Croda International : Sustainability Impact Report

Focused on impact

Delivering more for climate, nature and society

Sustainability Impact Report 2023

Contents

Sustainability Impact Report

CEO statement	1
At a glance	2
Business model	3
Our stakeholders	4
The road ahead	5
Enabling our strategy	7
Climate Impact	9
Performance table	13
Nature Impact	14
Performance table	18
People Impact	19
Performance table	23
Sustainability governance	24
Fundamentals performance	26

Visit croda.com for updates to our impact work throughout the year

Limited Assurance∆

∆indicates where metrics have been assured (limited assurance) under ISAE (UK) 3000 and ISAE 3410 by KPMG, our independent assurance provider and reflects the position for the year ending 31st December 2023. See www.croda.com/sustainability for details.

Key progress in 2023

Scope 1 & 2		Scope 3 upstream		Land area saved		Lives sustainably
emissions (TCO2e)		emissions (TCO2e)				improved by Croda
						Foundation projects
101,246∆		674,234∆	58,815		22.8 million
(2022: 121,122)	(2022: 918,810)		Hectares (versus		(since launch in 2021)
				2019 baseline)
Sales		Adjusted profit		Total Recordable		Water use reduction
		before tax (PBT)		Injury Rate
£1,694.5m		£308.8m	0.72	35%
2022: £2,089.3m		2022: £496.1m	(2022: 0.74)		(versus 2018 baseline)

Where we publish on sustainability	Annual	Sustainability	Reporting
Report	Impact Report	Data Pack	www.croda.com
Sustainability Commitment progress					
Non-financial information statement	
TCFD	
GRI			
SASB/ISSB review			
Principal Adverse Impact Statement			
Limited Assurance Opinion and Reporting Criteria					

Sustainability Impact Report

CEO statement

Steve Foots

Group Chief Executive

"It will be the fantastic efforts of all our employees that will deliver the positive impacts we strive to achieve, and I thank everyone at Croda and our partners for their commitment, hard work and positive approach to delivering against our goals."

1. The Global Risks Report 2024, 19th ed., World Economic Forum, www.weforum.org/publications/global-risks-report-2024
2. For more details on this work and reports against specific frameworks, refer to Where we publish on sustainability (opposite page) for their location.

2023 presented another turbulent year in a post-Covid world, where the twin shocks of high inflation and extended destocking impacted Croda's business. Beyond this frame, in addition to the visible impacts of climate change, geopolitical issues and the technological risks and opportunities of Artificial Intelligence dominate the short-term global risk agenda1.

However, as a leader, I am as interested in the longer-term risks and how our strategy reflects and acts upon them today. The most important 10-year risks remain connected to the sustainability agenda

• social inequality, environmental degradation, and the climate crisis. This reconfirms the importance of living our Purpose, Smart science to improve lives™, and delivering the right impacts on climate, nature and society through our Commitment launched in 2020, to become Climate, Land and People Positive by 2030. With this in mind we have decided from this year to focus this report on the impacts of our activities, bringing to life outcomes of the work we are prioritising across Croda2.

Working hard to meet our Science Based Targets (SBTs)

Delivering on our carbon emissions reduction targets will ensure we contribute to limiting the global temperature rise to below 1.5°C above pre-industrial levels. In 2023, our scope 1 and 2 emissions were 101,246 tonnes CO2e (2022: 121,122 tonnes CO2e), tracking

well below our SBT in part due to lower sales volumes. We are also targeting material upstream supply chain emissions reductions,

in 2023 introducing a new internal scope 3 dashboard and prioritising work with like-minded key suppliers.

Understanding and acting on our contribution to improve our impacts on Nature

We are already saving more land through the use of our crop and seed technologies than is used to grow our bio-based raw materials, and have challenged ourselves to go further. At the end of 2023 we are on track to meet our target to save at least 200,000 hectares more land per year in 2030 than in our 2019 baseline. We announced in 2022 our aspiration to build on this to contribute towards a Nature Positive world. Our focus this year has been understanding our impacts and dependencies on nature, where we have identified

and started taking action on land use change and freshwater as priorities in our supply chains and operations.

Our efforts to support staff within Croda

and wider society are having positive impacts

The Croda Foundation has sustainably improved the lives of more than 22 million people worldwide since it was founded as a charitable

organisation in 2021, while internally we have maintained a gender balanced Board and increased the number of women in leadership roles to 39% (2022: 38%), a leading position in our sector. Reflecting our absolute commitment to the safety of our employees and local communities, we have set a challenging target to reduce our Total Recordable Incident Rate (TRIR) to 0.3 by 2025. The 2023 rate fell slightly, with the second half of the year showing a 20% improvement over the first half. This is a step in the right direction, but there is so much more to do. As we focus on embedding safety as a value across Croda (rather than just an annual priority), in 2023 TRIR became an annual bonus scheme metric, and more than 4,500 hours of safety culture training were delivered to over 500 leaders.

Delivering impact through our customers

This work has real impact when it translates to helping our customers make the right decisions on their formulations and product offerings. Like Croda, they recognise most of their footprints are in their supply chains. In 2023, we launched our product-level carbon footprint (PCF) data to customers, covering the majority of our product portfolio and aligned with the industry guidance we helped create as members of Together for Sustainability (TfS) and the World Business Council for Sustainable Development (WBCSD). We also engaged extensively with customers in sharing broader Life Cycle Assessment (LCA) data on our ingredients; we see most impact- and value-creating business opportunities in the short and medium term arising from sustainability trends in customer markets.

Leadership in sustainability continues to evolve

We have set out to be a leader in the supply of innovative sustainable ingredients, and leadership expectations continue to progress.

As this report goes to press, we have been awarded Leadership status (A-) by CDP across our 2023 Climate, Water and Forest programs, confirming we are on track with our ambitions to be a sustainability leader. As I work with our Executive Committee and Board to refresh our sustainability strategy in 2024, I recognise the ongoing work

in Croda to ensure accountability for the various aspects of the sustainability agenda is embedded in the right parts of the organisation.

We also continue building the competencies every role requires to deliver on their sustainability responsibilities and support living our Purpose. It will be the fantastic efforts of all our employees that will deliver the positive impacts we strive to achieve, and I again thank everyone at Croda and our partners for their commitment, hard work and positive approach to delivering against our goals.

Steve Foots

Group Chief Executive

Croda International Plc Sustainability Impact Report 2023

1

Sustainability Impact Report

At a glance

Croda is the name behind some of the world's most successful brands. We use Smart science to improve lives™: creating, making and selling innovative ingredients that

are relied on by industries and consumers around the world.

Our global presence

Who we are and what we do

We use smart science to create high performance ingredients and technologies that improve people's lives. We target long-term, global positive impacts on climate, nature and society. We work with suppliers, customers, their consumers, and other stakeholders across our value chains to ensure sustainability, innovation, quality and resource efficiency are at the forefront of every Croda ingredient, process and relationship.

Consumer care

We develop innovative and sustainable ingredients that provide vital functionality in beauty and household cleaning formulations. We help our customers to differentiate their products, build strong brands, meet their sustainability commitments, and satisfy changing consumer needs.

Life Sciences - Pharma

We develop components and systems to deliver Active Pharmaceutical Ingredients (APIs), supporting our customers across the entire lifecycle of a drug: from early-stage research to commercial manufacture.

Life Sciences - Agriculture

North AmericaLatin America

845	460
employees	employees
£396.6m	£185.4m
sales	sales
5	6
manufacturing sites	manufacturing sites

EMEA

2,929

employees

£690.2m

sales

18

manufacturing sites

Asia

1,618

employees

£422.3m

sales

13

manufacturing sites

We are an innovation partner to major crop science companies and smaller customers, developing delivery systems to meet the sustainability challenges of current generation products and enabling future regenerative approaches to agriculture.

2 Croda International Plc Sustainability Impact Report 2023

Sustainability Impact Report

Our business model: Anticipating global needs to deliver positive impacts through our customers

The customer is at the heart of our business model. Croda innovation focuses on helping our customers to have the greatest impacts in their markets.

What we do and how it creates impact

Global	Problem	Solution	Product	Commercial	Global
Needs	Discovery	Development	Manufacture	Supply	Impact

We strive to anticipate customer needs in light of global developments

and trends - and then provide disruptive, innovative solutions that are crucial to protecting and restoring our planet and society. We promote and respond

to smart industry regulations and voluntary standards.

We aim to increasingly anticipate the downstream impacts and the future effects of our products.

Our sustainability-literate innovation teams benefit from new insights from customers and thought leaders on low-footprint ingredients and processes.

We want to meet consumer and end specifier demands for lowest footprint alternative ingredients (e.g. low carbon, water or other natural resources).

We also work to ensure sustainability performance criteria are embedded in our innovation, as we develop sustainable solutions from chemical, biotech or biological processes.

We lead our industry in the use of non-fossil raw materials, sourced sustainably. Through increased transparency in our supply chains we will deliver products that help customers achieve their own carbon reduction and climate ambitions.

Our multiple technology platforms provide a huge array of solutions, including yet-to-be commercialised technologies.

Our global reach and agnostic approach to technology mean we can select the products with the greatest positive impacts. We also work with industry consortia and trade associations on data sharing; raw material and ingredient traceability enable more informed decisions.

We are increasingly focusing

our innovation and smart science where they can improve most lives and have the greatest impacts on climate, nature

and society.

We work with many other organisations and consortia.

Croda International Plc Sustainability Impact Report 2023

3

Sustainability Impact Report

Our stakeholders: Where we create impact

Our employees

Our highly skilled employees choose to work for Croda because they identify with our Purpose, are excited by our Commitment and see our values of Responsible, Innovative and Together aligning with their own. We maximise our positive impact on our employees by keeping them physically and emotionally safe, paying a Living Wage, building their skills and competence, and giving them fulfilling roles. We connect them to our sustainability strategy through setting relevant individual objectives as well as supporting participation in our Sustainability Professionals Network or Sustainability Champions Network.

Our customers and markets

We deliver more than 6,000 specialty ingredients to more than 15,000 organisations worldwide. Our customers use our ingredients to differentiate their own products and to meet sustainability commitments, regulatory requirements and changing consumer demands. Climate change, biodiversity loss, widening inequalities, changing demographics, overexploitation of resources and innovation in digital technologies are transforming consumer demands. Through our customers and their products, our ingredients can improve consumers' lives by minimising the negative impacts of consumption and help make positive impacts on planet and society.

Our shareholders

Investor needs and expectations relating to environmental, social and governance (ESG) issues continue to grow. Regulations in many jurisdictions increasingly require investors and analysts to assess and publish the non-financial risks and opportunities associated with their investment portfolios. Our focus on impact and transparent approach to sharing data and information enables shareholders

to understand and calculate the positives that we bring to their portfolios.

Our suppliers

As a significant contributor to our impacts

on planet and society, we partner with suppliers to help improve sustainability practices in supply chains, and commit to sharing the benefits equitably. Working towards more sustainable sourcing is supported by activities that include supply chain mapping, certified transparency and direct investments, often in collaboration with industry partners to maximise impact.

Our local communities

Providing a Living Wage for all of our employees and contractors further benefits the communities where we live and work, along with continued investment in our sites. In addition, Croda employees donated 5,310 hours (2022: 5,336 hours) via our 1% Club through volunteering in their local communities. This focuses on STEM outreach through teaching in schools, summer camps and sponsoring students, prioritising disadvantaged and underrepresented groups. We also donate IT equipment to local schools.

Our innovation partners

Our partnerships with universities, research organisations and startups significantly contribute to the portfolio of technologies we can deploy to make an impact through

our ingredients. In return, our shared knowledge, understanding of the sustainability needs

of our customers, and collaboration helps them to secure funding and develop breakthrough technologies.

Industry	Sharing our knowledge as part of consortia	Society
	enables industry-wide challenges to be
	addressed. Working to make ingredients from
	sustainable sources more widely available for use
	has positive benefits industry-wide and for many
	manufacturers in the markets where we operate.
	Through trade associations and government
	engagement we actively contribute to improving
	regulatory and voluntary sustainability standards.

Our smart science is improving the lives of	Planet
people around the world. Our ingredients
improve health and wellbeing, for example
protecting people from skin cancer and
contributing to vaccine development projects
targeting WHO priority diseases. Alongside this,
the Croda Foundation is an independent
charitable organisation deploying Croda's
funding to improve access to healthcare, reduce
poverty and hunger, and improve livelihoods.

We are working to reduce the negative environmental footprint associated with our operations and value chain. We collaborate with external initiatives and organisations to better assess and measure our impacts and dependencies. This includes creating opportunities to restore ecosystems through investing in projects in our agri-based supply chains, and through the use of crop and seed innovations

to support more sustainable agriculture.

4 Croda International Plc Sustainability Impact Report 2023

Sustainability Impact Report

The road ahead: Challenges and megatrends

Of the trends affecting our markets and supply chains, we have identified three key global challenges where delivery of our Commitment can maximise positive impacts on climate, nature and society.

Feeding a growing population and restoring nature

Feeding a global population that is expected to reach 10 billion people by 2050 will require a 70% increase in agricultural output1. Food systems alone already account for a third of GHG emissions2,

two thirds of freshwater use, and over three quarters of biodiversity loss and most suitable land has already been farmed, so increased output will come from better yields. This will require more sustainable agricultural practices, and growing more resilient crops on less suitable land, supported by restoration of degraded ecosystems.

Living more sustainably within planetary boundaries

Population growth and increasing consumption, fuelled by the expansion of the middle class particularly in developing countries, are putting pressure on planetary systems such as water, climate and biodiversity, and scarce natural resources. Addressing this challenge requires transformational new approaches to consumption and circularity.

Global demand for health and wellbeing

The pandemic has made consumers more conscious of their physical and mental wellbeing, and expanded demands on healthcare systems, already increasing due to a growing and ageing population. This has increased demand for sustainably-sourced effective ingredients that are underpinned by science and support improved physical and mental health.

Our response to these global challenges continues to be shaped by two technology megatrends:

Demand for more sustainable products

Today's consumers want to live more sustainably, which influences their product buying behaviour. Consumer-facing companies want ingredients to help them deliver products with substantiated claims and assured information on their social and environmental footprints, including carbon, water and other resources. Crop science and agriculture businesses want innovative, biodegradable ingredients with a low footprint that have a positive impact on improving yields, soil health and biodiversity.

Avoiding negative impacts through biologics

Biologics are giant molecules manufactured inside animal cells

or micro-organisms that are transforming medicine and agriculture. Biologic drugs mean you can treat diseases in more targeted ways with fewer side effects. In crop science, naturally occurring microbes can act as fertilisers, while nucleic acids can enable targeted pesticides, reducing overall dosage with fewer unintended side effects, and fewer resources needed for the same beneficial impacts.

But these complex molecules are hard to make, difficult to keep stable, and require sophisticated delivery systems.

1. Food and Agriculture Organization of the United Nations. Global agriculture towards 2050.
2. Francesco N Tubiello et al 2021 Environ. Res. Lett. 16 065007.

Croda International Plc Sustainability Impact Report 2023

5

Sustainability Impact Report

The road ahead: A strategy focused on impact

Our Commitment is to be Climate, Land and People Positive by 2030, working towards our goal of becoming the world's most sustainable supplier of innovative ingredients.

17

da

m

en

t

al

2.3, 2.4

n

u

F

s

15.2, 15.3, 15.5

3.3, 3.4, 3.9

e

L

iv

t

a

i

n

s

d

e

P

o

Smart science

P

14.1

4.3

o

TM

s

t

to improve lives

i

a

t

i

m

v

i

e

l

C

13.2

5.5

Scan this QR code

Climate Positive: we are delivering absolute reductions in greenhouse gas (GHG) emissions in line with our verified 1.5ºC Science Based Target. We have started to provide customers with verified product-levelcarbon footprints (PCFs) that, together with the avoided emissions in use that our technologies can provide, will help them deliver on their own climate targets.

Land Positive: using natural resources brings a responsibility to take a holistic approach

to nature and the role of ecosystems in achieving climate goals, whilst also addressing social inequalities. We are already Land Positive: our crop and seed technologies save more land than is used to grow our bio-based raw materials. We now aspire to contribute to a Nature Positive world by 2030.

People Positive: we use Smart science to improve livesTM, from targeting vaccine solutions for the most challenging diseases to protecting millions of people from damage caused by the sun. Internally, we recognise the value of diversity and are working towards ambitious targets to make a positive difference.

		to discover more
about our Commitment
12.2, 12.5,							6.3, 6.4
12.6, 12.7
P	e	o					e
				v
		p		ti
			i
				le Pos
							7.2, 7.3

8.5, 8.8

9.4

See page 8 for the UN Sustainable Development Goals and Targets we have connected to our Commitment wheel and business models

Part of our strategy to reduce our negative impacts and increase our positive impacts on climate, nature and society includes our Fundamental targets. These represent the social licence required for a multinational manufacturing company, such as Croda, to operate in 2030. In setting them we considered all stakeholders in our ecosystem and strive to adopt best practices in environmental protection, labour and human rights, ethics and sustainable procurement.

Several of the targets and KPIs that we have grouped and reported as Fundamentals in the past are more aligned with our climate, nature and society impacts. They have therefore been reported on the relevant progress page at the end of each section.

As we become a partner of choice for our customers and suppliers in delivering on this strategy, we are identifying the priority areas for action:

• Sustainable Supply Chains: targeting material upstream scope 3 reductions and minimising our impacts on nature.
• Transformational Sustainable Innovation: creating a product portfolio that supports our customers' Net Zero and Nature Positive goals.
• Positive Downstream Impacts: working with stakeholders to improve people's lives and identify how we can maximise the positive impacts of our products during their use and at end of life.

6 Croda International Plc Sustainability Impact Report 2023

Sustainability Impact Report

How we enable our strategy

To ensure Croda and our value chains are 'match fit' to deliver on our Commitment, we have focused on two key enablers: data and employee competency building.

Transparency and traceability of our supply chains...

As a speciality ingredient manufacturer we source bio-derived and mineral materials. We believe sustainability begins at the source, which makes raw material traceability and data transparency important factors in our strategy. Such insights help us to identify potential risks linked to environmental degradation and human rights, and then seek to minimise those impacts For example, we require suppliers

to communicate the country and sub-national region of origin for all our materials so we can better understand risks linked to each and develop a relevant strategy.

...for our customers

Our customers and other stakeholders increasingly expect a high degree of transparency regarding the ingredients they use. We work across extremely complex supply chains for many thousands of raw materials and products to deliver this. We are already starting to provide product-specific Life Cycle Assessment (LCA) data and, in 2023, launched product carbon footprint (PCF) data to our Beauty Care customers (see case study). This will help our customers, and ultimately end consumers, to make more informed choices.

Engaging employees and building sustainability competences

Croda has always prioritised investment in the development of new knowledge and skills to help our people to thrive and, as a result, are continuously adding value to our customers and maintaining our ability to attract and retain the best talent. In 2023, we developed the framework for a Sustainability Academy

to help employees acquire the skills they will need to operate in a rapidly changing context, help Croda deliver our Commitment and further their career development. We are piloting the programme in 2024 with senior leadership and commercial teams, with a view to rollout in 2025.

"Our aim is to provide everyone at Croda with an up-to-date understanding of sustainability, building the competence of our employees globally so we can deliver our Commitment, and at the same time help them acquire new skills to further their career prospects."

Aris Vrettos

Director, Sustainability Strategy and Transformation

Product carbon footprints (PCFs):

Croda has developed a tool to automate the calculation of cradle-to-gate product carbon footprints for the majority of our Beauty Care portfolio. Launched to customers in the summer of 2023, and aligned with the guidance from Together for Sustainability (TfS), it covers scope 1 direct greenhouse gas emissions, scope 2 emissions, scope 3 emissions for raw materials, plus data on transport

and other areas. "The aim is to create a validated methodology to measure the carbon footprint of ingredients at a product-specific level," says Cara Eaton, Sustainability Director, Consumer Care. "The availability of far more granular data is incredibly valuable to Croda and our customers, moving us beyond compliance. We can identify emissions hotspots within our portfolio and put decarbonisation strategies in place, and customers can make more informed decisions as they work towards their own targets."

ASD Impact Fund:

We are contributing to the first Impact Fund of Action

for Sustainable Derivatives (ASD), developed in partnership with Tides Foundation and Kaleka, launched in March 2022 with five other ASD members. Its purpose is to find ways to sustainably restore the landscape and support socioeconomic growth in a priority region (Central Kalimantan, Indonesia) with strong links to our palm derivative supply chain. In its first pilot year Kaleka has reported meeting its objectives, including recruitment of >600 farmers to become RSPO certified and 500 hectares of forest protected through a social forestry scheme. This project is a great example of the overlap between climate, nature and social impact through one investment programme, and Croda continues to commit

to the Fund in 2024. To read more visit: https://sustainablederivatives.org/our-impact

Croda International Plc Sustainability Impact Report 2023

7

Sustainability Impact Report

Sustainability strategy: Connected with the SDGs

			Value chain													Operations															Products and services
	8.5	12.2	12.7	13.2	15.2	15.5		3.9	4.3		5.5	6.3	6.4	7.2	8.8	9.4	12.5	2.3	2.4	3.3	3.4	7.3	13.2		14.1	15.3

Consumer Care

Beauty Care

Beauty Actives

Home Care

Fragrance and

Flavours

Life sciences

Seed Enhancement

Crop Protection

Pharma

Our ratings and frameworks

While our focus is on delivering impact, we also understand the value of external ratings to our stakeholders. We use the submission and feedback processes from ratings such as MSCI, Sustainalytics, EcoVadis and CDP to learn and improve our approach across the sustainability agenda.

As this report goes to press, we have been awarded Leadership status (A-) by CDP across our 2023 Climate, Water and Forest programs, confirming we are on track with our ambitions to be

a sustainability leader.

8 Croda International Plc Sustainability Impact Report 2023