| | | | | | | | | |  | | Platinum gauze catalyst for nitric acid manufacture and catalyst pellets for the abatement of nitrous oxide from nitric acid plants. |  | | |  | | Production facilities at the new catalyst manufacturing plant in South Korea. | | | |  | | Membrane electrode assemblies (MEAs) for fuel cells.
| | | | | | | | | | | | Corporate Social Responsibility
Johnson Matthey embraces a culture of continuous improvement in all aspects of corporate social responsibility (CSR). Continuous improvement is driven through corporate policies, a comprehensive management system and the commitment of our staff. There are three key policy areas which provide the framework for the management of corporate social responsibility: Environment, Health and Safety (EHS); Employment; and Business Integrity and Ethics.
Innovation and technical leadership are at the forefront of our business and we apply our skills to the development of products and technology which make a positive contribution to preserving the environment, in particular those that mitigate the effect of climate change. This includes the continual development of products that will improve the resource efficiency of our industrial customers and of products that make a positive contribution to the health and wellbeing of society. In managing our business we will endeavour to match these aspirations at all levels of our organisation and seek similar standards from those with whom we work.
Johnson Matthey operates according to well established ethical, social and environmental policies and over the last year further initiatives have been undertaken to improve our operational performance in these areas. Details of these initiatives can be found in Johnson Matthey’s Corporate Social Responsibility Report and are presented here in summary. The full report can be found on the company’s website at www.matthey.com.
As reported last year, corporate social responsibility is now monitored by the CSR Compliance Committee which is a sub-committee of the Chief Executive’s Committee (CEC). The CSR Compliance Committee has specific responsibility for setting and overseeing compliance with the standards for group CSR performance through the development, adoption, dissemination and implementation of appropriate group policies and other operational measures. It comprises the division directors and senior representatives of Group Legal, Internal Audit and Group EHS. CSR issues are reviewed by the CEC on a monthly basis with the Audit Committee reviewing the business risks associated with CSR at least once a year.
As outlined in the Corporate Governance section the board has embedded corporate social responsibility into its risk management process and formally reviews the area once a year. CSR is championed at the highest level at Johnson Matthey and the board has reviewed and endorsed the full report.
Johnson Matthey’s Products and Technologies
Many of our products and technologies have a particularly positive social and environmental benefit. They range from anticancer compounds to our emission control and management technologies for cars, trucks and buses, which improve air quality around the world. Johnson Matthey’s products and technologies have a significant role to play in the mitigation of climate change through reducing dependence on fossil fuels. These range from chemical process catalysts which improve the resource and economic efficiency of many industrial processes to fuel cell technologies which aim to make an important contribution to the clean generation of electricity and energy supply. The stabilisation of the world’s climate will require massive changes right across the energy network and part of the solution presents a challenge for business in developing more sustainable solutions for its customers. This offers a number of business opportunities where Johnson Matthey’s products and technologies could be the key enabler in delivering long term environmental benefits to society with the generation of further value for our shareholders. Further details of Johnson Matthey’s activities in these important areas are described the CSR report.
Product safety is critical to Johnson Matthey and sophisticated systems are in place to ensure that a high level of protection is afforded to our customers. Increasing emphasis is being placed on life cycle assessment and sustainable chemistry.
Whilst Johnson Matthey’s main contribution to sustainable development will be through the excellence of our products we also seek to achieve similar levels of excellence in the management of the business and in the quality of our manufacturing operations. Our expertise in processing valuable precious metal materials provides us with a core competence in the conservation, re-use and recycling of natural resources; principles which are applied throughout our business.
Stakeholder Engagement
Johnson Matthey undertakes a wide range of engagement activities focused on communication with individuals and organisations who are impacted by its operations or who may impact on the Johnson Matthey business, both at corporate and divisional level. These include shareholders, fund managers, employees, customers, communities and national and international trade associations. The company plays an active role within the Chemical Industries Association (CIA) with representation on the CIA Council and other strategy boards. Johnson Matthey has also continued to play a leading advisory role through its participation in a number of sector trade associations and national and local government organisations. The company is also actively involved more broadly with other international trade and government bodies to inform the development of policy in areas where Johnson Matthey’s technology and products can play a pivotal role, for example in improving air quality and enabling the shift towards more sustainable consumption and production. Neil Carson, Chief Executive of Johnson Matthey, chairs the UK government’s Business Taskforce on Sustainable Consumption and Production and is a prominent member of the Corporate Leaders Group which has provided valuable suggestions to UK government and the European Commission on climate change issues. A number of the company’s senior management are involved in the UK government’s sustainability and climate change initiatives.
Further details of Johnson Matthey’s stakeholder engagement activities can be found in the CSR report on the company’s website at www.matthey.com.
Environment, Health and Safety
Environmental, Health and Safety Policy Statement
The Chief Executive’s Committee formulates and agrees a written policy statement which forms the basis of the group EHS management system. The board approves this policy statement which is signed by the Chief Executive and is available at each site throughout the Johnson Matthey group, as well as being published externally. This policy is presented in full in the CSR report and on the company’s website at www.matthey.com/cr/ehs.
Environmental, Health and Safety Management
Johnson Matthey is firmly committed to managing its activities throughout the group so as to provide the highest level of protection to the environment and to safeguard the health and safety of its employees, customers and the community. Our EHS policies provide the guiding principles that ensure high standards are achieved at all sites around the world and afford a means of promoting continuous improvement based on careful risk assessment and a comprehensive EHS management system.
The group EHS management system is reviewed regularly to ensure that it reflects international best practice and our growing understanding of the practical application of sustainable development.
The corporate objectives, policies and group EHS management system define accountability and set the standards against which conformance audits are assessed. A fundamental revision of the group EHS management system was undertaken during 2005 to reflect regulatory changes and advances in best practice. These policies were communicated across the group in early 2006 and now all facilities have developed local policies to meet the requirements of the new corporate policies. The group EHS management system is available to all employees via the company intranet.
The second year of implementation of the revised health management strategy was underpinned by an increased level of investment in preventive health management programmes and services across the group during 2006. This has already had a beneficial impact on performance.
EHS compliance audits are an integral part of Johnson Matthey’s corporate EHS management system and are vital for the achievement of continuous improvement in all aspects of EHS. All Johnson Matthey operated manufacturing and research and development facilities are included in the audit programme. The audit frequency for each facility is determined by the scale, inherent risk and past performance of the operation. Audits review conformance with the group EHS management system and compliance with national legislation, as well as providing an opportunity to share best environmental, health and safety practices.
The Group Occupational Physician undertakes business health management reviews to provide consulting advice to guide the prioritisation and planning of programmes to optimise workplace health protection and promote workforce productivity.
The CSR Compliance Committee reviews all audit reports, including health management reviews, and appropriate follow up is taken on any outstanding issues. A total of 19 detailed compliance audits were completed in 2006/07.
During the year we have formalised the management of substance and product safety through the appointment of a Group Product Stewardship Manager who also has responsibility for management of our chemicals compliance programme which includes meeting the requirements of the forthcoming EU Registration, Evaluation and Authorisation of Chemicals (REACH) regulation.
ISO 14001
Over the past year continued progress has been made with the implementation of ISO 14001, in line with our target of achieving registration at all major manufacturing sites by 2010. Three manufacturing sites achieved ISO 14001 registration during the last year. This was less than our target of five as a number of sites expected to achieve registration were sold as part of the sale of Ceramics Division. Across the group, 62% of our staff now work at sites with ISO 14001.
Regulation
The new EU REACH regulation comes into force from June 2007 and is widely acknowledged as the most comprehensive chemical control legislation ever introduced in Europe. Johnson Matthey strongly supports the objectives of the legislation in protecting human health and the environment. During the year a REACH conformance programme has been established to manage the introduction of the legislation which will span the next decade. The objectives of this initiative are to ensure timely compliance while limiting and managing any potential detrimental effects on our business. At a business unit level detailed assessments of substance inventories have been completed and plans are in place for REACH pre-registration and subsequent phases of the programme. The company continues its strategy to leverage industry cooperation through consortia to share the costs of testing and implementation. Costs over the next ten years are expected to remain within our earlier estimates of £10 million.
2006 was the second year of phase one of the European Emissions Trading Scheme (EU ETS). As a result of the sale of Ceramics Division in February 2007, Johnson Matthey now has only one permitted site participating in the scheme. This site, located in the UK, remains within the pre-existing Climate Change Agreement Scheme and so benefits from the opt-out applicable to UK sites until phase two of the EU ETS begins in January 2008. At that time, the site will become an active participant in the scheme. Allowances for the site have been allocated and due to the peculiarities of the rules there will be a shortfall of 10,000 tonnes of CO2 resulting from the coincidental commissioning of an energy saving combined heat and power (CHP) unit during the baseline year. This will provide further stimulus for energy saving initiatives at the site to minimise the need to purchase carbon credits.
Climate Change
With continued increased public awareness of the issues of climate change there is a clear consensus that we must be more efficient in our use of existing energy sources as we transition towards a low carbon world. With our core competence in catalysis and precious metals technology, Johnson Matthey is well placed to contribute to providing solutions to this global issue and to benefit from the associated business opportunities.
Johnson Matthey continues to focus on developing new products and technologies which make a positive contribution to society and the environment, and is actively working to improve the performance of its own manufacturing operations through improved energy and resource efficiency. Examples of both commercial and developmental products and technologies and manufacturing improvement initiatives from across the Johnson Matthey group can be found in the CSR report.
Training
Training is vital to ensuring continuous improvement in environmental, health and safety performance. A number of seminars on high priority health and safety topics were completed during the year. Operations managers, process engineers and EHS professionals from nine plants participated in one such international seminar to learn about the application of new containment technologies to reduce potential exposure to hazardous chemicals in manufacturing processes. Training on the use of the accident and incident reporting software system, AirsWeb, has also continued throughout the year at a number of facilities across the group. | | | | | | | |  | | | |  | | | |  | | | | | | | | Environmental, Health and Safety Performance
Johnson Matthey undertakes a comprehensive annual review of group environmental performance covering all manufacturing and research and development facilities. Where necessary, past environmental data has been restated to reflect changes in the business, for example divestments and site closure.
During 2006 our European sites continued to make good progress against the long term environmental improvement targets established during 2005. This year has also seen the development of targets at other facilities worldwide with over 75% of our sites now having established environmental improvement targets. The remaining sites will set targets during 2007/08.
Significant reductions in key environmental impacts were achieved during 2006, specifically energy use, emissions of acid gases and waste production. In particular energy consumption fell by 5% as a result of the focus on energy efficiencies by sites and NOx emissions fell by 14% as a result of significant investments at plants in Royston and Brimsdown in the UK and Panki, India. An increase in water usage was observed as a result of the inclusion of annual environmental data for the first time from new sites.
On 24th November 2006 Johnson Matthey pleaded guilty to four charges of failing to comply with the conditions of the Pollution, Prevention and Control Permit related to our autocatalyst facility at Royston, UK during 2002/03. The company was fined £35,500 and ordered to pay costs of £30,000.
A comprehensive occupational illness identification and reporting system was introduced in 2005 resulting in improved prevention and recognition of such cases. The group occupational illness incidence rate has significantly reduced in calendar year 2006 compared to the rates observed in 2004 and 2005.
Accidents are actively monitored and detailed statistics are compiled monthly at a group level. We believe that any accident is unacceptable and in April 2006 the CEC set a new group target of zero greater than three day accidents.
With the introduction of more robust health and safety data collection mechanisms, including the implementation of the global AirsWeb accident and incident reporting software system, all of our published safety data has been restated to reflect the higher level of accuracy inherent in the new systems.
Our safety performance has improved during the past year with the incidence of greater than three day accidents at Johnson Matthey calculated as 4.50 per 1,000 employees in March 2007, a reduction of 17% from 5.41 per 1,000 employees in March 2006. The total number of accidents that resulted in lost time was 38, a 55% reduction compared to the previous year. During the same time period, the total accident rate reduced by 25% from 11.74 to 8.88 per 1,000 employees per year.
In 2006/07 the number of days lost per 1,000 employees per year was 125, a similar number to the previous year. 45% of the total time lost across the group resulted from four accidents with a combined total of 488 lost days.
All accidents are thoroughly investigated to determine root causes and assign appropriate preventative and corrective actions.
Following the fatality last year at the St Catharines’ facility Johnson Matthey pleaded guilty to a charge under the Canadian Occupational Health and Safety Act. The court imposed a fine of $150,000 but commended the facility for its full cooperation during the investigation and the remedial actions undertaken to prevent recurrence of such an accident.
Environmental, Health and Safety Targets
Johnson Matthey continually monitors environmental, health and safety performance in order to identify those issues most pertinent to the business and to drive improvement.
During 2006/07 the company established long term environmental impact reduction targets at the majority of its sites (over 75%) and aims to develop targets at all remaining sites during the forthcoming year. Three manufacturing sites across the group have already implemented plans to achieve ISO 14001:2004 registration during 2007/08.
There will be continued focus on achieving a further reduction in the incidence of occupational illness conditions caused by exposure to chemicals. The ability of businesses to evaluate chemical product hazards and minimise employee exposure during manufacture will be enhanced through the use of improved in house occupational toxicology skills, coaching and written guidance on the application of containment technologies and continued investment in plant improvement projects.
All sites within the group will continue to work towards the target of zero greater than three day accidents. Leading and lagging indicators are now an integral component of site improvement plans in order to better monitor performance against these improvement conditions.
We will complete a review of the group EHS management system to revise and develop policies to reflect new plant and processes, regulatory changes and improvements in industry best practice. Guidance for sites will be prepared for both new and revised policies as appropriate. Additions and revisions to the management system will be communicated to all sites within the group for local implementation.
Human Capital Management
Johnson Matthey’s people are the group’s most valuable resource. We are committed to recruiting high calibre employees and providing them with the information, training and working environment they need in order to perform at the highest standards. We encourage all our employees to develop to their maximum potential and we are committed to supporting them with effective human resources policies and practices that are strategically linked to the needs of our business and our customers.
Implementation of Johnson Matthey Human Resources Policies
Johnson Matthey’s people policies are implemented through the corporate human resources standards which set requirements for operations throughout the group to follow. These standards, which are generally in advance of legal requirements, provide internal consistency and are supported either by detailed regional procedures and / or business unit procedures. All of these policies and procedures are subject to regular review to ensure that they continue to reflect both regional best practice and local legislation. During the year a comprehensive review of UK policies and practices was undertaken in order to meet the requirements of the Employment Equality (Age Discrimination) Act 2006. Site specific human resources policies and procedures are communicated to staff at inductions and through staff handbooks. Human resources policies and risks are examined by the Chief Executive’s Committee and the CSR Compliance Committee. | | | | | | | |  | | | |  | | | | | | | | Key Employment Policies
Equal Opportunities
It is the policy of the group to recruit, train and develop employees who meet the requirements of the job, regardless of gender, ethnic origin, age, religion or sexual orientation. Disabled people and employees who become disabled are offered employment consistent with their capabilities. The business values the diversity of its people and employment applications are welcomed from all sections of the community including minority groups.
Training and Development of People
The Management Development and Remuneration Committee of the board takes a special interest in ensuring compliance with the Training and Development of People Policy objectives to: | | | | | | | | | • | Ensure highest standards in the recruitment of employees. | | | | | • | Assess training needs in the light of job requirements. | | | | | • | Ensure relevance of training and link with business goals. | | | | | • | Employ and evaluate effective and efficient training methods. | | | | | • | Promote from within, from high potential pools of talent. | | | | | • | Understand employees’ aspirations. | | | | | • | Provide development opportunities to meet employees’ potential and aspirations. | | | | | | | | | | | Johnson Matthey recognises the need to maintain its ability to recruit well qualified staff to support the development of the business in new and emerging markets. This challenge will be met through appropriate manpower planning, local recruitment and the encouragement of international mobility.
An increasing level of training and development activity within Asia has been established to reflect the growing importance of this region to the business, including a major cross divisional programme primarily for managers in Asia.
The first module of the programme was held in the UK in March 2007 and will continue in South Africa later in the year. In addition to an increase in local process operator training, there has been a worldwide emphasis on team leader development. Cross cultural awareness training continues to be an important component of career foundation, middle manager and senior manager development.
Johnson Matthey continues to have a steady requirement for high calibre graduate recruits to meet immediate technical and commercial job needs and for development to meet future management requirements throughout the group. The combination of direct scientific contact with key university departments and a streamlined recruitment procedure ensures a reliable supply of high calibre applicants worldwide.
Employee Relations and Communication
The quality of its employee relationships is a priority for Johnson Matthey. The company has a low voluntary staff turnover (7.5% in the calendar year 2006) with many employees staying with the company for their whole careers.
Johnson Matthey recognises the importance of effective employee communications and particularly the value of face to face dialogue. Information and comment is exchanged with employees through the company’s in house magazine, regular news bulletins, presentations to staff and team briefings. Employees are also encouraged to access the company’s intranet and website.
Johnson Matthey continues to maintain good and constructive relations with all recognised trade unions which collectively represent 37% of all group employees worldwide. During the year no working time was lost due to employee action.
The company supports employee share ownership and where practicable offers employees the opportunity to participate in share ownership plans which provide the facility to purchase company shares with a company funded matching component. Employees in six countries worldwide are able to contribute to a company share ownership plan or a 401k approved savings investment plan. Through these ownership plans Johnson Matthey current and former employees collectively held 1.5% of the company’s shares at 31st March 2007.
Johnson Matthey also sponsors pension plans for employees of its operations throughout the world. These pension plans are a mixture of defined benefit or defined contribution pension arrangements, savings schemes and provident funds designed to provide appropriate retirement benefits based on local laws, custom and market practice.
Activities over the Last Year
There have been a number of key development initiatives at Johnson Matthey sites during the past year. Improvements to employee communications and engagement have continued to focus on the use of site satisfaction and attitude surveys as a means of strengthening and enhancing the two way dialogue with employees. In order to build on and extend these local benefits a small project team was established to investigate the feasibility of running a global employee attitude survey for all Johnson Matthey employees worldwide. Using a confidential and independent survey administrator a pilot of a possible groupwide employee survey was conducted in two businesses on an international basis, using a combination of web hosted and paper survey questionnaires. The response rate amongst the 900 employees invited to participate was 65%. 89% of those who took part said that they were satisfied with working for Johnson Matthey and 93% said that they were proud to work for the company. In addition to these very positive outcomes there were also helpful indications of what the management team should focus on to make the company an even better place to work.
In December 2006, an updated and improved company intranet site was launched to all employees worldwide. The site features a new visual design, enhanced navigation and improved and more detailed content. In addition to latest company news, announcements and policies, employees can access important up to date departmental information in the areas of corporate communications, human resources, EHS, IT and risk assurance.
Our continued focus on improving attendance management and rehabilitation case management programmes has contributed to a further reduction in the rate of sickness absence and human capital costs. There has also been an increased investment in wellness and mental wellbeing programmes to improve employee health and wellbeing and promote attendance and work performance.
The major initiative launched last year to provide policy awareness training for senior managers was expanded in 2006/07 to include US specific seminars, with a parallel programme of e-learning available for all US employees. Worldwide over 150 managers attended the seminars during the year which cover their responsibilities for compliance with Johnson Matthey policies for employees, commercial contracts and the management of company assets. An on-line version is currently in development which will be completed by a wider range of junior managers and senior staff during 2007/08.
During the year a management skills database was created as a means of strengthening the internal development and mobility of the 800 management staff within the group. The database provides a valuable resource to support and broaden the succession planning process by creating greater cross divisional visibility of the functional skills, background and key competencies of the managers in the group. | | | | | | | | Social and Ethical Matters
Business Integrity and Ethics
A reputation for integrity has been a cornerstone of Johnson Matthey’s business since Percival Norton Johnson founded it in 1817. It gives customers the confidence that the company’s products meet the standards claimed for them and that they may safely entrust their own precious metals to Johnson Matthey for processing and safe keeping. Employees at all levels are required to protect Johnson Matthey’s reputation for integrity.
The company strives to maintain the highest standards of ethical conduct and corporate responsibility worldwide. All employees have a duty to follow the principles set out in Johnson Matthey’s Business Integrity and Ethics Policy Statement which is available on our website at www.matthey.com/cr/biepolicy and in the CSR report. It is the responsibility of directors and senior management to ensure that all employees who directly or indirectly report to them are fully aware of Johnson Matthey’s policies and values in the conduct of the company’s businesses. It is also the responsibility of directors and senior management to lead by example and to demonstrate the highest standards of integrity in carrying out their duties on behalf of the company. These issues are further safeguarded through corporate governance processes and monitoring by the board and sub-committees of the board.
Johnson Matthey facilities have established policies and procedures through which employees can raise employment related issues for meaningful consideration and resolution. In the US a confidential and secure website and telephone helpline was established last year to give employees an additional means to raise any issue of personal concern. These confidential reporting arrangements will be extended to all Johnson Matthey employees worldwide during 2007.
Supply Chains
Management of the supply chain and contractor activities is a core component of the ISO 9000 and ISO 14000 series of standards. Supply chain and contractor management questionnaires are a requirement of achieving and maintaining registration and as such, ISO registered Johnson Matthey sites require the completion of appropriate questionnaires. For those sites without ISO registration, the group EHS management system provides policy and guidance on both supply chain management and contractor control.
Whilst we are confident of the human rights performance of our own operations we recognise that business practices in the supply chain are not always transparent and represent a risk that must be managed. We support the principles defined within the United Nations Universal Declaration of Human Rights and the International Labour Organisation Core Conventions.
Community Engagement Activities
Johnson Matthey is actively involved in programmes worldwide that promote good community relations to foster a relationship of understanding, trust and credibility. Guidance on site requirements is detailed in the group EHS management system.
An annual review of community engagement activities across the group has been carried out and shows that 100% of Johnson Matthey operations with over 50 employees participate in activities within their local communities, an increase of 5% on last year. These activities are wide ranging and include charitable giving, support for educational projects, the advancement of science and economic regeneration projects. Johnson Matthey employees also participate in activities or hold community related roles outside of the work environment. The company is supportive of this broader community engagement, allowing employees time off during working hours as appropriate. The review also demonstrates that more sites are setting objectives for their community engagement activities and that an increasing number of sites are planning specific activities in their community programmes.
During the year, an area on the group intranet dedicated to community engagement was launched to offer further support to sites in developing and implementing meaningful community programmes. Over the next year, this intranet site will be further developed and promoted across the group to stimulate new ideas for community engagement and encourage the sharing of best practice. A review of site community engagement activities will be conducted once again and we will continue to focus on how best to measure and improve the impact of our community involvement.
Charitable Programmes
Johnson Matthey’s long history of support for charitable causes is matched today through programmes at both a group and a business unit level. The causes supported are aligned to issues to which the Johnson Matthey business makes a contribution and issues on which employees are passionate.
In 2006/07, Johnson Matthey supported 36 charitable causes through its corporate annual donations programme. These included support for organisations working in the areas of arts and the environment, medical and health, science and education and social welfare. 50% of these corporate donations were in support of social welfare causes. A total of 62 additional charitable causes received one-off donations through the corporate programme during the year.
In the UK, Johnson Matthey continues to operate its annual Charity of the Year programme and employee views are considered when deciding on the charity. Help the Aged was chosen as our charity of the year for 2006/07 and further details on the partnership are available in the CSR report. Johnson Matthey sites around the world also lend support to many other charities locally and nationally through donations, employee time or loans of company facilities.
In the financial year to 31st March 2007 Johnson Matthey donated £330,000 to charitable organisations. This figure only includes donations made by Johnson Matthey and does not include payroll giving, donations made by staff or employee time. The company made no political donations in the year.
Working Towards a Sustainable Future
Johnson Matthey is making and will continue to make a significant contribution to sustainable development through the application of its leading technology, the ingenuity of its people and by the generation of profits. As the global trend continues towards improved energy efficiency and the adoption of alternative energy resources, we remain focused on innovation and development to deliver sustainable solutions for our customers and on improving the performance of our own manufacturing processes through improved energy and resource efficiency. During the year, the Chief Executive launched a groupwide initiative to engage employees in developing a long term sustainability strategy for Johnson Matthey. In the initial stage of this initiative we have been working with Forum for the Future to deliver a series of five workshops to gain the input of senior managers in the company. The output of the first workshop, held in the UK in March 2007, has been extremely positive and the programme continues in the UK, US and Asia in the early part of 2007/08. The further aspects of strategy development, communication and implementation will continue during the forthcoming year.
Verification
The board, Audit Committee, Chief Executive’s Committee and CSR Compliance Committee review CSR issues as part of the company’s risk management processes. A review of site based environment, health and safety reporting systems forms part of the group environmental, health and safety audit programme. The board believes that the measures taken to review the CSR information provide a suitable level of confidence without external audit. Johnson Matthey utilises external specialists where specific CSR issues are identified. | | | | | | | | [ back to top ] | | |
