Climate Change Data

Environmental Metrics

ESG Focus Areas

• Safety
• Climate Change (Greenhouse gas emissions, energy use)
• Sustainable Solutions
• Employee Engagement
• Community Engagement
• Ethics
• Transparency
• Employee Rights

Environmental Achievements

• Reduced absolute carbon footprint by 9% between 2009 and 2020 while growing sales; reduced emissions per ton of product by 28%
• Increased share of purchased low-carbon and renewable energy to 56% in 2020
• Decreased chemical oxygen demand (COD) released to surface water compared to 2019
• 50% reduction in Process Safety Events between 2019 and 2020

Social Achievements

• Top-quartile performer in people safety with no fatal incidents and 15 lost time injuries in 2020
• Launched Continuous Performance Management process with 95% employee participation
• Partnered with American Corporate Partners to mentor veterans
• Partnered with local manufacturers in India to build a community healthcare center

Governance Achievements

• 100% of assigned employees completed compliance trainings in 2020
• All supplier contracts and purchase orders require adherence to the Business Partner Code of Conduct
• Comprehensive Enterprise Risk Management process implemented

Climate Goals & Targets

Environmental Challenges

• Economic and/or end market slowdown
• Execution of the transformation plan
• Cyber security
• Legal and regulatory compliance
• Process safety and asset integrity
• Water stress at three manufacturing sites

Mitigation Strategies

• Pandemic preparedness plans allowed for business continuity
• Global and regional response teams implemented to protect employees
• Process Safety Management (PSM) approach implemented
• Mitigation plans developed for water-stressed sites
• Continuous monitoring and employee awareness for cybersecurity
• Internal subject matter experts provide guidance and training for legal and regulatory compliance

Supply Chain Management

Supplier Audits: 99% of suppliers by spend acknowledging Business Partner Code of Conduct (2020); 34% of suppliers assessed using EcoVadis (2020)

Responsible Procurement

• Business Partner Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: SASB

Certifications: ISO 14001, OHSAS 18001, RC14001

Third-party Assurance: ERM Certification and Verification Services (ERM CVS)

UN Sustainable Development Goals

• SDG 2
• SDG 3
• SDG 8
• SDG 9
• SDG 12
• SDG 13

Nouryon's products and actions contribute to these goals through sustainable agriculture, health and well-being, economic growth, resilient infrastructure, sustainable consumption and production, and climate action.

Sustainable Products & Innovation

• Bio-based polymers
• Dissolvine® chelating agents
• Arquad GS antimicrobial agent
• Cool roof coatings

Awards & Recognition

• EcoVadis Silver rating
• Safe Handling Award from Canadian National Railway
• Texas Chemical Council (TCC) awards

Environmental Metrics

ESG Focus Areas

• Safety and environmental performance
• Sustainable solutions
• Employee engagement
• Climate change
• Ethics and transparency

Environmental Achievements

• Reduced greenhouse gas emissions per ton of product by 9% between 2009 and 2021
• Reduced sulfur oxide (SOx) and nitrogen oxide (NOx) intensity by 55% and 58% respectively, and the intensity of our water intake and waste by 24% and 15% respectively, from 2009 through 2021
• Reduced total waste intensity by 15% from 2009
• Reduced water consumption intensity by 31% between 2009 and 2021
• 59% of total energy consumption from low carbon and renewable sources
• 83% of electricity consumption from low carbon and renewable sources

Social Achievements

• Recordable injury rate declined by 25% and process safety rate declined by 23% in 2021 compared to the prior year
• Reduced OSHA incident rate by 49% and process safety incident rate by 74% from 2018 through 2021
• 36% gender and racial/ethnic diversity representation on the Board of Directors
• 24% of mid-level managers and above are female
• Established a new Inclusion and Diversity (I&D) function
• Established a Global Mentoring Program
• Established a Global I&D Network

Governance Achievements

• Completed a comprehensive qualitative analysis using the Task Force on Climate-related Financial Disclosures (TCFD) framework
• 100% of employees completed mandatory Compliance trainings
• Strengthened cybersecurity with the appointment of a Chief Information Security Officer and team
• Expanded risk management capability and resources to align risk management more closely with Nouryon’s strategic objectives

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the COVID-19 pandemic
• Climate change impacts
• Water stress in some regions
• Managing substances of concern (SoCs)

Mitigation Strategies

• Improved asset uptime by 3.2% (excluding lost time to weather events and global supply shortages)
• Setting 2030 targets to reduce absolute GHG emissions (Scope 1 & 2) by 40%, total waste intensity by 10%, and water consumption intensity by 10%
• Aspiring to be a net zero organization by 2050
• Implementing a Process Safety Management (PSM) approach
• Proactive monitoring of new and future SoCs and substitution of harmful substances with more sustainable alternatives
• Expanding Scope 3 emissions calculations beyond upstream raw materials

Supply Chain Management

Supplier Audits: 96% of suppliers assessed for CSR risk using EcoVadis Risk IQ tool (2021)

Responsible Procurement

• Business Partner Code of Conduct
• EcoVadis assessment and tracking of supplier sustainability performance
• Supplier of the Year Awards for sustainability

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products
• Growth in renewable energy related products

Reporting Standards

Frameworks Used: SASB

Certifications: ISO 14001, RC 14001

Third-party Assurance: ERM Certification and Verification Services Limited

UN Sustainable Development Goals

• Goal 2
• Goal 3
• Goal 5
• Goal 7
• Goal 8
• Goal 9
• Goal 12
• Goal 13

Nouryon's solutions contribute to increasing crop yields, improving product biodegradability and recyclability, enhancing energy efficiency of buildings and vehicles, and improving infrastructure durability

Sustainable Products & Innovation

• Eco-Premium Solutions
• LumaTreat® polymers
• ArmoSoft® DEVQ
• Amaze™ SP

Awards & Recognition

• EcoVadis Gold Rating
• CDP B Rating for Climate Change
• Sustainalytics rating of 25.3 (top 14% of specialty chemicals companies)

Environmental Metrics

ESG Focus Areas

• Health and safety
• Climate change (energy use and GHG emissions)
• Ethics and transparency
• Employee rights
• Innovation and product development
• Product stewardship

Environmental Achievements

• Reduced total absolute Scopes 1 and 2 GHG emissions by 1.3% between 2019 and 2022
• 34% of total energy consumption from renewable sources in 2022
• Reduced sulfur oxide (SOx) emission intensity by 6% between 2019 and 2022
• Reduced fresh water consumption intensity by 5% between 2019 and 2022
• Five manufacturing sites in Brazil achieved carbon neutrality in 2021
• Eco-efficiency tracking in place at 100% of manufacturing sites

Social Achievements

• Reduced OSHA incident rate (OIR) by 12% and process safety incident rate (PSIR) by 79% between 2018 and 2022
• Four employee-led Business Resource Groups (BRGs) grew to include more than 800 employee participants
• Hosted first-ever Global Month of Service
• 23% of mid-level managers and above are female
• 36% gender and racial/ethnic diversity representation on the Board of Directors

Governance Achievements

• EcoVadis Platinum rating (top 1% of companies rated)
• CDP B rating for Climate Change
• 100% of in-scope employees completed mandatory Compliance trainings
• Zero substantiated complaints concerning breaches of customer privacy or losses of customer data in 2022

Climate Goals & Targets

Environmental Challenges

• Total waste intensity increased by 13% between 2019 and 2022
• Increased NOx emission intensity by 13% between 2019 and 2022
• Supply chain disruptions due to global events

Mitigation Strategies

• Developing a GHG emissions reduction roadmap with tangible actions to achieve 2030 targets
• Implementing plans to meet 2030 targets for water and waste reduction
• Evaluating potential lower-carbon raw materials with suppliers
• Exploring collaboration opportunities with customers and suppliers
• Evaluating and deploying innovative technologies

Supply Chain Management

Supplier Audits: 94% of suppliers assessed for CSR risk using EcoVadis Risk IQ tool; 60% of suppliers measured on CSR performance by EcoVadis score

Responsible Procurement

• Business Partner Code of Conduct
• EcoVadis assessment and rating
• Corrective action process for non-compliant suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Development of energy-efficient products
• Growth in demand for sustainable solutions

Reporting Standards

Frameworks Used: GRI, SASB, TCFD

Certifications: ISO 14001, RC 14001, ISO 9001, ISO 45001, RSPO Mass Balance (MB) at five sites

Third-party Assurance: ERM Certification and Verification Services Limited

UN Sustainable Development Goals

• Goal 2 (Zero Hunger)
• Goal 4 (Quality Education)
• Goal 3 (Good Health and Well-being)
• Goal 10 (Reduced Inequalities)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)
• Goal 8 (Decent Work and Economic Growth)
• Goal 9 (Industry, Innovation and Infrastructure)
• Goal 5 (Gender Equality)
• Goal 7 (Affordable and Clean Energy)

Nouryon's sustainable solutions contribute to these goals through various initiatives detailed in the report

Sustainable Products & Innovation

• Expancel® HP92 microspheres; Bermocoll® FLOW cellulose ether; SolAmaze® Natural; Agrilan® 1015 biodegradable dispersant; Dissolvine® GL and M green chelating agents; Levasil® colloidal silica

Awards & Recognition

• EcoVadis Platinum rating; CDP B rating for Climate Change; American Chemistry Council (ACC) Sustainability Leadership Award for Agrilan® 1015; Cosmetic & Toiletries Allē Award for SolAmaze® Natural; 17 safety awards from the Texas Chemical Council (TCC) and Association of Chemical Industry of Texas

Environmental Metrics

ESG Focus Areas

• Climate Change
• Safety
• Environmental Performance
• Sustainable Innovation
• Stakeholder Engagement
• Supply Chain Sustainability
• Diversity & Inclusion
• Ethics & Compliance

Environmental Achievements

• 14% reduction in total absolute Scopes 1 and 2 GHG emissions between 2019 and 2023
• 42% of total electricity consumption from renewable sources (up from 36% in 2019)
• 33% of total energy (including steam) from renewable sources (up from 30% in 2019)
• 25 of 60 manufacturing sites sourced with 100% renewable and/or low carbon electricity
• Achieved ISCC PLUS certification for green monochloroacetic acid (MCA) production at Delfzijl site

Social Achievements

• Top quartile people safety performance according to American Chemistry Council benchmark data
• 78% decrease in process safety incident rate compared to 2019
• 3% decrease in OSHA Incident Rate (OIR) versus 2019 baseline
• Expanded supplier spend assessed for sustainability by EcoVadis to 66%
• Joined Together for Sustainability (TfS) to strengthen supplier audit capabilities
• Grew employee-led Business Resource Groups and Mentorship program
• Expanded community partnerships and volunteerism initiatives globally

Governance Achievements

• Board-level oversight of all sustainability-related areas
• Annual self-evaluation process for Board of Directors
• Annual review of policies incorporating internal and external assessments
• Evaluation of including climate-related targets in leadership incentive scheme

Climate Goals & Targets

Environmental Challenges

• Climate change (transition and physical risks)
• Supply chain disruptions
• Water stress at some locations
• Increasingly strict laws and regulations globally

Mitigation Strategies

• Comprehensive qualitative analysis using TCFD framework
• Development of Carbon Business Strategy and Roadmap
• Investment in renewable energy projects and PPAs
• Analysis of indirect GHG emissions across value chain
• Collaboration with suppliers on Scope 3 emissions reduction
• Proactive management of substances of concern
• Implementation of corrective action plans for non-compliant suppliers
• Robust Enterprise Risk Management (ERM) approach

Supply Chain Management

Supplier Audits: 66% of supplier spend assessed for CSR risk by EcoVadis

Responsible Procurement

• Business Partner Code of Conduct
• EcoVadis assessments
• Together for Sustainability (TfS) membership
• Requesting product carbon footprint data from suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Hurricanes
• Water stress
• Extreme temperatures

Transition Risks

• Carbon pricing mechanisms
• Regulation of end markets
• Raw material prices and availability
• High investment cost of transition technology

Opportunities

• Products and services for helping customers achieve climate goals
• Markets for access to new opportunities
• Resource efficiency focusing on circular economy
• Sales into renewable energy markets
• Carbon capture solutions

Reporting Standards

Frameworks Used: SASB, GRI

Certifications: ISCC PLUS, ISO 14001, RC 14001

Third-party Assurance: ERM Certification and Verification Services Limited

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 9 (Industry, Innovation, and Infrastructure)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)
• Goal 2 (Zero Hunger)
• Goal 3 (Good Health and Well-being)
• Goal 4 (Quality Education)
• Goal 5 (Gender Equality)
• Goal 8 (Decent Work and Economic Growth)
• Goal 10 (Reduced Inequalities)

Initiatives described throughout the report contribute to these goals

Sustainable Products & Innovation

• Triameen® Y12D
• Kromasil® 100Å diC4 spherical silica
• Berol® Nexxt surfactant
• Dissolvine® GL Premium chelating agent
• Amaze® SP 100% natural polymer
• ElfaMoist® AC humectant
• Finnfix® BBR

Awards & Recognition

• CDP A- score for climate leadership
• EcoVadis Gold rating
• 2023 Responsible Care Company Award
• 13 awards from Texas Chemical Council
• Safety Award by AICM in China
• Ringier Technology Innovation Award for Amaze® SP and ElfaMoist® AC