportant part in meeting our climate change
objectives. Several approaches are taken by Croda
in efforts to reduce carbon emissions, which
include: improving energy efficiency on our
manufacturing sites, substituting our current fossil
fuels with renewable energy and identifying low
carbon next generation technologies for use in
our manufacturing.
Our decarbonisation roadmaps require that we
eliminate our reliance on fossil fuels and only
consider low-carbon processes for our operations
in order to meet our net zero objective by 2050.
Adopting innovative processes / technologies toimprove efficiency and, in turn, lower carbon
emissions, through a varied pipeline of novel
technologies will enable Croda’s manufacturing to
be both low carbon and profitable. Examples ofrecent innovations include several manufacturing
sites applying digitalisation tools to optimise
process conditions, which has led to yield andefficiency benefits. Also, in 2022, one site will be
implementing continuous process technology
which will enable Croda to manufacture several
key products in a more energy efficient andflexible way.

But innovation is not solely the responsibility of
the research and development teams, it is a joint
enterprise with the commercial teams, external
partners and customers. All these groups,
therefore, need to be prioritising innovation thathelps our customers deliver the greatest impacts
against the SDGs, as well as using the 12
Principles of Green Chemistry to target the intrinsic
sustainability requirements of new ingredients to
support this.
During 2021 we have been putting in place
processes and rolling out training to ensure this isconsidered at the very start of the innovation cycle,
building in sustainability by design in our innovative
future ingredients. From my newly created role, I
am very excited to lead this work, and connect allparts of Croda to align behind the sustainable
innovation challenge.

Ian Tooley is Vice President – Chemistry

Switching to renewable energy sources is only partof the journey.

Low carbon sulfate-free surfactants
Rapid manufacturing capacity expansion is required in 2022 for our sulfate-free
product range. To minimise our carbon emissions we have incorporated many low
carbon technologies into our expansion plans, such as membrane filtration forconcentrating solutions, continuous processing, industrial heat pump technology
and advanced process control tools. By implementing such technologies we canrely less on fossil fuels, as the new process is largely powered by renewableelectricity, and reduce our overall energy usage and deionised water consumption
by improving the efficiency of the process. By utilising new technology to increase
the final product concentration we are also able to reduce the scope 3 emissions
associated with transportation of products to our customers.
The increased level of automation associated with the new process will improve
the process safety profile, enhance product quality and decrease operating andcapital costs.

4

Croda International Plc
Sustainability Report 2021

GRI

Standard Numbers:
102-15 and 305-5

23

SDG targets underpin oursustainability strategy

88%of new products launched in 2021
directly contribute to ourpriority SDG targets

Our decarbonisation
roadmaps require that
we eliminate our relianceon fossil fuels and only
consider low carbon
processes for ouroperations in order tomeet our ultimate net zero
objective for 2050.
Kim Carmichael
Decarbonisation and Process Technology
Director

GRI

Standard Numbers:
102-15 and 305-5

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Sustainability Report 2021

5

27%

reduction in scope 1 and 2
GHG emissions intensity since2020, demonstrating we aredecoupling growth fromenvironmental
impactThrough the pandemic
we have learnt of theincreasing importanceof working closely with
our partners, in a moretransparent way thanever before.

mRNA
and genetherapy
We have an important role in next
generation vaccines and othertherapies

Laura Reilly
Vice President – Life Sciences Marketingand Digital

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Sustainability Report 2021

GRI

Standard Numbers:
102-15 and 305-5

Delivering positive impact for the planet and society

Laura Willemsen and Laura Reilly provide
commentary on future opportunities

Helping to address the challenge created

LR by the biggest global health crisis in living

memory has been a career highlight for manyof our teams. Our Purpose is delivering smart
science that improves people’s lives. I can’t think ofa better breakthrough that would change people’s
lives than enabling the COVID-19 vaccine discovery.

Laura Willemsen is Vice President –Consumer Care Marketing
Consumer demand for personal care

LW solutions with proof of effectiveness,underpinned by science and that are
sustainable, is growing rapidly globally. Generation
Z consumers, aged up to 25, are influential andsustainability-conscious, self-educated and looking
for efficacy and transparency.
Our Personal Care business is alreadypredominantly bio-based, this year we enhanced
this further with the acquisition of Alban Muller. Thisis a company with a unique portfolio of naturalingredients including high tech actives, combining
efficacy with the natural origin of botanicallysourced ingredients.

This tangible example shows that we have an
important role to play in enabling the potential ofnext generation vaccines or other therapies, forexample, gene therapy and mRNA technology.
While much of this science is still in its relative
infancy, there has been a sharp rise in the numberof early phase pharmaceutical trials in these areas.
Through the pandemic we have learnt of theincreasing importance of working closely with ourpartners, in a more transparent way than everbefore. With common goals we are stronger
together. The world is now looking to apply mRNA
to tackle many other diseases, from flu to malaria,
and we are committed to do all we can, with our
drug delivery technologies and expertise, to fast
track future breakthroughs.

Alban Muller has solutions to meet consumer
demand and support our customers to makescientific and sustainability pack claims. The
business is well positioned for fast growth thanks
to in-house developed innovation and external
collaborations.
Alban Muller has full value chain transparency for its
products, and local sourcing collaborations is one
area of differentiation that enables us to develop
holistic value propositions for, and together withour customers.
The novel and unique Zeodration technology opens
the door to fast growing market demand forwaterless personal care solutions. This technology
combines high performance and sustainability
benefits in terms of reduction of energy, water
consumption and carbon footprint.
Together with Sederma and Crodarom, as part ofour Beauty Actives business, Alban Muller offers
our customers the complete portfolio of scienceand sustainable natural active ingredients.

GRI

Standard Numbers:
102-15

Laura Reilly is Vice President – Life Sciences
Marketing and Digital
Collaboration is also at the heart of our growthacross our Crop Care businesses. The agriculturalindustry, and food production around the world, is
at a pivotal time of change to a more sustainable
future. This transition drives innovation. There is arequirement for products and services with minimal
environmental impact, and customers welcome
co-design on microplastic-free, low carbon or
biodegradable solutions. Increasingly these
are targeted at biopesticide development.
Something that I believe makes us special is thatwhile we are a growing company, we continue toretain our agility and intimacy with customers, yetalso see the bigger picture. Our continued
investment in local product validation centres, mostrecently in Brazil, is a great example of this; amultifaceted team, with a strong focus on
innovation, digitalisation and new technologies,
coming together under one roof to create
sustainable solutions.

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7

Chief Executive’s statement

Extraordinary people
Shared Purpose
2021 demonstrated once again how our
Purpose and Commitment to sustainability are
helping to deliver record performance in the faceof many challenges. The COVID-19 pandemic
continues to test many aspects of day-to-day life
and at Croda we can take great pride in theextraordinary commitment from our people who
are using Smart science to improve livesTM.

We take great
pride in theextraordinarycommitment
from our people,
who are using
Smart scienceto improve lives™
Steve Foots
Group Chief Executive

Our ambition to create a positive impact is an
integral part of our culture which continues todefine our success. Throughout this second yearof COVID-19, I saw at first-hand the resilience ofcolleagues managing societal challenges
together with the challenges in business.
Increasing vital supplies of our COVID-19
vaccine ingredients, responding successfully tothe rapid recovery in demand, integrating
acquisitions, completing the strategic review
of our industrials businesses, maintaining ourinnovation pipeline and focusing on meetingclimate change objectives have all been due
to the extraordinary efforts of our people.
Shared Commitment
We have not been distracted by the day-to-day
challenges presented in 2021 and have focusedon our 2030 targets to be Climate, Land andPeople Positive in this, the “Decade of Action”.
Our 2030 Commitment continues to be an
enabler and significant contributor to our overall
performance.
In 2021 we became only the third major
chemical company globally to have a 1.5°C
Science Based Target (SBT) verified and declare
our ambition to become a net zero organisation
by 2050. Our ambitious greenhouse gas
emission reduction targets, covering both ouroperations and supply chain, set us apart as
leaders in our industry, reflecting our ongoingdeparture from fossil-based chemistry overmany years, and endorsing our capital lightbusiness model.

based targets for nature that will define a clear
pathway to address dependencies on natureand inform solutions to reduce the risk of nature
loss. Understanding land footprint is prerequisite to understanding our impacts, so ourLand Positive ambition provides us with unique
opportunities for positive impact on nature andbiodiversity.
Innovation
Our innovation is being driven by increased
internal investment and stronger external
partnerships. The increase in the proportion of
New and Protected Products (NPP) that we selland formulate into customer products is
testament to our strong innovation engine. We
are now involved in over 150 COVID-19 projects
in over 30 countries and contributing to thedevelopment of 15 of the 24 vaccines prioritisedby the World Health Organization.
To help our communities, in 2021 weestablished Croda Foundation, providing £1m of
annual funding to help permanently improve one
million lives, and subsequently an extra funding
award of £2m to improve vaccine and healthinfrastructure.
Supporting our Climate, Land and People
Positive strategy are our Fundamental objectives
that include our commitment to be a safe
company for our employees and communities.
While our headline safety stats weredisappointing, the vast majority of our locations
recorded an excellent safety performance in
2021, and we are working with the remainder todeliver our targeted improvement to a TRIR of
0.3 by the end of 2024, which would position us
as one of the leaders in our industry.
Our employees
Within Croda, we pay a living wage to all
employees and are making good progress on
our gender balance targets, with a continued
increase in women in leadership positions andfull gender parity on the Board.

I am delighted with the detailed validation of ourscope 3 carbon inventory; carbon embedded insupply chains is challenging for many businesses
and with life cycle assessments now covering
75% of our raw material inventory we have aclear view of where we need further
decarbonisation in our supply chains.

We end 2021 with confidence and collective
pride in our business, our Purpose and our
Commitment to make a positive impact and I
thank everyone across Croda for their continued
ambition and commitment to leadership insustainability.

We will do the right thing following thedivestment of the majority of our industrial
businesses expected this summer, retaining
our bio-based raw material target whichbecomes more challenging but rebasing ourcarbon targets, which otherwise would havebecome easier.

Steve Foots
Group Chief Executive

Understanding the impact of our business onnature is as important as understanding scope 3
carbon. The Science Based Targets Network(SBTN) is developing guidance to set science-

8

Croda International Plc
Sustainability Report 2021

GRI

Standard Numbers:
102-10, 102-14 and 102-15

At a glance

Showcasing our Commitment

Our ratings and frameworks*

While our full focus is on delivering impact, we understand the value
to our stakeholders of external ratings. We use the submission andfeedback processes from ratings such as MSCI, Sustainalytics,
EcoVadis and CDP to learn and improve our approach across thesustainability agenda.

Positively impacting society
In June we received a societal contribution award from theAmerican Chemistry Council for our lipid systems, which provided a
critical foundation for a major COVID-19 vaccine. We wererecognised for this award as the first company to supply clinical andcommercial quantities of the lipid technology that enables thetargeted release of the mRNA vaccine to muscular tissue, helping toenable rapid development of a vaccine to protect individuals fromCOVID-19 and enhance human health and quality of life.
Beyond COVID-19, our lipid systems can help in the development of
future vaccines and other medical treatments and will play animportant role in helping us reach our target of contributing to thesuccessful development and commercialisation of at least 25% of thepipeline vaccines listed by the WHO by 2030. We were pleased to berecognised for living our Purpose of Smart science to improve lives™.

Our strategy to deliver strong growth
Our business strategy will help us meet our ambition to become Climate, Land and People Positive by 2030.
This long-established strategy delivers value for all stakeholders, even in years of challenge and worldwide change.

Sustainability

Innovation

GrowthAligning our business with our Purpose
and accelerating our customers’ transition
to sustainable ingredients.

The lifeblood of our business, we seek toincrease the proportion of NPP (New &Protected Products) that we sell.

We achieve this through:• Creating ingredients that provide a benefit
in use with reduced environmental impact• Aligning our business with the United
Nations Sustainable Development Goals• Across short, medium and long-term time
horizons, identifying the specific risks andopportunities associated with existing anddeveloping ESG themes (for example,
climate) which could present a material
impact on our businessWe achieve this through:• Investing in our own R&D application
and regional innovation centres• Working closely with customers
to better understand their needs• Identifying disruptive technologies• Working with open innovation partners

Increasing our positive contribution to the
SDG targets by 2030, at the same timecreating value growth opportunities for ourcustomers.
We achieve this through:• Sharing a clear Purpose and engaging all
employees in our Commitment• Applying a resilient business model thatenables long-term planning• Using our unrivalled local, direct anddigital selling approach to engage all
customers• Decarbonising our balanced global
manufacturing footprint• Following a proactive approach tostrategic innovation and product portfolio
management* The use by Croda of any MSCI ESG Research LLC or its affiliates (MSCI) data, and the use of MSCI logos, trademarks, service marks or index names herein, do notconstitute a sponsorship, endorsement, recommendation, or promotion of Croda International Plc by MSCI. MSCI services and data are the property of MSCI or its
information providers, and are provided ‘as-is’ and without warranty. MSCI names and logos are trademarks or service marks of MSCI.
Croda International Plc
Sustainability Report 2021

9

Business model

Our business model
Using smart science to create high performance
ingredients and technologies that improve lives.

1

2

Who we rely on

What we do

37%

NPP as a% of total sales(2020: 27%)36

new open innovation
projects initiated84%

Innovation partners
Our innovation model combines internal R&D withexternal technology investments and partnerships,
providing opportunities to collaborate with
universities and SMEs. This innovation ecosystem
is unique, with R&D advances increasingly driven
by these partnerships. Our partners contribute to
the high proportion of NPP we sell and thecontinued differentiation of our portfolio. In return,our shared knowledge helps them to advancescience, secure funding and make breakthroughsthat benefit society.

Employees

We have a growing global employee base withmore than a quarter of employees now located in
UK employee sharescheme participation Asia serving faster-growth markets. Recent
acquisitions have increased the proportion of(2020: 85%)
people in science-based roles. Improving
workforce diversity is benefitting innovation by
expanding the range of thinking in our company.
Our model is decentralised, facilitating faster
Non-UK employee
decision-making delegated to colleagues who areshare scheme
close to customers. Our clear sense of Purpose
participationand sustainability Commitment, underpinned by(2020: 63%)high levels of employee share ownership, ensuresthat everyone pulls together to achieve our goals.
This is reflected in strong engagement and highemployee retention rates.
Voluntary employee
turnover(2020: 5%)

60%

8%

Suppliers
Suppliers
representing

65%

of our spend havebeen evaluated fortheir responsible
practices(2020: 50%)

10

Most of Croda’s organic raw materials arebio-based (originating primarily from palm
derivatives, corn, castor, rapeseed, coconut andsunflower oils), enabling us to provide alternatives
to fossil-based ingredients. Using natural
resources brings with it responsibility to ensure
there are no negative societal or environmental
impacts as well as ensuring security of supply. We
partner with suppliers to improve sustainability
practices in supply chains and commit to sharing
the benefits equitably.

Croda International Plc
Sustainability Report 2021

We use smart science to create high performance
ingredients and technologies that improve lives. Ouringredients deliver vital functionality to customers at
low inclusion levels, providing low footprint, highimpact solutions to help them meet their sustainability
goals, and those of wider society. We operate globallyand are focused on high-value niches in life scienceand consumer markets.

CreateEngageLeveraging our position as theleading innovator in our selectedmarkets, we meet consumer
needs by continuously expanding
our portfolio of 6,000 sustainable
and innovative ingredients,
supported by claims validation,
quality testing, sustainability data
and regulatory insight.

By building direct relationships
with customers, rather than using
distributors, and collaboratingwith them at Croda innovation
centres around the world, we gaina detailed understanding of theirneeds helping us to identify
new opportunities.

Make

Sell

We use resources safely andresponsibly at our manufacturing
sites around the globe, runningflexible operations that have alower capital intensity than mostchemical sector peers.

We have a unique direct sellingmodel encompassing local sales,
technical resource andwarehousing, selling ingredients toaround 17,000 customers ranging
from multinational companies toregional and independent brands.

Priority SDGs

GRI

Standard Numbers:
102-2, 102-8 and 102-12

Why
we aredifferent• Strong sense of Purpose• Agile, decentralised operating model; ‘One Croda’ culture• High proportion of renewable raw materials• Long-standing leadership and investment in sustainability• Long-term sustainability strategy in place• Global footprint with local sales, R&D and warehousing• Collaborative, open innovation model• Flexible, capital-light operations• Direct-to-customer selling model rather than using
distributors• Broad customer base, large and small• Compete on value rather than price• Focused on high-value niches• Top returning FTSE 350 company over the last 20 years

3

Who we create value for

Employees

Communities

Society

We have 6,135 (2020: 5,684) employees globally,
all of whom received a Living Wage in 2021. We
increased the proportion of women in leadership roles to
36% in 2021, in line with our commitment to achieving fullgender balance in leadership positions.

Our employees donated 2,750 hours (2020: 2,559
hours) via our 1% Club, volunteering in their local
communities and delivering tailored support in
response to COVID-19. We are providing access toour smart science through Croda Foundation, which
achieved charitable status and began funding
programmes to improve one million more lives.

We use our smart science toimprove the lives of people all aroundthe world (see People Positive
below). In every country in which we
operate we pay all required taxes
and have a fair taxation policy.

Customers

Consumers

Customer demand

Consumer requirements

Our customers seek innovative and sustainable
ingredients to differentiate their products andmeet changing consumer requirements.

Climate change, biodiversity loss, widening
inequality, changing demographics, and innovations
in digital technologies are transforming consumer
demands. See megatrends, page 12.

~6,000+100%

speciality ingredients~17,000

customers worldwide

Shareholders

increase in sustainableproducts launched since 2019

Croda is the top-returning
FTSE 350 company over thelast 20 years. We delivered arecord financial performancein 2021 and made significant
progress on our non-financial
performance as we execute
our sustainability strategy.

24%

Customer productConsumer benefit

Customers use our ingredients at low inclusion levels intheir products to deliver vital functionality, while helping
to meet their sustainability commitments, regulatory
requirements, and consumer needs.

Through our customers’ products, ouringredients improve consumers’ lives byaddressing their needs in sustainable ways.

effective annual return over
20 years

Delivering our Commitment

GRI

Climate Positive

Land Positive

People Positive

We are reducing our emissions in line with our verified
Science Based Target, aligned with limiting global warming
to the 1.5˚C scenario. The majority of our raw materials are
renewable rather than petrochemical-based, delivering
product carbon footprint reductions to our customers.

We are already land net zero with ourcrop and seed technologies saving
more land than is used to grow ourbio-based raw materials.

Our ingredients improve health and wellbeing, for example
in 2021 protecting 55 million people from skin cancer,
and our lipid, adjuvant and excipient technologies areincluded in trial vaccines for 15 out of the 24 priority
diseases on the WHO’s Pipeline Vaccine list.

Standard Numbers:
102-7

Croda International Plc
Sustainability Report 2021

11Market

Megatrends
Among the megatrends that will drive growth across Croda, threecommon themes are sustainability, emerging markets and digital.
Our response to each continues to develop as we work towards our
Commitment to be Climate, Land and People Positive by 2030.

Sustainability

Scanning the horizon beyond the COVID-19
pandemic, other crises remain urgent: climatechange, loss of biodiversity, conserving resources
and social inequality. This is recognised by business– in the five previous years, environmental andsocietal risks have occupied four out of the top five“risks on a global scale over the next 10 years”
identified in the World Economic Forum Global Risk
Reports. In 2022 all of the top five global risks
connected with the sustainability crises.
The United Nations IPCC Sixth Assessment Reportconfirmed what most people recognise: humaninduced climate change is already causing many
weather extremes in every region across the globe,
and the correlation with human activity has
strengthened since its last report. Only by reducing
greenhouse gas (GHG) emissions to net zero as
quickly as possible and at the latest by 2050 cansociety limit the temperature rise to 1.5°C
above pre-industrial levels, and so avoid the worst
impacts of climate change.

See our strategy

P09

Emerging
markets

See our strategy

P09

DigitalSee our strategy

P09

12

Croda International Plc
Sustainability Report 2021

2021 not only confirmed the known scienceand need for urgent action on climate change,it also saw an explosion in public and politicalawareness of the crisis in nature, with biodiversity
loss recognised for the second year running as

Emerging economies present significant challenges
to meeting the SDGs, not least since rapid mass
urbanisation aimed at raising standards of living canalso pose threats to environmental and societal
health. Increasing consumption and an expanding
middle class drive demand for consumer goods
and health care in such countries, particularly for
products that improve living standards.

one of the top business risks by the World
Economic Forum.
Social inequality clearly drives negative outcomes
for the poorest in society, who are hardest hit by
the impacts of climate change, poor health andfuture opportunity. However, research shows thathigh levels of inequality negatively impacts all levelsof society, not just the poorest.
United Nations SDGs
The United Nations Sustainable Development Goals(SDGs) tackle these interlinked issues and were
designed as a blueprint to help achieve a better,more just and more sustainable future for all.
They require organisations to consider where tofocus resources to maximise their positive impact.
With the SDGs describing what success looks likein 2030, the context in which businesses areoperating and trying to deliver against the targets ischanging rapidly. The 2021 United Nations Climate
Change Conference (COP26) showed how leadingbusinesses are setting the agenda and encouraging(even driving) governments to raise their level ofambition and plan for successful execution. It also
highlighted the level of frustration and anger that isbuilding in communities for more urgent andtransformational change.

Through increased access to expertise, resourcesand education, emerging economies have theopportunity to ‘leapfrog’ some of the environmental
and social issues faced by the developed world increating a more sustainable future for all.

We believe no trade-offs should be made between
solving social and environmental issues andachieving living standard improvements: they must
be complementary.

Digital transformation offers unparalleledopportunities to help overcome some of the world’s
biggest challenges. This can include meeting
requirements for integrity in supply chains, speeding
up innovation, a continued drive to make more withless, and today’s expectations for sustainability
reporting and disclosure. Digital tools offer speed,
intelligence, connected supply chains and overall
efficiency gains.

Consumers, empowered by digitalisation, havechanging expectations. They now expect greater
choice and want to know more about the products
they use, favouring companies that innovate
responsibly and are transparent.

GRI

Standard Numbers:
102-15 and 304-2

Top global risks by impact

ClimateactionfailureExtremeweather

Biodiversity
loss

Socialcohesion
erosionLivelihood
crisesInfectious
diseases

ClimateactionfailureWeaponsof mass
destruction

Biodiversity
loss

Naturalresource
crises2020

ClimateactionfailureWeaponsof mass
destruction

Biodiversity
loss

ExtremeweatherWater
crises

2019

Weaponsof mass
destruction

ClimateactionfailureExtremeweatherWater
crisesNaturaldisasters

2018

Weaponsof mass
destruction

Extremeweather

Naturaldisasters

ClimateactionfailureWater
crises

2nd

3rd

4th

5th

2022

GeopoliticalEnvironmental

2021

Societal

Source:World Economic Forum’s Global
Risks Report 2022

1st

How we are responding
Sustainability underpins how we thinkcommercially and is the biggest driver of ourstrategy. We recognise that long-term value
creation will be driven at the intersection of
innovation and sustainability.
With our strong Purpose, we are committed tomeeting the interests of all stakeholders. For
example, non-financial metrics are now
monitored alongside financial and linked to
specific targets within the SDGs. We arecommitted to being the most sustainablesupplier of innovative ingredients.
Becoming Climate Positive
Our science-based target has been validated to
the 1.5°C pathway, with Croda the third major
chemical company globally to do so. We arecommitted to becoming a net zero organisation
by 2050. We are increasing our use of bio-based
raw materials and providing ingredients thatenable our customers to save carbon andreduce emissions.

Becoming Land Positive
The use of our crop protection ingredients andseed treatment technologies already saves moreland than we use to grow our raw materials. We
are innovating to increase agricultural land use
efficiency, protect biodiversity, and ensure foodsecurity. We also have a commitment to
deforestation-free and responsible sourcing andare working to understand our impacts anddependencies on biodiversity.

Becoming People Positive
Croda Foundation awarded grants
to its first round of social impact projects,
and also received a £2 million restricted grantfrom Croda International to support healthinfrastructure projects in developing countries.
In health and wellbeing, our adjuvant
technologies are being evaluated in 15 outof 24 WHO pipeline vaccines. Vaccination is
one of the most cost-effective ways ofprotecting people and can have the greatest
impacts in poorer countries.

“Companies with a genuine purpose to deliver longterm wellbeing cannot wait until they get everythingright. They need to be transparent about theirsustainability goals and transition plans, to build
momentum with stakeholders for the delivery of
positive impact.”
Aris Vrettos
Director, Centre for Business Transformation, Cambridge Institute for Sustainability Leadership

How we are responding
In our own operations we apply the same highstandards everywhere that we operate, with aparticular emphasis on governance, sustainability
and business ethics, while recognising that manymarket structures and regulatory frameworks arestill emerging. We carefully consider all
stakeholders in our ecosystem and strive to
adopt best practices in environment, labour andhuman rights, ethics, and sustainableprocurement.

With the acquisition of Iberchem, we have an
outstanding opportunity to support sustainablegrowth in countries with lower scores on the
Human Development Index (HDI) by working
with local customers and consumers on key
issues and enabling widespread use of oursustainable technologies.
We are already involved with insetting: enabling
positive impacts in rural communities throughour bio-based raw material supply chains,which are mainly located in emerging
markets.
For example, our Beauty Actives businesssupports the Rimba Raya project inIndonesia, helping local communities toimprove their livelihoods and restore
rainforest. We foresee further opportunities
through supply chain consortia, such as
Action for Sustainable Derivatives.

How we are responding
We are investing in digitalisation initiatives acrossall aspects of our business model, accelerating
progress towards meeting our Commitment tobecome Climate, Land and People Positiveby 2030.
We have rolled out the first phase of ourIngredient Transparency project, providing
customers with up to 150 sustainability-

GRI

Standard Number:
102-15connected datapoints on key products. We haveapplied artificial intelligence and data science toshorten product development lifecycles andinvested in knowledge management to leverage
global R&D expertise. We have also rolled out acentralised sustainability reporting software suite(see case study page 38) to improve ease ofdata reporting by all locations, automating

analysis, and allowing all parts of ourbusiness to view sustainability data relating totheir responsibilities.
Our new Customer Insights Centre of
Excellence (see case study page 39) uses
digital tools to engage and capture feedback
from thousands of customers in all regions so
we respond better to their needs.

Croda International Plc
Sustainability Report 2021

13

Materiality

2021 materiality
assessment
In our journey to become Climate, LandAD and People Positive by 2030, we want

Antonia Doncila,
Sustainability
Specialist, provides
insight into the benefitsof updating ourmateriality assessment

to ensure our corporate strategy isaligned with the expectations of stakeholders,and it develops in the right direction given the
backdrop of rapidly changing environmental
and societal requirements on business. A
Group materiality assessment allowed us tofine-tune our understanding of the sustainability
issues and opportunities most material to our
key stakeholder groups, and therefore moststrategic for our business. The risks andopportunities identified were added to the risk
registers using the global risk framework
Recurring themes from this stakeholder
engagement include: transparency andtraceability across the entire value chain;increasing regulations and reporting
obligations; biodegradability and waste
management; more proactive engagement;
and wider collaboration to understand andaddress the interconnected nature of issues.

This exercise confirmed that our 2030 strategy
and objectives resonate strongly with our
stakeholders’ vision. The overwhelming
message was a clear recognition of the
progress Croda has made on sustainability,
our solid disclosures, and commitment
to transparency.
Changes since our 2018 assessment
While material areas such as Climate Action,
Process Safety and Product Innovation sit at
the top of our priority list and are fundamental
drivers of growth, the latest assessment
revealed ideas for improved dialogue, a great
potential for expertise sharing, and issues on
the horizon we should be considering. New
material areas such as Biodiversity, Circular
Economy and Global Health Preparedness
have been added to reflect our holistic viewof sustainability, to guide development of
new meaningful corporate targets, andprovide greater granularity and disclosure
across the value chain.

Process
Desktop research

Stakeholder engagement

Final scoring

Using a methodology aligned with the ISO
26000 standard, we examined a broad
range of sources identifying hundredsof material issues which were then refinedand consolidated. Further stakeholder
engagement was based on a final listof 65 material issues grouped under
15 umbrella themes that became ourmaterial areas.

We collaborated with an external provider to engage
with four key stakeholder groups: investors,
customers, suppliers and employees. The objective
was to validate, score and rank the material issues
and themes identified in the previous step, gaining amore granular understanding of trends, priorities
and perceptions by stakeholder group. Using
surveys and interviews, we were really pleased withthe level of engagement, making this review themost comprehensive to date.

In a focus group session, our Sustainability
Committee examined the findings and how
they aligned to our ESG strategy andreporting framework and our 2030
sustainability targets. They consideredissues not currently addressed and how
they might be managed and measured.
The hierarchy of material areas was thenadjusted, adding new material areas toreflect the developing sustainability agenda.

Materiality matrix
We have mapped our material areas according to their most likely source and outcome, and where they intersect with our sustainability
strategy to be Climate, Land and People Positive by 2030.

L Land Positive
P People Positive
F Fundamentals
Material areas that
range across axes

Risk to Croda,
therefore a challenge

C Climate Positive

Croda’s impact on the world

The world’s impact on Croda

C Climate Action

L Circular Economy

L Environmental Stewardship

C Global Change

F Health, Safety and Wellbeing
P

Opportunity for Croda
to provide a solution

Growing
Businessfor Good14

Croda International Plc
Sustainability Report 2021

Preparedness

F Process Safety

C L

PDiversityand Inclusion

C

L

F

Product
Stewardship

P Product Innovation

P F Our People

L
Biodiversity

C L F Supplier Partnership
C L P F Customer Intimacy

F Responsible Business
F Knowledge Management
P Community Education and Engagement

GRI

Standard Number:
102-47

Key stakeholder insights
Customer

Investor

Supplier

Climate Action
Product Innovation
Our People
Environmental Stewardship
Supplier Partnership

Employees
Top of mind
Issue explored in depth, a top priority, mentioned frequently.
Central agenda
Issue discussed, a high/growing priority, mentioned often.
Active monitoring or emerging
Issue touched on, not an immediate priority,
mentioned in passing.

Process Safety
Product Stewardship
Customer Intimacy
Health, Safety and Wellbeing
Responsible Business
Growing Business for Good
Diversity and Inclusion
Global Change Preparedness
Knowledge Management
Community Education and Improvement

Additions to our materiality matrix based on
stakeholder engagement
Biodiversity
Circular economy
Biodiversity and circular economy were highlighted as key
concerns by stakeholders in both the survey and especially in
the interviews. They were mentioned specifically rather than aspart of the existing issues covering them.
Stakeholders want more clarity about how these issues arebeing taken forward, as they don’t feel they’re currently
discussed well enough in our strategy.

Suppliers

Investors

Suppliers consider product innovation as a critical solution from acircularity, climate change and human rights perspective. They
recognise our leading expertise on emerging sustainability issues
and are keen for more expert-to-expert dialogue to align priorities
and co-ordinate faster sustainability action. Suppliers want abetter understanding of how they fit into our overarching strategy
as well as greater collaboration around supply chain requirements
and limitations, given more stringent legislation and regulations.

Investors showed overarching support for our ESG strategy,
recognising our solid disclosures and commitment to transparency.
Our verified science-based targets bring greater credibility to our2030 objectives and investors anticipate more detail through clearer
linkages, signposting and case studies around how SBTs will be
met. They see R&D, human capital management and protecting
biodiversity as important aspects of transitioning to a moresustainable world. Moving forward, investors expect a continued
focus on impact reporting, going beyond communicating on
specific issues and into disclosure on wider holistic impacts andsustainable revenue analysis.

Customers
Customers want to achieve higher levels of quality assurance andtraceability throughout the value chain. They emphasised the needto think more holistically about each product, its environmental
footprint and the role it will play in a circular economy. In thiscontext, customers applaud our willingness to share informationand our meaningful sustainability targets, and welcome theopportunity to work together on joint projects and share information
to demonstrate greater accountability without losing confidentiality.

Employees
Employees scored Process Safety, Health Safety and Wellbeing,
Diversity and Inclusion, Knowledge Management and Global
Change Preparedness higher than external stakeholders, giving
these areas equal weight to Climate Action. They recognised theneed to improve product availability in the developing world while
being prepared for shifts away from high consumption, and are
keen for more training around the circular economy and how Croda
fits in. A diverse workforce, mental health wellbeing and internal
knowledge sharing were quoted as the basis for innovation.

GRI

Standard Numbers:
102-21 and 102-40

Sustainability Committee
The Sustainability Committee, as owners of the sustainability strategy,
examined the materiality assessment outcomes through the lensof our Purpose, Smart science to improve lives™, and identified newopportunities to maximise impact, and approaches for more targetedsustainability action. An important learning is that future businessresilience is dictated by an increasing focus on transparency andtraceability across our entire value chain, which reaches beyond
climate issues into biodiversity, circular economy and human rights.
Material areas such as Process Safety, Climate Action, ProductInnovation, Responsible Business and Our People already provide
solutions to this new learning through the long-term targets linked tothem. In addition, new sustainability objectives involving expertise
sharing and a more collaborative approach internally and externallywill be created. We will map the needs of our customers andsuppliers, identifying areas where we can help them to meet theirsustainability goals through mutually beneficial partnerships, andrefining our messages around the significance of this work.

For more information on the process, the material areas
and their definitions please access croda.com

Croda International Plc
Sustainability Report 2021

15

CSO letter

Management, governanceand culture
Progress against our ambitious
2030 Commitment
As the world continued to deal with the effectsof the pandemic, the crises in climate, nature,
overexploitation of resources and inequality
remain and, for many, have worsened as a resultof COVID-19. With this backdrop, I am reallypleased to report the 2021 progress achieved by
the Croda family and our partners as we strive tomeet our ambitious 2030 Commitments.

Looking ahead,sustainability leaders
will differentiatethemselves not by
increasing levels of
ambition, but throughexcellence in execution.
This is why weannounced interim
milestones against our2030 targets in the lastyear, and where we will
focus in 2022.
Phil Ruxton
Chief Sustainability Officer

Purposein Action

16

Croda International Plc
Sustainability Report 2021

A few highlights from this report: Climate
Positive we received validation of our Science
Based Target, aligned with a 1.5°C scenario,
only the third major chemical company toachieve this and declare the ambition to be net
zero by 2050; Land Positive we are on track tomeet our revised, more challenging ‘land saved’
target and are examining our broader impact
and dependencies on nature and biodiversity;
People Positive we find our lipid, adjuvant andexcipient technologies included in trial vaccines
for 15 out of the 24 priority diseases on the
WHO’s pipeline vaccine list; Fundamentals weachieved our target to ensure all our permanentand temporary employees are paid a Living
Wage a year ahead of schedule.
Our sustainability journey and culture
I have been equally excited by the increasinglevel of engagement in our sustainability journeyaround the Croda world – we have foundedregional Sustainability Champions Networks tocatalyse more activity and sharing of bestpractices at a local level; we held our second
Carbon Summit for senior leadership; and we
delivered the first Purpose in Action Conference
and Awards, case studies of many of the award
winners are found throughout this report.
With such an ambitious agenda, not everythingalways goes to plan. We are disappointed tohave not progressed further against our personal
and process safety targets and have received apermit violation notice at one of our recently
acquired locations. We are increasing resourcesand our focus on these areas as a matter ofutmost priority.

Embedding our Purpose,
Commitment and Difference
Our Purpose in Action awards
Between July and September our Purpose
Implementation team continued engaging all
employees by organising a virtual conference
series, with webinars delivered by regions,functions and sectors across the Croda
world. Sessions were available on demandwith content accessed 4,714 times by
employees, helping to further embed Our
Purpose, Commitment and Difference acrossthe organisation. The event culminated in the“Our Purpose in Action” awards ceremony,

Our leadership role in supporting thesustainability journeys of others
As we aim to be the most sustainable supplierof innovative ingredients, we recognise theleadership role we must play. 2021 saw us
develop new partnerships to advocate for fasterchange and to support the sustainability journeysof others; we joined the United Nations Global
Compact, demonstrating we align with the wider
expectations on business in meeting the
Sustainable Development Goals; and we arefounding members of the BusinessTransformation Group at the Cambridge Institutefor Sustainability Leadership, helping define amodel for truly sustainable businesses ofthe future.
A Consumer Care and Life Sciences
focused company
2021 saw dramatic changes in the external andinternal landscapes for Croda. The ESG agenda
moves on at pace, with mandatory climate-risk
reporting and increasing focus on the business
impacts on nature and social inequality. Croda’s
portfolio has transformed into a consumer andlife sciences focused business with the sale ofthe majority of our Performance Technology andIndustrial Chemicals business, expected to close
summer 2022. In anticipation of these changes
the Executive Committee spent significant time
considering the impact on our sustainability
strategy. They concluded that we will retain thesame level of ambition across our Commitment,
despite the changing portfolio, and identified
areas where we will take even more ambitious
action in the future.
Finally, I would like to recognise and thank thehuge efforts of everyone in delivering the 2021
progress towards meeting our Commitment,
despite dealing with various challenges at workand at home.
Phil Ruxton
Chief Sustainability Officer

shining the spotlight on employees and teams
around the world who had driven action
towards achieving our Commitment ordemonstrated they were living our values. The
awards were well received, with 148 global
entries. The eight winners were selected by ajudging panel comprising of Executive andSustainability Committee members andannounced by our CEO Steve Foots. Winners
were awarded £5,000 to give to a charity of
their choice and these charities were also
shortlisted for the Croda Foundation Charityof the Year, see page 33. Look out for someof these winning entries highlighted in casestudies throughout the report.

GRI

Standard Number:
102-14

Board and Executive Committee oversight
Our two most senior Committees, the Board of
Directors and Executive Committee, areultimately responsible for our financial andnon-financial performance. They maintain an
active role in ensuring sustainability remains an
integral element of our business strategy. Phil
Ruxton, Chief Sustainability Officer, reports into
the Executive Committee and chairs our
Sustainability Committee.
In 2021 our CEO Steve Foots led the Executive
Committee in a review of our sustainability
strategy. This was supported and informed by
the Sustainability Committee and also included
representatives from our Board and the investor
community. The review considered the rapidlychanging external environment and thetransformational organisational changes
underway in Croda. Our Board has also given
sustainability significant focus, conducting a full
review of progress against our Commitment in
December 2021.
Sustainability Committee
To ensure ownership of our Commitment and2030 KPIs across Croda, the Sustainability
Committee was formed in 2020. This is a formal
sub-committee to the Executive Committee, withdelegated authority to oversee the development,
measurement and delivery of our sustainability

KPIs as well as Group communications andrecommendations to further develop our strategy.
It comprises members of the Executive
Committee and senior leaders from acrossCroda, with each member responsible fordelivery of specific 2030 targets. Expert resource
is provided by Group Sustainability andthird-party partners. The Sustainability
Committee met five times in 2021.
Measuring and reporting non-financial KPIs
We have developed the detailed metrics andreporting methodologies behind our 2030
targets and applied the principle of placing
responsibility to collect and approve data as
close to source as possible. We recognise theincreasing importance of the accuracy andintegrity of this non-financial data for all
stakeholders. Since 2019, our greenhouse gas(GHG) emissions have been independently
assured to a reasonable verification level by
Avieco. Work continues to ensure the rest of ournon-financial data is audit compliant as andwhen required. In 2021 we invested in marketleading technology to automate the collation andinternal reporting of these metrics and optimised
the business processes required to maintain thedata, providing training for all employees holding
data entry and validation responsibilities, seepage 38.

2021 reporting parameters
This report covers the sustainability performance of
Croda International Plc for the period 1 January
2021 to 31 December 2021. The scope of thisreport, and data within it, is all operations wholly
owned for the full 12-month period, plus those
operations where we have significant management
influence due to a majority shareholding. As of
31 December 2021, Croda employed 6,135
people across 105 locations in 39 countries.
Culture and employee engagement
We believe our ambitious and public commitment
to use Smart science to improve lives™ is
inspiring and encouraging changes in employee
behaviour, uniting our people in helping to delivera more sustainable future.
Through constant communication, enablingand recognising employee-led initiatives andsharing best practices and learnings we are
increasingly engaging all our employees in oursustainability journey.
In 2021 we formed regional Sustainability
Champions Networks of enthusiastic employeeswith a passion for sustainable improvements andengagement with their colleagues. These
voluntary networks will be used to support local
management teams to develop and deliver local
sustainability plans, as well as encourage andfacilitate idea generation and execution, across all
Croda locations.

Our Sustainability Committee
Phil Ruxton
Chair and Croda Foundation

Tracy Sheedy
Gender Balance, Fair Income,Knowledge Management,
Wellbeing

Michelle Fargen
Scope 3 raw materials andSustainable Procurement

Ian Tooley
Carbon Cover and Sustainable
Innovation

Murali Duvvuri
Regional Head and Employee
Engagement

Mine Enustun
Product StewardshipMark Robinson
Reducing Emissions, Healthand Safety, Environmental
Stewardship

Dave Cherry
Land Use and Crop Science
Innovation

Julia Creasey
Responsible Business,
Communications and ESG
ReportingFreek Snieders
Health and Wellbeing

Sandra Breene
President Regional Delivery

Nick Challoner
Chief Scientific Officer

GRI

Standard Numbers:
102-15 102-16, and 102-20

Croda International Plc
Sustainability Report 2021

17

Sustainability strategy

Our Commitment
We are committed to being the most sustainable supplierof innovative ingredients. We will create, make and sell solutions
to tackle some of the biggest challenges the world is facing.
By 2030 we will be Climate, Land and People Positive.

Fundamentals

La

e

e
sitiv
Po

Alignment with SDG 17 applies across our
Commitment. Just as partnerships are critical to
the success of the UN Sustainable Development
Agenda, achieving our 2030 Commitment isdependent on productive partnerships with all
our stakeholders. Other SDGs and their targets
are no less important; whilst they are not driving
our strategy, we contribute to achieving themthrough our Fundamental objectives and Croda
Foundation.

Our approach to providing resources to meetour 2030 targets follows the Croda model ofdecentralising as far as possible to be close
to the point of need/action. Our central Group
Sustainability and Sustainable Sourcing functions
provide expertise and manage third-party
relationships. In 2021 we deployed our first
dedicated sustainability resources in the sectors
and regions, and plan to double this level ofresource in 2022, as well as ensuring all relevant
employees have sustainability objectives anddevelop the skills to support this.

nd

Aligning with the UN SDGs
The United Nations Sustainable Development
Goals (SDGs) underpin our Commitment. We
have identified 23 SDG targets from 169, acrossnine goals, that are drivers of our strategy: thosewhere we must reduce our negative impacts andwhere we can make the biggest positive
contribution. These are grouped around thethemes of climate, nature and society, hence
our Commitment to be Climate, Land andPeople Positive.

eP
os
itiv

We have important KPIs outside of Climate,Land and People; we believe these
Fundamentals are crucial to the success of ourbusiness. These targets represent the requiredsocial licence for a multinational manufacturing
company like Croda to operate in 2030.

Refreshing the strategy and resourcing
for execution
A review of our sustainability strategy by the
Executive Committee in 2021 resulted inre-committing to the highest level of ambition
across all our 2030 targets, despite a changing
business portfolio. We also developed plans tobuild on our strategy, account for new issues ofimportance to our stakeholders (see materiality
page 14) and prioritise resources to ensure we
excel in execution and engagement.

C li ma t

In 2020 we launched our Commitment,
externally benchmarking our targets withthe support of the Cambridge Institute for
Sustainability Leadership to ensure ourambitions align with expectations of asustainability leader in our industry. Ours is a
restorative strategy, designed to ensure thatplanet and society are better as a result of ouractivities, and we are not just mitigating against
negative impacts.

Smart scienceto improve livesTM

Peo
ple Positive

18

Croda International Plc
Sustainability Report 2021

GRI

Standard Numbers:
102-16

Measuring our growth vs the SDGs
Having previously identified the SDG targets that directly connect with our Commitment (see Sustainability Report 2020 page 11), this year
we have mapped out how those SDG targets can be impacted through the use of our products in the markets in which we operate,considering our product offering into those markets and the primary supply chains and operations that provide them.
We plan to continue this assessment in the coming years to develop a means of assessing our revenues and profitability by SDG target.
The table below presents a summary of the SDG targets our activities impact, broken down by sector and business unit:
Consumer Care

Value Chain

SDGSLife Sciences

BeautyCare

BeautyActivesHome
Care

Fragrances& Flavours

8.5

8.5

8.5

8.5

12.2

12.2

12.2

12.7

12.7

12.7

Seed
Enhancement

Crop
Protection

12.6

12.2

12.2

12.7

12.7

12.7

13.2
15.2
15.5
3.9

PTIC
HealthCareEnergyTechnologies

12.7

12.7

13.2
15.5

3.9

15.2

15.2

15.5

15.5

3.9

3.9

15.2
15.5
3.9

3.9

Smart
Materials

Industrial
Chemicals

12.2

12.2

12.7

12.7

13.2

13.2

15.2

15.2

15.5

15.5

3.9

3.9

3.9

6.3

6.3

6.3

13.2
15.2

3.9

4.3

Operations

5.5

5.5
6.3

6.4

6.4

7.2

6.4

7.2

6.3

6.3
6.4

7.2

7.2

7.2

7.2

7.2

7.2

Products & Services

8.8

GRI

9.4

9.4

9.4

9.4

9.4

9.4

9.4

9.4

9.4

9.4

12.5

12.5

12.5

12.5

12.5

12.5

12.5

12.5

12.5

12.5

2.3

2.3

2.4

2.4
3.3

3.4

3.4

7.3

14.1

Standard Number:
102-15

14.1

7.3

7.3

7.3

7.3

7.3

7.3

7.3

13.2

13.2

13.2

13.2

13.2

13.2

13.2

14.1

14.1

14.1

15.3

15.3

14.1

Croda International Plc
Sustainability Report 2021

19

Climate

Climate Positive
We will continue to reduce our carbon footprint and increase our use of bio-based
raw materials, whilst the benefits in use of our ingredients will enable more carbon
to be saved than we emit through our operations and supply chain.

27% Approved 951,000 69%

reduction in scope 1 and
2 GHG emissions intensity
since 2020.

1.5°C Science
Based Target.

tonnes CO2e avoided through the useof ingredients attached to verified
case studies.

of our organic origin
raw materials were
bio-based in 2021.

Climate Positive by 2030
SDG
7.2

Reducing Emissions
Objectives

Targets

Milestones and metrics

We will achieve our science-basedtargets (SBTs) by reducing ouremissions in line with limiting the
global temperature rise to 1.5°C
above pre-industrial levels,
maximising the use of renewableenergy in our operations.

• By 2030, we will have
• A reduction of 25% in 2018
achieved our SBTs, reducing
absolute scope 1 and 2
scope 1 and 2 emissions byemissions by the end of 2024
46.2% from a 2018 baseline, • All Croda locations to have ain line with limiting global
decarbonisation roadmap bywarming to 1.5°C, andthe end of 2022
reducing upstream scope 3
emissions by 13.5%• Thereafter, by 2050 we will be
a net zero organisation

SDG
9.4

2021 progress• Absolute scope 1 and 2 emissions have
reduced 12.7% since 2018, despite a
5.8% increase in output volume, as we
decouple business growth fromenvironmental impact• Non-manufacturing sites were engaged inroadmap setting with the support ofregional champions, with 25% completed

SDG
7.2
7.3

Carbon Cover

SDG
13.2

SDG
13.2

We will enable the transition to a low • By 2030, use of our products • Two million tonnes of CO2e
• 951,000 tonnes CO2e were avoided
carbon economy. We will be Climate
will avoid four times theemissions savings delivered
through the use of ingredients attached to
Positive, working closely with ourcarbon emissions (scope 1,
through use of our products
verified case studies, giving a carbon
customers to develop products that
2 and 3) associated with ourby the end of 2024, which will
cover ratio of 0.8:1
offer carbon saving benefits in use.
business – our 4:1 carbon
be externally verified• 80% of our product portfolio has now
cover• 100% of our product portfolio
been evaluated, identifying further carbon
evaluated for downstreamsaving benefits in use
scope 3 impact by the endof 2024
SDG
12.2

Sustainable Innovation
We will accelerate the transition to• By 2030, over 75% of our
bio-based products, moving away
organic raw materials by
from fossil/petrochemical feedstocks.
weight will be bio-based,absorbing carbon from theatmosphere as they grow20

Croda International Plc
Sustainability Report 2021

• 71% (rolling three-year
average) of our organic raw
materials to be bio-based by
the end of 2024

• Our use of bio-based organic raw
materials increased by two percentage
points from 67% to 69%• A multidisciplinary working group
identified all current petrochemical-based
raw materials that could be replaced withbio-based alternatives

GRI

Standard Numbers:
102-15 and 301-1

Reducing Emissions
SDG Targets:
7.2, 9.4 and 13.2

Leadership and advocacy
As a signatory to the UN Global Compact
Business Ambition for 1.5°C and member of theRace to Zero campaign, we are demonstrating
leadership on climate action in an industry that isrecognised as hard to decarbonise.
In September 2021 we signed an open letter to
all G20 leaders urging them to keep the Paris
Agreement’s 1.5°C goal within reach. This was
signed by more than 600 businesses across all
G20 countries stating that the G20 has acollective responsibility and opportunity todemonstrate global leadership to decisively
address climate change.

Lending our voice to urge leaders and otherorganisations to follow our sustainability
leadership is not new for Croda. In 2020 we also
signed an open letter to the UK government
urging a clean and just recovery plan following
the COVID-19 pandemic, and most recently
have urged the UK government to set out acomprehensive net zero strategy.
In support of the aims of COP26, we presented
at many climate-focused events in 2021,
including UNGC UK, discussing the route to net
zero for manufacturing.
COP26 saw us not only focus our internal
communications on this important event, sharing
video clips recorded by our employees inattendance at the Green Zone, we also used it
as an opportunity for our STEM team to further
engage with schoolchildren on sustainability. We
developed new material for our STEM
Ambassadors to take into schools, highlighting
the importance of COP26 and climate change,
encouraging discussion about everyday changes
we all can make to reduce our carbon footprint(see People Positive, page 33).

Emissions and intensity charts

GRI

Standard Numbers:
102-15, 102-56, 305-1,2,3,4 and 5

1.5°C science-based target validation
In July 2021 we became only the third major
chemical company globally to have a 1.5ºC
science-based target validated. By the endof 2029 we will have reduced our operational(scope 1 and 2) emissions by 46.2% from a2018 baseline.
With the majority of our emissions within our
supply chain, we also had our scope 3 target
approved by the SBT initiative: to reduce our
upstream scope 3 emissions by 13.5% over thesame time frame. The focus here is to engage
and work with suppliers to reduce emissions
associated with sourcing raw materials (seeSupplier Partnership, page 41) alongsidetransportation and distribution of products toour customers.
By taking action to achieve these targets within
our operations and supply chain we can support
our customers and enable them to meet theirown GHG emission reduction targets.

GHG emissions intensity(TeCO2e/£m)2

GHG emissions1
Scope 1 / tonnes CO2e

Scope 1 and 2 emissions intensity

Scope 2 / tonnes CO2e
250

Scope 1 and 2 emissions (‘000 tonnes CO2e)

Since 2018, our baseline year, our total scope 1 and
2 greenhouse gas (GHG) emissions have reduced by
12.7%. Within this, scope 1 emissions increased by
4%, whilst we have seen a 60% reduction in scope 2
emissions. This has been driven by a switch torenewable electricity across our manufacturing sites. In
2021 we engaged with Accenture to help us explore
electricity sourcing options for our manufacturing sites
in Asia, where availability of green electricity is morechallenging. Renewable Energy Certificates (REC)purchases at Thane, India and Singapore have led to asignificant reduction in scope 2 emissions this year.
Scope 1 and 2 GHG emissions from our UK operations
were 34,559 TeCO2e in 2021 (2020: 35,692 TeCO2e)
representing approximately 20% of our global
GHG emissions.
Our chosen measure of GHG emission intensity divides
our GHG emissions (market-based scope 2 emissions)by value added2, a measure of our business activity.
Since 2018, our GHG emissions intensity has improvedby 39%, illustrating how we are decoupling growth fromour environmental impact.
Our scope 1, 2 and 3 GHG emissions are verified by
Avieco. Their formal independent verification statement
is available at: www.croda.com/carbonverification
Energy consumption and efficiency improvements
In 2021 we consumed 1,178,117,781 kWh(2020: 1,125,612,495 kWh) of energy across our global
operations. This included 219,130,734 kWh(2020: 222,759,173 kWh) consumed by UK operations.
As part of our strategy to improve the efficiency ofenergy consumption, 36 projects were implemented
globally, realising 39,514,274 kWh of annualised
efficiency improvements, equivalent to 9,063 TeCO2e
avoided emissions.

We have also carried out quantitative climate
scenario analysis in the last year in alignment
with the Task Force on Climate-related Financial
Disclosures (TCFD) recommendations (seepage 25).

200

350

54
39

150

155

142

28
150

22
161

100

50

GHG emissions intensity (TeCO2e/£m)2

The urgent need for society to tackle the climate
emergency was highlighted during 2021. The
United Nations Conference on Climate Change(COP26) highlighted that governments andbusinesses must both play their part in movingfrom ambition to action if we are to limit global
temperature rises to no more than 1.5°C above
pre-industrial levels and prevent the mostcatastrophic effects of climate change.

316.27300

275.27263.69250

192.65

200
150
100
50

0

2018

2019

2020

2021

0

2018

2019

2020

2021

1. Our GHG inventory has been completed in accordance with the Greenhouse Gas Protocol, Corporate
Accounting and Reporting Standard (Revised Edition). Scope 1 emissions are calculated using Defra
Government emission conversion factors for greenhouse gas company reporting. Scope 2 emissions aremarket-based.
2. Value added is defined as operating profit before depreciation and employee costs at reported currency.

Croda International Plc
Sustainability Report 2021

21

Climate

Reducing Emissions continued

Decarbonisation roadmaps
In 2021 our manufacturing sites have continued
working to develop and refine decarbonisation
roadmaps. These will ensure we can achieve our
SBT through energy efficiency projects, moving
to alternative fuel sources and innovating to findless energy-intensive ways to manufacture. By
the end of 2022 every location in the Croda
world, including all offices, will have avalidated roadmap.

2021 scope 3 emissions by category

2021
2021scope
scope33emissions
emissions byby category
category

Purchased
goods
and- services- 83%
Purchased
goods
andservices
83%
Purchased
goods
andservices- 83%
Raw materials
– 73%
Raw
materials–
73%
Raw materials – 73%
PFR/tolling/semi-finished– 5%
PFR/tolling/semi-finished– 5%
PFR/tolling/semi-finished– 5%
Packaging–2%
Packaging–2%
Packaging – 2%
Other – Other
3%
Other – 3% – 3%
Capital Capital
goods – 6%
Capital goodsgoods– 6% – 6%
Fuel- and energy-related – 3%
and energy-related
Fuel- Fueland energy-related– 3% – 3%
Upstream transportation and distribution – 6%
Upstreamtransportationand distribution
Upstreamtransportationand distribution– 6% – 6%
Road – 3%
Road Road– 3% – 3%
Sea – 2%– Sea
2% – 2%
AirSea– 1%– 1%
Air – 1%
WasteAir
generated
in operations – <1%
WasteWaste
generated
in operations– <1% – <1%
in operations
Businesstravel generated– <1%Businesstravel –travel<1%
Employeecommutingand– home
Business<1% working – <1%

In this way we have started to move fromambition to action, and are seeing projects
focused on carbon reduction already being
implemented. For example, the biomass boiler
at Hull (see case study) and a low carbon
sulfate-free surfactants expansion project at our
Rawcliffe Bridge manufacturing site (page 4).
Use of an internal shadow carbon price(2021: £50/tonne CO2e) has supported thesecarbon-focused investment proposals.
Projects at manufacturing sites alone will not get
us to our target. We also need our sector teams
to develop innovative, low-carbon alternatives
to our existing ingredients, for example, looking
at the opportunities of moving to biotechnology,
as well as evaluating and managing productportfolios for carbon intensity. To enable this, ourfinance team has developed a methodology toautomate calculation of scope 1 and 2 emissions
at a product level, using existing product costand site emission data. We can now provide themajor business sectors with scope 1 and 2
product level carbon footprint data.
For the first time, 2021 saw the major sector
teams present their carbon budget to the
Executive Committee alongside their financial
budget. Forecasting their carbon emissions for2022 based on projected growth, sector teams
presented actions to ensure emissions remain
within budget and are aligned to achieving our
SBT. In 2022 we will add scope 3 emissions
associated with raw materials into thesecalculations, further improving sector visibilityof their carbon footprint to enable better
decision making.
Cradle-to-gate carbon footprint data for our
entire product range will add huge valueinternally and with our customers.

Purposein Action
See Embedding our
Purpose, Commitment
and Difference

P16

22

Croda International Plc
Sustainability Report 2021

Employeecommutingand home– <1% – <1%
Employeecommutingandworking
home working

2021 scope 3 emissions 1,141,056 teCO2e(2018 baseline: 994,235 teCO2e)

Industry leading visibility of scope 3
emissions inventory
In 2021 we undertook a project to update ourscope 3 emissions inventory, working with
Avieco. This enabled a clear view of our supply
chain emissions and allows us to identify areas for
improvement. “The scope 3 enhancement has
significantly improved Croda’s footprint reliability
through using best practice and more primary
supplier data,” said Julie Craig, Chief Commercial
Officer, Avieco. “Granularity and repeatability havebeen key to the process and the improvements
will enable Croda to better track their progress.”
In completing this work, we have identified thatour 2018 scope 3 baseline is 104,461 tonnes
CO2e lower than originally calculated. This wasprimarily due to the accuracy of emission factors
for our capital goods scope 3 category. Moving
to a greater level of granularity and distancebased data for business travel has also resulted
in a lower baseline for this category. However,through increased accuracy, we have identified agreater number of emissions associated with ourpurchased goods and services. This is our largest
category, making up 83% of our upstream scope
3 emissions, the majority of which is raw

Hull biomass boiler
Climate Positive: Our Purposein Action award winner
As part of our SBT commitment, we havepartnered with AMP Clean Energy to install an
11MW biomass system at our Hullmanufacturing site, a great interim step on ourjourney to net zero until alternative fuel sources
like hydrogen are viable. The biomass project,which will supply steam for the entire site, isfuelled by locally sourced and sustainably
managed forestry residues. There is no impact

materials. Through this work, we have also
included emissions associated with our packaging
for the first time.
Life cycle assessment (LCA) studies for key raw
materials were updated in 2021. For palm oil andpalm kernel oil derivatives, this now includes theability to represent the reduction in carbon
footprint associated with purchasing RSPO
certified palm, avoiding 23,949 tonnes CO2e in
2021 compared with 2018 purchasing patterns.
With strong support from our suppliers, 40% of
our GHG emissions attached to raw materials arecovered by these supply chain specific studies.
We also have volume-based industry-recognised
LCA figures attached to a further 35% of our raw
material GHG emissions.
Our 2021 scope 3 emissions are 14.8% higher
than our baseline year of 2018. This is largely due
to greater investment, and increased emissions
associated with raw material purchases, due toincreased production volumes. Business travel
reduced by 75% due to the pandemic. This
increased granularity allows us to identify carbon
hotspots in our supply chain, and work with
suppliers to drive emissions reductions (seepage 42).
on landfill as ash residues are routed into
sustainable by-products, such as soil improvers
and building blocks. Through a 20-year energy
supply agreement reliance on fossil fuels will be
reduced, as well as a benefit from low carbon
heat over the long term, reducing the site’s
scope 1 emissions by 60% and saving 10,000
tonnes of CO2e emissions annually. The
cross-functional project team worked hard totight deadlines to make this innovative project
happen: the first deployment of such technology
within the Croda Group. The judges felt they
were worthy recipients of a Climate Positive
Award at our first Purpose Awards ceremony.

GRI

Standard Numbers:
102-15, 102-56, 305-1,2,3,4 and 5

Carbon Cover
SDG Targets:
7.2, 7.3 and 13.2

Over the last three years we have been working
to quantify carbon emissions savings throughthe use of our products, with the goal of
reducing or avoiding four times the carbon
emissions associated with our business. We are
already working towards this target, discoveringand accounting for avoided emissions using
existing ingredients, as well as developing
new products that not only have low carbon
footprints but also deliver in-application
carbon savings.

Our total avoided emissions in 2021 linked to
Avoidedemissions/tonnes
CO2e CO e
Avoidedemissions/tonnes
2
the sales of ingredients from these case studies,
Carbon cover
ratio
Carboncover ratio
and our product case studies validated in 2020
Avoided emissions/tonnes
CO2e
Avoided emissions/tonnes
CO2e
and 2019, is 951,000 tonnes CO2e. This leads
1.0
to a carbon cover ratio of 0.8:1. All case studies960,000 960,000
1.0
951,000951,000
were aligned with our existing methodology for
0.9
0.9
quantifying and reporting avoided emissions, 940,000 940,000
as externally validated by Avieco.
0.8

In 2021 we identified five new case studies
where emissions were avoided, including a
new product launched in 2021. The emissions
savings of this new product were revealed
during its sustainability assessment, part of the
new way of working for our innovation teams to
support our Commitment.

0.6

Avoided emissions/tonnes CO2e

Avoided emissions/tonnes CO2e

2020
2019

2021
2020

0.7
0.6
0.5
0.4

0.5
0.4

0.3

0.3

0.2

0.2

0.1

0.1

0.0
2021

0.0

Carbon cover assessment

Total avoided emissions in 2021

c.80%

951,000of product portfolio assessed identifying
further carbon savings in use

0.7

Carbon cover ratio

800,000 800,000
2019

0.8

Carbon cover ratio

The four other products were identified by our
Carbon Cover working group, set up in 2021
to drive the discovery of new case studies andidentify avoided emissions for larger productand application areas. The group assessedaround 80% of our product portfolio forpotential carbon savings in use, which led to
our first multi-product, multi-applicationassessment, encompassing all products soldby our Crop Protection, Plant Impact andIncotec businesses.

We have seen an increase in our overall carbon 920,000 920,000
cover ratio compared to 2020. Despite the fivenew case studies, the increase in avoided
900,000 900,000
emissions is modest, mainly because of aslowdown in the automotive market, where our 880,000 880,000
polymeric friction modifiers in engine oils provide
significant emissions avoidance. Grouped case 860,000
860,000
850,500850,500
studies that cover larger product volumes, such
839,220839,220
as the one developed in 2021 on land saving,
840,000 840,000
alongside innovation to develop new products
offering avoided emissions in use, will be key to820,000 820,000
meeting our 2030 target.

tonnes CO2e

The five product case studies validated in 2021:
Coltide™ Radiance (ironing)
Our laundry additive reduces the timerequired to iron clothes, so reducing
overall energy consumption for the task
and lowering emissions.

Nutrivent Balance™
Our hair care product helps reduce sebum
production, helping hair look cleaner for longer.
This offers the possibility for consumers towash their hair less often, leading to a
reduction in water consumption, and so theenergy required to power and heat the water.

GRI

Standard Numbers:
102-15, 102-56 and 305-5

LoVOCoat
This surfactant can be used as an emulsifierin solvent-based paints. Emissions are avoided
by using lower VOC containing components(water-based) in place of higher VOC(solvent-based) ones, whilst maintaining
the performance characteristics of the final
paint product.
Land use savings
As explained on page 27, our Crop Protection,
Plant Impact and Incotec products wereassessed for their impact on land use. Moreefficient use of land leads to lower emissions,
including saving resources such as pesticides,
fertilisers, energy for farming equipment,
and more.
Tween™ 24
Our Crop Protection adjuvant works byenhancing the bioavailability of the active
ingredient within a fungicide formulation.
The actives work more efficiently, andadditional yield can be attained. Increasing
yield leads to more efficient land use, which
can in turn reduce carbon emissions, andwater consumption.

Croda International Plc
Sustainability Report 2021

23

Climate

Sustainable Innovation
SDG Target:
12.2

In 2021 our use of bio-based organic raw
materials increased to 69% from 67% in 2020.
This was due to increasing sales of our ECO
surfactants. Our target is for our use of
bio-based organic raw materials to reach 75%
by 2030, three times that of the European
Chemical Industry target of 25%. Bio-basedmaterials sequester carbon as they grow, sousing them allows us to minimise our impact on
the environment by designing lower-footprint
products, originating from renewablecarbon sources.

Research and Development
In 2021 we continued to embed sustainability
into our ways of working within our R&D teams.
This included assessing the impact of all new
R&D projects against the UN Sustainable
Development Goals (SDGs) and maximising
bio-based content where possible.

manufacturing process for each new ingredientto ensure we can support the sustainability
benefits demanded by our customers. A
Sustainability Impact Assessment (SIA) in 2021
showed that biotechnology could bring further
sustainability benefits. Biotech processes use
lower reaction temperatures than conventional
chemical processes, leading to reduced energy
consumption and opportunities to use energy
from low carbon sources. Additional benefits
include reducing the need for chemical
processing, reducing or removing the need forcatalysts, and improved process safety.

savings in use and have a bio-based content
greater than 75%.

As Champions,
we create
Throughout the year our scientists received
training on sustainability topics, such as how
awareness,to assess bio-based content and the sciencebehind biodegradability. Work was also
encourage andundertaken to align our existing procedures
2021 saw additional progress made towards
across global R&D teams to ensure sustainablefacilitate the use
this target by a new multidisciplinary team,innovation remains at the forefront of all newcomprising members from our R&D anddevelopments.
of our sustainability
procurement functions. This team was createdThis work was led by our Innovation &to identify new opportunities through innovation
Sustainability Champions who are helping tochecklist acrossand collaboration and further increase our use
embed sustainability across our global R&D
of bio-based raw materials. The group identified
team. They play a central role in the adoption of
R&D teams.
raw materials currently derived fromsustainable practices within the function, sharing
petrochemical sources that could be replaced
training, providing regional expertise and helping This drives
with bio-based alternatives. Furthertranslate important documents into local
investigations in 2022 will determine how
languages. For example, our Sustainability
understanding
these changes can be made while maintaining
Checklist for new products was translated into
the same or bettering the performance ofChinese for our growing team in the region.
of the importanceour products.
In 2021 the majority of the new, patented andIn addition to substituting existing virgin fossilof NPD projectprotected products (NPP) that we launched
raw materials for bio-based ones, our R&D
were 75% bio-based or greater, highlighting theteams have been developing new products from
evaluation andcrucial role our R&D teams play in meeting ourrenewable origins. This includes scaling our2030 Commitment. They are not only
biotechnology capabilities with the expansion of
output to ensure
responsible for designing low-footprint
our biotechnology laboratory footprint in the UK.
bio-based products that meet our markets’
Offering an increasing number of products madealignment withdemanding performance and quality needs, butusing biotechnology is another way in which we
also ones with sustainability benefits in use, as
expect the proportion of our bio-based organic
our sustainability
seen with our surfactant LoVOCoat™, which
raw materials to grow.
helps to reduce VOCs. In 2022 we plan togoals.
We carefully assess the whole biotechnology
launch more products that enable carbon

24

Croda International Plc
Sustainability Report 2021

Anu Chaphekar
Research and Technology Manager

Our R&D teams now assess the impact of
all new projects against the SDGs.

GRI

Standard Number:
102-15 and 301-1

Task Force on Climate-related
Financial Disclosures (TCFD)
To help us understand the potential impact of climate change on ourbusiness and to inform our future strategy and planning, we haveconducted scenario analysis looking at both transition and physicalrisks across three different scenarios, between a 1.5°C net zero 2050
orderly scenario, up to a hot house world +3°C scenario.
As part of the Task Force on Climate-related Financial Disclosures (TCFD) recommendations,further detail on this scenario analysis can be found in our Annual Report and Accounts page 40.

Transition risks

Of the risks modelled as part of our scenario analysis, thepotential cost of increased carbon taxation has the mostsignificant impact so far. The risk is already mitigated tomoderate levels due to our 1.5°C SBT, and ourcommitment to be net zero as an organisation by 2050.
Our current transition plans stretch out to 2030, and weare now beginning work on our 2050 decarbonisationplans, starting at one of our top 10 manufacturing sites,
Rawcliffe Bridge in the UK (see case study).
Our use of a shadow internal carbon price (£50/
tonneCO2e) as part of every capital expenditure proposal,
helps us to understand the future OPEX impact
associated with carbon taxation, and helps support thefinancial case for pure decarbonisation projects.
Since 2019 we have had an ESG clause within our bankfacility. On achieving agreed decarbonisation targets weretain a small percentage of the interest resulting in a fundwhich must be spent on decarbonisation projects,
supporting our transition to a low carbon future, andmitigating these associated transition risks.

Physical risks

Of the physical risks assessed so far, the increase innatural raw material pricing, in particular palm, could leadto moderate to high levels of risk by 2045 in a 1.5°C net
zero by 2050 scenario, due to increasing demand forpalm oil as an alternative to fossil-based oils.
Our Commitment to be Climate Positive means that wewill increase our use of bio-based raw materials. Throughour Commitment to be Land Positive, we will enable
more land to be saved than is used to grow ourcrop-based raw materials. Through innovation, we will
help customers to mitigate the impact of climate change,
and increase the availability of land suitable for growing
crops, all actions that will mitigate the physical climate
related risks associated with crop production within our
supply chain and for our customers.

UK Government funding at
Rawcliffe Bridge for net zerodecarbonisation roadmap
In October 2021, we successfully applied for the The Department for
Business, Energy and Industrial Strategy (BEIS) Industry of Future
Programme (IFP). Qualifying UK manufacturing sites need total
carbon emissions in excess of 10,000 teCO2e/year and following
application, our Rawcliffe Bridge site was selected to be part ofthe study.
This scoping study will involve using an engineering delivery partner
to develop a net zero roadmap for 2050 for the site. During thisroadmap process, decarbonisation technologies will be identified,these could include commercially available technologies but also
those that require further R&D and innovation. Following completionof the scoping study, BEIS may provide further support to sites
involved in the programme in the form of follow-up activities/funding.

Reducing water use impact at Mevisa
Water is the primary medium through which we will feel the effects ofclimate change1. Water availability is becoming less predictable in many
places, and in some regions droughts are exacerbating water scarcity.
Situated in a Natura 2000 site2 experiencing water shortages due toprolonged droughts, our colleagues at our Mevisa manufacturing site in
Girona, Spain, have taken a proactive approach towards building
resilience against increasing water stress and mitigating the physicalrisks of climate change. This includes extensive upstream anddownstream ecosystem studies assessing flow regimes, vegetation
cover, species richness and trophic structures. The site also monitors
the quality of aquifer and riverine water to enhance local water quality
through site discharges, evaluating water risks to prioritise future
improvements, and exploring rainwater harvesting opportunities.
Since 2018 Mevisa has halved its water use thanks to investments inclosed loop cooling towers which operate fully with recycled water,while future investments will focus on increased recycling of highconductivity water reaching the effluent treatment plant.

1. www.unwater.org
2. As defined by the European Commission, Natura 2000 is the largest
coordinated network of protected areas in the world, core breeding and restingsites for rare and threatened species.

GRI

Standard Numbers:
201-2

Croda International Plc
Sustainability Report 2021

25

Land

Land Positive
Our products will enable more land to be saved than is used to grow ourbio-based raw materials. Our innovation will help customers to protect
biodiversity and to mitigate the impact of climate change and landdegradation, increasing the availability of land suitable for growing crops.

Biodiversity

33,734hectares of land saved over2019 baseline: our range ofbiostimulants, adjuvants andseed coatings continues tosave more land than is used to
grow all of our bio-based
raw materials.

We recognise the benefits Croda
technologies can bring in protecting
biodiversity and nature, and havestarted a programme to measure
our impacts in partnershipwith CISL.

Validated
Through extensive field trials
with a major customer inBrazil we measured anddemonstrated the land saving
benefit of our adjuvant
technologies.

60%

of our land area saved
is in Asia and Latin
America, where there isgreatest demand for foodproductivity and thehighest threat ofdeforestation.

Land Positive by 2030
SDG
2.3
2.4

Land Use
Objectives

Targets

We will save more land
than we use. We will
increase agriculturalland use efficiency,
protect biodiversity andimprove food security
by sourcing sustainably
and inspiring innovationin our agrochemicalbusinesses.

• Throughout this decade, the land saved• By the end of 2024,
through the application of our crop
the land area saved
protection and seed technologies willthrough use of our
exceed any increase in land used to growtechnologies will be
our raw materials by at least a factor ofat least 80,000
two, and by 2030 we save at least
hectares per year
200,000 hectares per year more thanmore than in 2019in 2019

Crop Science Innovation
We will invest ininnovation projects
and partnerships to
support crop and seedenhancement in
mitigating the impact ofa changing climate andland degradation.

26

SDG
12.2

SDG
15.2
12.5

Milestones and metrics 2021 progress• We continue to work with our key suppliers togather details of improvements in yield, GHG data,soil health, water consumption and protectionof biodiversity• We have validated our land-saving data for our
adjuvant technologies through extensive field trials
with a key customer in Brazil• We saved 33,734 hectares per year more than our2019 baseline year and remain on track to hit our
2024 intermediate milestone and 2030 target
SDG
15.2
15.3

SDG
13.2

• Through to 2030 we will bring an average • By the end of 2024, • We define a technological breakthrough as a newof two crop technological breakthroughs
we will have brought
technology with a measurable significant effectto market each year that are in alignment
10 qualifying
and either a more sustainable route to an existingwith our SBTs and which help our
technological
performance effect, or a new performance effectcustomers mitigate the impact of climate
breakthroughsfrom an existing technology platform that is in line
change and land degradation
to market
with our SDG goals• By 2030, we will have established three• We launched a second microplastic-free seed
new partnerships to contribute to thecoating technology, extending our impact into key
recovery of compromised farmland andfield crop markets
protect biodiversity. We will work with
• Our research programmes were reconfigured tocustomers, universities and businessfocus more explicitly on sustainability-led
councils to achieve thistechnologies that will drive our increasing benefits
for nature and biodiversity• We have secured our first commercial sale ofmicroplastic-free seed coatings

Croda International Plc
Sustainability Report 2021

GRI

Standard Numbers:
102-15 and 304-2

Land Use and Crop
Science Innovation
Benefits for nature and biodiversity
We are increasingly aware of the benefits that
our technologies can bring in protecting natureand biodiversity, and are making this anincreasing focus of our innovation. We also
recognise our responsibility to minimise thenegative impacts we have on nature through ouroperations and supply chain.
All business is dependent upon nature, or
impacts nature in some way. At the simplest
level, land use may be that occupied by sites
and operations. However, in many businesses
the greater land use impact lies upstream in the
supply chain with the sourcing of raw materials.
Today’s complex global supply chains make itchallenging for any organisation to performthese calculations.

SDG Targets:
2.3, 2.4, 12.2, 13.2,
15.2, 15.3 and 15.5

In 2021 the positive
yield impact of ourbiostimulants, adjuvantsand seed coatings, andthe use-rate of those
products per hectare ofland, saved the equivalentof 125,958 hectares.
Accelerating our move away from fossil/
petrochemical feedstocks whilst also maximising
the amount of land available for crops meant
that, three years ago, we wanted a detailed
understanding of our land footprint. Thisquantitative measure is essential for any
business to set a baseline to understand its
impact on nature and biodiversity. Equallyimportant is an understanding of how our activity
may impact biodiversity, deforestation, foodsecurity, soil health and water consumption.
We consider this holistic view of our land
usage our ‘land budget’.
This marks our continuing journey to our Land
Positive Target of at least 200,000 hectares
above the 2019 baseline.
Land footprint is a prerequisite to understand our
impact on nature and biodiversity.

A ‘nature positive
company’ is a company
which takes action atscale to reduce thedrivers of thedegradation of nature,
actively improve thestate of nature itself(both species andecosystems) and boost
ecosystem services.

Demonstrating our land-saving impact
The effective delivery of active ingredients isincreasingly reliant on incorporating adjuvants
into plant protection formulations. Adjuvants areimportant not only in targeting the delivery ofactive ingredients but also in reducing negative
impact on nature and biodiversity. TweenTM 24 isa novel adjuvant that can enhance thebioavailability of the active ingredient in afungicide formulation, improving yield andreducing land and water used and associatedCO2 emissions. In partnership with a customer,

field trial studies were carried out in Brazil.
Conducted over three growing seasons, thestudy showed how incorporating TweenTM 24
into a fungicide formulation against soybean rustcan significantly improve yield and reduce landuse, as well as identify associated water andcarbon savings. As a result of the yield
improvement, a greater mass of crop can beproduced per hectare, lowering the land area
required to grow one tonne of soybeans; thiscan be expressed as a land saving. This land
would typically require energy inputs, all of which
will have associated carbon emissions; in
reducing the land required to grow the crop,
significant carbon and water savings can beachieved, these have been externally validatedby Avieco (see page 23).
These trials have validated the assumptions
used to calculate our land-saving data for our
adjuvant technologies, demonstrating that ourassumptions are justified and, in fact,
conservative.
Investing for better breakthrough innovations
Croda Crop Care opened its new Product
Validation Centre, located in Holambra near São
Paulo, Brazil, in 2021. This state-of-the-art facility
includes laboratories and greenhouses and is
focused on serving our agrochemical customers,
validating and substantiating claims and resultsfrom our formulation, microbiology and seedtreatment laboratories.
Managed by a specialist team that includes
agronomists, chemists and biologists from Croda
businesses such as Crop Protection, Incotec and
Plant Impact, the centre has the highest level oftechnical expertise, ensuring the generation ofrealistic and robust data. This specialist team
now all under one roof enhances our ability toinnovate and explore the use of digitalisation andnew technologies to create more sustainable
solutions for our agrochemical customers.

In 2021 our crop
technologies delivered
land area savings
equivalent to 150,000
football pitches.

The Cambridge Institute for
Sustainability Leadership (CISL)GRIStandard Numbers:
102-15 and 304-2

Croda International Plc
Sustainability Report 2021

27

Land

Land Use and Crop Science Innovation continued

Value chain impacts
In the same way that scope 3 carbon embedded
in supply chains is now an important focus, so
too is the impact of business through its value
chain. The Science Based Targets Network(SBTN) is developing guidance to set sciencebased targets for nature to define a clear
pathway. This will enable value chains toaddress their impacts and dependencies onnature going beyond climate action to informsystematic solutions to reduce the risk ofnature loss.

In 2021 we gathered in-house experts and took
part in a workshop with Cambridge Institute for
Sustainability Leadership (CISL) to develop ourunderstanding of relevant and leading initiatives
relating to nature. This included the concept ofnature positive: requirements, challenges, andhow it can be measured. Most importantly, it
looked at developing a way forward on naturethat will continue to deliver practical action in thefield, further engage with employees, and enablea leadership position in line with emerging global
biodiversity targets.

SBTN guidance describes a five-step process,starting with impacts and dependencies where
we have a clear head start with our land budget
metrics in terms of use and savings.
As we transform from Land Positive towards Net
Nature Positive, we will better understand theways that each of our major manufacturing sites
and finished ingredients impact or depend uponbiodiversity, and we will drive positive change inour raw material and supplier selection.
Importantly, it will shape our customers’
ingredient and supplier selection, and proactively
contribute to their sustainability goals.

5-step process of SBTs for Nature

1

2

3

4

AssetsInterpret &prioritise

Measure, set& discloseAct

Assess and identify yourcompany’s most material
impacts anddependencies on nature
and where they occur inyour value chain.

Interpret the results ofstep 1, prioritise different
places across yourspheres of influence where
you can start acting today.

Use the SBTN’s draft
measurement framework
and available guidance on
SBTs or interim targets, tobegin determining “howmuch” action is needed indifferent places.

Use SBTN’s Action
Framework (AR3T) andbest practices for
implementation to begin
developing groundedplans to deliver on
your targets.

5

Track

Monitor your progress,
adapt your strategy ifnecessary, and reportyour progress publicly.

Croda’s current position and future plans
Calculations on land use
footprint alreadyestablished. In 2022 wewill start impact anddependencies reviews on
our key bio-based raw
materials and sites.

From 2023 we will set
prioritised targets basedon our land footprint for
key bio-based raw
materials and sites
identified.

Establish baseline andtarget description, atimeline for achieving
targets and a time-boundprogramme for action.

Establish grounded actionplans in priority places.

Internal knowledge andpublic reporting on
actions taken, identify
which actions haveachieved their outcomes
and factors of success.

Source: Science Based Targets Network

Purposein Action
See Embedding our
Purpose, Commitment
and Difference

P16

28

Croda International Plc
Sustainability Report 2021

Global Digital Symposium
Innovative: Our Purpose in Action
award winnerWith the pandemic curtailing customer
events and face-to-face meetings, we
wanted to find new ways to reach ourcustomers and continue supporting themwith new ideas and innovation. Our Crop
Care team hosted a three-day global Digital
Symposium to communicate oursustainability ambitions and demonstrate
the breadth of our technologies. During theevent, our team of experts exploredchallenges and trends affecting the
agrochemical industry. Through interactive
live presentations and on-demand booths
we demonstrated how Croda technologies
can deliver more sustainable formulations.
Topics shared with over 1,000 registrants
included how microplastic-free solutions
reduce the environmental impact of seedcoatings, and the challenges andopportunities of formulating withbiopesticides as part of integrated pest
management systems.

GRI

Standard Numbers:
102-15 and 304-2

Reforestation
Revitalising ecosystems,
improving biodiversity
and creating social andeconomic benefits for
local communities.

Purposein Action
See Embedding our
Purpose, Commitment
and Difference

P16

Incotec, our Seed Enhancement business,and Land Life Company are collaborating
in a pioneering project to accelerate global
reforestation, embracing the demands of
SDG 17, Partnerships for the Goals. This
involves integrating Incotec microplasticfree smart coating technologies onto tree
seeds, supporting scale up of reforestation
efforts. These specialist coatings boost
germination, increase resilience and survival,and enhance overall performance, and thisis the first time such technologies have been
applied to large-scale reforestation projects.

Biodiversity
Land Positive: Our Purposein Action award winner

The first seeds are being introduced at sites
in northern Spain, with the emphasis onplanting where trees are needed most,revitalising ecosystems, improving
biodiversity and creating social andeconomic benefits for local communities.
Pending the outcome of this first trial it isexpected that tens of thousands of pelleted
tree seeds will be planted in different
locations all over Europe starting in 2022.

effluents in a natural way without energy
expenditure and with no negative impact on
the environment – as well as helping with
employee wellbeing.

Natural wetlands are under threat in many
locations, including France. Alban Muller,
our recent acquisition for beauty botanicals,bought land adjoining its production site inFrance and for ten years has developed
water treatment and biodiversity gardens.
Developing banks and introducing certain
plants encouraged the return of amphibians,
while wooded ponds and hedgerows
provide shelters for many bird, insect andsmall mammal species. Three hives and abeekeeping fallow area support colonies ofbees and therefore pollination.
Water used in manufacturing is returned to
the gardens, nourishing vegetation andsupporting plant and animal biodiversity. As
a result of the water gardens, the site has
zero water waste for 300 days of the year.
The project makes it possible to manage

GRI

Standard Numbers:
102-15 and 304-2

Croda International Plc
Sustainability Report 2021

29

PeoplePeople Positive
We will apply our innovation to increase our positive impact on society.
We are improving the lives of our own employees and people around theworld by developing ingredients to improve health and wellbeing as well as
encouraging and promoting diversity.

55

million people protectedannually through the useof Croda sun protection
ingredients.

Supported
the global scale up of COVID-19
vaccine delivery and rapidly
executed significant investments
at manufacturing sites in the
UK and USA.

Six

projects approved forfunding by Croda
Foundation’s Boardof Trustees.

36%

leadership roles held
by women

People Positive by 2030
SDG
3.3
3.4

Health & Wellbeing
Objectives

Targets

We will use our smart science topromote healthy lives and wellbeing
through the development andapplication of our ingredients andtechnologies.

• By 2030, we will contribute • By the end of 2024 ourto the successful
technology will be partdevelopment andof at least 10 clinicalcommercialisation of 25% ofphase III trials acrossWHO-listed pipeline vaccines
at least 25% of the
WHO-listed pipeline• By 2030, we will protect at
vaccines
least 60 million people
annually from potentially• By the end of 2024 wedeveloping skin cancer fromwill protect one million
harmful UV rays, through thelives from skin cancer
use of our sun carethrough the use of novel
ingredientssun protection
technologies

Milestones and metrics

2021 progress• Developed a more detailed understanding of
the projects in which our technologies are being
used to develop WHO-listed pipeline vaccines• Croda technology at various stages of
evaluation in 15 out of the 24 pipeline vaccines,
across 79 projects (2020: 32 projects)• First novel sunscreen ingredients launched from
Entekno partnership• 55 million people protected annually throughthe use of Croda sun protection ingredients

SDG
5.5

Gender Balance
We will achieve gender balance in our • By 2030, we will achievebusiness by focusing on recruitment
gender balance across theand development opportunities toleadership roles in ourincrease the number of women inorganisation
leadership positions.

• We are rolling out
gender-balanced
shortlisting recruitment
across Croda, with atarget of having 80%
of shortlists genderbalanced by the endof 2023• Further progress made in reaching our genderbalance target, with 36% of leadership roles
now occupied by women (2018 baseline: 31%)
• Gender balance target incorporated for the firsttime in our long-term incentive plan for the mostsenior leaders (PSP)• Croda main Board, as of February 2022, isgender balanced, with appointment of two new
female non-executive directors• Intermediate milestones
for the Croda
Foundation to be set
during 2022

• First six projects approved for funding by the
Croda Foundation Board of Trustees• £2m additional restricted grant provided from
Croda to the Foundation, to be invested in
improving health infrastructure in regions withthe greatest need
• Charity of the Year competition launched, andthe British Heart Foundation became the firstrecipient of the £25,000 prize

Improving More Lives
We will promote our smart science• We will establish and fund aand help improve more lives using our Croda Foundation to help
technologies within relevant
improve one million lives incommunities, where our science canrelevant communities
make a positive difference. We aim tocreate STEM educational
opportunities and provide basic
necessities through the use andapplication of our ingredients.

30

Croda International Plc
Sustainability Report 2021

GRI

Standard Numbers:
102-15, 405-1 and 413-1

Health and Wellbeing
SDG Targets:
3.3 and 3.4

Vaccine developments
Like 2020, much of the world’s vaccine
expertise in 2021 focused on COVID-19. Our
teams at Avanti and Croda Denmark continued
to further the use of our smart science in vaccine
adjuvants and drug delivery excipients toaccelerate COVID-19 vaccine development. We
saw many enquiries from around the world as
vaccine development and production globalised.
For example, our team in Indonesia worked withauthorities to fast-track import of Croda
ingredients as well as providing technicalsupport to produce vaccines locally in responseto escalating cases.
In addition, we continued to increase
engagement with teams researching many
WHO-listed pipeline vaccines. Thanks to our
focus on these diseases, our technologies areincluded in even more vaccine candidates
across a greater number of pipeline vaccines
than in previous years. This takes us a step
closer to our target of supporting vaccine
development for 25% of WHO-listed pipelinevaccines and our 2024 milestone of 10 clinicalphase III trials.

Collaboration to deliver new vaccine adjuvants

To support the global scale up of COVID-19
vaccine delivery, we made significant and rapid
investments at manufacturing sites in the USA
and UK. This will further facilitate increased
capability and capacity to support WHO
pipeline vaccines as they commercialise in
the years ahead.

In 2021 we established a strategic collaboration with the Danish government’s life science
research institute, Statens Serum Institute (SSI). This will enable accelerated trials ofalternatives to traditional aluminium-based adjuvants. Our range of patented and novel
adjuvants brings new opportunities to impact diseases where current adjuvant technologies
have not resulted in effective vaccines. For example, one novel adjuvant enables vaccines to
induce strong antibody responses against tuberculosis, chlamydia, group-A streptococcus,
malaria, influenza, COVID-19 and RSV.

Preventing skin cancer
As part of our commitment to protect at least
60 million people annually from potentiallydeveloping skin cancer from harmful UV rays,
2021 saw the launch of the Solaveil™ MicNo®
range, extending our range of mineral filters thatare non-whitening on the skin. This novel range
from our partnership with Entekno is inherently
mild and non-irritant and there are no concerns
around skin penetration. For the first time, it ispossible to formulate highly transparent mineralsunscreen systems to meet the needs ofconsumers who want natural, clean sunscreens.
Supporting customers to improve theirformulations was a focus area in 2021,
developing new prototypes to meet specific local
market needs. For example, we developed theAsia Preferred Sensory kit, a series of UV
protection formulations that match the sensory
profile of the leading commercial benchmarksin the region.
In 2021 our UV filters and boosters helped
to protect 55 million people from potentiallydeveloping skin cancer from harmful UV rays.

GRI

Standard Number:
102-15Myth Busters
For some, 2021 was a year of fear and misinformation in solar care, with many myths
surrounding sunscreens and UV filters spread via social media and within our industry.
Misinformation works against the goal of SDG 4: quality education and lifelong learning.
As a result, we launched our Myth Busters campaign, tackling this issue through blogs,
presentations and infographics. As an authority on UV filters and a trusted industry voice,
we have a duty to debunk misinformation and endorse credible science, making people
aware of the facts so they can protect themselves from harmful UV and potentiallydeveloping skin cancer.

Croda International Plc
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31

PeopleGender Balance
SDG Target:
5.5

We continue to measure progress against ourgender balance targets with a focus on balanced
shortlists. We are delighted to report that the
number of women in leadership positions has
increased by five percentage points since the2019 baseline figure and is now 36% of the
population. This year we also saw a 5% increasein the number of female process operators. As
of February 2022, our Board is gender balanced– welcoming two new female Board members.
We also appointed a new female Chief
Information Officer (CIO) and promoted
several women into senior commercial andoperational roles.
For 2022 we have introduced a specific genderbalance target to our long-term incentive
Performance Share Plan. While we will continue
to promote and appoint on merit, we will also
work to ensure we have balanced shortlists andcreate an environment where female employees
can flourish, and believe this new incentive will
help us achieve this.
Diversity and Inclusion
Our target is to achieve gender balance across
our leadership roles by 2030. In 2021 we defineda D&I roadmap identifying actions in five key
areas to ensure we achieve this. These areas
are: diversity data gathering; improving D&I
awareness; developing our D&I brand;measuring and setting KPIs; and alignment
to reward and recognition.

We also completed our Global Diversity
Representation Survey. Carried out acrossall regions where data collection was legallyallowed, this is an important step in gaining abroad understanding of representation in Croda(see Annual Report page 37). We are now
developing specific actions to further understandthe data and identify next steps. In 2022 we willdefine additional metrics focused on wider areasof difference such as ability, ethnicity and sexual
orientation. We have continued to build D&I
awareness across Croda, including runningmasterclasses from thought leaders in the field.
We established a new global development
programme focused on inclusive leadershipcalled Phoenix Rising.

GenderbalancedBoard
as of February 2022

As part of our approach to understanding local
inclusion and diversity needs, our regional
teams also established new D&I sub-committees
to complement our Global D&I Committee. These
have been instrumental in advising regional
management on a range of topics to help deliver
real change in our employee experience.
The Croda D&I brand has been incorporated into
a new set of competencies based on our valuesof Together, Responsible and Innovative, tochampion inclusive behaviours. These have been
widely shared and included in performance
management processes.

+5%

increase in number of female
process operators

Phoenix Rising taught me that diversity is beyond race,
religion, nationality or gender, but about the power of different
opinions and perspectives. Leaders who listen to these different
perspectives and understand others for who they are will enablea much more inclusive organisation, empowering employees
to drive even greater success for our business in the future.
Mulat Hartmann
Regional HR Manager

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Croda International Plc
Sustainability Report 2021

GRI

Standard Numbers:
102-15 and 405-1

Improving More Lives
Supporting our local communities
We are committed to supporting and engaging
with the communities in which we operate.
In 2021, our employees donated 2,750 hours
through 1% Club volunteering, 47.2% of thiswas spent on STEM activities, encouraging thenext generation to consider roles in science,engineering, technology and mathematics.
Inspired by the 2021 United Nations Climate
Change Conference (COP26), we developed
additional materials for Croda ambassadors toshare with schools, connecting everyday changes
we can make to reduce our carbon footprint withthe discussions and negotiations in Glasgow.
In the US, we donated 1,000 solar panels fromour offices and laboratories when we relocatedto Princeton. We arranged to donate the panels
to three non-profit organisations for use in
low-income housing and to support the growingof crops.
We aspire to engage and enthuse many more
students in STEM subjects in the future,developing partnerships with organisations
skilled in connecting with schools in the rightway. In the UK, for example, we signed up to
Tomorrow’s Engineers CODE, organised by
not-for-profit Engineering UK. In doing so wehave committed towards common goals to
support the increase in diversity and number ofyoung people entering engineering careers, andwill multiply our impact at schools in sociallydisadvantaged communities across the UK.
Croda Foundation: from exciting concept
to first funded projects
2021 was the inaugural year of Croda
Foundation. It passed a series of important early
milestones, guided by the newly formed Boardof Trustees and Executive Director, with support

from a Croda-led Foundation Co-ordination
Committee which ensures engagement with
employees and support from senior
management. Croda Foundation achieved
Charity Status from the Charity Commission
for England and Wales in November 2021
(Registered charity #1196455).
First projects
Croda Foundation considers projects for funding
through nominations from Croda employees,
often supported by Croda resources(technology, ingredients, expertise and employee
volunteering). The first round of employee-led
nominations opened in August 2021, with theFoundation receiving 37 detailed proposals
from across the business. The first projects to be
funded were decided by the Board of Trustees
in November, with £150,000 committed tothe successful projects from core funds.
Charity of the Year launched
Supporting the Purpose in Action Awards(see page 16), the Croda Foundation launcheda Charity of the Year programme. Winners of
the awards nominated a charitable organisation
for a shortlist that was voted on by all Croda
employees, with the winning charity receiving a£25,000 donation towards its work.
The winner for 2021, nominated by the UK Life
Sciences team, was the British Heart
Foundation. A UK-based charity that funds
research into heart and circulatory diseases,
BHF is using Croda Foundation’s Charity of theYear grant to support its Patients First services.
This will include increasing the capacity andcapabilities of the Heart Helpline, improving an
online information hub, and creating engaging
activities for peer-to-peer virtual support groups.

“The BHF’s vision is a world free fromthe fear of heart and circulatory diseases.
We fund ground-breaking science todiscover cures, lifesaving initiatives
and vital support programmes for thoseliving with heart and circulatory diseases.
A huge thank you to Croda staff fornominating the BHF! Croda Foundation’s
generous donation of £25,000 will makean incredible difference in our Patients First
programme – ensuring that we cancontinue to be there for those affectedby heart and circulatory conditions.”
Chloe Embury
Head of New Partnerships,
British Heart Foundation.
Supporting health care delivery inchallenging locations
During the early part of the COVID-19 pandemic,
we supported local communities with the Acts ofKindness initiative (SR2020 page 27), building on
the generosity and will of Croda employees tohelp and do more.
We wanted to go further in 2021, targeting help
in places with the greatest need, which are often
not close to our manufacturing sites or offices.
Working with Croda Foundation was the ideal
way to do this: we provided an additional£2 million grant to the Foundation, separate andin addition to its core annual funding of £1 million,
restricted to supporting health care infrastructurein areas of greatest need over 12 months. The
Foundation has already identified and engaged
with partners in India (British Asian Trust), Uganda(Amref Health Africa) and Brazil (Instituto
Amazonas), committing half of this special
funding by the start of 2022.

Croda Foundation projects
America’s
Grow-a-Row
Scott Cardinali from Personal Care, basedin Princeton, USA nominated this project,
requesting £50,000 to use for seed purchase andcoating for AGAR’s Fresh Produce Initiative.

Restricted grant recipients
Amref Health
Africa UK
Providing infrastructure and training for 15,000
village-based health workers and 500 frontline staff
in 20 districts in Uganda, improving the health andwellbeing of around 750,000 people.

GRI

Standard Numbers:
102-15 and 413-1

Association of Womenin Agriculture Kenya(AWAK)
Nominated by Evonne Malefo in Croda South
Africa, this female-led organisation works toempower women towards self-sustaining projects
and lift them from poverty. AWAK was granted£30,000 to support their Resilient Recovery
project.

British Asian Trust

Supporting vaccination delivery and infrastructurein under-served communities in five states in India,
all of which have a high incidence of COVID-19
and low vaccination rates. Including training
22,300 personnel, providing staff for 3,700
vaccination centres and vaccinating up to
50 million people.

Blind SA

Nominated by Quentin Questiaux at Iberchem
South Africa, this Economic Empowerment Project
aims to benefit unemployed blind and partiallysighted people in South Africa. It received a grantof more than £71,000.

Instituto Amazonas

Tackling vaccine hesitancy through educationand digital inclusion, supporting 7,400 people
in 10 indigenous tribes in the state of Mato
Grosso, Brazil.

Croda International Plc
Sustainability Report 2021

33

Fundamentals

Fundamentals
Our social licence to operate is built on trust and is the foundation of everything we
do. We consider all stakeholders in our ecosystem and strive to adopt best practices
in environment, labour and human rights, ethics and sustainable procurement.

NETWORKAll employees temporary andpermanent were paid a living
wage at the end of 2021,
according to Fair Wage
Network criteria.

94%

17%

reduction in process
safety incident rates
compared to 2020.

of palm derivative
volumes purchased
have supply chaintransparency achieved
to refinery.

Awarded Business of
the Year at the World
Sustainability Awards.

Fundamentals
SDG
3.4
3.9

Health, Safety & Wellbeing
Objectives

Targets

Milestones and metrics

We will protect the health, • OSHA Total Recordable• Achieve OSHA Total
safety, and wellbeing at
Injury Rate in the top 10%
Recordable Injury Rate of 0.3
work of all of our people
for the chemical industry
by the end of 2024
and contractors.
• 30% increase in positive
responses to the wellbeing
areas in our Global
Employee Culture Survey

2021 progress• OSHA Total Recordable Injury Rate of 0.73*• Human Performance programme developed, to berolled out in 2022
• Leading with Empathy training for all managers to support
improved wellbeing• Mind UK Mental Wellbeing eLearning module for
employees, now completed by 1,900+ employees
SDG
3.9

Process Safety
We will protect the health • Zero significant process• Conduct an independent peer
and safety of all of oursafety incidents per year
review of our Process Risk
people, contractors and • We will continue to
Reviews (PRR) for high-hazard
the communities in which
processes by the end of 2023
investigate and apply
we operate.
learnings from minor• Develop reporting capability
incidents and near misses
against SASB process safety
indicators by the end of 2021

SDG
6.3
6.4

• Develop and implement a
methodology for water impact
assessment by the end of2021• Reduce our water use impact
by 25% from 2018 baseline by
the end of 2024
• Eliminate process waste tolandfill across our operations
by the end of 2024

SDG
8.8

• 22 (out of 40) PRRs have been peer reviewed• Now report process safety incidents against SASB
Process Safety Indicators• Process Safety Total Incident Rate (PSTIR) 0.034
for 2021

Environmental Stewardship
We will protect the natural • Reduce our water use
environment through theimpact by 50% from our
responsible management
2018 baselineof our water consumption
and waste production.

SDG
8.8

SDG
12.5

• Avanti, Alabaster, US, received a notice of violation for operating
without an appropriate permit for its emissions to air. The sitehas since resubmitted its application as part of its expansion
project and approval is expected in the first half of 2022
• Water Impact methodology refined and trialled with six
manufacturing sites• Manufacturing site at Shiga, Japan reduced water withdrawal
by 75% following investments to use recycled water• Process waste to landfill reduced by 21.4% from2018 baseline

Responsible BusinessWe will verify and maintain • Achieve outstanding CSR • Achieve an EcoVadis score of
our position as the mostperformance ratings
at least 85 by end 2023
sustainable supplier ofacross all themes within
innovative ingredientsthe EcoVadis assessment
within our industry.

• Awarded Business of the Year at the World
Sustainability Awards* Excluding COVID-19 and including acquisition impact

34

Croda International Plc
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GRI

Standard Numbers:
102-15, 303-3, 303-5, 306-2 and 403-1

SDG
8.5

Fair Income
Objectives

Targets

Milestones and metrics

We will contribute to sustainable • Everyone working at Croda • All employees, temporary andand inclusive economic growth bylocations, including
permanent, will be paid a living
ensuring that everyone working at
temporary and permanent
wage by the end of 2022
Croda sites receives a fair income.
employees, and all• All regularly employed
contractors will receive acontractors will be paid a living
living wage that is monitored
wage by end of 2024
and reviewed annually2021 progress• All employees, temporary and permanent,
were paid a living wage at the end of 2021,
according to Fair Wage Network criteria,
one year ahead of target

SDG
4.3

Knowledge Management
We will manage our intellectual
capital, ensuring employees
acquire the knowledge and skills
needed to promote thesustainable development of ourbusiness and promote lifelong
learning opportunities for all.

• Target to be finalised
during 2022

• 100% of employees will receive • Partnered with Ashridge Hult to launch newa minimum of one week’s
Leadership Development Programme
training per year by the end• Ambitious 2030 target still in development,of 2025
to be finalised during 2022

SDG
12.2
12.5

Quality Assurance
We will maximise our resource
efficiency and minimise all types
of waste energy, water andmaterials across our operations.

• Achieve a 99.5% Right First • Achieve a 99.0% RFT rate byTime (RFT) rate
the end of 2024

SDG
3.9

Product Stewardship
We will take a leadership role in• Full life cycle assessments
life cycle assessment of our(LCAs) of our top 100
ingredients and their impact oningredientsthe life cycle of our customers’
products. This will help themarkets in which we operate
move towards more circular
economies and reduce consumer
and employee exposure tochemical hazards.

• Finalise our LCA methodology
with external input andverification by the end of 2021
• Complete 40 LCAs by the endof 2024

Sustainable Sourcing and Supplier Partnerships
We will ensure that all our key• Ensure all key suppliers are • By the end of 2024, all key
suppliers are operating safely,
responding to EcoVadis andsuppliers will be required to
ethically and responsibly, and will
engaging with us to improve
achieve a minimum of thepromote the equitable sharing ofpractices
average score from EcoVadis
benefits within the supply chain.
(or equivalent) or will have an
action plan with timelines toclose gaps
• By the end of 2024, key
suppliers representing at least
50% of our raw material
volumes will be required to sign
up publicly to SBTi or equivalentcarbon reduction targets• By the end of 2024, suppliers ofcrop-based raw materials will
be required to provide supply
chain transparency in a fully
traceable and certified
sustainable manner

GRI

Standard Numbers:
308-1, 404-1, 404-2 and 416-1• Ended 2021 with a RFT rate of 98.33%,
ahead of the run rate required to meet our
2024 milestone• Proactive roadmap developed to ensure
continued progress to 2030 target
SDG
12.2

SDG
14.1

• LCA methodology finalised, compliant with
ISO 14040, supported and verified by
Ricardo• First full LCA completed for Coltide
Radiance

SDG
12.6
12.7

• Suppliers representing 65% of our spend
have been evaluated using EcoVadis• 85% of our palm derivative purchases in
2021 were RSPO-certified• >94% of purchased volumes in 2020 were
mapped back to either refineries, mills orplantations, working with Action for
Sustainable Derivatives (ASD)• We joined Together for Sustainability tocollaborate on mutual supply chaintransparency and to help develop industrywide standards for data sharing

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35

Fundamentals

Health, Safety & Wellbeing
SDG Targets:
3.4, 3.9 and 8.8

We were disappointed to recognise that, in
common with reports from other companies, ourmeasure of personal injuries for employees andcontractors under Croda direct supervision, theOSHA total recordable injury rate or TRIR, rose
during 2021 to 0.73. This excluded the effect ofa small number of work-related COVID-19 cases
and includes acquisition impact. Other
companies consulted agree that they haveobserved a similar pattern, ascribing this to theindirect effects of the continuing pandemic.
Personal injury rates for newly acquired sites
are on average higher than those at moreestablished Croda sites. As they integrate
systems, undergo training and recruit specialist
advisors, these acquisitions are already reducing
the number of injuries.
The pandemic continued to present challenges,
including requirements for home working,absence due to non-work-related infection,and self-isolation. Despite this, our sites havecontinued to focus on safe operation andmaking improvements.
Evolving behavioural safety: Human
Performance programme
We have deployed various approaches forbehavioural safety improvement for many
years. These were standardised in 2015 intoa Group-wide Behavioural Safety Observation
programme, implemented across all
manufacturing sites. To work towards ourambitious low personal injury rate target for

Improving process
safety and reducing
air emissions at
Atlas Point
The ECO operations team at Atlas Point,
USA, has worked diligently to improve
process safety and reduce air emissions in
2021. Following the higher-than-expected

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Wellbeing continued to be a focus in 2021 during
the pandemic, with many employees working
from home.
2030, in 2021 we continued evolving ourapproach with a new Human Performance
programme, designed by a specialist in Group
SHE. This redirects focus from purely frontline
operational staff towards all levels in theorganisation, and aims to maximise learning
opportunities whenever our people interact.
Founded on a unique set of principles, theprogramme creates opportunities for meaningfulconversations about how work is carried out, thereal risks people face, and to empower all
employees to get involved and provide solutions.
Each trial site is applying the new principles toactivities, including individual safetyconversations, group meetings and incident
investigations. Delivery of the full programme
will start early in 2022 at six sites prior to
adoption across all manufacturing sites.
SHE leadership for acquisitions
In 2021 we extensively revised and updated
our training in SHE leadership for new
acquisitions and provided this to sitemanagement teams at Avanti, Iberchem, Parfex
and Alban Muller. Five modules were delivered
across Asia, Europe and the Americas, covering
topics such as management systems and safety

emissions during commissioning in 2020,
modifications were made allowing the plant
to restart in March 2021. Working with local
regulators, all hazardous emission sources
have been eliminated. This involved evaluating
all 190 pressure relief valve installations toensure they exceeded the required
standards and upgrading emergency
response equipment.
Another significant milestone was completionof the plant’s first annual maintenanceculture maturity, and specifics including
management of change, risk assessment andincident investigation.
Wellbeing
Wellbeing continued to be a focus in 2021
during the pandemic, with many employees
working from home. We expanded provisionof our Employee Assistance Programmes toprovide counselling support and introduced
other mental health tools, such as the Shiny
Mind app in the UK. Many sites ran wellbeing
events including social activities, yoga classes,
exercise challenges and leisure classes, suchas painting.
We recognise that employee wellbeing is closely
associated with how people are managed andso ran webinars for our managers in 2021
on Leading with Empathy. We also increased
the number of communications shared with
employees through podcasts and webinars,
as well as online and printed newsletters.
Pleasingly, these actions have resulted in an
improvement in employee satisfaction related towellbeing questions, through an increase in thepercentage of positive responses.

shutdown to inspect equipment and overhaul
machinery, with no major issues found anda problem-free restart. A new system for
operator training and competency
assessment has also been implemented
during 2021, this is now being emulated
across several other sites in the Group as
best practice.
Improvements to process and personal safety
performance has enabled the site to achieve
its target of zero recordable injuries in 2021.

GRI

Standard Numbers:
403-1 and 403-2

Process Safety
SDG Targets:
3.9 and 8.8

Sustainability Accounting Standards Board(SASB) process safety incident rate
Strong process safety management helps toreduce downtime, mitigate costs and regulatory
risk, and maximise productivity. By contrast, a
process safety incident (PSI) can lead tooperational disruption, facility damage,
reputational harm, and increased regulatorycompliance and remediation costs. In line withinvestor and other stakeholder needs, we havedevised a system for data collection and reportingin line with the criteria of the SASB.
Due to the small number of events taking place,these metrics are not appropriate to use inimprovement processes; we will continue using
our various internal measures to monitor andprioritise improvements, with internal leading andlagging indicators of process safety performanceat all relevant manufacturing sites. We will also
publish a new suite of internal guidance
documents created by Group SHE specialists in
consultation with process safety specialists at
manufacturing sites and with input from externalrisk management consultants.
In January, our manufacturing site at Gouda, theNetherlands, had a fire in an oil-water separation
pit, which also damaged a raw material storagetank. We are pleased to report that there were
no injuries or environmental harm, with allmaterials contained on site. Since the incident,
the site has introduced a number of
improvements to address the findings from ourinternal investigation.

In 2021, using our internal measureof performance:

17%

reduction in PSI rates compared to 2020,
the majority being activation of protective
systems to ensure plants remained
within safe operating limits

25%

reduction in loss of containment events,
none of which were significant releases

Environmental Stewardship
SDG Targets:
6.3, 6.4 and 12.5

Water use impact
Water is a vital resource, and one to beconserved, yet it is also required at almost every
stage of a product’s life cycle. We arecommitted to pioneering corporate water
stewardship practices and have taken important
steps to reduce the water footprint within our
direct operations.
By the end of 2021, our total water withdrawal
had reduced 10.6% since 2018, whilst
production volumes increased by 5.8%. Most
notably, our manufacturing site at Shiga in Japan
reduced water withdrawal by 75% in 2021
following investments in closed loop cooling
towers that use recycled water.
In line with our 2030 target to halve our water use
impact from a 2018 baseline, we are currently
finalising the development of a methodology that
goes beyond the volumetric reduction of water
use and enables us to quantify the local
environmental impact associated with our water
management practices. Our methodology
accounts for volumetric consumption, local water
stress at source, water displacement effects andthe quality of discharged water.

Developed as a questionnaire based on extensive
environmental indicators (for example, physical,
biological, chemical) and a weighted scoring
system, our water use impact metric generates asingle impact score for each manufacturing site.
This score reflects the current environmental
burden of water use and helps to define a realistic
water reduction roadmap. We also used the WRI
Water Risk Aqueduct tool and Ecolab Smart
Water Navigator to identify the most substantive
water-related risks within our direct operations.
We plan to roll out our water impact methodology
to sites using a risk based approach in 2022.

Process waste to landfill
In 2021 we reduced our process waste sent tolandfill by 21.4% from our 2018 baseline, whichis good progress as we work towards zeroprocess waste to landfill from our operations by
the end of 2024. Of our 19 principal
manufacturing sites, only eight sent waste tolandfill during 2018 (baseline year).

Waste management
Iberchem, our global fragrance and flavours business based in Spain, has championed waste
management best practices through robust policies and employee education programmes.
In recognition of its achievements, the company received a Zero Waste Certification fromAENOR, the Spanish organisation responsible for the development and distribution oftechnical standards. Iberchem attained the certification by diverting more than 97% of its
waste from landfills and incinerators to recycling and recovery facilities (7% above certification
requirements). The evaluation covered 19 categories of waste, including paper, plastic, waterand electronics. This represents a significant step in transitioning away from a linear model
towards a circular economy.

Water stewardship

857,149m

3

of water saved by our manufacturing site
at Shiga, Japan

GRI

Standard Numbers:
303-3, 306-1, 306-2, 307-1, 403-2 and 403-6

Our Avanti, Alabaster site in the USA was given a notice of violation by the Alabama Department ofEnvironmental Management (ADEM) for operating without an appropriate permit for its emissions toair. The site has since resubmitted its application as part of its expansion project and is working withthe regulator to gain approval, which is expected in the first half of 2022.

Croda International Plc
Sustainability Report 2021

37

Fundamentals

Responsible BusinessResponsible business
Since 2012 we have used the EcoVadis
sustainability rating framework as a measureof our performance and a tool for continual
improvement to maintain our position as asustainability leader. The methodology isevidence based and covers assessment
against environment, labour and humanrights, ethics, and sustainable procurement.
We received a platinum award at our mostrecent assessment in 2020, placing us in the
top 1% of more than 75,000 companies
assessed globally.
During 2021 we engaged with stakeholders
within the EcoVadis organisation to better
understand our score and share ideas around
potential methodology improvements.
In early 2022 we will submit our most up-to-dateassessment and will also progress ourengagement with the methodology team at
EcoVadis, supporting further developments thatwill help drive continual improvement insustainability practices for the benefit of all
respondents to EcoVadis.

Increasing visibility of
non-financial data

In October we were delighted that oursustainability leadership was recognised
as we won Business of the Year at theWorld Sustainability Awards.
World Sustainability Awards is a global
platform celebrating excellence incorporate and social sustainability.
Organised by Sustainability Leaders,
73 companies were shortlisted acrossthe 12 awards categories. The judges
commended not only our ambitious
Commitment to 2030, but also ourachievements against our 2015-2020
sustainability targets, demonstrating that
Croda are leading the way in reducing
corporate CO2 emissions and improving
human rights. They remarked that ourachievements are testament to how fully
we have embedded environmental, socialand corporate governance into ourbusiness model, also commenting that
few organisations have embraced thefull definition of sustainability ascomprehensively as Croda, with our
holistic approach to sustainability an
example for others to follow.

In 2021, we implemented SpheraCloud,cloud-based sustainability reporting
software that has been rolled out to ourglobal locations and other functional
stakeholders for reporting of quarterly
non-financial data. As well as automating
data analysis and streamlining quarterly
reporting, real value is generated by thissoftware in the increased visibility of
non-financial data across our business.
Site, regional and sector leadership teams
can view dashboards showing nonfinancial performance, trends and progressagainst our 2030 targets. This is helping
inform decision making and elevating the
profile of non-financial data, which is
critically important to successfully deliver
our sustainability strategy.
EcoVadisPlatinum
award received in 2020
Global leader

top 1%

of more than 75,000 companies
assessed globally

Fair Income
SDG Target:
8.5

Living wage
We continue to pursue our global living wage
target, one of our sustainability KPIs linked to the
UN Sustainable Development Goals (SDGs). In
2020 we forged a partnership with the Fair Wage
Network (FWN) to establish living wage levels
across the world using an independent andeconomically rigorous methodology. Throughout
2021, we compared our global wage levels toliving wage comparators provided by the FWN
and made all necessary adjustments to ensure
all our employees are now paid a living wage asa minimum.

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As far back as 2018 we gained accreditation in
the UK as a Living Wage Employer from the Living
Wage Foundation. In 2022 we will continue toensure all UK employees and regular contractors
are paid at, or above, the rates advised.
Our focus now is ensuring living wage levels arereviewed annually and necessary adjustments towages are made to continue paying a living
wage to all our employees. We are also
beginning to progress towards our Commitment
to pay a living wage to all regularly employed
contractors globally by the end of 2024.

NETWORKKnowledge Management
SDG Target:
4.3

Our 2025 target is to ensure all employees havea minimum of one week of training each year.
This can be on the job, classroom-based inperson or virtually, self-study, an online
programme, professional training or taking partin mentoring or coaching.
To support this ambition, and in response to
the COVID-19 pandemic, we continued tosupport a significant number of online training
programmes available to employees, with morethan 2,000 courses available on our learning
management system, MyCroda. These courses,
many of which are available in multiple
languages, cover topics including personal
development, computer skills and leadership.
We moved much of our classroom training to a
virtual setting in conjunction with our internallearning and development teams and withexternal partners, such as Ashridge Hult
(leadership development programme).

Customer insights
Recognising that the needs and expectations of our customers are evolving, in 2021 weestablished a Customer Insights Centre of Excellence to uncover opportunities to improvecustomer experience and enhance the value we add. This work is a “voice of the customer”
research programme, consisting of three key feedback mechanisms: an online customer
survey (qualitative and quantitative); customer interviews; and focus groups. The insights
gained give a deeper understanding of our customers and how we can support their goals,
as well as position Croda effectively for future success.
Sustainability is core to the insights approach, alongside other key metrics such as productquality, innovation, customer service and collaboration. As a result of the work completed in
the first year we have gained intelligence that will inform more targeted and relevantinteractions with customers on sustainability across regions and sectors.

We continued to support asignificant number of online
training programmes
available to employees,with more than 2,000
courses available on ourlearning management
system, MyCroda.

Quality Assurance
SDG Targets:
12.2 and 12.5

Maximising right first time, minimising waste
Minimising energy and material investment in our
products means maximising right first-time rates
in production. If a product requires additional
processing, this increases CO2 emissions.
Where a batch is defective, that could mean
tripling emissions based on producing thedefective batch, recovery of that batch andmanufacturing a replacement batch. This is an
important perspective on preventing waste inproduct manufacture.

manufacturing sites achieve our strategic goals.
At many sites this means having only one or
two deviations in production each year. With
multiple manufacturing sites, all with their own
unique features, the roadmap will allow each toselect the right approach for their situation andmaximise progress. The toolkit is being rolled
out to all manufacturing sites in 2022, and theroadmap will ensure we make successfulprogress towards our 2030 target of 99.5%
right first time.

Previously, the focus on not-right first time
incidents was purely on failures to meet the end
specification. By now capturing and studying theunderlying quality “near misses” and process
deviations we halved the number of failures inthree years. We are very pleased with theprogress made in 2021, ending the year aheadof target and, to take this further in a proactive
manner, we have taken a suite of quality tools
and techniques and created a roadmap to help

Quality GMP Certificates
We have contributed to the success of EFfCI
and EXCiPACT GMP Certification Schemes forcosmetic ingredients and pharmaceutical
excipients for 10 years. These certificatesprovide independent and reliable confirmationthat the operations at our manufacturing sites
conform to Good Manufacturing Practice (GMP)
standards. Our sites hold 15 EFfCI GMP
certificates and eight EXCiPACT certificates.

GRI

Standard Numbers:
404-1 and 2

Many Croda customers demand physicalaudits of suppliers to ensure products are
manufactured to a suitable standard of GMP,
especially in pharmaceutical industries.
Increasingly, the cosmetic sector is following
this lead. We have opted to make these GMP
certificates and audit reports available tocustomers to help with these auditing
requirements.
Prior to the pandemic there was a reasonableuptake of this offer, but many customers stillinsisted on sending their own auditors to oursites. With travel restricted during the pandemic
and the number of visitors to sites reduced,
many customers changed their position and now
accept our GMP certificates instead of sending
auditors. This travel saving has contributed to an
overall reduction in emissions while maintaining ahigh standard of audit.

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39

Fundamentals

Product Stewardship
SDG Targets:
3.9, 12.2 and 14.1

Our 2030 target to complete life cycle
assessments (LCAs) for our top 100 ingredientsis driven by our commitment to understand theimpact of our products beyond factory gates
and take a proactive role in the transition to acircular economy.
We are collaborating with LCA experts Ricardo
to develop a bespoke cradle-to-grave LCA toolthat follows ISO 14040 requirements and can beconsistently applied to products across ourbusiness sectors. This tool examines raw
materials, energy, transport, emissions andwaste associated with core upstream
procurement activities, manufacturing processes
and downstream product use and disposal. It
subsequently reports on product specificenvironmental indicators including global
warming potential, ecotoxicity, land use,eutrophication and resource depletion. At
product level, LCA outcomes will be used tounderstand the environmental burden of key
stages, materials and processes, and so identify
the hotspots in the life cycle of a product while
also demonstrating the benefit of including
Croda products in a customer formulation. At
the corporate level, the results will informbusiness decisions and prioritisation ofsustainability actions, and add value to ourcommercial dialogue, creating opportunities
for future collaboration and alignment with
our stakeholders.
By the end of 2021 we had completed our firstpilot LCA (see case study) using our new tooland methodology. In 2022 we will complete afurther six full LCAs deploying central resources,
with a view to training others throughout Croda
in 2023 to use the tool. The results will then be
owned across our business sectors, who will
drive improvements, innovation and customer
collaboration using the results of the LCAs. This
will put Croda in a strong position to accelerate
progress and remain on track to complete our
LCA target by 2030.
LCAs and greater understanding of theenvironmental impacts of our product portfolio
can also help us to anticipate and stay ahead of
regulatory changes. Globally, registration
schemes such as EU REACH are becoming
more prevalent, having an impact on how weplan, launch and roll out products. Registration isfast becoming the price of entry for ingredients,
creating increased demands.
Global Product Safety TeamOur recently formed Global Product Safety Team
ensures safety and sustainability considerations
are built into a product through the innovation
phases. Building on regional product safety
expertise developed over many years, this new
global function focuses on areas such as study
design for existing testing requirements, while
taking longer-term views such as next
generation risk assessments. Our extensive
regulatory expertise enables us to react tochanging regulatory demands to meet ourcustomers’ expectations. The regulatory
landscape is complex, with a total of 112
countries globally with cosmetic legislation, of
which 48 countries have both chemical andcosmetic legislation, 52 countries have cosmetic
legislation only and 12 countries have cosmetic
legislation and draft chemical legislation. We
work with external partners and customers togrow and develop our knowledge, to provide
expert product support, and prepare forupcoming legislation such as the EU Green Deal.

Coltide Radiance – sustainability in use
Given the verified downstream benefits ofColtide Radiance – prolonging the lifetime ofgarments and reducing clothes waste by 10%,58.8 million m3 water savings and 243,400
tonnes of CO2 emissions avoided in 2021 – wewanted to understand the net environmental
footprint of this biopolymer and get a better
appreciation of its entire sustainability
credentials. The LCA revealed a very low
environmental burden associated with the
manufacturing stage of Coltide Radiance, thebiggest impacts being concentrated aroundthe product in use stage (laundry washing).
The climate change and water use impacts foreach 1kg of clothes washed are proved to belower when using fabric conditioners containing
Coltide Radiance than those without. This study
highlighted an opportunity to collaborate withcustomers on pursuing environmental savings in
the product in use stage, as this action, even if
at the expense of higher manufacturing burdens,
will yield a more sustainable result overall.

Coltide Radiance – environmental impact categories by life cycle stage
Water use
Ecotoxicity, freshwater
Resource use, fossils
Human toxicity, cancer
Ionising radiation
Eutrophication, freshwater
Human toxicity, non-cancer
Ozone depletion
Particulate matter
Land use
Climate change
Eutrophication, marine
Acidification
0%

20%

40%

60%

80%

100%

Upstream supply chain – raw materials
Croda operations
Downstream fabric conditioner manufacturing, use and disposal

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Croda International Plc
Sustainability Report 2021

GRI

Standard Numbers:
416-1

Global reach and regulatory expertise

Chemical and cosmetic legislation
Cosmetic legislation and draft chemical legislation
Cosmetic legislation/import check
No legislation

Sustainable Sourcing
and Supplier Partnerships
Supplier engagement
Confirming environmental integrity and social
accountability is an increasing prerequisite in
our upstream supply chains. During 2021
we arranged sustainability training for all
procurement individuals and engaged in
discussions with suppliers. The current andfuture selection of global suppliers is based oncollaboration and on aligning our goals, forexample, SBTs, new sustainable innovations,public commitments for carbon reduction, andsupplier understanding of their overall impacts
on nature and the environment.
Palm derivatives
Our use of palm-derived
raw materials is strongly
supported by RSPO supply
chain certification, supply
chain mapping andtransparency.

Thailand (1.2%), with 1,025 mills representing
90% of traceable volumes.
Our policy has been to preferentially source fromsuppliers with NDPE (no Deforestation, no Peat,no Exploitation) commitments and, in 2021, 81%of our volume was from suppliers with NDPE
commitments and 74% of our volume is fromsuppliers with established grievance procedures.
However, from 2022 we shall require that all
suppliers comply with NDPE, ensuring
elimination of links to deforestation.
With RSPO transformation of our consumer
product supply chains 99% complete, we
focused particular attention on our Performance
Technologies palm derivative supply chains. In
2021 our palm derivative volume consumption

SDG Targets:
12.6 and 12.7

increased in absolute terms by 13% over 2020
and, despite unprecedented challenges with
global restrictions in supply of RSPO-certified
raw materials, we achieved a further 10%
conversion over 2020 with 85% of our global
volumes physically certified.
Sustainable Palm Index
The Sustainable Palm Index (SPI), originallycreated in 2016 by L’Oréal, and later deployedwithin the ASD initiative, is a comprehensive
evaluation scorecard for direct suppliers of palmoil (PO) and palm kernel oil (PKO) derivatives.
Assessing commitments, efforts and practices
towards responsible PO and PKO derivatives
supply chains.
Our SPI score is 85/100 against the averagescores of 56 and 72 in surfactants andoleochemicals respectively.

In 2021 85% of our global palm derivatives
consumption was RSPO physically certified by
Mass Balance. In Europe and the Americas we
achieved 99% transformation to RSPO, whereasin Asia we continue to face challenges
completing the conversion.

Croda has been an invaluable founding member of
Action for Sustainable Derivatives, actively supporting,engaging and promoting the initiative within thederivatives sector with upstream and downstream
Working with Action for Sustainable Derivatives,*
supply chain players, and more broadly in sustainable
our 2020 supply chain mapping covered 96.8%
of our total volumes of palm-based raw materials palm forums. Croda brings a wealth of experienceand suppliers responded to the upstream
and a voice of constructive input to help shape andtransparency investigations representing 99.31%
deliver ASDs strategy to progress NDPE complianceof the palm feedstock volume equivalent.
Supply chain transparency was achieved for:and responsible palm derivatives sourcing through• 94% of volume to refineries
a collaborative, industry-wide and impact• 90% of volume to mills
oriented approach.
• 27% of volume to plantations
Greater than 98% of traceable volumes originate
from Indonesia (46%), Malaysia (51%) and

Edwina McKechnie
Associate Director BSR* Action for Sustainable Derivatives (ASD) is a collaborative initiative driven by derivatives users to transform their supply chains by increasing transparency, monitoring risks,engaging the sector, and generating on-the-ground impacts.

GRI

Standard Numbers:
308-1 and 416-1

Croda International Plc
Sustainability Report 2021

41

Fundamentals

Michelle Fargen on supply chain partnerships
To maximise the value gained from our sustainable supply chains, Croda has fully aligned

MF with SDG17, Partnerships for the Goals, to increase our levels of transparency across all

suppliers and supplier partnerships. This is important for the chemicals industry, and it isespecially important to Croda given our high focus and use of bio-based raw materials which may
have material environmental and socioeconomic impacts. To expedite the capture of thistransparency information, Croda is working with suppliers, customers and industry groups todevelop industry-wide standards for data sharing through our partnerships with Together for
Sustainability and EcoVadis Supply Chain. Working together we can transition the provision of thisinformation from our suppliers from its current complexity to business as usual.

Michelle Fargen
Global Head of Procurement andSustainable Sourcing

Advocacy in supporting sustainable palm
Throughout 2021 we engaged in many forums
and industry meetings, including:• Active participation in the UK Sustainable
Palm Oil Initiative (SPOI), including theindustry-led UK Roundtable on Sourcing
Sustainable Palm Oil, under the Partnerships
for Forests programme• Statement of support from businesses foran effective EU law to halt the trade incommodities and products linked todeforestation and conversion• Participation in industry discussions inestablishing due diligence legislation for
deforestation-free supply chains• Strong support and advocacy for ASD
membership via global webinars
At the RSPO’s 18th General Assembly held in
December, a Resolution was proposed byWWF, the Zoological Society of London andindividual member companies within Action for
Sustainable Derivatives to enhance therobustness of the RSPO Mass Balance model toaccelerate uptake of certified sustainable palmoil. Support for the resolution was delivered by
Chris Sayner, Croda Vice President – Customer
Alliances, at the General Assembly and was
carried with 83.13% votes in favour.

Ingredient integrity>70

ingredients will be ISCC certified in 2022

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Croda International Plc
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In my newly created role as Global Head of Sustainable Sourcing, I have connected with 100+
procurement and supply chain professionals across Croda to increase their awareness regarding
sustainability topics and how we can engage with suppliers to help meet our joint sustainability
goals. I plan to continue this work in 2022 by further engaging with our key suppliers to discuss theimportance of sustainability, transparency and collaboration – with a goal to reward suppliers who
are aligned with Croda.

International Sustainability and Carbon
Certification (ISCC)
ISCC is a globally
applicable certificationthat promotes the
reduction ofgreenhouse gas
emissions, sustainable
land use, protection of the natural biosphere,
and social sustainability for agricultural, forestry
and other raw materials. Along with RSPO, it is
one of the main international vegetable oil
certifications for chain of custody.
Following a successful audit and certification of
our Gouda site, and support from rapeseed raw
material suppliers, more than 70 ingredients will
be ISCC certified in 2022, confirming bio-based
renewable carbon content originating fromsustainable ISCC certified sources (massbalance), supporting the sourcing of sustainable
vegetable oil.
With ISCC we are committed to supporting theshift towards the circular economy andbioeconomy. ISCC certification is a way toprovide traceability and transparency throughout
our vegetable oil supply chain and show
customers that good agricultural practices arebeing used, human rights are respected and that
our raw materials are not contributing to
deforestation or harming biodiversity.
Union for Ethical Biotrade (UEBT)As a member of UEBT, Sederma
together with Crodarom and Alban
Muller have six ingredients verified
according to UEBT responsible
sourcing criteria. This verification
focuses on important requirementsfrom the UEBT standard, including
requirements on human rights, critical socialand environmental considerations to meetcompany due diligence, and to ensure no
negative practices.

Sustainable Castor Association

We joined the Sustainable Castor Association inJune 2021. This unites stakeholders fromthe various sectors of the industry – farmers,
oil mills and refineries, derivatives processors andother organisations with a direct or indirect
involvement in the castor oil supply chain –to develop and implement standards forsustainable castor. We will promote adherence
to the SuCCESS (Sustainable Castor Caring forEnvironmental and Social Standards) code
throughout our castor supply chains, in a similar
approach to our successful work with RSPO
and palm.

In 2021 we joined Together for Sustainability(TfS), an organisation that, in partnership with
33 major chemical companies, focuses onsustainable procurement activities. Members
work together to align supplier assessments andaudits, share supplier results, and influence
suppliers to improve performance in key areasof sustainability: environment, labour and humanrights, ethics, and sustainable procurement. TfS
is working to create a uniform framework for
capturing scope 3 emissions associated with the
products purchased by its membership. As aresult, we will have measurable results to support
supplier collaboration discussions and to makepurchasing decisions in support of the mostsustainable supply chain partners.

GRI

Standard Numbers:
102-12, 204-1 and 308-1

Glossary

Report abbreviations

PBT

Profit before tax

Plc

Public limited company

Ppt

Percentage point
Process Risk Review​£mMillion pounds sterling

PRR​

®

Registered trademark

PSI

Process Safety Incident

Degree Celsius

R&D

Research and Development

AGAR

America’s Grow-a-Row

RFT

Right First Time

AMREF

African Medical and Research Foundation

RSPO

Roundtable on Sustainable Palm Oil

ASD

Action for Sustainable Derivatives

SASB

Sustainability Accounting Standards Board

AWAK

Association of Women in Kenya

SBT

Science-Based Target

BEIS

Department for Business, Energy and Industrial Strategy

SBTi

Science Based Targets initiative

BHF

British Heart Foundation

SBTN

Science Based Targets Network

Business for Social Responsibility

Scope 1

Direct emissions from our own, or controlled sources

Bio-based organic​ Carbon-containing, from renewable,non-fossil sources​

Scope 2

Indirect emissions from the generation of purchased electricity,
steam, heating and cooling

Scope 3All other indirect emissions that occur in our value chain

SDG​

Sustainable Development Goal​

SHE​

Safety, Health and Environment​

SIA

Sustainability Impact Assessment

SPI

Sustainable Palm Index

SPOI

Sustainable Palm Oil InitiativeSR

Sustainability Report

SSI

Statens Serum Institute

STEM

Science, Technology, Engineering and Mathematics

SuCCESS

Sustainable Castor Caring for Environmental Standards

TCFD

Task Force on Climate-related Financial Disclosures

Te

Tonne

TeCO2eTonnes carbon dioxide equivalentTM

Trademark

TfS

Together for Sustainability

TRIR

Total Recordable Injury Rate

UK

United Kingdom

UEBT

Union for Ethical BioTrade

UN

United Nations

UNGC

United Nations Global Compact

USA

United States of America

UV

Ultraviolet

VOC

Volatile organic compound

WHO

World Health Organization

°C

BSR

c.

circa

CEO

Chief Executive Officer

CIO

Chief Information Officer

CISL

Cambridge Institute for Sustainability Leadership

CO2

Carbon dioxide

CO2eCarbon dioxide equivalent

COP26

26th United Nations Climate Change Conference

Defra

Department for Environment, Food and Rural Affairs

D&I

Diversity and Inclusion​

ECO

Environmentally Conscious Option range of bio-based products

EEMEA

Eastern Europe, Middle East and Africa

EFfCI

European Federation for Cosmetic Ingredients

ESG

Environmental, Social, and Governance

EXCiPACT

Certification scheme for pharmaceutical excipients

FWN

Fair Wage Network

GHG

Greenhouse gas

GMP

Good Manufacturing Practice

GRI​

Global Reporting Initiative​

HDI

Human Development Index

IFP

Industry of Future Programme

IPCC

Intergovernmental Panel on Climate Change

ISCC

International Sustainability and Carbon Certification

ISO

International Organization for Standardizationkg​

Kilogram​

KPI

Key Performance Indicator

LCA

Life Cycle Assessment

Cautionary Statement

m3

Cubic meters

mRNA

Messenger ribonucleic acid

MW

Megawatt

NDPE

No Deforestation, no Peat, no Exploitation principles

Net zeroEliminating almost all scope 1 and 2 emissions andsignificantly reducing our scope 3 emissions, with any
residual supply chain emissions permanently offset throughfully validated and approved schemes.

The information in this publication is believed to be accurate at the date of its
publication and is given in good faith but no representation or warranty as to its
completeness or accuracy is made. Suggestions in this publication are merely
opinions. Some statements and in particular forward-looking statements, by theirnature, involve risks and uncertainties because they relate to events and depend on
circumstances that will or may occur in the future and actual results may differ fromthose expressed in such statements as they depend on a variety of factors outside
the control of Croda International Plc. No part of this publication should be treated as
an invitation or inducement to invest in the shares of Croda International Plc andshould not be relied upon when making investment decisions.

NPD

New Product Development

NGO​

Non-Governmental Organisation​

NPP

New and Protected Products

Organic​

Carbon-containing, from renewable and/or fossil sources​

OSHA

Occupational Safety and Health Administration

Designed and produced by Black Sun Plc (London)
www.blacksunplc.com
This Report is printed on UPM Fine Offset which has been
independently certified according to the rules of the Forest
Stewardship Council® (FSC®). Printed in the UK by Pureprint,a CarbonNeutral® company. Both manufacturing paper
mill and the printer are registered to the Environmental
Management System ISO 14001:2004 and are Forest
Stewardship Council® (FSC) chain-of-custody certified.

Croda International Plc
Sustainability Report 2021

43

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