Emerald - Jaarverslag 2019

2019 Global Sustainability Report

Letter from the CEO At Emerald, we view sustainability as a critical competency. We all share a responsibility — as individuals and as an organization — to help build a safe, healthy, sustainable future for our families, our industry, and our communities.

Global Sustainability Report

Sustainability is a critical factor in all of our processes, operations, and business decisions. For example, whenever we begin a major investment or expansion, we are continuously thinking about how we can enhance the safety, efficiency, and eco-friendliness of the processes and equipment. This begins with planning, but it also continues throughout implementation and after project completion, as part of continuous improvement.

In the following pages, you will see a list of U.N. Sustainable Development Goals and the ways that Emerald contributes to each. It’s important to view sustainability from a variety of integrated perspectives, including health, safety, the environment, equity, and ethics, all of which contribute to better quality of life for everyone in our societies. The Sustainable Development Goals take all of these important aspects into account and create international alignment for key sustainability priorities.

I hope that you enjoy this edition of our Global Sustainability Report, where we take a look at our performance in 2019 and how Emerald contributed to the U.N. Sustainable Development Goals.

If you have any questions about the content of this report or about sustainability at Emerald in general, I encourage you to reach out to us at kalama@emeraldmaterials.com.

Edward T. Gotch Chief Executive Officer Emerald Kalama Chemical

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Global Sustainability Report

“It’s important to view sustainability from a variety of integrated perspectives, including health, safety, the environment, equity, and ethics, all of which contribute to better quality of life for everyone in our societies.�

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Overview Emerald Contributions to the U.N. Sustainable Development Goals The United Nations Sustainable Development Goals are an important, international set of priorities to help promote a sustainable future for everyone. Emerald’s vision for the future includes a commitment to protecting and supporting each other, our community, and the environment, which aligns with the U.N.’s mission for a sustainable future. Below, see how Emerald’s operations, processes, initiatives, and charitable works contribute to the U. N. Goals.

Global Sustainability Report

No Poverty

• Supporting our local communities through volunteering and partnerships with regional charitable programs (such as the Salvation Army, United Way, Emergency Support Shelter, Community Health organizations, and the Giving Closet)

Good Health & Wellbeing

• Innovating solutions that are lower VOC, lower toxicity, or safer than incumbent technologies (pg. 8) • Meeting the highest standards for quality and safety through stringent management schemes, with ISO 14001:2015 certifications covering the majority of operations (pg. 19) • Following US OSHA Process Safety Management regulations at all global sites (pg. 12) • Combatting antimicrobial resistance through alternative animal feed additives

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Zero Hunger

• Enabling safe, effective preservation of foods for longer shelf life and greater consumer access • Taking food safety seriously to reduce the potential for recalls and related food waste, with all food grade operations covered by FSSC 22000 certifications • Promoting high quality food products – for example, by providing ingredients for foods & beverages with reduced salt & sugar content • Feeding needy families through regional food drives

• Providing high purity preservatives suitable for the high quality standards of pharmaceuticals, extending shelf life and access for life saving vaccines and medications • Employee programs to incentivize wellness and physical fitness • Code of conduct requiring suppliers to have documented health and safety policies and safe, healthy working conditions

• Supporting employee growth and development through education and training, including tuition reimbursement and internship programs • Partnering with the Kalama School District in their Career and Technology education programs, which helps students of all ages and backgrounds work toward careers in STEM

Gender Equality

• Participating in educational and mentorship programs to promote girls’ engagement in STEM • Working to provide representation and diverse voices throughout the organization, with policies in place for equal opportunity and discrimination and staffing

Affordable & Clean Energy Clean Water & Sanitation

• Reducing water use (pg. 14) • Reducing material releases to protect water quality through responsible practices, such as secondary containment and routine safety training

Decent Work & Economic Growth

• Prioritizing personal and process safety at all sites and sharing OH&S metrics with all global employees monthly • Observance of human rights, including global compliance with UK anti-slavery laws to combat modern slavery and child labor • Securing our facilities to safeguard the safety of our employees • Fully audited for labor rights through Sedex SMETA • Code of conduct requiring suppliers to conform with strict human rights and labor standards

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Quality Education

• Investing in green energy to reduce carbon footprint, such as high efficiency natural gas, recycled steam energy (2014 Cefic European Responsible Care Energy Efficiency Award) • Reducing energy consumption per MT produced • Recovering energy from process byproducts

Industry, Innovation & Infrastructure • Fully audited by Sedex SMETA, which evaluates business ethics, labor rights, and HS&E • Innovating and registering new materials, working with regulatory agencies such as ECHA, E.U. BPR, and the U.S. EPA • Participating as members in meaningful industry organizations that drive sustainable change, such as the Green Chemistry & Commerce Council (GC3)

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Reduced Inequalities

• Providing equal opportunity employment and accessibility accommodations • Working to provide representation and diverse voices throughout the organization, with policies in place for affirmative action, equal opportunity and discrimination, and staffing

• Communicating openly and maintaining close relationships with local authorities, including first responders and ports

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Climate Action Responsible Consumption & Production • Responsible sourcing, such as utilizing synthetic alcohols that don’t contribute to deforestation and requiring suppliers to comply with a code of conduct • Evaluating the eventual fate of our products, with a focus on innovating for a circular economy and reduced carbon footprint • Reducing or recapturing waste, especially energy and VOC’s • Improving process efficiencies

Life Below Water

• Improving water effluent quality (pg. 14) • Providing solutions that have lower aquatic toxicity (no GHS label requirements) than other available chemistries

Peace and Justice

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Sustainable Cities & Communities

• Reducing greenhouse gases and other air emissions (pg. 14) • Maintaining EcoVadis Silver rating • Certified to ISO 14001:2015 for all site environmental management programs • Providing solutions that are lower VOC or environmental toxicity than incumbent technologies

Life on Land

• Reducing deforestation by relying on responsibly produced, synthetic equivalents that are identical to materials found in nature (pg. 15) • Preventing material releases through responsible practices, such as secondary containment and routine safety training

• Following policies for ethics, conflict of interest, antitrust, antibribery, anticorruption, corporate social responsibility, and supplier code of conduct

Vision

Mission

Our vision is to be the premier solutions provider and supplier of quality ingredients that customers choose because we deliver on our commitments and bring excellence to our customers’ products. We will build on our legacy and grow our expertise to help our customers create value with our trusted brands around the world. We protect and support each other, our community, and the environment.

Emerald Kalama is the world leader in toluene oxidation chemistry and a trusted and reliable supplier of specialty materials focusing on flavor & fragrance ingredients, non-phthalate plasticizers, anti-microbials, and synthesis intermediates. Our mission is to hear the voice of the customer and drive innovative solutions that exceed their expectations. We will utilize our expertise, expand our capabilities, and leverage our strong brands to drive growth and generate market leading value for our stakeholders

Values

Priorities

Value our customers and suppliers • Conduct our business and operate our plants responsibly and ethically • Continually improve our quality, service, and value • Always do the right thing

• Protect our community and employees • Be our customers’ first and preferred choice • Execute growth initiatives and invest for the future • Diversify our products, region and customer base • Meet or exceed service and quality goals • Meet or exceed EBITDA and working capital goals • Foster an environment of personal accountability and drive to be a high performance organization

Value our people and community • Foster teamwork, communication, commitment, trust, and personal growth • Embrace the community within which we work • Treat everyone with respect and dignity

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Vision, mission, values and priorities

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Good Health & Wellbeing Innovating solutions that are lower VOC, lower toxicity, or more consumer friendly than incumbent technologies

Global Sustainability Report Dr. Stephen Foster (left) and Kyle Posselt (right), R&D Chemists on Emerald’s Applications team, optimize a vinyl formulation to reduce VOC’s and eliminate phthalates, SVHC’s, and GHS labeling requirements using K-FLEX® dibenzoate plasticizers.

“Sustainability is a key objective for innovation at Emerald. It is one of the most powerful ways that we can contribute to a more sustainable future, enabling consumer products to be designed with safety as a focus,” said Kelly Pippine, Vice President, Marketing & Technology.

Emerald works with manufacturers to target areas where there is opportunity to improve the safety profile of consumer goods. These needs become a core focus for Emerald’s innovation strategy. The company evaluates the sustainability of

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new innovations based on a number of critical considerations, such as: • Is it lower toxicity? (published safety data, registrations, GHS labeling) • Does it have the potential to result in lower emissions / VOC’s?

• Is it less likely to result in an allergic reaction, sensitization, or irritation?

• Does it help manufacturers to comply with regulations?

• What is its most likely environmental fate? For example, is it biodegradable?

Can it contribute to a more circular economy?

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These questions were central to the development of Emerald’s new MODULAST® platform of polyurethane modifiers, launched in 2019.

“Polyurethanes were a new segment for us, but we looked at the market and saw that we had the ability to provide a modifier solution that would improve the HS&E profile of the end product. This development work led to the introduction of MODULAST® Modifiers,” said Julie Vaughn, Global Business Development Director, Industrial Specialties.

MODULAST modifiers are based on dibenzoate technology and have been optimized for polyurethanes used in consumer goods, especially athletic shoe soles. While the modifiers provide better elasticity and toughness than incumbent technologies, they were also designed for an improved safety and regulatory profile.

For example, they result in end products with exceptionally low VOC’s, which also avoid the safety concerns associated with phthalates. It was also important for Emerald to ensure that the line included an offering that is non-SVHC and has no GHS label requirements in the U.S. or Europe.

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“Consumers are growing more concerned about the products they bring into their homes and around their families every day.”

Global Sustainability Report

Natalie Keehan, Senior R&D Technician on Emerald’s Applications team, optimizes a household cleaner formulation to improve the safety profile and skin-friendly attributes, utilizing Kalaguard® SB in combination with hurdle technologies and ingredients such as mild surfactants.

“Consumers are growing more concerned about the products they bring into their homes and around their families every day. Whether it’s a pair of shoes, a wood coating, or an adhesive, MODULAST modifiers were developed to help ensure that those products meet the consumer’s expectations for safety,” Vaughn said.

A Holistic Approach to End Product Safety Emerald’s Technology team consists of three groups, focused on Synthesis, Applications Development, and Product Stewardship. The Synthesis team introduces new molecules that improve upon the safety, sustainability, and overall HS&E profile of available technologies.

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“By approaching innovation this way, we can ensure that we are not just introducing technologies with a better sustainability profile; we are validating that they can be realistically applied in formulations that are designed to meet consumer demands for safer products,” Pippine said.

For example, in 2019, Emerald completed a new registration under the Biocidal Products Regulation (BPR PT 6) in Europe for Kalaguard® SB sodium benzoate, a new home care preservative.

Kalaguard® SB is classified as a low-risk substance by the European Commission for applications governed by the BPR and is preferred over classical biocides to encourage the use of products with a more favorable environmental or human or animal health profile.

Emerald’s team made the decision to register sodium benzoate because it is a strong, cost effective candidate to replace isothiazolinones and other concerning chemistries, enabling manufacturers to create more consumer friendly, green household care products.

Because of its long history of use in applications such as foods, beverages, cosmetics, and pharmaceuticals, it had a proven track record to prevent the growth of bacteria, yeasts, and molds in consumer products. Sodium benzoate is also readily biodegradable, non-irritating to the skin, and listed for use by many green certification programs, including EU Ecolabel, EPA Safer Choice, and Nordic Swan.

However, sodium benzoate was not available for applications such as cleaners, detergents, laundry care, since these applications are regulated separately and require new registrations.

Following the BPR registration in 2019, Emerald anticipates completion for Kalaguard® SB under EPA FIFRA in late 2020. The Applications Development

team also continues to optimize the use of Kalaguard® SB in more sustainable formulations, which present unique challenges for microbial control.

“Beyond the registrations, it was also important for our applications team to evaluate how to incorporate Kalaguard SB into home care products, making sure that they are as consumer friendly as possible. We looked at how to utilize Kalaguard SB in combination with other green technologies to maximize the sustainability and preservation, such as skin-friendly, biodegradable surfactants and multifunctionals not derived from palm oil. In doing this, we are meeting a range of consumer needs through our applications work, rather than just focusing on one aspect of the formulation,” said Paul Wanrooij, Global Business Development Director, Consumer Specialties.

Global Sustainability Report

Completing a new BPR registration is a complex, resource-intensive process that takes years, so there are very few new actives being introduced to the market. At the same time, many classical preservative chemistries are being phased out due to health and safety concerns from regulators, consumers, NGO’s, and retailers. For example, one popular class of preservatives is called isothiazolinones, which are increasingly regulated as allergens and skin sensitizers. This has created opportunities for registered biocides and multifunctionals in EKC’s consumer and industrial applications.

“Sustainability is a key objective for innovation at Emerald” 11

Integrated Approaches to Protect Human Health, Water, and Air Quality Emerald’s core mission is to operate as responsibly and ethically as possible. As part of this mission, we use stringent HS&E management schemes and continuous improvement to advance safe and sustainable practices across the entire organization, improve efficiencies, and reduce carbon footprint.

Global Sustainability Report

The company maintains a range of certification programs, which help to ensure that Emerald’s operational schemes meet global standards for best practices in environmental management, safety, and quality. This includes ISO 14001:2015 certifications covering the majority of Emerald’s operations.

At all of Emerald’s sites, we use “Plan, Do, Check, Act” management methods for HS&E, a process-based, cyclical approach supported by ISO models. In addition, our management schemes include key standards, processes, and procedures for critical areas impacting sustainability. This includes the management and reduction of waste, emissions, water usage, and material releases. Recycling is used whenever possible to create circular processes, and upgrades include considerations for greener, more efficient energy sources.

Read more below about how this approach helps Emerald to promote safeguards for human health, aquatic ecosystems, and clean air.

Good Health & Wellbeing: Prioritizing Health & Safety Emerald’s safety management programs prioritizes the health and wellbeing of everyone at our sites. Our safety program uses ISO recognized models to identify, control, and mitigate possible hazards, with respect to personal safety, process safety, and product safety. We use best practices for training and change management, and we record how we plan, execute, control, and adjust activities to continuously improve our performance.

All Emerald sites follow US OSHA Process Safety Management (PSM) regulations. The PSM program includes 14 key elements to ensure chemical manufacturing processes are safe, including: • Process Hazard Analysis (PHA) A careful review of the process to identify potential risks and the safeguards needed to mitigate them; conducted for new processes, on a regular five year schedule, and whenever a significant change is made • Management of Change (MOC) Used to ensure changes are reviewed for potential risks and to communicate all changes to affected personnel

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“Recycling is used whenever possible to create circular processes, and upgrades include considerations for greener, more efficient energy sources.�

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Clean Water Emerald strives to protect the environment and the communities where it operates. Emerald is also committed to continuous improvement, the efficient use of resources and the minimization of environmental impacts.

Global Sustainability Report

Climate Action: Reducing Greenhouse Gases and Other Emissions Since 2012, Emerald has significantly improved efficiencies and reduced emissions. The graph below shows the change in emissions produced at our sites over time. The company has reduced total CO2 emissions per MT produced by 24.1%.

As much as possible, Emerald has worked to adopt cleaner, more efficient energy sources, such as natural gas. In Rotterdam, our largest manufacturing site, we utilize steam energy generated from municipal waste.

Scope 1 Criteria Pollutant Emissions: 2012 through 2019

20% 10,8%

10,9%

10% 0% -4,2%

-10% -20%

-13,4%

-14,3%

-19,7%

-24,1%

-30% -40% -50% -60% -70%

-66%

CO (tons)

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NOx (tons)

SOx (tons)

PM (tons)

VOC (tons)

Production CO2 / Energy / (total MT) Production Production

• Emerald locations use closedloop cooling systems, where the temperature requirements of the process allow. This reduces the usage of fresh water and reduces the amount of heat rejected to the rivers near our facilities.

• Water generated as a by-product of reactions and other water that comes into contact with chemicals is treated in anaerobic and aerobic biological treatment systems either at our facilities or at contracted treatment facilities. The effluent from these treatment systems meet local regulatory requirements.

• Emerald locations utilize secondary containment measures, such as concrete pads and dikes in process areas, to prevent releases from process equipment from reaching the ground and natural waterways.

• Some Emerald locations conduct routine groundwater testing as required by local regulatory authorities to protect groundwater.

• In addition, aquatic toxicity is an important consideration in the development and innovation of ingredients. One example is K-FLEX® PG. In contrast to many other plasticizers and coalescents used in paints, adhesives, and vinyl, K-FLEX PG is non-SVHC, non-phthalate, and extremely low VOC; can be used in Ecolabel certified products; and eliminates GHS label requirements (including those for aquatic toxicity) in the U.S. and Europe. By providing lower toxicity alternatives, we can help reduce the aquatic impact of end products that could contaminate waterways and threaten aquatic ecosystems.

Life on Land

“We are in an era of increasing consumer empowerment, and consumers increasingly want earth friendly products.

They are concerned about the future of the world we all share, and they want assurances that the products they buy reflect their values by minimizing environmental footprint,” said Wendy Herbst, Vice President and General Manager, Consumer Specialties.

In an age when “natural” and “plantderived” labeling represents a significant consumer trend, there is also an increasing awareness of the potential environmental impacts of certain naturally derived ingredients. How can manufacturers meet demand for natural ingredients while still prioritizing ecofriendly considerations?

Emerald believes that synthetic, sustainably produced ingredients— which are also identical to the same ingredients found in nature—is one answer to this challenge.

“Emerald’s core manufacturing processes are based on synthetic chemistry. But we are using those processes to re-create the very same compounds that are found in nature, without the environmental burden of having to extract them,” said Herbst.

The heart of Emerald’s chemistry processes is the synthesis of benzoic acid and benzaldehyde, which are produced using an oxidation process instead of a chlorination process.

Both of these compounds are widely found in nature. For example, benzoic acid is highly concentrated in many berries, and it is also found in cinnamon, cloves, and tree resin. Benzaldehyde is

found in almonds, many fruits, flowers, trees, coffee, and herbs, such as sage, chamomile, patchouli, and cinnamon.

Emerald also uses benzoic acid and benzaldehyde as raw materials to produce many downstream ingredients, including nature identical flavors, fragrances, benzoate preservatives, and low-VOC dibenzoate plasticizers.

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Reducing deforestation by relying on responsibly produced, synthetic equivalents that are identical to materials found in nature

Because these ingredients are synthetically produced, Emerald can reduce the environmental impact that could be associated with the extraction from their natural sources. Some types of naturally derived ingredients could have environmental and ethical issues, such as deforestation, limited availability, ecosystem destruction, and pollution associated with “slash and burn” farming.

Sustainable Alternatives to Ingredients Based on Palm Oil Palm oil, palm kernel oil, and their derivatives are estimated to be present in at least half of consumer products – in everything from foods, to personal care products, to paints and adhesives.

Oils palms have been an ancient staple crop for thousands of years, providing cooking oil, fuel for fires, and leaves used in weaving. In 2018, National Geographic estimated that its use has grown to 72 million tons consumed each year – 20 pounds of palm oil per person. Its relative efficiency (requiring half the land of other crops), creamy texture, and low cost make it an excellent option for many manufacturing processes and products.

Further, it is an industrially useful biofuel, an alternative to petroleum-based products.

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“Consumers may be surprised to find how many ingredients are produced using palm-based oils. Palm kernel oil is used to produce many oleochemicals, such as fatty alcohols, fatty acids, and glycerin.�

Another possible solution is the use of alternative oils. However, many of today’s substitutes are similar plant-based oils, such as coconut oil. Alternative, naturally derived oils present many of the same environmental issues as palm oil, but they may be even less efficient, requiring more land to cultivate the same amount of oil. A literature review of the available scientific literature on the ecological threats of different vegetable oils, published in Current Biology, found that oil-palm cultivation threatens 3.8 species per 1 million liters, versus 20 threatened species with coconut oil.

One solution the industry has implemented to combat the environmental impacts of oil-palm cultivation is the Roundtable on Sustainable Palm Oil (RSPO), a nonprofit organization with over 4,000 member organizations and a mission to “develop and implement global standards for sustainable palm oil.”

The RSPO’s certification program helps manufacturers to source palm oil that meets RSPO’s sustainability criteria. The certification requires that plantations may not clear primary forests, areas of high biodiversity, or fragile ecosystems. They must be audited to ensure their practices meet minimum standards for minimizing erosion, protecting water sources, and paying fair wages. However, palm oil from RSPO certified plantations only accounts for about 20% of the global supply, and deforestation for oil-palm cultivation is an continued, critical issue.

For example, palm kernel oil is used as a raw material in the production of C8 alcohol, also known as octanol. Emerald uses octanol as a key building block to synthesize many important ingredients, including Kalama® Hexyl Cinnamic Aldehyde, C-8 Aldehyde, and Peach Lactone. These products are used widely in consumer products such as cosmetics, foods, beverages, and pharmaceuticals.

While Emerald produces them using a synthetic process, they are still identical to the same compounds found in nature.

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However, since the mid 2000s, the escalation in the production of palm oil has led to the slashing and burning of tropical rain forests in Southeast Asia, making way for more oil-palm cultivation. The deforestation not only led to immediate impacts for widespread ecosystem destruction; it has also had significant impacts for carbon production. According to NASA and the New York Times, “the accelerated destruction of Borneo’s forests contributed to the largest single-year global increase in carbon emissions in two millenniums, an explosion that transformed Indonesia into the world’s fourth-largest source of such emissions.”

In addition, environmental NGO’s have voiced concerns about deforestation, peatland destruction, and violations of human rights in oil-palm cultivation.

Consumers may be surprised to find how many ingredients are produced using palm-based oils. Palm kernel oil is used to produce many oleochemicals, such as fatty alcohols, fatty acids, and glycerin.

By utilizing synthetic octanol instead of octanol derived from palm kernel oil, Emerald is able to eliminate the specific ethical and environmental concerns of oil-palm cultivation, providing another solution for more sustainable products.

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“Ingredients that are produced without oil-palm feedstocks can help shrink the overall ecological footprint of consumer products.”

Global Sustainability Report

“Consumers want to be responsible and buy products that have a smaller environmental impact. Because of this, environmental NGO’s are becoming more vocal about palm oils, and we are beginning to see label trends related to the avoidance of palm oils. But as a manufacturer, they are very challenging to avoid due to their prevalence, and other natural alternatives aren’t more ecologically sound. Further, RSPO certification only represents a portion of palm oils in the supply chain and may not eliminate the environmental concerns completely,” said Herbst.

“Ingredients that are produced without oil-palm feedstocks can help shrink the overall ecological footprint of consumer products. At the same time, by incorporating ingredients that are nature identical, manufacturers can still meet consumer demand for natural products.”

Pet Health & Hygiene Drink Household

A Sustainable Alternative to Threatened Sandalwood Oil Kalama® Osyrol® is another example of a synthetic material that is often used as a sustainable replacement for natural ingredients. Osyrol is known for its high quality sandalwood character, very similar to the natural material.

Sandalwood has been used as a fragrance ingredient for thousands of years, primarily in fine fragrances, air care, aromatherapy, and cosmetics.

Its woody, creamy aroma is associated with relaxation and wellness, and its versatility makes it highly valuable to perfumers. The scent of sandalwood brings richness to floral, earthy, herbal, musky, and gourmand fragrance blends.

Sandalwood oil is naturally derived naturally from sandalwood trees found in the Asia Pacific region, including India, Indonesia, China, Australia, the Philippines, and Hawaii.

Beauty & Personal Care

However, there are a range of environmental and ethical issues associated with the extraction of the oil from sandalwood trees. The trees take many years to mature, and there are dwindling numbers in its natural habitats. This has led to sandalwood trees becoming a threatened species in the dry tropical forests where they grow, listed as vulnerable and decreasing on the International Union for Conservation of Nature’s red list. Most regions have adopted legislation to conserve this precious resource, but illegal harvesting is an issue due to its worldwide popularity.

Food

Consumer products launched with ‘Palm oil free’ claim

3.500 3.000 2.500 2.000 1.500 1.000 500 0

2015

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2016

2017

2018

2019

First half 2020

Many suppliers work to sustainably source sandalwood oil from plantations, which helps to reduce the eradication of natural sandalwood trees. However, this limits

“Overall, sustainable chemistry is a very powerful tool to combat the ecological burden of many of the ingredients we rely on every day. Earth’s population is going to continue to grow, and we all need to work to preserve our natural resources and protect ecosystems to provide for a sustainable future, while still allowing us to have access to the consumer products we need,” [person] said.

To ensure that supplier values for sustainability match their own, manufacturers can look for indicators for sustainable production management. For example, Emerald’s production processes meet the following criteria for sustainability.

• Certified to meet ISO 14001:2015 for environmental management covering the majority of Emerald’s operations (including Kalama, WA, USA; Widnes, UK; and Rotterdam, The Netherlands) • EcoVadis silver • Sedex membership for transparency in responsible sourcing • Audited by Sedex Members Ethical Trade Audit (SMETA) • Cefic 2014 Responsible Care Award • Compliance and cooperation with all applicable regulatory authorities and many important environmental associations in the areas where we operate, including the U.S. EPA, the Netherlands Royal Association of the Dutch Chemical Industry (Vereniging van de Nederlandse Chemische Industrie or VNCI, a Cefic federation member)…

Global Sustainability Report

the availability relative to global needs for sandalwood in consumer products, and the cost of sustainably produced, naturally derived sandalwood oil is very high.

Osyrol is a replacement for natural sandalwood oil, based on synthetic and biorenewable feedstocks, which can provide the same characteristics as the natural material. However, it is sustainably produced in a tightly controlled manufacturing process, which allows manufacturers to deliver the sandalwood notes that consumers want, while reducing the burden on overexploited, vulnerable sandalwood trees in their natural ecosystems.

How can synthetic production be sustainable?

Regardless of whether an ingredient is naturally derived or synthetically produced, it’s important to evaluate the environmental impact of the methods used to make it. For example, naturally derived ingredients may be cultivated at sustainability-focused plantations, but they could also be linked with deforestation, destruction of valuable ecosystems, or high-carbon-emissions processes. Both synthetic and natural ingredient operations should be evaluated for their sustainability, including the management of water, emissions, energy, and waste.

1 Rosner, Hillary. “Palm oil is unavoidable. Can it be sustainable?” National Geographic. December 2018. https://www.nationalgeographic.com/magazine/2018/12/palm-oil-products-borneo-africa-environment-impact/ 2 Abrahm Lustgarten. “Palm Oil Was Supposed to Help Save the Planet. Instead It Unleashed a Catastrophe.” The New York Times and ProPublica. Nov. 20, 2018. https://www.nytimes.com/2018/11/20/magazine/palm-oil-borneo-climate-catastrophe. html?smid=em-share 3 “Joint NGO Statement on Failure of RSPO to Meet the Demands of Global Climate Crisis.” Greenpeace. https://www.greenpeace. org/malaysia/press/2676/joint-ngo-statement-on-failure-of-rspo-to-meet-the-demands-of-global-climate-crisis/#_ftn3 4 Rosner, Hillary. “Palm oil is unavoidable. Can it be sustainable?” National Geographic. December 2018. https://www.nationalgeographic.com/magazine/2018/12/palm-oil-products-borneo-africa-environment-impact/ 5 Gatti, Roberto Cazzolla et al. Sustainable palm oil may not be so sustainable. Science of the Total Environment. Volume 652, 20 February 2019, Pages 48-51.

6 Meijaard, Erik et al. Coconut oil, conservation and the conscientious consumer. Current Biology. Volume 30, issue 13, PR757-R758, July 06, 2020.

7 Arunkumar, A.N., Dhyani, A. & Joshi, G. 2019. Santalum album. The IUCN Red List of Threatened Species 2019: e.T31852A2807668. https://dx.doi.org/10.2305/IUCN.UK.2019-1.RLTS.T31852A2807668.en. Downloaded on 21 July 2020. https://www.iucnredlist.org/species/31852/2807668

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Emerald Personnel Making a Difference in Our Communities

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▲ Amber Yarnell (R&D Scientist), Mikaela Hall (Account Manager), and Natalie Keehan (R&D Sr. Technician) participated in the Camas Girls in STEM day 2019, where they encouraged girls in grades 5-8 to pursue their interest in STEM, spoke to them about their careers, and led a hands-on workshop about analyzing ingredients and formulating a personal care product.

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Emerald’s team organized its annual blood donation drive at the Vancouver HQ, where nearly 40 pints of blood were collected, with the potential to save over 100 lives.

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▲ EKC contributes to the DeltaPORT Donation Fund as a Deltalinqs member.

With the fund, the Port of Rotterdam Authority and industrial companies provide financial contributions to local non-profit institutions that are active in the fields of culture, welfare, sports, and recreation. The fund has a total of 300,000 euros per year to spend.

Examples include: new training outfits for local sport clubs; new lights for local soccer clubs; new sanitary for Scouting Westvoorne; holiday weeks for children who cannot have holidays because of social/emotional or financial problems; AED defibrillator to local first aid associations; contributions to local petting zoos; contributions to local art and music projects; etc.

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▲ Team Emerald, led by John Piper, Director of Product Compliance, rode in the Tour de Cure cycling fundraiser again in 2019. The team took the longest route, called “the Century”, riding over 100 miles (160 km) and raising funds for the American Diabetes Association.

▲▼ Emerald organizes an annual Halloween booth in downtown Kalama, WA. The 2019 theme was The Wizard of Oz, with tons of fun, experiments, and games for the community children – and, of course, candy. The booth included music, decorations, a trick-or-treat tree, races to the Emerald City, Wizard of Oz Plinko, a game to find the ruby slippers, and hands-on demonstrations for tornados, supercooled liquid, and instant snow. Pictured (L-R) are Stephen Foster, Pawel Rempala, Phil Oyer, Alicia McNiel, Marilyn Brown (Adams), Emily McBride, Kaitlin Keegan, 3 high school volunteers, Amber Yarnell, and Colleen Herron.

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▲ During our Safety Days, Emerald’s team in Rotterdam invited a famous Dutch goalkeeper to speak about his motivational book. All participants received a copy of the book. The total sale of the books was 1,100 euros and goes entirely to the Foundation surviving against pancreatic cancer.

▼ Emerald Kalama Chemical Limited is the main shirt sponsor of the Widnes Vikings Learning Disability Rugby League (LDRL) team. Widnes Vikings play in the second tier of the UK national rugby league and organize a number of community outreach projects. The scheme not only gives the players opportunities they would not have, but also benefits their families, too.

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▲ With the renewal of our site bikes at our Rotterdam Botlek site, we sold the old bikes to our employers to raise funds for the local food bank Rozenburg. Simone van Maanen donated the raised total of 1,000 euros to the local foodbank.

▲ In Rotterdam, Emerald’s ICT coordinator, Marcel de Bakker, donated our old ICT hardware to KiKa, which funds childhood cancer research to improve treatments. The total upbringing was 2,255 euros.

• The American Red Cross • Camas Girls in STEM for the Camas, WA school district • The Catalyst Discovery Centre – Widnes, UK • DeltaPORT Donation Fund – Rotterdam • E mergency Support Shelter – Longview, WA • Foundation Food Bank Rozenburg – The Netherlands • The Giving Closet – Vancouver, WA • Kalama Helping Hand – Kalama, WA

Global Sustainability Report

Organizations that Emerald’s teams supported in 2019, through donations of money, supplies, and/or time

▲ The Catalyst Discovery Centre in Widnes, the museum of the chemical industry in the UK, is currently undergoing a major facelift and modernisation, including upgrading the interactive exhibits. Emerald sponsored the upgrade of the exhibit ‘Sniff It’, which is fitting due to the site’s role as an aroma chemical manufacturer. Dr Neil Fairfax, R&D Manager, and Ainsley Wright, QC Analyst, are working with the exhibit designer to select suitable aromas at safe concentrations. Users will select a fragrance or a pre-set combination of fragrances from the control panel, and the blend of their choice is emitted from two vents above the panel.

The Catalyst also hosts school visits, some of which Emerald has sponsored.

Pictured are Graham Smith, Site Director; Rachael Emmitt, HR Business Partner; and Dr Neil Fairfax with children from St John Fisher School, Widnes.

• KiKa Children Cancer-Free Foundation – The Netherlands • The Salvation Army – Longview, WA • Santa’s Posse – Vancouver, WA • The Science Industry Partnership – United Kingdom • Surviving with pancreatic cancer Foundation – The Netherlands • Tour de Cure Oregon/SW Washington for the American Diabetes Association • United Way of the ColumbiaWillamette – Portland, OR • Widnes Vikings Learning Disability Rugby League (LDRL) team – United Kingdom

▲ Emerald is a member of the Science Industry Partnership in the UK. Through this partnership, six employees underwent training to be able to promote careers in Science, Technology, Engineering, and Maths into schools.

The Emerald Widnes STEM Ambassadors, pictured left to right, are Claire Dillon, R&D Engineer; Ainsley Wright, QC Analyst; Mike Grayson, QA Coordinator; Nicola Myles, Operations Engineer; Dylan Nash, Relief Operator; and Rob Begbie, R&D Technician.

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Emerald Kalama Chemical, LLC 1499 SE Tech Center Pl, Ste 300, Vancouver, WA 98683, USA +1 360-954-7100

Colophon This public report contains a summary of our official environmental report.

Emerald Performance Hong Kong 1708 Shui on Centre, 6-8 Harbour Road Wanchai, Hong Kong, China +1 852-2598-7990

Edition Emerald Kalama Chemical

Emerald Kalama Chemical BV Fascinatio Boulevard 200-232 3065 WB Rotterdam, The Netherlands +31 88-888-0500

Copyright Š 2019 All rights reserved.

www.emeraldkalama.com

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