< Previous8 NIPSEA LFG SUSTAINABILITY REPORT 2020 Key Industries and Global Presence We keep focus on three core business areas to lead our transition towards operating in a sustainable economy across 19 locations of operation. This is where we believe we can make the biggest difference, leveraging our strengths in coatings solutions of over 130 years. Reimagining Mobility: We steer industry standards in a competitive automotive segment by continually refining our Total Service Solution that balances design and performance. Steering Innovation: Our research and development work are rooted in in-depth market understanding to produce specialised and distinctive solutions for industrial applications. Transforming Spaces: We are constantly pushing new frontiers in technological development and product innovation to deliver green and safe products for consumer homes, and high-performance, protective solutions to help cities preserve their value and identity. Automative Auto/Re-finish 13% Consumer & Professional Trade 79% Industrials & Trade 8%PAINTING THE WAY FORWARD BEYOND COATINGS. BEYOND ASIA 9 Bangladesh 1 187 China 51 8,523 Turkey 6 1,418 Pakistan 1 326 Thailand 4 1,079 Vietnam 3 813 Korea 1 47 Egypt 1 59 UAE 12 Sri Lanka 1 624 Singapore 1 259 Taiwan 1 159 No. of Manufacturing Facilities No. of Employees India 1 1,172 Malaysia 3 1,055 Indonesia 3 6,184 Philippines 1 323 Myanmar 1 103 Hong Kong 55 Kazakhstan 410 NIPSEA LFG SUSTAINABILITY REPORT 2020 CHAPTER 2 PAINTING THE WAY FORWARD BEYOND COATINGS. BEYOND ASIA 11 SUSTAINABILITY AT NIPSEA GROUP12 NIPSEA LFG SUSTAINABILITY REPORT 2020 NIPSEA Group endorses the philosophy of “Mutual Prosperity” to lead our sustainability agenda. We believe that the measure of success in a sustainable economy is characterised by business viability that goes hand in hand with protecting the planet and elevating livelihoods of communities in places we conduct business in. As such, we embed ESG considerations into our business operations to capture continued growth for both NIPSEA Group and the environment in which we are present. We aim to bring together the diverse competencies of our companies in NIPSEA Group to maximise impact across Environmental, Social and Governance areas that are material to us, to ensure that we are well-positioned for strong sustainable growth through the next decade and beyond. Management Structure NIPSEA Group’s sustainability commitments are managed at the corporate group level. It is led by our Group Chief Executive Officer (GCEO) and guided by the Sustainability Steering Committee which is made up of the heads of departments from our five core business functions: Research & Development, Marketing & CSR, Human Resources, Finance and Business Excellence. The committee advises on ESG strategies that shape the organisation’s efforts across six broad themes – Customers, Environment, People, Community, Organisational Health, and Technical Capability, to maximise value creation and impact. Materiality Prioritisation We conducted a materiality prioritisation exercise in FY2020 to determine Environmental (E), Social (S) and Governance (G) topics that are key to NIPSEA Group and our stakeholders. This ensures that our sustainability strategy is focused in areas where we can make the biggest positive change, while ensuring that it reflects the dynamic sustainability landscape and the evolving interests and needs of our stakeholders. The exercise comprised a peer benchmarking and global trends research, followed by a materiality assessment and prioritisation workshop with key stakeholders. We derived 17 “High Priority” material topics that NIPSEA Group is confident in creating the most impact in through our core competencies. Head of Sustainability Steering Committee Sustainability Steering Committee Sustainability Pillars GCEO Marketing & CSR Business Excellence Human ResourcesFinance Research & Development CustomersEnvironment People & Community Organisational Health Technical Capability Peer Benchmarking Global Trends Research Materiality Assessment and Prioritisation Workshop “High Priority” Material Topics Targets Mapping Materiality MatrixMaterial Topics Strategic Objectives Strategic Analysis Recommendations and Roadmap Stakeholder Engagement Management Philosophy PAINTING THE WAY FORWARD BEYOND COATINGS. BEYOND ASIA 13 The category of “High Priority” refers to topics that are most significant to NIPSEA Group. We aim to take a leadership role in effecting change in areas concerning these topics, with targets set to track the progress of our efforts. There are 17 “High Priority” topics at this moment which the report content focuses on. The category of “Emerging Priority” refers to topics to be considered by the Group in the near future as part of fulfilment to rising stakeholder expectations and regulatory trends. Topics classified under this category can eventually be included in subsequent reports as “High Priority” when they become of greater significance to NIPSEA Group and our stakeholders. There are eight “Emerging Priority” topics at this moment. Following the GRI principles, all 25 topics have also been classified according to the categories of Economic, Environmental and Social. The colour legend provides the reference to the categorisation of topics according to the GRI Standards. RefHigh Priority Topics 1GRI 201–Economic Performance 2GRI 202–Market Presence 3 GRI 203–Indirect Economic Impacts 4 GRI 301–Materials 5 GRI 302–Energy 6GRI 303–Water 7GRI 305–Emissions 8GRI 306–Effluents and Waste 9 GRI 308–Supplier Environmental Assessment 10 GRI 401–Employment 11 GRI 402–Labour/Management Relations 12 GRI 403–Occupational Health & Safety 13 GRI 404–Training & Education 14 GRI 413–Local Communities 15GRI 416–Customer Health & Safety 16GRI 417–Marketing & Labelling 17GRI 418–Customer Privacy RefEmerging Priority Topics 18GRI 204–Procurement Practices 19GRI 205–Anti-Corruption 20GRI 304–Biodiversity 21 GRI 405–Diversity & Equal Opportunity 22 GRI 408–Child Labour 23GRI 409–Forced Compulsory Labour 24GRI 412–Human Rights Assessment 25GRI 414–Supplier Social Assessment 12 19 9 22 23 21 25 24 11 10 17 14 15 13 16 20 5 7 8 6 4 18 3 2 1 Low Emerging High Low Emerging High Importance to Stakeholders Significance to NIPSEA Group Economic Environmental Social Materiality Matrix14 NIPSEA LFG SUSTAINABILITY REPORT 2020 All “High Priority” topics are classified into business themes to allow us to effectively communicate our sustainability commitment that reflects our aligned purpose to stakeholder expectations. Our sustainability strategy is based on five¹ overarching pillars – Customers, Environment, People & Community, Organisational Health and Technical Capability. NIPSEA Group actively invests in three enablers - digitalisation, strength in talent and people, and technological development to spur innovation and transformation in our operations and across our supply chain. These allow us to unlock greater societal and environmental sustainability outcomes in our five sustainability pillars. • Digitalisation: We look to better the ways in which we engage with our customers and stay up- to-date on market developments. We are in the midst of exploring the use of digitalisation tools in our operations, including embracing e-commerce in our operations. • Talent and People: Skilled labour is key to providing good quality products and services. We emphasise training and skills development for painters and dealers alike to uplift and broaden the technical skill sets within the paints and coatings ecosystem, based on customer requirements. We also look to ingrain soft skills such as empathy and compassion in our people to ensure that their contributions go beyond functional benefits to include social benefits. • Technological Development: We look to expand beyond our core expertise of paints and coatings to provide complementary services to supplement our current portfolio. We currently leverage technological resources of our sister companies in Japan and Australia, as well as tap the expertise of universities and research institutions to deliver greater value to our customers. As travel restrictions and operational disruptions persist due to the pandemic, we increase the speed and degree at which we localise and adapt our strengths and capabilities to fulfil the requirements of conducting a good business in the countries we operate in. This ensures that we continue to do business at optimum and deliver the greatest positive impact possible, positioning NIPSEA Group to capture future growth post COVID-19. Sustainability Pillars NIPSEA Group‘s Sustainability Pillars Creating sustainable value for all stakeholders • Economic Performance 3 • Materials • Energy • Water • Emissions • Effluents and Waste • Supplier Environmental Assessment • Customer Privacy • Marketing and Labelling • Indirect Economic Benefits • Market Presence • Employment • Training and Education • Occupational Health and Safety • Labour / Management Relations • Local Communities • Customer Health and Safety Organisational Health Ensuring continued economic viability Environment Minimising our environmental footprint People & Community Investing in the well-being of our employees, and building and enabling better communities Customers Serving the needs of our customers well Technical Capability Innovating to drive progress and betterment for society 3 The material topic of Economic Performance is disclosed under the section of “2020 Highlights” in this report. PAINTING THE WAY FORWARD BEYOND COATINGS. BEYOND ASIA 15 NIPSEA Group’s Targets Outlined in FY2019NIPSEA Group’s FY2020 Progress Reduce energy intensity (energy requirement of products) Energy intensity* Reduce intensity of GHG emissions (Scope 1 & 2) GHG emissions intensity* Reduce water intensityWater intensity Increase average employee training hours Employee training hours Improve occupational health and safety Occupational health and safety cases 2% 2% 2% 0 NIPSEA Group is in the midst of re-aligning our long-term sustainability targets to help us focus on the areas we can create the most impact in as a leading coatings partner. The outcomes will be published in our next sustainability report. At present moment, we measure our environmental and social progress by evaluating our efforts against existing targets set in five “High Priority” areas that are significant to NIPSEA Group. Below, we disclose our FY2020 progress. Sustainability Goals and Stakeholder Engagement 2% StakeholdersEngagement MechanismsFrequency of Engagement Employees Internal communication channelsOn a regular basis Teambuilding activitiesOn a regular basis Employee welfare reviewsAnnually Customers Client meetingsOn a regular basis Forums, seminars, and conferencesOn a regular basis Customer service surveysAnnually Suppliers Site auditsAnnually Sustainability performance questionnairesAnnually Tender processAs and when needed Investors Shareholder meetingsQuarterly Planning with Board and senior management committees Quarterly Shareholder sustainability performance surveysAnnually Government and Regulators Compliance review and auditsAs and when needed Collaborative projectsAs and when opportunities arise Forums, seminars, and conferencesAs and when opportunities arise Business Partners Client meetingsOn a regular basis Customer service surveysAnnually Sustainability performance questionnairesAnnually NGOs and Industry Groups Performance outcome surveysAnnually Collaborative projectsAs and when opportunities arise Sustainability performance questionnairesAnnually +28% −2.91% −30.4% +9.6% We are committed to stay involved and connected with our stakeholders to build mutually beneficial and enduring partnerships that create value on both sides of the equation. Close collaborations that entail the exchange of knowledge, information, and creative concepts help us stay ahead of challenges and in the know of trends taking place in today’s increasingly complex sustainability sphere. Stakeholder Engagement We regularly engage our stakeholders through a variety of means. The table below lists the engagement mechanisms used to stay connected to each stakeholder group, as well as the frequency in which stakeholders are engaged using each method. cases of recordable work-related ill health or injuries 0 * Four additional plants introduced in the 2020 calculation were not factored into the 2019 calculation16 NIPSEA LFG SUSTAINABILITY REPORT 2020 CHAPTER 3NIPSEA GROUP’S FOCUS PEOPLE • ENVIRONMENT • CUSTOMERS • COMMUNITY • TECHNICAL CAPABILITYPAINTING THE WAY FORWARD BEYOND COATINGS. BEYOND ASIA 17Next >