2019 Sustainability Report

We are invisible! But we are everywhere!

Table of contents

Letter to Stakeholders .......................................................................................................................................

3

The process for the preparation of the first Sustainability Report ...................................................................

5

1. A history spanning over 100 years ............................................................................................................

9

1.1

Made in Italy since 1918....................................................................................................................

9

1.2

Our organisation..............................................................................................................................

10

1.2.1

Governance..............................................................................................................................

11

1.2.2

Economic performance ...........................................................................................................

12

1.2.3

Associations .............................................................................................................................

13

2. Our invisible strength ..............................................................................................................................

15

2.1

A high-quality production process...................................................................................................

15

2.2

Careful selection of materials..........................................................................................................

18

2.3

Our team..........................................................................................................................................

20

3. Attention to the environment and safety ...............................................................................................

25

3.1

Environmental protection ...............................................................................................................

25

3.1.1

Water withdrawal and discharge ............................................................................................

26

3.1.2

Waste.......................................................................................................................................

26

3.1.3

Emissions of pollutants............................................................................................................

27

3.1.4

Energy consumption and greenhouse gas emissions..............................................................

28

3.2

The health and safety of workers and customers ...........................................................................

29

Methodological note .......................................................................................................................................

32

GRI Content Index............................................................................................................................................

35

2

Letter to Stakeholders

Dear readers,

More than one hundred years after the establishment of Industrie Chimiche Forestali, I am proud to present you our first Sustainability Report, which is not intended to meet a legal obligation but rather to tell us and share with you our future commitments.

Demonstrating far-sightedness and a strong focus on emerging social and environmental issues, since 1998 we have decided to join the "Responsible Care" Programme, which promotes the Sustainable Development of the Chemical Industry worldwide according to values and behaviour oriented towards health, safety and the environment. This voluntary programme, launched globally since the eighties, represents excellence on the industrial scene: a unique, ethical and sustainable way of working and creating a corporate culture at the same time, improving company performance in terms of occupational health and safety and environmental protection.

This growing attention led us to offer our customers increasingly eco-friendly products without compromising their functionality and performance. We have in fact been working for years on the replacement of hazardous substances present in the formulation of our products and on the development of eco-friendly and low VOC adhesives, challenging working methods and technologies consolidated over time.

At Industrie Chimiche Forestali, there is a strong sense of belonging and teamwork. We strongly believe in the value of our people to whom we guarantee the opportunity of a qualified job and on which we invest to enhance their talents. This investment translates into a constant commitment to their personal and professional growth through numerous training activities.

In line with this spirit, we operate with respect for the safety not only of our employees but also of our customers and the surrounding population. Properly trained personnel and the development of processes and plants with high standards of quality and safety are the prerequisite that we put before any other consideration of economic opportunity. Quality, environment and safety are inseparable aspects of our entrepreneurial activity, which are also reflected in the maintenance and continuous improvement of Management System certifications, some of which were obtained more than twenty years ago and have therefore become a common working method for all our employees.

Our continuous investments in the research and development of innovative products, in plant design and in the training and safety of our employees guarantee us the possibility to grow in the medium-long term and the ability to operate in the global market.

For all these reasons, at Industrie Chimiche Forestali, we have made the integration of economic, environmental and social sustainability into the business our strong point, demonstrating on the market a better ability to be competitive as well as dynamic and flexible. We can only hope that what we have been doing for years at Industrie Chimiche Forestali is an incentive for all of you and that it will allow us to build a virtuous chain able to guarantee the end customer a safe, environmentally friendly and ethical product.

Chief Executive Officer

Guido Cami

3

Respect for nature

is also in the hands of

all those who do this work.

4

The process for the preparation of the first Sustainability Report

Industrie Chimiche Forestali S.p.A. (hereinafter referred to as ICF or Group) has decided to draw up its first Sustainability Report (hereinafter also referred to as "Report") with the aim of establishing an increasingly transparent communication towards its stakeholders and to describe the main information and initiatives relating to environmental, social and economic aspects that have characterised the Group for over 100 years.

The process undertaken by the Group for the preparation of the Report involved top management and the various corporate functions in the identification of relevant topics, the preparation of the document and the collection of data and information useful for the preparation of the Report.

The Sustainability Report of ICF was prepared in accordance with the Global Reporting Initiative Sustainability Reporting Standards (in short "GRI Standards"), the sustainability reporting standards whose reference principles and indicators are the most widely used and applied internationally.

The activities underlying the first preparation of the Sustainability Report are described below, i.e. the identification and prioritisation of stakeholders involved in the sphere of ICF and the analysis of non-financial topics relevant (or "material") for the Group in line with the GRI Standards.

Our stakeholders

The identification and prioritisation of the Group's stakeholders represents a substantial step towards the subsequent identification of the most relevant sustainability topics on which to focus the contents of the Sustainability Report.

The different stakeholders of ICF have been mapped on the basis of the analysis of the company structure, business activities, value chain and network of relationships existing around the Group. Subsequently, through the involvement of top management, the stakeholders identified were classified according to the following criteria:

  • impact on ICF: ability of the stakeholder to influence strategic or operational decisions of the Group;
  • ICF dependency: the level of stakeholder dependency on the choices, products and activities of the Group.

This analysis made it possible to assign a level of priority to the various categories of stakeholders with whom the Group intends to promote communication and bilateral dialogue initiatives in the coming years with the aim of establishing and consolidating a relationship of trust and continuous dialogue.

5

Material topics

A key step in the preparation of the Sustainability Report according to the GRI Standards is the identification of material sustainability topics on which to focus reporting.

ICF then carried out an initial mapping of sustainability topics potentially relevant to the Group on the basis of a series of activities aimed at analysing the context in which the Group operates (benchmark analysis with respect to a selection of competitors and customers belonging to different sectors of interest, analysis of the press review focused on ICF, analysis of emerging sustainability trends in the chemical industry). Subsequently, the results obtained were cross-referenced with contributions received from top management and the various corporate functions and with the set of sustainability topics indicated in the GRI Standards in order to define a universe of potentially relevant topics.

Subsequently, in order to identify material topics among those potentially relevant, ICF carried out the materiality analysis, i.e. it assessed the various sustainability topics identified according to their relevance for the Group and its stakeholders as required by the reporting standard.

In particular, through the holding of a workshop attended by the Group's top management, it was possible to define an order of priority for sustainability topics based on their relevance to ICF. The Group assigned priorities to topics by taking into account not only the qualified opinion of the key figures of the Group, but also ICF's formal commitment to the topics submitted for analysis, the strategic priorities of the company and the main areas of environmental, economic and social impact of the organisation.

In determining the relevance of sustainability topics from a stakeholder perspective, the priority levels resulting from the context analyses carried out were taken into account:

  • the benchmark analysis with respect to comparable Italian and international companies and customers of the Group operating in the main ICF sectors (automotive, packaging, footwear and leather goods), which has made it possible to distinguish the sustainability topics that are most frequently dealt with on the websites and in public documents;
  • the analysis of relevance with respect to the media and public opinion of sustainability topics through the recognition of the main events affecting ICF in the year of reference, examining the main articles in local and international newspapers;

6

  • the analysis of pressures in the field of sustainability for the chemical industry through the identification of the topics most discussed in the publications of the main industry associations (Federchimica, FEICA, etc.) and some international organisations (RobecoSam, SASB, etc.);
  • the analysis of sustainability trends at global level through the mapping of the sustainability topics most considered by major stock exchanges, sustainability rating agencies (DJSI, MSCI, etc.), international organisations (GRI, World Economic Forum, etc.) and government institutions (EU, UN, etc.).

As described above, in the future ICF will work to complement these context analyses with direct stakeholder engagement activities, aimed at stakeholders inside and outside the Group, to gather the impressions of key stakeholders and to orient reporting according to the expectations declared personally by the stakeholders themselves.

The overall result of the materiality analysis is represented through the ICF materiality matrix, which indicates the importance of each topic according to its relevance for the company (horizontal axis) and its relevance for stakeholders (vertical axis).

In the light of the matrix, the material topics on which the contents of this Sustainability Report will be focused are those falling under the green coloured boxes, i.e. the topics that were significantly relevant for ICF and/or its stakeholders:

7

  • topics related to regulatory compliance and environmental impacts of production processes: Environmental compliance, Effluents and waste, Emissions of pollutants, Energy and climate change, Water consumption, Raw materials;
  • topics related to products and their use: R&D and Innovation, Customer Health and Safety;
  • topics related to the Group's relations with its employees: Employment, Training and education, Occupational health and safety;
  • topics related to the Group's business: Economic performance.

8

1. A history spanning over 100 years

1.1 Made in Italy since 1918

The history of the Group began in 1918, the year in which the company Forestali s.r.l. (hereinafter referred to as Forestali) was established to extract the pyroligneous acid from the wood of the Maccagno forests in the province of Varese. In the twenties, the production of formaldehyde as a derivative of pyroligneous acid began, first in Maccagno and then in the plant in Sesto San Giovanni (MI). The activity of Forestali was then strengthened in the thirties with the establishment of the Società Italiana Resine (SIR) for the production of phenolic resins in Sesto San Giovanni.

In 1941, the production of special impregnated fabrics for the footwear industry began and in the fifties the production of adhesives. After the sale of SIR, formaldehyde production continued in Maccagno and Sesto San Giovanni until 1983, when the company stopped production in basic chemicals and focused definitively on the upstream segment of the footwear industry.

In 1984, Forestali produced a complete series of adhesives and auxiliary products for industries other than footwear: Durabond was created, a complete line of technical adhesives for furniture and, at the same time, high-quality and easy to use adhesives were formulated specifically for export to developing countries. Today, Durabond is present in Italy, Europe and over 30 non-European countries.

In 1987, Forestali relocated production from the plant in Sesto San Giovanni to the new plant in Marcallo con Casone in the province of Milan and on 31 December 1999 ceased production of fabrics for toe caps and counters at the plant in Maccagno. In October 2006, the Company changed its name to Industrie Chimiche Forestali S.p.A.

In 2016, the company Adhesive Based Chemicals S.r.l. (hereinafter ABC) was merged and became a division within ICF. ABC started its activity in 2005 in Marcallo with Casone, as a company fully dedicated to the polyurethane adhesive industry, focusing its activity in research, development, formulation and production of polyurethane adhesives for industrial applications for different sectors, mainly automotive, flexible packaging, graphic arts and industrial applications.

On 14 May 2018, the entire share capital of Industrie Chimiche Forestali S.p.A. was acquired by EPS Equita PEP SPAC S.p.A., a company listed on the AIM Italia market regulated by Borsa Italiana. Following the acquisition, EPS Equita PEP SPAC S.p.A. changed its name to ICF Group S.p.A. and began to carry out management and coordination activities as a holding company for its subsidiary Industrie Chimiche Forestali S.p.A.

In 2018, Industrie Chimiche Forestali won the "AIM ESG" award

Industrie Chimiche Forestali, always focused on the development of new applications and increasingly environmentally friendly products in the core business of adhesives and technical fabrics through constant investment in research and development, won the award for the "AIM ESG" category at the AIM Investor Day 2018 organised by IR Top Consulting at Palazzo Mezzanotte, home of the Italian Stock Exchange. The Group was selected by the jury of the AIM Awards, composed of the Department for International Trade andIR Top Consulting, based on the analysis of policies and practices on environmental, social and governance issues.

9

Industrie Chimiche Forestali and the Covid-19 emergency

Following the issuance of the Prime Ministerial Decree of 22 March 2020 on the containment and management of the Covid-19 epidemiological emergency, Industrie Chimiche Forestali continued its businessin that it operated in the chemical sector included among the sectors authorised to continue their activities.

The Group adopted all the measures required to safeguard the safety and health of its personnel working in the production areas and activated remote working for personnel in the administrative and commercialareas.

Thanks to the chemical skills of its employees and the plants already present on site, in April 2020 ICF alsolaunched a new business line dedicated to the production of hand sanitisers.

1.2 Our organisation

Industrie Chimiche Forestali, controlled since 2018 by ICF Group S.p.A.1, designs, manufactures and markets high-tech adhesives and fabrics in the following main markets: automotive, footwear, leather goods, upholstered furniture, flexible and industrial packaging.

The Group, while operating under a single company name, produces and markets its products through three separate brands: Industrie Chimiche Forestali, ABC - Adhesive Based Chemicals and Durabond.

The production activity of ICF is carried out through two separate divisions:

  • ICF Division, specialised in the production of adhesives and fabrics such as toe caps, linings and counters for the footwear industry, as well as solvent and water-based adhesives for the leather goods and upholstered furniture industries;
  • ABC Division, which produces adhesives for the automotive, flexible packaging and industrial segments.

Both divisions operate at the production site in Marcallo con Casone (MI), but the Group is also present internationally through its subsidiary Forestali de Mexico S.A., which markets its products on the Mexican market.

  • With a view to further simplifying the corporate structure, in March 2020 the Board of Directors approved the plan to merge IFC Group S.p.A. into Industrie Chimiche Forestali S.p.A.
    10

Group Structure

With 129 employees and a turnover of more than € 71 million2 in 2019, the Group exports to more than 60 countries around the world with a percentage of exported turnover of more than 65%. Sales and logistics management represents a strategic point for the Group's competitiveness, which has an intense commercial network of 21 agents (10 Italian and 11 foreign) and three logistics bases in Mexico, the United States and Hong Kong. The countries interested in marketing the Group's products within the EU are Germany, France, Spain, Portugal, Poland, Hungary, Slovenia, while worldwide they are Mexico, Colombia, Japan, China, Taiwan, Vietnam, India, Pakistan, Bangladesh, Turkey, Africa, Middle East and Eastern Europe (Russia, Ukraine). Globally, ICF has a portfolio of around 700 customers, the most relevant and least numerous of which are related to the automotive industry, while the remainder are small customers in the footwear and leather goods industry.

1.2.1 Governance

The governance of Industrie Chimiche Forestali consists of an administrative body (Board of Directors), a decision-taking body (Shareholders' Meeting) and a control body (Board of Statutory Auditors).

  • The indicated value refers only to the turnover of Industrie Chimiche Forestali S.p.A., equal to € 71.3 million.
    11

In particular, the Board of Directors is composed of three members: the Chairman, in the person of Guido Cami, and the Directors Giovanni Campolo and Rossano Rufini.

As from 2014, Industrie Chimiche Forestali adopted an Organisation, Management and Control Model pursuant to Italian Legislative Decree no. 231 of 8 June 2001 (hereinafter also referred to as "Model 231") and a Code of Ethics (hereinafter also referred to as the "Code") with the aim of raising awareness and communicating in a transparent manner the ethical and social values by which the Group is inspired, as well as defining the fundamental principles, rules of behaviour and responsibilities within the Group itself.

In order to safeguard the interests of stakeholders and ensure an efficient and reliable working method, the Code identifies the prerequisites to ensure that the business activity is inspired by the principles of fairness, transparency, diligence, honesty, mutual respect, loyalty and good faith.

Moreover, the Code of Ethics specifies the topics of fundamental importance for the Group's growth strategy:

  • Responsibility of internal personnel and external collaborators;
  • Conflict of interest, protection of company assets and image;
  • Rules of behaviour in the management and recruitment of human resources;
  • Rules of behaviour in relations with public bodies (public administration, parties, trade unions and associations);
  • Rules of behaviour for the management of contributions and sponsorships;
  • Rules of behaviour for the management of relations with the media;
  • Rules of behaviour for the prevention of corporate crimes, crimes with the purpose of terrorism, computer crimes and unlawful data processing;
  • Protection of Intellectual Property and Privacy;
  • Principles on which the behaviour of ICF is based and of which strict compliance is required by the Recipients with regard to occupational health and safety;
  • Principles on which the behaviour of ICF is based and of which strict compliance is required by the Recipients with regard to the Environment;
  • Relations and rules of behaviour with stakeholders, shareholders, suppliers and external collaborators.

With the adoption of Model 231, the Group established a Supervisory Body with the task of periodically checking the system of proxies and powers of attorney in force and their consistency with the entire system of organisational communications.

1.2.2 Economic performance

The economic value generated by Industrie Chimiche Forestali S.p.A. in 2019 was € 72.3 million3, of which about 90%, equal to approximately € 65.3 million, was distributed to the Group's main stakeholders. In particular:

  • The economic value generated includes both turnover and other income of Industrie Chimiche Forestali S.p.A.
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Economic value distributed in 2019

- operating

costs

amounted

to

approximately € 53.8 million, 83.9% of

Value distributed to

which were costs for raw materials;

employees

- personnel remuneration amounted to

13.30%

Value distributed to

capital providers

approximately € 8.7 million;

1.58%

- a total

value of approximately € 2.8

Value distributed

million

was

distributed

to capital

to the P.A.

providers and the Public Administration;

2.70%

Value distributed

- donations,

membership

fees

and

sponsorships

to

the

community

to the community

amounted to € 19,363, up by 94%

0.03%

Operating

compared to 2018.

costs

82.40%

Economic performance (k€)

2018

2019

Generated economic value

79,889.4

72,285.9

Distributed economic value

74,148.2

65,252.4

Operating costs

62,833.4

53,765.5

Value distributed to employees

8,689.3

8,677.3

Value distributed to capital providers

1,169.5

1,029.5

Value distributed to the P.A.

1,445.9

1,760.7

Value distributed to shareholders

-

-

Value distributed to the community

10.0

19.4

Retained economic value

5,741.2

7,033.4

"I Bambini delle Fate" Foundation

Thanks to ICF's strong sense of social responsibility and solidarity, the Group has been supporting the nonprofit Foundation "I Bambini delle Fate" since 2012. Also in 2019, ICF donated € 6,000 to the foundation that provides financial support to social inclusion projects and programmes managed by local partners for thebenefit of families with autism and other disabilities.

1.2.3 Associations

Industrie Chimiche Forestali is a member of Associazione nazionale Vernici, Inchiostri, Sigillanti e Adesivi (AVISA) (National Association of Paints, Inks, Sealants and Adhesives) of Federchimica, part of Confindustria and member of CEFIC (European Chemical Industry Council). AVISA represents the companies producing adhesives and sealants that carry on industrial activities in Italy in various sectors including: stationery, packaging, footwear, construction, wood and furniture, means of transport. The Association also liaises with European associations by joining CEPE (Conseil Européen de l'Industrie des Peintures, des Encres d'Imprimerie et des Couleurs d'Art) and FEICA (Fédération Européenne des Industries de Colles et Adhésifs), the European association of adhesive and sealant manufacturers.

The Chief Executive Officer of Industrie Chimiche Forestali S.p.A. is currently the Vice Chairman of AVISA and FEICA, as well as Chairman of the Adhesives and Sealants Group. Through a network of institutional relations with the main national and European industry stakeholders, the Adhesives and Sealants Group ensures that

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the requirements of the Italian Adhesives and Sealants Industry are taken into consideration during the law formation processes.

Among the services that AVISA offers to its member companies, the Technical Service plays a central role by overseeing the technical and legislative issues of interest, following and analysing the development of the legislative and regulatory framework and activating working groups to investigate specific issues and draw up guidelines and technical monographs.

ICF employees actively participate and collaborate in the various initiatives promoted by Federchimica, of which AVISA is a member, including Responsible Care (for further information, see §3.1 The Protection of the Environment) and the Technical Committee established by the association. The latter has the function of overseeing and documenting technical and legislative issues, monitoring and analysing the development of EU and national legislation with repercussions on the activities of the represented industries, and activating working groups for the in-depth study of critical issues.

ICF is associated with Unione Nazionale Accessori e Componenti (UNAC) (National Union of Accessories and Components, which represents the Italian industry of manufacturers of accessories and alternative materials for footwear and leather goods, and SATRA (Shoe and Allied Trades Research Association), a research and certification association for the footwear and leather goods industry. Moreover, the Group supports the Politecnico Calzaturiero, a training, technology transfer and business services structure in the Riviera del Brenta Footwear District, where shoes are produced mainly for women for the most important luxury brands.

In the packaging sector, ICF is a member of GIFLEX, which groups together manufacturers of flexible packaging in intaglio and flexographic printing, intended for the packaging of food, pharmaceutical, chemical products and other industrial applications, and the Italian Packaging Institute, an association of packaging companies in Italy.

The Group is also a member of the local employers' association ASSOLOMBARDA and participates in refresher courses on the various issues scheduled during the year with various company functions.

Finally, ICF is also a member of the newly formed association AssoAIM (Associazione Emittenti Aim Italia), created at the end of 2019, to represent small and medium-sized companies listed on the AIM Italia segment, the Italian Stock Exchange market dedicated to SMEs.

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2. Our invisible strength

2.1 A high-quality production process

"We are invisible! But we are everywhere!" This is the slogan of the ICF Group.

The Group produces and exports all over the world technical products for glueing and reinforcing footwear, leather goods of all kinds and industrial products, "invisible" but present everywhere. Glueing has now become an indispensable technique for bonding two or more substrates, not only in the industrial field but also in everyday life. Adhesives are now present in many sectors, from automotive to footwear, fabrics, leather goods, furniture; from flexible packaging to paper lamination and in many other industrial applications. Adhesives represent the hidden force that gives shape to the world, without which there would be almost none of the products that each of us today is used to taking for granted. Not only that: many innovative products could not even be manufactured without using glueing techniques. Bonding by means of adhesives is becoming more and more a technology adopted as a replacement for classic mechanical assembly systems. Today, adhesives are seen and perceived as a new solution to reduce the weight of materials and improve energy efficiency in construction.

ICF produces two types of products:

  • adhesives, which harden by physical process or chemical reaction for the footwear and leather goods industry as well as for the automotive and flexible packaging industry;
  • fabrics, also for the footwear and leather goods industry.

In particular, the Group's Forestali Division (or simply "Forestali") produces: adhesives and fabrics for toe caps, counters, linings, stiffeners and insoles for the footwear market, in which it has always been a leader in Italy and for which it collaborates with the most prestigious brands; solvent-based and water-based adhesives for the leather goods and upholstered furniture market. In particular, the production of Forestali's adhesives includes: dissolving adhesives (polychloroprene, natural rubber-based and synthetic rubber- based), water-based adhesives, synthetic adhesives (polyurethane), primers and activators. The adhesives produced by the Forestali Division for the upholstered furniture industry are marketed under the Durabond brand, while the remaining products of this division are sold under the Industrie Chimiche Forestali brand.

The range of adhesives and fabrics of the Forestali Division includes a series of "continuous" articles, which are produced up to a minimum quantity (made to stock), and numerous "tailor-made" products, i.e. customised solutions able to meet specific customer requirements (made to order).

The Adhesive Based Chemicals Division (or simply "ABC") deals with the production of adhesives for the automotive, packaging and industrial sectors. The products of this division are sold under the ABC brand and include: synthetic polyurethane adhesives with and without solvent, polyurethane adhesives in water dispersion, nitrocellulose-based adhesives, nitrile and nitro-butyl rubber and cleaners. The production of the ABC Division, in line with the type of sectors served, is planned on a monthly basis.

Automotive Upholstery

Footwear and

Packaging&

leather goods

15

IndustrialFurniture

The production of adhesives is the most chemical aspect of the plant in Marcallo con Casone and provides different methods of transformation according to the type of resin used. Adhesives can be produced by dissolution in solvent or water in special tanks under agitation, or by synthesis inside temperature controlled reactors.

In line with the production process constantly supervised by the plant operators, quality controls are carried out in the plant's internal laboratories and consist of analyses aimed at checking the composition of the adhesive upstream, during and downstream of processing. Some of the parameters analysed are dryness, viscosity, initial heat resistance and gas-chromatographic analysis of solvents.

The finished product is then filtered and packaged in tanks, drums or buckets of various sizes.

Fabrics consist of special articles used for covering or reinforcing footwear or leather goods. They are produced in the fabric department through a series of processes that are not necessarily sequential but can follow an order different from time to time according to the required formulations. The fabric can be impregnated in an impregnation bath, "inseminated" in case of application of powdered or coextruded products. Some impregnated or coextruded fabrics can pass through a dedicated hot-melt application line. The impregnated fabric passes through a heated and ventilated area for drying and water removal; in other cases, the fabric passes through an oven to obtain the melting of the applied adhesive and then inside the calenders for cooling. The product obtained is in the form of coils. For the production of toe caps and counters, the fabrics obtained are then unwound and cut into sheets of 1 m in size by about 1.4 m in order to be easily placed on the pallets used for shipping.

ICF is characterised by the high quality standards of its products thanks to the accurate checks carried out on incoming raw materials, the strict controls of the production process and the analyses carried out on the finished products. The Group has always pursued a Quality-conscious policy, obtaining in 1997 the certification of the Quality Management System according to UNI EN ISO 9001. Moreover, in 2019, ICF obtained the IATF 16949 certification for the automotive products of the ABC Division, the certification of the quality management system specific to the automotive sector.

The Group's ability to check and guarantee the quality and performance of its products is guaranteed by the three laboratories dedicated to Research and Development (R&D) and Quality Control that ICF has set up. In particular, the Manufacturing Laboratory (Footwear and Leather Goods) is dedicated to the Forestali Division, while the ABC Division makes use of the Automotive and Flexible Packaging/Lamination laboratories.

16

The laboratories are a technological centre equipped with all the resources and tools required for research, development and pre and after-sales technical support. Here, research and technical support merge into a single operational project that allows the company to develop and characterise products by creating customised solutions for its customers.

The laboratories also represent the reference point of Quality Control that interacts with all departments and guarantees a constant increase in the quality standards of raw materials, production processes and finished products, leading to a continuous improvement in product quality and process efficiency, in accordance with ISO 9001:2015. All internal controls, from physical and analytical checks on incoming materials and finished products to performance tests during product use, are carried out in the Group's laboratories.

In addition to quality, the Group pays also great attention to the efficiency of its production processes and the technological innovation of its plants. In this respect, it is investing heavily in production optimisation by reducing not only downtime but also the waste of fabrics and solvents generated during production processes.

In order to assess the environmental impacts generated by its products, in 2019 the Group carried out an LCA (Life Cycle Assessment) study on the production of extruded and impregnated fabrics in the leather goods and footwear industry, on the basis of which it is carrying out the registration and publication of the Environmental Product Declaration (EPD4).

  • The Environmental Product Declaration is a certified declaration that provides environmental data on the life cycle of products in accordance with the international standard ISO 14025.
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2.2 Careful selection of materials

The added value of ICF lies in its highly technical and high-performancesemi-finished products, which allow the Group to maintain a very high quality reputation on the market. To achieve this goal, the Group has always been careful in the choice of raw materials that will make up its products. In fact, ICF does not produce the raw materials required to manufacture its products but purchases and uses raw materials that become part of the proprietary formulations of the Group's products.

Already in 1998, the Group adopted an Environmental Management System in compliance with the UNI EN ISO 14001 standard that defines the management methods for all phases of the work: from the purchase of raw materials to production and delivery of the finished product to the customer.

For the purchase of raw materials, ICF relies on new and historic suppliers with whom it has already established a stable and trustworthy relationship, demanding high quality standards from everyone. Each year, suppliers are assessed on the basis of quality performance and the degree of attention to environmental issues. If any non-conformities are identified, the Group carries out audits with suppliers.

The raw materials used by the Group include fabrics and non-woven fabrics (TNT), solvents, resins and polymers. These are mainly virgin raw materials, with the exception of some fabrics and polymers that are also purchased regenerated.

The other materials purchased by the Group in that necessary for the production processes but not part of the final product are additives and lubricants.

ICF is also committed to using regenerated and recycled materials in its products, those intended for the footwear and leather goods industry, in particular:

  • 100% of the cotton fabrics used are regenerated cotton;
  • non-wovenfabrics used by the Group are composed of 25% regenerated polyesters;
  • 60% of extruded fabrics are produced using, among the different types of polymers, about 30% of recycled polymers;
  • 15% of the latex used in formulations for the production of impregnated fabrics are 100% natural.

Some fabrics impregnated with regenerated cotton and some extruded toe caps and counters containing recycled polymers are in the process of being GRS5 and Oeko-Tex Standard 1006 certified in that they meet a number of criteria related to recycling and responsible and sustainable development in the textile sector.

In 2019, ICF developed a new line of interlining for the footwear and leather goods industry called Forebio Prime, from the combination of the words "Forestali" and "biologico" (organic), made up of artificial fibres and latex originating from renewable and eco-sustainable sources. In particular, the textile support of Forebio Prime is made up of about 90% natural fibres from FSC Mix certified sources7.

  • GRS (Global Recycle Standard) is an international certification promoted by Textile Exchange, one of the most important non-profit organisations promoting internationally responsible and sustainable development in the textile sector with the aim of encouraging the use of recycled materials.
    6 Oeko-Tex Standard 100 is an internationally uniform and independent control and certification system for raw materials, semi-finished and finished products of the textile industry at all processing levels.
    7 FSC® (Forest Stewardship Council) is a certification that guarantees the origin of the product labelled FSC® from a responsible forest and supply chain management. FSC® certification is based on ten rules applicable worldwide that cover the essential aspects of responsible forest management.
    In particular, the FSC Mix label indicates that the wood or paper inside the product comes from FSC® certified material, recycled material and/or controlled wood (not less than 70% certified and/or recycled materials).
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The attention to the materials used goes as far as the choice of packaging for its products with the purchase of packaging made of regenerated material such as steel drums and tanks made of plastic, wood and steel parts.

The total materials used by the Group in 2019 amounted to 21,257 tons (down 6% compared to 22,586 tons in 2018), 90% of which raw materials.

Materials entering the production processes

Unit of measure

2017

2018

2019

Raw materials

t

22,336

20,409

19,225

Fabrics

t

1,132

1,210

970

Regenerated fabrics

t

1,344

1,005

812

Non-woven fabrics (TNT)

t

6,143

4,826

5,012

Solvents

t

7,780

7,820

6,985

Resins

t

733

725

680

Polymers

t

4,797

4,417

4,347

Regenerated polymers

t

406

406

419

Materials related to processes

t

6

6

5

Additives

t

3

2

2

Lubricants

t

3

4

3

Total

t

22,342

20,451

19,230

Packaging materials

Unit of measure

2017

2018

2019

Steel

t

1,214

1,207

1,115

Paper and cardboard

t

91

92

82

Wood

t

650

645

614

Plastic

t

240

227

216

Total

t

2,195

2,171

2,027

All ICF products in the footwear industry (adhesives, toe caps, counters, linings and stiffeners) comply with Commission Decision of 9 July 2009 on establishing the criteria for the award of the Community eco-label to footwear by reference to Regulation (EC) 66/2010 on the EU Ecolabel8. As required by European legislation, all ICF products do not contain the following substances: chromium VI, arsenic, cadmium, lead, free formaldehyde, pentachlorophenol and azo dyes. This allows shoe manufacturers to apply for the ecolabel for footwear provided that all other raw materials used comply with the Community standard.

For years ICF has been committed to the production of adhesives with reduced environmental impact, gradually moving from solvent-based adhesives to water-based and solvent free adhesives. The Group identified in the latter the turning point for a real environmental commitment by challenging prejudices and working methods and technologies consolidated over time, developing new formulations of water-based and solvent free adhesives to replace the classic solvent based ones. In addition to a reduced environmental impact and unchanged product performance, these adhesives also ensure the absence of risks in the handling of raw materials as well as in the use of the adhesive and in the use of the product by the end user.

  • EU Ecolabel is the European Union's ecolabel that distinguishes products and services that, while guaranteeing high performance standards, have a low environmental impact throughout their entire life cycle. Ecolabel is voluntary and subject to certification by an independent body (competent body).
    19

Another important initiative to reduce the hazardousness of products, carried out over the years by ICF, is the replacement of toxic and reprotoxic substances used in the formulations of some polyurethane adhesives, such as triethylamine and N-methyl-2-pyrrolidone.

For the flexible packaging sector, in addition to replacing classic solvent-based adhesives with water-based adhesives, in 2018 the Group began to change product formulations by introducing raw materials from renewable sources such as castor oil to replace polyesters of fossil origin.

2.3 Our team

The invisible strength of Industrie Chimiche Forestali is not only represented by its products but is also based on the strong bond between the people of the Group who work together and operate as a single team. Getting to know each other as individuals is what guarantees teamwork within ICF and it is what Group employees do every day, pursuing objectives, launching challenges and competing in all markets with passion and determination. ICF's hundred-year-old history is made possible by all the people who work and have worked in the Group, putting into practice its fundamental values of reliability and trust, which are as important externally as they are internally, among the people who make up the Group and between all of them and the Group itself.

As at 31 December 2019, the Group consisted of 129 people, down 1.5% compared to 2018. 122 of these are employed in the headquarters of Marcallo Con Casone in Italy and the remaining 7 are employed in the commercial office in Mexico. The majority of the workforce is made up of men (81%) in line with the type of industry in which ICF operates.

Total employees by gender

102

106

105

23

25

24

2017

2018

2019

In 2019, the employees of Industrie Chimiche Forestali are mainly blue-collar and white-collar workers, while executives and managers together make up less than 20% of the workforce. In 2019, blue-collar workers account for 46% of the workforce and are all employed in Italy at ICF's only production site.

20

Employees by professional category in 2019

4%

14%

46%

36%

Blue-collar workers

White-collar workers

Executives

Managers

The Group is committed to ensuring a stable job for its team, offering mainly permanent contracts, which in 2019 covered 95% of its employees. In particular, in Italy 116 out of 122 employees have a permanent contract, while at the Mexican headquarters all 7 employees are employed under such a contract.

Employees by contract type and gender

Unit of measure

2017

2018

2019

Permanent

no.

119

113

123

Women

no.

23

23

23

Men

no.

96

90

100

Fixed-term

no.

6

18

6

Women

no.

0

2

1

Men

no.

6

16

5

Total

no.

125

131

129

Moreover, ICF seeks to meet the personal needs of its employees by offering them the opportunity to choose a part-time employment. In 2019, 2% of personnel were hired under this type of contract, while the remaining personnel were covered by full-time contracts.

Employees by type of employment and gender

Unit of measure

2017

2018

2019

Full-time

no.

121

128

127

Women

no.

21

23

23

Men

no.

100

105

104

Part-time

no.

4

3

2

Women

no.

2

2

1

Men

no.

2

1

1

Total

no.

125

131

129

In the three-year period of reference, changes in the workforce affected only the Italian operating headquarters, while in Mexico the number of employees remained constant over the last three years.

21

The recruitment made by ICF in recent years was significant for a small to medium industrial company with an incoming turnover rate of about 5% in 2019. Recruitment was mainly in the under-30s and 30-50s age group, which is proof of ICF's desire to renew itself by bringing added value to the Group.

The search for young talents for the continuous development of products and technologies represents in fact a constant commitment of ICF to try to keep up not only with the times but, where possible, be one step ahead. In particular, the Group encourages young technicians from high schools and universities studying chemistry to join its R&D laboratories through curricular and extra-curricular internships.

The leaving turnover rate remained at a low level over the three-year period, reaching 6% in 2019.

Turnover rates

Unit of measure

2017

2018

2019

Joining turnover

%

6

10

5

Leaving turnover

%

2

5

6

Recruitment by age group

Cessations by age group

6

2

2

1

1

6

2

7

3

5

1

4

2

1

1

1

2017

2018

2019

2017

2018

2019

More than 50 years of age

More than 50 years of age

Between 30 and 50 years of age

Between 30 and 50 years of age

Less than 30 years of age

Less than 30 years of age

Recruitment by gender

Cessations by gender

11

8

7

7

6

3

2

1

2017

2018

2019

2017

2018

2019

22

Joining turnover

2017

2018

2019

By age group

Unit of

Italy

Mexico

Italy

Mexico

Italy

Mexico

measure

Less than 30 years of age

%

4

0

6

0

2

0

Between 30 and 50 years of age

%

1

0

5

0

2

0

More than 50 years of age

%

2

0

0

0

1

0

By gender

Women

%

0

0

2

0

0

0

Men

%

7

0

9

0

5

0

Leaving turnover

2017

2018

2019

By age group

Unit of

Italy

Mexico

Italy

Mexico

Italy

Mexico

measure

Less than 30 years of age

%

1

0

0

0

3

0

Between 30 and 50 years of age

%

1

0

1

0

2

0

More than 50 years of age

%

1

0

5

0

2

0

By gender

Women

%

0

0

0

0

1

0

Men

%

3

0

6

0

6

0

In Italy, all employees are covered by National Collective Labour Agreements, while in Mexico the employment relationship is regulated by the Mexican law. In particular, with regard to the Italian headquarters, the managers are covered by the National Collective Labour Agreement for managers of industrial companies while the other employees are covered by second-level bargaining in addition to the National Collective Labour Agreement of the chemical industry.

As provided for by the second-level bargaining, each year a participation bonus is paid to Group employees linked not only to the achievement of corporate profitability objectives but also to quality and safety. ICF believes that the indicators to be monitored in order to ensure the Group's competitiveness and development are also to be found in the quality of production processes, products and services, the safety of workers, as well as environmental, community and territorial protection. An improvement in these indicators requires constant adaptation of work procedures but above all effective information and training of workers and, on the part of the latter, strict compliance with company procedures.

The education and training of all personnel is of fundamental importance for ICF to increase its culture and internal technical skills, as demonstrated by the high number of hours of training provided each year, which amounted to 2,428 hours in 2019, equal to approximately 19 average hours per year per employee.

Average hours of training per year per employee

Unit of measure

2017

2018

2019

By gender

Women

hours/employees

25.5

29.6

30.2

Men

hours/employees

17.6

17.0

16.2

By professional category

Managers

hours/employees

12.2

13.6

9.6

Executives

hours/employees

18.1

21.8

19.4

White-collar workers

hours/employees

19.9

25.0

26.1

Blue-collar workers

hours/employees

19.6

14.9

14.5

Total

hours/employees

19.1

19.4

18.8

23

The importance attached by the Group to training is also demonstrated by the diversified training offered to its employees in order to guarantee them the opportunity to realise their full potential, ranging from quality, occupational health and safety and the environment, to the acquisition and in-depth study of work knowledge or techniques to ensure that they possess the technical and professional requirements to carry out the assigned tasks, up to the professional and personal growth of employees.

In particular, in 2019, 59% of the training hours provided were related to occupational safety. Furthermore, as ICF is a company at risk of major accident, personnel carrying out activities at risk or with significant potential impacts on the environment must have acquired the necessary skill not only through information and education, but also through training activities. The other types of courses provided in 2019 concern technical training, IATF 16949 certification for the Automotive Quality Management System, but also languages.

Training in 2019

1%

14%

9%

Training on safety

Language training

Training on quality (IATF 16949 certification)

17%

59%

Technical training

Specialist and managerial training

Newly recruited personnel, including those on temporary contracts and workers in cooperatives who carry out porterage activities for a limited number of hours/days, are provided with a training course to ensure rapid and efficient employment. This course provides information about the Group's structure and products, the organisation of the production plant as well as policies, manuals, procedures and instructions on quality, the environment and occupational health and safety.

In addition, in 2019 the Group introduced a top-down employee assessment process, which provided for company managers to define the skills required for the professional figures under their direct control and the subsequent identification of the training needed for each employee to reach the level required by their job.

24

3. Attention to the environment and safety

3.1 Environmental protection9

The strong sense of responsibility of Industrie Chimiche Forestali for protecting the environment guided the Group's activities from the outset with a view to continuously improving environmental performance and reducing environmental impacts, such as the consumption of raw materials and water resources, waste production, water discharges, the emission of pollutants and energy consumption.

The Group implemented its environmental commitment in 1998 by joining the Federchimica "Responsible Care"10 project, a voluntary international programme that promotes the Sustainable Development of the Chemical Industry in accordance with values and behaviour aimed at protecting the environment as well as occupational health and safety.

In the same year, ICF defined the Environmental Policy of the plant in Marcallo con Casone, which represented the starting point and reference for the identification of the Group's environmental objectives and improvement programmes. The Environmental Policy updated over the years, in addition to being published on the company's website, is disseminated to all employees through specific training and education meetings and shared with public control bodies and external companies operating on the site.

Also since 1998, the Group has implemented an Environmental Management System in accordance with the UNI EN ISO 14001 standard with the aim of guaranteeing the application of the Environmental Policy, the updating of improvement objectives and the definition and development of environmental programmes.

With the desire to enhance and spread more and more the commitment to environmental issues, in 2000 the Group also voluntarily joined the Community Regulation for the Eco Management and Audit Scheme (EMAS Regulation11). As required by the EMAS Regulation, ICF publishes annually the Environmental Declaration of the plant in Marcallo con Casone in which the environmental performance is described in addition to the set environmental objectives, improvement programmes and the results achieved.

The Group pays great attention to compliance with the environmental regulations to which its activities are subject. In particular, the production plant in Marcallo con Casone is one of the companies at risk of major accident as envisaged by the Seveso III12 Directive and both divisions of ICF are authorised through two separate Integrated Environmental Authorisations (IEA).13 During the year, the Group was not the subject matter of legal disputes and did not receive sanctions in environmental matters.

  • The reporting boundary on these topics does not include data from Forestali de Mexico S.A. de C.V.
  1. The Responsible Care voluntary programme was established in 1984 in Canada by the Canadian Chemical Producer Association (CCPA) and was launched in Europe in 1998 by the European Chemical Industry Council (CEFIC). Since 1992, Federchimica has managed the Programme in Italy.
  2. The Community Regulation for the Eco Management and Audit Scheme (EMAS Regulation) is an instrument created by the European Community which organisations (companies, public bodies, etc.) can join voluntarily to assess and improve environmental performance and provide stakeholders with information on the environmental management of their activities.
  3. Directive 2012/18/EU, also known as the Seveso III Directive and implemented in Italy by Legislative Decree 105 of
  1. June 2015, is the EU regulations on the control of major-accident hazards involving dangerous substances.
  1. The Integrated Environmental Authorisation (IEA) is the measure that allows the management of a plant at certain conditions guaranteeing compliance with IPPC (Integrated Pollution Prevention and Control) requirements, i.e. Directive 96/61/EC implemented in Italy by Legislative Decree 152/06 as amended and supplemented.

3.1.1 Water withdrawal and discharge

The processes carried out in the production plant of Marcallo con Casone, the production of water-based adhesives and the preparation of the aqueous suspensions of the sizing agents, in particular, require the use of water as raw material. The water supplied is also used for industrial uses, such as washing and cooling plants. The remaining part of the water consumed by ICF is used for civil purposes (drinking water, hygienic, irrigation and fire fighting).

95% of the water supply to Industrie Chimiche Forestali is provided by the municipal aqueduct and the remaining 5% by the well, for a total of more than 21 thousand m3 of water withdrawn14 in 2019, an increase of about 6% compared to 2018. The increase in water withdrawn over the three-year period is mainly due to the increase in the production of water-based adhesives and the expansion of the plant's green areas.

Water withdrawals by source (m3)

Water discharge by destination (m3)

19.040

19.958

17.132

17.347

12.664

10.700

1.324

957

1.161

2017

2018

2019

2017

2018

2019

From well

From acqueduct

In sewer

The water coming out of ICF's production processes, i.e. from the washing operations of the plants, is treated and reused on site where technically possible. In particular, the washing water of the plants is initially conveyed to a primary treatment plant and then treated by reverse osmosis before being stored in special tanks and reused again for washing the plants.

Therefore, ICF's wastewater consists of: water used to cool the plants, sanitary water, washing water from the yards and first and second rainwater. In 2019, the volume of water discharged15 into the sewer from the three ICF discharge points was more than 17,000 m3, up 1% compared to 2018, in line with the increase in water withdrawn. As required by the IEA, wastewater is monitored for the following parameters: pH, total suspended solids, COD, BOD5, sulphates and chlorides.

3.1.2 Waste

In 2019, waste produced by Industrie Chimiche Forestali amounted to 1,600 tons (down 15% compared to the previous year), 71% of which was non-hazardous waste and the remaining 29% hazardous waste, and included mainly organic solvents, obsolete or non-compliant adhesives, composite materials, packaging and waste carbon from emission abatement filters. Almost a quarter of the total waste produced in the year by ICF, amounting to about 435 tons, consists of packaging, and in particular mixed packaging, plastic packaging, wooden pallets and drums. 57% of the total waste produced is recycled, while 43% is disposed of.

  1. All the water withdrawn by Industrie Chimiche Forestali is fresh water (≤1,000 mg/l of total dissolved solids). Moreover, the Group does not draw water from water stressed areas.
  2. All water discharged by Industrie Chimiche Forestali has a total dissolved solids content greater than 1,000 mg/l.

26

Non-hazardous waste (ton)

Hazardous waste (ton)

506

502

550

799

866

586

353

367

361

131

140

102

2017

2018

2019

2017

2018

2019

Disposed of

Recycled

Disposed of

Recycled

3.1.3 Emissions of pollutants

The emissions of ICF consist mainly of process emissions and to a lesser extent of emissions due to the suction points of the laboratory hoods, the air exchange in the production rooms and the heating systems.

As prescribed in the IEA, all process emission points are monitored and sampled periodically according to pre-established schedules. The results of the emission analyses, which were made available to the monitoring authority, were always below the legal limits.

Emissions of pollutants into the atmosphere at the ICF plant consist mainly of NOx emissions (67% of the total in 2019) and CO, generated by the post-combustion plant that controls the solvent-based adhesives production department of the ICF Division. In particular, there was a significant decrease in NOx emissions in 2019 due to lower production of solvent-based adhesives in favour of water-based adhesives. The remaining part of the emissions are VOCs and correspond to total process emissions from the adhesive manufacturing plants of both divisions.

Emissions of pollutants (kg)

125,8

80,8

29,9

11,4

5,2

11,4

4,5

11,2

3,2

2017

2018

2019

CO

NOx

VOC

ICF is equipped to handle emergency situations inside and outside the plant, such as chemical spills, blocking internal and yard extinguishing water and preventing it from flowing into the sewer and collecting spilled products with special absorbent and filtering materials. In 2017, only one spill of 200 litres of solvent containing adhesive residues occurred on the plant's outer yard; in 2018, two spills of adhesives occurred on the internal waterproof flooring for a total of 100 litres. In 2019, there were three spills of solvent-based adhesives on the waterproof flooring of the ICF's adhesives production department, totalling 895 litres; moreover, during the transfer of a waste bin containing non-hazardous sludge, there was a water spill of 100 litres. All these episodes have been regularly managed in accordance with internal procedures, keeping spills

27

to a minimum and implementing a series of actions of not only procedural but also plant engineering nature, to prevent them from happening again.

3.1.4 Energy consumption and greenhouse gas emissions

ICF's energy consumption, which in 2019 amounted to 35,319 GJ, is mainly due to the consumption of natural gas, equal to about 47% and down 17% compared to 2018, and electricity, equal to about 48% and down 5% compared to 2018. Natural gas is used to feed the burners of the impregnator for the generation of hot water needed in the production of the ABC Division, and the afterburner, used for the production of the solvent adhesives of the ICF Division. The remaining part of the consumption is for heating the working environment. Electricity, entirely purchased from the network, is used to power the production processes mainly for the production of toe caps and counters in the fabric department and for the lighting of the premises, consisting entirely of LED lights.

The remaining part of energy consumption (5%) is linked to the consumption of automotive fuel and in particular to the consumption of diesel oil of the company car fleet and the forklift truck used by maintenance personnel and, to a lesser extent, to the consumption of petrol relating to the company van.

Energy (GJ)

17.282

17.890

17.001

1.579

1.579

1.628

24.388

20.070

16.690

201720182019

Natural gas

Automotive fuel

Electricity (from network)

Greenhouse gas emissions (Greenhouse gases, hereinafter GHG) Scope 1, or direct emissions, i.e. emissions from emission sources owned by or under the direct control of the Group; and Scope 2, or indirect emissions, due to the consumption of electricity or heat purchased by the Group correspond to energy consumption.

In 2019, Scope 1 emissions of Industrie Chimiche Forestali S.p.A. amounted to 1,062 t CO2, 88% of which was due to natural gas consumption, 11% to fuel consumption (diesel oil and petrol) for the company fleet and 1% to refrigerant gas leaks from air conditioning systems.

Scope 2 emissions of ICF are instead entirely related to the consumption of electricity purchased from the network. In 2019, Scope 2 emissions were 1,695 t CO2, calculated using the Location based method16, while with the Market based17 approach they are higher and equal to 2,282 t CO2, as the Group does not currently purchase electricity with certificates of guarantee of origin (GO).

  1. The Location based approach involves the use of national average emission factors related to the specific national energy mix for electricity production.
  2. The Market-based approach takes into account any certificates purchased by the Company attesting to the supply of electricity from renewable sources, and where they are not present, envisages the application of emission factors associated with the production of energy from thermoelectric plants.

GHG emissions (t CO2)

2019

1.062

1.695

2018

1.333

1.784

2017

1.480

1.723

Scope 1 Total emissions

Scope 2 Total emission - Location based

3.2 The health and safety of workers and customers

Health and safety in the chemical industry represent a "key" value: they are found in processes and products, as well as being of fundamental importance for people and the environment. Ensuring a safe workplace for all its employees and the surrounding area has always been a goal that ICF has pursued over the years in order to ensure the prevention and control of risks related to its activities and its products and processes.

Since 1998, the Group has been a member of Federchimica's voluntary Responsible Care programme, which aims to develop a constant focus on continuous improvement not only in environmental protection but also in the area of occupational health and safety.

ICF's commitment is also reflected in the maintenance of the Safety Management System in compliance with the OHSAS 18001 standard, for which the Group has been certified for the production plant in Marcallo con Casone since 2009. The management system has a double value both internally and externally: internally, it represents a fundamental guide to the actions and behaviour of all Group personnel; externally, it allows to maintain the trust of citizens, neighbouring companies, public bodies responsible for safeguarding safety, customers and suppliers, guaranteeing a positive and lasting relationship of collaboration.

For everything concerning the protection of occupational health and safety, the Group complies with the provisions of Italian regulations, and in particular with the requirements of Italian Legislative Decree 81/2008. Consequently, ICF has drawn up a Risk Assessment Document (RAD) in which it has defined specific procedures for the analysis and classification of risks and has identified prevention and protection measures to limit and manage them, through the introduction of innovative technological solutions and the reorganisation and updating of operating procedures.

Moreover, falling within the scope of application of Italian Legislative Decree 105/2015, therefore falling within the list of "companies at risk of major accident" (see paragraph §3.1 The Protection of the Environment), ICF has drawn up the "Major Accident Prevention Policy Document" in which, in compliance with the safety of its employees, the surrounding environment, the population and neighbouring activities, it describes how ICF identifies and pursues the objectives to prevent the occurrence of major accidents and mitigate any harmful effects.

With a view to risk prevention and with the aim of raising the awareness of all workers, the Group encourages all ICF personnel to report any hazardous situations by filling in the appropriate forms. The factory supervisor is then responsible for identifying the causes of such situations and the corrective actions necessary to prevent them from occurring again. Everything is then recorded and systematised by the Group's Health and

29

Safety Officer (HSO). This practice contributes to the calculation of the safety indicators used to obtain the participation bonus envisaged in the Group's second-level bargaining. These indicators are calculated on the basis of the scores obtained in the year during ten inspections carried out by a special commission in previously identified company areas of accidents at work, any spills into the soil and subsoil and the participation of workers in training and information initiatives on safety.

In terms of health, an occupational health specialist has been appointed who, together with the HSO, draws up the annual health plan in order to monitor the operators' exposure to the risks identified in the RAD through a series of health assessments.

The number of injuries over the three-year period remained low, rising from one in 2018 to two in 2019, both of which were minor injuries. Moreover, in the three-year period covered by the report, there have been no recordable occupational diseases or deaths related to them.

Injuries and injury rates

Unit of measure

2017

2018

2019

Recordable work-related injuries

no.

2

1

2

of which serious injuries

no.

0

0

0

of which fatal injuries

no.

0

0

0

Annual hours worked

no.

209,380

221,351

219,031

Recordable injury frequency rate

no.

9.55

4.52

9.13

Serious injury frequency rate

no.

0.00

0.00

0.00

Fatal injury frequency rate

no.

0.00

0.00

0.00

The awareness that in some of the production activities carried out there are dangerous substances and chemical processes related to major injury risks stimulates ICF to revise and rework its production process not leaving room for randomness but interpreting and assessing all the indirect indicators such as near misses. These analyses make it possible to identify preventative measures ensuring safety for employees and the environment, thus avoiding the occurrence of any accident.

All personnel participate in quarterly information meetings on major injury risks, and checks are carried out monthly by means of checklists and multiple-choice questions on the knowledge by plant personnel of operating procedures and instructions and emergency procedures.

The attention shown by the Group in protecting occupational health and safety can also be seen in relation to its consumers. While in previous years there was a tendency to focus on better performing products and new, highly durable materials, today the emphasis has shifted to the formulation of products that are increasingly safe for workers but also for end customers, both in terms of health and the environment. In fact, the continuous focus on and increased consumer awareness of health and safety is gradually leading to a development of products towards reduced toxicity.

ICF is committed to complying with national and international regulations applicable to its products and, in particular, falls within the scope of the REACH Regulation18 ("Registration, Evolution, Authorisation of Chemicals") of the European Union, aimed at ensuring not only respect for the environment, but also the protection of human health from the use of chemicals. It also complies with Regulation 830/2015 amending the REACH Regulation, establishing the final format of Safety Data Sheets (SDS) and how to update them. In accordance with this last regulation, in 2018 the SDSs of ICF's products were revised and sent to all customers.

  1. REACH (acronym of "Registration, Evaluation, Authorisation of Chemicals"), Regulation EC no. 1907/2006 of the European Parliament and of the Council, concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals, which envisages the registration of all substances produced or imported into the European Union in quantities exceeding one ton per year.

Moreover, each time a customer purchases a new product, it automatically receives the relevant SDS. The Group is also required to comply with the CLP Regulation19 dedicated to the identification of hazardous chemicals and to informing users about the hazards related to them. As a chemical industry, ICF also complies with all sector-specific regulations or those related to the specific use of the products, such as the Biocides, Construction and Ecolabel Regulations. The latter distinguishes products and services that, while guaranteeing high performance standards, are characterised by low environmental impact throughout their entire life cycle.

The attention to health and safety on the part of the Group already begins in its laboratories, where attention is paid not only to the creation of specific products in response to particular requests from its customers but also to the formulation of products containing raw materials that are not dangerous for man and the environment (as detailed in paragraph §2.2 Careful selection of materials). In the three-year period of reference, there were no cases of non-compliance with product safety regulations, thanks to the attention and solid control processes set up by the Group.

  1. CLP (acronym of "Classification, Labelling and Packaging"), EC Regulation no. 1272/2008 on classification, labelling and packaging of chemical substances and mixtures, which aligns the previous European Union legislation to the GHS (Globally Harmonised System of Classification and Labelling of Chemicals), a United Nations system to identify hazardous chemicals and inform users about these hazards.

Methodological note

The first Sustainability Report of Industrie Chimiche Forestali S.p.A. is related to the 2019 financial year (from 1 January to 31 December) and contains, where available, performance trends for the three-year period from 2017 to 2019 for comparative purposes.

The Report has been prepared in accordance with the GRI Sustainability Reporting Standards defined by the Global Reporting Initiative, according to the Core option, as set out in Standard 101: Foundation, paragraph 3.

This Report presents the main environmental, social and economic aspects that characterise the Group. The reporting scope is Industrie Chimiche Forestali S.p.A. and the subsidiary company Forestali de Mexico S.A., unless otherwise indicated. The registered and administrative headquarters of ICF are in Marcallo con Casone (MI), Via Fratelli Kennedy 75.

At the date of publication of this Report, no significant events occurred in 2020, except as already reported in the text.

Since this document is the first Sustainability Report of ICF, it has not been audited by an independent third party.

Material topics

According to the introductory chapter, the topics discussed in the Report and their level of detail are based on the results of the materiality analysis carried out by the Group. In connection with the materiality matrix itself, the following table shows the list of material GRI Topics for ICF and its stakeholders, the corresponding boundary in terms of impact and any reporting restrictions due to data unavailability on the external boundary of the organisation.

Reporting boundary of the material

Reporting restrictions on the boundary

Material GRI topics

topic

Internal

External

Internal

External

Environmental compliance

ICF

-

-

-

Water consumption

ICF

-

-

-

Emissions of pollutants

ICF

-

-

-

Energy and climate change

ICF

-

-

-

Training and education

ICF

-

-

-

Raw materials

ICF

-

-

-

Employment

ICF

-

-

-

Economic performance

ICF

-

-

-

Occupational health and

ICF

Suppliers

-

Reporting not extended to

safety

suppliers

Customer health and safety

ICF

-

-

-

Effluents and waste

ICF

-

-

-

32

The principles for defining the contents and for quality assurance of the Report

Consistent with the provisions of the GRI Standards, the principles used to define the contents of this Report through materiality analysis include:

  • Stakeholder inclusiveness: The organisation must identify its stakeholders and explain how it has met their reasonable interests and expectations;
  • Sustainability context: the document must present the organisation's performance in the broader context of sustainability;
  • Materiality: the document must include topics that reflect the organisation's significant economic, environmental and social impacts, or that substantially affect stakeholder assessments and decisions;
  • Completeness: the document must deal with material topics and their boundaries sufficiently to reflect significant economic, environmental and social impacts and allow stakeholders to assess the organisation's performance over the reporting period.

To ensure the quality of the information reported, the principles of quality as suggested by the GRI Standards have been complied with in the preparation of the Report: accuracy, reliability, clarity, comparability, balance, timeliness.

The reporting process and methods of calculation

The qualitative and quantitative information of a social, environmental, economic and financial nature contained in this first edition of the Sustainability Report was collected through direct interviews with the managers of the various company departments and by sending special data collection forms, according to a reporting process set up on an annual basis. The main methods of calculation and assumptions for the performance indicators reported are shown below, in addition to those already indicated in the Report.

  • For the calculation of the health and safety indices, injuries involving at least one day of absence at work following the day of the injury were taken into account; injuries while travelling to/from work were excluded.
  • The injury frequency rate has been calculated as follows:

Frequency rate = number of injuries / hours worked * 1,000,000.

  • For environmental data, where not available, conservative estimation approaches have been adopted, i.e. the assumptions associated with the Group's less positive environmental performance have been chosen.
  • The conversion factors used for the calculation of energy consumption are as follows:
    • the conversion factor used for natural gas comes from the table of national standard parameters published annually by the Ministry of the Environment and Protection of the Territory and the Sea for 2017, 2018 and 2019;
    • the conversion factors used for diesel oil and petrol come from the annually updated Defra (Department for Environment, Food and Rural Affairs of the United Kingdom) database for 2017, 2018 and 2019.
  • Greenhouse gas emissions have been calculated as follows:

Greenhouse gas emissions = activity figure * corresponding emission factor.

  • The emission factors used for the calculation of GHG emissions are the following:

33

  • Scope 1 Emissions: the emission factor used for natural gas comes from the table of national standard parameters published annually by the Ministry of the Environment and Protection of the Territory and the Sea for 2017, 2018 and 2019; the emission factors for diesel oil, petrol and coolant gases come from the Defra database, updated annually, for 2017, 2018 and 2019;
  • Scope 2 Emissions - Location based: the emission factor used for electricity purchased from the national electricity network according to the Location based method comes from Terna International Comparisons, 2017 edition, based on Enerdata data;
  • Scope 2 Emissions - Market based: the emission factor used for electricity purchased from the national electricity network according to the Market based method comes from AIB - European Residual Mixes, 2017 and 2018 editions.

For information and details on this document, please contact:

ICF Group

icfgroupspa@forestali.it

34

GRI Content Index

GRI Standards

Disclosure

Chapter reference

Omissions

GENERAL DISCLOSURES

Organisational profile

102-1 Name of the organisation

The process for the preparation

of the first Sustainability Report

102-2 Activities, brands, products, and services

1.2 Our organisation

102-3 Location of headquarters

Methodological note

102-4 Location of operations

1.2 Our organisation

102-5 Ownership and legal form

1.2 Our organisation

102-6 Markets served

1.2 Our organisation

102-7 Scale of the organisation

1.2 Our organisation

102-8

Information

on employees

and

other

2.3 Our team

workers

102-9 Supply chain

2.2

Careful

selection

of

materials

102-10 Significant changes to the organisation

Methodological note

and its supply chain

2.1 A high-quality production

process

102-11 Precautionary Principle or approach

2.2

Careful

selection

of

materials

3.2 The health and safety of

workers and customers

102-12 External initiatives

1.2.3 Associations

GRI 102:

102-13 Membership of associations

1.2.3 Associations

General

Strategy

Disclosures

2016

102-14 Statement from senior decision-maker

Letter to Stakeholders

Ethics and integrity

102-16 Values, principles, standards and norms

1.2.1 Governance

of behaviour

Governance

102-18 Governance structure

1.2.1 Governance

Stakeholder engagement

102-40 List of stakeholder groups

The process for the preparation

of the first Sustainability Report

102-41 Collective bargaining agreements

2.3 Our team

102-42 Identifying and selecting stakeholders

The process for the preparation

of the first Sustainability Report

102-43 Approach to stakeholder engagement

The process for the preparation

of the first Sustainability Report

102-44 Key topics and concerns raised

The process for the preparation

of the first Sustainability Report

Reporting practice

102-45

Entities included

in the

consolidated

Methodological note

financial statements

102-46

Defining

report

content

and

topic

Methodological note

Boundaries

35

GRI Standards

Disclosure

Chapter reference

Omissions

The process for the preparation

102-47 List of material topics

of the first Sustainability Report

Methodological note

102-48 Restatements of information

Methodological note

102-49 Changes in reporting

Methodological note

102-50 Reporting period

Methodological note

102-51 Date of most recent report

Methodological note

102-52 Reporting cycle

Methodological note

102-53 Contact point for questions regarding the

Methodological note

report

102-54 Claims of reporting in accordance with the

Methodological note

GRI Standards

102-55 GRI Content Index

Content Index

102-56 External assurance

Methodological note

MATERIAL TOPICS

GRI 200 - ECONOMIC PERFORMANCE INDICATORS

Economic performance

GRI 103:

103-1 Explanation of the material topic and its

The process for the preparation

Management Approach 2016

Boundary

of the first Sustainability Report Methodological note

GRI 201:

Economic performance 2016

103-2

The

management approach and

its

1.2.2 Economic performance

components

103-3 Evaluation of the management approach

1.2.2 Economic performance

201-1

Direct

economic value generated

and

1.2.2 Economic performance

distributed

GRI 300 - ENVIRONMENTAL PERFORMANCE INDICATORS

Materials

GRI 103:

Management

Approach 2016

GRI 301: Materials 2016

103-1

Explanation of the material topic and its

The process for the preparation

of the first Sustainability Report

Boundary

Methodological note

103-2

The management approach and its

2.2

Careful

selection

of

components

materials

103-3

Evaluation of the management approach

2.2

Careful

selection

of

materials

301-1

Materials used by weight or volume

2.2

Careful

selection

of

materials

Energy

GRI 103:

Management

Approach 2016

GRI 302:

Energy 2016

Water and effluents

103-1 Explanation of the material topic and its Boundary

103-2 The management approach and its components

103-3 Evaluation of the management approach

302-1 Energy consumption within the organisation

The process for the preparation of the first Sustainability Report Methodological note

3.1 Environmental protection

3.1 Environmental protection

3.1.4 Energy consumption and greenhouse gas emissions

GRI 103:

Management

Approach 2016

103-1

Explanation of the material topic and its

The process for the preparation

of the first Sustainability Report

Boundary

Methodological note

103-2

The management approach and its

3.1 Environmental protection

components

103-3 Evaluation of the management approach

3.1 Environmental protection

36

GRI Standards

Disclosure

Chapter reference

Omissions

GRI 303: Water

303-1

Interactions with water as a shared

3.1.1

Water

withdrawal

and

and effluents

resource

discharge

2018,

303-2

Management of water discharge-related

3.1.1

Water

withdrawal

and

Management

impacts

discharge

Approach

GRI 303:

303-3

Water withdrawal

3.1.1

Water

withdrawal

and

Water

discharge

and effluents

303-4

Water discharge

3.1.1

Water

withdrawal

and

2018

discharge

Emissions

GRI 103:

Management

Approach 2016

GRI 305: Emissions 2016

Effluents and waste

103-1 Explanation of the material topic and its

The process for the preparation

of the first Sustainability Report

Boundary

Methodological note

103-2

The management approach and its

3.1 Environmental protection

components

103-3 Evaluation of the management approach

3.1 Environmental protection

305-1

Direct (Scope 1) GHG emissions

3.1.4 Energy consumption and

greenhouse gas emissions

305-2

Energy indirect (Scope 2) GHG emissions

3.1.4 Energy consumption and

greenhouse gas emissions

305-7

Nitrogen oxides (NOX), sulphur oxides

3.1.3 Emissions of pollutants

(SOX), and other significant air emissions

GRI 103:

Management

Approach 2016

GRI 306:

Effluents

and waste 2016

103-1 Explanation of the material topic and its

The process for the preparation

of the first Sustainability Report

Boundary

Methodological note

103-2

The management approach and its

3.1 Environmental protection

components

103-3

Evaluation of the management approach

3.1 Environmental protection

306-2 Waste by type and disposal method

3.1.2 Waste

306-3

Significant spills

3.1.3 Emissions of pollutants

Environmental compliance

GRI 103:

103-1 Explanation of the material topic and its

The process for the preparation

Management

of the first Sustainability Report

Boundary

Approach 2016

Methodological note

103-2 The management approach and its

3.1 Environmental protection

components

103-3 Evaluation of the management approach

3.1 Environmental protection

In the three-year period from

GRI 307:

307-1Non-compliance with environmental laws

2017 to 2019, the Group did

Environmental

not report significant non-

and regulations

compliance 2016

compliance with environmental

laws and regulations

GRI 400 - SOCIAL PERFORMANCE INDICATORS

Employment

GRI 103:

103-1 Explanation of the material topic and its

Management

Boundary

Approach 2016

103-2 The management approach and its

components

103-3 Evaluation of the management approach

GRI 401:

401-1 New employee hires and employee

Employment

turnover

2016

The process for the preparation of the first Sustainability Report Methodological note

  1. Our team
  1. Our team

2.3 Our team

Occupational health and safety

GRI 103:

103-1 Explanation of the material topic and its

Management

Boundary

Approach 2016

The process for the preparation of the first Sustainability Report Methodological note

37

GRI Standards

Disclosure

Chapter reference

Omissions

103-2 The management approach and its

3.2 The health and safety of

components

workers and customers

103-3 Evaluation of the management approach

3.2 The health and safety

of

workers and customers

GRI 403:

403-1 Occupational health and safety

3.2 The health and safety of

Occupational

management system

workers and customers

health

403-2 Hazard identification, risk assessment and

3.2 The health and safety of

and safety 2018,

incident investigation

workers and customers

Management

403-3 Occupational health services

3.2 The health and safety

of

Approach

workers and customers

403-4 Worker participation, consultation and

3.2 The health and safety of

communication on occupational health and safety

workers and customers

403-5 Worker training on occupational health and

3.2 The health and safety of

safety

workers and customers

403-6 Promotion of worker health

3.2 The health and safety

of

workers and customers

403-7 Prevention and mitigation of occupational

3.2 The health and safety

of

health

and

safety impacts

directly

linked

by

workers and customers

business relationships

GRI 403:

Occupational

403-9Work-related injuries

3.2 The health and safety

of

health

workers and customers

and safety 2018

Training and education

GRI 103:

103-1 Explanation of the material topic and its

The process for the preparation

Management

of the first Sustainability Report

Boundary

Approach 2016

Methodological note

103-2

The

management

approach

and

its

2.3 Our team

components

103-3 Evaluation of the management approach

2.3 Our team

GRI 404:

Training

404-1

Average hours of training per

year

per

and education

2.3 Our team

employee

2016

Customer health and safety

GRI 103:

Management

Approach 2016

GRI 416: Customer health and safety 2016

103-1 Explanation of the material topic and its

The process for the preparation

of the first Sustainability Report

Boundary

Methodological note

103-2 The management approach and its

3.2 The health and safety of

components

workers and customers

103-3 Evaluation of the management approach

3.2 The health and safety

of

workers and customers

416-2 Incidents of non-compliance concerning

3.2 The health and safety

of

the health and safety impacts of products and

workers and customers

services

Aspects not covered by GRI standards

R&D & Innovation

GRI 103:

Management

Approach 2016

103-1 Explanation of the material topic and its Boundary

103-2 The management approach and its components

103-3 Evaluation of the management approach

The process for the preparation of the first Sustainability Report Methodological note

  1. A high-quality production process
  2. Careful selection of materials
  1. A high-quality production process
  2. Careful selection of materials

38

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Industrie Chimiche Forestali S.p.A. published this content on 12 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 October 2020 16:39:01 UTC