08/02/2021

To our stakeholders:

I am pleased to confirm that SGD Pharma affirms its support to the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption.

In this annual Communication on Progress, we describe our actions to continually improve the integration of the Global Compact and its principles into our business strategy, culture and daily operations. We also commit to share this informations with our stakeholders using our primary channel of communication.

Sincerely yours,

Christophe Nicoli
Chief Executive Officer

SGD Pharma has a recruitment Policy and a Code of Conduct and Ethics preventing discrimination, harassment and child forced labor. Moreover, social dialogue is in place throughout the company.

We also drafted a new supplier Code of Conduct which enacts general principles and requirements to be followed by our suppliers revolving around 4 axes (Ethics, Labour & Human Rights, Health & Safety, Environment). The part about Labour & Human Rights deals with forced and child labour, working hours and wages, respect & dignity, freedom of association and discrimination.

Finally, our plant in China is SA8000 certified.

We strive to create a positive work environment and atmosphere through social dialogue.

Tools and measures fostering diversity. Social dialogue denotes all instances of negociation, joint working, exchange of views between employers' and workers' representatives.

Moreover, we encourage our suppliers to implement management systems to facilitate adherence to all applicable laws and regulations and strive for continuous improvement.

Awareness training and internal controls on child labor, slavery and human traffiking are done. Also, a whistleblowing procedure is in place.

Our plant in China is SA8000 certified. 8 collectives agreements have been signed in 2019. The percentage of women in the whole company (39% in 2019) and percentage of trainees & apprentices in France and Germany (4,3% in 2019) increased compared to 2018.

SGD Pharma has a recruitment Policy and a Code of Conduct and Ethics preventing discrimination, harassment and child forced labor. Moreover, social dialogue is in place throughout the company.
3 out 5 plants are ISO 45001 certified and our plant in China is SA8000 certified.

We also drafted a new supplier Code of Conduct which enacts general principles and requirements to be followed by our suppliers revolving around 4 axes (Ethics, Labour & Human Rights, Health & Safety, Environment). The part about Labour & Human Rights deals with forced and child labour, working hours and wages, respect & dignity, freedom of association and discrimination.

Health and safety procedures have been translated in major languages spoken by employees. Health & Safety training is an integral part of our EHS risk prevention strategy.

We launched a company-wide project SGD Pharma way, to review our way of working and adapt for the future with a perspective of growth and higher performance. This project covers our decision processes, organization, people development and performance management.

3 out 5 plants are ISO 45001 certified since 2019.
The average hours of training per year per employee has increased in 2019 with 28,25 average hours of training per year per employee.
Most of the total Workplace is covered by a formal agreement and 8 collective agreements were signed in 2019.

Example in China:
We reached one of our ultimate goals at the Zhanjiang Plant in China by recording 0 Lost Time Accidents (LTA) in 2019. The substantial increase in H&S training hours annually per employee is one of the key drivers that led to the improvement of our injury frequency rate and our LTA and NLTA accidents.
Our ambition regarding our EHS maturity: As we exceeded our 2019 target, we raised our 2020 objectives. Thus, for 2020 we aim for an overall maturity score of 73 out of 100, with each of our sites being over 60 out of 100. Additionally, in 2019 we made the required preparations to have our 5 plants ISO 14001 and ISO
45001 certified by the end of 2020. As a result, we aim to have 100% of our plants certified against these two management systems.

We have a EHS Policy distributed throughout the group.

We also drafted a new supplier Code of Conduct which enacts general principles and requirements to be followed by our suppliers revolving around 4 axes (Ethics, Labour & Human Rights, Health & Safety, Environment). The part about Environment deals with environmental authorizations, climate change, efficiency of resources waste and emissions, spills and releases.

Moreover, 3 out of our 5 plants are ISO 14001 certified.

For the 1st time ever, SGD Pharma conducted a precise inventory of its Scope 1 and 2 GHG emissions.
Between 2020 ad 2025, we will rebuild all our furnaces and upgrade them with new technologies in order to improve our overall energy efficiency. We are also involved in the Furnace of the Future led by FEVE in which we collaborate with 20 European glassmakers.

To reduce our water consumption, we installed closed-loop circuits at all our production sites. Thanks to this installation, we saved more water in 2019 than in 2018.

Our current strategy to Foster reuse and recycling focuses on 3 axes: train our team and raise awareness, identify new treating and sorting partners, and improve internal sorting and flow management.

Monthly reports are communicated within the EHS teams throughout the group in order to discuss different topics and how each plant deals with any incident if one appears.

We set new clear KPIs that help us to track more efficiently our environmental performance.

As we calculate our carbon footprint for the first time (216495 tons of CO2 for scope 1 & 2 emissions), we have clear vision on which topic we have to progress for the new few years.

We are respondant to the CDP (score B for 2019) & EcoVadis (73/100 in 2019).

SGD Pharma's Code of Conduct is the foundation of the Group's actions in term of business ethics. The Code of Conduct and Ethics is an integral part of SGD Pharma's culture. We also have a FCPA Policy that clarifies and develops the guiding principles mentionned in our Code of Conduct. The purpose of this Policy to to ensure compliance with all applicables laws regarding bribery and corruption.

We also drafted a new supplier Code of Conduct which enacts general principles and requirements to be followed by our suppliers revolving around 4 axes (Ethics, Labour & Human Rights, Health & Safety, Environment). The part about Ethics deals with conflict of interest, corruption, free comptetition, conflict minerals, animal welfare, privacy and data cprotection, confidentiality, etc.

We offer a whistleblowing hotline to each of our stakeholder, that allows individuals to come forward and report any person or party's actions that may constitute as bribing.

We believe that the best way to mitigate risks related to corruption and prevent it, is to educate our employees and develop an anti-corruption company culture. Our goal in 2019 has been to focus on at-risk areas after a first anti-corruption training Campaign conducted at group level in 2018 and 2019.

In 2019, we reviewed our third-party validation procedure with initial and periodic control of all third-parties of SGD Pharma.

We release our GDPR (General Data Protection Regulation) Policy in March 2019 too.

In 2019, we strenghtened our reporting regarding anti-corruption and 96% of at-risk employees were trained on business ethics issues.

We have identifed and addressed material topics related to corruption and compliance through a full risk assessment at group level.

No alert was reported through the whistleblowing hotlines in 2019.