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Hempel Corporate Responsibility Report 2011

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<strong>Corporate</strong> <strong>Responsibility</strong> <strong>Report</strong> <strong>2011</strong>


Ethical Behaviour | Our People | Community Engagement | Procurement | Health & Safety | Environment<br />

Contents<br />

Introduction to the<br />

<strong>Hempel</strong> <strong>Corporate</strong> <strong>Responsibility</strong> <strong>Report</strong> <strong>2011</strong> 02<br />

How we work with <strong>Corporate</strong> <strong>Responsibility</strong> 03<br />

Ethical behaviour 04<br />

Our people 06<br />

Community engagement:<br />

Our corporate social responsibility08<br />

Employee volunteering 11<br />

Procurement 13<br />

Health & Safety 14<br />

Environment 16<br />

<strong>Corporate</strong> <strong>Responsibility</strong> <strong>Report</strong> <strong>2011</strong>


Introduction to the<br />

<strong>Hempel</strong> <strong>Corporate</strong> <strong>Responsibility</strong> <strong>Report</strong> <strong>2011</strong><br />

I am proud to introduce our <strong>Corporate</strong> <strong>Responsibility</strong> <strong>Report</strong>.<br />

Since its creation in 1915, the <strong>Hempel</strong> Group has been<br />

at the forefront of companies who acknowledge that their<br />

responsibilities lie far beyond financial achievements and<br />

numbers on a balance sheet. In recent years, our customers,<br />

suppliers and employees have expressed an increasing<br />

interest in knowing more about our work within <strong>Corporate</strong><br />

<strong>Responsibility</strong>. We have therefore published our first<br />

consolidated report as a way to provide our stakeholders<br />

with a better picture of the key values that drive us as<br />

we conduct our business.<br />

We believe our coatings contribute to a better world through<br />

increased protection and fuel efficiency, but we also know<br />

that our activities involve chemicals. So we must focus each<br />

and every day on reducing our environmental impact and<br />

creating a healthy and safe workplace for everyone directly<br />

or indirectly involved in our products. We meet these goals<br />

by providing quality training to our employees and through<br />

innovative research into new technologies – all without<br />

compromising the high level of product performance<br />

rightly expected by our customers.<br />

Our global presence, with activities in most parts of the<br />

world, has been possible because our business is based on<br />

the respect of each individual and every culture.<br />

All <strong>Hempel</strong> employees are connected through our Code<br />

of Conduct and our common fundamental values of Quality<br />

and Service. These principles support our underlying<br />

standard of ethical behaviour, which we believe is essential<br />

for a more transparent business and a better world.<br />

A company like ours cannot be a part of the greater<br />

global society without also being an active player in local<br />

communities. In <strong>Hempel</strong>, we believe that everyone deserves<br />

a fair chance at a proper education, as access to education<br />

is a crucial step in overcoming poverty and building a solid<br />

future for individuals, families and even countries. This is<br />

why the <strong>Hempel</strong> Foundation invests heavily in schools and<br />

education programmes in areas of the world that<br />

are especially in need.<br />

I hope you will enjoy this journey through our current<br />

and future initiatives within <strong>Corporate</strong> <strong>Responsibility</strong>, and<br />

that this report will give you the confidence that we are<br />

a valuable coatings partner.<br />

Pierre-Yves Jullien<br />

Group President and CEO<br />

2 <strong>Corporate</strong> <strong>Responsibility</strong> <strong>Report</strong> <strong>2011</strong>


Ethical Behaviour | Our People | Community Engagement | ProcuREment | Health & Safety | Environment<br />

How we work with <strong>Corporate</strong> <strong>Responsibility</strong><br />

The <strong>Hempel</strong> Group is committed to conducting business in a socially<br />

responsible manner and with respect for our environment and communities.<br />

Supplying coatings to the Decorative, Protective,<br />

Marine, Container and Yacht market segments, <strong>Hempel</strong><br />

has 24 factories, 48 sales offices and 10 R&D centres all<br />

over the world. We strive to create a safe and inspiring<br />

workplace that also engages with the local community.<br />

Our <strong>Corporate</strong> <strong>Responsibility</strong> work also aims to foster a<br />

closer dialogue with our stakeholders, customers, suppliers<br />

and employees. By discussing our ambitions within <strong>Corporate</strong><br />

<strong>Responsibility</strong>, we hope to build even stronger relationships<br />

based on exceptional business practices and ethics.<br />

In <strong>2011</strong>, we established a governance structure, including<br />

a steering committee headed by the CFO, to ensure<br />

commitment from top management and alignment with our<br />

business strategy. At the same time, we also went through a<br />

process to structure our work within <strong>Corporate</strong> <strong>Responsibility</strong><br />

and to ensure we cover all aspects of our business. The<br />

process involved representatives from top management and<br />

included workshops and training sessions. As part of the<br />

process, we analysed our business and identified six focus<br />

areas within <strong>Corporate</strong> <strong>Responsibility</strong> for <strong>Hempel</strong>: ethical<br />

behaviour, our people, community engagement, procurement,<br />

health and safety, and the environment.<br />

This <strong>Corporate</strong> <strong>Responsibility</strong> <strong>Report</strong> gives an overview of our<br />

efforts in each of our six focus areas.<br />

As part of our One <strong>Hempel</strong> – One Ambition strategy, we acquired Crown Paints<br />

in <strong>2011</strong>. Crown Paints will publish its own Sustainability <strong>Report</strong> for <strong>2011</strong> and is<br />

therefore not included in this report.<br />

About the <strong>Hempel</strong> Foundation<br />

The main purpose of the <strong>Hempel</strong> Foundation<br />

is to own, secure and provide a sound<br />

economic basis for the continued existence<br />

and development of the business carried<br />

out by the <strong>Hempel</strong> Group worldwide.<br />

The <strong>Hempel</strong> Foundation also supports<br />

charitable projects of a cultural,<br />

humanitarian and scientific nature around<br />

the world, especially if they help meet<br />

the world’s environmental and poverty<br />

challenges. To make this contribution as<br />

effective as possible, the Foundation<br />

focuses on two key issues:<br />

the education of children in need,<br />

and research into environmentally<br />

sustainable solutions for<br />

the coating industry.<br />

3


Ethical behaviour<br />

Conducting business in a responsible manner, with respect<br />

for our individual employees and the communities in which<br />

we operate, has always been a priority for <strong>Hempel</strong>.<br />

While we ensure compliance with all relevant laws and<br />

regulations in the countries where we have a presence,<br />

mere compliance is not enough. With this in mind,<br />

we have launched a number of training programmes and<br />

other initiatives to make certain our ethics standards<br />

are met in all areas of our business.<br />

We have policies in place that cover communication,<br />

business ethics, management responsibility and health,<br />

safety and environment.<br />

Internal audits<br />

Internal audits are an important part of our commitment to<br />

ethical business behaviour. Not only do they ensure safe<br />

operations and proper working conditions, they also support<br />

our awareness of all the legal requirements surrounding the<br />

use and sale of our products.<br />

Each year, we carry out an extensive internal audit programme<br />

that ensures compliance with our company’s standard<br />

procedures and financial requirements, as well as our HSE<br />

Management requirements and other legal aspects. In<br />

<strong>2011</strong> alone, we conducted more than 25 individual audits of<br />

<strong>Hempel</strong> companies within the <strong>Hempel</strong> Group. Each region also<br />

conducts its own internal audits of Quality and Environment.<br />

The audit reports are sent to our Executive Group Management<br />

Team along with quarterly reports demonstrating<br />

follow-up results.<br />

4 <strong>Corporate</strong> <strong>Responsibility</strong> <strong>Report</strong> <strong>2011</strong>


Ethical Behaviour | Our People | Community Engagement | ProcuREment | Health & Safety | Environment<br />

Code of Conduct and Business Ethics<br />

Our Code of Conduct describes how <strong>Hempel</strong> conducts<br />

business. A copy is given to all of our suppliers along with<br />

a request that they respect these guidelines when doing<br />

business with us. Our Business Ethics policy provides further<br />

guidance for all employees and includes guidelines regarding<br />

gifts and entertainment. The policy also covers conflicts of<br />

interest as well as our anti-bribery clause.<br />

We also provide each of our employees with a copy of our<br />

Code of Conduct and our Business Ethics policy when they<br />

join <strong>Hempel</strong>. To ensure these guidelines and policies are<br />

understood and adhered to, we developed an online training<br />

programme and test that covers both documents. Any<br />

employee that does not pass the test is required to retake<br />

it. This training programme has already been rolled out to all<br />

office and management staff in the Americas region, with a<br />

100 per cent completion rate. Over the course of 2012, the<br />

programme will be rolled out to the other <strong>Hempel</strong> regions.<br />

Anti-bribery policy<br />

As stated in both our Code of Conduct and our Business Ethics policy,<br />

<strong>Hempel</strong> is determined to avoid any form of corruption or bribery.<br />

The payment or acceptance of a bribe is fundamentally inconsistent<br />

with <strong>Hempel</strong>’s values and our high standard of honesty in<br />

business relationships.<br />

Competition law<br />

As part of our efforts to ensure competition law compliance,<br />

a number of important markets were audited in 2010 and <strong>2011</strong>.<br />

These markets were subsequently provided compliance training that<br />

was based on an analysis of current sales, trends and <strong>Hempel</strong>’s<br />

position in the relevant product markets.<br />

In addition to the audits, European employees of the <strong>Hempel</strong> Group<br />

also took part in webinar-based training sessions to improve their<br />

understanding of competition law. Similar training sessions and audits<br />

are planned for the years ahead, and the programme will be expanded<br />

to cover the Americas, Middle East and Asia Pacific as well.<br />

5


Our people<br />

In order to achieve our vision<br />

and One <strong>Hempel</strong> – One Ambition<br />

strategic objectives, we need the<br />

right people on our team. Success<br />

in our competitive global market<br />

hinges on providing an attractive<br />

work environment that enables our<br />

people to grow professionally while<br />

making a difference for our customers.<br />

In <strong>Hempel</strong>, we offer our 5,000<br />

employees the support they need to<br />

realise their professional goals and<br />

reach their full potential.<br />

Recruitment<br />

Recruiting a considerable number of new employees in<br />

both mature and emerging markets is an important step in<br />

supporting our ambitious growth strategy. This past year, we<br />

implemented a best practice process and assessment tools<br />

for global recruitment, and we developed and implemented<br />

a new employee orientation e-learning programme. This<br />

programme provides a common introduction to <strong>Hempel</strong> in<br />

multiple languages, helpings us integrate new employees<br />

faster and more effectively throughout <strong>Hempel</strong>’s organisation.<br />

Performance and development<br />

To support the performance and continued growth of both<br />

our employees and our company, annual performance and<br />

development reviews are mandatory for all <strong>Hempel</strong> employees.<br />

The employee performance evaluation process includes<br />

goal setting, performance measurements, feedback and<br />

recognition. The aim is to recognise achievement, evaluate<br />

progress and support the continued development of<br />

each employee.<br />

Training<br />

<strong>Hempel</strong> Academy is our global centre for training and<br />

development. Based in Copenhagen, Denmark and Shanghai,<br />

China, the Academy develops and delivers training<br />

programmes for both employees and customers. The<br />

training offerings include paint technology, management,<br />

leadership, communication, finance, and sales and marketing.<br />

These programmes draw on <strong>Hempel</strong>’s position as a global<br />

organisation and our instruction methods incorporate<br />

e-learning, webinars, classroom training, seminars,<br />

workshops and personal, one-on-one coaching.<br />

6 <strong>Corporate</strong> <strong>Responsibility</strong> <strong>Report</strong> <strong>2011</strong>


Ethical Behaviour | Our People | Community Engagement | ProcuREment | Health & Safety | Environment<br />

Developing leadership talent<br />

Our talent programme prepares tomorrow’s leaders, fosters<br />

innovation and helps us attract, develop and retain the right<br />

people. To strengthen our pool of future leaders, the <strong>Hempel</strong><br />

talent programme Explorer – Next Generation was launched<br />

in 2010. The programme is designed to develop general<br />

leadership skills as well as nurture specific competencies<br />

and expertise. More than 50 <strong>Hempel</strong> employees were<br />

accepted into the programme in its first year alone.<br />

Taking care of our people<br />

In 1954 J.C. <strong>Hempel</strong> established the Employee Foundation to provide<br />

financial support for people connected to <strong>Hempel</strong> (employees or<br />

relatives of employees) who are in special need of assistance.<br />

<strong>Hempel</strong>’s Employee Foundation helps those associated with <strong>Hempel</strong><br />

who are suffering hardships primarily due to catastrophic illness,<br />

death of a family member or other similar tragic circumstances.<br />

Young talent<br />

In <strong>Hempel</strong>, we offer young, talented people opportunities to<br />

develop their competencies through trainee programmes in<br />

our main markets. For example, our China trainee programme<br />

admits up to 16 young graduates per year and opens the door<br />

to careers within sales, technical service and supply chain<br />

management. Each position provides a structured training<br />

programme over 18-24 months and valuable on-the-job<br />

experience that prepares participants for a career within<br />

the <strong>Hempel</strong> Group.<br />

In addition to our local trainee programmes, <strong>Hempel</strong> also<br />

collaborates with AIESEC (the world’s largest student-run<br />

organisation) to offer international internships that give<br />

young people hands-on experience and skills.<br />

In <strong>2011</strong>, <strong>Hempel</strong> developed a new global HR system that will help streamline our HR processes<br />

and give us better global reporting capabilities. This new HR system was implemented in the<br />

Americas region in <strong>2011</strong> and will be rolled out in the rest of <strong>Hempel</strong> during 2012.<br />

7


Community engagement:<br />

our corporate social responsibility<br />

A company is an integral part of a community. And while<br />

all companies contribute by paying taxes and creating jobs,<br />

<strong>Hempel</strong>’s global reach enables us to play a larger role in<br />

society. Through the <strong>Hempel</strong> Foundation, we support cultural<br />

and humanitarian projects around the world, with a specific<br />

focus on the education of children in need.<br />

Education of children in need<br />

As one of the most viable pathways out of poverty, an education is the key to lasting,<br />

positive change for many children. And yet for millions, a formal education is well<br />

beyond reach. That is why <strong>Hempel</strong> supports initiatives to help teach disadvantaged<br />

children, who urgently need a foundation for learning in order to build a better future<br />

for themselves, their families and their communities.<br />

Children enrolled in the following education programmes supported by the <strong>Hempel</strong><br />

Foundation receive a quality education that includes community outreach, parental<br />

involvement, teacher training, new textbooks and modern learning materials. In 2013,<br />

we plan to expand the number of projects in order to give even more children around<br />

the world access to a quality primary education.<br />

8 <strong>Corporate</strong> <strong>Responsibility</strong> <strong>Report</strong> <strong>2011</strong>


Ethical Behaviour | Our People | Community Engagement | Procurement | Health & Safety | Environment<br />

Pune, India<br />

Despite India’s growing prosperity,<br />

millions of the country’s children<br />

lack access to proper education. The<br />

<strong>Hempel</strong> Foundation is supporting three<br />

schools in Pune, a city located 150<br />

km east of Mumbai. The schools are<br />

in one of the city’s less-developed<br />

areas, and the improvements include<br />

the development of new materials for<br />

teaching and learning, repairs to the<br />

buildings and upgrades to the facilities<br />

and classrooms. The project also helps<br />

familiarise teachers with innovative,<br />

effective new teaching methods.<br />

West Bengal, India<br />

India’s brick-making industry employs<br />

millions of unskilled labourers, many<br />

of whom are children. These children<br />

have no access to playgrounds, health<br />

services or education. The <strong>Hempel</strong><br />

Foundation is therefore building two<br />

new education centres for the children.<br />

Set to open in April 2012, the centres<br />

will provide warm food, healthcare and<br />

comprehensive pre-education. The goal<br />

of the project is to help the children<br />

learn as many necessary basic skills<br />

as possible, enabling them to enter the<br />

local education system and hopefully<br />

get a chance at a much brighter future.<br />

Alto Molócué, Mozambique<br />

The <strong>Hempel</strong> Foundation is providing<br />

support to two schools of 700 children<br />

each in Alto Molócué, Mozambique.<br />

Before the project began, the<br />

schools in this impoverished region<br />

were in extremely poor condition<br />

and classrooms contained up to 80<br />

pupils. The lack of adequate teaching<br />

materials, high absentee rates and<br />

poorly trained teachers added to the<br />

appalling situation. Our initial efforts<br />

have focused on educating the teachers<br />

in basic competencies, establishing<br />

professional school management,<br />

reducing the number of children in each<br />

class, providing new teaching materials<br />

and books, building a school library and<br />

launching reading clubs.<br />

Shanghai, China<br />

Due to China’s economic growth,<br />

cities such as Shanghai have seen an<br />

enormous influx of migrant workers<br />

and their families. The local school<br />

systems have had difficulties handling<br />

the increase in enrolment, and so a<br />

number of private schools are being<br />

established to help educate the migrant<br />

children. Unfortunately, the schools<br />

lack sufficient resources as the parents<br />

are often unable to afford tuition.<br />

The <strong>Hempel</strong> Foundation is therefore<br />

supporting five of these migrant schools<br />

to help these children get a proper<br />

education. More than 10,000 migrant<br />

children are benefitting from this project.<br />

9


Chengdu, China<br />

On 12 May 2008, a massive earthquake<br />

hit China’s Sichuan province. The<br />

catastrophe claimed the lives of nearly<br />

87,000 people and left thousands of<br />

children orphaned. The SOS Children’s<br />

Village in Chengdu took in many of the<br />

earthquake orphans, and the <strong>Hempel</strong><br />

Foundation immediately provided<br />

financial assistance to the Village. Today,<br />

the <strong>Hempel</strong> Foundation continues to<br />

support one of the family houses that<br />

is home to eight children and their SOS<br />

mother. The house provides the children<br />

with a good home and the opportunity<br />

for a quality education.<br />

Lujan, Argentina<br />

Argentina’s economic collapse in 2001<br />

left many impoverished. And although<br />

recovery has been rapid, many families<br />

are unable to provide their children<br />

adequate opportunities for a better<br />

future. The <strong>Hempel</strong> Foundation is<br />

therefore supporting one family house in<br />

the SOS Children’s Village in Lujan, near<br />

Buenos Aires. The home gives eight<br />

orphaned or socially vulnerable children<br />

a caring environment, a comprehensive<br />

education and, most importantly, a<br />

fresh start in life.<br />

Battambang, Cambodia<br />

Cambodia’s modern history has been<br />

shaped by war and political unrest.<br />

Since peace finally came in the late<br />

1990s, the country has been struggling<br />

to rebuild its school system. The<br />

<strong>Hempel</strong> Foundation provided a donation<br />

to help construct a new school in<br />

Battambang and today the Foundation<br />

co-funds the school’s daily operations.<br />

The school opened its doors in 2009<br />

and is now filled with 500 children who<br />

are eager to learn to read and write.<br />

Johannesburg, South Africa<br />

In 1989, the first Vuleka School was<br />

established to help black children learn<br />

English so that they could go on to<br />

study in comprehensive English medium<br />

schools. Today, Vuleka Schools provide<br />

a high quality primary education that<br />

enables most students to be awarded<br />

scholarships for high school and,<br />

hopefully, university. A good education<br />

gives hope to underprivileged black<br />

children, as it is a vital step in finding<br />

a good job and building a better future<br />

for themselves and their families. The<br />

<strong>Hempel</strong> Foundation supports the Vuleka<br />

School in North Riding, Johannesburg<br />

and its 193 pupils.<br />

10<br />

<strong>Corporate</strong> <strong>Responsibility</strong> <strong>Report</strong> <strong>2011</strong>


Ethical Behaviour | Our People | Community Engagement | Procurement | Health & Safety | Environment<br />

Community engagement: employee volunteering<br />

At <strong>Hempel</strong>, we believe<br />

corporate responsibility is<br />

about more than our policies.<br />

So to stress the importance<br />

of taking an active role in<br />

our world, we encourage our<br />

employees to volunteer their<br />

time to the causes that<br />

mean the most to them.<br />

Volunteering not only<br />

helps out people in need,<br />

it’s also a unique learning<br />

opportunity that fosters<br />

personal development and<br />

greater social awareness<br />

among those who generously<br />

give their time.<br />

Here are a few examples of how some of our employees have generously volunteered<br />

their time and energy to make a positive impact in <strong>2011</strong>:<br />

Mozambique<br />

Six employees – one from each<br />

of the regions in <strong>Hempel</strong> and one<br />

from Crown Paints – spent a week<br />

volunteering in Mozambique. The<br />

group experienced first-hand<br />

how a school project sponsored<br />

by the <strong>Hempel</strong> Foundation is<br />

helping disadvantaged children<br />

obtain a good primary education.<br />

During their visit, the volunteers<br />

taught English and Spanish,<br />

built a volleyball court and gave<br />

presentations of their home<br />

countries. They also introduced the<br />

children to games from their home<br />

cultures – a novel experience for<br />

these children who have never<br />

left their local community.<br />

China<br />

Many outdated computers that<br />

companies take out of service are<br />

still well-functioning. So <strong>Hempel</strong><br />

China’s IT department came up<br />

with a plan to make good use of<br />

old computers to help children<br />

in need. The IT professionals<br />

travelled from all over China<br />

to Chengdu to donate some of<br />

<strong>Hempel</strong>’s old computers to the<br />

region’s SOS Children’s Village,<br />

which the <strong>Hempel</strong> Foundation is<br />

already supporting. The team also<br />

volunteered their time to help set<br />

up the machines and teach the<br />

children how to use them.<br />

Poland<br />

When <strong>Hempel</strong> opened a new<br />

factory in <strong>2011</strong> in Poland, our<br />

employees also wanted to make<br />

a positive impact on the local<br />

community. Their project, called<br />

“<strong>Hempel</strong> – the World of Paints”,<br />

taught the children about paint<br />

and allowed them to experiment<br />

with its physical properties. They<br />

learned how substances behave<br />

when mixed together and how to<br />

achieve the best results with paint.<br />

While broadening the children’s<br />

horizons, the project also showed<br />

them that the knowledge they<br />

gain from school is applicable<br />

in everyday life. A great success,<br />

the employees have now run the<br />

project several times.<br />

Argentina<br />

Employees of <strong>Hempel</strong> Argentina<br />

volunteered their time at the local<br />

SOS Children’s Village in Lujan.<br />

Another project supported by the<br />

<strong>Hempel</strong> Foundation, the Children’s<br />

Village is home to orphaned and<br />

underprivileged children from the<br />

region. Our volunteers spent the<br />

day working side by side with the<br />

children as they painted the jungle<br />

gym on the playground. This was<br />

a project about community and<br />

family, and some of the <strong>Hempel</strong><br />

employees even brought along<br />

their own children and spouses to<br />

help out and join in the activities.<br />

11


Ethical Behaviour | Our People | Community Engagement | Procurement | Health & Safety | Environment<br />

Procurement<br />

Each <strong>Hempel</strong> product is made from raw materials sourced from around<br />

the globe through multiple suppliers. As we work with key raw material suppliers<br />

to develop and produce high quality products, we also strive to foster solid<br />

relationships built on outstanding business practices and similar business ethics.<br />

Supplier policy<br />

As a baseline when building a<br />

sustainable business relationship,<br />

we expect our key raw material<br />

suppliers to adhere to the standards<br />

defined in our supplier policy.<br />

The policy outlines our expectations<br />

related to quality management and<br />

safe operations in terms of the<br />

environment as well as employees.<br />

Also included in the policy is our<br />

expectation that business is<br />

conducted in a manner that does<br />

not compromise <strong>Hempel</strong>’s<br />

Code of Conduct.<br />

Supplier agreement<br />

All key raw material suppliers sign our<br />

supplier agreement. The agreement<br />

commits the raw material supplier<br />

to upholding our supplier policy and<br />

meeting international standards for<br />

labelling and packaging as well as<br />

for the safe storage, handling, and<br />

transport of dangerous goods.<br />

The agreement also includes standards<br />

for health, safety and environment.<br />

We ensure that all raw materials used<br />

in our products meet legal requirements.<br />

For example, all raw materials used<br />

in Europe are subject to REACH<br />

compliance. This ensures compliance<br />

not only through the commitment of our<br />

suppliers, but also through a rigorous<br />

internal qualification and approval<br />

process for all raw materials used<br />

in our production.<br />

Supplier dialogue<br />

Our key raw material suppliers are<br />

our business partners, so we establish<br />

a mutually beneficial partnership that<br />

is built on continuously developing<br />

materials and incorporating corporate<br />

responsibilities. In order to build a<br />

common understanding of corporate<br />

responsibility and to learn from each<br />

other, we have introduced dialogues<br />

with selected suppliers on this<br />

subject and related issues. In 2012,<br />

we will further educate our buyers<br />

and category managers within<br />

corporate responsibility topics,<br />

enabling us to extend our dialogue<br />

with even more suppliers.<br />

We currently assess compliance<br />

to standards and policies through<br />

a questionnaire.<br />

<strong>Corporate</strong> <strong>Responsibility</strong> <strong>Report</strong> <strong>2011</strong><br />

13


Health & Safety<br />

<strong>Hempel</strong> has long been committed<br />

to ensuring the health and safety of<br />

our employees and customers.<br />

Our work practices and the products<br />

and services we develop all support<br />

our role as a responsible company<br />

with an integrated approach<br />

to health, safety and<br />

environmental management.<br />

Our Group Health, Safety and Environmental policy along with<br />

our training programmes establish a solid framework that<br />

enables us to improve working conditions and reduce the risk<br />

of accidents and incidents. We also promote the use of safer<br />

materials when developing new products and we are ahead<br />

of schedule in our efforts to implement a new international<br />

standard for safety labels on all products.<br />

Health and safety forms an integral part of all of our activities<br />

related to the production and handling of raw materials and<br />

products in our factories and warehouses.<br />

Training<br />

Training is an important part of our health and safety activities.<br />

With an aim to increase awareness and minimise risks, our<br />

<strong>2011</strong> training programme covered accident prevention, fire<br />

prevention and forklift operation. The accident prevention<br />

and fire prevention training programmes are offered by Group<br />

Compliance Management to managers and workers in our<br />

factories and warehouses. In <strong>2011</strong>, a total of 103 people were<br />

trained in accident prevention, and 106 were trained in fire<br />

prevention.<br />

The forklift operation training programme material was<br />

developed in response to a number of accidents, incidents and<br />

near-misses that happened while operating forklifts. In <strong>2011</strong>,<br />

15 of our factories and 19 of our warehouses conducted this<br />

training – in all, more than 500 employees took part.<br />

14 <strong>Corporate</strong> <strong>Responsibility</strong> <strong>Report</strong> <strong>2011</strong>


Ethical Behaviour | Our People | Community Engagement | ProcuREment | Health & Safety | Environment<br />

Direct causes of accidents<br />

60<br />

Number of accidents<br />

19.1<br />

Number of accidents<br />

per 1 million factory working hours<br />

17%<br />

10%<br />

13%<br />

38<br />

32<br />

27<br />

28<br />

33<br />

24<br />

20<br />

24<br />

23<br />

10.7<br />

12.0<br />

11.0<br />

9.9<br />

13.7<br />

10.2<br />

8.5<br />

10.6<br />

9.2<br />

17%<br />

9% 4%<br />

17%<br />

13%<br />

2002<br />

2003<br />

2004<br />

2005<br />

2006<br />

2007<br />

2008<br />

2009<br />

2010<br />

<strong>2011</strong><br />

Accidents<br />

We keep detailed records of all accidents that occur in our<br />

factories so that we can investigate and analyse the causes.<br />

Over the years, we have achieved significant improvements<br />

thanks to awareness, training and preventive measures.<br />

An accident is defined as an on-the-job injury that results in at<br />

least one day’s absence. In <strong>2011</strong>, 23 accidents were reported<br />

by our factories across the Group. When we compare the<br />

number of accidents to our total working hours, the level is<br />

quite low for our industry. But every accident is one too many,<br />

so we do our best to learn from these accidents and prevent<br />

their reoccurrence.<br />

Three of our factories accounted for 70 per cent of all<br />

accidents in <strong>2011</strong>. These factories are now receiving special<br />

attention and guidance.<br />

Product safety<br />

We depend on more than 800 different chemicals to produce<br />

our assortment of products. Each of these chemicals has a<br />

unique profile, and some are safer to handle than others. As<br />

stated in our Group HSE policy, we actively work to integrate<br />

environmentally sustainable technologies and the use of safer<br />

materials in the development of new products and solutions.<br />

With this in mind, our R&D team takes a cross-functional<br />

approach to replace, reduce or eliminate the chemicals we<br />

consider least safe or most restrictive to use.<br />

2002<br />

2003<br />

2004<br />

2005<br />

2006<br />

2007<br />

2008<br />

2009<br />

2010<br />

<strong>2011</strong><br />

Safety communication<br />

The way we communicate how to work safely with <strong>Hempel</strong><br />

products is gradually changing to a new system called GHS –<br />

Globally Harmonised System for Labelling and Classification of<br />

Chemicals. The United Nations-endorsed system is intended<br />

to support international efforts concerning the safer and more<br />

environmentally-responsible management of chemicals.<br />

This improved safety labelling system is being gradually<br />

adopted by countries all over the world. We have already<br />

implemented GHS in China – well before national regulations<br />

have required us to do so.<br />

Safety First campaign<br />

In a continuous effort to reduce risks and ensure workplace safety,<br />

<strong>Hempel</strong> Singapore launched a Safety First campaign focused on<br />

reporting and learning from near-misses. It kicked off in November<br />

<strong>2011</strong> with a training session for 30 production and warehouse<br />

operators and managers. The campaign includes our new definition<br />

of near-misses as well as information on how to report a near-miss<br />

and why it is important to report these issues.<br />

The Safety First campaign will be rolled out in all of <strong>Hempel</strong>’s<br />

factories in Asia Pacific during 2012, followed by our sales offices<br />

and warehouses and the rest of the <strong>Hempel</strong> Group.<br />

<strong>Hempel</strong> Singapore has the longest running record<br />

for days without accidents: an impressive 1159 days<br />

(as of 31 December <strong>2011</strong>) – more than three years.<br />

Machinery ● ● Other<br />

Handling/lifting ● ● Transport/traffic<br />

Moving object ● ● Hazardous substance/spill<br />

Slip/trip/fall (same level) ● ● Fall at height<br />

Indirect causes of accidents<br />

13%<br />

3%<br />

13%<br />

11%<br />

10% 47%<br />

3%<br />

Procedure not followed ● ● Other<br />

Inadequate training/instruction ● ● Carelessness<br />

Unsatisfactory conditions ● ● Inadequate personal<br />

Inadequate equipment ● protection<br />

Part of body affected<br />

17%<br />

7% 4%<br />

10%<br />

10%<br />

7%<br />

21%<br />

14%<br />

10%<br />

Eye ● ● Other<br />

Head/face ● ● Toe/foot/ankle<br />

Back/neck ● ● Leg/knee<br />

Arm/elbow ● ● Chest/abdomen<br />

Finger/hand/wrist ●<br />

15


Environment<br />

At <strong>Hempel</strong>, we are committed<br />

to taking responsibility for protecting<br />

the environment through our policies<br />

and our actions. For us, responsibility<br />

is about complying with all relevant<br />

laws and regulations in the countries<br />

in which we operate, continuously<br />

improving our environmental<br />

performance and supporting<br />

research into environmentally<br />

friendly technologies<br />

and solutions.<br />

Our Group Health, Safety and Environmental (HSE) policy<br />

requires us to integrate sustainable technologies into<br />

the development of new products. This also benefits our<br />

customers by helping them reduce their carbon footprint.<br />

Some of our recent innovations extend the lifetime of steel<br />

constructions, reduce the fuel consumption of ships and<br />

lower the energy and maintenance costs of buildings.<br />

We also have policies in place to ensure that our HSE<br />

management system monitors our environmental performance,<br />

and that we optimise our resources through recycling and<br />

reduced consumption. The energy we use in production and<br />

the generation of waste are two key areas in which where we<br />

are actively working to improve our environmental performance.<br />

The graphs in this section show the consolidated figures<br />

for all <strong>Hempel</strong> factories.<br />

ISO certification<br />

Our quality and HSE management systems are certified<br />

according to the ISO 9001 and ISO 14001 standards. Due to<br />

our uniform processes and quality across our entire company,<br />

we received ‘Global’ certification in <strong>2011</strong>. Now, instead<br />

of regional or standalone certificates, our new ISO 9001<br />

certificate covers more than 45 sites. In addition, our global<br />

ISO 14001 certificate covers more than 25 sites, and five<br />

sites are covered by a global OHSAS 18001 certificate.<br />

16 <strong>Corporate</strong> <strong>Responsibility</strong> <strong>Report</strong> <strong>2011</strong>


Ethical Behaviour | Our People | Community Engagement | Procurement | Health & Safety | Environment<br />

Total energy in kWh per tonne product manufactured<br />

Total waste kg per tonne paint produced<br />

hazardous waste other waste<br />

187<br />

183<br />

26.3<br />

161<br />

160<br />

145<br />

127<br />

131<br />

143<br />

139<br />

148<br />

22.2<br />

20.0<br />

17.2<br />

17.5<br />

17.0<br />

17.2<br />

16.4<br />

8.4<br />

8.1<br />

17.3<br />

17.0<br />

16.4<br />

16.6<br />

15.7<br />

13.7<br />

13.7<br />

15.7<br />

14.1<br />

16.7<br />

2002<br />

2003<br />

2004<br />

2005<br />

2006<br />

2007<br />

2008<br />

2009<br />

2010<br />

<strong>2011</strong><br />

2002<br />

2003<br />

2004<br />

2005<br />

2006<br />

2007<br />

2008<br />

2009<br />

2010<br />

<strong>2011</strong><br />

Energy consumption<br />

Thanks to energy saving efforts and a rise in production volume, our energy<br />

consumption per tonne of manufactured product decreased from 2002 to 2007.<br />

From 2008, our energy consumption has remained stable, but due to a decrease<br />

in total production volume, relative energy consumption has increased.<br />

In <strong>2011</strong>, the opening of two modern, automated factories in Poznan, Poland and<br />

Guangzhou, China began to impact our energy consumption. Automation helps us<br />

reduce the risk of injuries that stem from manual handling, but it does lead to greater<br />

energy use. We are working to counteract these factors through energy saving<br />

initiatives such as optimising equipment usage in our production plants.<br />

Waste management<br />

Waste is an element of paint production that is impossible to avoid, but must<br />

be managed. Our intention is to reduce waste generation as much as possible and<br />

to increase the recycling of waste. Since 2002, <strong>Hempel</strong>’s waste generation is down<br />

by almost 50 per cent.<br />

We have made considerable reductions in “other waste,” which consists of materials<br />

that can for the most part be recycled (including packaging, metal, plastic and wood).<br />

“Hazardous waste” needs special disposal treatment, and each year more and more<br />

waste fractions are included in this category as a result of updated legislation.<br />

We have nonetheless kept pace with the industry in terms of our hazardous<br />

waste reduction efforts.<br />

In 2010, we changed our definition of waste to exclude waste that can be repurposed,<br />

which resulted in the large drop from 2009 to 2010. Waste management will continue<br />

to be a focus area for all of our factories in 2012.<br />

17


Global HSE Competition<br />

For the second year in a row, we held an HSE competition<br />

for our production units. Each factory was asked to submit<br />

a story that involved a safety or environmental improvement<br />

that reduced risk, improved efficiency or saved costs.<br />

<strong>Hempel</strong> Portugal was awarded first prize for its new<br />

cost-effective “clean-in-place” tank cleaning system that<br />

uses less solvent and requires less energy while improving<br />

the safety and working conditions of operators.<br />

Second place went to <strong>Hempel</strong> Bahrain for its waste water<br />

treatment plant that ensures a high degree of recycling when<br />

washing tanks used for waterborne paints. And third place<br />

went to <strong>Hempel</strong> Yantai for its implementation of several energy<br />

saving projects, including solar panels for heating water.<br />

HSE audits<br />

Audits are an important part of our Health, Safety &<br />

Environment (HSE) management system in our factories.<br />

They help ensure the safety of our employees and the<br />

uninterrupted supply of products to our customers, and<br />

they are a crucial part of our risk management efforts.<br />

In <strong>2011</strong>, we conducted eight HSE audits of factories as well<br />

as HSE inspections of <strong>Hempel</strong> offices and customer sites<br />

where our coating advisers work. Through these audits, we<br />

monitor compliance levels compared with our own standards,<br />

the local legal requirements and, where relevant, the ISO<br />

14001 standard. Risks at each site are assessed and<br />

all unmitigated issues are addressed.<br />

HSE audits also enable us to identify and document<br />

best practices, which are subsequently shared all over<br />

the <strong>Hempel</strong> Group and help us improve our performance.<br />

18 <strong>Corporate</strong> <strong>Responsibility</strong> <strong>Report</strong> <strong>2011</strong>


Ethical Behaviour | Our People | Community Engagement | Procurement | Health & Safety | Environment<br />

Product development<br />

Our Research and Development team systematically works on new innovations and products to meet<br />

our customers’ increasing demand for energy-efficient products that incorporate sustainable technologies.<br />

This focus is also in line with <strong>Hempel</strong>’s own ambition to reduce our impact on the environment.<br />

These are three of our latest product innovations:<br />

EcoBoxcoat<br />

A series of products for the Container segment,<br />

EcoBoxcoat is set to replace the traditional solventborne<br />

system that has dominated the market for the<br />

past 30 years. The EcoBoxcoat system can be applied<br />

with the same equipment in the same factories as the<br />

solvent-borne system, so it does not require any major<br />

production changes or huge investments.<br />

The EcoBoxcoat system will not only reduce solvent<br />

emissions (VOCs) by nearly 90 per cent, it will also<br />

improve the working environment for the thousands of<br />

applicators who are applying the coatings. And it will<br />

significantly reduce the risk of fires.<br />

EcoBoxcoat is expected to perform on par with or even<br />

better than the existing traditional systems.<br />

Contex Thermoguard<br />

Launched in <strong>2011</strong>, Contex Thermoguard is an innovative<br />

insulation coating that saves money and energy while<br />

improving comfort.<br />

Contex Thermoguard’s insulating hollow vacuum<br />

microspheres form a tight, interlocking matrix that<br />

reduces radiated, conductive and convective heat<br />

through the painted surface. The high reflectivity of the<br />

coating also deflects nearly all of the sun’s rays, and<br />

this drastically reduces the cost and energy required for<br />

cooling a home or a building.<br />

Contex Thermoguard is an excellent solution to reduce<br />

passive solar heating when applied to exterior walls.<br />

By lowering the indoor temperature by as much as 5˚C,<br />

Context Thermoguard saves electricity consumption<br />

and helps regulate the indoor climate.<br />

HEMPASIL X3<br />

Conventional antifoulings for ship hulls contain biocides<br />

that leach into the marine environment. Unlike these<br />

traditional coatings, HEMPASIL X3 is based on a blend<br />

of silicone polymers that forms a hydrogel microlayer<br />

between the paint surface and the seawater. This results<br />

in dramatically enhanced fouling release properties. By<br />

reducing hull friction, HEMPASIL X3 also improves fuel<br />

efficiency and subsequently reduces CO 2<br />

emissions.<br />

Since its launch in 2008, HEMPASIL X3 has been the<br />

recipient of five product awards, three of which were<br />

related to the product’s environmental profile and two<br />

of which were related to the innovative idea behind<br />

the technology.<br />

Results from comprehensive towing tank studies<br />

have been confirmed in practice on some of the world’s<br />

largest crude oil carriers, which saw an eight per cent<br />

reduction in fuel consumption. Based on these<br />

results, if the entire world fleet was given a coat of<br />

HEMPASIL X3, its carbon footprint could be reduced<br />

by 80 million tonnes.<br />

19


Ethical Behaviour | Our People | Community Engagement | ProcuREment | Health & Safety | Environment<br />

Research in environmentally sustainable solutions<br />

<strong>Hempel</strong> and the <strong>Hempel</strong> Foundation support research in environmentally friendly technologies,<br />

particularly in the area of surface protection. A long-term partnership with the Department of Chemical<br />

and Biochemical Engineering at the Technical University of Denmark is driving fundamental research<br />

and raising awareness of sustainable technologies.<br />

The partnership supports the following programmes:<br />

<strong>Hempel</strong> Student Innovation Laboratory<br />

The Laboratory supports bachelor’s and master’s<br />

degree students who are working on innovative,<br />

environmentally sustainable solutions in chemical<br />

and biochemical engineering.<br />

International Elite Master’s Programme<br />

This offers grants for living expenses and tuition to<br />

international students working on a master’s in chemical<br />

and biochemical engineering. <strong>Hempel</strong> employees act<br />

as mentors to guide the students as they learn to<br />

work globally with sustainable technologies.<br />

PhD programme<br />

Selected master’s students focused on expanding<br />

knowledge within the field of surface protection are<br />

offered an opportunity to continue in the university’s<br />

PhD programme. Projects include extending the lifetime<br />

of constructions, improving technologies within renewable<br />

energy, lowering the fuel consumption of ocean-going<br />

vessels and improving the environmental performance<br />

of coatings. All research is made public through<br />

scientific publications.<br />

20 <strong>Corporate</strong> <strong>Responsibility</strong> <strong>Report</strong> <strong>2011</strong>


HEMPEL A/S<br />

Lundtoftevej 150<br />

DK - 2800 Kgs. Lyngby<br />

Denmark<br />

Tel: +45 4593 3800<br />

Fax: +45 4588 5518<br />

E-mail: hempel@hempel.com<br />

www.hempel.com

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