Our efforts in embedding sustainability throughout IVL for over a decade has enabled us to achieve responsible growth while ensuring business resilience through unprecedented times. The COVID-19 pandemic has had an impact globally over the past year, testing our ability at all levels to manage the well-being of our employees and the communities around us. We are gratified by the responsible actions of all those across our organization and the seamless alignment in adjusting to rapid changes in the working ecosystem. We have continued to create value for stakeholders across our value chain despite these challenges.
An even stronger focus on sustainability is necessary as we navigate through the pandemic and uncertainties.
In light of COVID-19, sustainability means being resilient and agile in response to adverse events, working in partnership with others, and focusing ever more closely on health, safety and well-being.
Ensuring Health and Safety during COVID
Our employees’ well-being has always been a key driver in our sustainability efforts. We focused first and foremost on ensuring their safety while maintaining business continuity and actively supporting our communities as they adapted to the pressures of the COVID-19. We quickly mobilized our efforts worldwide by creating a Global Emergency Management Team (GEMT) and empowered our local leadership to ensure employee safety and oversee preventive measures at our sites, including increased health and security protocols and proper protection and sanitation. We acted swiftly in following and implementing the guidelines and regulatory requirements of local authorities and adopted the necessary workplace controls.
As some countries face second and third waves, or localized outbreaks, we continue to remain vigilant and ready to respond as circumstances change. Our head office and subsidiaries contributed a combination of monetary donations, medical equipment, medicines, PPE and hygiene and food products to employees, hospitals, institutes and community groups. Our commitment to being a responsible industry leader remains stronger than ever in these challenging times.
Business Resilience and Portfolio Expansion
As the COVID-19 pandemic continues to create global supply chain disruptions, we remain steadfast in our values and see change as an opportunity. Our continued efforts in sustainability, particularly in areas of innovation and strong stakeholder relationships with our industry partners has enabled us to be operationally resilient throughout this crisis. Our significant investment in recycling businesses demonstrates the growth of our recycling portfolio resulting in minimal environmental impact.
In line with our strategy, in January 2020 we acquired Huntsman’s world-class integrated oxides and derivatives businesses. With a cash value of US$2 billion, this represents the largest and most ambitious acquisition ever by IVL. It strengthens our R&D, technical capabilities, international footprint through a flagship site on the US Gulf Coast, Chocolate Bayou and Dayton in Texas, Ankleshwar in India and Botany in Australia. By combining IVL and Huntsman’s experience, our access to market, technical and intellectual properties, we will also lower corporate overheads and consolidate supply chain and procurement, boosting EBITDA contribution by US$40 million by 2021.
We continue to successfully secure financing for our sustainability-linked initiatives. In 2020, we received two significant environmental, social and governance (ESG) linked loans, of which the commercial terms are linked to improvements in IVL’s ESG performance. We successfully completed Thailand’s first ever cross-border Sustainability-Linked Ninja Loan worth US$225 million from 16 Japan-based banks and institutions. This is structured in response to our sustainability performance, and interest is adjusted based on our ESG score. In November 2020, IVL also received the International Finance Corporation (IFC)’s first-ever blue loan to a global plastic manufacturer addressing marine plastic pollution. This landmark US$300 million financing package, comprising a US$150 million senior loan from IFC and parallel loans of US$150 million from the Asian Development Bank (ADB) and Deutsche Investitions-und Entwicklungsgesellschaft (DEG), will help increase our recycling capacity in Thailand, Indonesia, the Philippines, India and Brazil. Through this financial capacity, we are empowered to address the issue of plastic waste management in our environment, support our global recycling commitments and improve the socioeconomic development of the communities surrounding our operations by creating jobs.
The Value of our Transformation
Our journey to continued excellence is never-ending– even during this pandemic. While I have previously noted that our transformation is to create value, it is also a mean to accelerate our decision-making capacity and execution within the company. However, this transformation effort is different from previous initiatives due to its comprehensive nature. We are positioning the company towards new full potential with an ambition that incorporates all levers of value creation. IVL’s Olympus project, a cost transformation initiative, including deployment of a global business solutions throughout finance, operations, procurement, supply chain, sales and HR Functions, is expected to deliver savings of approximately US$610 million by 2023. We must continue to put integrated efforts across businesses and functions as we lead our transformation from the front and sustain a new way of working. These actions are being taken by our team through greater empowerment and accountability, together with a more refined and best-in-class approach as we continue to grow in size.
In 2020, IVL was recognized by the International Data Corporation (IDC) Thailand and I was acknowledged as the “2020 DX CEO” for Thailand in 2020’s IDC Digital Transformation Awards (DX Awards). This recognition further strengthens our motivation to forge global collaborations in the future.
Climate-focused in Action
Our efforts in mitigating climate change are driven by our Climate Change Strategy 2025 which focuses on the four key pillars of preserving natural resources, investing in the circular economy, building resilience to climate change and driving continuous improvements in our product and process efficiencies. This includes ensuring that we work to minimize energy intensity and GHG emissions, despite continuing to grow. One critical area is responsible water management. We seek to reduce the use of energy and freshwater in our operations and remain focused on our 2025 ambition.
IVL joined the 50 Climate Leaders campaign in 2020, which includes the Task Force on Climate-related Financial Disclosures (TCFD) and the United Nations Global Compact (UNGC) among others, to showcase our collective work as part of the international business community and to demonstrate our leadership and determination in taking effective action against climate change.
Focusing on our Full Potential
As a leadership team, we have come together as one voice on our transformation - to which we are all committed. We remain focused on incorporating all levers of value creation and will ensure that our portfolio is integrated and responsibly serves the end use of consumers’ demands while keeping in mind the importance and commitment to the circular economy.
In 2020, we continued our progress in implementing our Leadership Curriculum program targeted at empowering leaders within all levels of our organization with the necessary skills and tools to ensure a sustainable business performance. In 2020, a mix of e-learning, virtual training, and in-person training were deployed globally. A total of 200 leaders completed the Leadership training program and approximately 1,000 leaders were trained via e-learning in the fundamentals of IVL Leadership Skills. We also customized the Mentoring Program for junior and middle management participants, while Executive Coaching was initiated with two leaders to support targeted leadership development. We will continue to deploy and expand the curriculum to achieve IVL’s leadership development objectives.
Recognitions to Reflect Our Sustainability Leadership
The dedication of IVL’s team has once again been reflected in the numerous recognitions received over the past year. We are honored to have been listed in the DJSI World Index for the second consecutive year and the DJSI Emerging Markets Index for the fourth consecutive year with the 2020 results putting IVL in the top three among the world’s leading chemical companies.
IVL has been a UN Global Compact participant since 2020 and continues to actively support it’s ten principles. IVL participated in the “Thailand Business Leadership for SDGs” organized by the Global Compact Network Thailand (GCNT) Forum 2020 at the UN Conference Center in Bangkok. This conference helped to convey how we are operating our business through a circular economy concept with a long-term focus. During the conference, IVL pledged THB 1 billion in the event towards projects and initiatives that directly support achieving the United Nations Sustainable Development Goals (UN SDGs) and committed to embedding them in our core business strategies and activities.
Creating a Sustainable Future
As we move into the next decade, we remain committed in creating value for the 3Ps - People, Planet and Prosperity. Our journey requires that we consistently focus on our five key priorities of Cost Transformation, Full Asset Potential, Adjacency Growth, Recycling Leadership, and Leadership Development.
We have a responsibility towards our key stakeholder groups including 25,000 employees and their families, as well as our customers and industry partners. We endeavor to create positive value for the communities surrounding our operations. As our responsibility to our stakeholders increases in tandem with our organizational growth, we are cognizant of the need to be transparent. Our deeply entrenched “Winning” spirit drives our perseverance and has enabled IVL to deliver progress even in times of great uncertainty. Our sustainability culture from our spirit within IVL is the success factor to create a better tomorrow.
We remain on alert and vigilant as COVID-19 remains an ever-present threat into 2021. However, the way in which we navigated this crisis gives us confidence that we will emerge from it more resilient and stronger than ever, with even more innovative solutions for plastic waste and focused on increasing our sustainable footprint across all geographies.
Finally, we would like to acknowledge our employees, stakeholders, business partners and associates for their continued support in making 2020 a year of accomplishment under such challenging circumstances.