cpl aromas · sustainability is important to cpl. we recognise that we cannot maintain our quality...

CPL AROMAS2018 SUSTAINABILITY REPORTInspired by a sustainable, circular economy

2018 Sustainability Report

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CONTENTSIntroduction

A message from Chris Pickthall 32018 at a glance 4

About CPL

Our Sustainability Commitment

Governance & Reporting

Performance Review

Appendix

About Us 6Where We Operate 7Our Supply Chain 7Our Purpose 8

Sustainability Vision and Strategy 10Stakeholder Engagement 11Our Focus 12Our Material Topics 13

Organisation and Implementation 18Commitment and Scope 19Reporting Process 19Feedback 19

Protecting Our Environment 21Caring for People 26Responsible Innovation 32Ethical Sourcing 37

External Initiatives 41Membership of Associations 41GRI Content Index 42


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A MESSAGE FROM CHRIS PICKTHALL Every day we impact our future, for better or for worse. Sustainable, honest, ethical and responsible working practices are integral to our business and to the future of our industry. The rising pressures on the planet and society from factors such as pollution, climate change, rising population, inefficient use of resources, improper waste management and so on, impact our business, employees, customers and communities. Although we are only one company, we recognise that our actions and decisions impact a global value chain.

At CPL Aromas Ltd., we embrace our responsibility to integrate sustainability into every aspect of our business, to meet the needs of today without compromising the ability of future generations to meet their needs. We have therefore launched a new sustainability vision and strategy to lead positive, transformational change.

We have defined an aspirational vision for what we can and should achieve, as well as a systematic approach to sustainability management, in line with our business strategy, underpinned by continuous learning and development, to inspire and drive lasting change.

In developing our sustainability strategy, we considered the ‘circular economy’ model, which aims to maximise the utility of resources by increasing efficiencies, keep resources in use for as long as possible, and recover and regenerate materials, reducing waste.

The fragrance industry is fast moving, and CPL Aromas is at the forefront of change. True sustainability is the work of many and we have dedicated teams that strive to look differently at challenges, break new ground, and challenge the status quo. In doing so, we’re actively shaping standards and supporting the next generation of fragrance innovators through key areas of our sustainable business vision.

In 2018, we saw great performance with sales growing by 11%. We also made significant progress towards our 2030 sustainability goals, with investment in renewable energy, employee development, and the appointment of CPL’s first ‘Head of Sustainability’. In a difficult climate, with increased costs, lack of material availability, supplier shut downs remaining a concern, and navigating political uncertainty, particularly with regards to Brexit, we continue to invest in green technologies, such as solar, LED lighting and rainwater harvesting, as well as research and development into new and existing technologies.

Sustainability is important to CPL. We recognise that we cannot maintain our quality of life for future generations unless we commit to change the way we work now. CPL’s commitment is to work in ways that help to minimise the detrimental environmental and social impact of our activities across the world 1.

Chris PickthallChief Executive Officer

CHRIS PICKTHALLCHIEF EXECUTIVE OFFICER

1GRI Disclosures: 102-1 & 102-14

2018 HIGHLIGHTS AT CPL101.9M

Group sales GBP18

Locations5*

Manufacturing sites

28,303Products sold

593Total

Employees

808,128Hours worked

safely

11%Increase in

sales

4Sustainably sourced raw

materials

7,067Tonnes

manufactured

WE INCREASED OUR DONATION TO CAFOD BY 14% RISING TO £275,000

IN 2018 WE ACQUIRED DM FRAGRANCES TO CREATE CPL

AROMAS SPAIN

WE ADDED A NEW R&D CENTRE TO OUR PORTFOLIO – CPL AROMAS

SPAIN

WE CREATED OUR FIRST SUSTAINABILITY TEAM & BRANDING

PRODUCT CATEGORIESPERSONAL CARE | HOME FRAGRANCE | FINE FRAGRANCE

HOUSEHOLD | LAUNDRY CARE

* this report excludes CPL Spain acquired in October 2018

ABOUT CPL AROMASORGANISATIONAL PROFILE & OPERATING FOOTPRINT


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ABOUT US

WE CREATE FRAGRANCES THAT IGNITE THE IMAGINATION

CPL Aromas is a world-leading fragrance house. We focus our creativity, innovation and energy on making outstanding fragrances. We bring new ideas and insights to help our clients grow their brands and delight their customers.

CPL remains a family owned business, and we employ almost 600 employees in 18 international locations serving customers in over 100 countries. We rank in the top 10 of the sector’s major businesses and we are the largest fragrance-only fragrance house in the world. CPL is home to some of the world’s leading perfumers and is trusted by the world’s top brands to translate their creative vision into best-selling fine fragrances and fragranced products.

At CPL, we pour our creativity and energy into producing fragrances that delight the senses. We also appreciate the deeply personal experience that fragrance brings: the ability to conjure up a cherished memory and capture it forever.

In the fashion and fragrance business, reputation is everything. That’s why we take an uncompromising approach to quality, working in partnership with our clients to create new fragrances their customers will love. We also have ground-breaking technologies that can unlock new, dynamic market segments for our clients to explore.2

2GRI Disclosures: 102-16


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ABOUT US

WHERE WE OPERATECPL Aromas is headquartered from the UK. We serve customers in over 100 countries and have operations throughout the globe. We are a business-to-business company serving many industries, mainly manufacturers of Fine Fragrance, Personal Care, Laundry, Household and Air Care products.3

OUR SUPPLY CHAINOur supply chain covers raw material sourcing through to delivering our fragrances to our customers. Much of the supply chain is out of our control, particularly the manufacture and supply of our Raw Materials, so we have put measures in place to mitigate the risk and ensure sustainable practices are being used.

Every raw material goes through a buying process. This includes Quality Control, Perfumery, Analytical and Regulatory assessments.

We try to eliminate long supply chains by going direct to source, resulting in full traceability for every material. A secondary source for our raw materials is vital. Natural disasters, crop failures and changes in demand can have an impact on our supply - having a secondary source helps to mitigate the risk and ensure continuity of supply to our customers.

In 2019 we will be implementing our responsible sourcing policy and will be working through the assessment process of our suppliers. This includes the commitment to sustainable practices, and ensures we are buying from ethical sources.

Our supply chain is well established and there have been no changes in the last 12 months.4

3GRI Disclosures: 102-2 – 102-74GRI Disclosures: 102-9 & 102-10

20%Natural

Ingredients

80%Synthetic

Ingredients

>250Number of

RM suppliers


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ABOUT US

OUR PURPOSEAt CPL Aromas our people drive our success. We believe that the more diverse our business, including an expansive geographic coverage and product portfolio, the greater our ability to achieve long-term, sustainable growth as the fragrance market expands.

As part of our sustainability strategy, we intend to add sales growth through targeting emerging markets, investing in our facilities and acquisitions within the fragrances industry.

In 2018, CPL Aromas acquired dM Fragrances. This important acquisition provides a base for the company in the important Spanish fragrance market, also providing additional sales in the Middle East and Africa where dM had a strong presence. The acquisition is of strategic importance to CPL Aromas as it ensures the company will continue to have production facilities within the European Union after the United Kingdom leaves the EU.5


OUR MISSION

“To be our key customers’ first choice for fragrances”

OUR PURPOSE

“To create fragrances that help drive our customers’ success through our innovation and outstanding customer service”

OUR VALUES

• We support all colleagues, earn their respect and communicate openly• We are one global team• We are creative, passionate, and have fun• We have a winning mentality• We care for the environment• We are honest and ethical

OUR COMMITMENTVISION & STRATEGY


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OUR SUSTAINABILITY COMMITMENT

SUSTAINABILITY VISION & STRATEGYCreating a sustainable future is essential to CPL’s long-term growth. At CPL, we embrace our responsibility to integrate sustainability into every aspect of our business. Our decisions and actions can impact the global value chain.

To maintain our success, we must change our perspectives and continuously improve our practices. We have embedded a sustainable mindset throughout our business and culture which is essential for continued success.

As we developed our new sustainability strategy, we began re-thinking the historical linear ‘extract – manufacture – dispose’ economy, and replaced this with a circular model that is both restorative and regenerative by design. This concept is a driver of sustainable innovation of products, business models, companies and economies and includes (but is not limited to) the following considerations:

To maintain our success, we must change our perspectives and continuously improve our practices. We aim to incorporate this way of thinking into transforming how we design our products, operate our facilities and engage with our employees, customers, suppliers and communities.

At CPL Aromas, we are committed to actively contribute towards the United Nations Sustainable Development Goals. We have integrated these goals into our sustainability strategy and business, highlighting where our efforts can provide the most value in advancing these goals.


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OUR SUSTAINABILITY COMMITMENT

STAKEHOLDER ENGAGEMENTWe engage with our significant stakeholders on issues that are important to them and to us, in order to identify mutually beneficial opportunities. We engage directly and indirectly with our stakeholders throughout the year, and goals and objectives are set with our stakeholders’ interests in mind. CPL has many avenues for dialogue with stakeholders, including information and feedback we receive during the ordinary course of business. This information is fed back during Sustainability Team meetings.

We have identified our key stakeholder groups that impact our ability to achieve the intended results of our sustainability strategy6:


Stakeholder Group

Communication Type Key Topics, Requirements & Concerns

Global Operating Board

– Monthly Board Meetings– Briefings – Conferences

– Economic performance– Raw material availability– Talent management– Legal Compliance

Local communities

– Local community engagement– Green Teams engaged with the communities we operate in

– Health, safety and wellness– Product environmental impact– Human rights– Diversity and inclusion– Transparency and reporting

Customers

– On-going dialogue– Customer sustainability requests– Customer visits and audits– Conferences and events

– Product quality, safety and environmental impact – Innovation – Human rights– Transparency and reporting

Suppliers

– Supplier assessments and audits– Collaborations to improve performance– Direct engagement with suppliers

– Responsible Sourcing– Raw Material Availability

Employees

– Employee engagement initiatives– Annual performance discussion– Talent management – Learning and development – Green Teams, engagements and on-going dialogue

– Professional development– Employment security – Good employee working relationships– Safe and healthy work environment– Diversity and inclusion

Law enforcers & regulators

– Emerging legislation/regulation– IFRA consultation– Media– Membership of working groups/ forums– Industry Conferences

– Product quality, safety and environmental impact– Responsible sourcing– Health, safety and wellness– Transparency and reporting– Human rights & Legal Compliance

Media

– Email communication– Social Media– News articles– Documentaries– Press releases

– Transparency & reporting– Climate change & renewable energy– Ocean pollution (single-use)– Rising & ageing population– Palm oil– Ethical practices


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In order for our strategy to be successful, it is paramount that we engage with our stakeholders regularly. We engage with our customers daily, to ensure we meet their requirements. Suppliers are critical for our success and we are working to ensure that sustainable practices are cascaded down within the supply chain. Employee focus groups have been used in the identification of our stakeholders and implementation of the engagement. The sustainability aspects listed in the table above are essential in setting the direction of our sustainability approach and prioritising use of resource.

Through dialogue with our stakeholders, we are able to identify opportunities to improve our relationships, our management of key issues, as well as collaborate on projects for shared benefit. By identifying the most important topics, we are able to prioritise our efforts where we can make the most impact.7

OUR FOCUSAs the need becomes increasingly more urgent, we are striving to become a forward-thinking, sustainable business. The purpose of our sustainability strategy is to achieve long-lasting, responsible growth, covering all aspects of our business. We have therefore designed our approach around four key pillars. By focusing on environment, people, innovation and sourcing, we can closely link our economic goals to our responsibility to the planet, our employees and wider society.


ENVIRONMENTMinimising our environmental footprint across the value chain

PEOPLEImproving health and wellbeing of members within stakeholder communities

INNOVATIONDriving sustainable business through responsible innovation

SOURCINGOptimising sustainability across our supply chain


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OUR MATERIAL TOPICSCPL have analysed our material topics and their scope according to social value and their value to CPL. This enables us to identify the topics with the greatest value potential in order to focus our energy and resources. Issues identified - considering our key stakeholder interests within the wider context of sustainability - allow us to analyse the significance of the topics for our business as well as the possible positive and negative effects on the environment and society. This informs our Sustainability strategy and enables us to set objectives that will have the greatest impact.

Based on this, our strategy focuses on the 10 issues identified as the most material and those of greatest importance to our stakeholders. We plan to evaluate our material topics regularly, to identify significant risks as well as new opportunities, along with our material topics for future reporting.

We believe the information presented within this report includes sufficient coverage of the following material topics and their boundaries to reflect our significant economic, environmental and social impacts for 2018.


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Explanation: Mitigating effects on climate change by reducing usage of energy and generation of emissions. Climate change has a direct impact on availability of our key natural resources because it alters ecosystems, disrupts raw material availability and water supply. As such, climate change poses a significant risk, yet also presents an opportunity to adapt processes and act to mitigate its effects.

Boundaries: Within CPL we are working to improve the efficiency of our sites, including clean energy, energy saving technologies and initiatives to reduce GHG emissions. We are continually assessing the risks posed by climate change and adapting where possible to mitigate adverse effects. Outside CPL, where possible we involve our supply chain, from raw material suppliers to service providers, to reduce their contributions to climate change.

WASTE MANAGEMENT

Explanation: Pursuing a culture of waste elimination by adequately managing all of CPL’s waste streams and methods of disposal. Waste management helps to limit our negative impact on the environment and reducing production of waste also results in cost saving.

WATER STEWARDSHIP

Explanation: Optimising the use of water, improving efficiencies and recycling where possible, as well as ensuring the quality of water discharged. Water is essential but in areas where availability is limited due to climate change there is increasing competition for access. We need to use water efficiently in order to keep our operations running and consumers are seeking products that are manufactured in a water-efficient way.

ENERGY & EMISSIONS REDUCTION

Boundaries: Within CPL we make efficient use of water and limit the environmental impact of the way we consume and discharge. We are continually assessing and implementing new water-saving technologies and efficiencies. Outside CPL, where possible we encourage our material suppliers and service providers to use water efficiently also.

Boundaries: Within and outside of CPL, we work to reduce waste through recycling and reuse; or, ensure that it is recovered and/or disposed of in an environmentally sustainable way.


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Explanation: Ensuring our products meet specifications on quality, are safe and comply with all applicable laws and regulations, as well as customer requirements. The safety of our products and the safety of the consumer are of the utmost importance. We must provide our customers with products that meet all agreed requirements and applicable legislation, or we run the risk of extra costs and damaging our reputation.

Explanation: Effectively recruiting, developing, engaging, positioning and retaining a balanced workforce that meets future business requirements. We focus on employee development to improve skills and productivity, continually adapting skills to requirements and offering the best opportunities. This helps to improve retention of staff, reduce costs and increase our revenue. It also makes CPL a great place to work and forms part of our objective to become an employer of choice.

Boundaries: Within CPL there is an engaging and inspiring environment for employees to realise their career aspirations. We foster proactive talent development, offering support and working to strengthen our leadership capabilities. In addition, we reinforce the growth of a strong workforce by developing industry experts and future leaders to develop skills for sustained success.

DIVERSITY & EQUALITY

Explanation: Having a balanced workforce which reflects the societies in which we operate, including efforts to eliminate all discrimination and ensure opportunity for people from all backgrounds to succeed. CPL operates in many different countries around the world and in order to be effective we need to understand the cultural differences that we encompass. Sensitivity to diversity and promoting inclusion is key

to developing a broad range of views within the company. We believe equal opportunities for everyone is important to our success.

Boundaries: Within and outside CPL, we have to be open to sharing data and information, internally and externally.

Explanation: Providing a safe and healthy working environment and a culture of responsible employee behaviour, as well as improving employee wellbeing. Our ongoing success depends on the health and safety of our employees. We also have an objective to become an employer of choice and our effortsto improve employee wellbeing in and outside the

workplace are central to this.

Boundaries: Within CPL we reduce the number of health and safety incidents by improving the workplace environment, safety behaviour and awareness.

EMPLOYEE HEALTH SAFETY & WELLNESS

EMPLOYEE DEVELOPMENT & ENGAGEMENT

The quality of our products is the key to our success and that of our customers, so we must place their need for quality at the heart of everything we do.

Boundaries: Within and outside CPL, we ensure our products are safe for people and the environment when used as intended and that they comply with all local laws as a minimum requirement. We gather information on the origin of ingredients to support compliance.

PRODUCT QUALITY & SAFETY


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TRANSPARENCY & REPORTING

Explanation: Disclosing an adequate level of information and data in alignment with recognised frameworks and in compliance with local laws and regulations. Transparency is expected in all areas of our business, from supply chain data to R&D information, formulas and business processes. Increased transparency has a positive impact on our

RESPONSIBLE SOURCING

8GRI Disclosures: 102-46 & 102-479 Management Approach GRI Disclosures: 103 – 1 for all material topics, pages 13-16

PRODUCT INNOVATION

Explanation: Optimising the environmental impact of our products within our supply chain, in the way they are designed, manufactured and ultimately used by the consumer. We want to minimise the negative environmental impact of our products. This is important to our customers and their consumers, and it is key to improving our own financial and environmental performance. But we must also proactively influence positive change. CPL has the desire and the ability to shape the future of the fragrance industry and our approach to Innovating

Responsibly must consider the potential impact of our processes and products on the wider environment.

Boundaries: Within CPL, we develop new technologies and processes to limit the environmental impact of our products and encourage positive behaviour. Outside CPL, we engage with customers to develop new products and technologies that are healthier and more sustainable.

reputation, which boosts loyalty among customers and employees, and therefore our bottom line.

Boundaries: Within and outside CPL, we must be open to sharing data and information, internally and externally.8,9

Boundaries: We are currently developing our responsible sourcing and partnerships policy to enable us to work with our suppliers to make sure they have plans in place to meet our sourcing standards.

Explanation: Ensuring high standards in health & safety, social issues, environmental protection and business integrity in the way we source. By developing our responsible sourcing initiatives, we can reduce our environmental and social impact. Our sourcing strategy also helps to mitigate the risks inherent in our complex supply chains.

GOVERNANCE & REPORTINGSTRUCTURE & REPORTING PROCESS


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GOVERNANCE & REPORTING

ORGANISATION & IMPLEMENTATION This year we have created our sustainability team. The CPL Sustainability Team is the global and cross-business committee that helps integrate sustainability principles more strongly into our core processes. To further reinforce our commitment to sustainability, we have also appointed our Head of Sustainability.

Under the chairmanship of the Head of Sustainability, representatives come together quarterly to ensure that sustainability-relevant topics and the concerns of our important stakeholder groups are considered along the entire value chain.

Our leadership teams at each site play a vital role in the roll-out of our strategy and integrating sustainability into the objectives and the culture of their divisions.

We manage sustainability by integrating processes into our Management Systems:10

10GRI Disclosure: 102-18

Quality ISO 9001

Work SafetyOHSAS 18001

EnvironmentISO 14001

Social Responsibility

SA 8000

GLOBAL OPERATING BOARD

PURCHASING MARKETING OPERATIONS R&D PERFUMERY HR QSHE

GROUP TECHNICAL DIRECTOR

HEAD OF SUSTAINABILITY

SUSTAINABILITY & GREEN TEAMS


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COMMITMENT & SCOPECPL Aromas fully expect all staff and contractors to uphold our sustainability strategy. We commit to educate our suppliers of our policies and encourage them to align operating practices with policy objectives.

Our attention to environmental, social and economic responsibility including all compliance obligation allows us to be innovative and demonstrate leadership on the issues that are important to us and our stakeholders.

This report covers our manufacturing sites (excluding CPL Spain, acquired in October 2018). All operations are included in the consolidated financial statements, found at www.cplaromas.com.

In 2019 we commit to including all category A sites into our reports. Category A sites are defined as any manufacturing site regardless of the number of employees or any other site (e.g. offices and labs) with greater than 50 employees. Joint ventures are excluded.

Since this is our first report, it is difficult to provide effective comparison against historical data.11

REPORTING PROCESSThis is our first sustainability report. This report covers 1st January 2018 – 31st December 2018. We commit to report on an annual basis going forward. This report has been prepared in accordance with the GRI standards: Core option. We currently do not seek external assurance regarding this report.

This report presents information with a long-term, forward-thinking view. It describes CPL’s aspirations, predictions, objectives and expectations, yet actual outcomes could diverge significantly. Factors that could result in changes to CPL’s operations include (but are not restricted to) disruption in the supply of raw materials due to breakdown of suppliers or external factors such as climate change, changes in regulations, laws and other government statutes, and risk of changes in consumer preferences or expectations. As this is our first Sustainability Report, we have collated 2018’s performance data to act as a baseline from which to report all future progress.

All objectives have been established in line with and contribute toward the UN Sustainable Development Goals (SDGs).12

FEEDBACKFor questions regarding this report please contact us at [email protected] 13

11GRI Disclosure: 102-4512GRI Disclosures: 102-50, 51, 52, 54, 5613GRI Disclosure: 102-53

PERFORMANCE REVIEWENVIRONMENT, PEOPLE, INNOVATION & SOURCING


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PROTECTING THE ENVIRONMENT

MINIMISING OUR ENVIRONMENTAL FOOTPRINT ACROSS THE VALUE CHAIN

The rising pressures on the planet from factors such as pollution, climate change, inefficient use of resources and improper waste management, impact our business, employees, customers and communities. We recognise that our actions and decisions impact a global value chain.

At CPL Aromas, we embrace our responsibility to protect our environment throughout every aspect of our business, to meet the needs of today without compromising the ability of future generations. Sustainability efforts embedded throughout strategy result in positive impact on business performance.

Our objectives have been established in line with and contribute toward the UN Sustainable Development Goals (SDGs).

We operate each of our manufacturing facilities in line with ISO 14001: 2015 Environmental Management Standard. This enables us to record and report our environmental performance across our sites. Performance is measured and evaluated through regular Management System reviews, internal and external auditing.

At CPL we are taking action. We are implementing ambitious objectives, aimed at minimising our environmental impact. We have assessed all of our activities and those of our suppliers to find opportunities to limit our environmental impact.

OUR OBJECTIVES

1. 100% renewable electricity by 20302. 50% reduction of Scope 1 & 2 emissions14 by 20303. 20% reduction in global municipal water consumption14 by 20304. Zero waste to landfill by 2030

14Per tonne produced

CPL Aromas Ltd. supports

the SDGs


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ENERGY & EMISSIONS REDUCTIONEnergy efficiency is vital to our commitment to sustainable business by significantly reducing our environmental impacts as well as operating costs. Energy use is a big contributor to GHG emissions. Our strategy focuses on minimising energy use and increasing the amount of renewable energy that we purchase. Our objectives will contribute to the global target of keeping a global temperature increase below the 2°C threshold.

Our Environmental Managers, Green Teams and Senior Leadership are working hard to reduce our emissions and energy consumption across the globe, through the use of energy saving technologies, operational efficiencies and clean energy generation.15

In 2018, our total energy consumption was 10,228 gigajoules. 94% of our electricity is currently purchased from sources of non-renewable energy.16

In 2018, our manufacturing facility in Dubai set about creating a private solar power plant that will offset 326,041kg of carbon dioxide annually.

Matthew North, General Manager Dubai, explains: “We began this development as environment sustainability is one of CPL’s key values; CPL Aromas is committed to the protection of the environment, continual improvement in our environmental performance and compliance with both applicable legislation and company policies”.

Solar energy is a smart choice and has many financial and environmental benefits which will assist CPL in meeting our 2030 renewable energy targets. The installation of the solar panels will be completed by April 2019.

Our combined Scope 1 and 2 emissions for 2018 was 828959.49 kg CO2e (117.3kg CO2e per tonne produced). Our Scope 1 (direct) emissions are significantly lower than our Scope 2 (indirect) emissions as a result of energy usage. We aim to eliminate all sources of Scope 1 emissions and significantly reduce our Scope 2 in order to meet our 50% target by 2030.17

Our manufacturing sites are our highest users of energy. CPL are investing in energy-saving and renewable energy generation technologies, such as LED lighting and solar power, in order to reduce our energy demand as well as our GHG emissions – a long-term investment with significant cost savings.

We have received approval for the installation of solar panels at 2 of our manufacturing sites, which will be installed during 2019.

15GRI Disclosures: 103-2 & 103-316GRI Disclosures: 302-117GRI Disclosures: 305-1 & 305-2

CPL Dubai harnesses solar energy


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WATER STEWARDSHIPWater scarcity is becoming an increasingly important issue as the global demand grows. We recognise water scarcity is a risk to local communities and to business growth. We are therefore working toward a water management strategy to address these concerns and have set an ambitious target to reduce water use by 20% per tonne of product by 2030 (for municipal and groundwater) This objective is in line with the United Nations SDGs.

At CPL, we are committed to making efficient use of water and to limit the environmental impact of the way we consume and discharge water. Our actions include reducing water use through operational efficiencies, recycling water where possible and making use of other sources such as rainwater. We ensure that the wastewater from our operations is discharged responsibly. Water is an essential element in our manufacturing activities as well as throughout our entire value chain. Our Environmental Managers, Green Teams and Senior Leadership continue to explore and identify innovative ways to reduce our water usage and diversify water sources.18

In 2018, we withdrew approximately 3000 cubic meters of water from municipal sources (2,772,814 litres). This works out to be 392.4 litres per tonne produced. Operational efficiencies, water-saving technologies and initiatives such as rainwater harvesting, are being investigated to further recycle and reuse water.

18GRI Disclosures: 103-2, 103-3 & 303-1

In 2018, CPL Aromas Dubai & CPL Aromas Colombia achieved certification to the international environmental standard ISO 14001:2015, joining our UK manufacturing facility as the 2nd and 3rd CPL sites certified. Gaining certification is a huge achievement and there is an ongoing objective to implement in all manufacturing sites around the world.

“Working towards certification has put environmental considerations at the forefront of people’s minds, driven new environmental initiatives and helped us identify areas of environmental significance so that we can channel resource there to make the biggest impact possible.” - Emily Heron, Head of Sustainability.

One of the values that make CPL who we are is “We Care for the Environment”; we care about the impact we have in our industry and society and ISO 14001 demonstrates those values which set CPL apart.

CPL Sites Achieve ISO 14001:2015 Certification


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WASTE MANAGEMENTThe ultimate goal is to eliminate waste. Through operational efficiencies we can reduce the amount of waste we produce, recycling where possible to decrease landfill disposal and where recycling is not possible, incineration for energy recapture and recovery.

A circular economy is vital for waste management, a restorative and regenerative economy in contrast to a “take-make-dispose” linear economy. We have set an ambitious target of sending zero waste to landfill by 2030. Less waste to landfill benefiting CPL, the wider society and environment. This goal encourages employees to implement innovative solutions to reduce waste through reusing and recycling materials at home.

We undertook an assessment across our sites to determine our various waste streams and their disposal methods. One of our sites (UK manufacturing) already sends zero waste to landfill. Our UK Sustainability and Green Team representatives are now working with other locations to share methodologies and roll-out globally.

In 2018, we disposed of 5635 tonnes of waste in total. Of this, 41.85 tonnes (7%) was sent to landfill (the equivalent of 4176kg CO2e), 118.73 tonnes (21%) was sent for incineration and 402.92 tonnes (72%) was recycled. We currently do not separate out waste data by hazardous/not hazardous (this is to be included for reporting period 2019).

Our next steps include a thorough review of our waste contracts and methods of disposal, eradication of single use items (including plastics) where possible, and an increase in recycling of applicable materials.19

Since 2015, the local teams at Brixworth manufacturing have been making strides towards hitting its site sustainability goal of zero waste to landfill, and it has finally achieved this. 100% of the waste generated at Brixworth is either re-purposed, recycled, or sent for alternative methods of disposal, such as incineration for energy recovery.

For example: waste fragrance oils are re-purposed to create blends for potpourri; steel drums are made from 100% recycled steel and are recycled after use, and; materials contaminated with fragrance oil are sent for energy recovery.

In 2019, the team will continue its efforts, identifying local waste management partners who can guarantee disposal with positive environmental effects. Proper waste handling and separation is necessary to make reuse and recycling possible and so the team will continue to work internally to make sure that the importance of separating waste at source is well understood.

Zero Waste to Landfill at Brixworth Manufacturing

19GRI Disclosures: 103-1, 103-2 & 306-2


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MONITORING PROGRESS

2030 Target 2018 Results Goals for 2022 Measure/ Future Plans

100% Renewable Electricity

0% renewable electricity

30% renewable electricity

Collation of energy usage figures for all Category A20 sitesImplementation of solar panels at relevant manufacturing facilities

50% Reduction of Scope 1 & 2 Emissions21

15.22kg CO2e per batch produced 15% reduction21

As above, plus: LED lighting implemented globallyElimination of Scope 1 emissions (move to electric cars and FLTs)Removal of R22 gas from all air conditioning unitsVoltage optimisation

20% Reduction in Municipal Water Consumption21

50.92 litres per batch produced 10% reduction21

Water use reviewCleaning process reviewRainwater harvestingRecycling and water saving technologies

Zero Waste to Landfill 7% waste to landfill 5% to landfill

Review of all contractsEradication of single use itemsAlternative methods of disposalIncrease in recycling Target achieved at CPL Brixworth

20Category A facilities are any manufacturing site regardless of the number of employees or any other site (e.g. offices and labs) with greater than 50 employees. Joint ventures are excluded.21Per tonne produced


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CARING FOR PEOPLE

IMPROVING HEALTH AND WELLBEING OF MEMBERS WITHIN OUR STAKEHOLDER COMMUNITIES

Health, safety and wellness of people and society is integral to sustainability. For society to flourish, all members must have their basic needs met and their human rights protected.

Our responsibility goes far beyond our own business. At CPL, we work with people across the globe, living and working in a wide range of environments and economic situations. Ensuring each person that we come into contact with has access to basic resources, their health is protected and they enjoy good quality of life, is key. We are committed to helping local communities, engaging our employees and providing an inspiring and supportive environment in which they can make a significant impact. Research shows that by helping our employees consider how they can uniquely impact the world, it makes them happier and more productive.

It is a key business objective to operate in a manner that protects health & safety of our employees, contractors and visitors who come to site. We currently operate a H&S management system in line with OHSAS 18001. We also embrace a balanced workforce throughout our organisation and are fully committed to a culture of inclusiveness. By reflecting societies and cultures in which we operate, we strive to strengthen our teams by providing opportunities for people of all backgrounds, gender and age, operating in line with SA8000:2008.

OUR OBJECTIVES

1. Become an Employer of Choice by 20302. Zero Lost Time Accidents by 20303. Develop at least one local community project at each CPL site20 by 20304. Increase support towards global CSR projects year on year

20Applies to Category A facilities – any manufacturing site regardless of the number of employees or any other site (e.g. offices and labs) with greater than 50 employees. Joint ventures are excluded.


the SDGs


27

To provide a better employee experience we are focussing on the following 5 key areas:- Recruitment and onboarding: getting the right people for the right role - Leadership: enhancing leadership capability and development pathways- Performance: building performance driven culture and renumeration - Development: providing development opportunities for people to learn and grow- Process: improve HR processes, policies and support

Employee Data 2018No. of employeesAll 488Male 245Female 243PermanentAll 483Male 244Female 239UK 159Dubai 100Colombia 48Hong Kong 136China 40TemporaryAll 5Male 1Female 4UK 0Dubai 0Colombia 0Hong Kong 5China 0Full-timeAll 466Male 239Female 222Part-timeAll 22Male 5Female 17

New Employee Hires 2018

Male 47

Female 74

<30 years 54

30-50 years 55

>50 years 12

Europe 31

Asia 68

Middle East 14

Americas 8

Aus. & NZ 0

At present, none of our employees are covered by collective bargaining agreements.23

In 2018, our focus has been on enhancing leadership capabilities. We have enhanced our leadership capabilities through sessions for ‘women in leadership’, as well as ‘leadership to drive business growth.’

We have continued with our trainee schemes, developing our trainee perfumer course and held our first Global Sales & Key Account Academy Program.

22GRI Disclosures: 103-2 & 103-323GRI Disclosures: 102-8, 102-41, 103-2 & 401-1

EMPLOYMENT OF PEOPLEAt CPL, we recognise that our success is centred around our people and their talent. It’s the passionate dedication, hard-work and creativity of our workforce that enables us to continue to deliver quality fragrances and exceptional customer service.

CPL’s HR strategy is to be the employer of choice. We owe our success to the exceptional dedication of our global workforce and, in order to sustain this success for the long-term, we recognise the need to strive for positive employee experience and engagement. We want to retain our staff, attract top talent and build a reputation as a great place to work.

In the development of this strategic objective, we have designed our HR framework around: designing business objectives and deliverables; building workforce capabilities; performance reward and recognition; and engaging our workforce. Our objective is to create an environment within which our employees can experience job satisfaction and continuing professional development. 22


28

DIVERSITY & EQUAL OPPORTUNITY We are one global team and diversity and equal opportunity is important. We believe that by reflecting those societies and cultures in which we operate, our teams are strengthened and reflect the customers in the areas we serve. We provide opportunities for people from all backgrounds, gender, locations and ethnicities, without discrimination.

As an international business, serving customers in over 100 countries around the globe we need the right people in the right location to represent our customers better.

Our ethical and social accountability policy is written in line with the provisions of SA 8000 Social Accountability Standard, which is mandatory throughout the company. This standard is based on the UN declaration of human rights, conventions of the ILO, International Human Rights norms and national labour laws.24

We have a diverse staff in terms of gender and age ranges. Part of our commitment to become an employer of choice is to ensure we continue to develop a workforce of getting the right people in the right role and offer the same opportunities irrespective of background, gender, location or ethnicity.25

This recent photograph taken outside our Jebel Ali sales office illustrates the truly diverse nature of our company with some of our employees dressed in their national attire. CPL Dubai now employs 95 members of staff and within that we have colleagues representing 21 different nations. Hattie He, Global HR Director says, “diversity is more than just policies and practices, it is an integral part of who we are as a company, how we operate and how we see our future!”

Diversity

2018

Directors

Male 10 (90.9%)

Female 1 (9.1%)

<30 years 0 (0.0%)

30-50 years 3 (27.3%)

50+ years 8 (72.7%)

Rest of the workforce

Male 245 (50.2%)

Female 243 (49.8%)

<30 years 117 (24.0%)

30-50 years 319 (65.4%)

50+ years 86 (17.6%)

24GRI Disclosures: 103-2 & 103-325GRI Disclosures: 405-1

Embracing Diversity


29

HEALTH & SAFETYThe safety, health and wellbeing of our employees is of the highest importance. We have, therefore, set an ambitious target to eliminate accidents and injuries within the workplace. Good performance, however, is only possible through continual monitoring, assessment and improvement, and past achievement does not guarantee future success.

We operate a global Health & Safety Management System in line with OHSAS 18001 to help maintain a safe and healthy working environment. Our lost time accident rate (LTAR) is low and well-controlled, with no fatal injuries occurring.26

All Male Female

Fatalities 0 0 0

Number of LTAs 7 6 1

Number of injuries (non LTA)

24 14 10

LTA Rate1 (LTAR) 4.329 5.0505 3.6075

Lost Days 44 37 7

Lost Day Rate2 (LDR) 7.93651 13.348 2.5253

Number of employees 600 300 300

Number of days worked 138600 69300 69300

Number of Hours Worked4

1108800 554400 554400

CPL Aromas is firmly committed to maintaining and improving all aspects of its health and safety performance. It is a key business objective of CPL to operate in a manner that protects the health & safety of our employees, customers, contractors and visitors.27

26GRI Disclosures: 403-227GRI Disclosures: 103-2 & 103-3

Our leadership team show their commitment through our Senior Management Audits of Health & Safety. These are conducted yearly at each site, emphasising our commitment for Safety and ensuring our sites are meeting the expectations of the business.

To achieve our target for all CPL sites to achieve zero lost time accidents by 2030 we have put the following actions in place:

• All CPL manufacturing sites to be certified to ISO 45001:2018 Occupational Health and Safety by the end of 2025• Prevention of incidents by: rigorous risk assessment; thorough investigation and root cause analysis, and; improved group communication and information sharing• Reviewed and updated induction process to ensure all new employees, contractors and visitors are aware of hazards• Behavioural safety auditing of every site

The above is to be underpinned by use of an inter-site reporting tool, to facilitate continual improvement, encourage openness and promote sharing of information & documentation, with access to all employees.

CPL & Sunderland University

We have been a partner with Sunderland University for 3 years now teaching students of BSc Cosmetic Science Course all things fragrance.

Glenn Moran, Analyst: “For our industry to have a sustainable and vibrant future, it is essential to invest in the education of the next generation of scientists and professionals. For this reason it was a privilege to spend some time working with the enthusiastic and talented young scientists at the University of Sunderland and to support them during the course of their studies in Cosmetic Science”.


30

COMMUNITY & CORPORATE RESPONSIBILITY We believe in sharing our resources with some of the most marginalised communities of the world. We commit a proportion of our profits every year to charitable initiatives, working on a range of projects that are committed to impacting society for the better.

We are longstanding partners with CAFOD (Catholic Agency for Overseas Development) and work with CAFOD’s inspiring teams on a variety of projects every year. We fund charitable initiatives that help the poorest and most vulnerable communities in the world – regardless of religion or culture.

CAFOD promotes long-term sustainable development, advocates economic justice and works to build peace. CAFOD works in partnership with local organisations on community projects, ensuring the context of the issue is thoroughly understood. Whilst the church allows access to these vulnerable communities, CAFOD’s vast network is formed of both religious and secular organisations. CAFOD support schemes ahead of, during and after completion of projects. It is essential to find ways to empower the community so they are able to continue this developmental work themselves into the future.

Engaging with the communities in which we operate is also vital in ensuring sustainable cities and communities (UN SDG 11). We are therefore committed to engaging our employees as the primary agents of change in their local communities.

We have partnered to establish COFVI (The College of Fragrance for the Visually Impaired) in Mumbai, to provide employment opportunities to the visually impaired in India’s fragrance industry.

CPL undertook substantial research together with the Blind Person Association (Mumbai), and were able to prove that the visually impaired have a heightened sense of smell compared to people with unimpaired vision. In India, this is helping to change the mindset of a marginalised community, showing them that, what may be perceived as a disability can in fact be a unique gift.

COFVI was established off the back of this research. The organisation is now committed to educating a new generation of visually impaired evaluators and perfumers and is working with global fragrance powerhouses to challenge the lack of visually impaired employees in the industry.

We believe that the benefits of creating a culture in which everyone can thrive and positively impact the communities around us, far outweigh the costs. But we believe giving should be more than just financial. We dedicate time to supporting life-changing activities.

COFVI: Chanchal’s Story

CPL India’s Trainee Evaluator Chanchal graduated from COFVI in September 2017.

“I found out about COFVI through the National Association for the Blind in Mumbai. I didn’t know about any school or institute providing such a unique degree. After coming across COFVI, I was very keen to enrol on the course and build a career out of my passion.

The course is very well balanced, giving students exposure to the whole spectrum of the fragrance industry. I was also able to develop my soft skills alongside technical skills. I believe confidence is vital for every individual. My training at COFVI has done immense good to my confidence, and this is visible in my work. People around have always believed in me and I feel fortunate to have their support and guidance.”

CAFOD: Working to Improve Employment Opportunities for Arab Women in Israel

CPL continue to support various CAFOD projects throughout the world, including an employment project for rural Arab women in Israel. This project continues to offer a unique solution for women who remain at the bottom of the social ladder, empowering Arab women and giving them the confidence to challenge any disrespectful or discriminatory treatment they face.

In the past six months, through this project 211 women have been employed in the agricultural, caregiving and cleaning sectors. In addition to this, the project continued its policy of networking to influence change and promote job opportunities for Arab women, including holding lobbying meetings with the Welfare and Work committee of the Israeli parliament.


31

MONITORING PROGRESS

2030 Target 2018 Results Goals for 2022 Plans to achieve

Employer of Choice

2 trainee schemesWomen in leadership training & Leadership development workshop

Increased staff retention and diversity

Improve HR processes, policies and supportAdditional measures of diversity assessed

Zero Lost Time Accidents

7 Lost Time Accidents (LTAR 4.329)

Reduction of 50% in LTAR Implementation of ISO 45001

At least one local community project at each CPL site 28

COFVI, NAB One community project per site

Global drive to engage employees in selection of local projects

Increase support towards global CSR projects

£240,000 Increase financial support by 100%

Employee EngagementFundraising Initiatives

28Category A facilities - these are any manufacturing site regardless of the number of employees or any other site (e.g. offices and labs) with greater than 50 employees. Joint ventures are excluded.


32

RESPONSIBLE INNOVATION

DRIVING SUSTAINABLE BUSINESS THROUGH RESPONSIBLE INNOVATION

Sustainability without economic growth cannot succeed. Economic sustainability requires that we use our resources effectively and responsibly so that we can consistently drive economic success. Sustainability is at the key topic for business and research has shown sustainability benefits business when integrated throughout operations.

Innovation is a key value of our business – we innovate to drive sustainable business through creative thinking and innovative approaches toward company growth, as well as new technologies. Companies are dealing with unprecedented combinations of economic, social, environmental and technological trends, that require sophisticated and innovative, sustainable management.

Consumers are increasingly aware of climate change and resource depletion, and this trend is guiding the focus of innovation at CPL. Our goal is always to create fragrances that ignite the imagination, helping our clients grow their brands and delight their customers. Sustainability is a key part of our innovation and adding value by developing products that benefit both the environment and society. This means finding more efficient production practices, reducing waste generated and the overall impact on the environment and human health.

CPL operates global and local quality management systems in line with ISO 9001:2015 that helps us to manage this vital pillar of sustainability.29

OUR OBJECTIVES

1. Sell annually £5m of Ecoboost fragrances by 20302. Develop a sustainable, biodegradable capsule technology for Aromacore by 20223. Improve internal and external sustainability communication

We were Gold Sponsors of this year’s IFRA UK Fragrance Forum

CPL Aromas were delighted to be gold sponsors of the 2018 IFRA UK Fragrance Forum. Each year, the Forum provides a great opportunity for members and associates to come together outside of everyday work and turn their attention to broader themes and activities that affect or influence our industry.

2018’s event had the theme of ‘Scentimental – fragrance on the mind’ and took place on World Mental Health Day. The event had a fantastic range of speakers who showcased different areas of research

on the link between our minds and olfaction, as well as a talk on the impact scent can have.

Topics included the role olfaction plays in detecting Alzheimer’s Disease; why certain smells are ‘hard wired’ into our brains and how they affect our wellbeing; and the link between olfaction and cognitive function.

The day was incredibly well-received and created a real buzz around the research that was presented.

29GRI Disclosures: 103-1, 103-2 & 103-3


the SDGs


33

ECONOMIC PERFORMANCECPL grew by 11% in 2018, a great performance given the climate. Increased costs, lack of material availability and supplier shutdown remain a concern, but we have put strategies in place to mitigate these risks. In 2019, we again are aiming for sales growth in a challenging environment. Negotiating contracts and raw material availability is a priority, and navigating political uncertainty, particularly with regards to Brexit.

In 2018, we acquired dM Fragrances, now trading as CPL Aromas Spain. This strategic acquisition has added a new manufacturing site to our company and helped us mitigate the risk of Brexit. This new site allows us to continue supply throughout Europe should we have a hard Brexit. It has also enabled us to enter the large and exciting Spanish market and work with new customers in Spain and across the world.

In addition, we continue to invest in our facilities, with automation introduced to our Colombian manufacturing site to enable more efficient production and increased capacity, and a new IT Centre of Excellence to digitally transform and lead CPL Aromas into the next phase of growth.30

GBP (000) 2017/18Sales 91471Operating Costs 70717Employee Wages and Benefits 20613Community Investments 275

30GRI Disclosures: 103-2, 103-3 & 201-1

CPL Appoints New Head of Sustainability

In 2018, CPL Aromas appointed Emily Heron as its first Head of Sustainability. Emily started working with CPL in 2012 and with her experience managing the QSHE department, she was the perfect fit to take on the role. CPL is committed to deliver continualimprovement and this new role is important in raising awareness of the importance of sustainability issues across all of its global sites. Emily is key in shaping CPL’s commitment to providing a sustainable future within the fragrance industry and she will be key to delivering continual improvement by offering directional support, open communication and sharing of best practice across all of CPL’s global divisions

Commenting on the appointment CPL Aromas CEO, Chris Pickthall, said; “Sustainability is important to CPL Aromas. We recognise that we cannot maintain our quality of life for future generations unless we commit to change the way we work now. The

appointment of Emily Heron as Head of Sustainability demonstrates CPL’s commitment to work in ways that help to minimize the [negative] impact of our activities across the world”

Farmacosmetica 2018, Colombia

In September, CPL participated in the largest and most important fair in Colombia for the pharmaceutical and cosmetic industry.

The CPL stand had various sensory stations in order to present 4 of its leading-edge technologies, one of which, EcoBoost, is an environmentally friendly fragrance technology, using just 10% of the normal fragrance dosage with no compromise in strength or quality.

It was an excellent opportunity to talk to some of our current customers, as well as new ones, about what CPL has to offer.


34

ECOBOOSTThrough innovative and scientific thinking, we have developed EcoBoost, a unique fragrance concentration technology. EcoBoost creates high-impact fragrances at just 10% of the normal fragrance dosage with no compromise in strength or quality. EcoBoost addresses some of the main challenges faced by our customers; 1. Environment; reducing their packaging, transport, energy and disposal costs, 2. Formulation; reducing concentration helps reduce solubility issues etc.3. Cost; by using 90% less fragrances EcoBoost helps our customers significantly reduce their costs4. Regulation; lower dosages are often below the regulatory thresholds eliminating the need for on pack labelling.

We have already developed 1,000 EcoBoost fragrances, both in response to client needs, and to reflect wider trends within the market. In 2018, we saw sales of EcoBoost rise significantly by over 30% and we aim to triple sales by 2030.

AROMACORECreating fresh, long lasting fragrance is the goal of every brand in the household and personal care sectors. Our AromaCore technology is an established technology renowned for its ability to lock fragrance within an outer wall, which once broken releases long-lasting fragrance performance.

The current Aromacore capsules contain micro-plastics and as such, a more sustainable alternative must be found. Our specialist encapsulation chemists are currently working on alternative, sustainable methods of encapsulation and we have set a target to develop a sustainable, biodegradable capsule technology by 2022.

PRODUCT INNOVATIONProduct innovation is essential to drive long-term sustainable growth. Our aim is to create cutting edge, forward thinking, fragrance concepts and technologies that help drive our customers’ business. We take innovative approaches and directions to explore and solve the challenges of fragrance development that our clients face.

We have a dedicated research team that strive to break new ground, look differently at challenges and reinvent and enhance formulations that make it possible to create better fragrances, whilst reducing environmental impact and waste. By doing so we have created breakthrough products that have revolutionised existing markets and unlocked entirely new ones.

In 2018, CPL invested heavily in the R&D team and facilities so we can continue to drive fragrance innovation into the twenty-first century. We continued to invest in existing sustainable technology EcoBoost, seeing continuing increases in sales, as well as launching our Aromacore Plus technology.


35

We ensure that our products are safe for people and the environment when used as intended. Every one of CPL’s fragrances is subject to strict regulatory, quality, safety and environmental assessments. ISO 9001, ISO 14001 and OHSAS 18001 standards form the foundation of our manufacturing processes, including responsible handling of materials.

We are committed to ensuring that all of our products are fully compliant with regulations. Providing safe products is essential, we have a Global Regulatory team which ensure our systems are up to date and we are providing correct data. We are therefore committed to supplying the necessary information to all of our customers for the correct handling and use of our products.

All ingredients go through a stringent assessment covering regulatory, quality, health, safety and environmental requirements. All relevant information is available on product labels, safety data sheets and certificates of analyses. We guarantee the safety of our products throughout their entire life cycle when used as intended. Our regulatory department is responsible for ensuring that CPL ingredients and products are in compliance with relevant regulations and legislation and are continually monitoring this compliance.31

In 2018, CPL did not identify any breaches of safety or health regulations in relation to our products. Fragrance information and labelling requires information on sourcing of ingredients, content environmental and safety impact, safe use of fragrances (including within the customer’s product) and disposal. 100% of our fragrances sold are subject to these requirements.32

COMMUNICATION & TRANSPARENCYCommunication and transparency are important to both CPL and our stakeholders. To be a successful and trusted organisation, it is necessary for us to build trust and confidence with our stakeholders, and this is best achieved through transparency throughout our operations.

Transparency builds trust with our employees, customers, suppliers, and so on, making everyone feel they are working for and with a company with high ethical standards. One of our values at CPL is to operate in an honest and ethical way and transparency is part and parcel of what that looks like.

When transparency is integrated into corporate culture, employees are more engaged and committed to the vision of the company. Transparency is achieved through direct and clear communication. This is essential internally with employees and with our external stakeholders. We have an objective to improve our internal and external communication to gradually build a more transparent corporate culture.

Making relevant information readily available is an important way of improving transparency and this will involve updating our website to enable instant access to policies, strategies and other relevant documents as well as progress towards our objectives and targets. In addition, finding ways to embed transparency into our culture is critical, creating an open and honest environment essential to our success.

The first step in improving our communication is this report which will be continued on an annual basis.

31GRI Disclosures: 103-2, 103-332GRI Disclosures: 416-1, 416-2 & 417-1

PRODUCT SAFETY & LABELLING


36

MONITORING PROGRESS


Triple sales of Ecoboost £1.66m sales Double sales of Ecoboost Sales Team & Marketing

to promote technology

Sustainable, biodegradable capsules technology

Appointment of new encapsulation chemist

Sustainable, biodegradable capsules technology

Explore existing techCollaboration/research agreementDevelop in-house

Improve sustainability communication

Head of Sustainability Appointed and Team formedPress releases and interview conducted

Website to be updated in line with new strategyFurther press releases, increased social media presence, better communication for internal teams

Report yearly


37

ETHICAL SOURCING

OPTIMISING SUSTAINABILITY ACROSS OUR SUPPLY CHAIN

Rising pressures on the environment and society have significant impacts on our supply chains. Our supply chains are complex, global and vulnerable to natural disasters, water scarcity and poor labour conditions in much of the world.

A particular risk is the declining availability of natural fragrance ingredients due to unsustainable farming and supply disruption (a result of climate change). With a growing population, ingredients sourced from food items will continue to become scarcer. It is important to manage natural ingredient sourcing responsibly; a variety of issues need to be considered, from sudden climatic changes to political or economic problems.Natural doesn’t always mean more sustainable. Synthetic alternatives, when managed responsibly, can reduce many of the risks associated with naturals. Modern chemistry can strive towards waste reduction and recycling, cleaner and more streamlined processes to improve yields and helping to reduce or eliminate potentially harmful by-products.

We source a large number of materials from a variety of suppliers and managing supply chains at this scale is complex. We are committed to ensuring our ingredients are responsibly sourced to secure a stable, sustainable supply. In addition, we are committed to working with as many of our suppliers as possible for greater transparency and to improve safety, environmental, social and business integrity practices across the board.

To mitigate the risks within our supply chain, we have a secondary source for many ingredients. This allows flexibility in supply but through our stringent assessments ensures the expectation of quality is still met.

OUR OBJECTIVES

1. Develop and implement a responsible sourcing & partnerships policy by 20202. Assess 100% of suppliers for their commitment to sustainability by 20303. Develop sustainable purchasing agreements for 10% of natural ingredients by 2030


the SDGs


38

PROCUREMENT PRACTICESOur global purchasing team is responsible for buying all our natural and synthetic fragrance ingredients. We must ensure continuous supply of materials, meeting our quality expectations, at competitive and consistent costs. Our buyers are essential to our ability to satisfy customer requirements, and as such must be able to adapt to rapidly changing environments and markets.

There is a growing demand for sustainable and ethically responsible products and we are taking actions to identify sustainable sources of raw materials, diversify supply, collaborate with suppliers to sustainably farm natural materials and investigate sustainable synthetic alternatives, making us more resilient to change. In addition, where we are able, we are focusing on sources local33 to our operations.34 In 2018, 26% of our raw materials were sourced from local33 suppliers. We are working to increase this number where possible, including direct supply where available. However, due to the nature of the

materials we use, we are restricted in what we can achieve.

CPL are committed to working with suppliers who have strong business ethics, respect people and understand the need to preserve the environment. We have formed a team tasked with helping out suppliers to achieve high standards in these areas. In order to deliver on our responsible sourcing commitments, we are conducting audits of our main direct raw material suppliers. This requires a clear articulation of CPL’s definition of ‘responsible sourcing’ and as such we are finalising our new ‘Responsible Sourcing and Partnerships Policy’ to be published by 2020. This will define a consistent set of standards and requirements in health and safety, social, environmental and business integrity practices.

Partnership lies at the heart of our approach and is the key to developing successful relationships with our suppliers. The road to responsible sourcing is a process of continuous improvement.

33 local suppliers are defined as those suppliers within 200 miles of our manufacturing divisions34GRI Disclosures: 103-2, 103-3 & 204-135GRI Disclosures: 103-2, 103-3 & 308-1

SUPPLIER ASSESSMENTOur Responsible Sourcing and Partnerships Policy will form the basis by which we will assess suppliers for their commitment to sustainability. Through an assessment programme, starting with key suppliers, we will evaluate our supply chains and drive compliance with defined standards in environmental protection, health & safety, social responsibility and business integrity. The requirements will apply to everyone in our supply chains.

The implementation of such a comprehensive policy across a global network of suppliers is an enormous task, but we view this as an opportunity to drive positive transformation in supply chain. Our objective is to assess 100% of our raw material suppliers to this policy by 2030.

We have currently screened 4 suppliers for their commitment to sustainability from around 473. 35

SUSTAINABLE PURCHASING AGREEMENTS

We work in conjunction with our suppliers and wherever possible work with them to switch to greener methods of production, to make life safer for their employees and improve fairness and social responsibility. This helps to promote the creation of shared value for our customers, suppliers and all who participate in producing our raw materials. We have set an objective to develop robust, sustainable purchasing agreements for 20% of our natural ingredients by 2030.

We have sustainable agreements in place for 4 natural materials; Sri Lankan Black Pepper and Sandalwood, Indian Davana and Rwandan Patchouli Oil. We are creating a sustainable supply chain, working with and investing in farmers, promoting sustainable farming practices, and conducting rigorous vendor quality management ensuring that the product meets our expectations whilst being fully sustainable and traceable. By developing trust and working in partnership with the producers, we can source for shared value and generate benefits for our customers and all the participants in the supply chain.

This work continues, and the Purchasing team is working to generate more shared value with the farmers, to help us to protect our supply chain and ensure we meet the sustainable expectations of today’s consumer.


39

Case Study: Black Pepper

Black pepper is a key fragrance ingredient. It is also an important spice in cooking and thus sourcing is increasingly challenging.

We have created a partnership with Plant Lipids to provide sustainable Sri Lankan black pepper. We aim to improve livelihoods through fair prices for raw materials and eliminating intermediaries in the supply chain. Our partner provides training modules and technical assistance, meaning farmers learn sustainable farming techniques and improve their output. This ensures that the product meets the expectations of CPL, whilst also being fully traceable.

The environmental impact of growing all ingredients is carefully managed with water and soil resource conservation and protection. In the case of Black Pepper, Plant Lipids use living trees as support for the pepper vines, instead of concrete or wooden posts. These provide natural shade for the pepper

and contribute to soil fertility when they drop their leaves.

By developing trust and working in partnership with the green pepper producers (the pre-curser to black pepper), we are able to source for shared value and generate benefits for our customers and all the participants in the supply chain.

MONITORING PROGRESS


Responsible sourcing policy

Policy in development

Policy implemented (by 2020)

Not applicable

100% supplier assessment <1% assessed 50% assessed SEDEX memberships

Sustainable Purchasing Agreements for 10% of naturals

Agreements for 4 natural raw materials

Agreements for 12 natural materials

Partnerships with suppliers & audits

APPENDIX


41

EXTERNAL INITIATIVESCPL Aromas has been partnered with London College of Fashion for nearly 20 years. Through the partnership we offer student mentoring, idea validation and product testing opportunities. We sponsor annual competitions for LCF students providing them with work experience on industry projects, and the opportunity to showcase their work. CPL Aromas helped found LCF’s first BSc in Cosmetic Science, which we continue to support.*

The University of Sunderland has partnered with CPL for teaching on their Cosmetic Science Course. We have participated for several years in developing the students’ understanding of the Fragrance industry.*

As part of our unwavering commitment to supporting charitable initiatives, we helped establish COFVI (The College of Fragrance for the Visually Impaired) in Mumbai to provide employment opportunities to the visually impaired in India’s fragrance industry.*

CPL Aromas is committed to reporting with a consistent approach, we are therefore following the Global Reporting Initiative.*

We are committed to ensuring that we contribute to the United Nations Sustainable Development Goals, and therefore have integrated these into our Sustainable strategy and policies.*

MEMBERSHIP OF ASSOCIATIONS

CPL Aromas is an active member of the International Fragrance Association (IFRA) UK. We are on many working groups, ensuring a consistent approach throughout the industry.*

We are also an active member of the Research institute for Fragrances Materials. Providing usage data, and ensuring comprehensive data is available for the safety of our materials.*

As a member of the British Safety Council, we keep up to date with legislation, show our commitment to a safe working environment and request any advice or guidance as required.*

IFEAT – The International Federation of Essential Oils and Aroma Trades. As a member, we receive regular publications and socioeconomic reports for specific natural materials.*

*GRI Disclosure: 102-12 & 102-13


42

GRI Standard* Disclosure Page(s) Comments

GRI General DisclosuresOrganisational ProfileGRI 102-1 Name of the Organisation 3GRI 102-2 Activities, brands, products and

services4, 6-7

GRI 102-3 Location of headquarters 7GRI 102-4 Location of operations 7GRI 102-5 Ownership and legal form 6GRI 102-6 Markets served 6-7GRI 102-7 Scale of the organisation 6-7GRI 102-8 Information on employees and other

workers 27-28

GRI 102-9 Supply chain 7GRI 102-10 Significant changes to the

organisation and its supply chain7-8

GRI 102-11 Precautionary Principle or approach 19GRI 102-12 External initiatives 41GRI 102-13 Membership of association 41StrategyGRI 102-14 Statement from senior decision-maker 3Ethics and integrityGRI 102-16 Values, principles, standards and

norms of behaviour8

GovernanceGRI 102-18 Governance structure 18Stakeholder engagementGRI 102-40 List of stakeholder groups 11GRI 102-41 Collective bargaining agreements 27GRI 102-42 Identifying and selecting stakeholders 12GRI 102-43 Approach to stakeholder engagement 12GRI 102-44 Key topics and concerns raised 11Reporting practiceGRI 102-45 Entities included in the consolidated

financial statements19

GRI 102-46 Defining report content and topic boundaries

14-16

GRI 102-47 List of material topics 14-16GRI 102-48 Restatements of information Omission This is the first CPL Aromas Ltd.

sustainability reportGRI 102-49 Changes in reporting Omission This is the first CPL Aromas Ltd.

sustainability report.GRI 102-50 Reporting period 19GRI 102-51 Date of most recent report 19GRI 102-52 Reporting cycle 19

GRI CONTENT INDEX


43

GRI 102-53 Contact point for questions regarding the report

19

GRI 102-54 Claims of reporting in accordance with the GRI standards

19

GRI 102-55 GRI content index 42-45GRI 102-56 External assurance 19GRI Economic DisclosuresGRI 201: Economic PerformanceGRI 103-1 Explanation of the material topics and

its Boundary13-16, 32

GRI 103-2 The management approach and its components

32-33

GRI 103-3 Evaluation of the management approach

32-33

GRI 201-1 Direct economic value generated and distributed

32-33

GRI 204: Procurement PracticesGRI 103-1 Explanation of the material topics and



37-38


37-38

GRI 204-1 Proportion of spending on local suppliers

37-38

GRI Environmental DisclosuresGRI 302: EnergyGRI 103-1 Explanation of the material topics and



21-22


21-22

GRI 302-1 Energy consumption within the organisation

21-22

GRI 303: Water GRI 103-1 Explanation of the material topics and



23


23

GRI 303-1 Water withdrawal by source 23


44

GRI 305: EmissionsGRI 103-1 Explanation of the material topics and



21-22


21-22

GRI 305-1 Direct (Scope 1) GHG emissions 21-22GRI 305-2 Energy indirect (Scope 2) GHG

emissions21-22

GRI 306: Effluents and WasteGRI 103-1 Explanation of the material topics and



24


24

GRI 306-2 Waste by type and disposal method 24GRI 308: Supplier Environmental AssessmentGRI 103-1 Explanation of the material topics and



37-38


37-38

GRI 308-1 New suppliers that were screened using environmental criteria

37-38

GRI Social Disclosures GRI 401: EmploymentGRI 103-1 Explanation of the material topics and



26-27


26-27

GRI 401-1 New employee hires and employee turnover

26-27

GRI 403: Occupational Health and SafetyGRI 103-1 Explanation of the material topics and



35


35


45

GRI 416-1 Assessment of the health and safety impacts of product and service categories

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GRI 416-2 Incidents of non-compliance concerning the health and safety impacts of products and services

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