CSR Rapport 2020

CSR Report 2020

Statutory report of social responsibility ref. The Danish Company Accounts Act §99a. Part of Directors Report in CP Kelco 2020 Annual Report.

CP Kelco ApS · DK-4623 Lille Skensved · CVR: 21 21 02 85

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About CP Kelco CP Kelco ApS is a leading global producer of nature-based ingredients, which are used to improve texture and stability in food products, pharmaceutical and personal care applications. CP Kelco ingredients are also used in various household care products and industrial applications. The Company is owned by J.M. Huber Corporation, one of the largest family-owned companies in the United States. CP Kelco has manufacturing facilities in Denmark, Germany, the US, Brazil and China. At Lille Skensved, Denmark, CP Kelco ApS produces pectin and carrageenan based respectively on citrus peel and seaweed. The citrus peel is imported from South & Central America and Southern Europe, whereas the major part of the seaweed typically comes from the Far East, Canada, Chile, and Africa. The facility in Lille Skensved employs approx. 365 people within production, research & development, sales & customer support, purchasing and administration.

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The Huber Principles CP Kelco conducts business based on the Huber Principles. The Huber Principles define the company’s culture and align with longstanding core values of the organization. CP Kelco’s policy is to prevent incidents that affect people and environment. We strive to maintain a workplace where employees, contractors and neighbors are not injured or exposed to unnecessary impact. We will keep a high standard for occupational health, external environment, and process safety. At the same time, we will continue to implement improvements through cultural updates, reduction of resource consumption, training and a systematic approach. CP Kelco and the J.M. Huber Corporation are committed to operate in a way that minimizes our environmental footprint and are ready to participate in private/public partnerships that will help lead to a more sustainable future. The company’s evolving sustainability philosophy is focused on a Triple Bottom Line approach that balances People, Planet & Profit considerations when making critical business decisions. The local EHS+S department in Skensved ensures that the facility produces in accordance with Danish legislation and ensures local alignment and implementation of company EHS+S practices and targets.

SUSTAINABILITY

BEHAVIOR

Competitive advantage through

customer intimacy and operational excellence

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Environment As a manufacturer of nature-based ingredients CP Kelco consumes natural resources such as water, raw material, and natural gas. The site monitors usage of these resources closely and is continuously working to reduce the impact on the environment.

Water: CP Kelco is aware that clean water is a scarce resource and aims to reduce the amount of consumed water. CP Kelco’s target was to reduce the consumption of water by 6% between 2017-2020. This target has been achieved and exceeded as the total reduction in 2020 was 7,25%. From 2019 - 2020 there has been a reduction in water used vs production, resulting in the lowest amount of cubic meters in four years.

A result of the consumption of water is wastewater from the production. The amount of wastewater has decreased by approximately 7% in the same period of time. This decrease is mainly a result of the lower consumption of water. The decrease in wastewater vs. production is likewise the lowest in four years.

1.637.215 1.761.552 1.694.241 1.776.226 1.680.230

0500.000

1.000.0001.500.0002.000.000

2016 2017 2018 2019 2020

Water consumption

Total [m3]

1.181.679 1.359.375 1.381.325

1.439.378 1.334.058

0200.000400.000600.000800.000

1.000.0001.200.0001.400.0001.600.000

2016 2017 2018 2019 2020

Cleaned Waste water

Total [m3]

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Energy CP Kelco also focuses on energy savings and has implemented seven energy saving projects in 2020 achieving savings equivalent to 2.765 kwh. The overall target for the reduction of energy consumption from 2017-2020 was 2% per year – 6% in total. This target has been achieved with a total reduction of 15,51%. Natural gas is used by the plant in boilers for energy production, steam, heat, and electricity. From 2019-2020 there has been a decrease in consumption of natural gas by approximately 4%.

33.839.397 34.208.813 32.684.862 36.196.288 34.767.308

0

5.000.000

10.000.000

15.000.000

20.000.000

25.000.000

30.000.000

35.000.000

40.000.000

2016 2017 2018 2019 2020

Natural gas consumption

Total [Nm3]

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.

Electricity is part of the total energy consumption. 1/3 of the electricity consumption is bought and 2/3 is produced by the plant. There is a slight tendency to use more electricity from the grid. The consumption of electricity vs. production is lowered with 3%.

The emissions of CO2 from the plant have been reduced by approximately 5% from 2019-2020. This is a result of a lower oil consumption for energy production in 2020.

58.321 56.753 57.692 60.001 59.954

0

10.000

20.000

30.000

40.000

50.000

60.000

70.000

2016 2017 2018 2019 2020

Electricity consumption

Bought [MWh] Produced [MWh]

76,51 77,22 73,63 80,63 76,57

0,00

10,00

20,00

30,00

40,00

50,00

60,00

70,00

80,00

90,00

2016 2017 2018 2019 2020

Emission of CO2

Mt

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The overall reduction target for greenhouse gases (GHG) of 2% per year from 2017-2020 was not achieved; the actual result for this time period is 4,54%. CP Kelco is working actively on reducing the emission of C02 by developing a plan for further reductions. CP Kelco contributes to making district heating in the local community more sustainable. In 2017 CP Kelco started up the recovery of excess heat from the cooling towers for utilization in the district heating in the municipality of Køge and from 2017 – 2020 the amount of excess heat from CP Kelco used for district heating has increased continuously. As of 2020 more than half of the need for district heating in Køge is covered by excess heat from CP Kelco.

1.159

32.263

46.918 47.082

0

5.000

10.000

15.000

20.000

25.000

30.000

35.000

40.000

45.000

50.000

2017 2018 2019 2020

MW

h

Excess heat for utilization in district heating (MWh)

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Waste The production of pectin and carrageenan also results in waste. The total amount of waste is at the same level in 2020 as in 2019. Waste from the pectin production has increased whereas waste from the carrageenan production has decreased.

CP Kelco has a significant focus on recycling residues. The largest amount derives from the pectin production and CP Kelco coorporates closely with external partners to find the best possible ways to utilize the residues e.g. for production of green energy at Solrød Biogas. CP Kelco continuously investigates sustainable opportunities/alternatives for sludge and seaweed. The general focus on waste reduction has resulted in achieving status as a “Zero Waste to Landfill” plant diverting at least 90% of the waste from the plant towards recycling or beneficial reuse leading it away from landfill disposal. In 2020 the amount of waste to landfill decreased further from 39 ton to 16 ton.

119.744 107.055 112.610 139.056 140.1550

20.00040.00060.00080.000

100.000120.000140.000160.000

2016 2017 2018 2019 2020

Waste trends

Pectin Seaweed Sludge Perlite Bedaffald

113

82 88

3916

0

20

40

60

80

100

120

2016 2017 2018 2019 2020

Landfilled waste [ton]

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Occupational health and safety Safety CP Kelco SKV strives to be a safe place to work with major focus on preventing events and incidents through proactive safety initiatives and training. All employees contribute to this preventive effort by registration of near-misses and safety observations. Contractors and business partners are also involved in the proactive work as we believe that a safe and healthy environment includes the external companies with whom we coorporate. An open dialogue at all levels is promoted throughout the plant as we seek to create a common proactive safety culture for everybody working at the site regardless of employment relationship. Employees are very involved in finding solutions to overcome any challenges and naturally food safety and process safety are also included. The Health and Safety committee of the plant contributes to this work and also serves as ambassadors among the employees. There is a strong collaboration between the Health and safety committee, the EHS+S department and the management on the plant. Regarding LTIR (Lost time injury rate) there is a decrease in LTIR from 7,54 in 2019 to 5,56 in 2020 and the incident rate is well below sector LTIR.

The severity of incidents in the plant in 2019-2020 is not as high as reported for previous years. There is ongoing work to improve the system reducing the number of incidents e.g. through focus groups and workshops, Safety Walks on the plant, Safety Talks with contractors and audits. CP Kelco continuously aims to improve the work environment and ensure progress and development. Targets are discussed and approved by the Health and Safety Committee and communicated to all employees.

5,41

7,347,62 7,54

5,66

1,081,47 1,52 1,51

1,13

10,5

8,69,8 9,6

0,00

2,00

4,00

6,00

8,00

10,00

2016 2017 2018 2019 2020

LTIR per workhours[incidents with absence]

LTIR pr. 1 mill workhours LTIR pr. 200,000 workhours Branche LTIR

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Employees

The” Principles in Action” provide guidelines for fair employment practices. The Company is proud of the Group’s long-standing tradition for treating all employees with respect and dignity. Under the” Respect for People” principle, the Company values employee diversity and superior teamwork and does not accept discrimination due to gender, race, sexual orientation, age, nationality, religion, political belief etc. CP Kelco believes that Diversity & Inclusion contributes to strengthen unity and well-being and in CP Kelco Skensved we are successfully collaborating with AspIT which is an educational program for people with autism spectrum conditions. Furthermore CP Kelco wishes to retain the employees and is attentive to the fact that employees can have different needs for flexibility in the different stages of their working life, for an example by offering the opportunity for time limited agreements such as working part time, job rotation or similar. The company encourages an open dialogue between managers and employees to find the best solution for the employee and the company. Employees who for different reasons have a reduced ability to work full time can qualify for a flexible job. This ensures the employees connection to the labor market as well as maintaining experience and knowhow in the company. Job efforts and qualifications are factors that come into play when an employee is hired, promoted, paid etc. in CP Kelco. The company supports social initiatives in the community and is regularly in dialogue with the board of the citizens’ association in Lille Skensved. Average seniority in CP Kelco is still approx. 15 years. Education is in focus, and in 2020 CP Kelco initiated an education program for the black smiths in Maintenance which includes an educational upgrade to Automatic Technician. Over the last 18 years, CP Kelco has had 140 apprentices and 110 trainees. Health and well-being among employees are highly prioritized and every second year the employees are offered a health check by an external provider, giving the employee the opportunity to focus on specific health aspects. Several initiatives from 2019 continued into 2020 e.g. participation in national health campaigns such as We Cycle To/From Work. The cafeteria supports the good habits and offers healthy meals. The Company continuously works with health promoting initiatives and looks positively at supporting the employees’ own initiatives for example by supporting sports activities outside of the workplace such as badminton, yoga and spinning.

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CP Kelco strives hard to be a great place to work and is actively seeking feedback from employees to ensure that the initiatives to improve health and well-being are meeting the employees’ wishes and expectations. There is an Employer Engagement Survey every third year across the entire Huber organization and HR monitors employee satisfaction in connection to onboarding of new employees. Another tool is the yearly workplace assessment and in the latest workplace assessment (April 2020-April 2021) CP Kelco scores high in what is categorized as “Social Capital” in Denmark (86% in cooperation and 87% in trust and fairness).

The company is sought after among students as partner in connection with preparation of master projects and academic research; for example, there is a great interest in CP Kelco’s international Graduate Program. This program is a two-year on-the-job training and learning program involving rotation to three different sites enabling the graduate to acquire a wide range of hands-on experience and project management skills. The company is known in the community as a good workplace and is receptive and open minded towards new ideas and activities. Having a high score in the workplace assessment, high seniority among employees and a good reputation among students and in the local community can be explained with high employee satisfaction driven by the company’s approach to the employees. This approach supports the employees in having a high level of opportunity to influence their own work environment through the Health and Safety Committee, it gives the opportunity for education and development and creates and open and honest dialogue in the company.

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Ethics A very important element in the manner CP Kelco conducts business is ethical behavior. The Huber Principles are the basis of the Company’s Ethics Program, i.e. the values and principles followed beyond regulations which are mandatory by law. The company’s employees are expected to conduct themselves with professionalism and ethical responsibility toward others. The Company is operating its business with the highest standard for compliance with laws, regulations, and corporate policies as well as internationally accepted standards. This is expressed internally e.g. in the handbook containing guidelines on how to follow the ethical principles. Every employee is asked to confirm that he/she understands them and commits to adhere to the principles. The principles encourage open communication and ensure that potential ethical issues easily come up to the surface and are fixed correctly. If employees violate the company’s guidelines, it will lead to corrective actions and if relevant, even disciplinary action. There were no reports of inappropriate workplace behavior in 2020. Externally CP Kelco builds relations with suppliers who follow guidelines and standards corresponding to those of CP Kelco. The relevant guidelines are communicated to suppliers and the Company follows up on compliance with its principles during regular visits. Areas with a particular need for follow up are continuously monitored and reviewed. The supplier information database is continuously updated and has allowed us to perform risk assessment of suppliers and the materials supplied to CP Kelco. This risk-based approach is used to develop audits and action plans to address potential risks. The supplier audits cover areas such as quality, food safety and sustainability with focus on CP Kelco core values. The company is not involved with business suppliers who do not meet the company’s standards.

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Sustainability & CP Kelco Our drive is to improve today for a better tomorrow and CP Kelco’s Triple Bottom Line supports the United Nations Sustainable Development Goals. In the end of 2020 four UNSDG’s were identified to reflect how our sustainability strategy supports and aligns with the UNSDG’s. CP Kelco SKV will work continuously to positively impact these goals.

Read more about CP Kelco’s commitment to the UNSDG’s here: https://www.cpkelco.com/sustainability/united-nations-sustainable-development-goals/

CP Kelco ApS Ved banen 16 DK-4600 Køge, Denmark Tel.: +45 56165616 CVR: 21210285

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