Imperial Chemical Industries (ICI)

During 2006, ICI further embedded sustainable practices into the way we do business. We have expanded the scope of the activity well beyond our historic focus on safety, health and environmental improvement, although these remain central to the way we operate. Through a strategy approved by the Board and launched in 2006 called “The ICI Way”, we have integrated the essential components of a socially responsible, environmentally sound and economically viable business.

Specific objectives are set out in our fourth set of five-year programmes to achieve continuous improvement in sustainability – Sustainability Challenge 2010.

Key areas of activity in 2006 included revision of the ICI Code of Conduct to reflect best practice. During 2007, all employees worldwide will be trained in the new Code through workshops and online programmes, with additional training in antitrust law for all appropriate staff.

Although our Operations (manufacturing) Board launched a Company-wide energy reduction project in 2006 as part of our goal to deliver continuous improvement in our environmental impact and operating costs. The focus is on medium-sized sites, with each site setting stretch improvement objectives ahead of our Challenge 2010 target of a 5% energy reduction per tonne of production between 2005 and 2010.

We continue to work with customers to understand their expectations of us as a supplier in contributing to their sustainable performance, particularly in developing products that have sustainability benefits – which can be a competitive differentiator. Our Paints business is working with a major customer and Forum for the Future, a sustainability charity, on a UK Department of Trade and Industry-funded project to develop smarter ways to reduce the overall life cycle impact of decorative paints.

We also are extending our own supplier assessment programme, using the principles of the UN Global Compact, to ensure compliance with broader social standards as well as ICI’s own product stewardship standards. Following our pilot, we will plan how to assess all key suppliers against these standards on an ongoing basis.

ICI had the need for careful risk assessment of suppliers reinforced when a small supplier in Brazil was found to be employing children on its site. ICI has ceased trading with this supplier and is working with local NGOs which help companies address this issue.

ICI made progress during 2006 in developing our employees’ capabilities in line with corporate strategy. For example, we are preparing to staff our new China Technology Centre (CTC), currently under construction in Shanghai, by recruiting science graduates from China’s top universities and posting them to our existing key research and development centres in the US and UK to gain experience in ICI’s technology. They will then transfer to the CTC which will be an important research hub within ICI’s global R&D network.

ICI remains in the upper quartile of peer companies in our comparator group, the American Chemistry Council, for employee health and safety. Although our performance continues to improve we are behind our own challenging milestones. With great regret we report two contractor fatalities on our sites during 2006 – the first fatalities involving operations, rather than motor vehicle incidents, since 2000. We always extract learning from these incidents and clearly must not lose the focus required to ensure our employees and contractors are safe at work.

However, overall, we made substantial progress in our sustainable development in 2006. We are also pleased to report that for 2007 ICI has retained its place on the Dow Jones Sustainability Index, as well as on the FTSE4Good Index.

More information on our 2006 sustainability performance will be available from May 2007 in the ICI Sustainability Review, with more detail available on ICI’s corporate website, www.ici.com/sustainability