Climate Change Data

Environmental Metrics

ESG Focus Areas

• Focus on Circular Economy
• Pollution
• Climate Change and Carbon Emissions
• Energy Eco-Efficiency
• Water Management
• Innovation
• Cybersecurity
• Employees' Human Rights
• Relations with Customers and Suppliers
• Sustainable Corporate Governance
• Active ESG Risk Management
• Diversity
• Community Engagement

Environmental Achievements

• Decreased TRIR (Total Recordable Incident Rate) by 43% since 2018.
• Continued emphasis on fostering a circular economy and consolidating leadership in the rPET industry.

Social Achievements

• Increased female staff by 13% from 2018 to 2020.
• Implemented employee engagement assessments to support professional and personal growth.
• Developed a global Health, Safety, and Environment policy.

Governance Achievements

• Developed an Alpek Code of Ethics and a Human Rights Policy.
• Deployed an ESG Champion to develop an ESG Strategy aligned with business objectives.

Climate Goals & Targets

Environmental Challenges

• Lack of data in some areas, requiring further initiatives to improve data gathering.
• COVID-19 pandemic impacting training hours and operations.

Mitigation Strategies

• Strengthened data gathering processes to enhance transparency.
• Addressed COVID-19 contingency with disciplined measures, resulting in no contagions within facilities.
• Implemented various training programs despite pandemic challenges.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards, SASB Standards, TCFD recommendations, S&P Global CSA Indicators, UN Sustainable Development Goals

UN Sustainable Development Goals

• Goal 1
• Goal 2
• Goal 3
• Goal 4
• Goal 5
• Goal 6
• Goal 7
• Goal 8
• Goal 9
• Goal 10
• Goal 11
• Goal 12
• Goal 13
• Goal 14
• Goal 15
• Goal 16
• Goal 17

The report aligns with various UN SDGs through its initiatives in areas such as human rights, community engagement, environmental protection, and sustainable governance.

Environmental Metrics

ESG Focus Areas

• Circularity
• Pollution
• Carbon Emissions & Energy Eco-Efficiency
• Water Management
• Innovation
• Cybersecurity
• Occupational Safety
• Relations with Customers and Suppliers
• Sustainable Corporate Governance
• Active ESG Risk Management
• Diversity, Equity & Inclusion (DEI)
• Community Engagement

Environmental Achievements

• Reduced Scope 1 & 2 emissions by 9% compared to 2019.
• Reused about 8,000 tons of packaging and other materials in operations.

Social Achievements

• Improved TRIR (Total Recordable Incident Rate) by 16% from 2020 to 2021.
• Developed Alpek’s DEI Policy.
• 75% of employees who used maternity/paternity leave returned to work in 2021.

Governance Achievements

• Welcomed a new female independent board member in early 2022.
• Consolidated ESG Taskforce formed by CEO, ESG officer, IRO, Human Capital Director, and top executives from all BUs.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to climate events (hurricanes in the Gulf of Mexico).
• Stringent customer targets for emissions reductions in their value chain.
• Potential for increased CO2 taxation and bans on single-use plastics.

Mitigation Strategies

• Multidisciplinary risk management process to assess climate-related risks.
• Investing in infrastructure, equipment, and new technologies to meet customer requirements.
• Monitoring and updating climate-related risks continuously.

Supply Chain Management

Responsible Procurement

• Customer satisfaction assessments (90% average satisfaction).

Climate-Related Risks & Opportunities

Physical Risks

• Interruptions in production by suppliers; natural disasters (hurricanes).

Transition Risks

• Regulatory changes (CO2 taxation, bans on single-use plastics); market shifts (consumer perception of PET).

Opportunities

• Increased demand for chemical products to meet growing global population needs.

Reporting Standards

Frameworks Used: GRI Standards, SASB Standards, TCFD, UNGC, S&P Global CSA, CDP

Certifications: ISO 9001, ISO 14001, BRCGS, SMETA, EcoVadis, Responsible Care, Oeko-Tex, UL GreenGuard Cert., FM approved, ICC ES, FSSC 22000

Third-party Assurance: The Climate Registry (for some sites)

UN Sustainable Development Goals

• Goal 2
• Goal 3
• Goal 4
• Goal 5
• Goal 6
• Goal 7
• Goal 8
• Goal 9
• Goal 11
• Goal 12
• Goal 13
• Goal 14
• Goal 15
• Goal 16
• Goal 17

Alpek's initiatives contribute to these goals through various environmental, social, and governance programs.

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• 19% reduction in Scope 1 & 2 emissions compared to 2019 SBTi Base by the end of 2022.
• SBTi validated and approved GHG emissions reduction target: 27.5% reduction of Scope 1 and 2 emissions, and 13.5% Scope 3 emissions by 2030 (2019 base).

Social Achievements

• Developed Alpek’s DEI Policy in late 2021, released in early 2022.
• Constantly invests in employee health and safety (vaccination campaigns, weight-loss contests, etc.)

Governance Achievements

• Welcomed a new female independent board member in early 2022.
• Consolidated ESG Taskforce formed by CEO, ESG Officer, IRO, Human Capital Director, and top executives from all BUs to oversee ESG initiatives and metrics.

Climate Goals & Targets

Environmental Challenges

• First fatality in 6 years occurred in 2022 at a newly acquired facility in Oman due to mishandling of a forklift.

Mitigation Strategies

• Thorough review of all serious injuries up to the executive level. Special high focus will be given to future new sites added to Alpek’s network. Alpek strives to learn from all incidents and improve standard ways of working.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards, TCFD, SASB, S&P CSA, CDP, FTSE4Good Index, UN Sustainable Development Goals

Environmental Metrics

ESG Focus Areas

• Climate Change Strategy
• Circularity & Product Responsibility
• ESG Risk & Impact Management

Environmental Achievements

• 27.5% absolute emissions reduction for Scope 1 and Scope 2 by 2030 (2019 base)
• 13% absolute emissions reduction for Scope 3 by 2030 (2019 base)
• rPET capacity of 268,000 tons, which represents 89% of progress towards the 2025 goal of 300,000 tons

Social Achievements

• Implemented inclusive recruitment processes, minority-focused development programs, and DEI training
• Endorsed the Women’s Empowerment Principles and Movimiento Congruencia
• Provided unconscious bias training for managerial positions
• Sustained implementation of women’s networks and mentoring programs
• Continued facility adaptation for women and individuals with disabilities
• Finalized its first company-wide gender pay gap analysis
• 27% reduction in Alpek’s TRIR versus 2022
• Two business units and ~34% of the sites achieved zero recordable incidents

Governance Achievements

• Established ESG Committees at the Board, C-Suite, and business unit levels with clear objectives
• Provided training to familiarize the organization with new ESG frameworks
• Standardized and enhanced data collection, review processes, and communication efforts
• Issued its first Sustainability-Linked Loan, valued at USD 200 million

Climate Goals & Targets

Environmental Challenges

• Raw materials supply due to Ukraine-Russia conflict
• Global supply chain impact: Red Sea instability
• Climate-related risks (transitional and physical)
• Arising Carbon Taxes in Mexico
• Water stress in high-risk zones

Mitigation Strategies

• Reducing the purchase of raw materials from North America and increasing the imports of Asian raw materials
• Establishing strategic alliances with key producers, increasing storing capabilities, and expanding transportation routes
• Weekly monitoring of indicators such as opportunity costs of raw materials, gasoline inventories, and market prices for Asian and American raw materials
• Communication with shipping companies, optimized logistics practices by readjusting reorder points, and vigilant monitoring of container logistics pricing from Asia to the Americas
• Comprehensive mitigation measures at all sites located near coastal zones to anticipate and minimize the impacts of climate events
• Developed a carbon reduction target in line with the SBTi initiative
• Created a Net Zero Roadmap to identify potential decarbonization technologies
• Evaluating the potential costs of these adaptations
• Installed a recirculation system in Mexico to recover discharged water
• Introduced a water reuse system at a Chilean facility
• Standardizing and optimizing processes to reduce water consumption

Supply Chain Management

Supplier Audits: Initial screening process in 2023 covered suppliers accounting for approximately 86% of the total spend; 3 significant suppliers identified

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Extreme heat
• Drought
• Wildfire
• Water stress
• Coastal flooding
• Fluvial flooding
• Tropical cyclones
• Pluvial flooding

Transition Risks

• Carbon pricing
• Litigation
• Market shifts
• Reputational risks
• Technological risks

Opportunities

• Use of lower-emission sources of energy
• Development and expansion of low-emission goods and services

Reporting Standards

Frameworks Used: GRI Standards, SASB, TCFD, UNGC, S&P CSA, CDP

Certifications: ISO 9001, ISO 14001, ISO 45001, ISO 17025, BRCGS 6, SMETA, FSSC 22000, EcoVadis, UL 2809, Clean Industry, Responsible Care, Halal, Kosher, UL GreenGuard Cert., FM approved, ICC ES, ISCC Plus, SCS (Recycled Content Standard)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 2
• Goal 4
• Goal 5
• Goal 6
• Goal 7
• Goal 8
• Goal 9
• Goal 12
• Goal 13
• Goal 14
• Goal 15
• Goal 16
• Goal 17

See GRI Index for details

Sustainable Products & Innovation

• rPET
• PET
• PET Sheet
• EPS for construction
• Bio-fertilizer

Awards & Recognition

• HSBC and EY annual award for Sustainable Innovation in the Governance category

Environmental Metrics

ESG Focus Areas

• Carbon emissions
• Business practices
• Whistleblower protection
• Gender pay gap

Environmental Achievements

• 2022 GHG emissions intensity lower than the industry average
• Published 2023 Sustainability Report including a new double materiality matrix, decarbonization roadmap, climate-related risk & opportunity assessment, and a company-wide gender pay gap analysis.

Social Achievements

• Published 2023 Sustainability Report including a company-wide gender pay gap analysis.
• Enhanced whistleblower protection policy

Governance Achievements

• Enhanced whistleblower protection policy

Climate Goals & Targets

Environmental Challenges

• Delayed rainfall season in Altamira causing temporary disruptions to operations at three sites.
• Excess capacity in petrochemical markets

Mitigation Strategies

• Leveraged global footprint and managed inventory to maintain volume levels.
• Structural cost improvement initiatives (100% completion, expected savings reflected by 3Q24).

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather, flooding