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SustainablePackaging

from a Sustainable Company

2017 Report

ARDAGH GROUP SUSTAINABILITY REPORT 2017

1

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


2

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.


3

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.

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

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.


4

2016 Performance Overview2015 2016 KEY ACHIEVEMENTS

Management & Leadership

External Rating: EcoVadis Gold Gold Gold level

External Rating: Carbon Disclosure Project (CDP)

D B Improvement from “Disclosure” to “Management” level

Sustainable Supply Chain

Sedex: Self-Assessment questionnaire Implementation of a Responsible Procurement Policy

Material UseAluminium and Steel Input [t] 835,634

840,202 (excl Metal Beverage)

Lightest seafood aluminium can1,440,923

(incl Metal Beverage)

Glass Melted [t] 6,746,787 6,794,866 High definition sculptured embossing

Energy Total Energy [MWh] 13,007,089

13,000,291 (excl Metal Beverage) 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.14,349,772


Air Emissions

Direct and indirect CO2 [tCO

2] 4,123,796

4,037,289 (excl Metal Beverage) Reduction of 15% in CO

2 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 20144,453,594


Volatile Organic Compounds (VOCs) Metal [t]

1,883


Reduction of more than 20% in VOC emissions in Metal Food and Speciality since 20104,254


NOx Glass [t] 10,089 9,709 Reduction of 28% in NOx emissions since 2007 in Glass Europe

Waste Management

Total Waste [t] 106,126

97,028(excl Metal Beverage)

Use of 100% recycled corrugated boxes at one of our Glass North America plants116,279


Water Management

Total Water consumption [m3] 7,181,626

6,806,414 (excl Metal Beverage) Implementation of water recirculation system where rain water is collected and used for process purposes

at our Glass Plant in Montorio, Italy9,663,226(incl Metal Beverage)

Health and Safety

Lost Time Accident Rate 0.5

0.54 (excl Metal Beverage)

Ardagh BSafe! Programme0.48


Employment Total Employees 18,857


23,331(incl Metal Beverage)

InnovationArdagh received various design and supplier awards for glass and metal products. These include the Coca-Cola Enterprises ‘Supplier of the Year’ Award, and the Accolade Wines ‘Sustainable Supplier of the Year’ Award in 2016

Metal Beverage was not in scope for 2015 figures, but is for 2016 figures.


5

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.


6

Our Approach to Sustainability

Sustainability Long - Term Targets 2025 (base year 2016)

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.

Our sustainability strategy is inextricably

linked with this vision, and is built on

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.

Sustainability is at the core of our

business and built into our DNA. Each

Social & Ethical Environmental Glass

Environmental Metal

ARDAGH GROUP

- Maintain top level ratings with EcoVadis and Carbon Disclosure Project (CDP) supply chain disclosure

- All plants to identify and assess their individual stakeholder interests

- Community involvement projects at every plant in response to stakeholder

interests

- H&S management and behavioural safety systems implemented at every plant

- tNOx/a -17% - tVOC/a -4%

- Waste recycling rate +10%

- m3 Process water consumption -9%

- tCO2 /a

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

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.

-17% CO2


7

To be the preferredpackaging

partner to theworld’sleadingbrands

Environmental

EconomicSocial &Ethical

Our SustainabilityPillars

EconomicInvestment in Local Community Projects

Investing in Energy Efficiency TechnologiesReducing Material Use

Minimising Transportation CostsShared Value for all Stakeholders

EnvironmentalArdagh GoGreen Index Metal & Glass TargetsEnvironmental Management SystemsLCA ProjectsEnvironmental Control StandardsStandard Operating SystemsEnvironmental PolicyPermit Compliance Management

Social & EthicalCommunity ProjectsCode of Conduct and CSR PolicySedex ParticipationEcoVadis ParticipationBSafe! ImplementationSupply Chain Risk AssessmentEthics HotlineTalent DevelopmentCustomer Satisfaction Surveys


8

We have already delivered on many commitments and we are committed to further improvements by the end of 2017.

2017 Sustainability Commitments: Progress Update

GROUP

ACHIEVED BY 2016

EXTERNAL RATINGECOVADIS Achieve EcoVadis gold status Gold

CARBON DISCLOSURE PROJECT (CDP) Increase Carbon Disclosure Project (CDP) rating B

SOCIAL & ETHICAL

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 &

SPECIALITY

Progress 2016 vs. base year



Base Year 2007* Base Year 2014* Base Year 2010*

ENVIRONMENT

ENERGY Reduce energy consumption -6% -2% -13%

EMISSIONS

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%

WATERReduce 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

*Different base years reflect respective acquisitions.


9

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

- United Nation’s (UN) Universal

Declaration on Human Rights

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.

http://www.ardaghgroup.com/userfiles/files/ardagh-group-code-of-conduct-2017.pdf

https://www.ardaghgroup.com/corporate/sustainability


10

Teamwork

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.

TrustTrust is central to our business. We have

cultivated an environment of mutual

respect, integrity and transparency.

ExcellenceOur 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.

Teamwork

Trust

Excellence

Our Code Of Conduct SupportsOur Core Values

Teamwork

Trust

Excellence

Teamwork

Trust

Excellence


11

Environmental

Sustainable Consumption and Production

Climate ChangeClimate 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.

Regulatory and Legal RequirementsWe 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.

Water ResourceBoth 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.


12

BiodiversityOur 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.

ProductionWe are focused on maximising material

recycling through initiatives such as long-

term 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.

http://ec.europa.eu/environment/nature/natura2000/index_en.htm

http://www.iucnredlist.org/

http://www.everycancounts.co.uk/


13

‘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.

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 MaterialsMaterials, 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.

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

http://metalmatters.org.uk/

http://www.container-recycling.org/

http://www.container-recycling.org/

https://carbotech.ch/cms2/wp-content/uploads/Final_PeM_Report_Carbotech.pdf


14

PermanentMaterial Product

Product

Non-permanentmaterial spiralto end of life

MaterialsResources

Non-Permanent Permanent

No

n-R

en

ew

ab

leR

en

ew

ab

le

MetalsGlass

Permanent Material Concept

- 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.


15

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 *1 European Aluminium Association*2 The Aluminium Association*3 Brazilian Aluminium Association*4 APEAL - Packaging Steel Association *5 Can Manufacturers Institute*6 FEVE - Container Glass Association *7 Glass Packaging Institute

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.

https://european-aluminium.eu/

http://www.aluminum.org/

http://abal.org.br/en/

https://www.apeal.org/

http://www.cancentral.com/

http://feve.org/

http://www.gpi.org/

http://www.captaincullet.com/


16

* FEVE

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.

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

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.

http://feve.org/


17

Coatings LinerCompounds

PurchasedElectricity

FossilFuels

Aluminium

Steel

Consumers

Filling &Retailing

Distribution

IN

OUT

OtherEmissions

Waste

WasteWater

VOC

Metal PackagingConversion

Supply Chain Metal Packaging Production Process


18

Oxygen

PurchasedElectricity

FossilFuels

Consumers

Filling &Retailing

Distribution

OUT

OtherEmissions

Waste

WasteWater

Particulates

Glassworks

ProcessWater

IN

Sand Cullet

Supply Chain

SodaAsh

Limestone

Glass Container Production Process


19

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.

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.

CULLETCONTENT*

GLASSEU

70%CONTENT*CULLET

GLASSNA

40%

*on average

Metal Division:Steel & Aluminium Consumption

2015 2016

Aluminium Consumption %

Steel Consumption %

100%

80%

60%

40%

20%

0%


20

Case Studies

Metal Packaging - The Netherlands

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%.

Energy Consumption Reduction

Metal Packaging - Russia

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.

Metal Packaging - Brazil

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.

Metal Packaging - Germany

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 - United Kingdom

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.

Metal Division:Energy consumption by primary energy source

% Fossil Fuels

% Electricity

2015

% Fossil Fuels

% Electricity


2016

Glass Division:Energy consumption by primary energy source

% Fossil Fuels

% Electricity

2015 & 2016


% Fossil Fuels

% Electricity

2015

% Fossil Fuels

% Electricity


2016


% Fossil Fuels

% Electricity

2015 & 2016


% Fossil Fuels

% Electricity

2015

% Fossil Fuels

% Electricity


2016


% Fossil Fuels

% Electricity

2015 & 2016


21

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.

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-in-class energy performance, compared to similar plants across the country. On average, these facilities perform within the top 25% nationwide for energy efficiency.

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.


22

Case Studies

Glass Packaging - Germany

In Germersheim, we implemented new technology to re-use the heat produced by the glass furnace to heatthe 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.

Glass Packaging - The Netherlands

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 residualwaste product (secondary raw material) from the water treatmentindustry, and are used to substitute limestone as a virgin raw materialin the production of high quality, clear container glass. The benefits are both financial and environmental.

Glass Packaging – Germany

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 CO

2 emissions by more than

300 tonnes per year.


23

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.

- 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 DivisionThe 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.

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

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.

Metal Division

CO2

EmissionsScope 1

[tCO2] 2015

CO2

EmissionsScope 1

[tCO2] 2016

CO2

EmissionsScope 2

[tCO2] 2015

CO2

EmissionsScope 2

[tCO2] 2016

124,369 tonnes

122,397 tonnes (excl. Metal Beverage)

136,029 tonnes

133,856 tonnes (excl. Metal Beverage)

246,353 tonnes (incl. Metal Beverage)

426,206 tonnes (incl. Metal Beverage)


24

Case Studies


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.

Metal Packaging - Germany

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 state-of-the-art ventilation systems which feature heat and coolant recoverycycles. These new units save Ardagh more than 32 tonnes of CO

2

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 CO

2 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.


25

Emissions - Glass Division The absolute CO

2 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

Case Study


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 Ni enburg, which resulted in NOx emissions being reduced by more than 60%.

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.

Glass Division

CO2

EmissionsScope 1

[tCO2] 2015

CO2

EmissionsScope 1

[tCO2] 2016

CO2

EmissionsScope 2

[tCO2] 2015

CO2

EmissionsScope 2

[tCO2] 2016

2,561,078 tonnes 2,473,711 tonnes 1,302,319 tonnes 1,307,324 tonnes


26


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.


One of the Group’s glass plants received the prestigious Pratt Indus-tries Environmental Impact Award in 2015 for its use of 100% recycled cor-rugated 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.

Case Studies

Glass Packaging - Sweden

Ardagh Group’s glass plant in Limmared has taken another step towards reducing CO

2 levels by

harnessing hydropower in the production process. This has resulted in a significant reduction in CO

2,

as 100% of the electricity used at this plant now comes from renewable resources.


27

Waste – Metal 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.

Waste – Glass Division

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%.


28

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.

Glass Division:Water Consumption

7

6

5

4

3

2

1

0

[m

io. m³/

a]

556,698

4,596,477

1,199,656

436,729

4,516,016

1,105,120

Municipal Water [m3]

Surface Water [m3]

Ground Water [m3]

2015 2016

Metal Division:Water Consumption

2015

255.95315.497

557.345

517.137

26.553

3.061.671

Municipal Water [m3]

Surface Water [m3]

Ground Water [m3]

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0

[mio

. m³/

a]

255.95315.497

Food and Speciality

2016 Food and Speciality

2016 Metal

Beverage

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.


29

Case Studies


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.

Metal Packaging - Czech Republic

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.

Glass Packaging - Italy

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.


30

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.


31

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 AssessmentAs 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 ConductIn 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.


32

Stakeholder EngagementWe 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.

Ardagh Ethics HotlineWe 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.

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.

http://www.ardaghgroup.com/corporate/sustainability


33

Our Employees

EmployeesOur 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.

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.

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.

Case Study


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.


34

Talent DevelopmentTalent 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


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.

It’s not just about you.


35

Health & SafetyArdagh 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.


36

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.

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.

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 & SafetyWe take H&S very seriously at Ardagh.

Therefore, we operate regular quality

and food safety management and in-

line inspection systems which ensure

prevention and control. Our objective

is to minimise consumer risks by

continuously improving our policies

and management systems.

Health and Safety

10 Including total workforce and independent contractors working on-site.

Ardagh Group’s Health & Safety KPIs 2015 2016

Ardagh Group Lost Time Accident Rate(Lost Time Accidents per 100 FTE per year)

0.50 0.48

Ardagh Group Total Injury Rate(Lost Time and Medical Treated Injury Rate per 100 FTE per year)

1.92 1.67

Fatalities10 0 0


37

Community InvolvementOur 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.

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*.

Case Studies


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.

38


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


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.


39

Customer SatisfactionCustomer 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.

Industry Trade AssociationsWe 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

INSTITUTERECYCLING

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.


40

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.

Product Cycle & Investments


41

Refinementof Ores

Filling atCustomers

Retailers

Consumption

Collection& Recycling

SecondaryRaw Material:Scrap Material

Mining:e.g. Bauxite,Cassiterite,

Coking Coal,Iron Ore

PrimaryMetal

Production

Semi -Fabrication

MaterialConversion:

Forming, Coating,Printing

Refining &Smelting

Manufacturing:Melting, Forming

Filling atCustomers

Retailers

Consumption

Collection& Recycling

SecondaryRaw Material:

CulletExploration ofRaw Materials:Sand, Soda Ash

Value ChainThe principal value chains of our Glass and Metal Divisions are shown in these graphics.

Ardagh Group’s Value Chain

Glass Metal


42

SEDEX Platform Engagement

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.

EcoVadis Gold Level Certification

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.

Carbon Disclosure Project (CDP)

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.

External Sustainability Assessment


43

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.

Innovation

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.


44

Sculptured Embossing

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.

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

‘The All In One Fondü’

Metal Packaging - The Netherlands & R&D Center Crosmières, France

‘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.

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.


45

SpRing Latch

Metal Packaging - Europe

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%.

World’s Lightest Can


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.

B-Can


The B-Can marks the latest

achievement in light-weighting of

aluminium beverage cans, reducing

the initial metal gauge by a 10µm step.

Whilst the 50cl can with sales volume

in excess of one billion cans in 2016,

is well established, the 33cl can is

now ready for the market. The B-Can

technology accounts for product CO2

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.


46

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.

ContactWe 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.

http://www.ardaghgroup.com/sustainability

mailto:sustainability%40ardaghgroup.com?subject=

http://www.ardaghgroup.com/sustainability

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