Chief Executive’s Statement
In times of increasing environmental, social and economic uncertainty, we are determined to continue playing our part in meeting the global challenges and to make a positive impact. The United Nations Sustainable Development Goals (SDGs) are beginning to focus global efforts on positive change; for Croda these SDGs have reinforced our drive to provide solutions that support sustainable development as a moral and business imperative. We shall continue to thrive, not by simply improving our own economic, social and environmental performance but also actively creating positive change.
Smart science to improve lives
Continuing to deliver strong and consistent financial results, together with strong and consistent non-financial results, reflects our vision, mission and values. This is now encompassed in our new purpose statement, ‘smart science to improve lives’. Since the very beginning of Croda in 1925, we have understood the important part that science plays in everyday life. 94 years later, our unrivalled ability to innovate through ‘smart science’ enables us to meet our customers’ and their consumers’ needs. Our products have always added financial value and we increasingly recognise the positive environmental and social impact that they all have; we work to ‘improve lives’.
During 2018, we increased focus on our contribution to the SDGs. I have been delighted with the breadth and depth of the work that has been undertaken throughout our businesses to identify many areas in which we are making significant positive contributions. Most satisfying is that these contributions are coming from across all our functions; not only through the application of our products, but also in the sourcing of raw materials, innovative product design, our flexible operations, and our acquisition of exciting new sustainable technologies. The measurable output of our innovation is increasing economic and shareholder value, but we are intent on further measuring our positive impact and setting ambitious targets.
Our innovation goes beyond delivering more value and benefit from ingredients with a lower environmental footprint. Today, more than ever before, we are innovating up and down the value chains, creating new ingredients in our research centres and in collaboration with our customers, suppliers, open innovation and smart partners, we are identifying and commercialising unique opportunities that add value to our customers’ products, satisfying the needs of their consumers and improving lives.
We shall continue to decouple our growth and increased shareholder value from our impact on the environment, and further futureproof our business with our capital light, carbon light, technology and intellectual property rich acquisition strategy. Following six years of collaboration developing specific applications in personal care and crop care sectors, in January 2018 we acquired Nautilus, a marine biotechnology company based in Charlottetown, Prince Edward Island, Canada. In March 2018, we acquired Plant Impact, an innovative bio-stimulant business. Using chemistry and novel molecule discovery, Plant Impact identifies ways to improve the yield and quality of crops by stimulating or moderating plant responses in both healthy and stressed crops during key growth stages. Then in late December 2018 we acquired Biosector, a vaccine adjuvant specialist, seen as a natural extension of our existing pharmaceutical excipients portfolio within our health care business.
We believe that our culture and our people set us apart from our peers. Our can-do attitude, agility, family spirit and customer focus are at the heart of what makes Croda different, and a true source of our competitive advantage. I am determined that we will continue to safeguard our culture and nurture the environment that enables everyone to reach their full potential. I would like to thank everyone across the group for the positive contributions they make to sustainability every day.
Steve Foots, Group Chief Executive
To continuously improve we must establish clear commitments and performance targets aligned to our 14 material areas and their longer-term objectives. We define material areas as topics or issues with the potential to affect the long-term success of our business, including the economies, environments and societies in which we operate. Targets have been set with our Group Executive Committee that support our sustainability strategy and ensure that progress is made in addressing our material areas.
|Material Area||Long-term Objective||Link to Key Risks|
||Affordable and Clean Energy directing our efforts to combat climate change through reductions in scope 1,2 and 3 emissions.
||Failure to develop/deliver process innovation
|Community Education & Involvement
||Encourage and help develop younger generations, with a focus on science, technology, engineering and maths; and maintaining a strong relationship with our local communities all over the world.|
||Fostering close relationships with our customers to identify and find innovative solutions for unmet needs globally.
|Diversity & Inclusion
||Embracing the differences of a multi-skilled, multi-ethnic and multi-geographical workforce through an inclusive environment.
||Focusing on reducing our water consumption and minimising waste production across our operations, as well as maximising reuse and recyclability of our packaging.
Major environmental incidentCompliance with environmental law (covers underlying contamination or new breach of regulations)
|Health, Safety & Wellbeing
||Protecting the health and safety of our employees and promoting wellbeing throughout the organisation.
||Major safety incident|
||Retaining, protecting and effectively storing knowledge and data within the
|Our People||Attracting and developing people and ensuring equality of opportunities for all; ensuring we act as one global team to continue our growth and success.
Employee recruitment, retention and motivationSuccession planning for senior positions
||Ensuring that our operations remain safe and legally compliant through effective leadership.||Major safety incident
||Providing our customers with sustainable products through relentless innovation, using metrics such as bio-based raw material content, cradle-to-gate carbon footprint and the 12 Principles of Green Chemistry.
||Global Raw material security and sustainability
||Responsible sourcing of our raw materials, maximising our use of bio-based raw materials and land-use productivity, and ensuring the supply of safe and sustainable products through regulatory leadership.
||Procurement/buying risk (e.g. inappropriate supplier selection; poor price negotiation which leads to material cost increases)
|| Supplying customers with high quality, trusted products on time and in full, minimising waste and ensuring consumer safety.
Chemical regulatory compliance
||Operating in a responsible and ethical manner through the entire value chain by engaging with our stakeholders and remaining transparent.
Ethics/governance compliance failure (e.g. competition law (anti-trust)/Bribery Act). Tax compliance failure (includes transfer pricing, and approach to tariffs/tariff barriers).Information security failure.
| Supplier Partnership
||Understanding and managing supply chain risk through sustainable procurement activities and close collaboration and engagement with suppliers.
||Third party supplier risks: ethical, reputational, sustainability of raw materials.