< PreviousStakeholder Engagement We actively engage with our stakeholders through multiple channels to ensure that NIPSEA Group stays ahead of the challenges and trends in today's rapidly evolving sustainability landscape. The table below provides information on the frequency with which different stakeholder groups are engaged through each mechanism. STAKEHOLDERS OUR EMPLOYEES OUR CUSTOMERS OUR SUPPLIERS OUR INVESTORS GOVERNMENT AND REGULATORS NGOS AND INDUSTRY GROUPS FREQUENCY OF ENGAGEMENT ENGAGEMENT MECHANISMS On a regular basis On a regular basis On a regular basis On a regular basis On a regular basis Annually Annually Annually As and when required Quarterly Quarterly Annually As and when required As and when opportunities arise As and when opportunities arise Annually As and when opportunities arise Annually On a regular basis Annually Annually • Internal communication channels • Team-building activities • Employee welfare reviews • Client meetings • Forums, seminars, and conferences • Customer service surveys • Site audits • Sustainability performance questionnaires • Tender process • Shareholder meetings • Planning with Board and senior management committees • Shareholder sustainability performance surveys • Compliance review and audits • Collaborative projects • Forums, seminars, and conferences • Performance outcome surveys • Collaborative projects • Sustainability performance questionnaires • Client meetings • Customer services survey • Sustainability performance questionnaires OUR BUSINESS PARTNERS 10Management Philosophy NIPSEA Group’s sustainability agenda is anchored in the philosophy of "Mutual Prosperity," which prioritises not only the sustained commercial viability of our business but also the company’s commitments to the planet and our people. To this end, we have integrated ESG considerations into every aspect of our operations, thereby ensuring that both our business and the environment can thrive together. By leveraging the diverse competencies of our companies, we can make a meaningful impact in areas that are material to us in terms of ESG, and position ourselves for long-term sustainable growth. Our sustainability commitments are led by NIPSEA Group’s Chief Executive Officer ("GCEO"), while initiatives managed at the corporate group level are overseen by the Sustainability Steering Committee. This committee is composed of the heads of departments from our five core business functions: Marketing & CSR, Business Excellence, Human Resources, Finance, and Research & Development (“R&D”). These departmental leaders serve as advisors and provide valuable insights on ESG strategies that ultimately shape the organisation's efforts across five Sustainability Pillars: (1) Environment, (2) People, (3) Community, (4) Innovation, and (5) Customers SUSTAINABILITY PILLARS GCEO HEAD OF SUSTAINABILITY COMMITTEE MARKETING & CSR BUSINESS HUMAN RESOURCES FINANCE R&D S U S T A I N A B I L I T Y S T EE R I N G C O M M I T T E E CUSTOMERSENVIRONMENTPEOPLECOMMUNITYINNOVATION OUR APPROACH TO SUSTAINABILITY 11GRI-SASB Materiality Assessment In 2022, we re-evaluated our existing topics through management interviews and conducted a double materiality assessment using both GRI and SASB Standards to identify and prioritise the most significant ESG issues relevant to our business. The materiality assessment mapped the existing 19 “High Priority” topics identified in the previous year using the GRI Standards against the newly introduced SASB Chemical Industry Standards for this year. Based on the results of this GRI-SASB materiality assessment, we narrowed down the ESG issues that are most relevant to our business and key stakeholders such as investors, employees, customers, and communities. This allows us to prioritise ESG issues that matter most to us and our stakeholders and develop critical ESG strategies to manage risks effectively and seize opportunities. Material Topics Through this year’s double materiality assessment, we identified 9 material topics which are of utmost significance to us. This list of 9 material topics was reviewed by the Sustainability Steering Committee and management, as well as ultimately approved by the Board. All the identified topics have been classified under the five Sustainability Pillars mentioned above and mapped to their corresponding GRI and SASB disclosures in the table below. Sustainability Pillar Energy and Emissions Reduction Strategy • GRI 302-1: Energy consumption within the organisation • GRI 302-3: Energy intensity • GRI 305-1: Direct (Scope 1) GHG missions • GRI 305-2: Energy indirect (Scope 2) GHG emissions • GRI 305-4: GHG emissions intensity • GRI 305-7: Nitrogen oxides (NOx), sulphur oxides (SOx), and other significant air emissions • Gross global Scope 1 emissions • Air emissions of the following pollutants: (1) NOx (excluding N2O), (2) SOx, (3) volatile organic compounds (“VOCs”), and (4) hazardous air pollutants (“HAPs”) • Discussion of long-term and short-term strategy or plan to manage Scope 1 emissions, emissions reduction targets, and an analysis of performance against those targets • GRI 303-3: Water withdrawal • GRI 303-4: Water discharge • GRI 303-5: Water consumption • (1) Total water withdrawn, (2) Total water consumed, percentage of each in regions with High or Extremely High Baseline Water Stress • Description of water management risks and discussion of strategies and practices to mitigate those risks • (1) Total energy consumed, (2) Percentage grid electricity, (3) Percentage renewable, (4) Total self-generated energy Water Conservation Strategy Material Topics for FY2022 GRI DisclosuresSASB Accounting Metrics Environment 12Sustainability Pillar Material Topics for FY2022 GRI DisclosuresSASB Accounting Metrics • GRI 306-3: Waste generated • GRI 306-4: Waste diverted from disposal • GRI 306-5: Waste directed to disposal • Amount of hazardous waste generated, percentage recycled Waste Management Strategy Environment • GRI 403-9: Work-related injuries • Total recordable incident rate (“TRIR”) and (2) fatality rate for (a) direct employees and (b) contract employees Workforce Safety and Well-being • GRI 405-1: Diversity of governance bodies and employees • GRI 401-3: Parental leave • Topic excluded from SASB Guidelines Diversity and Inclusion • GRI 413-1: Operations with local community engagement, impact assessments, and development programs • Discussion of engagement processes to manage risks and opportunities associated with community interests Community Impact • GRI 404-1: Average hours of training per year per employee • Topic excluded from SASB Guidelines Training and Development People Community • GRI 203-1: Infrastructure investments and services supported • Revenue from products designed for use-phase resource efficiency Sustainably Advantaged Products Innovation • GRI 416-1: Assessment of the health and safety impacts of product and service categories • Discussion of strategy to (1) manage chemicals of concern and (2) develop alternatives with reduced human and/or environmental impact Product Safety Design Customers OUR APPROACH TO SUSTAINABILITY 13Sustainability Goals In 2021, NIPSEA Group set medium-term sustainability targets across 7 "High-Priority" material topics, which we have identified as areas where we can create the most impact. To determine these targets, we conducted a peer benchmarking assessment against seven comparable industry peers, evaluating our current performance within the paint industry and enabling us to establish strategic targets. Using the SMART (“Specific”, “Measurable”, “Achievable”, “Relevance”, and “Time-bound”) Framework, we analysed the quality of targets set by our selected peers across the 7 "High-Priority" topics, leading us to develop and finalise 10 targets that are aligned with the relevant United Nations Sustainable Development Goals ("UN SDGs"). These targets have been approved by the Board and will guide our sustainability efforts in the coming years. UNSDGsMaterial TopicsSub-categoriesTargetsProgress Energy and Emissions Reduction Strategy Energy Intensity (GRI 302-3) Emissions Intensity (GRI 305-4) Water Intensity (non-GRI metric) Number of Fatalities and Work-Related Injuries (GRI 403-9) Occupational Health and Safety Management System (GRI 403-1) Average Hours of Training Per Year Per Employee (GRI 404-1) Water Conservation Strategy Workforce Safety and Well-being Training and Development Reduce energy intensity by 8% by 2025 against a 2021 baseline, with a yearly reduction target of 2%. Reduce GHG emissions intensity (Scope 1 and 2) by 15% by 2025 against a 2021 baseline, with a yearly reduction target of 4%). Reduce water intensity by 8% by 2025 against a 2021 baseline, with a yearly reduction target of 2%. In progress – interim target not met; 25.2% increase from 2021 due to significant decrease in total production output. In progress – interim target not met; 18.3% increase from 2021 due to significant decrease in total production output. In progress – interim target not met; 10.2% increase from 2021 due to significant decrease in total production output. Achieve zero cases of recordable work-related injuries. Ensure that the OHS management system adheres to the latest versions of international OHS standards (i.e., ISO 45001:2018 and OHSAS 18001). Increase average employee training hours by 20% by 2025 against a 2021 baseline, with a yearly improvement target of 5%. In progress – target not met; 101 recordable work-related injuries, reduced from 118 cases in 2021. Achieved – 59.7 hours per employee, a 298% increase against the 2021 baseline. Achieved – ISO 45001:2018 and OHSAS 18001. 14Community Impact UNSDGsMaterial TopicsSub-categoriesTargetsProgress Sustainably Advantaged Products Infrastructure investments and services supported (GRI 203-1) Assessment of the Health and Safety Impacts of Products and Services (GRI 416-1) Product Safety Design Develop a definition for “sustainably advantaged products” to classify products and services, and establish a baseline for revenue generated from “sustainably advantaged products” in 2022. Assess the health and safety impacts of at least 80% of significant products and service categories by 2025. Achieved – a baseline of USD 557.81 million in terms of revenue derived from sustainably advantaged products. Achieved – 99.5% of significant products and service categories assessed. Infrastructure investments and services supported (GRI 203-1) Dollar value of investments into community initiatives (non-GRI metric) Make a meaningful impact on the lives of at least 10 million individuals across the three main pillars - Education, Empowerment and Engagement - under the strategic CSR Framework from 2019 to 2025. Invest at least US$5 million in CSR initiatives each year to make a meaningful impact across the 3 main pillars – Education, Empowerment and Engagement – under the strategic CSR framework. Achieved – >15 million lives impacted from 2019 to 2025. In progress – target not met; invested US$4.2 million in CSR initiatives in 2022. OUR APPROACH TO SUSTAINABILITY 15CHAPTER 3 SAFEGUARDING THE ENVIRONMENT Energy and Emissions Reduction Strategy As a part of the chemical manufacturing industry, NIPSEA Group recognises that a significant portion of our environmental footprint comes from greenhouse gas (“GHG”) emissions resulting from energy use. To improve energy efficiency, we adopt an integrated risk and opportunity approach by rethinking and reinventing process applications in our manufacturing operations. Our actions are guided by the Green Plan, a company-wide movement to advance the sustainable development agenda by prioritising Profit, People, and Planet. We aim to reduce both direct and indirect energy consumption in our business value chain and foster a culture of environmental responsibility within the Group. Our energy conservation efforts go beyond regulatory compliance through various activities. The NIPSEA Group manages GHG emissions directly at the operating facilities under ISO 14001:2015 environmental management systems. We conduct an environmental impact control check for GHG emissions at each stage of the product life cycle to minimise emissions intensity, such as by using battery-operated forklifts instead of diesel-powered ones. We also conduct ambient air quality monitoring to manage emissions through a systematic, long-term assessment of pollutants. Biannually, we measure and collect information on ambient air quality, stack emissions, VOC levels, and chemicals emitted. We have also installed air pollution control devices, such as wet scrubbers, dust collectors, and spray paint booths, to reduce the amount of chemical pollutants released into the air. ACTIVITIESDESCRIPTION We offer employee skills training in the areas of design innovation and energy-related procurement, covering topics that range from machinery, tools, and production equipment. Our training enables proactive management of energy efficiency in current processes. We implement programmes to track the electrical power consumption of each piece of equipment per unit of output. We established an Independent Energy Management Committee to review and update environmental work plans and targets on a yearly basis. Additionally, monthly management meetings are held to discuss energy and emission performance, allowing for quick adjustments when necessary. We conduct assessments that identify inefficient energy users in each facility's process chain. Depending on the facility, we measure the Overall Equipment Effectiveness (“OEE”) and engage with external vendors to flag problematic machinery or processes. An annual capital expenditure budget is set aside specifically for upgrading or replacing these inefficiencies. We communicate the responsibility for energy conservation to all employees, from executives to management levels, ensuring compliance with the drafted measures. We also send out quarterly ‘Safety and Sustainability’ newsletters on a NIPSEA Group level to all relevant stakeholders, informing them through the Safety and Sustainability dashboard about key metrics such as electricity usage, CO2 emissions per tonne, hazardous waste per tonne, personal injury cases, etc. Skills Training Maintenance and Monitoring Programs Management Reviews and Meetings Impact Assessments Clear Communications 18In 2022, our total energy consumption was 1,606,756.1 GJ, a 6.3% increase from the 2021 level, while our energy intensity measured 316.8 MJ/tonne, a 25.2% increase from the previous year. Similarly, our Scope 1 and 2 GHG emissions increased by 0.5% as compared with 2021, totalling 243,485.4 tCO 2 e, while our emissions intensity measured 48.0 kg CO 2 e/tonne, an 18.2 % increase from the previous year. This was likely due to the inclusion of new entities in this reporting year, particularly the Europe Group, given that the data was unavailable last year. Our total production output also reduced by 15.0% due to a market demand slowdown, leading to an increase in both energy and emissions intensities. Consequently, we did not achieve our yearly reduction targets of 2% and 4% for energy intensity and emissions intensity respectively. We will continue to monitor our progress and strive to meet our overall goal of reducing our energy intensity by 8% and emissions intensity (Scope 1 and 2) by 15% by 2025 against a 2021 baseline. TOTAL ENERGY CONSUMPTION GJ 925,096.00 ELECTRICITY CONSUMPTION 655,631.90 FUEL CONSUMPTION NONRENEWABLE 26,028,20 FUEL CONSUMPTION RENEWABLE 50,955.20 DIRECT SCOPE 1 GHG EMISSIONS 192,530.20 ENERGY INDIRECT SCOPE 2 GHG EMISSIONS TOTAL GHG EMISSIONS t CO 2 e SAFEGUARDING THE ENVIRONMENT 19Next >