Managing Sustainability

Johnson Matthey has well established processes, policies and management systems for managing sustainability which are described in detail on the group’s website.

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The Board of Directors is ultimately responsible for social, environmental and ethical matters. These matters are embedded into the group’s risk management processes and reviewed annually by the board. The Audit Committee monitors performance and reviews the business risks associated with corporate social responsibility (CSR) at least once a year. Policies are set and approved by the Chief Executive’s Committee (CEC). The CEC also addresses risk and control issues and reviews key environment, health and safety (EHS), social and governance issues. The CSR Compliance Committee is a sub-committee of the CEC and has specific responsibility for setting standards and overseeing compliance with group standards and for identifying and monitoring EHS, social and governance risks. At a strategic and operational level, a group sustainability team, chaired by the Group Sustainability and Technology Leader, reports to the CSR Compliance Committee.

Group policies and management systems provide the framework for managing performance and driving continuous improvement. Sustainability is managed across the group according to five elements: financial; governance; social; health and safety; and environment.

Accountability at division and individual business level is an important underlying feature of Johnson Matthey’s culture and this principle is borne through in the way we manage sustainability. This emphasis on local action also plays a key part in Sustainability 2017 and has done so from the development work leading up to its launch in December 2007 and then subsequently since we have embarked on its delivery. Achieving our goals has always been underpinned by making sustainability our ‘way of doing business’ and the principle of fully embedding sustainability into our routine business processes and planning activities was established at an early stage.

Every business is required to include sustainability in its annual budget setting process and must define the nature of the programmes and projects to be undertaken, together with capital expenditure requirements and value generated over a three year business cycle. Target metrics that are meaningful in a local business context are requested as part of the plan, together with details of the contribution that the programme will make towards reaching the group’s overall objectives. The plans include the contribution to sustainability stemming from improvements in operations together with benefits derived from the development of new and improved products.

These plans are discussed with the Chief Executive’s Committee as part of the annual budget discussions, are reviewed by the Audit Committee and are formally approved by the board. As part of the process, progress against the Sustainability 2017 targets is assessed on a group basis to establish if additional management action is required.

Senior management rewards are based on achieving outstanding performance and enhanced earnings per share growth. Sustainability is an essential part of achieving such performance and is an integral part of the annual budget and strategic planning process as described above. Annual incentives and goals for middle management include personal objectives that can be used to drive sustainability.

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