Achieve carbon neutrality
by 2017

For Johnson Matthey the working definition of carbon neutrality states: Achieving carbon neutrality means that through a transparent process of (1) calculating emissions, (2) reducing those emissions and (3) ‘offsetting’ residual emissions, our net carbon emissions equal zero.

We have robust processes in place to calculate our carbon dioxide (CO₂) emissions (measured according to the group’s total global warming potential (GWP)) and since the launch of Sustainability 2017, group facilities have been engaged in a wide range of energy efficiency initiatives to reduce our total CO₂ emissions. Businesses are also setting energy reduction targets as part of their annual sustainability plans to drive further progress. We have been very successful in improving our energy efficiency and every year have been able to demonstrate reductions in energy use per unit of output since the launch of Sustainability 2017. Yet despite the excellent initiatives underway, we are faced with the challenge of driving down our absolute CO₂ emissions while at the same time growing our business. In 2010/11 our total GWP has increased by 6% against the 2006/07 baseline year as production increased in response to increased market demand, several new plants came fully on line and we acquired new manufacturing facilities. Technical programmes are underway to further improve the energy efficiency of our processes.

Alongside this we continue to develop an approach to address our carbon neutrality aspiration of achieving net zero carbon which does not rely on the purchase of external offsets and will underpin and encourage the development of new low carbon and clean technology products for our customers. At the time of last year’s report we described our early thoughts on how we would tackle this. Following further detailed evaluation over the last 12 months, we now do not believe that creating our own internal ‘carbon levy’, applied annually to residual GWP and used to generate additional funding to support ‘clean technology’ R&D in the company, is workable as a transparent method of tackling our carbon neutrality aspiration. While it is still too early to provide information on the detailed aspects of our approach, it does include plans to audit our products, especially those introduced since the launch of Sustainability 2017, and evaluate their contribution to climate change and broader sustainability issues. Key activities will include understanding and measuring the benefits of our products in mitigating climate change impacts where appropriate and measuring reductions in the greenhouse gas (GHG) emissions of our customers. However, we will also consider other environmental and health related benefits of our products. Despite the evolution in the detail of our strategy for carbon neutrality, we remain focused on the establishment of an approach which would drive emissions reductions and new product development in Johnson Matthey and ultimately support the generation of new sustainable products for our customers – the second key business driver for Sustainability 2017. We will continue to monitor both our absolute GHG emissions (expressed as our GWP) and our GHG intensity, i.e. our GWP relative to our sales excluding the value of precious metals as detailed in the Environment: Our Performance section of this report.

* Data for 2007 and 2008 is for year ended 31st December 2006 and 2007 respectively.

Achieve zero waste
to landfill by 2017

The amount of waste sent to landfill has fallen by 63% since the baseline year. It is noted however, that in the first full year of Sustainability 2017 we saw a substantial decrease in the amount of waste sent to landfill as a result of new European regulations. This decrease was driven mainly by these regulations with only a small contribution from initiatives in the group. We are making good progress towards our target although in 2010/11 waste to landfill has increased slightly on last year as a result of business growth. We are working on a number of approaches to bridge the gap to 2017 including the application of lean manufacturing principles, recycling, improving our loss to yield ratios and the introduction of reuse technologies which can convert our waste into energy. In the future we would look to broaden the scope of this particular goal to reduce all waste, not just waste to landfill. That said, progress to date is good and we believe we are on track to deliver further financial savings, improved manufacturing efficiency and reduced environmental burden through striving towards zero waste to landfill.

* Data for 2007 and 2008 is for year ended 31st December 2006 and 2007 respectively.

Halve the key resources
we consume per unit of
output by 2017

Resource efficiency is the first key business driver of Sustainability 2017. Our goal is to cut consumption of key resources per £ million of sales excluding the value of precious metals by 50% by 2017. In 2008 the top three key resources were identified for each facility in Johnson Matthey and electricity consumption, natural gas consumption and water use emerged clearly as the most significant to the majority of the group. In all three cases, we are making very good progress. Against the baseline year, electricity consumption per unit of output is down 34%, natural gas consumption per unit of output has reduced by 29% and water use per unit of output is 36% lower. As a result, the group is on track to meet the 2017 targets. This performance has been achieved through applying lean manufacturing principles, optimising energy use and by introducing water recycling and harvesting projects. Work is underway to maintain progress through further process optimisation initiatives and the integration of new, more resource efficient manufacturing technologies where possible. We continue to review which resources are most significant to the group.

* Data for 2007 and 2008 is for year ended 31st December 2006 and 2007 respectively.

Achieve a zero ‘greater
than three day’
accidents safety target

Growing our business through sustainability is not only about our operations and products. Protecting the health, safety and wellbeing of our employees has always been a key priority in Johnson Matthey and it is their contribution that will underpin the growth of our business in the years ahead. In 2008/09 we saw a disappointing increase in our lost time accident rate but prompt action was taken to revitalise our accident prevention processes. As a result, our rate of occupational accidents involving lost time had fallen to its lowest reported level by April 2010. Our performance has reached a plateau during 2010/11 with a small increase in accident rates by the end of the year as shown in the graph above. A number of initiatives are underway to encourage further reductions and are described further in Safety: Our Performance and Safety: Our Aims and Targets. Any accident is unacceptable and the group continues to focus hard on progressing towards a target of zero accidents.

Implement ISO 14001 at all
major manufacturing sites
by 2010

Operating our business in an environmentally responsible way is a cornerstone of sustainability. The ISO 14001 environmental management system provides a solid foundation for achieving and maintaining high standards and for driving improved performance. All of the group’s major manufacturing sites are required to implement ISO 14001 with a target of achieving registration by 2010. By 31st March 2011, all but one of our major manufacturing sites had achieved registration with the remaining site on track to do so in 2011/12. Newly commissioned / acquired businesses will work towards achieving compliance with ISO 14001, which will normally be expected within two years.