Sustainability.

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Recruitment, Training, Development and Diversity

Johnson Matthey’s employees are respected as the group’s most valuable resource and play a vital role in building a sustainable business. We are committed to recruiting high calibre employees and providing them with the information, training and working environment they need to perform to the highest standards. All employees are encouraged to develop to their maximum potential, supported by human resources policies and practices that are strategically linked to the needs of the business and our customers.

The skills, qualities and wellbeing of employees underpin the group’s success. An effective, streamlined recruitment procedure supports the steady requirement for high calibre graduates and career foundation training programmes are in place to engage new recruits. We also offer training and development programmes at middle and senior manager levels. Employees from acquired businesses are actively encouraged to attend programmes to expose them to the wider group culture and help them integrate. Our extensive portfolio of training is delivered at our facilities around the world and programmes include presentations from senior executives to anchor the course content to the company’s strategies and progress.

During the year we have reviewed our existing training and development programmes and, as a result, additional programmes have been added. We have introduced a sustainability awareness seminar to support and engage employees in our sustainability strategy, improve their understanding of our sustainability goals and enable them to plan their contributions towards achieving local and corporate sustainability objectives. An online version of this seminar has also been developed and is currently being trialled. We also identified the need to provide more specific development opportunities for managers in our manufacturing operations and a new global manufacturing and leadership programme has been launched to address this.

Our aim is to retain high potential and high performing staff. Providing career development opportunities for employees assists in staff retention and in turn, succession planning and the sustainability of management. Recruiting well qualified staff is vital to support business development, particularly in new and emerging markets such as in Asia, and this is achieved by appropriate manpower planning, local recruitment and the encouragement of international and cross divisional mobility. The group has a management skills inventory database to help to identify and match suitably qualified internal candidates to promotional and development opportunities globally and / or across our divisions as we strive to place the right people with the right skills in the right places. Beyond satisfying the immediate business needs, the company is committed to developing a more internationally diverse workforce to support its global business.

During the year we took part in a consultation with the UK Border Agency in relation to the UK government’s plans in relation to immigration restrictions. This continues to be an important issue for UK based businesses seeking to recruit the best people into roles in the UK and moving existing employees from outside the UK into UK businesses.

The group’s gender balance improved slightly this year to 78% male and 22% female.

Employee Relations, Communication and Engagement

The quality of our employee relations is a priority for Johnson Matthey and the company is proud of the high level of commitment and loyalty from its employees. We have a consistently low voluntary staff turnover (5.6% in 2010/11, see Group Key Performance Indicators) with many employees staying with the company for their whole careers.

Effective two way communication with employees is important and in particular, face to face dialogue. Communication on matters of interest to employees is exchanged through the in house magazines, attitude surveys, regular news bulletins, presentations and team briefings. Employees are also encouraged to access the group’s corporate intranet, sustainability intranet and website. As part of our ongoing programme of employee attitude surveys, this year our Process Technologies business carried out a survey amongst its 1,200 employees around the world.

The company supports employee share ownership and employees have the opportunity to participate in share ownership plans, where practicable. Under these plans, employees can buy shares in the company which are matched by a company funded component. Employees in six countries are able to contribute to a company share ownership plan or a 401k approved savings investment plan. Through these ownership plans Johnson Matthey’s current and former employees collectively held 1.84% of the company’s shares at 31st March 2011.

Johnson Matthey also sponsors pension plans for its employees worldwide. These pension plans are a combination of defined benefit and defined contribution pension arrangements, savings schemes and provident funds designed to provide appropriate retirement benefits based on local laws, custom and market practice.

The group has recovered well from the global economic slowdown which forced us to reduce employee numbers in 2008/09. In 2010/11 the group’s average employee headcount has increased by 9% on prior year.

Johnson Matthey continues to maintain good and constructive relations with all recognised trade unions which collectively represent 38% of all group employees worldwide. During 2010/11 no working time was lost within the group due to employee action.

The corporate sickness absence rate during 2010/11 was 2.1% which is unchanged from 2009/10. We continue to encourage our businesses to invest in sustainable health and wellness programmes to support the longer term health, wellbeing and performance of our employees. During the year a new web based health assessment package was launched to employees in the UK which provides advice on improving health and wellbeing based on their answers to an online questionnaire.

Community Investment

Johnson Matthey has a strong tradition for good community relations and the company and its employees are actively involved in programmes worldwide. We have an important contribution to make to the economic development of our local communities, not only as an employer but also through collaboration and investment, both financial and in kind. Johnson Matthey is a member of the London Benchmarking Group (LBG).

Guidance on site requirements for community relations is detailed in the group EHS management system and a review of community investment activities across the group is carried out each year. In 2010/11, the review indicates that 93% (all but three) of Johnson Matthey’s operations with over 50 employees participated in activities within their local communities. This is slightly down on last year, mainly as a result of new manufacturing facilities that commenced full operation in 2010/11 not yet having established community investment programmes. The review also demonstrates that a higher proportion of sites with over 50 employees have planned community investment activities for the year ahead.

Community activities at our sites are wide ranging and include charitable giving, support for educational projects, the advancement of science and economic regeneration projects. Employees also participate in activities or hold community related roles outside of the work environment. The company is supportive of this broader community engagement, allowing employees time off during working hours as appropriate. In efforts to further encourage volunteering amongst employees, benchmarking studies on the approach taken by other companies have been conducted this year. As a result, a group wide volunteering policy is being developed which will be issued during 2011/12. This forms part of a broader programme of work now underway to establish a more formal community investment strategy for the group. This will continue in 2011/12 with the aim of establishing a community investment strategy and policy during the year to support our operations around the world in developing their community programmes.

Johnson Matthey’s long history of support for charitable causes continues today through group and business programmes. The causes we support reflect the areas in which the group’s technologies have a benefit and the issues which strike a chord with our employees. At a group level, Johnson Matthey operates a charitable donations programme which includes support for organisations working in the areas of environment, medical and health, science and education, social welfare and international development. The programme includes an annual donations scheme where a number of charities are selected triennially and receive a donation from the company each year for a three year period. In 2010/11 48 charitable causes received an annual donation through this scheme. The group's programme also considers individual requests for support throughout the year and a further 58 charitable organisations received donations on this basis in the year. The group also has a specific programme of support focused on promoting the understanding and awareness of science among children and young people and began work on a number of new projects this year.

Johnson Matthey continues to select a charity partner to focus support on one particular cause and employee views are considered when identifying the charity. The group is supporting the British Heart Foundation and other national heart federations around the world in a partnership that will run to the end of 2011/12. Further details on the partnership are available in the Sustainability Report.

Johnson Matthey’s global sites also lend support to many other charities locally and nationally through donations, employee time or loans of company facilities. In response to the earthquake and tsunami which struck Japan in March 2011, Johnson Matthey’s employees and businesses across the globe have rallied together, raising funds to support relief efforts in Japan. At a corporate level Johnson Matthey has donated £10,000 to The Japanese Red Cross (via The British Red Cross) to support the charity’s relief efforts in the immediate aftermath of the disaster. Johnson Matthey’s operations around the world have also offered support to their national Red Cross or Red Crescent Movements or other charitable relief agencies working in Japan. For example, our Royston and Brimsdown sites in the UK held a special fundraising day to raise money for the British Red Cross’ work in Japan. Employees at the two sites were encouraged to wear items of red clothing and make a donation at one of the donation points around the sites. The majority of staff came to work dressed in something red – from red socks to red nail polish. The day was a great success and raised vital funds to support efforts in Japan. As the situation in Japan continues to develop, we are also consulting with our colleagues at Johnson Matthey in Japan to discuss developments and identify appropriate local charitable initiatives to support longer term rebuilding and rehabilitation work in the country.

In the financial year to 31st March 2011 Johnson Matthey donated £517,000 to charitable organisations, up 13% on prior year. This figure only includes donations made by Johnson Matthey and does not include payroll giving, donations made by staff or employee time. The company made no political donations in the year. We will continue to support a wide range of charitable causes in 2011/12.

Stakeholder Engagement

Johnson Matthey has a wide range of stakeholders with an interest in hearing from or working with the company. These include customers, employees, suppliers, fund managers, shareholders, communities, governments, non-governmental organisations (NGOs) and national and international trade associations. We aim to provide meaningful and transparent communications to meet the needs of all stakeholder groups and deliver information to them in the most appropriate format. These formats may include annual performance reports, participation in performance indices (Carbon Disclosure Project, FTSE4Good, for example) or one to one discussions on specific topics. We communicate with our stakeholders throughout the year and engagement is integrated into business decision making processes.

The company is actively involved with the Chemical Industries Association (CIA), the European Precious Metals Federation (EPMF), the EU association of the non-ferrous metals industry (Eurometaux) and plays a leading advisory role through participation in government bodies and a number of sector trade associations that are relevant to its business activities. The company is also engaged with national and local government to inform the development of policy in areas where Johnson Matthey’s technology and products can play a pivotal role. During the year, as part of our programme of responsible care for our products, Johnson Matthey has taken a leading role in establishing an industry sector group to improve the quality of existing risk assessments on applications of platinum group metals and to improve dialogue with external stakeholders.

Neil Carson, Chief Executive of Johnson Matthey, is a prominent member of the Corporate Leaders Group and is a member of the Advisory Board for the Cambridge Programme for Sustainability Leadership. A number of the company’s senior management are involved in the UK government’s sustainability and climate change initiatives. Johnson Matthey’s executives have also made a contribution to a range of organisations and committees during the year and the company continues to participate in numerous government consultations. We have also continued to support the activities of Forum for the Future.

At regular meetings with the company’s major shareholders, matters relating to sustainability and corporate social responsibility may be discussed together with the performance and development of the group’s businesses.

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