Tate & Lyle

Annual Report 2014 Corporate site

Corporate Responsibility

Our sustainability journey

We approach corporate responsibility (CR) from a stakeholder perspective; in terms of our workplace, the environment, our marketplace and the communities of which we are a part. We seek to continually improve the way that we manage, perform in and report on CR matters.

Corporate responsibility governance

Governance of CR matters is overseen by the Board’s Corporate Responsibility Committee (see the Corporate Responsibility Committee Report).

The Chief Executive is the director with specific responsibility for CR matters.

CR matters are part of the Group’s risk management and reporting processes (see the Risks section).

Our policies and control arrangements addressing human rights include:

  • our Code of Ethics and the internal and external communication and training undertaken around it
  • the Company’s position and practices on equal opportunities and diversity
  • the Company’s Speak Up (whistleblowing) arrangements (see the Corporate Governance Report)
  • our controls for managing standards in the supply chain (see our Marketplace section below).

Management and performance

Workplace

We deeply regret three fatal accidents that occurred at our sites during the last year: these tragic accidents and our response are reported in the Chairman's Statement, Chief Executive's Review and the Workplace section below.

Environment

We were included in the FTSE 350 Climate Disclosure Leadership Index for the second year running in 2013, having scored once again in the top 10% of the FTSE 350 companies responding.

Marketplace

We implement controls to promote and ensure responsible and ethical conduct by our employees, business partners and in our supply chain (see our Marketplace section below).

Community

We have expanded community involvement in the year providing support locally and globally in the areas of well-being, education and environment (see our Community section below)

Reporting and communication

Engagement

This year we have engaged with customers and other key stakeholders and used this feedback to review how we report on and communicate about CR matters.

Reporting

The scope, principles and methodologies we use in reporting CR performance are provided in ‘CR Reporting Criteria Annual Report 2014’.

Our internal audit function reviewed the CR information and data in this Annual Report to confirm its accuracy.

We gained independent external assurance over selected environmental data in the Environment section below from Bureau Veritas UK Ltd. Their assurance statement can be found here.

Our employees are critical in delivering our strategy. The key CR considerations for us in terms of our workplace are safety and how we manage our relationship with employees. In line with our Values, we believe that everyone should be safe at work and be treated fairly and with respect.

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Employee profile

At 31 March 2014, Tate & Lyle employed 4,523 people (2013 – 4,326). Our employee base has increased in the last year primarily due to the formation of Tate & Lyle Howbetter in China, and the acquisition of Biovelop, the Swedish oat beta glucan manufacturer.

  • Employees by division

    as at 31 March 2014

    Sales by division
    Employees by division
    1 Bulk Ingredients 49%
    2 Speciality Food Ingredients 42%
    3 Central functions 9%
  • Employees by geography

    as at 31 March 2014

    Employees by geography
    Employees by geography
    1 North America 46%
    2 Europe, Middle East & Africa 37%
    3 Latin America 10%
    4 Asia Pacific 7%

Safety

We have no higher priority than safety, for our employees and for everyone who comes to our sites. Our ultimate goal is to have no accidents and no injuries.

Our Executive Safety Steering Committee, chaired by our Chief Executive, met throughout the year to review our safety performance and improvement programmes.

Our senior executives are personally involved in safety management and undertake annual executive audits at the majority of our sites around the world.

Performance

We deeply regret the deaths during the last year of an employee at our manufacturing facility in the Netherlands who fell from height, an external truck driver working at our joint-venture site in Hungary who died in an industrial accident, and a contractor in Singapore who died from burns after a hot water escape in April 2014. A further contractor remains in a critical condition in hospital in Singapore.

These tragic accidents were thoroughly investigated, both internally and externally. Actions, based on preliminary findings, have been taken to prevent this type of accident reoccurring and so that we may learn from these tragic events. Further details are provided in the Chairman’s Statement and the Chief Executive’s Review.

Fatalities
2013 2012 2011
Fatalities 21 0 0
1
One employee and one external truck driver. One of our contractors also had a fatality in April 2014.

The safety performance indicators, recordable incident rate and lost-work case rate, saw a 32% and 49% reduction respectively during the year, to reach our lowest levels ever recorded. However, safety is about people, not just numbers, and we can never do too much to keep ourselves and our colleagues safe.

Safety
Recordable incident rate Lost-work case rate
Change versus Change versus
2013 2012 2013 2012
Employees 0.43 -32% 0.09 -53%
Contractors 0.94 -34% 0.22 -49%
Combined 0.58 -32% 0.13 -49%
External benchmarking

To put our safety performance in context and because many of our employees are located in the US, we compare our results with US industry averages, as shown in the graphs below.

Recorded incident rate

Number of injuries requiring treatment beyond first aid per 200,000 hours

Number of injuries requiring treatment beyond first aid per 200,000 hours

US industry sector empoyee averages 20123 and Tate & Lyle employees 2013

US industry sector empoyee averages 2012 and Tate & Lyle employees 2013

Lost-work case rate

Number of injuries that resulted in lost-work days per 200,000 hours

Number of injuries that resulted in lost-work days per 200,000 hours

US industry sector employee averages 20123 and Tate & Lyle employees 2013

US industry sector employee averages 2012 and Tate & Lyle employees 2013
2
We report safety performance by calendar year.
3
Source: US Department of Labor, November 2013.

Safety milestones

Five of our US plants between them won 15 US Corn Refiners Association (CRA) Safety Awards during the year.

Twenty-five of our facilities did not experience a recordable injury in 2013, compared to 20 in 2012.

Safety initiatives

Safety projects and activities progressed during the year included:

  • Contractor safety programme: we improved contractors’ safety by increased monitoring, sharing best practices, and closer relationships
  • Safety competency: we trained managers and supervisors on safety leadership and ownership; training for safety representatives included courses on scaffolding and excavation
  • Hand safety: a third party conducted glove surveys; we purchased additional cut-resistant gloves and knives with retractable blades; and installed glove-type awareness boards
  • Safety awareness: we held our annual Global Safety Week where many employees and their families, and contractors, took part in activities across our sites worldwide.

Occupational health and well-being

We contract with external occupational health professionals to monitor and safeguard the health of employees at work, and to provide information, advice and support to them on general health and wellness matters.

Relationship with employees

Our Values define what we stand for and how we behave with our customers, suppliers, investors, the communities we operate in and with each other. We believe in equal opportunities for all, regardless of gender, sexual orientation, age, marital status, disability, race, religion or other beliefs and ethnic or national origin.

Our Values

Our policies, practices and procedures for recruitment, training and career development promote equality of opportunity. We are committed to treating people with disabilities fairly in all respects, including regarding applications, training, promotion and career development. An employee who becomes disabled would, where appropriate, be offered retraining for a more suitable role.

Diversity and inclusion

We believe in a culture where all employees contribute to the performance of the Company and have the opportunity to develop fully according to their individual abilities. We aim to attract a diverse workforce that reflects the communities in which we operate. In 2011 we established a Diversity and Inclusion Council. It works on creating awareness of diversity and inclusion issues, tracking inclusion metrics, and championing our diversity and inclusion programme across the Company.

Progress during the year included:

  • Continued increase in awareness among senior managers of diversity and inclusion issues, having included consideration of these issues in their annual performance objectives
  • Embedding a focus on diversity in our recruitment practices
  • Enhanced cultural diversity from the acquisition of Biovelop, the Swedish oat beta glucan manufacturer, and the formation of Tate & Lyle Howbetter in China.

Employee engagement

We believe that employees who are engaged (by which we mean committed to the Group, its goals, values and strategy, and to each other) are happier and ultimately deliver better results.

Good internal communication is essential to this. We communicate with our employees in a number of ways, from Company-wide media including our intranet and our quarterly employee magazine which is published in 13 languages, to face-to-face dialogue such as site-wide meetings, functional meetings and small group or team meetings.

We continue to invest in helping employees and managers stay up to date with the latest requirements of their roles; courses provided during the year included a supervisors’ development programme, people management development programme, stakeholder management and influencing, and sales training.

In 2013 we conducted our second employee survey to obtain employees’ candid opinions about Tate & Lyle and to facilitate conversations about how we can make the Company a better place to work.

Participation increased to 84%, while the overall survey score was just above 3.6 on a scale of 1 to 5 (where 5 is the best score), also an increase compared to the prior year. The results highlighted areas of progress and strength as well as areas where we can improve. These have been translated into action plans for individual teams as well as the Company as a whole.

Gender diversity

as at 31 March 2014

  • Board of Directors

    Board of Directors
    Board of Directors Gender diversity
    1 Men 7 (70%)
    2 Women 3 (30%)
  • Senior managers and statutory directors1

    Senior managers and statutory directors
    Senior managers and statutory directors Gender diversity
    1 Men 117 (81%)
    2 Women 27 (19%)
    1
    Gender diversity for senior managers, excluding statutory directors, is 43 (77%) men and 13 (23%) women.
  • Employees2

    Employees
    Employees Gender diversity
    1 Men 2,860 (73%)
    2 Women 1,035 (27%)
    2
    Excludes joint-venture employees.

We aim to operate our business with a strong regard for environmental sustainability. By using resources such as energy and water more efficiently, and reducing waste, we aim to improve our environmental sustainability while also controlling operating costs.

Implementing our business strategy, by growing our Speciality Food Ingredients division, is gradually changing the shape of our manufacturing operations to produce more speciality products (see our Speciality Food Ingredients section) which typically involve additional manufacturing steps compared with our Bulk Ingredients division. This can drive some increase in resource use and waste, which we are working to mitigate through efficiency and waste reduction projects and programmes.

We work to address environmental considerations across the life cycle of our products, from our agricultural supply chain to how our products are packaged and transported.

Our environmental policy and standards apply to all our activities globally and we aim to integrate environmental considerations into all major decisions.

Our facilities operate under local environmental authorisations and permits and we require strict compliance with these at all times. If a site breaches an operating limit we seek to take steps immediately to resolve the issue and prevent reoccurrence.

Our internal global compliance audit programme confirms compliance with our environmental and food safety, quality and health and safety management standards. Additionally, our rolling programme of external, independent environmental compliance audits assures compliance with regulatory requirements.

Within our own operations and joint ventures we focus on those aspects of our activities that have the greatest potential impact on the environment, namely the use of energy (and consequent air emissions and carbon footprint), water use, and waste management.

Beyond our own operations we focus our attention on our agricultural raw material and ingredient supply chain, the transportation of our products to our customers, and our product packaging.

Environmental performance1

Energy use

GJ per tonne production

4.562 Energy use
Primary carbon footprint3

Tonnes CO2e per tonne production

0.3752 Primary carbon footprint
Water use

Cubic metres per tonnes production

4.302 Water use
Waste to landfill

Tonnes per 1,000 tonnes production

7.212 Waste to landfill
1
We report environmental performance by calendar year.
2
Refers to 2013 data that has been externally assured by Bureau Veritas UK Ltd. Their assurance statement is at www.tateandlyle.com/CR2014.
3
Previously we have reported carbon footprint in tonnes of carbon dioxide (CO2); we now report in tonnes of carbon dioxide equivalent (CO2e) across all years.
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Environmental sustainability targets and achievements

We have four medium-term environmental sustainability targets.

four medium-term environmental sustainability targets
Target by end of 2016 Calendar year 2013 status Example
Reduce CO2e emissions from energy use by 12.5% per tonne of production (baseline year 2008)4 10% reduction in CO2e emissions per tonne of production versus 2008 In calendar year 2014, we will be implementing an energy project at our Sagamore, Indiana, US plant that will reduce our greenhouse gas emissions by up to 56,000 tonnes CO2e per year
Implement packaging reduction programmes with customers representing >50% of sales (£) Programmes initiated with customers representing >20% of sales (£) In 2013 we changed from a paper-foil-paper sack to a paper-plastic-paper sack for several products that improves recyclability (and thereby reduces resource use)
Implement transport efficiency programmes with customers representing >50% of sales (£) Programmes initiated with customers representing >25% of sales (£) Four high-efficiency, low emission ‘methane diesel’ trucks are dedicated to our central European distribution, utilising liquefied natural/bio gas
Implement sustainable agricultural sourcing programmes for our top 20 agricultural raw materials and ingredients by volume Overall, we are currently working on sustainable agricultural sourcing across 30 raw materials/ ingredients. During the year we established new sustainable sourcing criteria for four agricultural raw materials/ingredients We utilise an externally conducted sustainability risk assessment of our agricultural raw materials/ingredients to help us decide how to focus our work on sustainable agriculture
4
We recognise that installing new air emissions control equipment at several locations over the next few years and the manufacture of more speciality products will make it more challenging to reduce our energy use and CO2e emissions in the medium term.

Operational performance

During the year we saw the impact of:

  • some of our Bulk Ingredients plants running below capacity – which reduces their environmental efficiency, due to lower demand for carbonated soft drinks caused by unusually cold and wet weather
  • changes in our production mix – with the manufacture of more speciality products
  • some site-specific factors causing temporary environmental efficiency impacts, such as works to implement a new process sequence at Loudon, US and from taking equipment off-line at Decatur, US for scheduled replacement.

In calendar year 2013, compared with 2012 our performance was as follows:

  • Energy use per tonne of production increased by 1.6%. Since 2008 we have reduced energy use per tonne of production by 8%.
  • Carbon footprint from energy use increased by 1.9% per tonne of production. Since 2008 we have reduced CO2e emissions per tonne of production by 10%. In calendar year 2014 we will be implementing an energy project at our Sagamore, Indiana, US which we anticipate will reduce our emissions by up to 56,000 tonnes CO2e per year.
  • Water use per tonne of production increased by 2.8%. Since 2008 we have reduced water use per tonne of production by 6%. Water re-use and recycling projects implemented at Dayton, Ohio, US during the last two years are saving more than 500,000 cubic meters of water annually.
  • Waste to landfill increased by 2.2% per tonne of production. Since 2008 we have reduced waste to landfill per tonne of production by 25%.

We are working to improve our environmental performance by focusing on:

  • Capital projects and operational practices to reduce our impact
  • Working with our suppliers and others to promote sustainable agriculture
  • Working with our customers on reducing our combined environmental impact associated with transport and packaging.

Group greenhouse gas (GHG) emissions for the period 1 January to 31 December 2013 in tonnes of carbon dioxide equivalent (tCO2e) were:

  • From combustion of fuel and operation of facilities (Scope 1) 2,270,489 tCO2e1
  • From electricity, heat, steam and cooling purchased (Scope 2) 1,224,731 tCO2e1
  • In total (Scope 1 and 2) 3,495,220 tCO2e1 which equates to an intensity of 0.375 tCO2e1 per tonne of production.

We have reported on all of the material emission sources required under The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013. We report GHG emissions in line with the GHG Protocol Corporate Accounting and Reporting Standard. The scope, principles and methodology we use are provided in ‘CR Reporting Criteria Annual Report 2014’ at www.tateandlyle.com/CR2014.

1
Refers to 2013 data that has been externally assured by Bureau Veritas UK Ltd. Their assurance statement is at www.tateandlyle.com/CR2014.

The food and beverage industry is our largest market sector and comprises over 70% of Group sales. Other industry sectors we sell into include industrial, animal feed and personal care.

CR in the marketplace for us is about: the safety, integrity and functionality of our products; the origin of our agricultural raw materials; the conduct of our commercial relationships; and the standards within our supply chain.

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Product safety and quality

Our products adhere to the highest standards of food safety, quality and traceability. Products that are safe and to the correct specification are of the utmost importance to us. To ensure this, all of our manufacturing facilities are externally certified to the Global Food Safety Initiative each year and we have well-established processes and procedures globally to ensure that we comply with this standard. Our control arrangements include in-process testing, an annual global compliance audit programme, and independent food safety audits of every manufacturing site. The ability to trace and recall product is tested annually both globally and locally at each facility.

Developing sustainable products

Our aim is to help our customers provide consumers with healthy, nutritious foods and beverages as part of a normal balanced diet. We aim to ensure that our ingredients, and any claims we make regarding their benefits or efficacy, are supported by clear, demonstrated science.

In line with our strategy, we focus particularly on growing our Speciality Food Ingredients division, and as such the majority of our new product development is in this area. Many of our speciality sweeteners and fibres improve stability, thereby helping to extend consumer product shelf life and assist in avoiding food waste, which is an important food industry sustainability issue. Our health and wellness platform delivers innovative ingredients with substantiated health benefits to customers worldwide. For example, PromOat® Beta Glucan, a product we acquired in 2013, is a natural component of wholegrain Swedish oats that allows foods and beverages to help lower cholesterol levels and promote digestive and intestinal health.

Our raw materials and ingredients are largely derived from renewable agricultural sources, principally corn, and in addition we consider sustainability matters throughout the product lifecycle. To this end, for our innovation pipeline, we use a sustainability evaluation tool to:

  • Undertake a sustainability risk assessment at an early stage in the product development process, to identify any potential concerns
  • Evaluate sustainability issues as we proceed with product development, to avoid or reduce any potential adverse impacts such as the use of energy and non-renewable resources, and to leverage positive impacts such as product health and wellness benefits.

Conduct of commercial relationships

We are committed to ensuring a safe, open and responsible culture in all our business dealings wherever we operate, in line with our Code of Ethics. The Code is made available in 13 languages and is communicated internally via our intranet, through local ‘Ethics Ambassadors’ across the business, and through training programmes. Externally, the Code is integrated into our supplier and business partner relationships.

We support our employees and business partners in coming forward with any information concerning actual or alleged breaches of the Code of Ethics. As part of our Speak Up process, we provide access to an independent, anonymous third-party reporting service, through free phone numbers in 47 countries and by email. Information on accessing this service is communicated across the Company, and externally via our corporate website. Any issues reported are investigated by members of our Speak Up Committee, a group of senior Tate & Lyle executives who are responsible for ensuring that any concerns are investigated and that appropriate action is taken.

Standards in our supply chain

We operate a tiered, risk-based approach to CR matters in our supply chain.

  • Our Code of Ethics sets out the ethical standards and behaviours we require our employees and business partners to follow in conducting the Company’s business. It is communicated to our suppliers through our contracts and other engagement with them.
  • Our purchase contract terms and conditions include: the requirement for our suppliers to uphold international business standards and to be fully compliant with all applicable laws and regulations, including but not limited to those regarding freedom of association and collective bargaining, non-discrimination, anti-corruption/anti-bribery, and the prevention of child or forced labour; that they comply with the standards, expectations and commitments in our Code of Ethics; and that they require comparable compliance of their own suppliers.
  • Our Procurement function has in place a global procedure whereby the environmental, social and governance risks associated with supply contracts are evaluated, based on: firstly, the source country, where independent ratings of human rights risk are applied; and secondly, the items being supplied, with reference to an external sustainability risk assessment of our agricultural raw materials/ingredients. If the source country is identified as being of high or medium risk for human rights, or the contract is for a higher risk item, enhanced control arrangements are put in place.

Our sustainable agriculture programme specifically addresses environmental, social and governance matters in our agricultural raw materials/ingredient supply chain (see our Environment section).

In addition, having used the ‘Sedex’ social and ethical compliance system across our own manufacturing facilities for a number of years, we are now starting to use it in our supply chain as one of the tools to promote and assure good CR practices.

Tate & Lyle is a member of the FTSE4Good indices of companies meeting global corporate responsibility standards; the screening criteria for which include supply chain risks and control arrangements.

We have a strong history of community involvement and during the year we continued to support communities local to our operations and globally.


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Our approach

For Tate & Lyle, community involvement is about having a positive and lasting relationship with the community: changing lives for the better. We focus on three specific areas:

  • Well-being: to provide practical assistance in the area of well-being from health issues including nutrition to general welfare, such as supporting food banks
  • Education: to develop young people’s knowledge and understanding of science, technology, engineering and mathematics (STEM subjects), and their preparedness for a career in a STEM-based discipline, either academically or vocationally
  • Environment: to promote environmental sustainability and good environmental management, addressing issues of climate change, natural resources and conservation

Overview of the year

In the year ended 31 March 2014, charitable donations were £501,000 (2013 – £376,000). We aim to increase our investment in community involvement each year, in line with the growth of our business.

  • Community spend by area

    Year ended 31 march 2014

    Community spend by area
    1 Well-being 39%
    2 Education 34%
    3 Environment 18%
    4 Other 9%

Local programmes/partnerships

We seek to engage with local communities where our principal manufacturing, R&D and office facilities are located. Employees at each location can make their own decision as to the specific projects they support and the partnerships that they develop. As a result we support a range of initiatives and organisations in our local communities.

  • Well-being: we supported a wide variety of local health and well-being initiatives this year, including United Way community programmes at several locations in the US. For the second year running, our e-Christmas card supported the homeless charity Crisis at Christmas in London, UK and the Northern Illinois Food Bank in Chicago, USA: both organisations provided practical, immediate assistance to those in need over the holiday period.
  • Education: this year we supported local schools, colleges and universities. For example: by assisting with new equipment purchases, running a road safety event for children at local schools, and providing scholarship funds to help students access higher education.
  • Environment: this year we supported a number of environmental initiatives, including improvement works to local park and conservation areas, and tree planting.

Global partnerships

We have made good progress in developing our global partnership programmes during the year.

On well-being, we have continued to be a partner with the Global Alliance for Improved Nutrition (GAIN), and we contributed $50,000 to disaster relief by the Red Cross following the Philippines typhoon in November 2013.

For education, we are implementing an undergraduate bursary/scholarship programme across selected universities internationally, assisting undergraduates to access courses in STEM disciplines.

For environment, we are a corporate partner of the environmental research and engagement charity Earthwatch, with which we have established a project on the ecology, conservation and sustainable harvesting of seaweed.

Read the Chief
Executive's Review
Read the
Chairman's Statement