Indorama Ventures : Sustainability Report 2022

SHIFTING

TOWARDS

The

SUSTAINABILITY REPORT 2022

SUSTAINABILITY

REPORT 2022

This year's "Shifting Towards the NEXT Generation" report highlights IVL's three businesses, integrated value chain, and post-COVID growth, resilience, and sustainability plans.

NEXT represents different business segments, with the X symbolizing diversity and inclusion in purple, and the brown background representing IVL's 2022 implementation of a bio-based feedstock plan.

The report also emphasizes segment performance and contributions to achieving the 2025 and 2030 targets, highlighting our collective pursuit of sustainability excellence.

Indorama Ventures Public Company Limited

Chemicals

Sustainability Yearbook Member

S&P Global ESG Score 2022

80 /100

As of February 7, 2023.

Position and Score are industry specific and reflect exclusion screening criteria. Learn more at spglobal.com/esg/yearbook

A member of the S&P Global

Sustainability Yearbook 2022

Listed in the DJSI-World and Emerging Markets Indices for the fourth and sixth consecutive years respectively

in the Chemicals sector.

IVL was ranked in the 96th percentile.

KEY SUSTAINABILITY RECOGNITIONS

AND AWARDS IN 2022

FOR MORE

INFORMATION

Achieved the 99th percentile	Achieved an ESG Risk Rating	#1 constituent in the FTSE4Good
in an assessment of	in the 5th percentile among 227	Index Series
basic chemical companies	commodity chemical companies	(ESG score 4.5 out of 5)
	(1st percentile = lowest risk)

Achieved an A rating	Achieved a B rating	Achieved a #1 rank
	in the CDP's Climate Change	among 54 global
	Assessment	chemical companies

Winner	Winner	Highly Commended
"Top Sustainability Advocates	"Best Sustainable Product"	"Circular Transition"
in Asia"	with our DejaTM product

2	INDORAMA VENTURES PCL.
VISION - TO BE A WORLD-CLASS SUSTAINABLE CHEMICAL COMPANY MAKING GREAT PRODUCTS FOR SOCIETY.

The first Thai company to received the

"Asia Responsible Enterprise Award 2022"

in the Circular Economy

Leadership category.

Received the first "AMCHAM

Corporate Social Responsibility

Excellence Recognition 2022"

from the American Chamber of

Commerce in Thailand

Highly Commended

SET Sustainability Awards

for companies with market capital

beyond THB 100 billion

2022 Low Carbon and Sustainable

Business Awards

SUSTAINABILITY REPORT	3
2022

TABLE OF

CONTENTS

Key Sustainability Recognitions and Awards in 2022	3
Deputy Group CEO and Group Chief Financial	6
Officer Message	8
Chief Strategy Officer Message
Chairman of the ESG Council Message	10
Chief Sustainability Officer Message	12
IVL'S KEY ESG HIGHLIGHTS 2022	14

Chapter 1: Who We Are

Business and Value Chain Overview	20
Business Segments and Products	24
Strategic Achievements	26
Business Segments' Key ESG Highlights 2022	28
IVL's Targets and Performance	34
Outlook Towards 2024	35

Chapter 2: Our Sustainability Approach

IVL's Approach to Sustainability	38
Sustainable Value Creation	40
Risks, Opportunities, and our Future Outlook	46
Sustainable Financing	50	Chapter 3: Materiality
Roadmap Towards a Sustainable Future	52	58
Sustainability Highlights & Achievements of 2022	53	Stakeholder Engagement
			Thought Leaderships	62
			Engagement with the United Nations	62
			Major Industry Associations, Memberships	66
			and Collaborations	68
			Materiality Assessment 2022
			Chapter 4: Environmental Progress	72
			Supporting Sustainable Growth
			Innovation Across Our Portfolio	72
			Driving Circularity	80
			Advancing Towards Net Zero Carbon	88
			Improving Energy and Operational Efficiencies	91
			Renewable Energy Transition	93
			Emerging Technologies	96
			GHG Management	96
			Internal Carbon Pricing	96
			Sustainable Supply Chain Management	98
			Managing Our Environmental Impact	99
			Our Approach to Environmental Management	99
			Water Management	101
			Waste Management	103
			Air Pollution Management	105
			Biodiversity	106
4	INDORAMA VENTURES PCL.
VISION - TO BE A WORLD-CLASS SUSTAINABLE CHEMICAL COMPANY MAKING GREAT PRODUCTS FOR SOCIETY.

Chapter 5: Social Impact

Expanding Boundaries to Meet the Needs	110
of Customers	110
Focusing on Safe and Sustainable Products
Maintaining Strong Customer Relationships	116
Engaging Our Suppliers	118
Embedding ESG in our Supply Chain	118
Establishing a Robust Supply Chain Management	119
Process & System	119
Conducting Thorough Evaluations,
Due Diligence and Supplier Training	120
Ensuring Compliance in our Supply Chain
Investing in Our People	122
Developing World-Class Talent	122
Employee Performance Management	128
Creating a Conducive Workplace	132
Providing a Safe Workplace	138
Occupational Health and Safety (OHS) Performance	139
EHS Management and Compliance Systems	140
Employee Participation and Training in EHS	142
Plant Crisis Management	146
Giving Back to Our Communities	148
Recycling Education	152

Chapter 6: Robust Governance

Visionary Leadership Board of Directors	158
Board of Directors	158
Ensuring Responsible Business Practices	160
Corporate Governance	161
Sustainability Governance	162
Whistleblowing	165
Anti-Corruption	166
Acting with Transparency	166
Sound Risk Management	168
Internal Risk Management Processes	168
Risk Assessment and Mitigation	169
Risk Culture and Feedback Mechanisms	172
Business Continuity Planning (BCP)	173
Managing Cybersecurity Risks	174
Cybersecurity Governance	175

Chapter 7: Appendices

Global ESG Performance Data	180
GHG Scope 1, 2 and 3 Audit Certificate	192
Independent Assurance Statement	194
About this Report	198
Glossary	202
Contact and Feedback	203

SUSTAINABILITY REPORT	5
2022

DEPUTY GROUP CEO AND GROUP CHIEF FINANCIAL OFFICER MESSAGE

"THE FUTURE BELONGS TO THOSE WHO EMBRACE SUSTAINABILITY AND FOCUS ON ITS SUCCESS, ALONGSIDE SOLID BUSINESS PRACTICES AND A GROWTH MINDSET.

WITH OUR TRACK RECORD OF EXECUTING GROWTH SUSTAINABLY, INDORAMA VENTURES IS PROUD TO BE A LEADER IN THE CHEMICALS INDUSTRY AS WE MOVE TO CREATE A BETTER WORLD THROUGH OUR COMMITMENT TO CIRCULARITY, INTEGRITY AND INNOVATION."

In 2022, we continued investing in new sustainable technologies, with an ambition to use more bio-based and circular materials as feedstock. As we shift towards the future of circularity, we are partnering with Carbios, a green industrial biotech company, to build France's first PET bio-recycling plant, which will have the capacity to process 50,000 tons of PET waste per year. We also partnered with Polymateria, a London-based innovator, to introduce biodegradable hygiene products such as face masks to the market. The biotransformation technology employed in the products presents a new way of addressing plastic waste.

Expanding our recycled PET capacity will fortify our leadership position in our largest business segment. Around half of the world's PET today is recycled, and this will continue to grow as collection improves. In 2022, we launched our newest recycling facility in the Philippines in partnership with Coca-Cola. More plants are planned as we build towards our commitment to recycle 750,000 tons of post-consumer PET bottles by 2025, and 1.5 million tons by 2030, for an investment of US$ 1.5 billion.

To be a purposeful leader in sustainability, we established Indorama Ventures Investments & Holdings (IVIH), our start-up business incubator that invests in businesses that drive advancements in recycling, including bio-based chemicals and polymers, renewable feedstock, and biodegradable polymers. We have already identified 30 projects with the potential to deliver on these commitments.

Our Fibers segment achieved a Core EBITDA of US$ 212 million in 2022. This was lower than the previous year due to geopolitical events such as the Russia-Ukraine conflict and the energy crisis in Europe, which delayed a recovery in our Lifestyle and Mobility verticals. Nonetheless, the Hygiene vertical posted steady results and, moving forward, we plan to increase our R&D expenditure for personal care, hygiene, and safety products. We also acquired a wool spinning business in Italy and Poland to support the sustainable growth in our Fibers segment.

TAKING SWIFT ACTION FOR HEALTH & SAFETY

Our highest priority is the safety of our employees and communities, and we are committed to ensuring a safe working environment in all our operations. In 2022, we reinforced safety performance processes alongside our environmental performance, with a strict emphasis on developing assurance and capability as part of our Environmental, Health and Safety (EHS) culture in all our sites.

Despite our overall strong safety performance, we experienced some incidents. An accident resulted in a contractor tragically passing away while repairing a bulldozer at PT Indorama Petrochemicals (PTIP) in Indonesia. Indorama Polyester Industries Public Company Limited in Nakhon Pathom, Thailand, experienced a leak of a common heat transfer fluid that was successfully contained within 10 minutes. The event was handled swiftly, followed by a thorough investigation and pre-emptive

Following our strong performance last year, it is with deep gratitude to our teams around the world that once again 2022 was a record year for Indorama Ventures. Our excellent results are a testament to the company's geographically diversified and integrated portfolio, backed by our people's efforts and resilience. Our cutting-edge chemistry is at the center of our customers' daily necessities, with 70% of our products being integral components found in food and beverage packaging, home furniture, and personal care products. Indorama Ventures strives to lead the chemicals industry as a forward-thinking organization focused on sustainability, in alignment with our purpose of "reimagining chemistry together to create a better world."

LEVERAGING INNOVATION FOR SUSTAINABILITY

Our efforts in driving innovation and circularity within our product portfolio have been fruitful. Our DejaTM carbon-neutral pellets were awarded the Best Sustainable Product Award at the Chemical Week Sustainability Awards 2022. We also took the first place in the ChemScore ranking

for product safety for the second consecutive year. We are pleased to be included in the Dow Jones Sustainability Indices (DJSI) - World and DJSI Emerging Markets for the fourth and sixth consecutive years respectively.

We have an ongoing commitment to sustainability, backed by precise and ambitious goals and an established ESG framework.  Our sustainability goals ensure value creation and protection, while sustainable practices support new avenues of growth, such as through advanced recycling, for example.   

NEXT-GENERATION PARADIGM SHIFT

The polyester value chain links Indorama Ventures' global, integrated footprint, and connects all our businesses. Polyester is fully circular, which means sustainability potential is built into our business model. Our 'Vision 2030' is about adding to our industry leadership in sustainability, including through increasing our recycling capacity, introducing more circular feedstock into our products, and increasing resilience throughout our business.

STRONGER PERFORMANCE,

GREATER INNOVATION

In 2022, we reported a 31% year-on-year increase in Core EBITDA to US$ 2.3 billion. Our Combined PET segment recorded a robust Core EBITDA of US$ 1.3 billion, driven by our integrated business model and rising demand for recycled PET. The acquisition of Ngoc Nghia Industry in Vietnam bolstered our packaging portfolio. We also acquired an 85% equity stake in UCY Polymers, a Czech Republic-based PET plastic recycler.

The integration of the strategic Oxiteno acquisition in 2022 resulted in a 94% year-on-year EBITDA growth of our Integrated Oxides and Derivatives (IOD) segment. This was due to the addition of Oxiteno's High-Value-Added (HVA) surfactants portfolio, complemented by our combined R&D strength and efficiencies driven by Project Olympus, our operational and digitalization excellence program.

equipment changes. In the begining of 2023, a fire at the PTA production plant of Indorama Ventures Quimica S.L.U. in Spain, was contained quickly, with minor disruptions to operations. We are committed to continuously improving our EHS performance.

A SUSTAINABILITY-CENTRIC FUTURE

We believe the future belongs to those who embrace sustainability and focus on its success, alongside implementing sound business practices and a growth mindset. With our track record of sustainable growth, Indorama Ventures is proud to be a leader in the chemicals industry as we create a better world through our commitment to circularity, integrity and innovation.

DILIP KUMAR AGARWAL

Deputy Group Chief Executive Officer and

Group Chief Financial Officer

6	INDORAMA VENTURES PCL.
VISION - TO BE A WORLD-CLASS SUSTAINABLE CHEMICAL COMPANY MAKING GREAT PRODUCTS FOR SOCIETY.

SUSTAINABILITY REPORT	7
2022

CHIEF STRATEGY OFFICER MESSAGE

"THE AGGRESSIVE DECARBONIZATION OF OUR BUSINESS BY 2030 WILL BENEFIT OUR CLIMATE AND SETS THE STAGE FOR A NEW GROWTH CHAPTER AT IVL."

A JOURNEY OF OPERATIONAL

EXCELLENCE

Increased production costs due to fluctuating demand and supply have urged us to initiate operational excellence programs, such as Project Olympus and Project Titan. In 2022, Project Olympus delivered impressive EBITDA gains of US$ 475 million, thanks to our robust procurement and supply chain initiatives. This initiative seeks to boost the production capacity at our facilities, thereby sustaining the timely supply of high-quality products to our customers.

Apart from operational excellence, IVL's senior leadership is focused on integrating digitalization into our operations to enhance business productivity and growth. To achieve this goal, IVL's Aligned Systems and Processes (A.S.A.P.) project has progressed to the second phase, covering 23 entities across Combined PET, Fibers, and IOD, with over 1,100 users. Combined with IVL 4.0, the A.S.A.P project is aimed at standardizing the company's data, processes, and practices on a globally integrated digital core platform. Additionally, the company has also successfully implemented SAP S/4HANA, our flagship Enterprise Resource Planning software, in our IOD segment and Combined PET sites in the Americas.

TOWARDS NET ZERO CARBON

As we make headway in regard to sustainability, it is crucial that we remain agile and responsive by thoroughly assessing our potential risks and opportunities. To that end, IVL strives to maintain a holistic understanding of the local, national, regional, and global external environment, thus enabling us to take proactive measures to ensure that our business persists in being adaptable and sustainable.

EMERGING TRENDS AND

ITS IMPLICATIONS

We persistently monitor significant trends that may pose risks or benefits to our business, including the European Energy crisis, Carbon Tax Analysis including the EU Emissions Trading Scheme (ETS), climate change, water scarcity, and biodiversity loss. Although the challenges of inflation and an unsteady economy may test our sustainability efforts in 2023, we remain well-prepared to address these challenges via operational excellence and digitalization projects, as well as decarbonization projects.

To mitigate the impacts of climate change, we have introduced a comprehensive six-pronged decarbonization strategies, focusing on progressively phasing out coal, procuring renewable energy, and more. Synonymous with our approximately 900 climate change adaptation projects. In addition, we diligently work with our top suppliers to reduce our GHG Scope 3 emissions and support their efforts to achieve their and our carbon footprint reduction goals.

We will carry on weaving ESG principles into our business strategy, as it would not only meet the growing expectations of our customers and stakeholders, but also strengthen our business in terms of resilience and adaptability in the face of external challenges such as climate change and geo-political events. We are convinced that by promoting our ESG agenda at IVL, we can make progress and enhance our sustainability excellence.

UDEY PAUL SINGH GILL

Chief Strategy Officer

Remark: In the preparation of Mr. Udey Gill's retirement end of April 2023, Sanjay Ahuja becomes Group Chief Strategy & Transformation Officer as of February 1st, 2023.

8	INDORAMA VENTURES PCL.
VISION - TO BE A WORLD-CLASS SUSTAINABLE CHEMICAL COMPANY MAKING GREAT PRODUCTS FOR SOCIETY.

SUSTAINABILITY REPORT	9
2022