I am happy to reiterate Napco National’s consistent and unwavering commitment to the United Nations Global Compact’s Ten Principles on Human Rights, Labour, Environment, and Anti-Corruption, as well as the Sustainable Development Goals (SDGs). This annual Communication on Progress (CoP) intends to briefly disclose the company’s many efforts toward the principles and SDGs and integrate them into our corporate culture, strategies, and operations.

We will be publishing a three-year Global Reporting Initiative (GRI) referenced report (2019 – 2021) by the end of 2022 to delve further into our sustainability efforts and impacts on the environment, society, and economy. GRI is the leading sustainability reporting standard. We will share this report with our stakeholders via our sustainability portal and other primary channels of communication.

Sincerely yours,

Mounir Frem
CEO, Napco National

Napco National supports and respects the protection of internationally proclaimed human rights. The company's employees are at the core of its operations, and ensuring their health and well-being is a key priority. Its manufacturing plants in Saudi Arabia are ISO 45000 certified, abiding by stringent occupational health and safety standards and requirements. Napco has dedicated ESG teams that focus on ensuring our operations do not pose any health and safety risks to its employees, surrounding communities, and the environment.

Furthermore, Napco that its employees work in safe environments and its Code of Conduct strictly prohibits unethical behavior, including violations of human rights, physical and verbal harassment, abuse, or threats. In addition, Napco's Diversity & Inclusion policy, as well as its 'Qudratak' program focuses on providing equal opportunities and inclusive work to people with disabilities. Napco is also committed to economically empowering women in line with Saudi Vision 2030 by offering jobs in safe and inclusive work environments.

Napco National has a whistleblower policy that supports declarations of any violations of its Code of Conduct and reports of unethical behavior while protecting the well-being of whistleblowers from any retaliation. Napco ensures all employees are trained on its Code of Conduct and Whistleblower Policy.

In 2021, Napco National launched internal awareness campaigns to create awareness of its Code of Conduct and Whistleblower Policy and the standards of ethical behavior expected of all members of the Napco family. The company also launched group-level communications focusing on employee health and safety and awareness training across all plants on the risks of hand and finger injuries. In an effort to encourage safe work practices, Napco National also launched an awards program for employees that demonstrate exemplary performance in health, safety, and environment. With the global pandemic still threatening health, the company helped employees take the COVID-19 vaccine and booster shots to secure their health.

Napco National believes in the right of every individual to find quality employment. The company believes in a fair, respectful, inclusive, and safe work environment, where diversity is valued and where unlawful discrimination, violence, bullying, and harassment in any form are considered unacceptable.

The company abides by the legal employment regulations set by the governments of the countries in which it operates, predominantly the Kingdom of Saudi Arabia. The internal recruitment policy prohibits the employment of individuals below the legal working age and the age of 16. The company’s Diversity & Inclusion policy focuses on implementing an inclusive environment free from discrimination and bias.

The company works with INDEVCO Consultancy for external HR consultancy services to put in place HR systems, policies, and practices that align with international standards and surpass local legal requirements. Recruitment practices are based on qualifications, experience, and talent, while compensation and benefits are dependent on various non-biased factors, including merit, job evaluation, and so forth. The company also has a learning culture, with a dedicated Napco Learning Institute that provides skill-building and knowledge acquisition training and workshops for employees.

Napco National does not participate in any form of forced or compulsory labor. All employees have legal contracts that align with local employment legislation. HR policies, procedures, and practices respect the freedom and rights of all employees and workers, comply with minimum wage standards, and are based on relevant and objective criteria. Napco’s HR works closely with divisions and departments to develop comprehensive job descriptions for all employees with clear career plans, fair salaries, and growth opportunities. Jobs are graded based on the required job qualifications, scope and responsibility, educational background, and experience needed.

In addition, Napco National’s ‘Qudratak…Quwatak’ Committee is dedicated to monitoring the wellbeing and effective inclusion and support of employees with special needs in a suitable and secure environment. The company complies with the ‘Mowaamah’ initiative launched by the Ministry of Human Resources and Social Development in support of the Kingdom’s strategy for the rights of persons with disabilities. This initiative is aimed at providing people with special needs with a suitable working environment by specific criteria and requirements.

The company’s dedicated Health, Safety, and Environment (HSE) team are responsible for managing operational procedures and processes so that they abide by international occupational health and safety requirements.

Napco National employs over 5,800 employees of 30+ nationalities of which nearly 2% are persons with disabilities. In 2021, Napco National successfully acquired the “Silver Mowaamah Certification”, granted by the Ministry of Labor and Social Development for Persons with Disabilities Inclusive Work Environment for 2020.

As a manufacturer, Napco National realizes and tracks its impacts on the environment from raw material to energy consumption, to waste generation. The company integrates sustainability considerations in decision-making, business planning, and strategy development. The company has set forth a sustainability strategy that focuses on the optimization of operations and product development.

Most of Napco’s operations are ISO 14001 certified for effective environmental management with environmental policies in place to manage impacts. In addition, the company’s environmental sustainability strategy includes goals and KPIs for reducing virgin material consumption, exploring renewable raw materials and energy, increasing the use of recycled materials, sourcing paper materials sustainably from responsible forests, designing products for circularity, and expanding its recycling operations.

Napco National Code of Conduct includes ‘Commitment to Safety and Environmental Protection’ which states:

The company is committed to providing a safe work environment, protecting the environment, and promoting safety standards in the communities in which it operates. The company seeks to conserve natural resources and reduce the environmental impacts resulting from its activities. The concerned persons should do their part to implement the rules and regulations related to maintaining public safety, and environmental protection.

Napco National’s 5-year strategy includes optimizing machinery and updating systems to reduce environmental impacts. In 2021, the company launched various sustainable products that use less raw materials by downgauging or using renewable raw materials or post-industrial and post-consumer recycled resins. Napco paper and corrugated packaging manufacturing plants also source virgin paper raw materials from responsible forestry (chain of custody) certified suppliers.

The company has also invested in redesigning products for circularity, homogenized structures and using water-based coatings and inks that ensure the recyclability of products while maintaining their critical packaging properties.

Furthermore, the organization launched an office waste recycling initiative and continued to divert industrial plastic waste from landfills through its washing and recycling operation, Recom, and its partnerships with petrochemical producers.

In 2021, Napco National played an active role in the Alliance to End Plastic Waste’s regional task group for the Middle East and North Africa region. In this role, the company works across the supply chain with suppliers, customers, and brands to eliminate plastic waste.

The environmental management and sustainable supply chain systems and standards Napco National abides by include ISO 14001, EcoVadis, and SMETA. Napco's Process Improvement Department and its Health, Safety, and Environment (HSE) teams are responsible for managing the environmental impacts of plants across Saudi Arabia.

In 2021, Napco National launched its Gaia™ brand of sustainable packaging products. The company has set targets to consistently invest in further sustainable product development. The company maintained its plastic waste collection and recycling efforts, as well as recycled over 1,500 Kg (1.5 MT) of office waste since launching its office waste initiative during the first year of its launch (June 2020 – June 2021). This is equivalent to over 6 MTCO2e, 36 m3 landfill diversion, and saving 26 trees. Napco National sponsored the Hejaz Ploggers Jeddah clean-up initiative on World Clean-Up Day for a third consecutive year.

All Napco plants are either certified or in the process of achieving ISO 14001 certification for environmental management and as such are audited by third-party auditing bodies to ensure that they conform to requirements. In 2021, Recom recycling operations successfully acquired ISO 14001:2015 certificate for the environmental management system. Its consumer products manufacturing plants also achieved EcoVadis Silver rating in 2021 based on the third-party evaluation processes for its environmental, social, and ethical indicators.

Napco National Code of Conduct emphasized anti-bribery and corruption, anti-money laundering, and anti-monopoly. All employees are prohibited from offering or receiving any bribe and will be severely penalized, including termination upon engaging in such unethical behavior.

The policy indicates that all employees must:
1. Avoid offering, presenting, or accepting bribes or illegal commissions in any way.
2. Use caution when dealing with government officials, including workers of state-owned
enterprises, offering or accepting anything of value that could be considered a bribe, not just cash or expensive gifts.
3. Report any request or offer for illegal bribery or commission.
4. Adhere to all policies and procedures currently applicable in the company

The Napco Code of Conduct covers all Napco employees and workers across all offices and plants. The company has an open-door policy, as well as a formal grievance mechanism via its whistleblower policy. The company takes all violations seriously and thoroughly investigates all cases. It has a progressive disciplinary system.

In 2021, Napco National ran an internal awareness campaign on its Code of Conduct by the CEO to ensure that all employees access, read, and acknowledge the expected conduct, standards, and principles of Napco team members. The company also ensured clear internal awareness of the formal grievance mechanism to empower employees to report any violations of this Code which includes Anti-Bribery & Corruption.