IFRA-IOFI
Sustainability Report
2020-21

Sustainability
Charter

Introduction
Martina Bianchini &Sven Ballschmiede
Welcome to the first annual IFRA-IOFI
Sustainability Report.
Formally launched last year, the Charter has
been long in the making. Since 2016 we haveworked with members and external experts todiscuss, develop and refine the program andcreate an ambitious new approach tosustainability across the two industries.
The Charter is a voluntary framework that has
been signed by 126 companies. It represents acollective commitment to making the difference
for the planet, for people and for our businessacross five Focus Areas - responsible sourcing,
reducing our environmental footprint, employee
well-being, product safety, and transparency andpartnerships.
In this Sustainability Report, we get an
opportunity to present the state of play - howthese companies are fulfilling or working
towards the Commitments in the Charter.

help raise the bar across the industry.
We cannot ignore the political, economic andsocial context that accompanies this first annual
Sustainability Report. The COVID-19 pandemic
continues to dominate our lives and ourbusinesses, and has emphasized the need for
greater sustainability.
Although the Charter is a project that has beenyears in the making, its time has truly come: anopportunity to underline our sectors’commitment to more responsible sourcing andproduction, to employee well-being, and to
economic sustainability.
We will continue to highlight and reinforce thiscommitment both through the Charter and in ourwork on public policy globally, including the EU
Green Deal and the US Sustainability Agenda, as
well as initiatives in Asia-Pacific and Latin
America.

The results are impressive, both in terms of thepercentage of the industries by market share andin terms of individual companies (our industries
including many small or medium-sizedenterprises).

This first Sustainability Report represents abenchmark for us to measure progress in futureyears. We hope to see, in the next twelve
months, more companies making progressalong the sustainability path, and morecompanies committing to the Charter.

The results reflect the fact that many companies
have long-standing sustainable development
commitments and have been engaged ininitiatives for many years. In the coming years wehope to further improve thanks to the Charter's
collective framework and the tools provided to

IFRA and IOFI will continue to provide
signatories and all members with its best efforts,
expertise and support to help maintain thefragrance and flavor industries' continuous
efforts on sustainability, in the context of theUnited Nations Sustainable Development Goals.

Executive summary
This first IFRA-IOFI Sustainability Report is asignificant milestone on the sustainability
journey of the fragrance and flavor (F&F)
industries.
Since 2016, IFRA and IOFI, as the global
representative bodies of the F&F industries, haveworked with members to develop a common
Sustainability Charter.
The Charter seeks to define what sustainability
means for our industries and creates a sectoral
framework. Such frameworks are importantvalue creators, helping to improve performanceand raise the bar on sustainability acrossindustries.
This report highlights the state of play of the F&F
industries in the five Focus Areas of the Charter:
Ensure responsible sourcing throughout thevalue chain
Reduce our industries’ environmental
footprint and address climate change
Enhance the well-being of employees andensure a rewarding labour environment
Be at the leading edge of product safety
Be transparent and a reliable partner forsociety
The Charter was formally launched in July 2020
with around 100 signatory companies - a figurethat exceeded expectations and that showed theinterest and willingness of F&F companies toengage in a common initiative and makecommitments on a series of shared goals.
Once the Charter was launched, the next step, inautumn 2020, was to invite all signatorycompanies to participate in a baseline survey on
their own performance against the five Charter
Focus Areas in order to provide a representative
picture of the overall sustainability maturity levelof our industries.
Of the now 126 signatories to the Charter, morethan 80 per cent responded to the 31-question
survey on the five Focus Areas and 17
Commitments.
It should be noted that in the F&F industries, a
relatively small number of large global
multinational corporations represent more thanfour-fifths of the market, while the remainder ismade up of small and medium-sized enterprises.
The results therefore need to be interpreted withthese market dynamics in mind.
The results will be a baseline against which we
can measure progress in the industries. That
overall picture is an impressive one: the results,
which will be the baseline for future
Sustainability Reports, show a high level of'maturity' in the industries on sustainability.
Across the five Focus Areas, we consistently see
more than two in every three companies having
strategies in place, or in the pipeline, to addressthese sustainability challenges. When mapped
against market share, the overwhelming majorityof the F&F market has plans in place to improve
its performance.
On responsible sourcing, the awareness andlevel of active engagement in the F&F industries
is high. More than 70 per cent of respondents including the companies that make up the vast
majority of the market - engage in dialogue with

farmers and local communities, supporting
equitable practices, community development andeducation.
The bulk of the market has advanced humanrights and labor standards roadmaps, as well as
biodiversity action plans. Our Toolbox of laws
and sustainability programs provide the toolsthat will help other companies develop similarroadmaps and action plans.
On environmental footprint and climate change,
the overall footprint of the F&F industries isrelatively small and the industries exhibit a goodenvironmental profile. More than 75 per cent ofrespondents, and more than 90 per cent of the
F&F market by market share, have a global
environmental strategy, implementing ecodesign measures and acting to reduce
consumption and waste.
Between a fifth and a third of respondents again, representing the lion's share of the market- have waste roadmaps or are implementing new
business practices to reduce energy and water
consumption, greenhouse gas emissions andwaste. Uptake of green chemistry principles isstrong and has the capacity to grow.
IFRA and IOFI have taken steps to improveunderstanding of the concept of green chemistryby hosting a Masterclass for its members in
March 2021 with one of the concept’s founders,
Dr John Warner.
On employee well-being and offering a rewarding
labor environment, the F&F industries alreadydemonstrate high standards. More than 70 per
cent of respondents have occupational healthand safety strategies that go beyond
implementation of regulatory requirements inplace and nearly half are using internationallyrecognized evaluation tools.
Around half of respondents - including thebiggest companies - exhibit best practice on
occupational health and safety. This includes
offering equal opportunities and fair treatment of
all employees, promoting diversity and inclusion,and providing training and development
opportunities to upgrade professional skills. The
vast majority of the industries' employees
benefit from this high standard.
The COVID-19 pandemic has presented manyoccupational health and safety challenges for
the F&F industries, and IFRA and IOFI havesupported member companies through thedevelopment of best practice guidance
documents and by monitoring legislative andpolicy changes around the world.
F&F companies play an essential role in the two
industries' value chains – delivering our products
into high-quality food supply chains and thehygiene and cleaning product supply chains.
Consumers expect high-quality and reliable
products that would contribute to their healthand well-being at a time of crisis: the fragrance
and flavor industries worked hard to deliver
essential products to our customers and to
consumers, keeping facilities open, supply
chains working, and employees safe.
The F&F industries are already at the leading edgeof product safety – a non-negotiable requirement.
In addition to complying with our respective

Codes of Practice, compliance with existing
regulations is crucial.
Dialogue helps to support product safety, andour survey highlights how more than 90 per centof respondents engage in dialogue withdownstream customers on product stewardshipand how more than a quarter provide educational
support in a proactive way to ensure optimum
safety and strengthen confidence in the safe useof our materials.
On transparency and partnerships, more than
three in four respondents have a global
responsive governance strategy in place,including all the largest companies. More than
three in every five respondents employ anticorruption measures that go beyond legal
requirements and approximately two-thirds areengaged in ongoing dialogue with politicalstakeholders, with almost every signatorycompany involved in some form of dialogue.

webinars, speaker sessions, and an online
Toolbox with information on good practices,
details of legal and regulatory frameworks andsustainability programs, and international
disclosure standards.
In 2021, we will establish a new standing
Sustainability Committee to further refine ourcommon framework and drive theimplementation of the Charter and improve its
governance. We will also work to expand thegeographical scope of the Charter and thenumber of signatories.
But our goals will remain consistent: to raiseawareness in the sector, provide a common
framework for action and implementation, build
dialogue and partnerships and report on our
progress. We ultimately seek to make adifference for the planet, for people and for ourbusiness through our common, sectoral
sustainability framework.

The impressive results provided by signatories
complement the work done by IFRA and IOFI as
global representative bodies of the F&F industries.

We look to work with our customers, partners
and stakeholders to design the safe andsustainable products of the future.

We are engaged in sectoral partnerships withorganizations such as the Union for Ethical
Biotrade and GIZ, a German development
agency, to develop sustainability best practices.

And, with a strong reference to the United
Nations Sustainable Development Goals (SDGs),
the fragrance and flavor industries will continue
to use the Charter to contribute to public policy
objectives and to communicate about ouractivities according to international reporting
standards and the SDGs.

IFRA and IOFI also support signatories by
providing tools and information throughResults &Activities
2020-21

Introduction
Results & Activities 2020-21

About the Report
This first annual IFRA-IOFI Sustainability Report
is an important one.
First, it provides an opportunity to introduce theSustainability Charter to a wider audience: toshare information about our journey to raise thebar for sustainability in our industries.
Second, it provides the first data on the 'maturity
level' in our industries against the Commitments
contained in the Charter. It sets the benchmark
for future reports, allowing us to measureprogress in the coming years and for signatorycompanies to drive improvement.
Part A: State of PlayThe first part of the Report is based on a surveyof signatory companies. More than 100
companies responded to the survey - a response
rate of more than 80 per cent, covering the vast
majority of the industries by market share. This
feedback allows us to present a representative
picture of sustainability across the industries.
The survey included 31 questions based on thefive Focus Areas and 17 Commitments.
Signatory companies gave a self-assessment of
their sustainability efforts - an indication ofwhether they had programs in place or wereplanning initiatives; the extent to which theyreported their work; and how they complied withinternationally-recognized norms and standards.
The results of the survey are set out in two ways.
The principal metric is the number ofcompanies. This approach allows us to assess
progress across the industry, from small
businesses to large multinationals, giving equal
weighting to each company.
However, we believe that it is also important togive a more balanced impression of thesustainability profile of the industries by taking
into account market share. We have therefore
used available data to estimate the industries'
overall sustainability profile based on the size ofcompanies.
This part of the Report also includes further
information on each Focus Area and maps eachone against the relevant United Nations
Sustainable Development Goals, also known as
the SDGs or 'Global Goals'. (This mapping isbased on our own assessment and may differ
from individual company approaches.)
Part B: Our activities
The second part of the Report gives a shortoverview of the key events undertaken in 2020,
including the formal launch of the Charter, thepublication online of a 'Toolbox' of sustainability
initiatives, programs and laws, and the creationof new groups to bring together signatories andoversee the development of the Charter.

FOCUS AREA 1

Responsible sourcing
About this focus area
Ensure responsible sourcing throughout thevalue chain
The fragrance and flavor industries have a keyrole to play in socio-economic development
relating to the sourcing of raw materials –notably in relation to job creation, skills
development and the improvement of
employment prospects. This is especially
important for people living far from the main
centers of employment.
F&F companies must ensure respect for humanrights and labor standards in our activities andproducts, as well as in our business relationships
and in monitoring the activities of partners. In
areas where there is political instability or evenconflict, companies have to be especiallyvigilant.
In their operations and supply chains, F&F
companies rely on a variety of ecosystemservices that are generally classified as common
property and/or public goods, and which must be
protected. The protection and/or rehabilitation of
biodiversity is an imperative as well as anopportunity to develop new projects and engage
employees and wider communities.
As responsible industries, we should also seek togo beyond our core business activities bycontributing to dynamic and positive change at a
local level, whether through involvement ineducation or culture, community cohesion or
wider technological development.

Activities under this Focus
Area relate to a number ofUnited Nations Sustainable
Development Goals
The selected SDGs areranked according to theirrelevance to the Charter

Results in summary
The survey results highlight good progressin the area of responsible sourcing: wellover half of respondents alreadyhave a strategy in place; another fifth plan
to create a strategy in 2021.
More than a third of respondents use
internationally recognized evaluation tools,
and when mapped against market share, wellover 90% of the fragrance and flavor market isat this most advanced level.
More than 70% of respondents - including thecompanies that make up the vast majority ofthe market - engage in dialogue with farmers
and local communities, supporting equitable
practices, community development andeducation (Commitment 1.1).
Companies representing the vast majority ofthe market have developed roadmaps to
identify, map and mitigate risks relating tolabour standards (Commitment 1.2) - and wehope that in the coming years morecompanies will be able to join them.
Likewise, the 14 companies who haveestablished biodiversity and ecosystem
protection plans (Commitment 1.3) include
the largest companies - meaning that F&F
market as a whole demonstrates a strong
attachment to respecting the natural world.

FOCUS AREA 2

Environmental footprint
and climate change
About this focus area
Reduce our industries’ environmental footprint and address climate change
Increasing concerns over climate change raised
expectations of industry. Regulators, customers
and other stakeholders want to know how we will
anticipate issues, diminish risks, lower
emissions and develop solutions. The fragrance
and flavor industries are committed to a circular
economy approach with practical measures that
include limiting the environmental impact of theirfacilities and investing to comply withenvironmental rules.
Engaging in a circular economy approachrequires us to rethink the old industry model andadapt it to changed societal expectations. For
example, waste is becoming either a material
resource or an energy resource (throughrecycling and energy recovery), with a circular
economy approach allowing companies tocreate value and make savings by lowering
waste treatment costs or reusing materials.

To ensure resource availability in the future,companies should ensure that the raw materials
used in our industries - whether natural orsynthetic – are used efficiently. The sustainability
and environmental footprint of both natural andsynthetic ingredients will need to be considered,examining the sustainability profile of each typeon a case-by-case basis.
In addition, companies should use energy, waterand other resources carefully, and implement the
principles of green chemistry, in the knowledge
that resource consumption is closely linked totheir overall environmental impact – both globallyand locally. Other concerns relate to the use of
non-renewable resources. Optimizing
consumption and avoiding overconsumption,
particularly of electricity, not only reduces theenvironmental impact but can give companies acompetitive edge.

Results in summary
More than 75% of respondents, and more than
90% of the fragrance and flavor market bymarket share, have a global environmental
strategy, implementing eco-design measuresand acting to reduce consumption and waste.
Between a fifth and a third of respondents havewaste roadmaps or are implementing new
business practices to reduce energy and water
consumption, greenhouse gas emissions andActivities under this Focus
Area relate to a number ofUnited Nations Sustainable
Development Goals
The selected SDGs areranked according to theirrelevance to the Charter

waste (Commitment 2.2). With this number
covering the vast majority of the market, the F&F
industry exhibits a good environmental profile.
Green chemistry (Commitment 2.3) is an
emerging practice but more than half
respondents use it in some form, and IFRA andIOFI are taking action to increase awareness ofgreen chemistry and encourage greater uptakeof its principles.

FOCUS AREA 3

Well-being of employees
About this focus area
Enhance the well-being of employees and ensure a rewarding labor environment
Companies have a moral and legal duty toensure health and safety at work. But there isalso an economic incentive: prevention helps toreduce risks, prevent accidents and illness, andboost economic performance.

The fragrance and flavor industries, as significant
employers, have a role to play on subjects such as
equal pay and protection of certain groups in theworkforce (such as young people, older people
and people with disabilities).

Given the materials used, the fragrance andflavor industries have the potential to expose
workers to potential occupational risks. We
should therefore anticipate and limit the risks
associated with products and processes toensure the health and safety of employees.

The challenge is to allow diverse talents toexpress themselves fully and sustainably in thecompany, and to respect all differences. By
implementing a diversity and equal opportunities
policy and promoting inclusion, companies canincrease their attractiveness as employers andimprove performance.

Like other industries, we have to address
physical risks (from travel, musculoskeletal
disorders, lifting, electrical charge, noise and soon) as well as psychological and social hazards.
These issues also affect our employees andservice providers, who should be informed ofhealth and safety rules and guidance.

A well-established social dialogue improves thefunctioning of companies and reduces the risk of
conflict. Involving employees in the development
and implementation of their own working
conditions increases their satisfaction, well-being,
motivation, loyalty and performance.

Results in summary
Employee well-being is a Focus Area wherefragrance and flavor companies are alreadyshowing exceptional progress, with more than
70% of respondents having health and safety
strategies in place that go beyond implementationof regulatory requirement; nearly half using
internationally recognized evaluation tools.
Going beyond legal compliance and awarenessof equal treatment principles, more than half ofActivities under this Focus
Area relate to a number ofUnited Nations Sustainable
Development Goals
The selected SDGs areranked according to theirrelevance to the Charter

respondents embed these principles in theirpolicies and processes. Based on market share,
the vast majority of F&F employees have thisadvanced level of protection (Commitment 3.2).
Around half of respondents also report best
occupational health and safety (Commitment
3.1) and training and development practices(Commitment 3.3), well beyond legal
requirements in these fields.

FOCUS AREA 4

Product safety
About this focus area
Be at the leading edge of product safety
Good manufacturing processes are the starting
point for the development of products with ahigh level of safety and a good environmental
profile. The benefits for companies of highquality processes and products are significant –not only in relation to consumer satisfaction andprotection, but also in terms of financial savingsand competitive advantage.
‘Safety by design’ means that companies need torethink key phases in a product life cycle, frommanufacturing, to use, to end-of-life. It means
managing risk, meeting customer and consumer
expectations with regard to protection of humanhealth and the environment, developing systems
that ensure that the right people have the rightinformation at the right time.
IFRA and IOFI have Codes of Practice addressing
product safety and other topics. More information
can be found on p37 of the main report.

Results in summary
Product safety is at the heart of all the fragrance
and flavor industries do, and is a non-negotiablerequirement of F&F companies. As a result, oursurvey was more limited on this Focus Area:
compliance is a 'given'.

point, with around half of those doing sosystematically. This includes all the largest
companies, ensuring that the vast majority of themarket is engaged in close cooperation on
product safety.

Nevertheless, we asked signatories for more
information on how they work with customers in
consumer good companies to ensure productsafety (Commitment 4.2). More than 90% of
respondents engage in some manner on thisOn product stewardship (Commitment 4.4),
around three in every five companies provide
information beyond legal requirements, withmore than a quarter providing educational
support in a proactive way.

Activities under this Focus
Area relate to the United
Nations Sustainable
Development Goals

FOCUS AREA 5

Transparency &partnerships
About this focus area
Be transparent and a reliable partner for society
Business ethics guide companies to makedecisions that are fair and transparent and toprevent risks associated with unethical businessor industrial practices. Business failures in thisarea can have a significant impact in terms of
reputational damage, as well as leading topossible commercial, civil or criminal penalties.
With a strategy in place, a company should
develop indicators that allow analysis and followup of results and define a new direction if
necessary. Although reporting is not an end in
itself, these indicators have to be considered asa tool for continuous improvement.
Externally, a company can communicate onthese indicators to strengthen the credibility of
its actions and set an example. Building dialogue
with external stakeholders helps to create anenvironment that is conducive to understandingof a company's business and helping it toimprove.
Through our collective sectoral framework, weseek to enhance transparency, communicationand external reporting about our industries.
IFRA and IOFI conduct all our activities in linewith our antitrust compliance policies. We
provide regulatory bodies, industry partners andstakeholders with key technical and scientificinformation. We also enhance stakeholder
dialogue and collaboration along the value chain
with other businesses and stakeholders toaddress shared areas of interest.

Activities under this Focus
Area relate to a number ofUnited Nations Sustainable
Development Goals
The selected SDGs areranked according to theirrelevance to the Charter

Results in summary
More than three in four respondents have a
global responsive governance strategy inplace, including all the largest companies.
These companies are also engaged in themost advanced level of reporting on theirsustainability activities, being among the 27
companies that report according tointernational standards.
More than three in every five respondents
employs anti-corruption measures that go
beyond legislative requirements(Commitment 5.2) and approximately twothirds are engaged in ongoing dialogue with
political stakeholders (Commitment 5.4),
with almost every signatory company
involved in some form of dialogue.

Our activities in 2020-21
The public launch of the IFRA-IOFI Sustainability
Charter on 1 July 2020 was an opportunity toshare our initiative with the wider world andcelebrate the achievement of bringing together
more than 100 companies from the fragrance
and flavor industries to back a joint program.
The launch featured media activities by the two
Associations and by many signatories, withcoverage in trade media and positive feedback
on social media.
We also made improvements to the Charter
website at ifra-iofi.org, including the creation of ablog, to clearly explain the various elements of
the Charter, and the development of a new
Toolbox for signatories.
This Toolbox provides resources for signatorycompanies on implementing the Commitments
outlined in the Charter - with information on goodpractices, an opportunity to share good practice,details of legal/regulatory frameworks andsustainability tools/programs, and international
disclosure standards.
We also worked to broaden the reach of theCharter: first, by providing translations of theCharter documents in Chinese, Japanese, Spanish
and Portuguese on the Charter websites.
Second, we held a series of introductory
webinars for IFRA and IOFI members to explain
the Charter and encourage participation in theinitiative. National webinars were held in 2020
and 2021 with companies and Associations fromTurkey, Latin America, France, United States,
Spain, South Africa, and Asia-Pacific.
We also created the IFRA-IOFI Sustainability
Community - a platform for signatories and IFRA
and IOFI national associations to come together
and discuss sustainability topics and issues
relating to the Charter.
The first Sustainability Community webinar, heldin September 2020, included a thought-provoking
presentation on 'Rethink Economics: Give Valueto Nature' by Anders Wijkman, a former Memberof the European Parliament and Honorary
President of the Club of Rome.
A second webinar, in December, focused on the
Toolbox. The third webinar, in March 2021, lookedat green chemistry. More than 300 participantsjoined a two-hour 'masterclass' with one of thefounders of the green chemistry concept, Dr John
Warner.
These Sustainability Community meetings
continue in 2021. We are also launching a new
Sustainability Committee, bringing together asmaller group of signatories and members tosteer the Charter and other sustainability
activities.
Externally, IFRA and IOFI representatives took partin online conferences to spread the word about
the Charter. IFRA President Martina Bianchinigave a presentation at the European SDG Summit
2020 on Sector Sustainability Vision andRoadmaps, hosted by CSR Europe.
IFRA also hosted a session on sustainability at its
Global Fragrance Summit in March 2021, with
Sven Ballschmiede, IOFI Executive Director,
joining the session and outlining the key points of
the Charter.
Maxime Marchal, the Charter's Project Manager,
also presented at IFIA Japan, the Annual
International Food Ingredients & Additives
Exhibition and Conference, in May 2021.
IFRA and IOFI contributed to activities bymembers and partners, including a presentation
at the annual meeting of the South African
fragrance and flavor association, SAAFFI.
Work intensified on partnerships with externalgroups. IFRA and IOFI signed a memorandum of
understanding with the Union for Ethical Biotrade(UEBT) and is working in South Africa with aGerman development agency, GIZ on
sustainability activities relating to the growing andprocessing of Buchu, a native plant from South
Africa, complementing the Associations' existing
work on compliance with the Nagoya Protocol.

Sustainability
Charterifra-iofi.org