Sustainability at DS Smith is about identifying and managing the economic, environmental and social risks and opportunities affecting our company. Our biggest customers and retailers are increasingly demanding that their supply chain be able to support them in their goal.
Our focus on the supply cycle and our emphasis on closed loop recycling means sustainability is a core component of our business model. It defines our social purpose: to improve the supply cycles of all of our existing and potential customers.
I am proud to be part of a company that builds strong relationships intended to last for many generations. These relationships, in the widest sense, form our network of stakeholders and we will continue to meet their legitimate expectations. This means: satisfying the customer; ensuring the safety of our employees; delivering appropriate shareholder returns; paying taxes when due in accordance with national legislation; having transparent relationships with our European Works Council; and ensuring our raw materials are responsibly sourced.
Our perspective encompasses the full packaging supply cycle from design, sourcing and production through to consumer use, recycling and eventual disposal. Working in partnership with our customers and suppliers is vital if we are to achieve our collective goals.
Our contribution comes from our perpetual devotion to improving the efficiency of every stage of our customers’ packaging processes: reducing energy and CO2 emissions, minimising waste and providing better solutions to our society’s need for packaging that will not exacerbate deforestation or climate change.
I am also pleased to reaffirm DS Smith’s support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption. In this Review, we describe our actions and intentions in those areas which we believe are fundamental to improving the integration of these principles into our business strategy, culture and
daily operations.

www.dssmith.com/sustainability-report-2014

DS Smith subscribes to a number of international standards and guidelines relevant to corporate responsibility and business conduct, including:
• United Nations Global Compact
• United Nations Declaration of Human Rights and the Convention on the Rights of the Child
• International Labour Organisation (ILO) eight Fundamental Conventions
• Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises

Code of Conduct
We are committed to conducting business with the highest ethical standards. These apply in the way in which we engage with each other, our customers, employees, shareholders, suppliers and other stakeholders. Our reputation as a Group is founded on
always meeting these high standards.
The DS Smith Code of Conduct has been created to codify and describe our ethical position on key topics.
Our Code of Conduct defines common rules for all our employees, and provides guidance on DS Smith’s approach to ethical business practices, environmental values, and human and labour rights.

All our employees are encouraged to report suspected misconduct or unethical behaviour directly to their supervisor, Human Resources or Legal Services.
Our employees may also report their concerns in confidence to “Speak Up!”, our workplace malpractice hotline.
This is an external service through which anyone can confidentially and anonymously report any issues.

Sustainability is emphasised throughout DS Smith’s corporate governance, starting with our Board of Directors, the CEO and our Group Management Team.
• The DS Smith Plc Board is responsible for reviewing and approving the Group’s Environmental and Social Responsibility policies.
• Executive responsibility for sustainability sits within the Group’s executive leadership and management team. Its members
are responsible for overseeing the effective implementation of policies in areas under their control.
• The Group Sustainability Committee meets quarterly to review the management processes, targets and strategies that address our environmental and social risks and opportunities, and to ensure compliance with the Group’s environmental and social
responsibilities and commitments.
• The Group Social Responsibility Working Group is responsible for the provision of advice on social responsibility matters.
In 2013 we appointed a Sustainability Director to coordinate and structure our activities across the business and ensure we give this area the attention it deserves.
Our businesses and corporate functions are responsible for managing sustainability issues in their daily operational management. We use a wide range of tools to deliver this including:
• Specific policies, guidelines and statements
• Group-level targets and key performance indicators (KPIs)
• Third party assurance and verification
• Certification and audit, such as SEDEX, Ecovadis, FSC and PEFC
• Supply chain management
• Social and environmental impact and risk assessments
• Sustainability due diligence for investment decisions

DS Smith subscribes to a number of international standards and guidelines relevant to corporate responsibility and
business conduct, including:
• United Nations Global Compact
• United Nations Declaration of Human Rights and the Convention on the Rights of the Child
• International Labour Organisation (ILO) eight Fundamental Conventions
• Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises

HEALTH AND SAFETY
We recognise that our people and contractors work in environments which present real hazards. We strive to control those hazards through a risk-based approach using a hierarchy of control measures and we continuously aim to improve. Our employees are key in ensuring we operate safely and we address any concerns raised openly and promptly. Our long-term target is “zero accidents” and we set our key performance indicators to ensure that we continue towards that goal. Our safety performance has improved consistently, in terms of both accident frequency rates and severity, though we recognise that an injury to any of our people is unacceptable and hence safety remains a key focus for the Group.
Our businesses report their safety performance on a monthly basis and all accidents are fully investigated with the investigation findings circulated throughout the Group. Our Divisions monitor progress not only on reactive KPIs but also through their audit
programmes and other proactive KPIs such as observational safety, near miss reporting etc.
DIVERSITY AND INCLUSION
We do not tolerate any discrimination based on culture, nationality, race, religion, gender, gender identity, disability, sexual orientation or age. Our approach to diversity and inclusion is all about recognising that the ideal working environment is one which allows all our employees to perform at their best and develop to their full potential.
We value diversity of gender, age, and nationality as well as individual characteristics such as a broad life experience when evaluating diversity within DS Smith.
EMPLOYEE RELATIONS
Effective communication fosters employee alignment with our corporate goals and we use a variety of tools and channels to deliver this, from newsletters and team briefings to intranet updates and news bulletins.
Communication with employees is considered a primary responsibility for all managers, and employees are encouraged to participate and give their views on any aspect of the Group’s business including the annual and half year financial results and the economic factors affecting the Group’s performance.
Industrial relations, including collective bargaining agreements, are mainly managed on a national level. We uphold the labour rights set out in the Fundamental Rights Convention of the International Labour Organisation.

While DS Smith does not discriminate in its recruitment, there are more men (79%) than women (21%) in the Group and we believe this to be related to societal perceptions of the nature of working in the manufacturing sector in the economies where we operate. Clearly we would be concerned if our workforce did not reflect the ethnic or cultural diversity of the communities from which they are recruited. However, we do not prioritise any particular diversity dimension as more significant than another, and instead focus on the benefits of having a diverse and inclusive workforce who feel comfortable that their identities are respected. Diversity is important for us since we believe it to be a key factor behind high performing and innovative teams.

It has long been our policy to disclose our environmental impacts with full transparency:
• We report on our Climate Change impacts to the Carbon Disclosure Project.
• We are a member of the London Stock Exchange FTSE4Good index, an international responsibility performance benchmark.
It is our policy to measure the impact we have and to set ourselves challenging performance targets to enhance our position.
We have identified a number of Key Performance Indicators which we use to describe and measure the value our businesses create, as well as to help quantify the wider social costs of our operations and to measure our progress in reducing those costs.
We believe that by focusing on improving our performance using these measures, all of our managers and employees are
able to contribute to the sustainability of our business.
Our business strategy demands that we focus on the profitable development of innovative, sustainable and competitive products that meet our customers’ demands. As the previous sections have shown, we cannot do this in isolation, or without regard to global sustainability issues.

Our targets, set by the Board, require that in relation to production, we will:
• Reduce our CO2 emissions from fossil fuels by 20 per cent over the 10 years to 2020.
• Reduce our water usage in our paper mills by 20 per cent over the 10 years to 2020.
• Reduce the amount of production rejects sent to landfill by 20 per cent over the 10 years to 2020.
To support these goals, we will:
• Continue disclosure of our carbon footprint performance to the CDP.
• Ensure all paper mills are certified to ISO 14001 and OHSAS 18001 standard.
• Ensure all corrugating and converting operations are certified to OHSAS 18001 standard.
• Continue our engagement with the UN Global Compact to promote and support the implementation of its 10 principles.
For each of our primary targets, we have established an action plan to deliver the stated objectives:
• Our CO2 emissions will be reduced by a combination of increased energy efficiency and a switch from oil to gas where appropriate, or to renewable fuels.
• Our water use targets will be met by moving towards more closed water systems at some of our paper mills.
• A greater proportion of production rejects will be retrieved as materials and energy recovery, rather than sent to landfill.
We continually review our environmental targets to ensure they remain appropriate.

During 2013 several projects have been initiated to explore the benefits of converting sites to LED lighting. A number of potential sites were identified and trial installations were commissioned. A pilot site for a high bay lighting installation was completed at our packaging factory in Fordham, United Kingdom which was successful, and a framework agreement has been established with a supplier for high bay lamps. Five sites are presently in progress in the UK and the Nordic packaging region.
In Kemsley, United Kingdom the mill has increased the fibre yield of its RCF plant from 59 per cent to 64 per cent, making much better use of raw materials, and increasing the use of Mixed Waste Recovered paper from 7 per cent to 23 per cent, reducing the fibre material cost and enabling greater use of Post-Consumer Fibrous Materials.
In Wansbrough, United Kingdom the installation of high efficiency boilers is underway. This project is forecast to deliver efficiency improvements of 20% per annum, and in Gent, Belgium the project to replace the heavy fuel oil-fired boiler with a more efficient gas-fired boiler has been completed, and will deliver cost and carbon benefits from April 2014.
In Mariestad, Sweden we have had a successful project to optimise the enclosures and heat exchangers in the wet-end of the corrugator, which not only reduced the steam consumption by 13% but also improved the working environment in the production area.
In Värnamo, Sweden the project to connect to the local district heating system for site heating is now complete. This has reduced
the site’s dependency on LPG for ambient heat and has substituted fossil fuel for biomass which has also had a positive effect
in reducing CO2 emissions at that site.
In our DACH packaging region, a project to implement ISO 50001 - Energy Management commenced in November 2013, which
delivers better visibility and control over energy consumption.

ENVIRONMENTAL INCIDENTS IN 2013
No major environmental incidents or incidents of significant impact reportable to local or national authorities, or incidents potentially resulting in legal prosecution, have been reported during 2013.
ENVIRONMENTAL DATA
We collect environmental data on a monthly basis, and report this data for the previous calendar year in order to align with the
generally accepted practice of industry peers and external stakeholders. This aids sector and industry benchmarking.
The 2012 calendar year environmental data reported last year has been used as the baseline for our environmental performance
targets on CO2 emissions, water management and waste sent to landfill in relation to production levels.
Our Paper and Packaging businesses account for more than 95 per cent of the environmental impact relating to the three
target areas; CO2 emissions, water management and waste to landfill. Environmental performance data is presented in our Annual Report and Accounts, and on our website for calendar year 2013 together with the data previously
reported for calendar year 2012.

Ethics and Compliance
Ethical business conduct and compliance with local, national and international legislation are fundamental to our way of doing business. We believe that an ethical approach will lead to repeat business and protect our reputation, thereby preserving our license to operate.

In DS Smith, monitoring ethics and compliance and providing annual training to our employees is the responsibility of our Company Secretarial department. In recent years we have rolled out a wide range of policies, guidelines and training.
We believe that leadership is a crucial factor when it comes to achieving sustainable high performance and building our desired company culture.
Competition Law Compliance Programme
In 2013 we updated our Competition Law Compliance Programme, which aims to explain the fundamentals of anti-trust legislation to our employees. We also rolled out an extensive in-depth e-learning programme to increase awareness of legal regulations and mitigate the related risks. The target group for this e-learning has encompassed our Group Management
Team, Divisional management teams, and employees working in purchasing, marketing and sales. In 2013, over 1,500
employees were successfully trained in this programme.

We have developed clear expectations for all leaders within our organisation, and we follow up on their progress using performance appraisal tools and our company-wide employee survey.