Ercros S A : Annual report on corporate social responsibility (point 2nd A)

CORPORATE SOCIAL

RESPONSIBILITY REPORT

STATEMENT OF

NON-FINANCIAL INFORMATION

CORPORATE SOCIAL RESPONSIBILITY REPORT STATEMENT OF NON-FINANCIAL INFORMATION

1	Letter from the Chairman	4
2	Verification certificate	6
3	Object, methodology and materiality	7
4	Introduction	8
5	Business model	12
6	Non-financial risks	18
7	Contribution to the sustainable
	development goals ("SDGs")	21
8	Respect for human rights	26
9	Fight against corruption and bribery	31
10	Environmental matters	36
11	Staff matters	49
12	Gender diversity and equal opportunities	62
13	Supply chain	74
14	Social matters	83
15	Dialogue and transparency	90
16	Degree of compliance with the indicators
	contained in the CSR guide for the chemical
	and life sciences sector	96
17	Responsibility for the statement
	of non-financial information	113

Company name: Ercros, S.A.

Tax ID No.: A-08000630

Registered office: Avda. Diagonal, 593-595, 08014 Barcelona

Tel.: [phone]

Email: [e-mail]

www.ercros.es

Barring those cases in which the comprehension of the text so requires, all references contained in this document using the masculine gender will be considered as indistinctly referring to all persons, men or women, in order to avoid the repetition of terms and to facilitate the reading thereof.

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LETTER FROM THE CHAIRMAN

Corporate social responsibility report 2020

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Dear Madams and Sirs,

2020 was the year of covid-19. The impact

of the pandemic has been felt in all aspects of our lives and, of course, in the Ercros Group. At the beginning of this emergency, Ercros created the covid-19 corporate monitoring committee ("CMC-19")

and monitoring committees at all its facilities where, in close collaboration with employee representatives, it examined how the problem was progressing and designed plans to manage the situation. This has enabled the Group to implement preventive, organisational and control measures adapted to each production facility in accordance with the recommendations and mandates of the administrative authorities responsible; to reduce the spread of the virus among

its workers; and to ensure that business activities are maintained. Thanks to these measures, the Group has continued its production as normal as a chemical company providing essential services.

In 2020 we continued to make progress with regard to the environment, sustainability and governance. We have implemented a zero tolerance policy with regard to market manipulation, made progress in disseminating the code of ethical conduct, which has now been signed by practically all the staff, and maintained our commitment to voluntary programmes and agreements such as the UN Global Compact, the Responsible Care programme promoted by the chemical industry, and the code of good governance for listed companies approved by the Spanish National Securities Market Commission ("CNMV").

EcoVadis has rated the Ercros Group as a Platinum company, with a score of 81 out of

1. This rating places us among the top 1% of the best rated companies. We have also contributed to the achievement of the UN's

1. sustainable development goals ("SDGs") for people, the planet and prosperity.

In 2020 Ercros adhered to the Catalan government's climate action commitments, the main objective of which is to achieve carbon neutrality by 2050 by promoting the energy transition and adopting circular economy principles. Ercros' commitment to decarbonisation is clearly reflected in its 3D Plan, approved by the board of directors in January 2021.

In 2020 we reduced water consumption and greenhouse gas emissions per tonne produced. We have continued to devote efforts and resources to minimising the environmental impact of our factories and to improving the quality of the soil affected by carrying out our production activity in the past. Thanks to the logistical and operational improvements made in freight transport, we have saved 1,840 tonnes of CO2.

The Ercros Group's workforce remained stable in 2020. The fact that the vast majority

of our employees have indefinite-term contracts and that the length of service of our workforce is relatively long are clear indicators of the quality employment offered by the Group. However, we have a long way to go with regard to gender. Although the number of women has increased slightly during the year, we are aware that their weight in the workforce, 17%, can clearly be improved and will require a greater effort on our part.

With regard to prevention, all Ercros production facilities have successfully completed the process of migrating to the "ISO 45000 - Occupational health and safety management systems" standard. However, it has not been a good year in terms of

the accident rate, whereby the indicators have worsened after a very good 2019 in this regard. Carelessness in the tasks and activities being carried out is the reason behind the majority of accidents, which is why in 2021 we have launched a campaign to highlight this problem.

The changes in data on absenteeism due to common illness was also not positive in 2020. The increase in absenteeism is a widespread problem in the Spanish industrial sector, which was exacerbated this year

by the adverse effect of covid-19. We set up working groups to analyse the causes of absenteeism and establish measures to reduce the rate.

The training of Group employees is a

key tool for maintaining competitiveness and achieving safe work. In 2020, 93% of

the workforce participated in some training activity, for a total of 23,185 educational hours.

2020 was a complicated year from the point of view of distribution and transport. The numerous restrictions and regulations resulting from the covid-19 epidemic have made it difficult for the Group to sell its products and to supply the factories. In spite of this, thanks to Ercros' management and the willingness of all the Group's suppliers and customers, these restrictions have not affected operations and it has been possible to serve customers without affecting the service.

To strengthen the Customer Service Centre, a key element in the Ercros Group's value chain, a new management model has been implemented based on digitalisation with Zendesk, one of the most advanced customer relations tools on the market, while a new organisational structure has been implemented to streamline demand management, facilitate customer response and improve communication with the rest of the Group's departments.

The Group is involved in all the areas and communities in which it carries out its activities. It has therefore continued to train interns, sponsor local entities, donate food and resources to those affected by covid-19, and invest in research and development. The Group has also continued to provide transparent information to its employees, the media, its shareholders and the market, and has offered its knowledge by encouraging its staff to participate in seminars, debates, conferences and sector fairs.

2020 has been a challenge for everyone that makes up the Ercros Group, a challenge not only with regard to work, but also personally. Covid-19 was unforeseeable. We are successfully overcoming this challenge and are confident that it will be over soon.

As required by law, the external certification company Bureau Veritas has verified this statement of non-financial information and has rated the corporate social responsibility report "excellent", which demonstrates Ercros' commitment to sustainability.

Antonio Zabalza Martí

Chairman and CEO of Ercros

Barcelona, 19 February 2021

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