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  Johnson Matthey operates according to well established ethical, social and environmental policies. Over the last year the board has led a number of initiatives to improve our operational performance in these areas. Details of these initiatives can be found in the Johnson Matthey corporate social responsibility (CSR) review and are presented here in summary. The full report can be found at www.matthey.com.
The corporate social responsibility disclosure follows the guidelines issued by the Association of British Insurers and the format recommended by the Global Reporting Initiative has been used to guide the development of the corporate social responsibility review. As outlined in the Corporate Governance section the board has embedded corporate social responsibility into its risk management process. Corporate social responsibility is championed at the highest level at Johnson Matthey and the board has reviewed and endorsed the full report.
Johnson Matthey has a culture of constant improvement in all aspects of performance. In this area improvement is driven through corporate policies, a comprehensive management system and the commitment of our staff. There are three key policy areas which provide the framework for the management of corporate social responsibility: the Environment, Health and Safety policies; the Employment policies; and the Business Integrity and Ethics policy.
Johnson Matthey Products Many of our products have a particularly positive social and environmental benefit. They range from anticancer compounds to our autocatalyst technologies, which improve air quality around the world. In addition, our fuel cell technologies aim to make
a significant contribution to the generation of clean energy and security of supply.
Product safety is critical to Johnson Matthey and sophisticated systems are in place to ensure that a high level of protection is afforded to our customers.
Whilst Johnson Matthey’s main contribution to sustainable development will be through the excellence of our products we also seek to achieve similar levels of excellence in the management of the business and in the quality of our manufacturing operations. Our expertise in processing valuable precious metal materials provides us with a core competence in the conservation, re-use and recycling of natural resources, principles which are now applied throughout our business.
Environment, Health and Safety
Johnson Matthey is firmly committed to managing its activities throughout the group so as to provide the highest level of protection to the environment and to safeguard the health and safety of its employees, customers and the community.
The company’s Environment, Health and Safety (EHS) policies provide the guiding principles that ensure high standards are achieved at all sites around the world and afford a means of promoting continuous improvement based on careful risk assessment and comprehensive EHS management systems. These policies, summarised in the company’s policy statement below are reviewed at regular intervals. This work has given greater emphasis to formal management systems, which bring a systematic improvement in performance. Corporate policies provide a framework for all Johnson Matthey businesses to formulate site specific policies to meet local requirements.
EHS compliance audits are an integral part of Johnson Matthey’s corporate EHS management system. 69 facilities from our operations worldwide are included in the audit programme. 30 audits have been carried out in 2003 (2002 – 32). Formal exit interviews with local site management are a feature of the audits and audit reports are reviewed by the Chief Executive’s Committee with routine follow up on any outstanding issues. During the year further site visits were made to oversee health surveillance programmes by the Group Occupational Physician.
Over the past year Johnson Matthey has undertaken a number of initiatives to improve environmental and health and safety performance. This has included considerable investment in manufacturing processes to reduce safety risks, improvements to planning of site health and safety actions and the installation of new emission control technology.
   
 
 
   
* On an equivalent basis, over the last year, key environmental emissions have reduced. For the first time the data now includes emissions due to the Synetix and other smaller acquisitions. This growth in the business has given rise to increases in emissions for the year which are highlighted on the graphs in the lighter shade. Plans are in place to return emissions to a downward trend. The environmental data is for the calendar year.
   
  ISO 14001 Over the past year significant strides have been made in the implementation of ISO 14001. This progress has been led by the Environmental Catalysts and Technologies business where a programme to certify the entire business has been initiated. At present 16 sites are certified to the standard with a further two sites in the final stages of assessment. 45% of our staff work at sites with ISO 14001 accreditation, representing some 3,554 people.
Training Training is vital to ensuring continuous improvements in health and safety at all our sites. Over the past year staff of all grades have received training. There is a wide range of courses available to staff including courses on managing safely and site safety practices. Our major sites employ health and safety training specialists. Expert external trainers supplement in house capabilities where necessary.
Target Setting One of the key aims of Johnson Matthey’s EHS policies is to demonstrate continuous improvement in EHS performance. The group performance against targets is shown below. The targets are set in line with the UK Health and Safety Executive Revitalising Health and Safety initiative with a baseline year of 2000 for our worldwide operations.
   
 
1 Reduction of working days lost by 15% by 2004 and by 30% by 2010.
Target – 35,639 working days lost per 100,000 employees
Actual – 30,630 working days lost per 100,000 employees
   
2 Reduction in the incidence rate of major injuries by 5% by 2004 and 10% by 2010.
Target – 1,862 > 3 day accidents per 100,000 employees
Actual – 922 > 3 day accidents per 100,000 employees
   
  Given current performance we will be revising our future targets in the next year.
A group wide review of environmental performance is undertaken annually.
Targets are also set locally by business units to drive improvement in environmental, health and safety. Typical targets include:
   
 
> Reduction in waste or emissions to air or water.
> Reduction in energy or commodity use.
> Training of a certain number of employees on EHS issues.
> Undertaking a certain number of inspection programmes.
> Reviewing a target number of risk assessments and implementing new controls.
   
  Supply Chains Johnson Matthey supports the principles set out within the United Nations Universal Declaration of Human Rights and International Labour Organisation Core Conventions. Management of supply chains and contractor activities is a core component of the group EHS management system. Whilst we are confident of the human rights performance of our own operations we recognise that business practices in the supply chain are not always transparent and represent a risk that must be managed.
Community Activities The CSR review includes details of the community activities carried out by Johnson Matthey. In the UK the charity of the year programme has so far raised £30,000 for Diabetes UK. The company also supports many other charities locally and nationally through donations, employee time or loans of company facilities. As noted in the Directors’ Report, total charitable giving in 2003/04 was £313,000.
Verification The board and audit committee review CSR issues as part of the company’s risk management processes. A review of site based environment, health and safety reporting systems forms part of the group environmental, health and safety audit programme. The board believes that the measures taken to review the CSR information provide a suitable level of confidence without external audit. Johnson Matthey utilises external specialists where specific CSR issues are identified.
   
 
 
   
* On an equivalent basis, over the last year, key environmental emissions have reduced. For the first time the data now includes emissions due to the Synetix and other smaller acquisitions. This growth in the business has given rise to increases in emissions for the year which are highlighted on the graphs in the lighter shade. Plans are in place to return emissions to a downward trend. The environmental data is for the calendar year.
   
 
   
 
   
 

Johnson Matthey is firmly committed to managing its activities throughout the group so as to provide the highest level of protection to the environment and to safeguard the health and safety of its employees, customers and the community.
The company’s Environment, Health and Safety policies have been widely disseminated and provide the guiding principles necessary to ensure that high standards are achieved at all sites around the world. They also afford a means of promoting continuous improvement based on careful risk assessment and comprehensive EHS management systems, against which all sites are audited.

This policy and its associated procedures are designed to achieve the following corporate objectives:
   
 
> That all locations meet legal and group environment, health and safety requirements.
> That the design, manufacture and supply of products is undertaken so as to satisfy the highest standards of health, safety, environmental protection and resource efficiency.
> That management systems are effective in maintaining standards and fulfilling the challenge of securing continuous improvement in environmental, health and safety performance.
  In order to achieve these objectives we will:
> Provide leadership and commitment as an expression
of the importance that the board and the senior management team places on EHS issues.
> Ensure accountability by holding corporate management and senior executives within each operating division and business unit responsible for EHS performance.
> Provide the financial and human resources to allow EHS issues to be given an appropriate level of priority.
> Provide good communication internally and externally and encourage employee involvement and cooperation at all levels in the organisation in meeting EHS objectives.
> Ensure competence on EHS matters through education, training and awareness at all levels in the organisation, including creating an understanding of individual responsibilities for health and safety and the environment.
> Undertake assessments to identify the risks to health, safety and the environment from company operations and ensure that appropriate control measures are implemented.
> Ensure that new investments are designed and operated to the latest standards so as to eliminate or minimise risks to health, safety and the environment.
> Investigate incidents to identify the root cause and take action to prevent recurrence.
> Promote programmes to achieve energy and resource efficiency.
> Set key corporate objectives and performance targets that can be measured and assessed, reporting results in a meaningful and transparent way both internally and externally.
> Undertake regular EHS inspections and internal audits of operations, and review performance to ensure continuous improvement in EHS management.
   
  The group EHS management system will be reviewed regularly to ensure that it reflects international best practice and our growing understanding of the practical application of sustainable development.
   
 
   
 
   
 

Employment Policies
Equal Opportunities It is the policy of the group to recruit, train and manage employees who meet the requirements of the job, regardless of gender, ethnic origin, age or religion. Employees who become disabled and disabled people are offered employment consistent with their capabilities.

Training and Development of People Johnson Matthey recognises the importance of recruiting the very highest calibre of employees, training them to achieve challenging standards in the performance of their jobs, and developing them to their maximum potential.
Our policy requires careful review of organisation structure, succession and the development of high potential people to meet our business goals. The Management Development and Remuneration Committee of the board takes a special interest in ensuring compliance with the Training and Development of People Policy.

Training and Development of People Policy
 
> Ensure highest standards in the recruitment of staff.
> Assess training needs in the light of job requirements.
> Ensure relevance of training and link with business goals.
> Employ and evaluate effective and efficient training methods.
> Promote from within, from high potential pools of talent.
> Understand employees’ aspirations.
> Provide development opportunities to meet employees’ potential and aspirations.
   
 

Employee Relations and Communication Johnson Matthey recognises the importance of effective employee communications. Information and comment is exchanged with employees through the company’s in house magazine, regular news bulletins, presentations to staff and team briefings.

Business Integrity and Ethics Policy Statement A reputation for integrity has been a cornerstone of Johnson Matthey’s business since it was founded by Percival Norton Johnson in 1817. It gives customers the confidence that the company’s products meet the standards claimed for them and that they may safely entrust their own precious metals to Johnson Matthey for processing and safe keeping. Employees at all levels are required to protect Johnson Matthey’s reputation for integrity.
The company strives to maintain the highest standards of ethical conduct and corporate responsibility worldwide through the application of the following principles:
   
 
> Compliance with national and international laws and regulations is required as a minimum standard.
> Reputable business practices must be applied worldwide.
> Conflicts of interest must be declared and appropriate arrangements made to ensure those with a material interest are not involved in the decision making process.
> Improper payments of any kind are prohibited, similarly no gift whose value is material and which may be interpreted as a form of inducement should be accepted or offered by Johnson Matthey employees.
> Reporting of business performance should be undertaken in such a way that senior management is fully and properly informed concerning the business’ true performance, risks and opportunities in a timely manner.
> Ethical issues must be dealt with in an efficient and transparent manner.
> A positive contribution to society as a whole, and specifically the communities in which we operate, must be ensured.
> We must seek to influence our suppliers to operate to similar high standards as ourselves.
   
  We support the principles set out within the United Nations Universal Declaration of Human Rights and International Labour Organisation Core Conventions.
All employees have a duty to follow the principles set out in this policy statement. It is the responsibility of directors and senior management to ensure that all employees who directly
or indirectly report to them are fully aware of Johnson Matthey’s policies and values in the conduct of the company’s businesses. It is also the responsibility of directors and senior management to lead by example and to demonstrate the highest standards of integrity in carrying out their duties on behalf of the company. These issues are further safeguarded through corporate governance processes and monitoring by the board and sub-committees to the board.
   
 
   
 

1950s…
  Automotive exhaust emissions are proved to be a major source of photochemical smog in Los Angeles..
   
  1960s…
The first federal emission standards to control pollution from automobiles are set in the US in 1965. These targets are met without catalysts.
   
  1970s…
> In 1970, US Congress substantially lowers vehicle emissions limits and lead is phased out in gasoline in the USA from 1972 onwards.
> Johnson Matthey files a patent in 1971 covering the use of a rhodium promoted platinum catalyst to control NOx and gaseous organic compounds.
> In 1972, Johnson Matthey proves to the Environmental Protection Agency that the US emissions regulations can be met using rhodium-platinum catalysts.
> The first cars fitted with oxidation catalysts reach showrooms in the USA in 1975; unleaded gasoline is widely available.
> Japanese vehicle emissions standards to control HC, CO and NOx come into effect in 1976.
> US Clean Air Act amendments made in 1977 agree to tighten emissions standards further from 1981 onwards.
> Increased substrate surface area helps to improve pollution conversion efficiency of catalysts.
   
  1980s…
> More sophisticated ‘three-way’ catalytic converters are introduced in 1981 to meet strict NOx limits.
> Performance of three-way catalytic converters significantly enhanced by use of improved oxygen storage materials (based on cerium dioxide)
in catalyst washcoats.
> Vehicle emissions regulations introduced in Australia, incentives introduced in Germany.
   
  1990s…
> In 1990, Johnson Matthey files a patent covering the use of NO2 to reduce the combustion temperature of diesel particulate matter in a filter,
a system subsequently commercialised as the Continuously Regenerating Trap (CRT®).
> New legislation introduced in Japan in 1991 sets much more stringent vehicle NOx emissions limits.
> European Union emissions regulations that necessitate the use of catalytic converters (Euro 1) come into effect from 1993.
> In 1996, European Union emissions regulations tighten as Euro 2 standards are applied. Californian Low Emission Vehicle (LEV) standards come into force, emphasising the cold-start control of pollutants; palladium based catalysts found to be particularly suited to controlling HC emissions on engine start-up.
> Further improvements made in substrate surface area of catalysts.
> National Low Emissions Vehicle (NLEV) emissions standards take effect in the USA from 1999, requiring very substantial reductions in NOx.
   
  2000 Onwards
> EU emissions standards for all road vehicles become more stringent with introduction of Euro 3 regulations in 2000.
> A substantial retrofit programme is created by the Tokyo Metropolitan Government in a move to improve particulate pollution from diesel trucks and buses in the city.
> Diesel car sales in Europe surpass six million vehicles for the first time.
> Phase in of US Tier II emissions standards begins in 2004. These mandate further large reductions in NOx and particulate matter emissions. Tier II compliant vehicles are up to 99% cleaner than vehicles sold in the 1960s.
> Regulations will be introduced in the EU and USA between 2005 and 2010 which will create a significant new original equipment market for exhaust aftertreatment products.
   
 
   
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