corporate social responsibility - loparex.com...corporate social responsibility. the role...

C O R P O R AT E S O C I A L

R E S P O N S I B I L IT YS U S TA I N A B I L IT Y I N F O C U S

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C O NT E NTS4 I NT R O D U CT I O N

FOREWORD INTRODUCTION WHO WE ARE

12 W HY S U S TA I N A B I L IT Y M AT T E R SENVIRONMENTAL FACTORS REGULATORY FACTORS SOURCING

20 S U S TA I N A B I L IT Y AT LO PA R E XSOCIAL RESPONSIBILITY ECONOMIC RESPONSIBILITY ENVIRONMENTAL RESPONSIBILITY

34 F O R C H H E I M O P E R AT I O N SSOCIAL RESPONSIBILITY ECONOMIC RESPONSIBILITY ENVIRONMENTAL RESPONSIBILITY

56 O U T LO O K

We take our commitment to responsible care seriously. Loparex’s core value towards safety,

health and the environment extends beyond our company’s boundaries. With our approach to good

stewardship, we take great care when designing and manufacturing our products to ensure that they minimize the impact to the environment. This starts

with the selection of the raw materials, continues with the production and converting, and ends with

ensuring appropriate use by our customers. In collaboration with our customers, we are constantly

looking for environmentally friendly solutions.

Simon MedleyCEO, Loparex

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As a global leader in the release liner industry, Loparex strives to promote and maintain sustainable business practices for the benefit of our customers, suppliers, employees, and the communities in which we operate. This commitment is consistently reflected in our actions as a company, and is an integral part of our identity.

This report is intended to provide a clear overview into how we as an organization engage with the topic of sustainability, with particular focus on our Forchheim operations in Germany. It describes our philosophies, our programs, and our successes to date, and lays out our plans to further strengthen our achievements in these areas.

This report can be found online at www.loparex.com

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I NT R O D U CT I O N

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WH

O W

E A

RE

Hammond, Wisconsin

Malvern, PennsylvaniaEden, North Carolina

Cary, North Carolina

lowa City, lowa

Apeldoorn, The Netherlands

Forchheim, Germany

Guangzhou, China

Shanghai, China

Silvassa, IndiaMumbai, India

2.7B m2 Annual

Production

4 Sales

Centers

50+ Countries

Served

8 Manufacturing

Facilities

2 Technology

Centers

Over

2,000 Employees


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A DVA N C E D R E L E A S E S O LU T I O N S

We serve customers with in-depth technical expertise and industry- leading technology in eight distinct sectors across two divisions. Our Advanced Release Solutions division

supplies technically sophisticated and demanding end markets, leveraging Loparex’s extensive in-house expertise in silicone release, embossing, and liner technology.

C O N S U M E R & G R A P H I C S S O LU T I O N S

The Consumer & Graphics Solutions division offers high-quality engineered products for end consumer-focused industries worldwide, combining cost-effective production with

application-oriented design. We also supply a broad range of specialized markets, ranging from book lamination to trenchless sewer maintenance and refurbishment.

B U I L D I N G & C O N S T R U CT I O N

H E A LT H C A R E L A B E L S

G R A P H I C STA P E S & C O N V E RT I N G

C O M P O S IT E S G E N E R A L & D E V E LO P I N G

HYG I E N E


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P R O D U CT O F F E R I N G S

We are proud to offer the industry‘s most expansive portfolio of paper and film solutions. Loparex’s product range includes direct coated and poly-coated papers in weights from 25 to 392 gsm, and blown, cast, direct coated,

and poly-coated films in thicknesses from 10 to 1000 µm. We have in-house blown and cast extrusion capabilities for films up to 9 layers, and supply a full range of standard and specialty paper-based products.

P R O D U CT I O N C A PA B I L IT I E S

Loparex operates production sites in the United States, Germany, the Netherlands, India, and China. Collectively, these locations cover a full range of capabilities, from film extrusion to coating, curing, converting, printing, and packaging.

Our on-site teams also provide customers with design and project management support, and can address issues such as R&D, IP needs, and regulatory guidance.

VA LU E C R E AT I O N

Loparex takes a collaborative approach to value creation. We offer our customers competitive advantages through new product features and technology and manufacturing efficiency via an integrated supply chain and optimized production network. This, coupled with deep knowledge of applications, markets, and material science, has made us the release liner solutions provider of choice the world over.


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W HYS U S TA I N A B I L IT YM AT T E R SAs a producer of plastics and paper products, Loparex is at the front line of a complex and rapidly evolving debate regarding sustainability and corporate social responsibility. The role manufacturing plays in climate change has come under particular public scrutiny over the past decade, as have issues regarding plastic waste, pollution, and responsible forest stewardship.

Labor topics like workforce protections and fair wages have also moved to the forefront as the global economy pivots towards new forms of employment. The impact of the COVID-19 pandemic in particular has highlighted the risks faced by workers across the supply chain, and raises important questions as to how businesses can help safeguard their employees in times of crisis.

The mainstreaming of these topics has been further accelerated by the emergence of environmentally focused grassroots movements such as Break Free From Plastic and Fridays for Future, as well as national labor campaigns like the Fight for 15 in the United States. These are expected to create new legislative and market dynamics.

Loparex is an industry leader. As such, we also believe we have a responsibility to lead by example. Our core values, and the actions we take to promote more equitable and sustainable ways of working, are not only shared by our sites worldwide, but carry over to our partners and suppliers as well. We face these emerging challenges together, playing our part in shaping a positive future.

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E N V I R O N M E NTA L FA CTO R S

Globally, public sentiment towards environmental issues has sharpened, fueled by a growing concern towards climate change issues and amplified by the mass-communication capabilities of social media platforms such as Facebook and Twitter.

A 2019 poll commissioned by HOPE not Hate, a UK-based anti-racism organization, surveyed more than 1,000 people in the United Kingdom, Germany, Italy, Canada, Brazil, France, Poland, and the United States on their attitudes towards climate change. In seven out of eight countries, respondents listed climate change as their top concern. The majority of respondents also stated that they were already seeing the direct impact of climate change, and indicated their support for tough measures to curb

emissions and punish polluters. The latter represents another important change in public attitude: the idea that environmental issues are not only a priority, but a genuine emergency that must be addressed accordingly.

This rising environmental awareness is increasingly being reflected in purchasing behavior as consumers place more emphasis on goods with sustainable materials and become more educated about ethical sourcing. McKinsey & Company’s 2020 Global Consumer Sentiment Survey found 79% of all consumers surveyed included sustainable packaging in their purchasing decisions, while the CGS 2019 Retail and Sustainability Survey reported that 68% of its US-based respondents rated sustainability as an important factor in their purchases.

SHIFTING ATTITUDES

In Gallup polling, the percentage of US-based respondents who said that protection of the environ-ment should be given priority over economic growth, even at the risk of harming the economy, rose from 41 percent in 2011 to 65 percent in 2019. 2011

0

100

50

2019

41%65%

37 percent are willing to pay

higher-than-normal prices in order to have a product

with sustainable materials.

81 percent of global consumers feel it is

“extremely important“ or “very important“ for businesses to

implement measures to improve the environment.

73 percent say that they were

likely to change their consumption habits to reduce environmental

impact.

81% 73%

37%

Changes in general public opinion and specific consumer preferences have created greater demand for sustain-able solutions among major paper and plastic buyers, many of whom are currently implementing their own sustainability programs.

To accommodate this demand, promi-nent plastics and paper manufacturers have pivoted towards integrating and even encouraging sustainability in their business model, overhauling supply

chains, manufacturing practices, and product portfolios. Furthermore, it is not uncommon to see buyers and suppliers working together to develop and execute sustainability plans.

Companies that are able to act as a partner to their customers on this topic have a unique opportunity to forge new, stronger relationships. Companies that refuse to engage with it, on the other hand, risk being left behind by the market.

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SOURCE: Nielsen, “The Education of the Sustainable Mindset” (2018)

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R E G U L ATO RY FA CTO R S

Sustainability is also becoming more prominent on a governmental level, with an increasing number of countries committed to deve loping concrete policies towards environmental protection and social responsi bility. In the aftermath of the COVID-19 crisis, ensuring public health and safety will become another key priority.

In terms of reach, the most prominent sustainability-oriented measure is the 2016 Paris Agreement, which sets specific standards and targets for emission reductions with the goal of keeping average global temperatures from rising more than 2 °C above pre-industrial levels. More comprehensive

are the United Nations‘ Sustainable Development Goals (SDG), which cover 17 areas ranging from gender equality to renewable energy.

For businesses, however, the most significant guidance is being forged on a national and local level. In the European Union, a proposed European Green Deal would make member states climate-neutral by 2050 by coupling new and revised legislation on topics such as farming, building renovation, and biodiversity with support for related R&D projects. Similar plans have been proposed in South Korea and the United States, where individual states and cities are

Organizations such as the Ellen MacArthur Foundation charity have made the establishment and expansion of a circular economy a central part of their mission. In this, they are supported by some of the world’s largest and most recognized brands, including Unilever, Google, and Philips. However, such a transition

requires planning, investment, and – most critically – time. Companies that prepare for this shift ahead of time will have a smoother implementation and the opportunity to stake out first-mover advantages. Those that lag not only give up potential opportunities, but may suffer lasting operational and financial consequences.

THE CIRCULAR ECONOMY MODEL

Designing out waste and pollution

Keeping products and materials in use

Regenerating natural systems

now developing their own action plans for combatting climate change and safeguarding sustainability. Though many of these policies are still in their formative stages, the manufacturing world must be increasingly prepared

to rethink how it produces goods and how it manages available resources. One potential approach is that offered by the circular economy, which envisions a new global economic system built on three principles:

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EXTRACTION PROCESSING TRANSPORTATION

S O U R C I N G

Sourcing represents a multifaceted challenge for businesses pursuing sustainable practices. Depletion of resources is a major risk factor, and resource usage must be managed in line with the needs of future generations and ongoing economic viability. The environmentally sound extraction, processing, and transportation of raw materials is an equally key concern, as is the treatment and compensation of workers involved in these critical steps.

Companies in the paper and plastics industry, which are manufacturers as well as suppliers themselves, must not only take necessary steps to ensure their inputs come from

ethical and sustainable sources, but must also be in a position to provide appropriate information to customers seeking the same. This requires a willingness to create the necessary level of transparency, as well as a nuanced understanding of one’s own supply chain.

From a simple continuity standpoint, businesses must also make provisions for alternative sources of raw materials to avoid potential bottlenecks and create security and certainty for their operations. For multinational organizations in particular, single-source scenarios pose a significant level of risk and constrain a company’s ability to deal with unexpected challenges.

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S U S TA I N A B I L IT YAT LO PA R E X

At Loparex, the concept of sustainability is built on three core responsibilities collectively integral to our high standards as an organization. These are:

In each of these areas, Loparex has a clearly-defined philosophy and set of principles, as well as concrete programs for implementing these in all aspects of our operations.

To further ensure an effective overarching strategy for sustainability topics, Loparex has appointed a full-time Global Sustainability Manager. This role allows us to coordinate the development, implementation, promotion, and monitoring of environmental strategies and support Loparex customers in reaching their own environmental targets. The Manager works closely with relevant department heads across the Loparex organization, and develops strategic plans, targets, and budgets in direct collaboration with senior Loparex management.

Through the Global Sustainability Manager, Loparex also collaborates with governmental bodies, corporate offices, consultancies, associations, and academic institutions and agencies that promote ecologically sustainable operations.

From an innovation standpoint, Loparex employs significant numbers of experienced specialists whose role it is to develop new technological approaches for more sustainable paper and plastic liner products.

These include the development of new recycling techniques, alternative materials, and production concepts that contribute to a circular economy model.

In addition, Loparex has a number of active development partnerships with universities and start-ups in the field of sustainability research. These activities allow Loparex to promote long-term sustainability and innovation, and create future benefits for our customers.

Social Responsibility Health and safety, ethics,

community engagement

Economic Responsibility Workforce development,

responsible labor practices, quality management

Environmental Responsibility Environmentally conscious

production, products, and practices


S O C I A L R E S P O N S I B I L IT Y

HEALTH AND SAFETY

Loparex strives to provide a clean, safe and healthy working environment for all employees, contractors and visitors at all sites and facilities, and to take necessary steps to prevent accidents and injury to health by minimizing, so far as reasonably practicable, any risks

inherent in the working environment. We proactively and continuously improve working conditions through a robust safety training program that includes behavior- based safety, fire safety, risk protection, and electrical, mechanical, and structural safety.

Occupational SafetyLoparex operates with a zero incident mindset and a culture of compliance with strict workplace safety policies and procedures in place. Use of personal protective equipment, including but not limited to, safety shoes, safety glasses, hearing protection, cut-resistant gloves, as well as extensive use of machine guarding, and training on compliance with proper tools and procedures is a requirement. Employees that may be exposed to hazardous materials are trained on how to safely move, handle, and dispose of these materials.

Emergency Preparedness & Crisis ManagementLoparex identifies and assess potential workplace emergency situations and events, and minimizes their impact by implementing appropriate emergency plans and response procedures. In extraordinary crisis situations such as those presented by the COVID-19 pandemic, each manufacturing and office location will set up an emergency task force of qualified

specialists, ensuring a timely, targeted response to any issues encountered on site. Depending on the severity of the situation, additional crisis management teams can be formed at a regional and global level to allow Loparex locations to strategically coordinate with one another.

CommunicationLoparex takes a proactive approach to safety on a daily basis through its practices, policies, and procedures. Our employees are supported by dedicated teams driving a “zero incident” culture that seeks to eliminate the risk of workplace injuries while ensuring compliance with federal and state health and safety regulations. By strengthening our safety culture, we aim to empower one another to work safely while improving quality and productivity. Procedures and systems are in place throughout our organization to prevent, manage, track, and report workplace injury and illness, and keep all employees apprised of emergency situations and how to best respond to them.

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ETHICS

Loparex complies with all applicable international, national and local laws, rules and regulations, and respects international agreements. Responsible business practices are essential for ensuring competitive and profitable as

well as ethically correct performance. We do not tolerate corruption, bribery, price fixing or any other illegal acts in our operations, and expect our business partners to abide by these same principles.

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AntitrustLoparex complies with all applicable antitrust laws. These laws require that the we act independently and sell our products fairly and honestly on the basis of price, quality and service.

Disclosure of Confidential InformationLoparex will not release confidential information, discuss confidential matters or trade secrets with anyone not employed by Loparex.

Performance of ContractsLoparex observes the laws, rules, and regulations which are applicable to the acquisition of goods and services by our customers, and we will compete fairly and ethically for business opportunities. Employees involved in negotiation of contracts with customers must ensure that all statements and communication are accurate and truthful.

Employee ConcernsLoparex strives to create a culture where employees feel comfortable

directly reporting concerns of actual or suspected fraud, harassment, safety violations or other wrongdoing without the fear of retaliation.

Conflicts of InterestLoparex exercises fair, objective, and impartial judgement in all business dealings. We avoid involvement in any transactions or activities that could be considered to be, or give rise to, a conflict.

PrivacyLoparex shall protect the privacy expectations of personal information of everyone with whom they conduct business, including customers, suppliers, and employees.

Gifts, Personal Benefits & EntertainmentAny offer, promise, grant or gift made by a business partner in connection with Loparex business must comply with applicable laws and Loparex policies, and must not create an appearance of bad faith or impropriety.

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LABOR

Loparex is dedicated to the protection of human rights. We are a committed equal opportunity employer, and abide by fair labor practices. We ensure that our activities do not directly or indirectly violate human rights in

any country in which Loparex has facilities, or in which Loparex conducts business. This includes fundamentally avoiding forced labor, child labor, modern slavery and/or trafficked labor, and any form of discrimination.


Freedom of EngagementLoparex strives to create a workplace in which there is mutual trust and respect, and where every person feels empowered to contribute to the performance and reputation of our company. We ensure that all employees enter the employment relationship with us of their own free will, and have the choice to leave their employment of their own volition. Employment offer letters and agreements are written in the employee’s native language to ensure employees understand their employment terms.

Young WorkersLoparex complies with all applicable local laws regarding minimum hiring age for employees in the countries it operates in. In accordance with ILO guidelines, our policy is to employ no workers under the age of 15.

Humane TreatmentLoparex complies with all applicable laws and industry standards regarding a clean and safe workplace and working hours, including overtime. Paid accrued annual vacation,

holidays, leave and other time off is granted companywide, consistent with time in service and local practices.

Equality of Opportunity & Support of Diversity and InclusionLoparex aims to promote employee well-being and motivation, and provides opportunities for personal and career development. We believe all people should be treated equally, and no direct or indirect discrimi-nation based on sex, age, ethnic origin, nationality, religion, political opinion, sexual orientation, or membership in a union or collective bargaining unit is accepted. In recruiting, the focus is on each person’s skills, competence, and general suitability for the job. Application and recruitment processes are open and transparent.

Harassment and Disciplinary PracticesLoparex does not tolerate any form of harassment, including gestures, language and physical contact that is sexual, coercive, threatening, hostile, abusive, or exploitative in any manner. Individuals who exhibit such behavior during general work activity are subject to appropriate disciplinary action.

E C O N O M I C R E S P O N S I B I L IT Y

Loparex is a leading global manufacturer of release liners, serving customers with in-depth technical expertise and industry-leading production technology across operations in North America, Europe, India, and Asia. Loparex seeks to ensure sustained growth and profitability. While doing so,

however, we remain committed to high standards of labor, health & safety, the environment, ethics, and quality.

We actively seek business relationships with partners who share our values and promote the application of these high standards among those with whom they do business.


L A B O R M E T R I C S

EUROPE AMERICAS

EUROPE AMERICAS

879

17

740

10

166

9

264

8

ASIA-PACIFIC IN

DIA

ASIA-PACIFIC IN

DIA

EMPLOYEES BY REGION

AVERAGE EMPLOYEE TENURE IN YEARS

average tenure in years =

total employees =

10

2049

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QUALITY

Quality is the basic building block for the products of Loparex. It is our vision to make the name “Loparex” synonymous with “world-class products.”

This vision is built on the following principles:

• Quality is defined by our customers’ needs

• Quality means long-term customer relationships

• Quality begins on a management level

• Quality affects all employees• Quality is built on risk-based

thinking and action• Quality is built on rapid and

reliably implemented innovations• Quality must be supported by

demand and delivery planning• Quality means

continuous improvement• Quality is produced

at appropriate costs


CertificationsTo ensure our quality policies are consistenly implemented, all of Loparex’s global manufacturing locations operate under a certified ISO 9001:2015 Quality Management System.

Integrated Excellence InitiativeThe Loparex Integrated Excellence (InEx) Initiative supplements Loparex’s quality policies by creating a mechanism for the continuous improvement of processes, products, and services throughout the Loparex organization. The Initiative takes a holistic approach to quality, and combines tools and approaches from a range of management systems, in particular Total Productive Management (TPM) and the Toyota

Kata approach. The result is a customized framework adapted to the specific needs of our business and customers.

InEx empowers individual employees to analyse the processes found in their day-to-day work and identify where improvements could be made. Their managers in turn are expected to step into a “coaching” role, working directly with the employee to create actionable solutions and build up their skills and capabilities. Combining the knowledge and insights of the larger workforce with the higher-leveI perspective of management creates changes that can be understood, accepted, and adopted at all levels of the organization, ensuring lasting improvement.


Paper Sourcing PolicyIt is Loparex’s policy to maintain a commitment to the responsible sourcing of paper and to work solely with suppliers who share these values. Responsibly sourced paper will:

• Contain fiber that is legally harvested, sourced, transported, and exported from its country of origin

• Contain fiber that is traceable through the supply chain to the source of harvest

• Comply with local regulations• Protect high conservation values,

including intact forest landscapes and the protection of peatlands

• Protect high carbon stock areas and avoid conversion

• Respect indigenous people’s rights with free prior and informed consent

• Respect and comply with all worker safety standards and labor and human rights regulations, including no forced or child labor

Loparex will achieve this by:

• Continually communicating its expectations to paper suppliers and other stakeholders, including its employees

• Soliciting reasonable evidence, including appropriate documentation and, when requested, full trace-ability details, that its paper suppliers comply with all facets of this policy

• Routinely conducting reviews and audits as necessary to ensure

compliance with all facets of this policy, and updating relevant information on file as evidence of such compliance

• Qualifying potential new vendors in a way that is fully consistent with all facets of this policy

• Encouraging and supporting paper suppliers to continuously improve and strive to become fully compliant with all facets of this policy

We are committed to working with our paper suppliers to ensure this policy is fully implemented across our global network.

Zero LandfillLoparex pursues a zero landfill policy across the entirety of its organization. Key aspects of this policy include directing 99% of waste away from landfills at all sites, ensuring proper disposal of all hazardous waste, systematically tracking greenhouse gas emissions, and targeted wasted reduction measures at our corporate offices.

SmartWay® CertifiedThe SmartWay® Transportation Partnership was created in 2004 by the United States Environment Protection Agency (EPA) to incentivize businesses to improve their supply chain fuel efficiency. Loparex has been a SmartWay® Transport Partner since 2011, and continues to work with logistics partners to reduce emissions.

E N V I R O N M E NTA L R E S P O N S I B I L IT Y

It is Loparex corporate policy to lead, promote, and maintain environmentally responsible practices for the benefit and protection of our environment, customers, employees, and the communities in which we operate. Loparex strives for continual improvement through the development of specific products and programs that minimize environmental impacts throughout all processes along the supply chain. This is achieved by:

• Complying with applicable regulations and standards

• Focusing on material and energy efficiencies

• Supporting pollution prevention

and minimization programs• Reducing waste and finding

alternative uses to minimize material disposal

• Reviewing environmental objectives and monitoring performance

• Ensuring security of supply to our customers

• Continuously investigating more environmentally friendly materials and/or developing new products with a lower environmental impact

As a worldwide leader in the release liner industry, Loparex is committed to working with our suppliers, customers, and employees to make sure this policy is met at all locations.

B I L D

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F O R C H H E I MO P E R AT I O N S

The production site in Forchheim, Germany is the largest and oldest of Loparex’s manufacturing locations, and a center of technical excellence for extrusion, printing, coating, and embossing. It produces and converts polyolefin films for a variety of industries, in addition to housing a pilot production facility and R&D laboratory for novel film technologies. Since the plant was established in 1854, the city of Forchheim has grown up around its manufacturing buildings, and a close cooperation with the local community has evolved from this.

As a whole, the Forchheim site is the second largest employer in the region, with 750 employees as

of the end of 2019. A reputation as a global market leader and outstanding workforce development programs have made Loparex a highly attractive option for young people starting their career in one of the many technical and commercial professions trained at the site. As a result, some local families have been working at the Forchheim plant for four consecutive generations.

Integrated Management Systems are found at all levels, and are crucial in delivering both high production quality and outstanding transparency. Their goal is to exceed customers‘ expectations by driving ongoing process improvements across the entire operation.


In 2018, the site further strengthened its commitment to sustainable operation by creating a department to coordinate sustainability efforts across all aspects of production. The department‘s mission is to define targets and metrics for sustainability initiatives, build up interdepartmental communication streams and centralized KPI reporting, and prepare reports on sustainability measures and goals.

Trust is another important resource, and as critical as any resin to the site’s long-term success. As a company, Loparex believes in conducting business with integrity, and maintains stringent guidelines for employees, suppliers, and partners. To make these practices more transparent for

customers and partners, the Forchheim plant has been a member of the Supplier Ethical Data Exchange (Sedex) since 2011, and is committed to Sedex’s mission of driving more ethical and responsible business practices across global supply chains.

As an early and consistent adopter of sustainability measures with a decades-long commitment to responsible stewardship, Forchheim is an excellent example of how Loparex approaches these topics. Many initiatives and policies first implemented here will ultimately carry over to the greater Loparex organization, and the site continues to help define and enhance Loparex’s sustainability strategy.

F O R C H H E I M O P E R AT I O N S

INTEGRATED MANAGEMENT SYSTEMS

Five independently certified systems form the backbone of the Forchheim site‘s integrated management efforts.

1986 1999 2001 2003 2014 2018 NOW

ISO 9001Quality Management System

ISO 14001Environmental Management System

HACCPHazard Analysis and Critical Control Points

ISO 50001Energy Management System

OSHAS 18001Occupational Health and

Safety Assessment Series

ISO 45001Occupational

Health and SafetyManagement

System

ISO 14001 and 50001 in particular play an important role in ensuring environmentally sustainable production. For many years, the Forchheim plant has carried out targeted waste and energy managemen alongside ongoing development of environmentally conscious product options. The overarching goal has always been

to find ways to reduce, reuse and/or recycle films in internal production processes, as well as the production processes of customers. A crucial part of these efforts has been the adoption of new biopolymer material options to create films that are either biode gradable, manufactured from renewable resources, or both.



HEALTH & SAFETY

The Forchheim location began operating according to the OHSAS 18001 Health and Safety Management System in 2003. In 2018, the site adopted a more comprehensive ISO 45001-based system, three years ahead of the planned global phase-out of the OHSAS 18001 standard. Like OHSAS 18001, the ISO 45001 framework focuses on the reduction of occupational injuries and diseases and is based on a range of nationally and internationally accepted guidelines, including those defined by the International Labor Organization (ILO).

The plant takes a multifaceted approach to workplace safety, encompassing everything from ergonomic studies to responsible machine operation. Employees are expected to be familiar with all safety issues related to their role and undergo regular computerized training and testing on these topics. Additional training may be assigned as a result of particular accidents or incidents, ensuring employees do not repeat potentially dangerous mistakes.

A strong emphasis is placed on near-miss reporting as a tool for improving overall safety. The Forchheim site follows a philosophy based on the Heinrich Incident Triangle, a model adapted from the work of industrial safety pioneer Herbert William Heinrich (1886 – 1962). The Triangle holds that for every 300 near misses, there are 29 minor injuries and 1 major injury or death, and that in many cases, incidents of varying severity may share a common cause. By reporting and reacting to near misses, it then becomes possible to anticipate and ultimately avoid more serious accidents.

For this reason, the plant encourages employees to take ownership over their work centers, identify potentially dangerous situations, and report these to their supervisors. By both educating employees on the importance of near-miss incidents and providing them with the training needed to recognize hazards and tools with which to alert others, overall workforce safety can be greatly enhanced.

The core metric used to assess on-site health and safety at Loparex locations is the Total Case Incident Rate (TCIR). TCIR measures the number of workplace injury incidents per 100 employees, and represents a period of approximately 200,000 working hours. Unlike lost time rates, TCIR captures all injuries regardless of severity, and therefore offers a significantly more complete snapshot of a production site’s overall safety record.

Like other Loparex locations, Forchheim shares clear-cut goals for TCIR and injury severity rates, and is expected to drive improvements through gap analyses and implementing targeted and effective safety programs. Progress towards these goals is tracked in monthly reports made available to all employees. On-

site accidents at the plant are also documented in formal reports and distributed to the workforce. These reports not only seek to identify the

causes of accidents, but also identify clear steps employees are expected to take to avoid similar incidents in future.

20160

5.0

2.5

2017

4.15

2.31

2018 2019

2.101.58

LOPAREX GLOBAL TCIR, 2016 – 2019


B I L D – G E S U N D H E ITS TAG?

AccessibilityAs an equal opportunity employer, Loparex does not discriminate against any employee or job applicant because of race, color, religion, national origin, sex, physical or mental disability, or age. In the case of Forchheim, Loparex significantly exceeds industry averages and legally mandated minimums for minority groups in Germany, including disabled individuals. As a result, the site makes particular efforts to accommodate employees with

special needs. In one notable example, a machine operator who completed his apprenticeship at the factory became paraplegic after suffering a motorcycle accident in 2012. To support his reintegration into the workplace, the plant invested in a new ground-floor office with wheelchair access, elevator, and a dedicated “escape chair“ for emergency evacuation, ultimately allowing him to return to work as a member of the Maintenance department.

B I L D VO N D E RR E N OVAT I O N S A R B E IT?


Worker Health InitiativesThe Forchheim site is invested in the long-term well-being of its workers, and provides a variety of resources to foster healthier living overall. Measures implemented include an on-site doctor, twice-daily company exercise groups, regular Shiatsu massage therapy, weekly “fruit days,“ and free screenings for potential health risks such as respiratory and cardiovascular

diseases. The plant also has an in-house Cooperative Sports Collective (BSG), which provides organized exercise and activity options for employees. BSG activities run the gamut from football to Nordic walking, and have been part of company culture for over 70 years. At current, the BSG’s 14 groups have around 350 members, making it one of the largest Collectives in the region.

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ETHICS

To safeguard the integrity of its business and avert potentially damaging situations, the Forchheim site places a high priority on identifying compliance violations. Since Loparex values an open company culture, every interested party who is aware of compliance risks is encouraged to confide to an appropriate contact within the company, such as a supervisor, Human Resources, or Loparex‘s compliance officer.

The plant also offers a web-based whistleblower hotline for information on possible compliance violations related to the Forchheim site. This allows such information to be shared in a safe, confidential manner at any time and from anywhere in the world. Submitted tip-offs are forwarded to the

local Compliance Department, which confidentially processes all reports.

The hotline serves to identify and avoid major risks for the site. For this reason, only notifications regarding severe compliance violations are accepted and processed here, particularly those involving criminal business activity (e.g. acts of corruption), antitrust violations, and data protection breaches. Accusations against a person can result in serious consequences for them. Reporters are therefore requested only to share information that they are convinced is accurate, acting in good faith and to the best of their knowledge. Knowingly submitting false information can result in prosecution under criminal and labor laws.

COMMUNITY ENGAGEMENT

As a leading employer and historical fixture in the city, the Forchheim site – known locally simply as “Die Folie“ (The Film) – enjoys an extremely close relationship with its community. Beyond educational opportunities for area students, it also offers financial support for local sporting clubs and event organizers. The factory is currently a featured sponsor of the HC Forchheim 2011 women’s handball team, and previously sponsored SV Buckhofen‘s 11 – 13 youth football team. The plant has also provided funding for the circus performers‘ showcase ZirkArt and the Fränkische Schweiz-Marathon, which attracts thousands of runners, bikers, and skaters to the area each year.

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Charitable ContributionsThe Forchheim location makes a number of charitable contributions, most notably to Doctors Without Borders, which receives a yearly donation as part of an annual Christmas outreach. The plant also supports worthy local causes.

Since 2014, the Arbeiter- Samariter-Bund (ASB)’s Wünschewagen project has operated a fleet of specially equipped vehicles with which terminally ill and dying individuals across Germany can visit treasured

places with friends and family. To date, the project’s 1,300 volunteers have made over 1,500 wishes come true, supported by donations from individuals and organizations. The Forchheim finance team was among the first donors to the Wünschewagen Franken, which entered service in April 2019.

Annual donations are also made to the Kinderhilfe Eckental, which provides toys, games, and stuffed animals to children’s hospitals and hospice facilities in the greater Forchheim area.

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LABOR

The Forchheim location trains young professionals in a variety of blue-collar and white-collar occupations, and is the second-largest workforce educator in the district. In 2019, the site had 50 apprentices in sales and technical fields. Many who train at the plant go on to full-time positions there, and often remain with Loparex until retirement.

The site‘s three-year apprenticeship programs provide hands-on vocational education that emphasizes hard skills and critical concepts such as occupational health and safety and teamwork. White-collar trainees spend this time apprenticing in a variety of departments, learning about disciplines such as materials management, sales, marketing, finance and accounting.

Apprenticeships are also available for a variety of blue-collar occupations, including flexoprinting specialists, electricians, and industrial and process mechanics. In addition to making state-of-the-art machinery available to trainees, the factory completely modernized its training workshop in 2016, which now includes wireless access, laptops, projectors, and dedicated presentation areas.

The program is supported by the Upper Franconia Chamber of Commerce (IHK), which honored the Forchheim site for the quality of its education in 2019. The plant’s trainees have also acted as “Ausbildungs-Scouts“ (Training Scouts) for the IHK, touring local schools to share insights into the options and opportunities a vocational education offers.


Support for StudentsThe Forchheim location funds scholarships for gifted and talented engineering students through the German government’s Deutschlandstipendium (Germany Stipend) program. The Stipend, which was introduced in 2011, acknowledges top performers at state and state-recognised universities, and provides financing for them to pursue further studies. Here, the plant works in partnership with the Technische Hochschule (Technical University) Georg Simon Ohm in Nürnberg, sponsoring promising students in Applied Technology and Chemistry. In 2019, the Forchheim site was recognized by the Federal Ministry for Education and Research for its contributions to the program.

The plant also creates opportunity for younger students through its Schnupperpraktikum (Taster Practicum). This gives students at local schools the opportunity to spend a week exploring various departments, learning about their day-to-day activities and the skills and competencies behind them. A Schnupperpraktikum is often

a prelude to full-fledged vocational training, and can play an important role in helping students make decisions about their future careers.

Continuous DevelopmentContinuous development is another important facet of the Forchheim site’s labor policies, and has grown in both scope and quality over the past 5 years. Since 2014, the plant has partnered with the Volkshochschule (Adult Education Center) Landkreis Forchheim to give employees access to free and discounted classes in areas such as computer training, foreign languages, and reasoning and communication skills. Weekly Business English courses are also available on-site, accommodating all skill levels from beginner and up.

In 2017, the site appointed a full-time specialist for Personnel Development to create a more comprehensive framework for employee education. This resulted in the Sales Professional Program, which provides targeted team-based training in crucial “soft“ skills such as negotiation, persuasive communication, and product expertise.

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QUALITY

Quality is a central pillar of operations in Forchheim, and covers all aspects of the customer experience. The site follows what it calls a “000/100 Vision,” meaning production with zero outages, zero unplanned machine downtime, and zero waste while simultaneously achieving 100% satisfaction among stakeholders. The plant has operated under an ISO 9001 Quality Management System since 1986,

gradually expanding this to include a variety of other quality management approaches and measures, such as 5S and 6 Sigma. In 2017, this culminated in the launch of an program to establish comprehensive continuous improvement processes (CIP) across all levels and departments of the organization, creating the framework that currently underpins Loparex’s Integrated Excellence Initiative.


A rapid implementation of CIP measures across the manufacturing and administrative sides of the plant, fostered by dedicated training sessions, has created notable improvements in a comparatively short span of time. This was confirmed in 2019 when the site received a Silver Operational Excellence Award from the University of Ansbach‘s Center of Excellence for TPM (CETPM) for its work, joining previous notable awardees such as Continental and Daimler. Further underscoring the program’s success is the fact that the plant was able to achieve the fastest certification in the Award’s history. As of 2001, Forchheim also used a Hazard Analysis and Critical Control Points (HACCP) system to increase material safety and eliminate potential

sources of impurities and pollutants in its end products, particularly those manufactured for markets such as Hygiene and Health Care. Since introducing the system, the plant has recorded zero product recalls due to contaminated materials and zero workplace accidents resulting from material handling.

The Forchheim location’s quality focus is consistently reflected in its customer satisfaction metrics. A third-party survey of the site‘s major customers in Q1 2019 returned top rankings for reliability of product quality, with an average rating of 5.8 out 6. This in turn accounts for the plant‘s strong relationships with its top customers: here, the average business relationship is 15 years or longer, and average share of wallet is over 90%.

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In-house waste recycling through regranulation

Air purification and solvent recovery system installed

Becomes first producer of compostable bio waste bags in Germany

Second in-house waste recycling facility established

Introduces biodegradable dual-use diaper bags

Introduces biodegradable cast packaging films made from PLA

Introduces biodegradable blown packaging films made from PLA

Introduces tape films made from recycled materials

Introduces biopolymer backsheet films made from renewable resources


For over 40 years, the Forchheim plant has pursued new technologies, materials, and approaches in its efforts to create truly sustainable film solutions. Today, the site continues to use intelligent energy and waste management and continuous product development to deliver greener, more environmentally conscious customer solutions.

The plant takes a fourfold approach towards environmental sustainability:

• Replacing traditional film products with recycled, compostable, and bio-based solutions

• Reducing material and energy usage in products and manufacturing processes

• Reusing materials as often as possible in internal and customer production processes

• Recycling process and product waste, and assisting customers in the development of products with superior recyclability


A HISTORY OF SUSTAINABILITY

The Forchheim site‘s environmental sustainability efforts began in the 1970s, and have continued to expand since. The plant was an early pioneer in biodegradable materials, predating most industry efforts by decades.

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Sustainable SolutionsThe Forchheim site can produce films made of up 80% regranulated post-industrial waste, and is actively pursuing similar solutions from multilayer film waste. Compared to virgin plastic material, recyclates can reduce an end product’s CO2 footprint by up to two thirds.

The plant is also equipped to use post-consumer recycled (PCR) materials that meet Loparex’s high quality requirements as secondary raw materials. Although the use of these materials is often limited due to regulatory constraints, it is possible to produce films with up to 100% PCR

content for selected applications.

Additionally, the site works with a portfolio of polyethylene alternatives consisting of over 80% renewable biomass resources such as sugarcane ethanol. Such biopolymers have notably lower environmental impact than standard plastics, thanks to their ability to capture CO2.

Also on offer are soil-safe sustainable materials with certifiable industrial compostability, such as polylactic acids (PLAs) and thermoplastic starch blends. Such biodegradable films are also typically made of renewable biomass resources.


Reducing Energy UsageSince 2014, the Forchheim location has used a certified ISO 50001 Energy Management System and independent consumption analyses to identify potential savings and opportunities for optimization. These findings have resulted in a number of proactive energy-saving upgrades.

Recent renovations to the factory‘s cooling water system resulted in estimated savings of 360,000 kilowatt-hours (kW-h) per year. New water evaporators for on-site liquid nitrogen storage generate 270,000 kW-h of cooling energy a year for applications such as UV silicone p rinting, at the cost of just 8,400 kW-h of electricity. As a result of these and other measures, the plant has successfully

cut its overall energy consumption by 10% over 8 years, saving around 7.78 gigawatt-hours per year.

The Forchheim site is a founding member of the Industrieverband Kunststoffverpackungen (IK) Energy Efficiency Network, a partnership launched by Europe’s largest association for plastics packaging manu facturers. In October 2018, the 18 Network members publicly committed to reduce their energy consumption by 22 million kilowatt-hours within two years.

The Forchheim plant also practices conscious energy sourcing. As of 2019, 45% of the site’s energy needs were covered by renewable energy and 50% by natural gas.

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Reducing Material UsageFurther along the production chain, the Forchheim location has taken a lead in developing more resource-efficient manufacturing, using intelligent campaign planning, line start and finishing programs to reduce changeover waste across production lines.

Another important tool is downgauging, which minimizes material usage by reducing film thickness while still preserving thermomechanical properties.

With intelligent polymer selection and combinations, thickness can be reduced by up to 40% without affecting performance; 9-layer film manufacturing technology raises this to over 60%. The crown jewel in the plant’s downgauging efforts is its portfolio of ultra-lightweight films, which produce the thinnest packaging films in the industry. These use up to 50% less material than conventional films, with a target grammage of just 10 gsm, and retain the same look, feel, and processing options as their traditional counterparts.

MADE FOR RECYCLING

“Made For Recycling“ is a third-party standard developed by sustainability service provider Interseroh, research and advisory center bifa, and the Fraunhofer Institute for Process Engineering and Packaging IVV. It assesses how easily packaging can be disposed of, processed by a sorting system, and recycled once sorted.

Loparex’s printed polyethylene films for single wrap packaging were awarded “Made for Recycling” certification in 2019, scoring a full 20 out of 20 points.

Improving RecyclabilityPlastic is a high-quality material that readily lends itself to recycling, provided appropriate provisions are made in the end product. A variety of factors ultimately plays into whether packaging can be effectively recycled, including raw materials, coloring, labelling, and closure systems.

The Forchheim plant works hand-in-hand with its customers to optimize and certify recyclability in new product development. Beyond being more environmentally conscious, such optimizations help reduce disposal fees from regulations such as Germany’s VerpackG ordinance. Recovery concepts for film waste can also be tested on-site.

Reusing and Recycling MaterialsAt present, almost 90% of all internal film waste at the Forchheim site is either reused or recycled. Process films are reused whenever possible, while other process waste is regranulated and can be used to produce plastic pallets for internal usage. Edge trim waste from slitting is also collected and recycled, and the resulting recyclates are turned into process and packaging films. Plastic waste that cannot be used directly at the factory is sent off-site for material or thermal recycling.

These measures are supplemented by a solvent recovery system that reclaims solvent waste throughout the manufacturing process.

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Microplastics MitigationMicroplastics – commonly defined as plastic particles and fibers between 1 micrometer and 5 millimeters in size – have become an increasingly hot-button topic in the field of marine conservation. One reason for this is their impact: such pollutants not only endanger marine life, but can make their way back up the food chain, creating health risks for humans as well. Due to their small size and the many ways in which they can enter a marine environment, it is also more difficult to prevent microplastic pollution compared to more conventional waste.

Legislation regulating the spread of microplastics has been on the books since 2015, but the full extent of the issue is still relatively unknown. For this reason, Loparex is one of 14 industry partners actively contributing to the University of Munich’s ”Microparticles in the Aquatic

Environment and in Foodstuffs“ (MiPAq) Project. MiPAq examines the introduction, behavior, and impacts of microplastic in the environment, including mitigation and potential technical solutions. It goes beyond focusing on conventional plastic products to assess the effects of non-degradable plastics, biodegradable plastics, and natural particles on aquatic environments and food sources.

The Forchheim site also participates in the “Zero Pellet Loss” program initiated by the Industrieverband Kunststoffverpackungen in 2016. The Initiative focuses on the resin pellets used by plastic manufacturers, a notable source of microplastic pollution. It offers members a technical and organizational framework for eliminating pellet spillage în production and preventing pellets from entering marine environments.

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Regranulation of Internal Film Waste

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CLOSING THE LOOPTo support its environmental goals, the Forchheim plant has launched an R&D initiative called “Closing the Loop” to identify technological and process-

based innovations needed to create a circular economy for film products. The initiative touches on all stages of the plastic lifecycle.

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O U T LO O K

Sustainability and social responsibility will continue to play a central role at Loparex as we grow as an organization. We are committed to building on already successful programs in place at individual locations worldwide, as well as creating new initiatives for

our business as a whole. Health and safety will also have priority as we continue to protect the well-being of our workers and partners amidst the challenges posed by the COVID-19 pandemic. A number of concrete measures have already been planned for the near term, including:

Enhanced ReportingTransparency is a critical aspect of Loparex’s commitment to sustainability. While this report represents an important first step in providing appropriate insight into our work in this area, we will continue to publish and improve our reporting of key measures and metrics.

As of 2020, Loparex’s sustainability reporting will be expanded to include its US-based manufacturing sites; our Asian production locations are scheduled to be included from 2021 onwards.

Sedex CertificationSedex is one of the world’s leading ethical trade service providers, with a network of over 60,000 members in 180 countries and 35 industries. It provides critical data for suppliers as well as buyers, simplifying the process of ethical sourcing while creating opportunities for further improvement. The Forchheim location is already an active member of Sedex, and Loparex will further expand its presence on the platform in order to give buyers and partners more detailed insights into our supply and manufacturing practices.

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O U T LO O K

EcoVadis CSR ScorecardSince 2007, EcoVadis has helped over 65,000 businesses strengthen and optimize their sustainable procurement processes, among them leading multinationals such as BASF, Verizon, Nestlé, and Salesforce. The EcoVadis CSR rating system publishes comprehensive scorecards assessing performance in 21 CSR indicators across four major categories: Environment, Labor & Human Rights, Ethics, and Sustainable Procurement.

In the interests of improving transparency and driving further optimization, Loparex will be obtaining EcoVadis assessments for its operations.

FSC Chain of Custody CertificationThe Forestry Stewardship Council (FSC) is an international non-profit dedicated to ensuring "environmentally appropriate, socially beneficial and economically viable management of the world's forests." It is supported by around 850 organizations worldwide, including non-governmental organizations (NGOs), research bodies, trade unions, and private enterprises.

In addition to providing guidance certification for responsible forest management, the FSC also issues

Chain of Custody (CoC) certification to businesses that manufacture and distribute paper products. CoC certification traces the path of these products from source forests through the entirety of company’s supply chain, and requires that FSC-certified material is identified or separated from non-certified material throughout the chain. This creates greater transparency for consumers with regards to the origin and environmental impact of paper goods.

At current, both our Guangzhou and Silvassa production sites have received FSC CoC Certification. Going forward, this will be expanded to Loparex’s Apeldoorn plant in Europe and our US paper manufacturing locations.

Increase in Recycled Material UsageAs part of an organization-wide transition to sustainable product offerings, we aim to increase the amount of recycled material in our products to 10% or more by 2025. This commitment involves not only expanding application opportunities for recycled materials, but finding ways of recycling film products and waste that have not traditionally been incorporated into manufacturing processes at Loparex, building on research undertaken in Forchheim.

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