Smiths: Smiths : Sustainability at Smiths Report (smiths sustainability report 2024)

Engineering a better future Sustainability at Smiths report FY2024 Introduction E n v i r o n m e n t S o c i a l G o v e r n a n c e E S G d a t a 1 Welcome Welcome to our Sustainability at Smiths FY2024 report. Our purpose We are focused on solving the toughest problems for our customers, helping address critical global needs such as safety and security, decarbonisation and the ever-increasing demand for data connectivity. At the same time, we are building the long-term resilience of Smiths Group and our global operations. We are pioneers of progress - engineering a better future. Introduction A message from our CEO 2 Our ESG framework 3 Governance and delivery 4 Monitoring, measuring and reporting performance 6 External frameworks and scores 7 United Nations Sustainable Development Goals 8 Environment Commercialising high-value green technologies 12 Delivering Net Zero GHG 14 Respecting natural resources 18 Supply chain Supply chain 21 Social About this report This is the FY2024 Sustainability at Smiths report of Smiths Group plc. Data presented in this report is for the 12 months to 31 July 2024 unless otherwise stated. How to navigate this report Throughout this report you will find extra information, performance data and links to additional data in the right-hand column. Supporting data, statistics or insights Links to additional content within the report Pointers to additional external content Quotes from our team and highlights Use the links to navigate around the report and access external content. Read more about us in Read more about the our Annual Report Group on our website www.smiths.com Improving safety, health and well-being 24 Developing and attracting talent 26 Promoting diversity, equity and inclusion 28 Contributing to our communities 30 Governance Behaving ethically and legally 33 Effective long-term decision making and transparency 35 Managing risk and maintaining strong and effective 36 controls ESG data - metrics, targets and disclosures ESG data 39 Basis of preparation and methodologies 45 S u s t a i n a b i l i t y a t S m i t h s r e p o r t F Y 2 0 2 4 Introduction E n v i r o n m e n t S o c i a l G o v e r n a n c e E S G d a t a 2 Our ESG framework See how we organise our ESG commitments and objectives. Page 3 Sustainable Development Goals Read how we are contributing to the UN SDGs. Page 8 The Smiths Group Foundation We were excited to launch our new Foundation during the year. Page 31 ESG data disclosures See our expanded ESG data disclosures. Page 39 Material ESG topic message from our CEO As an engineering company with a 170-year history, our foundations rest on innovation, pragmatism and continuous improvement, and we are hard wired to create value. We take the same approach to sustainability matters, with an objective to minimise our net impact and create positive impacts where we can. Ultimately this is what our customers are asking for, as well as being an important goal in its own right, and inspiring for our people. This report describes the great progress we have made during the year on all aspects of ESG. Smiths technology is supporting customers in their sustainability goals across the world - to lower emissions, to electrify, to transition to new fuels like hydrogen, and to use and waste less. Our technology is also keeping people and property safe and secure in a time of growing instability and threat. Our own safety performance is above industry average, but we know we can always do better to keep our people safe from harm. We have hit all of our environmental targets and have set new ones for the coming three years on emissions, energy efficiency, renewable electricity, water and waste. We have also increased interrogation of our supply chain to better align supplier commitments with our own and support us to create value at every stage of the product cycle. We have great people, and our culture is strong. Our commitment to nurturing and developing Smiths talent is unwavering, as is our focus on diversity and inclusion. Bringing diverse views into the company and giving people the confidence to speak out drives the innovation and new ideas that benefit us all. My thanks to Smiths colleagues for everything they have done during the year. #ProudtobeSmiths Roland Carter Chief Executive Officer Our top five material ESG topics Improving safety, health and well-being Caring for our people is an essential pillar and our number one focus. Page 24 Commercialising high-value green technologies Applying our capabilities to innovate practical, commercial solutions that solve customers' environmental needs is a key vector for growth. Page 12 Delivering Net Zero GHG We have committed to ambitious Net Zero emission targets validated by the SBTi. Page 14 Supply chain Confidence, transparency and the ability to effect change in our supply chains is critical to manage risk and make progress on ESG. Page 21 Behaving ethically and legally Behaving ethically and with integrity is a fundamental part of our culture and vital in our markets. Page 33 S u s t a i n a b i l i t y a t S m i t h s r e p o r t F Y 2 0 24 Introduction E n v i r o n m e n t S o c i a l G o v e r n a n c e E S G d a t a 3 Our ESG framework We organise our ESG commitments, objectives and reporting in our ESG framework. In FY2023 we undertook Material ESG topic a double materiality assessment (DMA) to identify our most material ESG issues and test the framework. Read more about the outcome of the DMA on www.smiths.com Commercialising high-value green technologies Strong and growing portfolio of green technologies John Crane now present in approximately 70 energy transition-related hydrogen and carbon capture, utilisation and storage (CCUS) projects Page 12 ESG framework Supply chain Respecting natural resources 68 sites with ISO 14001 certification 30 water saving projects since FY2021 New Water and Waste Policies Page 18 Supply chain Delivering Net Zero GHG Climate/Net Zero transition plan validated by Science-Based Targets initiative (SBTi) Scope 1 & 2 emissions down 10.7% during the year 73% renewable electricity Page 14 Environment Delivering Net Zero GHG Commercialising high-value green technologies Respecting natural resources Moving to standardised and disciplined approach to supplier management across Smiths Invested in EcoVadis supplier management platform Page 21 Improving safety, health and well-being - Most material topic to Smiths Developing and attracting talent 75% of open senior roles filled by internal candidates 555 participants in Accelerate leadership programme Grew Veterans network and signed UK Armed Forces Covenant Page 26 Contributing to our communities First grants by Smiths Group Foundation - c.£1m distributed to 11 organisations Page 30 Behaving ethically and legally No human rights issues identified Ethics and compliance workshops held in India and Latin America Page 33 Managing risk and maintaining strong and effective controls Refreshed Group Policies on facilitation payments and anti-corruption Page 36 Improving safety, health and well-being Social Promoting diversity, Developing and attracting talent equity and inclusion Contributing to our Governance communities Effective long-term Managing risk and maintaining strong and decision making and effective controls transparency Behaving ethically and legally Smiths Excellence System (SES) - 15% reduction in total number of incidents - 71 sites with ISO 45001 certification - Launched new Health, Safety and Well-being Policy Page 24 Promoting diversity, equity and inclusion 27% of senior leadership roles held by women 372 participants in #EmpowerYou workshops Equal pay auditing now business as usual Page 28 Effective long-term decision making and transparency Board discussions on Net Zero plan, environmental performance and targets, people strategy, safety performance and Speak Out reports Page 35 S u s t a i n a b i l i t y a t S m i t h s r e p o r t F Y 2 0 24 Introduction E n v i r o n m e n t S o c i a l G o v e r n a n c e E S G d a t a Governance and delivery The Smiths Board of Directors and Executive Committee have ultimate responsibility for Smiths Group's ESG performance and associated governance and oversight. Our collaborative model enables us to bring together the skills and knowledge of our Board, our Executive team and our business leaders to harness the knowledge and skills of the whole Group to drive and deliver innovation, effective execution and best practice. See page 35 for a description of our Board Committees and their responsibilities. Our governance and delivery organisation Oversee Board of Directors Audit & Risk Committee Nomination & Governance Committee Remuneration & People Committee Innovation, Sustainability & Excellence Committee Executive Committee Prioritise Chief Financial General Counsel Chief People Officer Group Head of Smiths Excellence Business Presidents Officer & Sustainability Group Head of Strategy and Communications Senior Leadership Team Directorof Technology, Operations Financial Internal Company GC Ethics & Business Accountable People Leadership Team VP Sustainability & ESG and Commercial Controller Audit & Secretary Compliance GCs Leaders Risk Co-ordinated business delivery Internal Enterprise ESG Board Business Diversity Foundation Sustainability Strategy Regulation HSE Operations controls risk Committee Ethics Talent Equity and product Responsible Oversight Committee Committee Group excellence process reporting Council Inclusion commercialisation Group Communications Smiths Excellence System (SES) 4 S u s t a i n a b i l i t y a t S m i t h s r e p o r t F Y 2 0 24 G o v e r n a n c e a n d d e l i v e r y c o n t i n u e d Introduction E n v i r o n m e n t S o c i a l G o v e r n a n c e E S G d a t a 5 Smiths uses its strength in engineering and technology to contribute to the energy transition in ways that are sustainable, resilient and pragmatic. The Innovation, Sustainability &