Sustainability highlights

This year we are reporting for the first time on our new Science Based Targets and other 2030 ESG targets, while continue to implement our MissionZero programme.

CEO letter

With our MissionZero programme, we aim to deliver critical sustainability solutions to the cement and mining sectors. We do this by putting sustainability at the core of our business strategy. As we report on the progress we made during the year, we can only conclude there is a need to accelerate collective efforts to address the challenges across our industries and society at large.

In 2022, we are marking our company's 140th anniversary. I am honoured to take over as CEO at a time in history when the focus on sustainability across every business sector, including mining and cement, has never been higher on the agenda.

Both our industries face significant environmental challenges, including climate change, water scarcity, energy consumption and waste. Under the leadership of my predecessor, Thomas Schulz, we introduced MissionZero, our sustainability programme that aims to enable our customers to move towards zero water- and energy-waste mines and zero-emission cement plants by 2030. We made good progress during 2021 in providing game-changing innovations that will help make MissionZero a reality. In order to address the global challenges, we need to accelerate the adoption of new innovations. How do we do this? Through collaboration and partnerships across our industries and by working with relevant policymakers to speed up the adoption of these solutions and increase demand for green minerals, metals and cement.

We made good progress during 2021 in providing game-changing innovations that will help make MissionZero a reality.

In order to address the global challenges, we need to accelerate the adoption of new innovations. How do we do this? Through collaboration and partnerships across our industries and by working with relevant policymakers to speed up the adoption of these solutions and increase demand for green minerals, metals and cement.

Across both the mining and cement industries, we are seeing how the recognition of the sustainability challenges are being turned into concrete goals. Many industry bodies and individual companies have now committed to achieving net-zero carbon  emissions by 2050, some even faster, and are now planning and investing in their transition.

Likewise, I am encouraged to see policymakers around the world proactively looking at how to support the transition in these traditionally “hard-to-abate” sectors, as we witnessed at COP26. At the same time, we need to acknowledge that much more work is needed to translate ambition into action. Through MissionZero, FLSmidth is playing a key role in this transition.

So what exactly have we done in 2021?

Leveraging our technology leadership in mining

Mining represents the major part of our business, and we are accelerating the introduction of technologies to enable miners to reduce their environmental footprint. Digital solutions play a key role in this transition.

For instance, LoadIQ, a digital tool that uses data from the mill to optimise mill load, allows mining companies to increase throughput at the same time as reducing power consumption. Saving water, especially in water-scarce areas, is a crucial challenge for miners. Our dry tailings management solutions can recirculate up to 95% of process water, dramatically reducing the need to draw on scarce water resources and significantly cutting operating expenses. In September 2021, we launched the MissionZero Mine – which concretises our 2030 vision for sustainable mines by tying ambition to current and near-future solutions. The concept will be the roadmap for our R&D work and help deliver on our MissionZero goals to move towards zero energy waste, zero emissions and zero water waste in mining.

Saving water, especially in water-scarce areas, is a crucial challenge for miners. Our dry tailings management solutions can recirculate up to 95% of process water, dramatically reducing the need to draw on scarce water resources and significantly cutting operating expenses.

In September 2021, we launched the MissionZero Mine – which outlines our 2030 vision for sustainable mines by tying ambition to current and near-future solutions. The concept will be the roadmap for our R&D work and help deliver on our MissionZero goals to move towards zero energy waste, zero emissions and zero water waste in mining.

Introducing new technologies to deliver on net-zero cement

Given the current level of emissions from cement production, accelerating the move towards green cement is important. And I am pleased that, together with our industry partners, we are making demonstrable progress.

Replacing clinker with calcined clay – a lowercarbon alternative – is something the industry can now do safely. In June 2021, Vicat became the first major cement producer to order a full-scale clay calcination plant in Europe. We are very proud to deliver this technology, which will enable the company to produce cement with a 16% lower carbon footprint compared with existing processes. The need to replace fossil fuels with alternative fuels continues to grow. In partnership with Ssangyong Cement in Korea, we took an important step with our new HOTDISC-S, which allows firing of 85% waste fuel, opening up alternative fuels as a real option for producers everywhere.

The need to replace fossil fuels with alternative fuels continues to grow. In partnership with Ssangyong Cement in Korea, we took an important step with our new HOTDISC-S, which allows firing of 85% waste fuel, opening up alternative fuels as a real option for producers everywhere.

Increasingly, we are looking to innovate together with other technology leaders. In 2021, we established partnerships with Carbon8 Systems and Chart Industries to utilise and accelerate the potential of their carbon capture and storage (CCS) technologies in the cement industry.

Making progress in our own operations

While we are well positioned to reduce our customers’ environmental impact through our core offerings, we are also making our own commitment clear through environmental, social and governance (ESG) excellence. We reaffirmed our commitment to the United Nations Global Compact and started to implement actions to progress towards our 2030 targets for our key areas, including safety, environment and diversity.

Our environmental targets were validated by the Science Based Targets initiative in April 2021, confirming our commitment to be carbon-neutral in our own operations by 2030 and to cut customer associate emissions by 56% within the same timeframe. In April, we also joined the Copper Mark, an international framework established to demonstrate the copper industry’s responsible production. I am pleased to see we are progressing on our gender diversity target but, at the same time, recognise a need to attract more diverse talent to our two industries.

In April, we also joined the Copper Mark, an international framework established to demonstrate the copper industry’s responsible production.

I am pleased to see we are progressing on our gender diversity target but, at the same time, recognise a need to attract more diverse talent to our two industries.

In some areas, however, we are not satisfied with our performance. We saw an increase in the number of safety incidents in the first half of 2021 – a trend that we have eventually reversed, but which reminded us of the need for continued focus. To turn this around, we further stepped up our safety awareness training and added new tools to gain intelligence on potential workplace hazards and near-miss observations. In September, our Group Executive Management team led a Group-wide “Stand up for Safety“ campaign, where every employee was asked to renew their personal commitment to safety.

I would like to conclude by restating FLSmidth’s continued and increased commitment to helping our customers and industries minimise their environmental impact and footprint by creating and offering the solutions needed. I am excited by the opportunity to lead this work as the new Group CEO and look forward to working with every one of you – customers, employees and other stakeholders – to ensure that we achieve zero-emission mining and cement while contributing to a more sustainable society globally.

Mikko Keto

Group CEO

Addressing our value chain impact

We are setting long-term targets and implementing year-on-year initiatives to manage risk and improve the sustainability of our business across the value chain.

UPSTREAM

Supplier emissions: We have set a target to have 30% of our spend with suppliers with Science Based Targets by 2025. We are implementing an engagement programme to collaborate with suppliers and reduce our upstream Scope 3 emissions.

Supplier audit: We are continuously monitoring, screening and addressing sustainability issues within our supply chain. Since 2018, we have been running a dedicated supplier sustainability programme to ensure compliance with our Supplier Code of Conduct.

OUR OPERATIONS

Compliance: During the year, we focused on creating an understanding of our compliance framework through training as well as initiatives to increase transparency. More than 90% of our people completed our training programme.

Safety: Zero Harm to our people and those who work at our sites or for us remains our core priority. During the year, we needed to intensify our efforts to ensure we keep our focus.

DOWNSTREAM

99% Of our carbon footprint is in our downstream Scope 3 emissions and comes from the use of our products at our customers' sites. Our Science Based Target is to reduce our economic intensity by more than 50% by 2030 through our MissionZero programme compared with our 2019 baseline.

Read more about our actions and progress in the sustainability report

Sustainability performance highlights 2021

MISSIONZERO – Science based targets related

Spend with SBT-committed suppliers

% of total supplier spend

Our upstream Scope 3 SBT (Science Based Target) is to have 30% of our spend with SBT-committed suppliers by 2025. We tracked this data for the first time in 2021. We have started a process to onboard suppliers to collaborate to reduce greenhouse gas emissions.

Scope 1 & 2 GHG emissions

tCO₂e (market-based)

We met our 2021 target to improve our combined Scope 1 and Scope 2 CO₂e emissions by 10% versus 2020. This improvement was mostly due to our ongoing renewable energy purchasing programme, which improved our Scope 2 emissions and offset a slight increase in our Scope 1 emissions.

Economic intensity

Scope 3- economic intensity (use of sold products)

tCO₂e/DKKm order intake

We introduced a new target in 2021 to reduce our economic intensity by 56% between 2019 and 2030. This target measures GHG emissions from customers’ use of our products per DKKm order intake. We are in the early stages of implementing actions and expect to accelerate progress as we implement our MissionZero programme.

*Baseline year

ESG

Safety (TRIR)

Total Recordable Incident Rate/million working hours

Despite strong focus on mitigating actions and awareness, total number of incidents increased during the first half year and we did not achieve the target of 10% improvement from 2020. We increased our efforts during H2 2021 to maintain and improve our best-in-class record.

Women managers

%

Our 2030 target is to have 25% of woman managers, and due to our active recruitment and career development strategy, we increased our share of women managers in 2021.

Suppliers assessed for sustainability

No.

Easing of travel restrictions during 2021 in most areas related to the pandemic allowed us to finally visit suppliers again – enabling the completion of sustainability screenings. Combined with the increased focus on sustainability throughout FLSmidth, this lead to a good result in 2021.

Progress on MissionZero

Our MissionZero programme is designed to enable a sustainable mining and cement industry through technological solutions. In 2021, we introduced new technologies and set programme-specific targets to better measure our progress against our 2030 ambition.

Beyond technological innovation, achieving transformative goals requires a rethink of organisational processes, reinvented business models and deeper customer relationships. We have made good progress in these areas over the last two years, but need to continue accelerating our efforts together with the industry.

Over the last two years, we have been actively working on integrating MissionZero into our core business activities. Our research and development (R&D) work remains at the core of the programme.

Where we are on our journey
As not all the technologies necessary to deliver the MissionZero promise exist today, we started by developing solution roadmaps with our R&D teams. This exercise helped us to assess the technology gap we needed to close in order to achieve our goal and then develop the pipeline of solutions needed for both the cement and mining industries. This work is integrated into the MissionZero Mine and the Green Cement Plant concepts, which concretise how we bring the MissionZero ambition to life from a technology point of view between now and 2030. We are excited to have already introduced some of the technologies from these roadmaps to our customers in 2021, such as the calcined clay solution, which enables a reduction up to 40% in CO₂ emissions in the area of cement.

Achieving MissionZero also requires us to rethink our approach to partnerships in order to fast-track the development and deployment of breakthrough solutions at the same time as bridging our competence gap. Examples include the carbon capture and storage (CCS) collaboration with Carbon8 Systems and Chart Industries and the development of new flotation technology with the University of Newcastle in Australia.

To read more about our progress read the section in our sustainability report

The MissionZero mine

Demand for minerals is expected to double by 2050, and it is essential that governments and industry ensure that supply is sustainable, as the urgency of dealing with climate change accelerates. To illustrate how we can support mining’s journey through technology, innovation and digitalisation, we developed the MissionZero Mine: our vision of the mine of the future.

Increasing numbers of FLSmidth customers are adopting ambitious climate and water reduction targets. As a leading technology provider in the mining industry, it is our responsibility to support miners in their transition towards a more resource-efficient future. Many solutions exist today for our customers to reduce their environmental footprint at the same time as increasing their productivity. Others still need to be developed and brought to market. This is the purpose of our MissionZero Mine concept – to show what it means for miners in terms of innovation, digital/data optimisation and the adoption of currently available technologies. This concept brings the MissionZero ambition to life, exploring how we can already help customers to reduce their environmental footprint and make resource use more efficient in terms of cost and impact, as well as looking ahead to future technologies that can be real game changers for the industry.

See the MissionZero Mine in action missionzeromine.com

The green cement plant

Emissions from the production of cement account for 7-8% of global CO₂ emissions. With MissionZero, we made a promise to develop all the solutions needed to enable zero-emission cement production by 2030. This promise is brought to life by our Green Cement Plant concept.

PHASE 1: Phase out fossil fuels
PHASE 2: Reduce clinker factor by using resources other than limestone
PHASE 3: Achieve a Circular economy and alternative raw materials

TECHNOLOGY PATHWAYS 

1. Clay-based geopolymer cementitious binders
2. Circular model to replace
3. Carbon capture and production of hydrocarbons from alternative fuels

75% of the infrastructure that will exist in 2050 has not been built today. Ensuring this infrastructure is built in a sustainable manner is critical for global economies to achieve the goals of the Paris Agreement. A true hard-toabate sector, the cement industry did not have readily available and scalable decarbonisation solutions… until recently.

Demand from our customers for solutions that reduce their environmental impact is increasing. Likewise, we see regulators are also increasing their requirements with regard to the environmental performance. Overall, civil society is calling for greater transparency regarding product lifecycle emissions and is becoming increasingly focused on the cement industry's global impact. As a leading sustainable solution provider for the cement industry, we are currently deploying available solutions delivering significant emission reductions to our clients, while investing in research and development to create the next phase of innovations on the cement flowsheet.

Read more about our MissionZero related cement solutions on our website

Bringing a 360 vision of sustainability to our products

To deliver on our MissionZero promise, we are looking to integrate a set of core principles and features into our products and services. As such we will ensure that our products share the following characteristics over time: 

Knowing our environmental impact - following a full life cycle approach

With our products sold Scope 3 emissions making up 99% of our total emissions, it is imperative that we know the environmental performance of our equipment to a high degree of accuracy. As our customers are adopting Science Based Targets, we must be able to provide them with reliable sustainability data.

Commitment to product stewardship - recycling and upgrades

The mining and cement industries rely on equipment with a long lifetime. This equipment must be maintained over time, which can generate significant waste, mostly due to wear and replacing maintenance parts. In addition, storing discarded equipment can represent a safety hazard at our clients’ sites. Although recycling circuits already exist for the most common minerals (steel, copper), emerging technologies that rely on composite materials can create recyclability challenges for our clients and for smelters or refiners. We have initiated research and development on the design of products to enable them to be recycled more readily.

Monitoring and maintaining performance over time - digital and services

As a KPI, environmental performance of equipment is as important as throughput. Zero-emission mining sites and cement plants will require real-time tracking capabilities in relation to emissions and performance as well as continuously maintained optimal performance. FLSmidth is harnessing the possibilities offered by digitalisation to deliver sustainability outcomes. Our data collection and analysis services allow for predictive maintenance, which reduces unexpected downtime and maintenance costs.

Ensuring product safety

FLSmidth is committed to providing its customers with quality products that meet their expectations, contract specifications, industry standards and relevant statutory requirements. It is FLSmidth's ambition to deliver products and equipment to all customers that at least meet the essential health and safety requirements laid down in relevant EU product directives or regulations.

A value chain approach: responsible sourcing

Our responsibility spans our value chain. We must ensure that our suppliers work to stringent human and environmental standards. In recent years, we have compiled a set of corporate policies and processes aimed at conducting business responsibly. These policies cover our Supplier Code of Conduct, our HSE policy and our recent Conflict Minerals policy.

Environmental management 

You cannot manage what you do not measure. For many years we have worked to reduce emissions from our operations. To take the next steps, we committed to setting a Science Based Target to be carbon-neutral for our Scope 1 and 2 emissions by 2030 in line with our MissionZero programme ambition. The target was validated in May 2021 and we are implementing short-term actions and long-term plans to meet our target.

2%

increase in water withdrawal in 2021

22%

reduction in Scope 2 market-based emissions in 2021

A big effort to strengthen the governance and systems around our data – allowing us to better identify potential improvements – has been ongoing.

In 2021, our new Sustainability Performance Indicators (SPI) platform went live, enabling us to monitor and analyse all our environmental data. This system will maximise transparency and help us see where we are succeeding in relation to our targets and where improvements are needed.

We also launched our Emission Reduction Programme this year, encouraging all our locations to develop and implement emission reduction initiatives, such as improving energy efficiency, reducing fuel consumption and increasing recycling. Regular monitoring and sharing of best practices take place so that, globally, we become stronger.

We succeeded in achieving our target to reduce our combined Scope 1 and 2 emissions by 10% compared with 2020. Our water withdrawal increased slightly. To ensure we stay on track with our various commitments, we are developing a long-term roadmap to achieve our target to be carbon-neutral.

WHAT WE DID IN 2021

• Received validation of our Science-Based Targets
• Set site-level emission reduction goals
• Launched our new environmental data collection platform
• Launched site-level emission reduction programme
• Increased employee awareness

PLANNED 2022 ACTIVITIES

• Increase ISO 50001 certification coverage
• Implement site-level emission reduction programmes
• Maintain focus on achieving our emission reduction targets and renewable energy use

Creating more balance

Following our new 2030 targets focused on diversity, we implemented concrete actions during 2021 that established new standards for our company.

14.3%

women managers

97.1%

of employees received development reviews

In 2021, we conducted a comprehensive analysis to identify potential gender pay gaps, to look at where pay gaps occur as well as the procedures that contribute to this problem, such as recruitment, salary setting and promotions. We then began the task of ensuring gender pay parity, and good progress has been made. Ensuring we establish proper procedures to avoid creating this gap is a continuous focus for us, both now and in the future. Of course, equality also applies to the wages we pay all our employees. We want all our employees, wherever they live in the world, to enjoy a certain standard of living, and the wages we pay play a key role in this ambition. In 2021, for the first time, we conducted an analysis of all employees’ salaries relative to the standard of living in their locations. This analysis was in-depth and at country and, in some cases, even at city level. Through our collaboration with the Fair Wage Network, we have been working to make adjustments to salaries where necessary. This initiative will continue into 2022 and beyond, as one of our guiding principles is to ensure fair and competitive wages.

WHAT WE DID IN 2021

• Conducted living wage and gender pay gap assessments, in partnership with the Fair Wage Network
• Implemented inclusion awareness activities and flexible work arrangements
• Supported employee mental well-being with dedicated services
• Provided 36,671 employee training hours
• Established and monitored employees' engagement through monthly pulse surveys
• Introduced sustainability as a parameter in rewards programs, for example long term incentives and sales incentive plans

PLANNED 2022 ACTIVITIES

• Conducted living wage and gender pay gap assessments, in partnership with the Fair Wage Network
• Complete all harassment and bullying prevention workshops
• Pursue initiatives to achieve our 200 diversity targets
• Establish local employee engagement workshops and supporting initiatives
• Ensure that employee and Leadership development focuses on the importance of inclusive and healthy workplace characteristics
• Ensure a Sustainability goal is set for each employee

Empowering human rights

Respect for human rights is a core part of our culture. We acknowledge, however, that in some regions where we operate, this respect is not always as deeply embedded in local practices as we would like. We therefore face a challenge in ensuring our employees and partners both understand and are empowered to fulfil our expectations in this area.

108

human rights reviews

The solution to these challenges starts with education. In 2021, we rolled out a human rights e-learning course, providing a general introduction to human rights, the challenges we face at FLSmidth, and what we can do to make a positive impact. We also conducted targeted in-person training on fundamental human rights principles for a broad group of employees. As part of this training, we included anonymised real-life case studies to help our people learn to identify the signs of possible human rights violations.

To make our training programmes more accessible, we have translated our e-learning programmes into seven languages. We have also further integrated these translations into our internal platform, which enables us to track who has undertaken the training. This has been a challenging project, but it has helped broaden the scope and availability of training – particularly in high-risk regions. Due to the positive feedback received in 2021, the human rights e-learning course will be made mandatory for all white-collar employees in 2022.

WHAT WE DID IN 2021

• Provided human rights training courses
• Published our Human Rights policies and sub-policies
• Conducted online screenings to mitigate the challenges of on-site visits due to COVID-19
• Identified 3TGs in our supply chain
• Incorporated the Australian Modern Slavery Act 2018

PLANNED 2022 ACTIVITIES

• Increase our on-site assessments
• Increase engagement on human rights issues with our customers

Taking action and ensuring accountability

We firmly believe that safety is the responsibility of all our people. For many years, we have invested in creating a strong safety culture based on establishing best-in class standards that equip employees and engage them in our safety journey. We continued this work in 2021, rolling out a new reporting system with a more user-friendly format, and asking all our employees – from Senior Management down – to "Stand Up for Safety".

0.8

Lost Time Injury Frequency Rate

1.9

Total Recorded Injury Rate

75%

of safety observations resolved in 30 days

Transparency also means talking openly when we face challenges and ensuring accountability by making any necessary changes. During the first few months of the year, we saw an uptick in safety incidents. This, followed by the relaxation of COVID-19 restrictions, resulted in people returning to sites and potentially less vigilance around health and safety.

Thanks to our improved ability to track and report trends, we responded quickly to the Q2 figures. Visible Senior Management played a key role by sponsoring a "Stand up for Safety" campaign in September. Across the globe, work was temporarily stopped so that all individuals could recommit to safe working practices. Furthermore, all regions updated their safety action plans and several activities were put in place within a short period of time, such as increased awareness of contractor management, onboarding and safety behaviour.

Despite these, and many other actions, we did not meet our 2021 target to reduce our Lost Time Injury Frequency Rate (LTIF). While our safety figures remain among the best in the industry, the learnings from 2021 have highlighted the fact that we can never be complacent on our journey to (and beyond) Zero Harm.

WHAT WE DID IN 2021

• Updated our safety incident reporting system
• Launched a global "Stand Up for Safety" campaign
• Updated regional safety action plans
• Conducted an awareness campaign for contractor management
• Increased the number of ISO-certified sites
• Improved the safety of leading product groups
  
  

PLANNED 2022 ACTIVITIES

• Focus on behavioural safety programmes
• Standardise hazard risk identification
• Implement an audit management platform

Giving back to our local communities

Supporting local communities requires funding. This starts with the FLSmidth & Co. A/S Donation Fund, based in Denmark. Through this non-profit institution, we contribute up to USD 45,000 (DKK 300,000) per year to causes aligned with our values and vision. In 2021, this fund contributed to a wide range of projects, including training opportunities and humanitarian initiatives.

300,000

(DKK) Donation Fund contributing to training and humanitarian intiatives

1,500

students benefitting from new library facilities

3

ventilators given to the Chettinad Supe Speciality Hospital

Mining is big business in Chile, but women make up just 19% of enrolments in mining-related degree programmes in the country. To help increase gender diversity in the industry, we have launched a programme specifically for female secondary school students.

The latest copper minerals processing course launched in September 2021 with 32 students who are in their final year of secondary education at the Liceo de Salamanca school in Chile’s Coquimbo region. The course covers all stages of copper minerals processing and aims to encourage young women to complete internships with FLSmidth before going on to pursue a successful career in mining.

Other education-related projects include the installation of new library facilities at the Government Girls Senior Secondary School in Bawal, Haryana, India, benefitting 1,500 students, as well as a grant to help educate underprivileged young people in the Kancheepuram district of Tamil Nadu and the Bokaro, Dhanbad and Jamshedpur districts of Jharkhand, all in India.

Sustainability governance

During the course of 2021, we took active steps to further integrate sustainability into our commercial functions and operations. We updated our materiality assessment and advanced our work around embedding the elements of the Task Force on Climate-Related Financial Disclosures (TCFD).

GOVERNANCE IN GENERAL

Our sustainability programme is an integral element of our business strategy and one of our long-term priorities. Consequently, we are continuously taking steps to anchor it at all levels of our organisation.

Our Board of Directors oversees and approves key strategic decisions such as long-term target setting and incentive schemes and, through the Technology Committee, oversees our R&D strategy to support our MissionZero programme. The Board receives quarterly updates on the progress of the programme. Our Group Executive Management (GEM) is responsible for the progress of our MissionZero programme and operational sustainability performance. It plays an active role in the development of the strategic direction of the sustainability programme and cascading priorities across the organisation. Sustainability is now an integral element of the long-term incentive plan for our Senior Management.

Responsibility for activities that help us to make progress in relation to our 2030 MissionZero and operational sustainability targets is assigned to the relevant functions. This follows the structure of our sustainability and related policies. In 2021, we introduced a new incentive structure for our salespeople linked to our Science-Based Target (SBT) of improving our economic intensity.

Stakeholder management

CUSTOMERS

We are in continuous dialogue with customers about how we can support them in achieving their sustainability ambitions. This includes discussions about technology and innovation, but also about how demand for green minerals, metals and cement can be stimulated. We are increasingly adopting a partnership approach when it comes to innovation and bringing customers into our R&D cycle at an earlier stage.

FINANCIAL INSTITUTIONS

In the last few years, environmental, social and governance (ESG) factors have rapidly become crucially important for securing financing for high-value contracts in cement and mining. FLSmidth has strong competences and enjoys long-standing cooperation with financial institutions that help customers to finance their projects, at the same time as ensuring that the projects make a positive contribution to sustainability.

OUTSOURING PARTNERS

Our suppliers provide 80% of our manufacturing. Building strong and reliable relationships with our suppliers is key to our business. In addition, working strategically with our suppliers strengthens our MissionZero programme, as this allows for the co-development of new technologies, adding to our existing portfolio. During the course of the year, we joined the Copper Mark as a partner.

CIVIL SOCIETY AND PUBLIC SECTOR

Civil society and public sector Stimulating demand for green minerals, metals and cement requires a supportive policy environment with a specific role for public procurement. We actively engage in discussions with policymakers on this topic.

INDUSTRY ASSOCIATIONS

We are members or actively engage with industry associations and advocacy groups. We are a founding member of the Compliance in Mining Network, a collaboration between mining companies, mining equipment producers and EPC providers in the mining industry, working to improve compliance standards in the global industry.

Screening and awareness-raising

Our sustainability screening programme has been running since 2018 and is continuing to grow in scope and awareness. In 2021, we screened 641 different suppliers. The scope of the screening is to ensure that they:

• Adhere to the laws within the jurisdiction in which they operate
• Provide a safe and healthy working environment
• Comply with basic human rights
• Meet all applicable environmental laws and industry standards.
  
  

641

suppliers screened

128

screenings resulting in a new finding/nonconformity

We are pleased to say that the results from these screenings remain stable, with very few suppliers found to be in breach of our Code of Conduct. Every time we complete one of these screenings, we signal to our suppliers that these principles are critical to our business relationship. Each time they sign a purchase order with FLSmidth, they confirm, again, that they comply with our Code of Conduct. And every time our employee carry out the screening questionnaire, they are reminded of what we expect from our partners. This repetition builds awareness internally and externally of the path we are forging towards Zero Harm.

WHAT WE DID IN 2021

• Continued supplier screenings on compliance, health and safety, environment and human rights
• Had our supplier engagement target validated by the Science Based Targets initiative

PLANNED 2022 ACTIVITIES

• Continue progress towards our Science-Based Targets related to supply chain

Compliance

The new compliance policy framework introduced in 2020 comprises four core areas of operations: Code of Conduct, trade compliance, human rights and competition law. 2021 has seen us raising awareness of this new framework, with a number of initiatives to improve transparency and accessibility.

255

in-depth due dilligence screenings conducted

82.4%

of employees trained in anti-corruption

78

whistleblower reports submitted

ACHIEVING COMPLIANCE BY EMPOWERING PEOPLE

Firstly, we have put all the information and relevant policies on our website, where they are available to all stakeholders. Secondly, we have continued to educate our people about the new framework through live training (in-person, where possible, or else online), together with e-learning. When we launched the framework, we committed to getting every employee through both the live training and e-learning courses by the end of 2021. We reached a completion rate of 81.8% for the e-learning course and 83.5% for the in-person training by the end of the year and thus did not meet our target. However, feedback on the e-learning courses has been encouraging. We recognise the immense efforts of our HR team in delivering the e-learning courses and tracking uptake through the new software platform. But the work does not end there. We will continue efforts to build awareness throughout our business. This is also a key part of our onboarding process.

WHAT WE DID IN 2021

• Continued awareness-raising and training on our Compliance Policy Framework, achieving 82.4% employee coverage
• Increased transparency regarding our policies and sub-policies
• Expanded the third-party due diligence scope to include our supply chain

PLANNED 2022 ACTIVITIES

• Conduct an external review of our trade compliance
• Provide new training courses on compliance-related issues
• Assess automatic fraud detection systems
• Provide harassment prevention workshops