Our Responsibility

Global Reporting Initiative Report GRI Sustainability Reporting 2008 CSR Performance

The Croda Corporate Social Responsibility Report 2008 follows the G3 sustainability reporting guidelines by the Global Reporting Initiative (GRI) at Application Level C. Croda self declare the report. This is the first GRI Report prepared by Croda International Plc.

In 2008, we conducted a review assessing the We report on eighteen GRI Performance Indicators. applicability of the Global Reporting Initiative (GRI) These indicators were chosen as having high 2006 G3 guidelines to our reporting. A cross- relevance and materiality to our business. We have functional team reviewed the GRI standard attempted to report fully in all instances and when disclosures and indicators against a number of criteria not we have identified partial reporting. including relevance, materiality to the company and our ability to report on selected key indicators. We The implementation of GRI reporting as fully and as consulted both internally and externally with our completely as possible is our goal and we intend to stakeholders – investors, suppliers, customers, enhance our reporting on a year by year basis. neighbours and our employees – listening to their views and opinions on priorities. The main sources of information for this GRI Report are the Company website – www.croda.com, the Application of GRI guidelines at Level C requires 2008 CSR Report and the 2008 Company Annual information relevant to all those points of the 'G3 Report. Profile Disclosures' (under Strategy and Analysis, Organisational Profile, Report Parameters, The following abbreviations are used in this report: Governance, Commitment and Engagement) and at CSR – Corporate Social Responsibility least ten Performance Indicators, including at least one from each of: Social (SO), Economic (EC) and GRI – Global Reporting Initiative Environmental (EN). AR – Annual Report www.croda.com – The Company website Our published CSR Report for 2008 contained a GRI content index summary only. This full GRI Report provides more detail on both the standard disclosures and selected performance indicators.

1 GRI Content Index

Profile Description Page Reporting Level 1.1 Statement from the most senior decision-maker of the organisation and overall vision 1, 5-11 Reported 1.2 Description of key impacts, risks and opportunities 12 – 13 Reported 2.1 Name of the organisation 14 Reported 2.2 Major brands, products and/or services including volume or quantity 14 Reported 2.3 Operational structure of the organisation 15 Reported 2.4 Location of the organisation's headquarters and major divisions 15 Reported 2.5 Countries of operation 15 Reported 2.6 Nature of ownership and legal form 15 Reported 2.7 Markets served 15 Reported 2.8 Scale of the reporting organisation 15 Reported 2.9 Significant changes during the reporting period regarding size, structure or ownership 15 Reported 2.10 Awards received in the reporting period 16 Reported 3.1 Reporting period 16 Reported 3.2 Date of most recent previous report 16 Reported 3.3 Reporting cycle 16 Reported 3.4 Contact point for questions regarding the report or its contents 16 Reported 3.5 Process for defining report content 16 Reported 3.6 Boundary of the report 16 Reported 3.7 Limitations on the scope or boundary of the report 17 Reported 3.8 Basis for reporting that can significantly affect comparability 17 Reported 3.9 Data measurement techniques and the bases of calculations Not Reported 3.10 Explanation of any re-statements of information 17 Reported 3.11 Significant changes from previous reporting Reported 3.12 Table identifying the location of the standard disclosures in the report 17 Reported 3.13 Policy regarding external assurance for the report Not Reported 4.1 Governance structure of the organisation 17 Reported 4.2 Is the Chair of the Board of Directors also an executive officer? 17 Reported 4.3 Members of the Board of Directors that are independent and/or non-executive members 18 Reported 4.4 Mechanisms to provide recommendations or direction to the highest governance body 18 Reported 4.5 Linkage between compensation and the organisation's performance 19 Reported 4.6 Processes to ensure conflicts of interest are avoided Not Reported 4.7 Process for determining the qualifications and expertise of the members of the Board of Directors Not Reported 4.8 Statements of mission or values, codes of conduct and principles Not Reported 4.9 Procedures for overseeing economic, environmental and social performance Not Reported 4.10 Process for evaluating the highest governance body's performance Not Reported 4.11 Explanation of how the precautionary approach or principles are addressed Not Reported 4.12 Externally developed economic, environmental and social charters to which the organisation subscribes 19 Reported 4.13 Memberships in associations 20 Reported 4.14 List of stakeholder groups engaged by the organisation 20 Reported 4.15 Basis for identification and selection of stakeholders 20 Reported 4.16 Approaches to stakeholder engagement Not Reported 4.17 Key topics and concerns raised through stakeholder engagement Not Reported

2 GRI Sustainability Reporting 2008 CSR Performance

GRI Content Index

Indicator Description Page Reporting Level Economic Performance Indicators EC1 Direct economic value generated and distributed 21 Reported EC2 Financial implications and other risks and opportunities due to climate change Not Reported EC3 Coverage of the organisation’s defined benefit plan obligations 21 Reported EC4 Significant financial assistance from government Not Reported EC5 Range of wage ratios Not Reported EC6 Policy practice and proportion of spending on locally-based suppliers Not Reported EC7 Procedures for local hiring Not Reported EC8 Development and impact of infrastructure investments and services Not Reported EC9 Significant indirect economic impacts Not Reported Environment Performance Indicators EN1 Materials used 22 Reported EN2 Recycled input materials Not Reported EN3 Direct energy consumption by primary source 22 Reported EN4 Indirect energy consumption by primary source Not Reported EN5 Energy saved due to conservation and efficiency improvement Not Reported EN6 Initiatives to provide energy-efficient or renewable energy based products and services Not Reported EN7 Initiatives to reduce indirect energy consumption Not Reported EN8 Total water withdrawal by source 23 Reported EN9 Water sources significantly affected by withdrawal of water Not Reported EN10 Water recycled and reused Not Reported EN11 Land in or adjacent to protected areas and areas of high biodiversity value Not Reported EN12 Significant biodiversity impacts Not Reported EN13 Habitats protected or restored (Additional) Not Reported EN14 Strategies, current actions and future plans for managing impacts on biodiversity Not Reported EN15 IUCN Red List species in areas affected by operations Not Reported EN16 Direct and indirect greenhouse gas emissions 23 Reported EN17 Other relevant indirect greenhouse gas emissions Not Reported EN18 Initiatives to reduce GHG emissions Not Reported EN19 Emissions of ozone-depleting substances Not Reported EN20 NOx, SOx and other air emissions 24 Reported EN21 Total water discharge 24 Reported EN22 Total weight of waste 24 - 25 Reported EN23 Significant spills 25 Reported EN24 Waste deemed hazardous under the terms of the Basel Convention Not Reported EN25 Identity, size, status and biodiversity value of water bodies and related habitats Not Reported EN26 Initiatives to mitigate environmental impacts of products and services 25 Reported EN27 Products and packaging materials reclaimed Not Reported EN28 Significant fines and sanctions Not Reported EN29 Transportation impacts Not Reported EN30 Environmental protection expenditures Not Reported

3 GRI Content Index

Indicator Description Page Reporting Level Human Rights Performance Indicators HR1 Investment agreements with human rights clauses Not Reported HR2 Suppliers and contractors screened on human rights Not Reported HR3 Employee training on aspects of human rights Not Reported HR4 Incidents of discrimination and actions taken Not Reported HR5 Right to exercise freedom of association Not Reported HR6 Risk for incidents of child labour Not Reported HR7 Risk for incidents of forced labour Not Reported HR8 Security training – human rights policies Not Reported HR9 Violations involving rights of indigenous people Not Reported Labour Practices & Decent Work Performance Indicators LA1 Workforce by employment type, contract and region 26 - 27 Reported LA2 Employee turnover 27 Reported LA3 Benefits provided only to full-time employees Not Reported LA4 Employees covered by collective bargaining Not Reported LA5 Minimum notice periods Not Reported LA6 Workforce represented in health and safety committees Not Reported LA7 Rates of injury and illness and number of work-related fatalities 27 Reported LA8 Education, training, counselling, prevention and risk-control programmes for workforce and others Not Reported LA9 Health and safety topics covered in union agreements Not Reported LA10 Training per year per employee 28 Reported LA11 Programmes for skills management and lifelong learning Not Reported LA12 Employees receiving regular performance and development reviews Not Reported LA13 Composition of governance bodies and workforce per category Not Reported LA14 Ratio of salary of men to women Not Reported Society Performance Indicators SO1 Programmes to assess impacts on communities 28 Reported SO2 Business units analysed for risks related to corruption Not Reported SO3 Training about anti-corruption policies Not Reported SO4 Actions in response to incidents of corruption Not Reported SO5 Public policy positions and lobbying Not Reported SO6 Value of contributions to political parties and groups Not Reported SO7 Legal actions for anti-competitive behaviour Not Reported SO8 Fines and sanctions for non-compliance Not Reported Product Responsibility Performance Indicators PR1 Assessment of health and safety impacts Not Reported PR2 Non-compliance with regulations and codes during life cycle Not Reported PR3 Information required by procedures 29 Reported PR4 Incidents of labelling non-compliance Not Reported PR5 Practices related to customer satisfaction Not Reported PR6 Adherence to laws and standards related to marketing communications Not Reported PR7 Incidents of non-compliance with marketing related regulations Not Reported PR8 Customer privacy and data loss Not Reported PR9 Non-compliance with regulations for use of products 29 Reported

4 GRI Sustainability Reporting 2008 CSR Performance

GRI – G3 Content Index: Our CSR and Sustainability Strategy

Profile 1 Strategy and Analysis 1.1 Statement from the most senior decision-maker of the organisation and overall vision. Corporate Social Responsibility Executive Sponsor Statement Croda – Our Responsibility For more then 80 years, we have been a global leader in natural based speciality chemicals. The successful Uniqema integration in 2006 has resulted in a business that is well placed to meet the challenges of the twenty first century. Throughout our history, we have shown a commitment to safety, environmental and social responsibility through recognising and implementing good practice and encouraging a culture of responsibility and action in all that we do. Sustainability and social responsibility have always been synonymous within Croda and they continue to sustain our vision going forward. The Croda Vision Underpinning life at Croda is the Croda Vision – our statement of the Company culture, which both informs and describes our behaviour: I To remain an independent company and operate as one global team I We will remain a ‘fun’, lively, stimulating and exciting place to work, where all employees have the courage to question, and all functions and individuals are valued I There will be a place for many styles of leadership, but all leaders will have as their primary objective to build other leaders I We can only achieve our goals through excellent and constant communication, creativity and setting clear objectives at every level I We will continually improve I We will continue to be an ethical and responsible company Croda CSR Policy Our vision was the basis for the Croda CSR Policy. Croda believes that to be successful as a company it must act responsibly and with integrity in all areas of its activities. Croda is committed to its business operations throughout the world being conducted in a manner that is consistent with relevant good practice in relation to social responsibility. It is the responsibility of everyone working within the Company to ensure that wherever we operate in the world… I We will work within the standards in our Code of Ethics to ensure that all our business practices are conducted with integrity I We will treat our employees fairly, complying with the ILO declaration on the Fundamental Principles and Rights at Work and providing a rewarding environment in which our employees are engaged and developed I We will respect our customers and suppliers and aim to treat them honestly and responsibly with consistent standards wherever we operate I We will minimise any negative impact on the environment that might be associated with our operations or our products, searching out new ways to conserve natural resources and innovating to improve our products and processes I We will be a good neighbour. Not just keeping our own house in order but also reaching out to support, aid and relate to those in our neighbourhood. In particular we will focus on providing educational and academic support and engaging in projects that will benefit our local communities I We will seek out opportunities for dialogue with all our stakeholders I We will monitor and record our achievements under this policy so that we may continuously improve Our Strategy Our strategy has been unchanged for ten years. We aim to be a leading, independent, global speciality chemical company. We only invest in businesses if they can be truly global, can create innovative technology, can operate in markets with long term growth significantly higher then global GDP and can realistically sustain high operating margins.

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Profile Our Strategy (continued) Our success is predicated on choosing the right markets and our focus markets have been selected based on these criteria. But choosing correctly is not enough. We have also invested in innovative plant and processes to enhance our leadership position. We have an innovative culture deeply embedded in the whole Croda organisation, especially in our Research teams and our global Sales and Marketing units. We are also innovative in our response to the global challenges to society and the environment. We have recognised Croda is not just about the products, how they are made, or how they are used, but also the impact of our activities on everything we do – Our People, Our Neighbours, Our World and Our Partners. Our business is global and this means we have a global responsibility but with the knowledge that our contribution and impact is greatest in the communities in which we operate. Our Corporate Social Responsibility policies and practice are an integral part of the way we run our business worldwide. They are designed to ensure that Croda is a valued member of the community. In economic terms, our strategy in delivering our financial obligations to shareholders means we continue to create opportunity, employment and wealth in the communities where we operate. In relation to the environment, our strategic focus on discovery and innovation leading to the development of safer and more environmentally acceptable products together with the investment in modern manufacturing plants contributes to sustained improvement in the environmental performance of our operations and products. Our focus on social sustainability covers a wide range of issues that affect or concern our people and the society we are part of. Our strategy implicitly recognises that our license to operate is based on consent of the wider community and the impact our operations could have on them. Our Corporate Social Responsibility Commitments 2008 represented a year of solid progress towards achieving our CSR objectives based on the ‘4 Pillars’ of employees, community, environment and market place. Our commitment to our CSR principles remains resolute, with their continued importance within the Group reinforced by the assignment of an executive sponsor and the creation of a new cross functional team to lead CSR across the Group. This team, which has representation from all of the business divisions and regions, has made a huge difference by building on the existing momentum. Our commitments and their objectives have been carefully selected to align with the priorities across our ‘4 Pillars’ of Corporate Social Responsibility – Our People, Our Neighbours, Our World and Our Partners. These commitments are detailed in the Corporate Social Responsibility Action Plan for each of our ‘4 Pillars’ which identify the issues, the objectives, targets and where possible, appropriate key performance indicators. This plan will be reviewed annually to ensure the priorities remain relevant and to set new objectives if necessary. Ownership and delivery of these objectives and targets rests with the Executive Committee at Croda. We have identified our top priorities for action and this report provides information on our performance against current objectives and our new objectives for the future. We have decided to adopt the Global Reporting Initiative (GRI) format to provide a consistent and transparent approach to our CSR reporting. Most important, however, is the enthusiasm, creativity and inspiration of our employees worldwide in their endeavours to sustain a successful and responsible company. Employees – Our People We recognise that business success depends on retaining and developing the skilled, motivated employees who are part of our global team based in 43 worldwide locations. The success of the individual and hence the Company depends on the academic and vocational development of all employees and this forms the core of Croda’s people management strategy. Our responsibility extends to providing our people with a safe and healthy workplace. It is based on respect and partnership, which stimulates individuals to achieve their full potential. Employee Development Croda’s focus on employee development has continued throughout the year with many courses, educational programmes and leadership development activities taking place around the globe, such as; Graduate Development Croda India introduced its first Graduate Development Programme, which aims to develop high calibre graduates from leading business and technical schools. This scheme is in addition to programmes currently running in the USA and Europe, ensuring there is a constant supply of fresh talent to the business.

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GRI – G3 Content Index: Our CSR and Sustainability Strategy

Profile Employees – Our People (continued) New Managers In Europe, 56 employees have taken part in the Croda New Manager Development Programme – a new eight module course covering aspects of people management. Leadership Development 24 senior managers from around the globe joined Croda’s Leadership Development Group during 2008. The cross functional, multicultural teams, which make up the group, focus on personal and leadership development and networking within the company. In-Company School In the chemical industry, finding and employing highly skilled process operations can be difficult. For example, at our Gouda site, demand is much higher then supply, mainly because suitable candidates tend to live in Rotterdam, close to the main industrial area of Botlek. In the past, the Gouda site had a long tradition of tackling the problem by setting up its own in-company training school, so it was decided to resurrect this idea. In October, a new intake of seven enthusiastic students started their training. The programme should lead to this year’s intake taking up their first Process Operator jobs at Gouda from April 2009. Health and Safety Health and Safety training continues to be an important part of our employee development strategy. During the year employees from across the globe have participated in a number of different Health and Safety related courses. Members from each of the 5 shift teams from our Rawcliffe Bridge site in the UK took part in two days of off site training to improve their knowledge and practical skills in fire fighting techniques. Community – Our Neighbours The local communities in which Croda operates are important elements of what makes us successful. Not only do they provide the core of those people who work for us, both now and in the future, but they also provide the supporting infrastructure that allows us to operate. It is important that we develop a positive relationship with ‘Our Neighbours’. Tackling Skin Cancer in the UK As an innovator in the area of UV protection technologies and formulation, Croda has always been at the forefront in assisting constant improvement in sun protection from both scientific and regulatory viewpoints. But now, through its association with Skcin (The Karen Clifford Skin Cancer Charity), Croda is supporting the message of “being safe in the sun” through the use of shade, appropriate clothing and a good UVA/UVB sun lotion. 2009 will see Croda as the principal sponsor and financial supporter for the inaugural UK conference on the prevention of skin cancer. Crodamazon The Crodamazon project has been operating in Brazil for a number of years and involves Croda Brazil working in partnership with the communities living in the Rainforest on the banks of the Amazon. Working with these local communities on how plants can be used to support our business in a sustainable manner is of great interest to both Croda and the local communities. Croda Brazil identifies communities which will work in a responsible manner to cultivate and harvest the fruits and nuts from which the Crodamazon oils are extracted. The town of Careiro Castanho recently welcomed its first natural oils processing plant donated by Croda, Cupuama Oleos, where community involvement has taken a step further by Croda showing them how to press or crush the pulps themselves. Outstanding Contribution to Youth Mentoring Croda Inc was one of twenty-nine businesses presented with tributes from the Governor of Delaware at a business appreciation event held at the University of Delaware. These businesses have supported youth mentoring in different ways, all of which are invaluable to its success. Development & Education Throughout the world, Croda has continued its efforts in support of academic development and education at schools, colleges and universities within its local communities. One of the most developed relationships with our communities is with local schools and colleges. Many of the children are potential Croda employees of the future and so this investment in local schools is a longer-term investment in ourselves.

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Profile Community – Our Neighbours (continued) Work Experience Our Mill Hall production facility in Pennsylvania, USA supported the Central Mountain Middle School job shadowing programme, where a number of 8th graders joined employees at the site to learn about the different types of careers and opportunities available in the industry. Mentoring & Careers Advice During 2008, employees from our head office at Cowick Hall continued to provide a trained mentoring service to year 11 students from local colleges which assists them with different aspects of their studies, future career opportunities and decisions regarding further education. Site Visits Each year, Croda supports on-site visits to our manufacturing plants and laboratories. This not only teaches children and young adults about chemistry itself, but also how chemistry impacts upon their daily lives. Engaging with the Community Croda’s significant involvement in community activities continued throughout 2008 in all locations. Our long history of support of local charities and community groups has covered general fundraising and skills support and through our ‘1% Club’ we aim to facilitate even greater engagement in community activity in coming years. The ‘1% Club’, which allows employees to take up to 1% of the time off from work to enable community activity, has been used to support some interesting and very worthwhile initiatives. A selection of ‘1% Club projects through 2008 covered activities such as: I Training to become a voluntary care worker I Creating a sculpture gallery at a local school I Working with children who have special needs at a local primary school I Giving a gymnastic lesson at a children’s school as part of a healthy living topic Environment – Our World Croda operates its business in a manner which actively seeks to prevent or minimise the possibility of our operations causing harm to people, plants or animals. We strive to provide the resources to educate and involve every individual in the company in achieving this objective. Croda is the first chemical company in the UK to build and operate a 2MW wind turbine on site to cut costs and CO2 emissions. The turbine is producing more than 50% of the Hull site’s electricity needs and exporting any excess to the national grid. Enforcement Action There are also areas where we need to improve. In 2008, the Group was prosecuted in the UK by the Environment Agency for an unauthorised release to air and was fined £24,000 plus costs. The Group was also fined $5,500 plus costs in the USA for a failure to perform leak detection and repair procedures in the second half of 2005. This was prior to the acquisition of the site by Croda in September 2006. The Group also reached an out of court settlement with the Public Prosecutor in Holland for alleged waste disposal offences during 2004 to 2006. This period was prior to the acquisition of the site by Croda in September 2006. SHE Performance Excellence in the management of safety, health and the environment is vital to ensuring the long term future and profitability of the company. Energy Consumption In 2008, the group energy efficiency per tonne declined by 6.1% compared to 2007 and has declined by 7.7% since 2006. Overall energy use by the group reduced by 3.6% compared to 2007 and has reduced by 9.25% since 2006. This was partly due to much reduced manufacturing volumes in 2008. SHE Management The first target for all former Croda sites to be certified to BS OHSAS 18001 by 2009 has been successfully achieved. Air emissions of volatile organic compounds (VOCs) In 2008, there was a 20.4% reduction in the amount of VOCs per tonne released to air compared to 2007 and an overall reduction of 18.8% since 2006. This improvement was due to major investment during the period to control the releases of VOCs.

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GRI – G3 Content Index: Our CSR and Sustainability Strategy

Profile SHE Performance (continued) Waste disposal In 2008, waste disposal to landfill per manufacturing tonne reduced by 18.0% compared to 2007 and has reduced by 31.4% since 2006. Waste water discharges In 2008, the compliance with our effluent discharge consents improved to 96.7% compared to 94.8% in 2007 and the baseline compliance of 90.8% in 2006. Consumption of mains water In 2008, the mains water used per manufacturing tonne increased by 15.1% compared to 2007 and has increased by 19.5% since 2006. Overall mains water used by the group has increased by 0.8% since 2006. Again this is due to the reduced manufacturing tonnage in 2008. Process Effectiveness and Energy – Cremona, Italy A successful way of recovering heat and achieving energy savings has been implemented on the Cremona site, with the installation of a thermo-compression system to recover low level heat from the distillation units used in fatty acid manufacturing. Energy Synergy – Chocques, France For over 15 years the Chocques site has established an energy trading relationship with the nearby waste incineration plant. The furnaces within the incinerator produce stream which is then used to generate electricity via a turbine for their own consumption. However, there is an excess of steam produced by the processing of waste for which the incinerator facility has no need. Today, 90% of the Chocques site steam requirement is supplied by the neighbouring incineration plant – in practice this equates to 45000 tonnes of steam transferred by connecting pipeline to Chocques, which would have otherwise been condensed and all of its heat content lost to the atmosphere. Water Sustainability – Croda Singapore Our manufacturing site in Singapore started to use ‘Newater’ in April 2008 and its use has now increased to approximately 90% of its total water consumption. The use of ‘Newater’ has enabled the site to reduce mains drinking water consumption by over 200 tonnes per day and significant cost savings have also been achieved. Market Place – Our Partners Treating our customers and partners with honesty and integrity is essential to our business success and we recognise that working constructively with all stakeholders on the responsible management of our raw materials and products is essential to our future. Our goal is to improve our products and actively search out new ways of maximising the efficient use of all resources used in their manufacture. Our commercial teams work with customers and other business partners, aiming to anticipate and respond to their needs. Underpinning this work is the knowledge that as an absolute minimum we will comply with all legislative requirements applicable to our products and where appropriate set our own more demanding standards. Up Close and Green We are recognised as being one of the world’s leading suppliers of speciality chemicals based on renewable raw materials. In 2008, over 70% of the raw materials we used were from renewable sources. Green Chemistry Green Chemistry is the “design, development and implementation of chemical products and processes to reduce or eliminate the use and generation of substances hazardous to human health and the environment”. This is pivotal to our technologies for the future. All research groups within Croda are encouraged to adopt the following principles when developing new products and chemical processes.

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Profile Market Place – Our Neighbours (continued)

Eco-considerate Hydraulic Fluids Croda has designed a range of PriolubeTM high performance, highly biodegradable esters which can be substituted for conventional mineral oils. The PriolubeTM range continues to work under high load/high temperature conditions yet can still be used in the coldest of climates. Fuel Efficient Engine Oils Croda has developed a range of patented, oxidatively stable PriolubeTM fuel efficient lubricant additives and PerfadTM friction modifiers. Product Performance, Quality and Safety The commitment to produce stewardship is a key element of our business. Croda looks beyond regulatory compliance and our policies encompass the protection of our customers and the public by the assessment and management of the potential risk from our products throughout their lifecycle. REACH Croda has successfully completed the pre-registration and we are able to reassure our customers that all substances within the products supplied by Croda into Europe that fall under the REACH regulations are pre- registered for use until their required phase-in registration dates. Main Challenges - Objectives, Targets and Performance Our key challenges and targets are summarised later in the 2008 CSR Report. This is our first GRI Report and you will see that we are reporting in a transparent way regarding the challenges that we face. We encourage dialogue on our approach to addressing the challenges and will remain committed to responsible corporate management. I would like to thank all our employees, neighbours, customers, shareholders and other stakeholders for their support in 2008.

Bryan Dobson Chairman – Corporate Social Responsibility Steering Committee

Further statements on corporate social responsibility and sustainability can be found in the 2008 CSR Report.

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GRI – G3 Content Index: Our CSR and Sustainability Strategy

Profile

Strategic priorities and key priorities Our position as one of the world’s leading speciality chemical manufacturers brings with it many responsibilities. We recognise that Croda is not just about products, or how they are made, or how they are used, but also the impact of our activities on: Employees - Our People Community - Our Neighbours Environment - Our World Market place - Our Partners Sustainability and social responsibility have always been synonymous within Croda; our emphasis on ‘natural chemistry’, using raw materials from renewable resources to make our products, our ongoing drive to develop ‘cleaner’, safer processes and technology to make these products, our quest to find the best people to join us, and then to train them and develop their skills and our relationships with our neighbours in the community, and in schools and education. A new team consisting of a cross section of different functions from across the company reviewed and prioritised the issues and risks facing the group now and in the future. Through stakeholder engagement we have been able to review our issues and objectives and ensure we have in place a process to enable thorough, open and transparent dialogue with all our key stakeholders. This activity led to the identification and ranking of a number of priorities relating to people and communities which go beyond our historical focus on environmental issues. Responsible sourcing of raw materials and the assessment of carbon footprint for our products were also identified as priority areas. A company can undertake such initiatives because they have to, or - like us - because they want to. Our commitments and their objectives have been carefully selected to align with the priorities across our ‘4 Pillars’ – Our People, Our Neighbours, Our World and Our Partners. These commitments are detailed in the Corporate Social Responsibility Action Plan, 2008 CSR Report, page 34. For each of our ‘4 Pillars’ we identify the issues, the objectives, targets and where possible, appropriate key performance indicators. This plan will be reviewed annually to ensure the priorities remain relevant and to set new objectives if necessary. Ownership and delivery of these objectives and targets rests with the Executive Committee of Croda. Progress on all of our objectives and targets has been reported in the CSR Report for 2008. Our performance on existing objectives and targets on SHE management are on track with all operational sites either gaining or expected to achieve certification by the deadline. There is continued progress on achieving our challenging objective to improve energy efficiency on all manufacturing sites with an overall reduction in energy use. We have invested in sustainable energy projects which mark an important beginning in the direct use of renewable energy sources. We are making solid progress against our other environmental targets particularly in the reduction of volatile organic carbon emissions to the atmosphere, the minimisation of waste to landfill and conformance with emission consents to controlled waters. The target to reduce the Company’s requirements for mains water per tonne manufactured has proved to be challenging reflecting the disproportionate influence of a reduction in manufactured volumes. There has been success in exploiting alternative sources of process water especially in our Singapore operations. The most significant event in 2008 was the setting of new objectives and targets on employee affairs, community engagement, responsible sourcing and use of renewable raw materials and climate change. These targets represent the outcome of an intensive process of looking at the broader trends facing our industry and our Company Our performance on these new objectives and targets will be reported each year. More information on our approach to CSR is available in the CSR section on www.croda.com.

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Profile 1.2 Description of key impacts, risks and opportunities.

We have recognised that Croda is not just about our products, how they are made, or how they are used, but also the impact of our activities on everything we do – our people, our neighbours, our world and our partners. We describe this commitment as ‘Our Responsibility’. Responsible Care® is the chemical industry’s global voluntary initiative under which companies, through their national associations, work together to continuously improve their health, safety and environmental performance, and to communicate with stakeholders about their products and processes. The Responsible Care® ethic helps our industry to operate safely, profitably and with due care for future generations, and was commended by UNEP as making a significant contribution to sustainable development at the World Summit on Sustainable Development in 2002. We have a longstanding commitment to Responsible Care®, ensuring everything we do from sourcing raw materials, to running our manufacturing sites and stewardship of our products to guide safe use and disposal is fully integrated in to the way we run our Company. However, our approach to social responsibility goes beyond the traditional boundaries of sustainability and has aspects relating to employee affairs and development, community interaction and support and a broader context in relation to our impact on the environment across our product lifecycles. We use our formal internal risk assessment processes to help us identify the opportunities and challenges associated with our corporate responsibility and the cross-functional team conducted a full CSR risk assessment in 2008, based on their knowledge of the external and internal environments and shifts in the expectations of the stakeholder groups they are in contact with. We talked to our stakeholders in order to identify and understand developments not directly under our span of control. Our objectives and targets are identified in the CSR Priority Action Plan on page 34 of our 2008 CSR Report. The Plan will be reviewed annually to make sure that it continues to be relevant. The salient details are: Our People This is a new area of objective setting, targets and measurement for Croda. We have identified a range of objectives relating to employee engagement and satisfaction, communication and openness, employee development and best practice in occupational health. Our performance on these objectives will be reported each year. Our Neighbours The commitment of Croda to its communities has been a focus for a number of years. The ‘Croda in the Community’ policy declares our intent to be a good neighbour, not only in managing our own affairs in a proper manner, but also by reaching out to support and relate to our local communities. Specifically, we are committed to four elements of engagement which define our philosophy which is to act responsibly and with integrity towards our neighbours and our commitment to having a positive impact on our local communities wherever we operate in the world. These elements are: I Protecting the community I Employment for the community I Standards within the community I Engaging with the community

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Profile

Our responsibility is to ensure our engagement both globally and locally but we believe our influence and contribution is greater with the communities and neighbourhoods where we have a presence. This means supporting these local communities is an important element of what makes us successful. These communities provide many of the people who work for us, now and in the future, and they also give Croda the infrastructure and resources to allow our company to flourish. We are proud of our relationships with our neighbours and the fact that we both gain from an open, positive and committed relationship to secure our futures. We have set two new objectives on openness of communication and community involvement and reporting on these objectives and their targets will be carried out annually. Our World Croda has established and measured performance against a set of stretching objectives and targets in this area for many years. Our performance against these objectives is reported in the 2008 CSR Report. Our Partners Our review found that responsible sourcing of raw materials and the assessment of the carbon footprint of our products are key priorities. Our commitment to ‘Green Chemistry’ and our guiding principles were implemented in 2008 with the objective to use resources more efficiently, to reduce our footprint while continuing to add value through offering products which meet our customers’ expectations and needs. Risk management The Risk Management Committee was expanded during the year to include all members of the Group Executive Committee and the Finance Committee other than the Group Chief Executive. Its role is to evaluate, propose policies on and monitor processes to control the business, operational and compliance risks faced by the Group. It normally meets four times a year. The company has implemented new practice on the identification of business risks and internal control procedures and the 2008 Annual Report provides an outline of the major risks and their management. Some of these risks have sustainability characteristics which are addressed by the CSR Action plan.

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Profile 2 Croda – Our Profile 2.1 Name of the organisation. Croda International Plc More information can be found on the Company website; www.croda.com. 2.2 Major Brands, products and/or services.

Croda uses a variety of technologies to manufacture a uniquely broad portfolio of oleochemical and speciality products. These products provide enhanced functionality when used as ingredients, additives, or processing aids within a wide cross section of industries, including many of the following: Consumer Care Industrial Specialities

Personal Care Polymer Additives Lubricant Additives Skin care, sun care, self-tanning, Caps & closures, film production, Automotive & Industrial skin lightening, hair care foamed polymers, injection lubricants, engine oils, fuel (including colourants, perms and moulding, liner compounds / additives, transmission fluids, relaxers), colour cosmetics, bath vinyl plastisols, liquid colour, greases, hydraulic fluids, gear oils, and shower, deodorants, anti- rubber, polyolefins, PVC, metalworking fluids, rolling oils, perspirants, depilatories, men’s styrenics, polyamides, compressor lubricants, chain oils. grooming, oral hygiene, baby biopolymers. care, perfumes, fragrances.

Health Care Polymer and Coatings Home Care & Industrial Nutrition, pharmaceutical Paints and coatings, resins, Cleaning excipients, dermatology, animal graphics and printing inks, Laundry detergents, fabric health adhesives and sealants, conditioners, hard surface elastomers (thermoplastic), cleaners, bathroom and toilet plastics and composites, foams, cleaners, carpet cleaners, hand ceramics. and auto dishwash, air fresheners and deodorisers, Industrial & Institutional (I&I) cleaners, furniture, shoe and leather polishes, skin care lotions for tissues and hygiene articles, automotive cleaning.

Crop Care Geo Technologies Process Additives Formulation additives and Oil & gas production, drilling, Candles, Car Tyres, Construction, adjuvants, herbicides, fungicides, refining. Emulsions, Fatty Acid derivatives insecticides, emulsifiable Water Treatment – water (alkoxylates, amides, esters, concentrates, micro emulsions, soluble polymers, flocculants surfactants), Fine Chemicals, seed treatments, soluble liquids, Fuel, Fibre Finish, Leather, Mining, Mining – Emulsion Explosives suspension concentrates, Minerals, Rubber Compounding, suspo emulsions, water Soap Bars, Solvents, Textile dispersible granulates, wettable Auxilaries, Tobacco powders.

More information on our products, markets and applications can be found on Our Website.

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Profile 2.3 Operational structure of the organisation, including main divisions, operating companies, subsidiaries and joint ventures. Croda’s corporate headquarters are at Cowick Hall in East Yorkshire, England. Croda has technical centres and manufacturing plants throughout the world. Croda is a world leader in natural based speciality chemicals which are sold to virtually every type of industry. Activities can be broadly classified into two sectors: Consumer Care which consists of global businesses in Personal Care, Health Care and Crop Care. Industrial Specialities which comprises Lubricant Additives, Polymers and Coatings, Geo Technologies, Polymer Additives, Household and Industrial cleaning and Process Additives. In addition, the group has an Enterprise Technology function which identifies and integrates new technology into the global business structure. More information on the organisation structure can be found at www.croda.com under: Worldwide Facilities and Locations Company Overview

2.4 Location of organisation’s headquarters and major divisions, operating companies, joint ventures and subsidiaries. Croda’s corporate headquarters are at Cowick Hall in East Yorkshire, England. More information can be found at www.croda.com under: Worldwide Facilities and Locations. 2.5 Number of countries where the organisation operates and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report. Croda is a truly international company with 3624 employees working at 43 sites in 35 countries. Croda has technical centres and manufacturing plants throughout the UK, France, Germany, the Netherlands, Italy, Spain, USA, Brazil, India, Singapore, South Korea, Indonesia and Japan. The strength of the research, development and manufacturing capabilities is underpinned by a global network of sales offices and technical/customer support teams. More information can be found at www.croda.com under: Worldwide Facilities and Locations.

2.6 Nature of ownership and legal form. Croda International Public Limited Company. The Articles of Association can be found at www.croda.com under: Corporate Governance The ownership structure and major shareholders can be found in the 2008 Annual Report on www.croda.com under: Annual Report & Accounts 2008. 2.7 Markets served (including geographic breakdown, sectors served and types of customers/beneficiaries). The markets served and their geographic breakdown can be found at www.croda.com under: Products & Markets and Worldwide Facilities and Locations. 2.8 Scale of the reporting organisation. The Group employed, at 31/12/2008 3624 employees worldwide. In 2008, 46% of sales revenue was to the Consumer Care market and 54% to Industrial Specialties. In 2008, the net sales by revenue and destination were: Europe 52%, Americas 29%, Asia 14% and ROW 5%. In 2008, revenue from continuing operations was £956.4 M At 31st December 2008 total capitalisation was £1,098m, £398m debt and £700m equity. These figures apply to Croda International Plc in total. Further information can be found in the 2008 Annual Report at www.croda.com under: Annual Report & Accounts 2008. 2.9 Significant changes during the reporting period regarding size, structure or ownership. The major disposals were our 46.5% share in Baxenden Chemicals, in February 2008 to Chemtura Corporation and our Chicago Oleochemical business was sold to H.I.G. Capital LLC in May 2008. These disposals further reduced Croda’s exposure to commodity and industrial markets.

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Profile 2.10 Awards received in the reporting period. The rewards in 2008 included the following: I Award for superior on time delivery and quality as “Partners in Success” by Banner Pharmacaps Inc. USA , I Award for “Placa al treball President Macià” to Croda Mevisa for outstanding improvements and progress initiatives by the Catalonian Government in the category of Safety and Health. This category acknowledges both continuous accident free days and general occupational health management. I Croda Inc. USA presented with a Tribute from the Governor of Delaware on January 29, 2008 for supporting youth mentoring. The tribute recognised Croda “for its outstanding contribution in youth mentoring, especially through the participation in The Great Delaware Mentoring Challenge. By supporting youth mentoring and nurturing the growth of mentor-mentee relationship with its employees, Croda Inc has and continues to lead by example.” I Croda Brasil was awarded a “First Supplier Award” by Syngenta Brasil and ‘Raw Material Supplier 2008’ by Nycomed for product quality, on time delivery and technical services I Croda Bromborough was the winner of the Wirral Investment Network award for Corporate Social Responsibility, sponsored by Unilever and the Liverpool Daily Post Regional Business Award for Corporate Social Responsibility, sponsored by the University of Liverpool.

3 Report Parameters Report Profile 3.1 Reporting period (e.g., fiscal/calendar year) for information provided. The Reporting Period is the 2008 calendar year. Reporting on objectives and target performance covers their period of application and not just performance in 2008.

3.2 Date of most recent previous report. The CSR Report for 2008 can be found at www.croda.com under: 2008 CSR Report We published our 2007 CSR Report at www.croda.com under: Corporate Social Responsibility Report 2007 With the implementation of GRI Reporting in 2008, this report is our first GRI Report and reflects our application level of ‘C’.

3.3 Reporting cycle (annual, biannual, etc). Croda have an annual reporting cycle and our printed CSR Report is published each year and released at the same time as our Annual Report.

3.4 Contact point for questions regarding the report or its contents. The contact is the Group Personnel Manager – Samantha Brook Contact details: [email protected]

Report Scope and Boundary 3.5 Process for defining report content. We have prioritised the key issues and indicators based on an external review with stakeholders and an internal review conducted across all Divisions worldwide. We have extended the scope of our CSR Action Plan for the first time, going beyond our traditional set of objectives and targets on safety, environmental and health priorities to include employees, community and partnership objectives. The GRI indicators were selected following a process of assessment against these priorities and accounting for relevance and materiality as set out in the GRI G3 Guidelines. More information can be found in our 2008 CSR Report

3.6 Boundary of the report. This report covers all of our international manufacturing and business locations – 43 in total. Detailed reporting on key performance indicators is for the manufacturing locations only and can be found on www.croda.com under: Worldwide Facilities and Locations Manufacturing

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Profile 3.7 State any specific limitations on the scope or boundary of the report. There are no specific limitations with concern to the scope or boundary of the report, however, entities over which the business does not have control or significant influence are excluded from the scope of the report unless otherwise stated. 3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations and other entities that can significantly affect comparability from period to period and/or between organisations. There were no major changes in subsidiaries, leased facilities or outsourced operations that significantly affect comparability on GRI-relevant topics with the previous Annual Report unless stated. 3.10 Explanation of the effect of any re-statements of information provided in earlier reports and the reasons for such re-statement. There were no significant re-statements with relevance for GRI reporting. However there is one re-statement made in this report that differs from that of our 2008 CSR Report, this is for indicator EN22, total waste proportion, hazardous and non hazardous waste. The original proportions shown in the CSR report of 20% to 80% were indicative. The figures in this report are the validated figures. 3.11 Significant changes from previous reporting periods in the scope, boundary or measurement methods applied in the report. This is the first GRI report produced by Croda. 3.12 Table identifying the location of the standard disclosures in the report. The table can be found on pages 2 – 4 of this report. 4 Governance, Commitments and Engagement 4.1 Governance structure of the organisation, including committees under the highest governance body responsible for specific tasks, such as setting strategy or organisational oversight. The Board of Croda International Plc is committed to high standards of corporate governance as outlined in the Combined Code ("the Code") on corporate governance appended to the UK Listing Authority Listing Rules. The Board, which meets at least eight times a year has a formal schedule of matters specifically reserved to it for decision. It is primarily responsible for the strategy needed for the successful direction of an international company and currently comprises the Chairman, the Group Chief Executive, the Group Finance Director and three independent non-executive directors. The Chairman is an independent (non-executive) director. All members of the Board have full access to the advice and services of the Company Secretary. Under the Company's Articles of Association all directors must offer themselves for re-election at least once every three years. More information together with the Articles of association can be downloaded from our website at; Corporate Governance 4.2 Indicate whether the Chair of the highest governance body is also an executive officer. The Chairman is an independent (non-executive) director. More information on the Board of Directors can be found in the Annual report for 2008 on www.croda.com: Annual Report & Accounts 2008.

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Profile 4.3 For organisations that have a unitary board structure, state the number of members of the highest governance body that are independent and/or non-executive members. The Board is committed to high standards of corporate governance and to complying with the provisions of The Financial Reporting Council’s Combined Code on Corporate Governance (“the Code”) where practicable. This statement, together with the directors’ remuneration report, set out on pages 25 to 32 of the 2008 Annual Report, describes how the relevant principles of governance set out in the 2006 version of the Code are applied to the Company. The Board has ultimate responsibility for the overall leadership of the Company and in this role it assists in the development of a clear strategy for the Group, monitors operational and financial performance against agreed goals and objectives and ensures that appropriate controls and systems are in place to manage risk. It comprises the Chairman, the Group Chief Executive, the Group Finance Director and three independent non-executive directors who have a range of business, financial and international skills and experience. This provides an appropriate balance within the Board. Biographical notes appear on pages 20 and 21 of the 2008 Annual Report. The Chairman and the Group Chief Executive have written accountabilities that have been approved by the Board. It is the Board’s opinion that all non-executive directors who served throughout the period under review were independent in accordance with the Code. The Board has a formal schedule of matters specifically reserved to it and this is posted on the Company’s website. The Chairman and non-executive directors meet together without the executive directors present on an ad hoc basis and the non-executive directors meet at least annually in the absence of the Chairman in order to appraise his performance. In addition to formal Board meetings, the Chairman and the Group Chief Executive meet on a regular basis.

4.4 Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body. Croda holds an Annual General Meeting each year to which all shareholders are invited to attend and ask questions relating to the business of the meeting which customarily deals with the annual report and accounts including the report on directors’ remuneration. In addition, UK company law provides statutory mechanisms for shareholders to require directors of companies to hold shareholder meetings and propose resolutions submitted by shareholders. Croda believes that effective internal communication is vital to achieving its business objectives, and communication and consultation strengthen the relationship between Croda and its employees. The Croda vision states that: I We can only achieve our goals through excellent and constant communication, creativity and setting clear objectives at every level. The vision also states that: I All employees have the courage to question, and all functions and individuals are valued. The company promotes a transparent and open way of working and is committed to developing and improving the effectiveness of the communication and consultation process. Communication and consultations may take various forms that include, but are not limited to: I Face to face meetings that may be formal or informal I Article in company magazine I Telephone calls I Team briefing and cascades I Letter I Group meetings I E-mail I Meeting with Union representatives and/or I Notice consultative bodies I Memo I Focus groups I E-list I Questionnaire I Announcements on intranet I Team consultations The appropriate method of communication and/or consultation will be decided by the Company dependant upon the nature of the topic involved.

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Profile 4.5 Linkage between compensation for members of the highest governance body, senior managers and executives (including departure arrangements) and the organisation's performance (including social and environmental performance). Remuneration of the executive members of the Board includes performance related aspects rewarding contribution to sustained increases in Company performance and value. More information can be found in the Annual Report for 2008 at www.croda.com in the Director’s remuneration report: Annual Report & Accounts 2008.

Commitments to External Initiatives 4.12 Externally developed economic, environmental and social charters, principles or other initiatives to which the organisation subscribes or endorses. Croda International actively participates in a number of organisations and bodies. Many relate to the speciality chemical sector and the responsible management of our products and to social responsibility and sustainability. 1. Charters I Responsible Care® - We are signatories to Responsible Care® which is the chemical industry’s global voluntary initiative under which companies, through their national associations, work together to continuously improve their health, safety and environmental performance, and to communicate with stakeholders about their products and processes. The Responsible Care® ethic helps our industry to operate safely, profitably and with due care for future generations, and was commended by UNEP as making a significant contribution to sustainable development at the World Summit on Sustainable Development in 2002.

I Round Table on Sustainable Palm Oil The mission of RSPO is to advance the production, procurement and use of sustainable oil palm products through: the development, implementation and verification of credible global standards and the engagement of stakeholders along the supply chain. We are members of the Roundtable on Sustainable Palm Oil (RSPO), which collectively brings oil palm growers, oil processors, food companies, retailers, NGOs and investors to work together towards a global supply of palm oil that is produced in a socially and environmentally responsible way. The Roundtable promotes palm oil production practices that help reduce deforestation, preserve biodiversity, and respect the livelihoods of rural communities in oil-producing countries. It ensures that no new primary forest or other high conservation value areas are sacrificed for palm oil plantations, that plantations apply accepted best practices and that the basic rights and living conditions of millions of plantation workers, smallholders and indigenous people are fully respected.

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Profile 4.13 Memberships in associations. The company is a signatory to the Responsible Care Initiative of the chemical industry trade associations in UK and USA, and more recently has endorsed the Global Charter agreed amongst the members of the International Council of Chemical Associations. Croda has also demonstrated its commitment to Sustainable Development by endorsing the principles developed in cooperation with stakeholders and member companies of the Chemical Industries Association. I The Chemical Industry Association (CIA) in the UK I The European Chemical Industries Federation (CEFIC) I The European Federation for Cosmetic Ingredients (EFfCi) I American Chemistry Council in the USA (ACC) I The Soap and Detergents Association in the USA (SDA) I The British Association for Chemical Specialties in the UK (BACS) I The Chemical Industry Association in The Netherlands (VNCI) I The Chemical Industry Association in Germany (VCI) I The Chemical Industry Association in Italy (Federchimica) I Cosmetics, Toiletries and Perfumery Association in the UK (CTPA) I Business in the Community (BITC) in the UK I Round Table for Sustainable Palm Oil (RSPO) I The International Pharmaceuticals Excipients Council (IPEC) I The Council for Responsible Nutrition in the UK (CRN) I The Global Organisation for EPA and DHA Omega 3 (GOED) I The Chemical Producers and Distributors Association in the USA (CPDA) I Brazilian Chemical Trade Association I Singaporean Chemical Trade Association.

Stakeholder Engagement The following disclosure items refer to general stakeholder engagement conducted by the organisation over the course of the reporting period. These disclosures are not limited to stakeholder engagement implemented for the purposes of preparing a sustainability report. 4.14 List of stakeholder groups engaged by the organisation. Our CSR approach is based on '4 Pillars': Our Neighbours, Our World, Our Partners and Our People. We encourage active engagement with a wide selection of stakeholders including our employees, the communities we operate in, our suppliers and customers, public bodies, capital market, the scientific community and responsible NGOs. Over 2008, we have met with key stakeholders and have described what we are doing and sought their views. This activity led to the identification and ranking of a number of priorities relating to our people and neighbours which go beyond our historical focus on environmental priorities. We have identified the responsible sourcing of our raw materials and an assessment of the carbon footprint of our products as priority areas as well. However, we recognise that although we have established a company framework to our CSR activities, their delivery will have to take into account the different social, environmental and economic circumstances of the countries in which we operate. We have established a team of regional champions who are empowered to work with their colleagues in order to support their commitment and enthusiasm in progressing local initiatives. This is a vital part of our corporate social responsibility strategy which supports and encourages local action as well as working towards success on our corporate CSR objectives.

4.15 Basis for identification and selection of stakeholders with whom to engage. Our CSR Steering Committee has identified our stakeholders and this has been integrated into our approach to Corporate Social Responsibility and Sustainability. Croda’s stakeholders are individuals or groups who can have an impact on the company’s ability to function. They can also be individuals or groups who are impacted by our activities, such as consumers.

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Data on performance GRI Indicator Description Performance Indicator No EC1 Direct Economic value generated and 2008 CSR Report distributed including revenues, operating Turnover £1002.6m Distribution of value added costs, employee compensation, donations To employees and other community investments, retained Pay, pension, social earnings and payments to capital providers security and redundancy and governments. payments £158.0m Value added To governments £302.8m Corporate taxes £33.3m To providers of capital Interest, dividends and minorities £46.5m Retained in the business £65.0m £302.8m Bought in materials and services £691.2m Other items £8.6m £699.8m

EC3 Coverage of the organisation’s defined 2008 CSR Report benefit plans Partial Reporting Defined benefits plan coverage Based on sample of 66.6% of employment population Total number of employees in sample 2,379 Number of employees covered by DB Schemes 1,347 (expressed as a percentage) (57%) Countries in sample: UK, Spain, India, Brazil, Netherlands, Singapore, Malaysia, German, Italy

21 Data on performance GRI Indicator Description Performance Indicator No EN1 Materials used by weight or volume. CSR Report – Page 24 2008 CSR Report We are recognised as one of the world’s leading suppliers of speciality chemicals based on renewable raw materials. Our definition of ‘natural’ and ‘renewable’ relates to both source and the capacity for replacement and renewal which means only plant and animal sources qualify. In 2008, over 70% of the raw materials we used were from renewable sources. Over 2009, it is our intention to establish practice worldwide to more accurately monitor the sourcing and use of renewable raw materials and to continue to actively engage with suppliers, customers and other stakeholders in the development of responsible and sustainable initiatives for renewable raw materials. GRI Indicator – EN 1 2008 Raw material sources Renewable (73%) Non renewable (27%)

EN3 Direct energy consumption by primary CSR Report – Page 37 source. 2008 CSR Report Our performance on this indicator is linked to our objective to improve the energy efficiency of our processes. The direct energy used as classified by source shows natural gas to be predominant with our direct investment in renewable energy projects beginning to make a contribution. Over 2008, two sustainable energy projects were completed. A wind turbine capable of supplying over 50% of the energy requirements of the Hull manufacturing site in the UK and a steam generator plant fuelled by waste combustible gases, biofuels and natural gas at the Emmerich manufacturing site in Germany. Our objective to improve energy efficiency per tonne of manufactured product declined by 6.1% compared to 2007 and has declined by 7.7% since 2006. Overall energy use by the Group reduced by 3.6% compared to 2007 and has reduced by 9.25% since 2006. This was partly due to much reduced manufacturing volumes in 2008. Our progress with energy reduction projects is demonstrated by our continued compliance with energy reduction targets of the UK Climate Change Agreement and the EU Emissions Trading Scheme.

GRI Indicator – EN 3 Direct energy used by source Natural gas (93.6%) Combined light and heavy fuel oils (4.9%) LPG (0.5%) Biofuel (0.8%) Wind (0.2%)

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GRI Performance Indicators GRI Indicator Description Performance Indicator No

EN8 Total withdrawal of water by source. CSR Report – Page 39 2008 CSR Report Our use of water as defined by source shows 16.3% from surface sources, 71.4% from ground water and 12.3% from mains water. Our objective is to reduce the Group’s requirements for mains water. Our target is for all manufacturing sites to reduce the use of mains water by 25% per tonne manufactured by 2010. Our performance in 2008 showed an increase of 15.1% in mains water per manufactured tonne compared to 2007 and an increase by 19.5% since 2006. Overall mains water use by the Group has increased by 0.8% since 2006. This is due to the reduced manufacturing tonnage in 2008. We have made significant progress at our Singapore manufacturing site in the replacement of mains water through the use of ‘Newater’ which now accounts for 90% of the total water consumption on this site and has reduced mains water consumption by over 200 tonnes per day. ‘Newater’ is reclaimed water derived from treated waste water through a combination of stringent purification techniques including dual membrane reverse osmosis and ultra violet treatment. GRI Indicator – EN 8 Water volumes by source Surface water (16.3%) Ground water (71.4%) Mains water (12.3%)

EN16 Total direct and indirect greenhouse gas 2008 CSR Report emissions by weight. Our overall objective is to work progressively towards a reduction in carbon emissions. We have taken the decision to be an active contributor to the Carbon Disclosure Project reporting on green house gas emissions and energy and to support our customers by participating in the supply chain leadership cooperation. Over 2008, the total direct and indirect GHG emissions was 291,738 tonnes CO2. The breakdown between direct and indirect GHG emissions was 66% and 34% respectively. GRI Indicator – EN 16 Carbon dioxide emissions by source Light fuel oil (3.1%) Natural gas (60.4%) Heavy fuel oil (1.4%) Electricity (20.3%) LPG (0.4%) Steam (13.6%) Biofuel (0.8%)

23 Data on performance GRI Indicator Description Performance Indicator No EN20 NOx, SOx, and other significant air Please refer to our CSR Report – Page 38 emissions by type and weight. 2008 CSR Report The Group has set an objective to minimise the mass of volatile organic carbon (VOC) emissions released to air from our processes with a target of all manufacturing sites to reduce VOC emissions (kg/tonne manufactured) relative to 2006. There was a 20.4% reduction in the amount of VOC per tonne released to air compared to 2007 and an overall reduction by 18.8% since 2006. This improvement was due to a major investment during this period to control the releases of VOCs including the installation of triple steam generators on the Emmerich manufacturing site in Germany which are capable of using the site’s VOC streams. This investment has eliminated VOC emissions on this site. For NOx, the 2008 figures for emissions globally were 741 tonnes and SOx were 1,479 tonnes

EN21 Total water discharge by quality and Please refer to our CSR Report – Page 38 destination. 2008 CSR Report Partial Reporting The Group has an objective to reduce the environmental impact on controlled waters with a target that all manufacturing sites achieve greater than 97.5% compliance with their effluent discharge consents in every year and for year on year continuous improvement towards 100% compliance. The compliance with our effluent discharge consents improved to 96.7% compared to 94.8% in 2007 and the baseline compliance of 90.8% in 2006.

EN22 Total weight of waste by type and disposal CSR Report – Page 38 method. 2008 CSR Report The total breakdown by weight of hazardous and non hazardous waste was 8,827 tonnes and 34,647 tonnes respectively. The proportion of hazardous to non hazardous waste was 25.4% and 74.6% respectively. The disposal of hazardous waste was by landfill (1.3%), incineration (30%), recycling (62.2%) and other methods (6.5%). For non hazardous waste, disposal methods were landfill (15.6%), incineration (18%), recycling (51.7%) and other methods (14.7%).

GRI Indicator – EN 22 Hazardous waste Landfill (1.3%) Incinerated (30%) Other (6.5%) Recycled (62.2%)

GRI Indicator – EN 22 Non hazardous waste Landfill (15.6%) Incinerated (18%) Other (14.7%) Recycled (51.7%)

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GRI Performance Indicators GRI Indicator Description Performance Indicator No

EN22 Total weight of waste by type and disposal GRI Indicator – EN 22 method. Total waste

Hazardous waste (25.4%) Non hazardous waste (74.6%)

1Proportions differ in the ‘Total Waste’ pie chart from them in the 2008 CSR report. Please see disclosure 3.10 for more details.

EN23 Total number and volume of significant spills. There were no significant and reportable spills in 2008.

EN26 Initiatives to mitigate environmental impacts CSR Report – Pages 24-33 of products and services, and extent of 2008 CSR Report impact mitigation. Our goal is to improve our products and actively search out new ways of maximising the use of all resources used in their manufacture. Our foundation approach to applying the principles of ‘Green Chemistry’ across our Research and Development organisation represents our intent to design and develop technologies for the future which reduce or eliminate the use and generation of substances hazardous to human health and the environment. Our initiatives and investment in process optimisation and environmental improvement include the improved effluent treatment system on the Gouda manufacturing site in The Netherlands, a novel filtration system for waste management at Rawcliffe Bridge in the UK, and the securing of surplus steam capacity by our Chocques site in France. From the product perspective, the development of novel processing techniques for the more efficient use of marine oils in the manufacture of Omega 3 fatty acids and the development of novel seed crops replacing some marine oil sources are examples of our best practice in securing our goal of minimising impact on the environment. There are other examples of innovative developments featuring mitigation of environmental impact for products offered to the crop care, lubricants and home care markets in the 2008 CSR Report Pages 24-33

25 Data on performance GRI Indicator Description Performance Indicator No LA1 Total Workforce by employment type, 2008 CSR Report employment contract and region. Partial Reporting We recognise that business success depends on retaining the skilled and motivated employees who are part of our global team based in 43 worldwide locations. 65% of our workforce are based at manufacturing sites, sales offices or administration centres in Europe. The remaining 35% are split between the Americas and Asia Pacific. Retaining a committed workforce is a key element of our people management strategy and offering permanent employment is a vital component of this. Only 3% of our global workforce are employed on temporary contracts (many of these are undergraduate interns and apprentices to whom permanent employment is normally offered upon successful completion of a training period). GRI Indicator - LA 1 partial reporting Total workforce by region Employee numbers by region Europe 2,361 Asia 655 The Americas 608 Total 3,624

GRI Indicator – LA1 Total workforce by region Europe (65%) Asia (18%) The Americas (17%)

GRI Indicator – LA1 Employees by gender Based on sample of 88.7% of employment population Females (28%) Males (72%)

GRI Indicator – LA1 Employees working part time Based on sample of 88.7% of employment population Part time (6%) Full time (94%)

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GRI Performance Indicators GRI Indicator Description Performance Indicator No

LA1 GRI Indicator – LA1 Employees working on temporary contract Based on sample of 88.7% of employment population

Temporary contract (3%) Permanent contract (97%)

LA2 Total number and rate of employee 2008 CSR Report turnover by age group, gender and region. Partial reporting Croda’s global voluntary turnover figure of 9% is comparable to the industry standard. The level of turnover in Europe is relatively low compared to country averages. In the UK exit interviews are conducted so that detailed reasons for leaving can be ascertained, trends spotted and strategies put in place to ensure turnover does not increase. GRI Indicator - LA 2 partial reporting Turnover by region Based on data from a sample of 88.7% of employment population

Tu r n o ve r Asia 13% Europe 6% The Americas 17% Global Average 9% Calculations based on voluntary turnover defined by GRI indicator LA 2 Calculations based on resignations only – global average = 6%

LA7 Rates of injury, occupational diseases, lost Please refer to our CSR Report – Page 39 days and absenteeism and number of work 2008 CSR Report related fatalities by region. In 2008 there was an increase in the reportable accident rate of 0.27% to 0.35% per 100,000 man hours. There was one reported case of an industrial disease – dermatitis. There were no work related fatalities.

27 Data on performance GRI Indicator Description Performance Indicator No LA10 Average hours of training per year per 2008 CSR Report employee by employee category.. Partial reporting To attract and retain the best people, we must invest in individuals’ professional development. During 2008 the average hours of training per employee was 21 hours. Our training and development opportunities are available to all. Individuals are responsible for motivating themselves to learn. All of our managers take personal responsibility to identify the training needs of the employees in their departments. In return the development opportunities available around the Croda group are varied, ranging from Manager Development Programmes, Health and Safety training, Personal Skills Development, Team Building, Executive Coaching, New Employee Induction Courses and Global Leadership Development Groups. GRI Indicator - LA10 partial reporting Average hours of training per employee Based on sample of 88.7% of employment population

Total hours of training for all employees in sample 68,164 Total employees in the sample 3,216 Average hours of training per employee for 2008 = 21hrs

SO1 Nature, scope and effectiveness of any CSR Report – Pages 12-17 programmes and practices that assess and 2008 CSR Report manage the impact of operations on The commitment of Croda to its communities has been a focus communities, including entering, operating for a number of years. The “Croda in the Community” policy and exiting. statement states the intent of Croda to be a good neighbour, not only by managing our own affairs in a proper manner, but also reaching out to support and relate to the local community. Specifically, Croda has committed to four elements of engagement with our neighbours. I Protecting the community I Employment for the community I Standards within the community I Engaging with the community This defines our attitude towards the community, allowing us to proactively pursue and positively respond to projects and opportunities which support it. For example, activities such as our employee volunteering program ‘The 1% Club’, our association with relevant local charities and good causes, and our development and educational programmes. In summary, ‘Our Responsibility’ is to act responsibly and with integrity towards our neighbours, and we are committed to having a positive impact on the local community wherever we operate in the world.

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GRI Performance Indicators GRI Indicator Description Performance Indicator No

PR3 Nature, scope, and effectiveness of any CSR Report – Pages 32-33 programmes and practices that assess and 2008 CSR Report manage the impact of operations on Our commitment to product performance, quality and safety is communities, including entering, operating represented by product stewardship being a key element of our and exiting. approach to business. We look beyond regulatory compliance and our policies encompass the protection of our customers and the public by the assessment and management of the potential risks posed by our products throughout their lifecycle – covering research and development, raw material sourcing, manufacture, storage, distribution and ultimate application including safe handling and use. Equally, quality is fundamental to everything we do through independently accredited quality management systems for all manufacturing locations and the integration of quality management into our enterprise management systems, ensuring the delivery of high quality products to our customers. There is more information on our approach to underwriting product safety and quality in the 2008 CSR Report, pages 32-33.

PR9 Monetary value of significant fines for non CSR Report – Page 40 compliance with laws and regulations 2008 CSR Report concerning the provision and use of In 2008, the Group was prosecuted in the UK by the products and services. Environment agency for an unauthorised release to air and was fined £24000 plus costs. In the USA, the Group was fined $5500 plus costs for a violation relating to a failure to perform leak detection and repair procedures on a manufacturing site in 2005. This was prior to the acquisition of the site by Croda in September 2006. The Group reached an out of court settlement in The Netherlands for alleged waste disposal violations between 2004 and 2006. Again, this was prior to the acquisition of the site by Croda in September 2006. Self declaration (Application Level)

Report Application Level C C+ B B+ A A+

G3 Profile Disclosures Report on: Report on all criteria Same as requirement for 1.1 listed for Level C plus1.2 Level B 2.1–2.10 3.9, 3.13 3.1–3.8, 3.10-3.12 4.5 – 4.13, 4.1 - 4.4, 4.14 - 4.15 4.16 – 4.17

G3 Management Not Required Management Approach Management Approach Approach Disclosures Disclosures for each Disclosures for each Indicator Category Indicator Category

G3 Performance Report on a minimum of Report on a minimum of Report on each core G3 Indicators & Sector 10 Performance 20 Performance and Sector Supplement* Standard Disclosures Standard Supplement Performance Indicators, including at Indicators, including at Indicator with due regard Report Externally Assured Report Externally Assured Report Externally Indicators least one from each of: least one from each of: to the Materiality Assured Report Externally Economic, Social and Economic, Human Rights, Principle by either: Environmental. Labour Society, Product a) reporting on the Responsibility. Indicator or b) explaining the reason for its omission.

If you need more information, please write to: •Sector supplement in final version Samantha Brook Group Personnel Manager Email: [email protected]

29 30 Croda International Plc Cowick Hall Snaith Goole East Yorkshire DN14 9AA England Tel +44 (0)1405 860551 Fax +44 (0)1405 861767 www.croda.com