The literal meaning of ‘sustainability’ is the ability to endure.
At Orica, we have a history dating back more than 140 years, through cycles of prosperity and challenge. Right now, Orica is experiencing tough market conditions alongside our customers but we are taking all the steps to ensure that we are ready to benefit when the cycle inevitably turns.
Orica is a truly global company with operations in over 100 countries and a significant commercial, environmental and community footprint. We can also confidently say that we lead our industry in the supply of vital products and services to the mining sector, an engine room for global growth. Our approach to undertaking these activities in a safe and responsible manner has been critical to our ability to deliver sustainable financial performance, to maintain the long-term support of those who regulate our operations and to remain welcome in the many communities in which we live and operate.
Tragically, in September this year, an explosion at our Antofagasta plant in Chile resulted in the deaths of two of our people. Both men leave behind devastated families and friends and their loss continues to be deeply felt by the Orica community. This accident has had a profound impact on our company and can never happen again. We continue to investigate the cause of the accident and learn the lessons to ensure the future safety of our people.
This tragedy has put into sharp perspective the critical importance of our ongoing commitment to safety and always acting in a responsible and sustainable manner. In this regard, we have an important opportunity to take stock of Orica’s performance. If we are to maintain our license to operate and provide a firm underpinning for our long-term commercial performance and investments then we simply must do better.
Disappointingly, even before taking into account the events at Antofagasta, our overall performance in 2016 on meeting our sustainability targets was well below where it should be. Our annual sustainability scorecard will be released in our Sustainability Report. We have not met many of our key environmental and safety targets.
During the course of the year we took important steps to improve our performance. The implementation of the new operating model will deliver higher levels of accountability across our regional businesses for the delivery of performance targets including our sustainability objectives. We also released the Orica Charter that outlines our core purpose “… to make our customers successful, every day, all around the world. We take pride in operating safely,responsibly and sustainably. Together these enable us to grow and create enduring value for our shareholders.” The Charter will be an important anchor point for determining our priorities and shaping a workplace culture that further supports sustainable growth and behaviours.
We have also progressed a number of specific initiatives. This includes the updating, development and implementation of a number of Operating Standards outlining the minimum safety, environmental and stakeholder requirements for our operations. We are moving towards a more rigorous approach and a lift in performance. It will take time and we have much work to do. We owe nothing less to our people, their families and the communities we operate in.
This year we have also undertaken an independent assessment of our material sustainability risks. This analysis identifies those areas we must excel in to build a robust, resilient and commercially sustainable business. In the past, Orica has reported on many of the issues highlighted in this materiality assessment, albeit under different headings. The assessment has also highlighted new areas for disclosure, including our long-term financial performance and the impacts on the business from climate change.
The issues identified by the independent assessment are covered in our Sustainability Report which includes a summary of our work in 2016, our priorities for the coming year and our long term organisational commitments.
Our Sustainability Report commits us to developing a Company-wide position on climate change and emissions reduction over the coming year. Global temperatures are on the rise as a consequence of a build-up of greenhouse gases and we have a responsibility to contribute to global and local efforts to minimise its impact. As a heavy energy user and emitter, our operations are also directly exposed to the transition underway towards a low carbon future. Our customers will also be impacted and we believe we can play an important role in reducing sector-wide emissions through the on-going innovation of our products and services.
Support from local communities close to our production sites is critical for our ability to invest with confidence in those assets and to guaranteeing supply to our customers. Like us, these communities should want our sites to grow and prosper and to play a positive role in the socio-economic fabric of their lives. That is why we have renewed our commitment to community investment programs over the coming year despite persistent tough trading conditions.
The progress of our remediation efforts at those sites under our care with legacy environmental issues continues. The return of land that was previously contaminated at our Botany site to productive use in 2016 is a particular highlight.
The Sustainability Report also includes information on diversity at Orica and the expected high standards and preferred behaviours for the workplace we have identified in our newly released Charter. Orica remains deeply committed to building a respectful, trusting and richly diverse culture at Orica, which is a critical foundation for our long-term business performance and resilience.
Another first for this year’s Sustainability Report will be the inclusion of Orica’s position on Tax Transparency. Orica is committed to not only doing the right thing by the environment and our communities. We must also reflect our broader commitment to operational excellence by being an exemplar of good governance and corporate behaviour, including paying our fair share of taxes in those countries we operate in.