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Johnson Matthey : Basis of reporting

06/15/2022 | 06:53am EDT

Other information

Basis of reporting - non-financial data


Independent greenhouse gas and health and safety assurance statement


Shareholder information


Glossary of key terms


Company details


Basis of reporting - non-financial data

This integrated report has been prepared in accordance with the GRI Standard: Core option.

It covers the period from 1st April 2021 to 31st March 2022. Our last annual report was published in June 2022.

Johnson Matthey compiles, assesses and discloses non-financial information for a number of reasons:

  • where there is a legal obligation (UK Companies Act, UK Stream-lined Energy and Carbon reporting (SECR) regulations, UK Modern Slavery Act);
  • to help drive improved business performance;
  • to demonstrate to institutional investors that Johnson Matthey's business approach is responsible, ethical, sustainable and offers a sound value proposition;
  • to demonstrate to our customers that Johnson Matthey's business conduct meets or exceeds all of the required standards and expectations;
  • to demonstrate to other stakeholders that Johnson Matthey conducts its business in an ethical, responsible and sustainable manner; and
  • to benchmark our corporate performance against peer group companies.

This report has been developed to incorporate the group's significant economic, environmental and social impacts and is set within the context of the United Nations Brundtland definition of sustainability (1987) and our own sustainable business goals to 2030. The principles of inclusivity, materiality and responsiveness help to shape the structure of the report and in setting priorities for reporting. The report also explains how we are continuing to build sustainability into our business planning and decision making processes and how, through our governance processes, we manage social, environmental and ethical matters across the group.

Performance data covers all sites that are under the financial control of the group, including all manufacturing, research and warehousing operations of the parent company and its subsidiaries. Joint ventures are not included.

For the purposes of reporting, separate business units resident at the same location are counted as separate sites.

Data from 83 sites was included in this report, 53 are manufacturing sites, 18 are R&D sites and 16 are offices.

Data from new facilities is included from the point at which the facility becomes owned by the company and operational. All non-financial performance data is reported on a financial year basis unless otherwise stated.

The process in place to independently verify the reported non-financial data are described on page 221. Certain employee data is included in the financial accounts and is also subject to the financial data third party audit see page 221.


Johnson Matthey | Annual Report and Accounts 2022

Other information continued

Restatements of previous year's data in AR2022

Previous years' data is restated, where necessary, to account for improvements in coverage and quality of available data. JM's materiality threshold for environmental data variance is

5%. We have made restatements of environmental performance data for five KPIs this year:

  • Our NOx emissions to Air have been restated following a review of the methodology that we were previously using to calculate this KPI. Where sites are not operating continuous monitoring, we have improved the calculations to calculate against batch chemistry rather than periodic monitoring. We developed the more consistent methodology with our current year data set and have also applied the new methodology to our 2019/20 and 2020/21 data which we have restated this year (see page 47).
  • Scope 3 emissions from purchased goods and services for 2019/20 and 2020/21 have been restated after the collection of more granular purchasing data. This has allowed us to apply more accurate GHG intensity factors.

Definition of employees and contractors

  • Scope 3 emissions from capital goods has been restated after reallocating emissions using an improved geographical basis. We have amended the totals for 2019/20 and 2020/21.
  • Scope 3 emissions from upstream transportation and distribution has been restated to account for our full logistics operations in 2019/20 and 2020/21. Previously, this data was only representative of emissions where the mode of transportation was known.
    The restated figures now include emissions where the mode of transport was unknown.
  • Scope 3 emissions from investments has been restated following a data review in which we discovered an error in emissions allocation in 2020/21. Previously this data accounted for the entire emissions for each entity and has been corrected to reflect JM's share for 2020/21.

A standard definition of employees and contractors has been implemented since 2017/18 across the group for all reporting of people-related goals. These definitions are used when reporting the relevant KPIs on page 31, and in the Sustainability report on pages 34-59 of this report.

Reported as "Employees"

Reported as "Contractors"

Permanent employees

Temporary employees

Agency employees

Outsourced function

Specialist service


Continuously site based.

Continuously site based.

Continuously site based.

Continuously or regularly site

One-off project or regularly

One-off project.


based on site.

Contract signed directly

Fixed term contract signed

Person employed by an

Facility management -

Small scale building or

Construction work, capital

between JM and individual

directly between JM and

agency performing tasks that

catering, cleaning or grounds

ground works; repairing

project work, major

and paid regular salary and

individual. Paid regular

would normally be expected

maintenance; IT and

specialist plant or

maintenance activities.

other benefits by JM.

salary and other benefits

to be undertaken by a

occupational health, if

equipment; low level

by JM.

JM employee.


maintenance; small scale

repairs to offices or other

buildings; stack monitoring.

Work is directly supervised

Work is directly supervised

Work is directly supervised

Work is supervised by

Work is supervised by

Work is supervised by

by JM.

by JM.

by JM.

contractor and monitored

contractor and monitored

contractor and monitored

by JM.

by JM.

by JM.


Johnson Matthey | Annual Report and Accounts 2022


Other information continued

Calculation methodologies for KPIs relating to our sustainable business goals to 2030

Products and services

Goal: Produce and innovate products for a cleaner, healthier world

We measure and track the positive impact of our products towards a cleaner, healthier world, aligned with our strategic aims. We focus on the products in our portfolio that support our four priority UN Sustainable Development Goals (SDGs): SDG 3 (Good Health and Wellbeing), SDG 7 (Affordable and Clean Energy), SDG 12 (Responsible Consumption and Production) and SDG 13 (Climate Action).

We use a financial lens to quantify impacts in two ways:

  1. We measure the correlation and classification of annualised sales of our products, services and technologies against our four priority UN SDGs. Sales are excluding precious metals. By increasing the percentage of JM's sales that contribute to our priority UN SDGs we will be increasing our societal value.
  2. We classify all our R&D spend according to the contribution any resulting commercial offering would bring to society in line with our four priority UN SDGs.

A judgement is made as to whether our products or R&D activities contribute to our four priority UN SDGs, either directly or by enabling others to contribute. This is done by considering the attributes of the products, or the intended outcome of the R&D work, and cross-referencing these against the priority UN SDGs and their accompanying targets.

Goal: Drive lower greenhouse gas emissions

This KPI is a measure of the tonnes of greenhouse gas (GHG) emissions avoided during the year using technologies enabled by JM's products and solutions, compared to conventional offerings. The KPI is expressed as tonnes of carbon dioxide equivalent (CO2 eq) and captures one year's impact for all qualifying technologies that have been operational during the year, as sold since 2020/21.

Our methodology for calculating avoided GHG emissions was developed in-house. For each qualifying technology, we first determine its functional unit, which is a quantified description of the performance requirements that our product or solution enables the technology to fulfil. The functional unit is then used as a reference to consider the boundary of the analysis, to ensure that the scope of the calculation covers the relevant life-cycle stages leading to the avoided emissions.

Performance comparisons are made against identified counterfactuals, which represent actual and significant products and solutions in the market, thus preventing us from overstating the avoided emissions. The lifetime of the technology is also considered to discount any impacts from the sale of previous years' technologies if these are no longer operational and, where applicable, adjustments to capture changing performance over time are made.

No allocation between value chain partners is applied, since there are no established guidelines for this; however, our products and solutions are vital to realising the benefits of the technologies being used, and our KPI aims to accurately reflect JM's role, in that we enable avoided GHG emissions via the use of such technologies.

We have also identified revenues aligned to the SASB Chemicals Sustainability Accounting Standard definition of products designed for use-phase resource efficiency, which includes products that "through their use - can be shown to improve energy efficiency, eliminate or lower greenhouse gas (GHG) emissions, reduce raw materials consumption, increase product longevity, and/or reduce water consumption". Qualifying products are those that either:

  • increase the efficiency of a product during its use phase (for example, our battery materials and fuel cell components); or
  • increase the efficiency of the manufacturing process used to make a product (for example, our catalysts and additives for the chemical, oil and gas industries).

Products beyond the scope of this assessment include those specifically designed to meet environmental regulatory requirements, our pharmaceutical and medical-related products, and any product where a use-phase resource efficiency benefit is unclear. Revenues aligned to the use-phase resource efficiency criteria represent sales excluding precious metals.

Goal: Enable less harmful air pollution globally

This KPI is a measure of the additional tonnes of nitrogen oxides (NOx) removed from vehicle tailpipes during the year using technologies enabled by JM's products, compared to the regulated tailpipe limits in 2020/21. The KPI captures one year's impact for all products that have been sold during the year to meet tighter tailpipe NOx limits, as enforced by different geographical regions for different vehicle categories.

Our methodology for calculating the additional NOx removed was developed in-house. For each qualifying technology, we consider the vehicles that the technology is fitted to, and any change in tailpipe NOx regulations enforced during the year; this determines the difference between the tailpipe NOx limits in the baseline year and the current year, for every vehicle where a new NOx limit must be met. Any difference in the tailpipe NOx limit is then multiplied by the corresponding number of vehicles that have been fitted with JM's products during the year. The corresponding number of vehicles is calculated from our market share of the number of vehicles sold each year, which is based on the number of emission control systems we supply to each geographical region and vehicle category. Lastly, we apply different vehicle characteristics, including annual distances, kilowatts per cycle and drive speed, to accurately represent the additional NOx being removed from the different vehicles included in the calculation. For vehicles sold since 2020/21 still operating in the current year, an adjustment may also be applied to the annual distances, depending on the age of

the vehicle.


Johnson Matthey | Annual Report and Accounts 2022

Other information continued

No allocation between value chain partners is applied, since there are no established guidelines to determine this; however, our products are vital to realising the benefits of the technologies being used, and our KPI aims to accurately reflect JM's role, in that we enable additional NOx removal via the use of such technologies.

Goal: Conserve Scarce Resources

Our KPI to monitor how we are advancing the circular economy is a measurement of all % recycled platinum group metals in our manufactured goods on a mass basis. We include use of five PGMs - platinum, palladium, rhodium, ruthenium and iridium in our target. This is defined as the weighted global average of all goods manufactured in our plants over the course of the reporting year and includes metal that is both sourced and funded by JM and metal sourced and funded by our customers.

We define primary metal as metal from a mine or originating outside of the refining loop. This is measured by recording the amount of metal matching this description that has been used in product manufacturing over the given time-period.

We define recycled metal as metal from non-primary sources. This makes up the balance of metal that has been used in product manufacturing over the given time-period.


Goal: Achieve net zero by 2040

Our operational carbon footprint, reported in tonnes of carbon dioxide (CO2) equivalent, includes Scope 1 and Scope 2 emissions.

Our Scope 1 greenhouse gas (GHG) emissions are calculated in tonnes CO2 equivalent using conversion factors for each energy source as published by Defra in July 2020. We include carbon dioxide (CO2), nitrous oxide (N2O), refrigerant and methane (CH4) process emissions to air in our Scope 1 calculations.

Our Scope 2 emissions are calculated using the 'dual reporting' methodology outlined in the GHG Protocol corporate standard 2015 revision, www.ghgprotocol.org. For the location based method of Scope 2 accounting, for all facilities outside of the US, we use national carbon intensity factors related to the consumption of grid electricity in 2019 made available in the 2021 edition of the world CO2 emissions database of the International Energy Agency. They were purchased under licence in February 2022 for sole use in company reporting. For US facilities we use regional carbon factors published by the Environmental Protection Agency in January 2022 edition of, eGRID data 2020. For the market based method of Scope 2 accounting, we have applied the hierarchy of sources for determination of appropriate carbon intensity factors, as outlined in Table 6.3 on page 43 of the GHG Protocol 2015 edition guidance. We have successfully obtained carbon intensity factors directly from our grid electricity suppliers in the EU, USA and Australia. However, it has not been possible to obtain this from suppliers in China, India, South Africa and non-OECD Europe.

Our total operational carbon footprint is based on:

  • Scope 1 emissions - generated by the direct burning of fuel (predominantly natural gas)
    and process derived greenhouse gas emissions (CO2, N2O, CH4 and refrigerants) on our premises and company-owned or leased vehicles.
  • Scope 2 emissions - generated from grid electricity and steam procured from third parties for use at our facilities.

Under the UK Stream-lined Energy and Carbon Reporting (SECR) April 2019 requirements, we are required to ensure that the quantification of GHG emissions and data reliability are sufficient to meet our obligation under the UK Companies Act 2006 (Strategic and Directors' Reports) Regulations 2013. The legislation indicates that all fuel used in company-owned and leased vehicles driven on public roads should be included and we report this in our 2021/22 Scope 1 data.

Scope 3 GHG emissions

Our annual Scope 3 GHG emissions are reported according to the methodology of the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard. A variety of accounting techniques were used depending on the availability of data. All value chain emissions over which JM has financial control are included; the key exclusion from this is raw materials where JM is a toll manufacturer i.e. when raw materials being used in our factories but remain in the financial ownership of our customer at all times.

When calculating the GHG footprint of each Scope 3 category, our principle of using the most accurate data sources was applied in the following order:

  1. GHG footprint data obtained directly from value chain partners.
  2. Mass based calculations using carbon intensity factors from respected databases, such as Defra's GHG reporting conversion factors and EcoInvent.
  3. Financial allocation based using Avieco's proprietary Input-Output model (EIO).
    This combines economic data from central banks and treasury departments with research data from the World Bank, OECD and other leading environmental agencies.


Johnson Matthey | Annual Report and Accounts 2022


Other information continued

Scope 3 GHG category as defined by GHG Protocol 1. Purchased goods and services

Calculation methodology

Where mass of purchased goods was available, this was used in combination with GHG intensity factors obtained either from suppliers or EcoInvent. For the remaining goods and for purchased services a financial allocation (EEIO model) was used

2. Capital goods

Financial allocation (EEIO model) using geographical breakdown of data shown in Accounting note 12 "Property, plant & equipment"

on page 174

3. Fuel- and energy-related activities

Defra's GHG reporting conversion factors 2021 were used to calculate well-to-tank GHG emissions from fuel usage, transmission and

distribution losses from purchased electricity, and well-to-tank and transmission and distribution losses of energy from steam

4. Upstream transportation and distribution

Emissions data was provided by our suppliers where available. Where only mass and distance of goods transported was available, this was

used in combination with Defra's GHG reporting conversion factors 2021. Otherwise, a financial allocation was made based on spend and

intensity factors from the EEIO model

5. Waste generated in operations

Where GHG footprints were available from waste service providers they were used, otherwise Defra's GHG reporting conversion factors

2021 were used according to mass of waste disposal by destination see page 46

6. Business travel

Footprint business travel for air and rail was obtained from our business travel service providers. Where available mileage for personal car,

taxi and public transport use was used in combination with Defra's GHG reporting conversion factors 2021. In the absence of mileage,

a financial allocation was made based on expenses spend and intensity factors from the EEIO model. Accounting is by date of

financial transaction

7. Employee commuting

Data is obtained by employee survey of miles travelled per week by modes of transport. Defra's GHG reporting conversion factors 2021 are

used to calculate the GHG intensity of each transport type

8. Upstream leased assets

Financial allocation (EEIO model) using floor space and geographical location

9. Downstream transportation and distribution

Where JM takes responsibility for the downstream distribution of goods, it was included in the upstream category calculation. Where our

customers takes responsibility, no data is available

10. Processing of sold products

No quantitative data available, but not expected to be material based on our knowledge of how our customers use our products

11. Use of sold products

We have removed Use of sold products from our footprint by agreement with SBTi, as it determined that the emissions we reported in this

category were 'indirect' and should not, therefore, be included.

12. End of life treatment of sold products

Many of JM's products are returned to the company for recovery of the precious metals and thus end of life treatment is included in our

Scope 1 + 2 footprint. JM does not have visibility of other end of life treatments

13. Downstream leased assets

Included in Upstream leased assets category

14. Investments

Financial allocation (EEIO model) using geographical breakdown of investment revenues from each entity


Johnson Matthey | Annual Report and Accounts 2022

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Johnson Matthey plc published this content on 15 June 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 June 2022 10:52:09 UTC.

© Publicnow 2022
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