Sustainable Packaging from a Sustainable Company
2017 Report
ARDAGH GROUP SUSTAINABILITY REPORT 2017
Contents Executive Summary
2
2016 Performance Overview
4
Understanding our Business
5
Our Approach to Sustainability
6
Environmental
11
Social & Ethical Management
31
Product Cycle & Investments
40
Basis of this Report
46
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Executive Summary As a leading global packaging manufacturer, Ardagh Group recognises that it is our responsibility to behave in a socially responsible manner. Our sustainability strategy is built around three key pillars: Environmental, Social & Ethical and Economic, with ambitious long term targets set for each. We are currently coming to the end of the first phase of our sustainability targets. We believe that sustainability is a journey rather than a destination, and as a business, we have already made considerable progress. Ardagh is very proud to have been awarded Gold by EcoVadis, for the second successive year. We are delighted also, that four of our Glass North America facilities have been awarded the Energy Star Plant Certification for their demonstration of best-in-class energy performance; these facilities are in the top 25% for energy efficiency in North America. In addition, our industry-leading level of recycled glass (cullet) management in Europe is also a source of great pride.
For the reporting period 2015/2016 we have once again delivered significant value for our stakeholders, while the acquisition of a new Metal Beverage business unit has added significantly to the Group’s operational footprint. This has enabled us to provide customers with a wider range of sustainable, rigid packaging solutions in both glass and metal. Both are permanent materials that contribute to the circular economy in a unique way, as both are infinitely recyclable, without any loss of quality. During 2015/2016 we made significant progress in a number of key areas. Health and Safety (H&S) is a top priority for Ardagh, and a continued focus has reduced our Lost Time Accident Rate (LTAR) by 4%. As a Group we successfully implemented our Code of Conduct and our Corporate Social Responsibility (CSR) Policy across our business, guided by the ISO 26000 and other international standards.
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
We publish our external sustainability assessments and ratings from recognised institutions including; EcoVadis, SEDEX and Carbon Disclosure Project (CDP). In partnership with our customers, we are committed to retaining our EcoVadis Gold rating, which has been awarded for two years running, and our CDP (B Score) position.
complete product cycle is in scope, from supplier to end consumer. It will incorporate the core issues of social and ethical controls, resource efficiency, material recycling and our continued focus on climate change. We look forward to making further progress in these areas as we continue to work with our stakeholders through 2017 and beyond.
Glass and metal container manufacturing requires fossil energy and generates emissions. These are important environmental issues and we take their control and reduction very seriously. We have made significant improvements over the years, since we established our first sustainability targets back in 2010. As Ardagh moves into the next phase of our sustainability journey we will be focusing on our 2025 targets. The
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
2016 Performance Overview Management & Leadership
Sustainable Supply C hain
2015
2016
Gold
Gold
External Rating: Carbon Disclosure Project (CDP)
D
B
Improvement from “Disclosure” to “Management” level
Sedex: Self-Assessment questionnaire
Implementation of a Responsible Procurement Policy
External Rating: EcoVadis
KEY ACHIEVEMENTS Gold level
840,202 Material Use
Aluminium and Steel Input [t]
835,634
(excl Metal Beverage)
1,440,923
Lightest seafood aluminium can
(incl Metal Beverage)
Glass Melted [t]
6,746,787
6,794,866 13,000,291 (excl Metal Beverage)
Energy
Total Energy [MWh]
13,007,089 14,349,772
High definition sculptured embossing Four of the Ardagh Group glass facilities in North America were awarded the Energy Star Plant Certification. They demonstrated best in class energy performance, and on average, performed within the top 25% nationwide for energy efficiency, compared to similar facilities across North America.
(incl Metal Beverage)
4,037,289 Direct and indirect CO2 [tCO2]
4,123,796
(excl Metal Beverage)
4,453,594
(incl Metal Beverage)
Air Emissions
Reduction of 15% in CO2 emissions in Glass Europe since 2007 Reduction of 11% in CO2 emissions in Metal Food and Speciality since 2010 Reduction of 5% in CO2 emissions in Glass North America since 2014
1,620 Volatile Organic Compounds (VOCs) Metal [t]
1,883
(excl Metal Beverage)
4,254
Reduction of more than 20% in VOC emissions in Metal Food and Speciality since 2010
(incl Metal Beverage)
NOx Glass [t]
10,089
9,709
Reduction of 28% in NOx emissions since 2007 in Glass Europe
97,028 Waste Management
Total Waste [t]
106,126
(excl Metal Beverage)
116,279
Use of 100% recycled corrugated boxes at one of our Glass North America plants
(incl Metal Beverage)
6,806,414 Water Management
Total Water consumption [m3]
7,181,626
(excl Metal Beverage)
9,663,226
Implementation of water recirculation system where rain water is collected and used for process purposes at our Glass Plant in Montorio, Italy
(incl Metal Beverage)
0.54 Health and Safety
Lost Time Accident Rate
0.5
(excl Metal Beverage)
0.48
Ardagh BSafe! Programme
(incl Metal Beverage)
18,761 Employment
Total Employees
18,857
(excl Metal Beverage)
23,331
(incl Metal Beverage)
Innovation Metal Beverage was not in scope for 2015 figures, but is for 2016 figures.
Ardagh received various design and supplier awards for glass and metal products. These include the CocaCola Enterprises ‘Supplier of the Year’ Award, and the Accolade Wines ‘Sustainable Supplier of the Year’ Award in 2016
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Understanding our Business Ardagh Group manufactures glass and metal packaging for the world’s leading brands. We are highly valued for our design innovation and manufacturing processes. The growth of our business has been driven by our expertise, relentless focus on quality and commitment to continuous improvement. Currently we have global sales of approximately €7.7 billion and operate 109 glass and metal manufacturing facilities in 22 countries, employing approximately 23,500 people. Since acquiring the Metal Beverage Packaging business from Ball Corporation (Ball) in June 2016 (with 22 new plants), our focus has been on integrating both the business and its people into Ardagh. Metal Beverage Packaging will be included in our 2025 sustainability targets. For more information please visit www.ardaghgroup.com.
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Our Approach to Sustainability Ardagh’s vision is to be the preferred packaging partner to the world’s leading brands. We will achieve this by putting our customers first, being innovative, being obsessive about quality, providing an inspirational working environment, having a holistic approach to sustainability and creating value for our business through continuous growth and development.
three sustainability pillars: Environmental, Social & Ethical and Economic. We recognise that these pillars are interdependent: we need strong economic performance to underpin our continued investments in our manufacturing facilities, innovation and developing opportunities. This economic performance is, in turn, enhanced by meeting environmental and social targets.
Our sustainability strategy is inextricably linked with this vision, and is built on
Sustainability is at the core of our business and built into our DNA. Each
of the three pillars is underpinned by a series of strategic imperatives and related programmes, designed to deliver on our 2017 targets. Throughout this report, we will bring to life some of our achievements through case studies from our operations. As we move towards our new 2025 targets and develop associated programmes, it is clear that Ardagh is in a strong position to begin the next phase of its sustainability journey.
Sustainability Long - Term Targets 2025 (base year 2016) Environmental Glass
Social & Ethical
Environmental Metal
- Maintain top level ratings with EcoVadis and Carbon Disclosure Project (CDP) supply chain disclosure
ARDAGH GROUP
- All plants to identify and assess their individual stakeholder interests
- tNOx/a -17%
- Community involvement projects at every plant in response to stakeholder interests
- Waste recycling rate +10%
- H&S management and behavioural safety systems implemented at every plant
- tVOC/a -4%
- m3 Process water consumption -9% - tCO2 /a
-17% CO2 VALUE CHAIN
- All suppliers to verify adherence to Ardagh’s Responsible Procurement Policy
- tCO2 /a annual indirect CO2 emissions
Additional footprint improvements in case of customer-related projects
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Our Sustainability Pillars
Environmental
Environmental
Economic
Economic Investment in Local Community Projects Investing in Energy Efficiency Technologies Reducing Material Use Minimising Transportation Costs Shared Value for all Stakeholders
To be the preferred packaging partner to the world’s leading brands
Ardagh GoGreen Index Metal & Glass Targets Environmental Management Systems LCA Projects Environmental Control Standards Standard Operating Systems Environmental Policy Permit Compliance Management
Social & Ethical Social & Ethical Community Projects Code of Conduct and CSR Policy Sedex Participation EcoVadis Participation BSafe! Implementation Supply Chain Risk Assessment Ethics Hotline Talent Development Customer Satisfaction Surveys
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
2017 Sustainability Commitments: Progress Update We have already delivered on many commitments and we are committed to further improvements by the end of 2017. GROUP ACHIEVED BY 2016
EXTERNAL RATING
SOCIAL & ETHICAL
ECOVADIS
Achieve EcoVadis gold status
Gold
CARBON DISCLOSURE PROJECT (CDP)
Increase Carbon Disclosure Project (CDP) rating
B
HEALTH & SAFETY
Implementing BSafe! programme Group wide
100%
COMMUNITY
Community Involvement Projects - At least 1 per plant
72%
SUSTAINABLE SUPPLY CHAIN ASSESSMENTS
Customer surveys successfully passed
100%
GLASS EUROPE
GLASS NORTH AMERICA
METAL FOOD &
Progress 2016 vs. base year
Progress 2016 vs. base year
Progress 2016 vs. base year
Base Year 2007*
Base Year 2014*
Base Year 2010*
SPECIALITY
ENERGY
Reduce energy consumption
-6%
-2%
-13%
Reduce C02 emissions
-15%
-5%
-11%
Reduce NOx emissions
-28%
-12%
-12%
Reduce particulate emissions
-80%
-9%
N/A
Reduce VOC emissions
N/A
N/A
-20%
Reduce process water consumption
-30%
-9%
N/A
Implement water reduction plan
N/A
N/A
Implemented
RECYCLING
Increase use of recycled content
+14%
N/A
N/A
MANAGEMENT SYSTEM
Environmental management systems implemented at each plant
100%
93%
55%
WASTE MANAGEMENT
Separate collection at each plant
N/A
N/A
Implemented
EMISSIONS
ENVIRONMENT
WATER
*Different base years reflect respective acquisitions.
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Our Core Values At the heart of our business are our Core Values: Trust, Teamwork and Excellence, which are seamlessly interwoven into the culture of our organisation, underpinning everything we do, every single day. They define how we work and how we interact with one another, our employees, suppliers, customers and stakeholders. We have a Code of Conduct in place that sets the standard for how we conduct business in terms of ethics and professionalism. Our Code of Conduct fully supports and adheres to the following internationally recognised standards: - International Labour Organisation (ILO) Declaration on Fundamental Principles and Rights at Work - ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy
Our Code of Conduct can be accessed via our website by clicking here. As a global company, we are conscious of our environmental responsibilities, and the far-reaching impact we have beyond our supply chain. Not only have we implemented environmental and sustainability management policies for all of our operations to adhere to, we also conduct transparent and consistent reporting against our sustainability targets. This is reflected in our ongoing commitment to reporting in line with the globally recognised Global Reporting Initiative (GRI) reporting standard. In addition, external assurance is provided by an independent third party who validates the environmental and H&S data upon which this report is based. This statement can be accessed via our website by clicking here.
In today’s business environment, sustainability is vital to economic success.
- United Nation’s (UN) Universal Declaration on Human Rights
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Teamwork Excellence Excellence
Trust
Trust Teamwork
Trust Trust is central to our business. We have cultivated an environment of mutual respect, integrity and transparency.
Our Code Of Conduct Supports Our Core Values
We recognise the importance of teamwork in meeting all our targets, including achieving business goals and fulfilling customer needs. Shared responsibility, communication and collaboration across teams, countries and cultures are critical to creating and maintaining a business environment that enables us to succeed.
Excellence Our philosophy is ‘right first time’. We constantly push ourselves towards continuous improvement. We are customer centric, committed to customer focused innovation and ambitious in our sustainability targets.
Excellence
Trust
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Environmental Sustainable Consumption and Production
Regulatory and Legal Requirements
Climate Change
We are in substantial compliance with current emission limits. We anticipate that the ever-increasing demands posed by new limit levels will challenge us to find new and innovative ways to ensure we remain compliant. By actively participating in the main industry bodies, we are fully informed of all regulatory and legal requirements. Our strategic planning process factors in potential upcoming regulatory and legislative changes and any investment required for new and upgraded manufacturing processes.
Climate change and loss in biodiversity are major threats facing our planet. At Ardagh, we are working to continuously improve our environmental performance and to mitigate such threats. We have developed a sustainability strategy to address identified risks and opportunities. The predicted rises in temperature and the imperative to reduce energy consumption across supply chains are key drivers of our sustainability strategy, programmes and policies. These issues also highlight a significant competitive advantage of our packaging materials. Glass and metal packaging keep products fresh without the need for refrigeration, allowing retailers and consumers to save energy and reduce carbon emissions when storing food and drinks.
Water Resource Both our Glass and Metal divisions use water in the production process. Therefore, the rising water scarcity in certain regions, where our plants are situated is an issue that we are acutely aware of and constantly monitoring. Ardagh has invested considerably to reduce the volume of water required for our process water systems. Strong results demonstrate our success in this area.
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Biodiversity Our facilities are mainly located in industrial or mixed-use areas; only a handful are adjacent to areas that are protected. As part of an environmental risk assessment, we maintain a list of plants that are within a 100 metre radius of protected areas like Natura 2000 and nationally designated areas. Only four of our European facilities – one glass and three metal – are in close proximity to Natura 2000 areas, and we are pleased to report that there are no IUCN Red List Species or National Conservation List Species whose habitats are in an area where we operate. We understand that manufacturing processes can have a negative impact on the environment, particularly through emissions and thermal radiation. We are confident that our glass and metal plants do not have a direct negative impact on biodiversity. Nonetheless, we are constantly monitoring our activities and working to improve our environmental
performance. For example, by further developing our environmental control standards, and by promoting the Ardagh GoGreen improvement programmes. The GoGreen Index (GGI) is an internal index indicator that brings together the most critical environmental KPIs and expresses them as one number. It provides us with one simple measurement of progress on environmental management, which helps us to establish priorities for annual programmes. Our cans, bottles and jars are made from non-renewable but permanent materials: aluminium, steel and glass. These materials are not classified as scarce resources. However, as we move towards more sustainable production and consumption of our packaging, we are participating in a number of initiatives and programmes aimed at both our own operations and consumer awareness.
Production We are focused on maximising material recycling through initiatives such as longterm engagement with cullet treatment plants. For example, we have renewed our contract with a local recycling company in the UK for the supply of up to 250,000 tonnes of glass, which is the equivalent of approximately 13% of the UK’s waste glass. This helps us to achieve high recycling rates, and in turn, lower the CO2 emissions from our glass production. Consumers ‘Every Can Counts’ is a partnership between beverage can manufacturers and the UK’s recycling industry, aimed at increasing the recycling rate of aluminium and steel beverage cans. We are a major supporter of this initiative, as it promotes metal’s impressive recycling credentials, increases recycling rates and helps us to reduce emissions and energy consumption in the supply chain.
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
‘Metal Matters’, another successful UK project, is focused on educating householders about metal packaging recycling, with the aim of motivating consumers to recycle more at home. In the U.S., we partner with the Container Recycling Institute (CRI), which promotes the recycling of glass and metal packaging. CRI sponsor the Great American Can Roundup, this is an annual contest in which U.S. can maker locations engage with local communities and compete against each other to recycle the most cans per employee. Ardagh has won this contest every year for the past nine years. Together we conduct studies of container reuse and recycling, as well as the influence of legislation on the market. The learnings from these studies help us to determine how we present relevant recycling education programmes to citizens, national Government agencies and elected officials. The aim of these initiatives is to get consumers to recognise the advantages of glass and metal, which are permanent materials that can be infinitely recycled, and can have a positive impact on meeting the national waste reduction targets.
*
Secondary raw material
Main virgin raw materials
Glass
Sand, soda ash, limestone and dolomite
Aluminium
Bauxite, caustic soda and lime
Steel
Iron ore, coking coal and tin
When making aluminium, glass and steel, we use a large amount of materials that have been in use before and are recycled (secondary raw materials) reducing the need for virgin raw materials. We also engage with the suppliers of our raw materials to ensure that their impact on biodiversity is kept to a minimum by following the appropriate legal requirements for renaturation. Concept of Permanent Materials Materials, in general, can be classified as renewable or non-renewable; as permanent or non-permanent. Renewable materials such as wood, paper or bio plastics are made from natural resources that can be re-built by biological processes. Permanent materials are classified as materials that, once produced, can be infinitely recycled
or reused without any loss in quality, which is also called closed-loop material recycling. Glass and metal are both permanent materials* with strong sustainability credentials, due to their recyclability and high level of inertness. The aluminium, steel and glass used to produce our cans and container glass are comprised of 100% permanent materials. In comparison to renewable materials, metal and glass does not need to be renewed, but recycled. - Ardagh uses both aluminium and steel in the Metal Division. As demand for these materials exceeds the supply that can be met from secondary materials, processing of virgin materials is still needed.
Carbotech (2014): Final Report – Permanent Materials, Scientific Background.
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Permanent Material Concept
Renewable
- The main material in our Glass Division is cullet. This is mixed with raw materials (such as sand and soda ash) during the melting process.
Non-Renewable
Permanent Material
Product
Metals Glass
Resources Non-Permanent
Materials
Permanent
Product
Non-permanent material spiral to end of life 14
ARDAGH GROUP SUSTAINABILITY REPORT 2017
Since aluminium, steel and glass are permanent materials that can be recycled repeatedly, they are highly valuable. Hence, the products we manufacture are collected through existing collection systems at their end of life. These collection systems include bottle banks for glass containers and existing municipal waste management. Using these collection systems, materials are recycled and re-used in our production process. The recycling rates for our materials are shown in the table on the right. The Glass North America recycling rate is lower than in Europe because of gaps in collection and recycling infrastructure. Ardagh actively supports recycling systems in order to achieve an increased availability of recycled glass and metal. Increased use of glass and metal recyclates decreases energy consumption in manufacturing and reduces the product CO2 footprint. As consumer awareness and education is critical to recycling, we support education initiatives on the importance of recycling for our environment.
Case Study
Glass Packaging - United States In 2016 we introduced a free, online educational programme on glassmaking and recycling in the United States. It provides elementary schools, teachers, parents and students with online activity books, stories and short animated films, aimed at promoting glass recycling. It’s hosted by two animated stars, Captain Cullet and the little Gob o’ Glass… and these guys know how to make learning fun.
Material - Region
Recycling Rate
Aluminium EU
70%*1
Aluminium US
64%*2
Aluminium Brazil
98%*3
Steel EU
78%*4
Steel US
71%*5
Glass EU
74%*6
Glass US
33%*7
Source of Data European Aluminium Association
*1
The Aluminium Association
*2
Brazilian Aluminium Association
*3
APEAL - Packaging Steel Association
*4
Can Manufacturers Institute
*5
FEVE - Container Glass Association
*6
Glass Packaging Institute
*7
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Environmental Management in Manufacturing Our plants operate best practice as required in our environmental permits. Energy Management Systems are implemented and are part of our Operational Excellence Programmes. Environmental Control Standards have been implemented to ensure effective control mechanisms for significant environmental issues, such as chemical and hazardous material management and air emission control. Our Key Environmental Impacts Our Metal Division converts steel and aluminium made from recycled and virgin raw metal into containers and closures. This process principally requires energy for coil shearing, internal and external coating, printing, application of sealing compounds, curing and drying and metal forming operations like bending, deep drawing and flue gas treatment. For other processes, such as protection of
cans against corrosion and application of decorative designs, some additional material inputs such as paints, inks, varnishes and coatings are required. The waste gases from such processes contain Volatile Organic Compounds (VOC) which are emitted from drying ovens, coating stations and cleaning processes. They are collected in a duct and exhausted by fans into the air or transferred to abatement equipment to comply with our permit demands.
ash and limestone. We use as much post-consumer glass as possible, as this enables the other raw materials to melt at lower temperatures, thereby lowering our energy costs and carbon emissions. In general, a 10% increase of cullet use, decreases energy consumption by 3% and CO2 emissions by about 5%*. Hence, the use of cullet is key from a circular economy, environmental sustainability, and competitiveness point of view.
Glass production is an energy intensive process. We use mainly natural gas and electricity to fuel our furnaces. As a result, the main emissions from glass manufacturing are carbon dioxide, nitrogen oxide and particulates. Heavy fuel oil has been substituted by natural gas in almost all of our furnaces, significantly reducing our carbon dioxide and sulphur oxide emissions. The primary raw materials used in the production of glass containers are cullet, sand, soda
FEVE
*
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Metal Packaging Production Process Coatings
Supply Chain
IN
Liner Compounds
Purchased Electricity
Fossil Fuels
Aluminium
Metal Packaging Conversion Distribution
Steel
Filling & Retailing Waste
Consumers
Other Emissions
Waste Water
VOC
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Glass Container Production IN Process
Supply Chain
Limestone
Fossil Fuels
Purchased Electricity
Process Water
Oxygen
Sand
Cullet
Soda Ash
Glassworks
Other Emissions Waste Distribution Consumers
Waste Water
Particulates
Filling & Retailing
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
The chart on the right shows the percentage split of our steel and aluminium consumption in 2015 and 2016. As a result of the acquisition of the Metal Beverage Packaging plants, the Group’s total amount of aluminium consumption increased significantly in 2016. In our Glass Division, the activity level was relatively constant during the reporting period. We have been able to increase the use of cullet by 1% from 2015 to 2016. This was mainly driven by our European operations. Availability of cullet is a limitation in general, and particularly in North America, because of a lack of recycling infastructures.
Metal Division: Steel & Aluminium Consumption 100% 80% 60% 40% 20% 0%
2015
2016
Steel Consumption % Aluminium Consumption %
By implementing a cullet management programme that covers the entire value chain, we have been able to use, on average, 70% cullet in our European made bottles, making us the industry leader in cullet management. Given that the industry average rate is 52%, we are extremely proud of this achievement. In Glass Europe we have achieved a 14% increase in cullet use when compared to 2007.
NA GLASS
40% CULLET
CONTENT*
EU GLASS
70% CULLET
CONTENT*
*on average
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Energy Consumption Reduction Case Studies
Metal Packaging - The Netherlands
Metal Packaging - Russia
Metal Packaging - Germany
Previously, the vacuum required for the production process at our Hoogeveen plant was generated by two continuously driven vacuum pumps. These pumps had to be cooled with water, supplied from a separate cooling installation. Replacing this system with a modulating vacuum pump, with revolving control, eliminated the need for the cooling system, thereby reducing energy consumption by around 74%.
The staff at our aerosol plant in Vyazma have taken a massive step forward in terms of energy efficiency by changing to LED lighting and installing a recuperation system in the plant’s compressor room, which reduced heating costs for the production area. Together these measures have saved approximately 14% of energy used in 2016, while also making employees more aware of the importance of energy efficiency and sustainability.
In the beverage can production process, post forming residues need to be removed from the can. As part of a washer process, numerous pumps provide the spray nozzles under high pressure with the cleaning agent which is applied to the cans. By the installation of variable frequency drive (VFD), it was possible to reduce pump speed and therefore save energy. In one of our washers at our Hassloch plant, we equipped four of these pumps with VFDs. This measure alone enabled savings of approximately 200,000 kWh electricity per year.
Metal Packaging - Brazil
Metal Packaging - United Kingdom
When it comes to increasing energy efficiency, our plants at Alagoinhas and Jacarei, together with our office in Sao Paolo, are leading by example. Installing a web energy system, making a significant technical change to their vacuum pumps systems and switching from electric to LED resulted in considerable energy savings in 2016.
At our Wrexham plant, we replaced the burners in one of the lacquer curing ovens with high-efficiency modern design burners. This robust, up-to-date burning system saves around 11,000 kWh of energy per year, while also providing a greater degree of flexibility for line control.
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Energy – Glass Division In our Glass Division, overall energy consumption and specific energy consumption remained constant during the reporting years 2015 and 2016. We achieved a reduction in energy consumption of 6% versus 2007 in our Glass Europe Division, and a 2% reduction versus 2014 in our Glass North America Division. Where feasible renewable electricity projects contribute to our overall reduction of fossil based energy consumption. One example is in Bridgeton, North America where solar power is used to partly cover the plant’s energy requirements.
Glass Division: Glass Glass Division: Division: Energy consumption consumption Energy Energy consumption byby primary energy source by primary energy source primary energy source
2015 & 2016 2015 2015 & 2016 & 2016
Energy – Metal Division We have in place a number of operational excellence programmes aimed at driving continuous improvement in our energy consumption levels. These programmes cover the areas of high-tech thermo processes, heat recovery systems, compressed air control systems and energy management systems. This has resulted in an overall decrease in our energy consumption in Metal Food and Speciality from 929,150 MWh to 917,521 MWh, resulting in a 1.25% reduction in 2015/2016. The diagrams below show the percentage split of energy between electricity and fossil fuels in 2015 and 2016. The increase in electricity from 34% in 2015 to 45% in 2016 reflects the acquisition of the Metal Beverage Packaging business, where the forming process requires more electrical energy.
Metal Division: Metal Metal Division: Division: Energy consumption Energy consumption Energy consumption byby primary energy source primary energy source by primary energy source
Case Study
Glass Packaging - North America Four of Ardagh Group’s Glass facilities in North America have been awarded the Energy Star Plant Certification. Our facilities have demonstrated best-inclass energy performance, compared to similar plants across the country. On average, these facilities perform within the top 25% nationwide for energy efficiency.
Metal Division: Metal Metal Division: Division: Energy consumption Energy Energy consumption consumption byby primary energy source by primary primary energy energy source source
% Electricity % Electricity % Electricity
% Electricity % Electricity % Electricity
% Electricity % Electricity % Electricity
% Fossil Fuels % Fossil % Fossil FuelsFuels
% Fossil Fuels % Fossil % Fossil FuelsFuels
% Fossil Fuels % Fossil % Fossil FuelsFuels
2015 2015 2015
2016 2016 2016
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Case Studies
Glass Packaging - Germany
Glass Packaging - The Netherlands
Glass Packaging – Germany
In Germersheim, we implemented new technology to re-use the heat produced by the glass furnace to heat the batch house. As well as being a great example of innovation, it reduces our fuel oil consumption by 12,000 litres every year, successfully saving money and reducing the environmental impact of the plant.
Ardagh Group was presented with a prestigious Resource Recovery Award in 2015 for successfully recycling softening pellets at its Dongen plant. These pellets are a valuable residual waste product (secondary raw material) from the water treatment industry, and are used to substitute limestone as a virgin raw material in the production of high quality, clear container glass. The benefits are both financial and environmental.
Frozen Cullet Technology reduces gas consumption by re-using the furnace waste energy to increase the cullet temperature. This technology was developed by Ardagh and results in a reduction of gas consumption, especially in winter, when the cullet temperature is very low. By implementing this technology at furnaces in Wahlstedt and in Nienburg, we are now seeing the benefit from this technology in three of our German furnaces. This has enabled us to reduce CO2 emissions by more than 300 tonnes per year.
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Emissions – General Information Air emissions are a generic term for pollutants like Carbon Dioxide (CO2) and Volatile Organic Compounds (VOC) that are released into the atmosphere. Since air emissions are generated in different parts of the value chain and in the production process, it is necessary to use a classification in order to avoid ‘double counting’. A globally used system divides emissions into three categories: - Scope 1: Direct emissions from sources that the organisation owns, such as combustion of fossil fuels used in the production processes or to operate vehicles. - Scope 2: Indirect emissions from sources that the organisation does not own, but has control of, such as the consumption of purchased energy and steam.
CO2 Emissions Scope 1 [tCO2] 2015
Metal Division
124,369 tonnes
- Scope 3: Other indirect emissions, that are not in control of/nor owned by the organisation, which include for example; employee commuting and purchased goods used within the production process. Emissions - Metal Division The carbon emissions (Scope 1 and 2) of the Food & Speciality plants correlate with the energy consumption. In 2016 the specific CO2 emissions from Metal Food and Speciality plants decreased by 2% per tonne of aluminium and steel input.
practice substitution programmes, in which products containing solvents are replaced by water based, high solids or solvent free alternatives. In addition to this strong achievement, non-solvent or low solvent emission cleaning techniques and abatement techniques are being implemented where available and feasible in our operations. We ensure that all quality, food contact and customer requirements are met. Despite the fact that we have achieved in excess of 20% in VOC emissions since 2010, we will still continue to seek further improvements.
In 2016 Ardagh Metal Food & Speciality achieved a reduction in excess of 10% in VOC emissions, from 1,883 tonnes to 1,620 tonnes through the implementation of a number of best
CO2 Emissions Scope 1 [tCO2] 2016 122,397 tonnes (excl. Metal Beverage) 246,353 tonnes (incl. Metal Beverage)
CO2 Emissions Scope 2 [tCO2] 2015
136,029 tonnes
CO2 Emissions Scope 2 [tCO2] 2016 133,856 tonnes (excl. Metal Beverage) 426,206 tonnes (incl. Metal Beverage)
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Case Studies
Metal Packaging - United Kingdom
Metal Packaging - Germany
Metal Packaging - United Kingdom
Our metal plant in Sutton-in-Ashfield reduced VOC emissions over a 12-month period by circa 60 tonnes. This enormous improvement, which represents more than 50% of this plant’s VOC emissions, has been achieved through improvements to efficiencies in the performance of the regenerative thermal oxidiser.
Given the layout and structure of the buildings at the Weißenthurm plant, it is necessary for us to use air conditioning. Over time, we have been replacing old, inefficient air conditioning units with new stateof-the-art ventilation systems which feature heat and coolant recovery cycles. These new units save Ardagh more than 32 tonnes of CO2 a year.
At our Wrexham plant the heating of the Bodymaker coolant system was replaced in 2016 by an air source heat pump system, which will save up to 475 tonnes CO2 per year. The coolant used in the aluminium beverage can making process, an oil/water emulsion, needs to be heated up to around 50°C. As the heat pump technology works in the opposite way to a refrigerator, we found we had a ready-made heat source to complete the job, providing another efficiency and resulting in further savings.
Metal Packaging - Italy Ardagh’s metal plant in Incisa Scapaccino in Italy has reduced its total solvent consumption by circa 10%, as a result of implementing an alternative cleaning technology. This machine cleans rubber rollers many times and minimises the solvent consumption and emissions from solvent vapours. This is a good example of Ardagh taking responsibility for efficient use of resources and reduction in emissions.
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Emissions - Glass Division The absolute CO2 emissions created by the Glass Division has decreased by approximately 2%, from 3,863,398 tonnes to 3,781,036 tonnes in the reporting period. Since 2014 we have reduced our CO2 emissions by 5% in Glass North America and since 2007 by 15% in Glass Europe. From 2015 to 2016, a reduction of 3.75% NOx emissions in the Glass Division was achieved. Both investment in upgrades of air emission abatement systems and our operational excellence
Glass Division
programmes have helped to reduce NOx emissions from furnace flue gases. All in all, we have reached a significant decrease of 28% in NOx emissions in our Glass Europe Division versus 2007 and 12% versus 2014 in Glass North America. Since 2008, Ardagh has invested more capital in emissions reduction than any other Glass North America container manufacturer.
CO2 Emissions Scope 1 [tCO2] 2015
CO2 Emissions Scope 1 [tCO2] 2016
CO2 Emissions Scope 2 [tCO2] 2015
CO2 Emissions Scope 2 [tCO2] 2016
2,561,078 tonnes
2,473,711 tonnes
1,302,319 tonnes
1,307,324 tonnes
Case Study
Glass Packaging - Germany Our Nienburg plant has been making great progress in reducing the NOx emissions of its furnaces over the past number of years, and has recently made a significant breakthrough. Given that the continuous operation of a typical glass furnace is longer than 15 years, it is very difficult to change the technology during its lifetime. However, through the integration of an electronic control and regulation system (model predictive control), and using the expertise of the plant’s glass technologists, we successfully achieved NOx emission values equivalent to the best available for our 17 year old furnace, by avoiding NOx formation. In 2016 we also invested in new burner technology for another furnace at Nienburg, which resulted in NOx emissions being reduced by more than 60%.
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Case Studies
Glass Packaging - Sweden
Glass Packaging - North America
Ardagh Group’s glass plant in Limmared has taken another step towards reducing CO2 levels by harnessing hydropower in the production process. This has resulted in a significant reduction in CO2, as 100% of the electricity used at this plant now comes from renewable resources.
One of the Group’s glass plants has achieved a significant decrease in NOx emissions. By installing a Continuous Emission Monitoring System, and incorporating as much cullet into the batch as is possible. These operations, combined with furnace energy improvements and emission abatement controls, have enabled the facility to reduce its NOx emissions by almost 60% in 2016 versus 2015.
Glass Packaging - North America One of the Group’s glass plants received the prestigious Pratt Industries Environmental Impact Award in 2015 for its use of 100% recycled corrugated boxes. Based on the amount of packaging boxes used in 2014, we saved approximately 19,000 trees by using recycled material compared to fresh cellulose.
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Waste – Metal Division
Waste – Glass Division
The amount of waste generated in 2015 and 2016 by the Metal Food & Speciality plants remained almost constant at approximately 60,000 tonnes, with a recycling rate of 70% (recycling including heat recovery). Ardagh Group is always searching for opportunities to reduce waste generation and increase waste recycling. We give priority to separate waste collection and recycling instead of disposal. This is emphasised by the separate collection systems that we implement at all our Metal Food & Speciality plants. Future focus will now be on increasing our recycling rate and further reducing our waste generation.
In our Glass Division, we have been able to reduce the total amount of waste from our glass plants by 20% in the reporting period. The waste recycling rate in our glass plants has increased slightly. Our environmental programmes are dedicated to increasing the recycling rate wherever feasible. The recycling fraction includes all waste which is treated in facilities with formal recycling classification (including heat recovery). Additionally, Ardagh continuously looks for opportunities to eliminate waste generation where possible, as this is the most environmentally friendly approach. From 2015 to 2016 the total waste generation was reduced by more than 8,000 tonnes and the recycling rate increased from 56% to 60%.
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Metal Division: Water Consumption 3.5 3.0 [mio. m³/a]
Water – Glass Division At Ardagh we are aware of the importance of water. Therefore, we try to reduce our water consumption wherever possible. As water is used mainly for cooling processes, we are implementing internal closed loop water systems as a key practice to reduce water consumption to low levels. As a result, in 2016 our Glass plants have been able to reduce their water consumption by 4% versus 2015. In addition, we try to source municipal or surface water instead of ground water wherever possible in order to protect important water sources. Compared to our long-term target base year of 2007 we have already achieved a 30% reduction of process water in Glass Europe. In Glass North America, we have achieved a 9% reduction versus 2014.
2.5 2.0 1.5 1.0 0.5 0
2015
2016
2016
Food and Speciality
Food and Speciality
Metal Beverage
Municipal Water [m3] Surface Water [m3] Ground Water [m3]
Glass Division: Water Consumption 7 6 5 [mio. m³/a]
Water – Metal Division In our Metal Food & Speciality plants, process water is consumed mainly by the production of draw and wall ironing cans (DWI). To minimise process water consumption, our plants operate closed loop water systems where feasible. The targeted implementation of water reduction plans have already been achieved in 2016. The diagram on the right provides an overview of water sources and total consumption in both 2015 and 2016. The decrease in water consumption of 10% from 2015 to 2016 for the Metal Food & Speciality plants can be attributed mainly to improving line efficiencies in North America. With the addition of the Metal Beverage Packaging plants in 2016, the total water consumption of the Metal Division increased as the beverage can production process requires additional water for forming, washing, rinsing and cooling than other can making processes.
4 3 2 1 0
2015
2016
Municipal Water [m ] 3
Surface Water [m3] Ground Water [m3]
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Case Studies
Metal Packaging - The Netherlands
Metal Packaging - Czech Republic
Glass Packaging - Italy
Our Deventer plant has reduced lacquer consumption in the so called “e-coat process” by more than 30%. This reduction was achieved with the optimisation of the solid concentration, temperature and conductivity of the bath. Since the e-coat bath consists of 99% deionised water, the process water consumption and waste water output have been reduced. This project shows Ardagh’s commitment to the efficient use of resources and waste water minimisation.
Our metal plant in Znojmo has reduced its total water consumption by more than 40%. This has been achieved by removing the residual washcoat; using absorbing materials instead of dipping the cans in a water bath after the washcoat application process. This innovative method ensures our high standards are maintained, whilst at the same time reducing our environmental impact.
Montorio, Al Vomano, has implemented a process water recirculation system where rain water and groundwater are collected and used for the process. The water used in the process is treated and recirculated back into the process, eliminating any waste water discharge.
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Environmental Management In addition to our environmental policies, we operate environmental control standards. The aim of these standards is to ensure effective control mechanisms for significant environmental impacts and aspects. Plant audits are conducted to monitor the implementation of the environmental control standards. We use those environmental control standard audits in addition to existing ISO 14001 audits. At the end of our reporting period 100% of our Glass Europe plants and over 90% of our Glass North America plants had been audited and certified. In the Metal Division, we are on track with our audit plan. Environmental Spills We are pleased to report that there have been no material incidents in our operations for the period under review.
Case Study
Metal Packaging - United States In the autumn of 2015, a hazardous materials spill mock drill was conducted at our Reno metal facility, involving Ardagh employees. The local fire department and a spill response team from the U.S. National Guard also participated in the emergency practice. We simulated a 170-gallon spill of hydrochloric acid during a routine delivery, with a number of workers injured at the plant. This exercise prepared everybody for any such similar situation and further enhanced our relationship with local organisations.
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Social & Ethical Management As part of our Social & Ethical Management, we have implemented precautionary measures to identify and control the social and ethical risks that are involved, to a certain extent, in all industries.
Sustainability Risk Assessment As part of our risk management measures, we assess the risk exposure of each country we operate in, against the following risk criteria: • • • • • • • • • •
Child labour Civil rights Collective bargaining Corruption Environmental challenges Forced labour Freedom of association Health challenges Political instability Poverty
For each country, these criteria were ranked and evaluated. Our analysis indicated that Ardagh operates in countries that are relatively stable and are not facing any significant risks. In addition, we are engaging with our complete supply chain to ensure that its risk management approach not only identifies these risks, but is also effectively responding to them. We have implemented a Responsible Procurement Policy, which builds the basis for a sustainable supply chain and sets out the requirements for effective controls against the key sustainability issues in the supply chain.
Ardagh Group Code of Conduct In 2014 Ardagh introduced our Code of Conduct (Code), which also addresses the key risk criteria outlined on the left. As training and awareness for our employees is extremely important to us, we conducted a company-wide communication, education and training programme to ensure that adequate information was shared and that awareness was raised amongst all staff, about the principles and procedures set forth in the Code. Then, as part of the roll out, every employee received a copy of the Code and was asked to confirm that they had read and understood the Code, including, but not limited to, information on human rights and corruption. Reference to the Code has also been incorporated into all new labour contracts. In addition, all sales agents had to sign their compliance and agreement with anti-corruption regulations.
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Ardagh Ethics Hotline
Stakeholder Engagement
We have implemented a new, formal process for anonymous reporting of grievances. A ‘Compliance Hotline’ has been established which is operated by a third-party service provider, who receives reports on our behalf. This ensures confidentiality for those who wish to raise any concerns.
We engage with our key stakeholders to understand their needs. This helps us to establish and maintain a positive relationship. Based on the chapter on stakeholders in the ISO 26000 guidelines, we identified our stakeholders and introduced a monitoring process in 2012. To translate our stakeholders’ interests into management processes, we linked our core stakeholder groups with organisational structures, communication activities and procedures, amongst others. These processes help us to constantly work on our stakeholder relationships by using the shared value concept. For more information please visit our sustainability web page.
After the acquisition of the Metal Beverage business, the newly acquired sites were also connected to the Compliance Hotline and employees were informed of the process. This process serves as an independent control and monitoring system for potential breaches of our Code of Conduct. During the reporting period, no human rights violations, cases of discrimination or labour practice violations were reported against our employees or our business partners.
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Our Employees Employees Our employees are a very important resource, critical to our current and future success. Therefore, we focus on giving them as much support as possible. All investment in employees is an investment in our future. We strive to be a good corporate citizen with ambitious sustainability targets, built around our people and the communities in which we operate. Our goal is to attract and retain the best talent and to maintain our reputation as an employer of choice. We have approximately 23,500 employees and operate 109 plants in 22 countries, which means that we work in an international environment with diverse employees, customers, business partners and suppliers. We recognise the benefits of diversity and welcome the perspective it brings to our organisation, culture and performance. We are an equal opportunity employer, seeking to provide equal opportunities to all, irrespective of race, colour, religion, gender, national origin, disability, age or sexual orientation. At present, we only collect employee gender and age data, however going forward, with employee permission, we plan to collect more
employee data so that we can measure and track our diversity performance. We recognise the benefits of a more diverse and inclusive culture.
Case Study
Ardagh supports, among others, freedom of association and effective recognition of the right to collective bargaining. Moreover, we acknowledge the importance of work councils alongside applicable collective bargaining structures, a principle included in our Code of Conduct.
Metal Packaging - The Netherlands
At all our plants, we adhere to at least the legal minimum wage, as defined by local law. In addition, Ardagh operates defined benefit and/or defined contribution pension schemes in most of its countries of operation, and any associated assets are held in separate administered funds and/ or individual personal accounts. We care for our employees and their families and support parental leave in compliance with local law. Information on return to work and retention rates are managed at a local level. In many countries, it is illegal not to offer benefits to part-time workers. We are committed to being compliant with all such legal requirements in the countries in which we operate.
Employees from our facility in Deventer now have the opportunity to use our six e-car (electric car) charging stations. Plus, we also have one multi-socket station for e-bikes (electric bikes). These stations can be used free of charge and have been an enormous success, with more employees choosing to travel to work by e-car and e-bike. This initiative encourages our employees to be both more physically active and more environmentally friendly.
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Talent Development Talent development is important to us at Ardagh. We support lifelong learning and conduct regular performance reviews which help our employees and our businesses to develop consistently and remain fit for future growth. Annual Personal Development Reviews (PDRs) are at the heart of this process with reviews deployed through manual or online PDRs. Online PDRs were conducted for all managers in 2016, 1,900 in total, 19% of which are women and 81% are men. A further 700 managers (22% women and 78% men) in the newly acquired Metal Beverage Packaging business received a manual development review in 2016, and for 2017 will be integrated into the global online PDR process.
In 2018, we will integrate any remaining manual local PDRs into the Ardagh and develop existing and long-standing employees, we also see it as crucial to train and develop our new generation of employees, in particular, our apprentices. Based on the recommendations from the PDRs, employees receive training in customised training programmes. We have a range of programmes in place, such as Lean Six Sigma, H&S and Personal Skills training. Furthermore, we have local management development training and a Group wide Leadership Development Programme. We also have a Group wide development framework in place to support employee development and progression into more senior roles.
Case Study
Glass Packaging - Germany Our Nienburg and Bad Münder plants have been awarded the ‘Best Place to Learn Award’, a German seal of quality for company training. During the assessment process, many aspects of our training programmes were reviewed, including applicant selection, professional integration, vocational learning and instructor capability. In addition, current and former apprentices, instructors and training officers were interviewed for their feedback. We are proud of this certification as it demonstrates our ability to attract and retain talent.
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Health & Safety Ardagh has a very robust H&S policy and programme in place, with standard procedures which are mandatory for all entities. Plants have formal H&S Committees in place with mandatory, regular review meetings as legally required. They represent the total workforce at the respective plant and usually consist of the Plant Manager and/or a trained H&S Manager. It is the Group’s best practice to have safety as an obligatory agenda item for all management reviews and all Board meetings as well as meetings with regional and local employee representatives, such as the European Works Council and local Works Councils. It is the responsibility of each operating facility to ensure that employees are adequately trained to fulfil their roles and H&S responsibilities. These basic requirements are similar at all plants, however, country procedures can vary to reflect differences in local legal requirements.
Case Study
Group BSafe! Programme Our global H&S programme is known as ‘BSafe!’ and has increased in importance and focus since its introduction. To protect the health and wellbeing of our employees and visitors to our facilities is one of our core responsibilities. We have communicated the BSafe! programme widely across the Group, the key insight being that it is not only the employee that is impacted by an accident, but also their family and friends. This programme is supported by a policy and training programme suited to the workplace, which is received by each employee. The importance we place on ‘BSafe!’ is reflected in the resources that are invested in it, professional safety managers, and developing safety leadership at all locations, delivery of training, investment in the maintenance and improvement of safety measures and managed communications channels.
It’s not just about you. 35
ARDAGH GROUP SUSTAINABILITY REPORT 2017
Health and Safety We are pleased to report that Ardagh Group’s Total Injury Rate is declining year on year, as is the Injury Severity Rate. This demonstrates that the BSafe! programme at Ardagh is successful, and is working effectively to address continuous improvements in high priority areas, including machine interventions and working near or with vehicles. We continue to maintain the most stringent conditions and behaviours in order to sustain these trends, and to address the root causes of minor injuries, such as ‘slips and trips’, manual handling and ‘bumped into’ accidents. For independent contractors working on-site, the same H&S measures apply and we treat all contractor issues as seriously and responsibly as we do our own workforce. Information on lost days and absenteeism of independent contractors is also recorded, and managed at local level.
10
Industrial manufacturing brings about a risk of a small number of occupational conditions. For both our own workforce and independent contractors working on-site, occupational disease exposure risks are the same. Noise and repetitive strain injuries are typically the main occupational health risks affecting hearing and soft tissue. However, there are only a small number of such occupational conditions and they are managed locally to ensure specific measures are taken to support the reduction in occurrences.
Consumer Health & Safety We take H&S very seriously at Ardagh. Therefore, we operate regular quality and food safety management and inline inspection systems which ensure prevention and control. Our objective is to minimise consumer risks by continuously improving our policies and management systems.
Over the 2015 and 2016 period, Ardagh has been compliant with relevant and applicable regulations, laws, and voluntary codes concerning the H&S of our products and the provision and use of our products. By applying our ‘BSafe!’ programme to all plants and offices, we have continuously reduced our Total Injury Rate.
Ardagh Group’s Health & Safety KPIs
2015
2016
Ardagh Group Lost Time Accident Rate
0.50
0.48
1.92
1.67
0
0
(Lost Time Accidents per 100 FTE per year)
Ardagh Group Total Injury Rate (Lost Time and Medical Treated Injury Rate per 100 FTE per year)
Fatalities10
Including total workforce and independent contractors working on-site.
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Community Involvement
Case Studies
Our aim is to have a robust and open relationship with, as well as a positive impact on, the communities in which we operate. To achieve this we invest in jobs, infrastructure projects and education, as well as engaging with the communities themselves.
Metal Packaging - United States
The general impact that the European Container Glass Industry has on the European Economy has been evaluated by FEVE (the European Container Glass Association) in 2014 for those years from 2003 to 2012. It showed that we not only created 63,000 direct, indirect and induced jobs in this period, but that we also increased the level of industrial investment and fostered the Circular Economy concept by working with permanent materials. Based on this evaluation, the Container Glass Industry contributes up to €9.5 billion to European Gross Domestic Product*.
One Ardagh engineering facility received top honours in the 2016 Great American Can Roundup Industry Challenge, by recycling 8,732 pounds of aluminium beverage cans in one year. The participation in the challenge organised by the Can Manufacturers Institute (CMI) raised $3,600 for Ronald McDonald House plus an additional $2,000 for other charitable organisations. Together, Ardagh Metal Beverage Packaging plants recycled more than 12,000 pounds of cans, raising more than $5,000 for charity.
Ernst & Young (2015): The European Container Glass Federation (FEVE); Environmental, social and economic contribution of the container Glass sector in Europe – Final Report. February 2015.
*
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Our plants have a direct and indirect impact on the environment, especially those that are very close to the communities in which they are situated. Therefore, we have implemented programmes to minimise any issues that may occur, for example odour and noise. The negative impact of our manufacturing on communities is considered to be low. If, despite all the measures taken, any nuisance occurs, we immediately analyse the situation and rectify the issue, usually in consultation and co-operation with the communities involved. This features as part of our stakeholder engagement plan. In addition to the general economic, social and environmental impact which we have on our local communities, we have implemented a programme of community involvement projects, with the objective of engaging with
local communities and companies and establishing strong relationships with them. Our long term target is for each Ardagh plant to create and implement a local community project at each of our major plants (those with more than 50 full time employees). There have been a wide range of initiatives across the Group, including; donations of toys to local children with difficult social backgrounds, financial donations, and even blood donations in areas with significant needs. By the end of 2016, 72% of Ardagh plants, within scope, had carried out at least one community involvement project and we are well on our way to realising our 2017 target of 100%. Although the Metal Beverage Packaging plants are not in scope of our 2017 long term targets, 71% of their plants conducted a community involvement project in 2016 too.
Case Study
Metal Packaging - United States A plant in North America hosts an annual Christmas ‘Toys for Tots’ event, which proved a huge success in 2016. The annual event is designed to raise money and collect toys for economically disadvantaged children within the community, aged between three months and 14 years old. During the fundraising week, everything that makes children’s hearts beat faster was collected – from books to bicycles. The week ended with a community event with live music, food and VIP guests: the plant’s fire brigade. The event was a great success and the children were delighted to be given a personal present from Santa Claus.
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Customer Satisfaction Customer satisfaction is an extremely important priority for us, which is why we regularly conduct customer surveys across our customer base. In the past, we conducted these surveys at Group level. However, due to recent acquisitions and business diversification, our approach in 2014 and 2015 was to conduct surveys for the individual divisions of Glass and Metal. Our Metal Division undertook a survey in 2015 covering European customers across its wide range of end markets. We were very pleased to learn that our customers value our quality, reliability, innovation and our proactive approach. The key differentiators of preferred supplier status identified were: best product, best quality, best cost and best service; therefore we included these measures into our continuous improvement programme, which we called ‘BBest!’.
It was clear from the results that quality, flexibility and price were not the only criteria critical to our customers’ satisfaction, but that data safety and privacy were also identified as very important. We take data protection extremely seriously, carefully protecting the information that our customers share with us. We adhere to relevant data protection regulations and comply with specific non-disclosure agreements with our current and prospective suppliers and customers. No complaints were recorded in the reporting period.
that we understand upcoming legislative issues, so that we contribute to the successful representation of glass and metal industries. Additionally, industry representations help us to understand what customers and consumers need. For example, a survey done by Friends of Glass in 2016 found out that Millennials choose glass packaging because of the quality it conveys about their favourite food and drinks brands. Valuable insights such as these help us to provide added value to our customers.
Industry Trade Associations We are a member of a number of key international and local industry associations. As a global industry leader, we take our responsibility seriously and contribute to the proactive sustainable development of both metal and glass industries, we are achieving this through our work with trade associations, chairing environmental, sustainability and marketing committees. It is crucial
CONTAINER RECYCLING INSTITUTE
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Product Cycle & Investments Our supply chains are highly stable and there have not been any major changes in our processes and suppliers since our last report (see overview of our value chains on page 42). We place great importance on long-lasting, open relationships based on trustworthy business conduct with our suppliers. In addition to the environmental impact, there are also certain potential social impact and risks associated with the extraction, smelting and transportation of raw materials, such as the potential for violation of human rights and labour practices. Within our supply chain we have determined that this risk is highest with regards to tin mining. To reduce and minimise these risks we established our Code of Conduct along with our Responsible Procurement Policy. The Code of Conduct outlines our behaviour towards our suppliers and the communities in which we operate, whilst the Responsible Procurement Policy sets out a framework for responsible behaviour on our suppliers’ side.
The latter also includes a list of supplier requirements that address issues in relation to human rights, labour practices and environmental & social impact. In addition to this ongoing process we also conducted a more extensive supplier evaluation in 2016, covering such aspects as human rights, labour practices and environmental impact. The evaluation included the top 70% of our suppliers (based on procurement spending) and focused on our top eight commodities. Based on the results provided, we have undertaken a risk assessment and identified those suppliers that need to enhance sustainability. We have communicated our requirements to these suppliers. Two measures for monitoring and reviewing risk in our supply chain are the participation in the well-known sustainability platforms EcoVadis and SEDEX.
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Ardagh Group’s Value Chain Glass
Metal Secondary Raw Material: Cullet
Mining: e.g. Bauxite, Cassiterite, Coking Coal, Iron Ore
Secondary Raw Material: Scrap Material Refining & Smelting
Exploration of Raw Materials: Sand, Soda Ash
Refinement of Ores
Collection & Recycling
Collection & Recycling
Manufacturing: Melting, Forming
Filling at Customers
Consumption
Primary Metal Production
Consumption
Semi Fabrication
Retailers
Retailers
Filling at Customers
Material Conversion: Forming, Coating, Printing
Value Chain The principal value chains of our Glass and Metal Divisions are shown in these graphics.
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
External Sustainability Assessment SEDEX Platform Engagement
EcoVadis Gold Level Certification
Carbon Disclosure Project (CDP)
SEDEX is a global, non-profit membership organisation for sharing responsible sourcing data on supply chains covering labour rights, H&S, the environment and business ethics. On this platform, we are connected to our customers, granting them access to information on our risk and supply chain management. All plants for which information has been requested by customers are registered on the platform. We had 20 glass and 39 metal plants registered on the platform by the end of 2016. Additional SMETA (SEDEX Members Ethical Trade Audit) audits have been conducted in response to customer requests, covering one glass and four metal plants in 2015 and one glass and three metal plants in 2016.
In 2016 Ardagh Group was awarded the gold certification by EcoVadis, which puts us in the top five percent of all assessed glass suppliers. This is the second time that we have achieved gold status. EcoVadis is an independent ratings agency that operates the first collaborative platform, allowing companies to assess the social and environmental performance of their supply chain. Since Ardagh conducted its first EcoVadis evaluation in 2011 we have consistently improved our performance, climbing from an initial bronze to gold status.
In 2016 Ardagh achieved ‘management level’ in the Carbon Disclosure Project (CDP), which means that we are in the top category of businesses that are undertaking coordinated action to address climate change issues. Ardagh has been taking part in the CDP annual evaluation since 2013, and has been improving its score consistently over that time. CDP is a non-profit charity that helps companies to manage their environmental impact. The current industry average is at the lower ‘disclosure level‘, which signifies that those businesses are being transparent about climate change issues.
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Innovation Innovation is at the heart of everything we do. We are committed to pioneering new packaging products and manufacturing processes. We maintain our leading global position by combining significant investment in research and development with our customer insights to produce customer-centric innovative solutions, including design, raw material reduction, and energy efficiency. Our investment in Research and Development (R&D) is delivering results, particularly for our customers. Our wealth of knowledge, together with our expertise, has allowed us to explore exciting possibilities in design, shapes and textures. This has led to the creation of new consumer experiences and achieved high acclaim for our customers’ brands. Our focus is to proactively drive our innovation agenda across new product applications, processes and sustainability improvements. The result is creative thinking throughout the organisation,
from design to delivery, so each integral part of the business feels the benefit and our customers reap the rewards. We continue to succeed in process innovation through a focus on: lightweighting, down-gauging and operational excellence. Our aim is always to create efficiencies, as part of our own production processes and those of our customers. With glass bottle light weighting, for instance, we succeed in retaining all of the products’ trademark dimensions, characteristics and strength whilst, at the same time, using less glass. We also continue to refine metal packaging production methods, in order to down-gauge the material; making it thinner and lighter therefore using less raw material. With advanced analytical software, such as FEA (Finite Element Analysis), we can now model new container designs based on optimum weights, even before production begins.
Nitro Can
The Nitro Can is a new packaging solution which capitalises on the Nitro coffee trend. Considered unique to the market, the can features a fixed, nitrogen-infused widget which delivers a powerfully distinct sound upon activation. The nitrogen, in turn, enhances the aroma of the coffee, generating a cascading pour that finishes the drink with a creamy, frothy head.
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
‘The All In One Fondü’
Sculptured Embossing
Metal Packaging - The Netherlands & R&D Center Crosmières, France
By embracing technology developed for the chocolate industry and applying it to glass design, Ardagh has taken the quality of embossing on the surface of glass containers to a higher level of lifelike detail. This technology has recently been used to replicate different texture effects including wooden planking and citrus peel, as well as to enhance the definition of scripted text and other branding icons.
‘The All In One Fondü’ – a Swiss cheese fondü, has proven very popular in Europe and North America and has achieved numerous packaging and design awards. This project began as a collaboration between Ardagh and a talented group of students at the Dutch University of Twente and resulted in an exclusive, award winning, microwaveable shaped fondü bowl.
In the Spirits sector, the technology has been used for Whyte and Mackay’s Claymore Whisky bottle. A more premium look and feel has been achieved by replicating the crest artwork on the label with an intricately embossed crest on the back of the bottle. This detailed new
design features embossing across five different depths to add definition to the swords, scrolling, rose petals and banner of the logo. Our innovation programme harnesses the power of cross-functional teams from our key regions and business functions. This involves a collaborative effort across regional design centres, central technical services, operational excellence and quality teams, core innovation teams and Group R&D teams.
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
World’s Lightest Can
SpRing Latch
B-Can
Metal Packaging - Europe
Metal Packaging - Europe
Metal Packaging - Europe
Pioneering development work at Ardagh has resulted in the production of the world’s lightest aluminium seafood can, with a conical wall thickness of only 0.170mm, a significant advance over its nearest competitor at 0.215mm. This impressive innovation was achieved by technicians at the Cuxhaven plant, Germany, supported by Ardagh R&D Centre in Crosmiéres, France. Together they applied their in-depth knowledge of beading (the ridges), which come in many shapes and sizes, incorporated into the can to give its body strength and stability. This achievement saves valuable resources, reduces the product’s CO2 footprint and is a great achievement for the environment.
The patented SpRing Latch metal closing innovation for metal conical pails eliminates the need for manual closing of the standard latch ring closure and greatly improves filling efficiencies and customer convenience. This simple yet ingenious manoeuvre seals the lid, and enables the pail to be effortlessly and securely opened and re-closed as required. SpRing Latch can be immediately fitted to the existing line, and therefore represents a very cost efficient solution. Additionally, the design enables stockpiling of 20% more pails and lids in one lorry, reducing transport emissions by 20%.
The B-Can marks the latest achievement in light-weighting of aluminium beverage cans by using approx. 5% less material. Both 500ml and 330ml are now in the market for several years and take advantage of a reduced C02 footprint. This footprint reduction equates to 5.5% and 6.0% footprint reductions of 5.5% and 6.0% for 50cl and 33cl cans respectively. “Since 2014 we have been using the reduced material specs and they run smoothly through our filling lines. We look for all kinds of ways to reduce damage to the environment. In the end, it can work if all companies in the total supply chain pull together”, says Wojciech Czeslaw Szczepaniak, Chairman of Namyslow Breweries.
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ARDAGH GROUP SUSTAINABILITY REPORT 2017
Basis of this Report This is Ardagh Group’s third biennial Sustainability Report. This document provides stakeholders with an update on our sustainability performance and achievements over the past two years and complements our financial reporting. During 2016 Ardagh completed a major acquisition of an international Metal Beverage business. Please note that whilst this acquisition was completed on 30 June 2016, performance data reported for 2016 includes the Metal Beverage business impacts covering the full calendar year (2016). This applies to all data unless otherwise stated. The reporting of our 2015 performance reflects the company structure and assets during 2015 i.e. excluding the impact of the Metal Beverage business. This report was completed in accordance with the core level of the Global Reporting Initiative (GRI) G4 guidelines. A detailed GRI Content Index is available on our website here. Environmental data
has been generated and aggregated from primary local data systems at each site. Where this has not been possible secondary data has been derived based on projections and informed estimates. Ardagh is confident that the performance data reported achieves the required level of accuracy for the intended purpose of communicating the scale and trends of its sustainability performance.
Contact We welcome feedback, comments and questions about this report. Please direct them to:
[email protected]. For more information including the external data assurance statement from RISE, visit our sustainability web page here.
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