Environmental, social and governance (ESG) report

We believe that being more sustainable over the long term will yield rewards equal or superior to the investment required. Sustainability is a key element within our strategy and our products frequently form part of the sustainability agenda for our direct customers and end-users

David Stirling
Group CEO

david sterling
Dr Karl Hewson, Director of Technology & Development

When designing optimal material solutions for the benefit of society we consider a range of stakeholders and the value chain as a whole. We are tackling today’s priorities of reducing environmental impact while anticipating the long-term benefits that our materials provide in the use-phase

Karl Hewson
Director of Technology and Development


Our approach to sustainability

Zotefoams considers that managing ESG impacts contributes to long-term value creation, supports resilience, enhances the Group’s reputation and helps safeguard the business’s future in an evolving business environment. The sustainability approach adopted by Zotefoams is centred on the twin principles of

i) minimising the use of natural resources through a series of internal measures, and

ii) preferentially operating in markets where Zotefoams’ products offer unique sustainability advantages which benefit society.

Sustainability is embedded through our strategic planning and decision-making. An analysis of sustainability risks and opportunities in 2021 led to the setting of clear targets for improvement. On page 58 we show the progress that we have made towards achieving our long-term aims.

Sustainability opportunities

Over the past century, materials manufactured using Zotefoams’ unique three-stage process have been designed into products which have saved energy by virtue of their insulating properties, have reduced the carbon emissions of cars, planes and trains by reducing weight which in turn lowers fuel consumption, have lasted longer than other comparable solutions and have been used to protect both people and products. These opportunities still exist today and the choice of Zotefoams materials is increasingly based on sustainability considerations.

Our core manufacturing process uses only temperature, pressure and nitrogen borrowed from the atmosphere to create foams that are uniquely pure and durable and which use less polymer thanks to their superior performance-to-weight ratio.

Zotefoams’ opportunity to improve sustainability arises principally in two distinct areas. Firstly, in reducing the carbon footprint of our operations. Secondly, in manufacturing products valued by our customers for their use-phase resource efficiency (a concept defined by the Sustainability Accounting Standards Board (SASB) as a product that, through its use, can be shown to improve energy efficiency, eliminate or lower greenhouse gas (GHG) emissions, reduce raw materials consumption, increase product longevity or reduce water consumption). Thermal insulation is a typical example of this, although it is difficult to measure this impact directly as Zotefoams products are used in many different applications and are often combined with other materials. In setting targets, we therefore focus on both the carbon footprint of the manufacturing process and on prioritising the development and sale of products that are use-phase resource-efficient. Further details of our metrics are on pages 65 to 67.

A portfolio of products…

AZOTE® Premium durable foams

See page 8
Lightweight technical foams

See page 8
Technical insulation for industry

See page 9
MuCell® &
and ReZorce®
Innovative technologies

See page 9

…aligned to sustainability

  • Light weighting
  • Recyclability
  • Durability
  • Insulation

Zotefoams Green Revenue Index


Green Revenue Definition



Polyolefin Foams

Applies to:

·   products typically manufactured
using 30–50% less raw material
than comparably performing foams

·   products used for thermal insulation in construction, aviation and road vehicles to replace heavier materials, enabling benefits in fuel economy (aviation, railway, road vehicles)

·   products providing durable protection designed for multiple reuse



High-Performance Products (HPP)

Applies to:

·   foams that allow for considerable increases in the efficiency of
resource usage

·   products used for thermal insulation (predominantly building and construction but also aviation) and to replace much heavier materials enabling benefits in
fuel economy (aviation systems where foam replaces heavier materials)

·   footwear components designed
with the intent to use less material




Applies to:

·   microcellular foam technology licences and related machinery designed to allow considerable increases in the efficiency of resource usage by reducing the raw material used in components by 15–20%.



Total revenues




Percentage green revenues



For detailed breakdown of green revenue by market and segment, click here.

How we manage sustainability objectives, opportunities and risks

For sustainability to be successfully embedded within a business, it needs to involve every relevant stakeholder.

We have embedded ESG considerations within our risk management process described on page 39 through alignment with the SASB requirements and the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

The risk management process aims to support the achievement of our strategic objectives through the identification and management of risks which may impact the long-term prospects of the Group.

Group Sustainability Steering Committee’s responsibilities

  • Includes Executive representatives from all business units and locations

  • Provides governance and sets the direction for matters relating to the long-term sustainability for the Group, including climate change considerations and the context of the business, ensuring the suitability of the sustainability framework used

  • Establishes sustainability objectives and ensures their continued suitability, adequacy and alignment with the direction of the Group

  • Monitors that the risks relating to sustainability are identified and appropriately mitigated by the relevant steering committees and report any exception to the Internal Controls Committee.

Green Revenue

Our criteria for green revenues are products which, during manufacture or use, provide a substantial increase in the efficiency of resources used. The applications we serve are varied and diverse; so, in calculating green revenues, we have assumed that all applications within a market achieve the same benefits in resource efficiency. For transportation markets, the benefits are reduced weight products which not only use less material but also allow improved fuel efficiency. For both Product Protection and Sports and Leisure markets, the products are designed to be lighter, so they use less material for the same or superior performance. For Building and Construction markets, our products are designed to save energy by sealing or insulating buildings and pipework. We have excluded revenue from sales to Industrial and Medical markets as, while some applications will undoubtedly offer resource efficiency benefits, many will use our products for other performance attributes such as purity.


We use the governance provided by our internal controls structure to evolve our products to offer greater environmental benefits to society while managing the reduction of our carbon footprint and waste.

All investments and resources are managed using technological, financial and sustainability criteria

Carbon footprint

The most significant proportion of our carbon emissions arises from our operations. As part of our commitment, we use electricity from renewable sources wherever feasible; for example, a Renewable Energy Guarantees of Origin (REGO) accredited supplier has been in place in the UK since 2021. Our foam manufacturing plants in Brzeg, Poland and Walton, USA also use 100% renewable electricity. Focused targets are in place to manage our Scope 1 and 2 emissions through the reduction of energy consumption, material used in manufacturing processes and waste; see pages 57 to 59. In order to align our commercial approach with customers use-phase efficiency (Scope 3 emissions), we have created a Life Cycle Assessment (LCA) template which we use to assess typical products and applications. Our Scope 1 and 2 emissions data, along with these example LCAs, are being made available to our customers to enable them to make informed Scope 3 decisions. We continue to monitor the Scope 3 emissions under our control, or alternatively over which we have influence, and use this to guide our decision-making. For example, we have designed foams manufactured from renewable resources and which therefore have a lower carbon footprint.

Business model and strategy

Our business model prioritises solutions with superior sustainability characteristics and which are focused on permanent applications; see page 18. Further details of how we incorporate climate change considerations in our strategic planning are provided under the TCFD section on page 60.


Our main sites are accredited or working toward accreditation to ISO 45001:2018 (occupational health and safety), ISO 14001:2015 (environmental management) and ISO 9001:2015 (quality management). We follow ISO 14021:2016 when making environmental claims and have taken steps to gain independent accreditation for these.

Foam manufacturing facility, Kentucky, USA


We have a strong safety culture grounded in continuous improvement that enables our workforce to operate in a safe environment, at home or at Zotefoams’ premises, and are guided by strong ethical principles that inform our activities


We manage Zotefoams by embedding robust corporate governance systems and principles within our business. We are led by an independent Board with diverse skills and operate under an effective and principled management team.

Risk management

A comprehensive risk management framework is in place. See page 40.

Diversity and inclusion

The Board adopted its diversity policy in 2021.

An Equal Opportunities Policy is in place and can be viewed on our website; visit here.

More information on diversity and inclusion at Zotefoams may be found in ‘our people’ on pages 70 to 74 and in our Nomination Committee report on page 86.


Considering all stakeholders when making key business decisions is fundamental to our ability to create value over the longer term. See our s172(1) disclosures on page 75. In particular, Zotefoams will continue to work with customers and suppliers on improving the sustainability characteristics of our products.

UK Corporate Governance Code 2018

The Company overall complies with the requirements of the UK Corporate Governance Code and has due regard to best practice in governance matters. Further details are provided in our corporate governance section on pages 80 to 82.

In particular:

  • 71% of the Board is independent, with 29% executive representation, supporting effective stewardship of the Company’s assets. All Board committees are fully independent
  • Board and committee members in post at year end attended 100% of all meetings in 2022 (2021: 100%)

    Progression towards greater gender diversity is noted in senior roles:
  • 28% of senior managers are female compared with 20% in 2021
  • 29% of the Board is female, with female Board Committees representation amounting to 45%
  • following the appointment of L Drummond as Chair Designate on 17 January 2023, the Board’s female membership increased to 37% and will further increase to 43% once she takes over as Chair from S Good at the 2023 Annual General Meeting, subject to election by the shareholders
  • an extended questionnaire for assessing the External Auditor’s effectiveness and independence in accordance with FRC guidance was completed in 2022. This evidenced that there is candid and complete dialogue between the External Auditor and the Audit Committee
  • the Board’s working arrangements were kept under review in 2022 to ensure that an optimal mix of in-person and virtual meetings was in place
  • the articles of association were last amended in 2020 to allow hybrid general meeting arrangements and comply with current best practice. The Board intends to continue to extend digital inclusion by regularly broadcasting business presentations on the Investor Meet Company platform.

Thoughtful employee engagement supports effective governance. The Board strived to enhance the employee voice in the boardroom during the year through both scheduled engagement during site visits and Board representation on the Joint Consultative Committee, which last adopted new terms of reference in 2021.

Executive remuneration

The Remuneration Committee sets executive remuneration in light of prevailing conditions and takes into account wider workforce pay and conditions. Executive remuneration is linked to ESG metrics.

See our Directors’ Remuneration report on pages 88 to 109.

Key targets

Our sustainability targets focus on the reduction of Scope 1, 2 and 3 carbon emissions.

In parallel with these specific Scope 1 and 2 targets, we have calculated the carbon cost of a representative selection of our foams (referred to as “carbon accounting”) and ReZorce® Circular Packaging technology.

We are utilising this information internally and working with selected customers to assess how this can be used constructively to make objective decisions to steer our own business and guide our customers in choosing the optimal material solutions for their applications. We are also developing Life Cycle Assessments for our products in use, giving us visibility of Scope 3 emissions on a case study basis.

Target met for 2022



Status at end of 2022


1. Improve purchase-to-product (mass balance) of foam products. We purchase
more polymer than we sell as foam, with losses in the current manufacturing process. This is waste material and waste energy which, with some investment, can be reduced. By the end of 2026,
we plan to have halved the polymer purchased
that is not in the end-product (internal waste and oversized materials). To support this, in 2022 we will financially and operationally plan the investments required in future years to achieve our 2026 target. Additionally, we aim to implement improvements to reduce the polymer waste rate during manufacture and are targeting a 2.5% waste reduction for 2022.

Measure the baseline excess polymer by end of Q1 2022.

Save 2.5% total waste
for 2022.


Propose a reduction plan including any capex for
2023 by the end of Q3 2022 and for 2024–26 by the
end of 2022.

Since publishing our 2021 Annual Report, we have broadened our target to include all foams produced, with significant focus and achievement in reducing excess polymer purchased for Footwear products.


For the first quarter of 2022, we measured the baseline of excess polymer purchased.


We worked on numerous efficiency initiatives throughout the year and calculated the excess polymer purchased for the full year to be 4.7%.


For our AZOTE polyolefin foams, our biggest product range, we achieved a 4.1% reduction in the excess polymer purchased during 2022.


We have allocated capital in our five-year plan
to improve manufacturing equipment so we can achieve our 2026 target.


2. Re-purpose unpreventable polymer waste from our UK manufacturing process. Inherent to achieving longevity and lightweight in our foams is a manufacturing step known as crosslinking, which modifies the polymer. Crosslinking is not practically reversable and therefore utilising this modified polymer to manufacture foams requires different techniques than when dealing with unmodified polymer. As we develop these techniques, we are able to re-incorporate this modified polymer in the manufacture of certain products.

By the end of 2022:

i. develop AZOTE
products that allow us to re-incorporate into our foams 50% of solid polymer waste produced at our UK site


ii. have found applications that reuse 90% of all AZOTE foam waste produced at
the UK site.

i. We have developed products and a manufacturing process capable of re-incorporating more than
50% of the solid polymer waste produced at our
UK site (68% was re-incorporated during the
month of November). We continue to build demand for these products.


ii. We work with two companies, Schmitz Foam Recycling B.V. and Apetek S.r.L, which utilise our product primarily as underlay in artificial turf. 94% of our foam scrap was re-purposed during 2022.






3. Zotefoams products have historically been designed to use less material and last longer. We will further develop our product portfolio by designing and developing new products which
offer our customers more sustainable solutions.

By the end of 2026, 5% of our revenue will
be generated from new products designed
and developed after 2022 for use-phase
resource efficiency.

An interim target of 0.5% of revenue was set for 2022.

We have worked to create a strong pipeline of products offering sustainable benefits to our customers. During 2022, we developed many
new products that contributed over £1.5m, or 1.2%, of revenue. The major developments are for a district heating project, many T-FIT insulation items and a new product for lightweighting of aircraft interiors.

Additionally, during 2022:

·   70% of the projects in our development portfolio offered sustainability benefits

·   we developed a foam containing polymer recovered from post-consumer waste which will be launched during 2023

·   we developed a high-performance foam based on a polymer with high renewable content which is now being evaluated by customers.


4. We continually strive to reduce the energy consumed in the manufacture of our products. As we produce greater quantities of products
across multiple manufacturing sites, the energy
we consume increases. Additionally, certain products we develop which offer use-phase resource efficiencies can require greater energy per unit volume to manufacture.


Setting a target which accommodates growth and
the changing product mix is difficult, but we have committed that by 2026 we will reduce the energy consumed per unit revenue by 10%.

An interim target of
0.73 kWh/£ was set
for December 2022.

Having started 2022 with a baseline of 0.74 kWh/£,
by December 2022 we had achieved 0.66 kWh/£, which far exceeded our interim target. This was primarily due to high-capacity utilisation and recent price increases. The energy consumed will vary through economic and investment cycles but, after correcting for price inflation, we still exceeded our 2022 target and thus see the long-term outlook
as positive.



We have set longer-term sustainability objectives, aligned to a sustainability backed loan facility, which will be published in future years

Long-term objectives







Achieve a 10% reduction
in the energy used to manufacture our products
by 2026

From a baseline of 0.74kWh/£ in December 2021, reduce the energy used per unit revenue generated (kWh/£)


0.73 kWh/£

0.66 kWh/£



0.72 kWh/£




0.70 kWh/£




0.68 kWh/£




0.66 kWh/£



Further develop our product portfolio by designing and developing new products which offer our customers more sustainable solutions such that, by 2026, they will account for 5% of revenue

Share of sales from products designed for use-phase efficiency (% of revenue)





















By the end of 2026, halve the polymer purchased that is not in the end-product (internal waste and oversized materials)

Reduction in the mass of excess polymer purchased
to that sold (% reduction)





















Improve circularity and waste reduction:
mass of excess polymer purchased compared with that sold as foam

Zotefoams manufactures a wide range of foam products in sheet form. These typically have minimum dimensions and include a process skin as part of the product sold to our customers. The process skins are often removed by our customers who use the consistent homogeneous core of the sheet.

While relatively thin, these skins are not typically required by customers, who then have to re-purpose them. Oversized sheets and skins are the two main causes of processing a larger quantity of polymer than the customer uses.

A key attribute, valued by our customers, is that the physical properties of our products are the same in all directions, giving performance benefits that allow them to replace competitive foams with significantly higher density. The unconstrained expansion required to achieve this is a contributor to the sheet being oversized and consumes more polymer; but this waste is much less than the extra polymer required by competitive processes to produce higher density foams that match the performance of our products.

The challenge we have set ourselves is to reduce by half this “Excess Mass of Polymer Purchased” over the next five years, with annual targets that reflect the long-term nature of this objective. This target has been endorsed by our lenders following the renewal of our refinancing arrangements in 2022.

The process skin is an integral part of the product and will always be present. Reduction of the polymer consumed can be achieved by the following activities:

  • optimisation of tooling: most foams we manufacture use common equipment which is not always optimal. Waste can be reduced by adapting and, where appropriate, purchasing optimised tooling

  • tolerance reduction: we guarantee customers can obtain a minimum size from our foam sheets. To achieve this, we target a larger size foam sheet during manufacture to accommodate the process skin and our manufacturing tolerances. Reducing tolerances at all stages of our process will allow us to reduce the target size and the excess mass of polymer purchased. For some process steps, this will require investment in new equipment

  • process improvements: there are small losses at all stages of our manufacturing process. Enhanced monitoring and a focus on reduction of these losses will reduce the waste

  • circularity: incorporating polymer waste we produce into products we sell in order to replace the virgin polymer we purchase. For many plastics processors this is standard practice. But AZOTE polyolefin foams are crosslinked, a chemical modification that prevents re-incorporation directly into the same process. We aim to develop a method to sustainably re-incorporate our chemically modified polymer waste into our premium products.

During 2022, we adopted detailed monitors at our Croydon site that measure and report waste at all stages of our process, allowing a consistent method of reporting the excess mass of polymer. In parallel, our engineering team has developed a process that allows products to be manufactured which incorporate our internal polymer waste. Our Ecozote® Sustainability+ LDR foams containing 30% recycled LDPE content were launched in October.

A baseline was generated using data from Q1 2022. Approximately half of this is intentionally included as process skins.

Five-year reduction target of Excess Mass of Polymer relative to baseline

Our target for the full year was to reduce Excess Mass of Polymer by 2.5%. We exceeded this target, achieving a 4.7% reduction over the baseline for the full year.

Task Force on Climate-related Financial Disclosures (TCFD) response

The risks associated with climate change are subject to rapidly increasing societal, regulatory and political focus, both in the UK and internationally. In line with the TCFD recommendations and best practice, we have embedded these risks into the Group’s risk management framework in order to adapt the Group’s operations and business strategy to address the financial risks resulting from both: (i) the physical risk of climate change; and (ii) the transition to a low-carbon economy.

We set out below our climate-related financial disclosures for the financial year ended 31 December 2022 in accordance with the Financial Conduct Authority (FCA) listing rule LR 9.8.6 R(8). The rule requires relevant companies to report on a ‘comply or explain’ basis against the TCFD recommendations. We have considered our ‘comply or explain’ obligation and have detailed in the table below the 11 TCFD recommendations, all with which we fully comply.


a. Describe the Board’s oversight of climate-related risks and opportunities
b. Describe management’s role in assessing and managing climate-related risks and opportunities

The Board sets the strategic aims of the Group, ensures that the necessary resources are in place to achieve the Group’s objectives and reviews management performance. The Board has oversight of climate-related matters (which include risks and opportunities) and is updated on these matters as necessary through:

the Audit Committee, which is responsible for keeping under review the adequacy and effectiveness of the Group’s internal control and risk management systems, which consider climate-related risks by the appropriate Control Committees (see page 44); and

bi-annual business unit presentations, which consider both the physical and transition risks of climate change and opportunities arising from climate change and are made by the executive function head to the Board. For examples of how we integrate sustainability and climate change considerations into our strategy, see pages 18, 20 and 24.

The sustainability targets linked to climate change that we set in 2021 were incorporated into the 2022 corporate objectives. The Executive team reviewed and discussed progress towards the objectives at its meetings in January, April, September and November 2022.


a. Describe the climate-related risks and opportunities the organisation has identified over the short, medium and long term
b. Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy and financial planning
c. Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2°C
or lower scenario


Our risk exposure to climate change is partly mitigated through operating foam manufacturing facilities in countries with high regulatory standards and through the implementation of well-established environmental management systems in all locations. The risk management framework on page 40 aims to assess the Group’s principal risks and ensure these are effectively managed across the entire business. Climate change is considered in our risk section as a principal risk. The financial impact of key climate change scenarios is reviewed below.







Physical risk such as adverse weather event disrupting manufacturing or our supply chain

Zotefoams sites are not located in areas under physical threat from climate change over and above an increased number of severe weather incidents. The likelihood of a severe weather impact is increasing, which in turn generates a higher expectation of supply disruption, including transportation. Most key suppliers are dual sourced, thereby mitigating this risk. As we invest in new, and update our existing, infrastructure, new designs accommodate more frequent extreme weather events arising from global warming.



A significant increase in the
cost of energy would increase manufacturing, raw material and transportation costs and create inflationary pressures

Energy prices are a significant direct cost to our business and also to our suppliers. We have set objectives to reduce our direct energy consumption across our manufacturing sites and to reduce consumption of raw materials.


As well as reducing the consumption of energy and raw materials, we also have recourse to increasing prices to our customers. To ensure we understand the market response to such price increases, which are often implemented with a lag compared with cost inflation and after consultation with our customers, we monitor demand through our Controls Framework and Sales & Operational Planning processes. Over time, we seek to invest closer to markets which are expected to account for most of our sales volume and to improve our mix so that it includes more higher-value products, both of which mitigate the risk of higher transport costs.



A significant increase in taxation to drive behaviour, such as a carbon, plastic or waste tax

Environmental taxes are a relatively low proportion of tax revenues. They have been used to change consumer behaviour (plastic bag tax, Climate Change Levy, landfill tax) and offer opportunity as well as risk.


It is likely that taxes will be used to incentivise and force quicker change as emissions reduction targets are accelerated. Passing on increased tax costs through pricing would be more difficult to achieve than for increases in the cost of energy and materials. Our Controls Framework monitors taxation trends related to climate change and plans accordingly, whether through energy efficiency initiatives, investments or product developments to accommodate changing demand patterns.



A significant shift in market demand pattern such as a move away from plastics or only sourcing circular plastic products. An increased demand for thermal insulation and lighter weight products. Increasing energy costs increase transport cost

Our technology produces foams with better performance and a clean foaming agent that can be used in applications which directly and indirectly save energy. This is aligned with a low-carbon economy. We have low exposure to single-use plastic markets. We have proven benefits in markets where weight saving is beneficial and where society values performance. Our product offering, managed through our Controls Framework, is evolving to meet the needs of a circular lower-carbon economy. The main challenge comes from faster transitions which reduce the time to react. In 2021, we added a Group Sustainability Steering Committee with a remit that includes monitoring and reacting to customer and market trends.



Significant increase in water costs, directly or indirectly through taxation or levy

Compared with other manufacturers, Zotefoams is not a big user of water and the relative cost is small. Any change in the cost of water will have a small impact. An environmental management system is in place to monitor water usage and identify improvement opportunities.


Short-term: Our business model is centred around sustainability. The opportunities available to Zotefoams are detailed on pages 14 to 19. Details of our strategic objectives, including those relating to sustainability and climate change, are provided on pages 22 to 24. Progress has been made against the sustainability targets set in 2021. See pages 57 to 59.

Medium and long term: We believe the benefits of plastics will be recognised and scarce resources will be managed to ensure optimal use and a circular economy. The processing of polymers uses less energy compared with many other materials which, with our technology benefit of producing lighter, longer-lasting products using less material and which have inherent thermal insulating performance, represents a significant opportunity as sustainability increases in importance.

a. Describe the organisation’s processes for identifying and assessing climate-related risks

b. Describe the organisation’s processes for managing climate-related risks

c. Describe how processes for identifying, assessing and managing climate-related risks are integrated into the organisation’s overall risk management

Refer to our risk management framework on page 40 and environmental sustainability and climate change risk on page 44.

a. Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process

b. Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks

c. Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets

The SASB framework provides performance metrics for our functional steering committees to implement. See further details on pages 67 to 69.

Our Scope 1 and 2 emissions are disclosed on page 66. Our approach to managing Scope 3 emissions is detailed on page 54. The risks are managed through our risk management framework detailed on page 40.

Progress against our sustainability targets is detailed on pages 57 to 59.

In the table below, we list the principal risks most likely to be materially impacted by climate change. We also set out examples of events that could cause financial losses or impact our strategy.


A risk assessment, looking at impact and likelihood, was conducted reviewing three climate change scenarios and five risk events. The assessment was first undertaken by the Executive team and later revised following review with the entire Senior Management team. The following methodology has been used to assess the potential risk impact and the likelihood of the risk event.

Potential risk Impact

Negligible (1)

Minor (2)

Moderate (3)

High (4)

Major (5)

Business disruption / asset damage and other consequential loss

Operating profit 

Operating profit 

Operating profit

Operating profit (ca.£1m–£2m)

Operating profit (ca.>£2m)

Politico-economic impact

Minimal financial impact

Material financial impact

Serious financial impact

Major financial

Extreme financial impact

Technology impact

No need to change existing technologies

Insignificant technology update required

Significant technology update required

New technology needs to be implemented in the medium term

New technology needs to be implemented urgently

Social impact

Public awareness may exist but no public concern

Local social issue or public concern

Regional social issue or public concern

National social issue or public concern

social issue or
public concern

Physical impact of climate change

Minimal impact

Material impact

Serious impact

Major impact

Extreme impact


Risk Rating






Almost certain












Likelihood of the risk event

Rare (1)

Unlikely (2)

Possible (3)

Likely (4)

Almost Certain (5)

Never occurred or is
highly unlikely to occur
in the next 20 years

Occurred several times
or could happen within
the next 20 years

Occurred at some point within the last 10 years and may re-occur within the next 10 years

Occurred infrequently: less than once per year and is likely to re-occur within the next 5 years

Occurred frequently: one or more times per year and is likely to re-occur within the next year

The following risk events arising from climate change or the transition to a low-carbon economy were considered:

  • physical risk: adverse weather event disrupts manufacturing or supply chain
  • significant increase in energy costs during transition: manufacturing costs, raw material costs, transport costs, inflationary pressures
  • significant taxation increase during transition: carbon tax, plastics tax, waste tax
  • significant shift in market demand pattern during transition: move from plastics or to circular plastic products only; increased demand for thermal insulation and lighter weight
  • significant increase in water costs: directly or indirectly through taxation or levy.

The ongoing transition to a low-carbon economy was considered through the prism of achieving global net zero carbon emissions to limit global warming. Three scenarios were considered: no target, net zero by 2070 and net zero by 2050. The transition at the global and national levels brings about political, legal, economic, technological and other changes which produce transitional risks. Transitional risks primarily affect economic performance, which we have considered in terms of our planning cycles of 1 year, 1-5 years and >5 years.


Climate change impact

Business as usual

Paris Agreement

Sustainable development scenario



Unlimited global warming (>>2˚C)
No global net zero target

Limited global warming
to >2˚C
Global net zero by 2070

Limited global warming
to >1.5˚C
Global net zero by 2050


Short term
(> 1 year)

Physical risk

Energy costs


Demand shift

Water costs


Mitigate supply chain.

Medium term (1-5 years)

Physical risk

Energy costs


Demand shift

Water costs


Mitigate supply chain. Develop environmentally sustainable products that are part of the circular economy in markets the products benefit or are less likely to be impacted. Better use of water as we update equipment and processes.

Long term
(>5 years)

Physical risk

Energy costs


Demand shift

Water costs


Modify existing and new infrastructure to accommodate changing climate. Business interruption insurances. Product range and pricing evolves to address taxes.

There are significant risks from climate change and the impact increases with faster transition to a low-carbon economy.

The impacts of climate change and the transition to a low-carbon economy are no greater than other risks faced by the business such as energy pricing and currency fluctuations. Our core products present opportunities in a low-carbon economy and the mitigations already in place for the current slower transition rate will help if the rate of transition increases.

Third party assessment

We continually strive to improve our sustainability disclosures.

In 2022, we made our first report to CDP, a not-for-profit charity that runs a global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts. Our report may be found on its website:

In early 2023, Zotefoams was also upgraded from an A score to an AA score by MSCI and was awarded a ‘green flag’ (the lowest risk rating) as it has no ESG controversies. MSCI ESG Research provides MSCI ESG Ratings on global public and a few private companies on a scale of AAA (leader) to CCC (laggard), according to exposure to industry-specific ESG risks and the ability to manage those risks relative to peers. Further details may be found on its website:

Safety, Health & Environment (SHE)

Zotefoams considers the management of SHE matters to form a key element of effective governance and has put in place specific policies relating to SHE. The Company is certified to accredited standard ISO 45001:2018 for Health and Safety, ISO 14001:2015 for Environmental Management Systems and ISO 9001:2015 for Quality Management and is subject to a recertification regime requiring two surveillance audits per annum. The recertification process for 2022 has been completed. The auditor commended Zotefoams’ willingness to continually improve and advised that the very small number of minor non-conformities raised in the previous three years was an excellent result.

“ Discussions with the Managing Director Europe held during the 2022 recertification audit provided assurance on the top management’s commitment and involvement in establishing and encouraging a positive health and safety culture across the business.

His dedication supports progress toward the achievements of Zotefoams’ environmental sustainability goals. ”

– BSI ISO 45001 & 14001 audit report, September 2022

The Board has ultimate responsibility for SHE policy and performance and receives quarterly reports on Group SHE issues. The Board has set a low risk appetite for health and safety matters. Annual performance objectives are agreed by the Board and performance against these is monitored as part of its quarterly reporting programme. RIDDORs (lost time accidents reportable under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013) are recorded immediately and are subject to a thorough root cause analysis reviewed by the Board, with appropriate follow-up actions agreed with management. Additionally, the Board has a detailed review of SHE performance, targets, metrics and approach through monthly updates.

The Group CEO is directly responsible to the Board for SHE performance. All SHE matters are overseen by steering committees, chaired by the Group CEO (or appropriate responsible person in subsidiary companies). The steering committees meet quarterly and consider overall performance and the impact of current and impending legislation.

On joining the Group, all employees receive induction training on SHE matters, including the Group’s SHE policies, and refresher training is provided, as appropriate, to ensure employees remain abreast of and familiar with SHE matters. Employees are made aware that each and every one of them has a part to play in ensuring their own safety at work and that of their colleagues. Employees are encouraged to report to their managers any unsafe, or potentially unsafe, acts or conditions. Senior managers are responsible for ensuring that SHE policies are implemented in their areas, that their teams are informed of the departmental SHE requirements and that employees receive and understand training on environmental issues and safe working practices. Regular audits are conducted to ensure policy and procedure implementation is appropriate.

The Group takes the reporting of all SHE incidents very seriously and requires employees to report all incidents, including any near misses, as well as damage to plant or equipment which has not resulted in personal injury. The Group considers the reporting of near misses to be as important as actual incidents, since it raises situations to management that could cause, or might have caused, harm. It then ensures appropriate corrective action can be taken to eliminate or minimise the risk. The Group also ensures that appropriate safety practices are included in standard operating procedures to reduce the risk of SHE incidents occurring.

Few controlled substances are used in the manufacture of our foams, but where they are, the Group has established procedures, in which the relevant employees are trained, to ensure safe storage and handling of such substances in accordance with regulatory requirements. The manufacturing process involves manual handling and processing of materials. When new or altered equipment or materials are introduced, and at regular periods thereafter, the risks to the processes are assessed and improvements made wherever possible, such as to the design of the equipment, to reduce or eliminate the risks identified.

The most strictly controlled parts of the Group’s sites are where high-pressure gas is used. The high-pressure autoclaves are subject to the Pressure Systems Safety Regulations 2000 in the UK, OSHA (Occupational Safety and Health Administration) in the USA and the Journal of Laws of the Republic of Poland, Dz. U. 2022 poz. 68. Tightly defined procedures and operational controls are in place to manage the safety of these pressure systems. Fail-safe mechanisms, known as pressure relief valves and bursting discs (which act like fuses in an electrical system), are included in the design of the pressure systems which, when triggered, allow safe depressurisation of sections of the system and prevent any further risks. Operation of these fail-safe mechanisms releases harmless nitrogen gas into the atmosphere. The air we breathe is composed of 78% nitrogen.

All SHE incidents are investigated by appropriate levels of management to ascertain the root cause of the incident and, wherever possible, working practices and procedures are improved to minimise the risk of recurrence. In 2022, there were no prosecutions, fines or enforcement actions taken as a result of non-compliance with SHE legislation (2021: none).

Health and safety

Fostering a safety culture has a positive impact on risk and performance. Our approach is twofold: strong leadership maintaining safety as the number one priority; and training of employees to develop the tools to continually improve safety in the working environment.

Management focus remains on developing safety leadership, using various engagement methods to increase Group-wide awareness of hazard identification and control. In 2022, the safety engagement programme in the UK expanded into non-manufacturing areas to incorporate contractor management, warehousing and facilities management. This wider coverage resulted in over 5,000 safety engagements in the UK (3,000 in 2021). The safety engagement programme has been adopted throughout the Group, where a further 595 safety engagements were carried out as we look to increase maturity across all sites and continue to focus on identifying hazards and improving awareness and behaviours relating to safety. We refreshed the use of 5S methodology at our Croydon manufacturing site to improve our workplace safety through the promotion of a clean working environment. Training has been provided over a broad range of safety topics and there are daily forums at which safety is the first agenda item and where concerns can be raised. Our KPIs indicate our approach is working. Health surveillance programmes Group-wide remain in place to provide at-risk employees with medical monitoring and support to ensure that work-related medical conditions are identified and addressed promptly through the appropriate referral to medical specialists. Wellbeing initiatives continued in 2022 and include mental health first aiders globally and comprehensive employee assistance programmes in our two largest sites in the UK and USA. Further details are provided in ‘our people’ on page 70.

Our Polish site organised a highly interactive day in September 2022 that involved supplier demonstrations of all types of safety-related products, with the aim of improving engagement with and understanding of safety. This was well-received and we plan to replicate this at other sites within the Group. In 2023, we will continue with the same approach as in 2022. The safety engagement programme will continue with an increased number of engagements being carried out by operators, with training to support this, both for specific hazards and non-routine tasks. We will continue to improve iteratively the headline SHE indicators across the Group and enhance the leadership team high visibility programme, including initiating a regular in-person Group-wide SHE leadership forum to share best practice across sites. Our Polish manufacturing site achieved ISO 45001 accreditation in December 2022.

The 5S methodology provides a framework to organise a work space for efficiency and effectiveness by identifying and storing the items used, maintaining the area and items, and sustaining the organisational system


In 2022, our UK site completed over 5,000 safety engagements. In recognition of this achievement, a special awards presentation was hosted by the HSE team.

Seven awards were presented to employees who had demonstrated a consistent contribution to the health and safety programme. The awards covered the most engagements completed, best quality, hazard identification, contractor surveillance, team focus, passionate about recycling and best safety representative for actively encouraging participation.

The award and recognition event was fun, well received and it was nice to see such a cross-functional group at an event that captured the spirit of the progress made over the last few years

Nick Donhue
OHSE Manager

Health and safety performance

The primary metric used to monitor the number of reportable injuries for the Group is RIDDOR. In 2022, two RIDDOR incidents occurred across the Group (2021: 0).

Both RIDDORs were subject to a detailed root cause analysis with hazard awareness being the common theme. Hazard identification of both frequent and infrequent tasks is part of our 2023 improvement plans. This will involve increased participation in safety engagement programmes and interactive competency-based training to enhance hazard awareness and routine inspections at all sites in the Group.

The Group also uses metrics devised by the United States Department of Labor to measure staff absences resulting from workplace incidents and accidents. This allows a comparison with a large, relevant peer group and also provides an established methodology with which we can benchmark our performance annually. In 2022, there were significant decreases in Days Away From Work (DAFW) and Days Away Restricted or Transferred (DART). Our strategy and actions to continuously improve the safety culture of the organisation continue to have a positive downwards effect on DAFW and DART, improving our performance relative to the latest benchmark data for Rubber and Plastics Processors. RIDDOR, DAFW and DART are our primary metrics. Other metrics are provided below to meet SASB Chemical Industry requirements.





(latest published figures)
















Direct Employees Contract Employees




Process Safety Incidents Count1



Process Safety Incident Rate1



Process Safety Incident Severity Rate1



Number of transport incidents1



Fatality Rate

Direct Employees
Contract Employees






1                Tier 1 level incidents.

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Specific Energy Consumption (SEC) – UK

In October 2009, the Company entered into a Climate Change Levy (CCL) agreement which involves meeting specific voluntary targets to increase energy efficiency and reduce carbon dioxide (CO2) emissions. Provided the Company meets the requirements of the CCL agreement, it receives a rebate on its electricity bills and is also exempt from the Carbon Reduction Commitment Scheme for the plastics sector; the scheme is run by BPF Energy Limited, to which unadjusted SEC figures are reported quarterly. The scheme will run up to 2025.

The Company measures energy efficiency by taking energy consumption and dividing it by the amount of material (in kg) that passes through high-pressure autoclaves. The increase in production of our HPP foams, which generally require more processing energy than polyolefin foams, prompted us to update these metrics to be product-mix neutral in 2018. In 2022, our adjusted energy efficiency measure, Specific Energy Consumption (SEC), has decreased 7% to 8.58 kWh/kg (2021: 9.22 kWh/kg), the lowest recorded since 2015. In 2019, the Company completed its second assessment under the Energy Saving Opportunity Scheme (ESOS) and remained compliant in 2022. The next assessment is planned in 2023.

The SEC value has been reported in the Annual Report as a mix-adjusted value since 2018 to reflect the growth of Footwear and to show the energy efficiency improvements made.

Global carbon emissions

Zotefoams products are used globally to improve people’s lives and reduce energy consumption, primarily through insulation and weight reduction. The processes we employ to create these foams allow us to use less raw material and produce lighter foams than competitive processes, both of which are beneficial for carbon reduction. In making these foams, energy (both gas and electricity) is the main source of carbon emissions from our facilities


Group: carbon emissions (CO2 tonnes)






Scope 1 Emissions (direct emissions from our operations which includes fuel)






Scope 2 Emissions (indirect emissions, primarily electricity)












Carbon emissions (kg) per material gassed (kg)







Group: pollutant emissions (tonnes)



NOX (excluding N2O)












NOX and SOX calculated from Scope 1 emissions.

VOCs and HAPs measured on a typical production day at factory emission points and scaled for total annual production volumes.

Overall carbon emissions for 2022 were 12,961 metric tonnes (2021: 14,210 metric tonnes), with the main changes being due to energy reduction initiatives such as standby sequencing of extraction systems and temperature optimisation of our thermal oil system.

In 2022, 99.4% (2021: 97.7%) of the Group’s carbon emissions arose from our use of electricity and gas, primarily in processing polymer but with some use in facility heating and cooling. Direct carbon emissions from other sources were minimal (0.6% of Group emissions) as we do not operate our own fleet of vehicles.

The methodology we have used is in accordance with the guidance published by the Department for Environment, Food and Rural Affairs in June 2013. We have only included emissions for which we are directly responsible. We have not included emissions for activities over which we have no direct control. For example, we have included business mileage on a Company van and mileage claimed by employees in the UK, but not other forms of business travel, such as travel made by employees elsewhere in the Group or travel using public transport or air travel.

We are committed to using renewable electricity where feasible. 100% of the electricity used in our UK, USA (Walton) and Poland sites comes from renewable sources.

Alternative measures

Many companies consider carbon offsetting. Zotefoams’ view is to report as a primary metric the absolute carbon emissions calculated using the UK government carbon cost of energy. We buy electricity from renewable resources, wherever available, and we do not buy carbon credits or subscribe to offset schemes such as tree planting or felling avoidance.

To facilitate a comparison with those who consider renewable electricity to have a zero-carbon footprint, our carbon footprint in 2022 was reduced by 37% in absolute terms.

While none of our sites is located in regions where water is scarce, we recognise that usage of water is a key environmental metric supporting our sustainability proposition. Our water consumption is metered and we have specific programmes to improve efficiency and reduce water usage. Water usage decreased by more than 25% across the Group in 2022, driven by a decrease in usage of almost 30% in the UK, our largest manufacturing site. We attribute this significant reduction to improvements in water usage through daily monitoring, with results reviewed and discussed at the daily production team meeting. This improved visibility has ensured more appropriate levels of control and engagement leading to the generation of new ideas in Croydon. There was a small increase in water consumption at our USA sites. This reflected increased production activity at our Walton site and capacity expansion of water jet machines at our Tulsa site.

Waste reduction initiatives accelerated in 2022, with two sustainability targets aiming to:

  • reduce scrap through the improvement of mass balance of AZOTE polyolefin foam products manufactured globally. Details of this target are outlined in the case study on page 59. During 2022, we targeted a 2.5% reduction in the excess mass of polymer purchased for our AZOTE products. We achieved 4.1%, mainly through activities to optimise tooling and re-incorporate polymer waste into products
  • re-purpose unpreventable polymer waste from our UK manufacturing process. We have two main sources of polymer waste: solid polymer from our extrusion process and foamed polymer from our fabrication facility and the destructive quality tests undertaken.
  • The solid polymer waste primarily comprises trims from our extrusion process. A small quantity of this can be re-incorporated directly into the product, such as the polymers used in our Footwear business. The majority is crosslinked LDPE (chemically modified), so cannot be directly re-incorporated into the product. We have developed a method to re-incorporate this chemically modified polymer sustainably into the foam manufacturing process with only minor changes to the performance. Our Ecozote Sustainability+ LDR foams, containing 30% recycled LDPE content, were launched in October and we are currently incorporating more than 50% of solid polymer waste into products. Demand for these products is growing and we are developing further products which incorporate post-industrial waste from other users
  • Almost all foam scrap is now re-purposed for use as underlay in artificial turf.

Details are provided on page 57.

Water: Global

Water consumption (000m3)





UK site





USA site





Other sites





Global consumption





Percentage in regions with Baseline Water Stress1









Extremely High




Waste: Global

Group: waste1





Waste recycled (tonnes)





Total waste (tonnes)





Total hazardous waste (tonnes)2





Percentage of hazardous waste recycled2





Sustainability Accounting Standards Board (SASB) disclosures

SASB Standards identify the subset of ESG issues reasonably likely to have a material impact on the financial performance of the typical company in an industry. The following table summarises our response to the sector-specific standards for chemicals companies.



Accounting metric


Unit of measure


Supporting disclosure

Greenhouse gas emissions

Gross global Scope 1 emissions, percentage covered under emissions-limiting regulations


Metric tonnes (t) CO2
Percentage (%)


See Group carbon emissions table on page 66. 0% of scope 1 emissions were covered under emissions-limiting regulations

Discussion of long-term and short-term strategy or plan to manage Scope 1 emissions, emissions reduction targets,
and an analysis of performance against those targets

Discussion and analysis



See Group carbon emissions section
page 66 and targets section
pages 57 to 59

Air quality

Air emissions of the following pollutants: (1) NOX (excluding N2O), (2) SOX, (3) volatile organic compounds (VOCs) and (4) hazardous air pollutants (HAPs)


Metric tonnes (t)


See Group carbon emissions table
page 66

Energy management

(1) Total energy consumed
(2) Percentage grid electricity
(3) Percentage renewable
(4) Total self-generated energy


Gigajoules (GJ),
Percentage (%)


See SEC table
page 65

We do not generate our own energy

Water management

(1) Total water withdrawn

(2) Total water consumed, percentage of each in regions with high or extremely high baseline water stress


Thousand cubic
meters (m³),
Percentage (%)


See water data table page 67

Number of incidents of non-compliance associated
with water quality permits, standards and regulation





Description of water management risks and discussion of strategies and practices to mitigate those risks

Discussion and analysis



See water data table on page 67 and TCFD disclosures pages 60 to 62





Accounting metric


Unit of measure


Supporting disclosure

Hazardous waste management

Amount of hazardous waste generated and percentage recycled


Metric tonnes (t), Percentage (%)


See waste data table page 67

Community relations

Discussion of engagement processes to manage risks
and opportunities associated with community interests

Discussion and analysis



See People section
pages 70 to 74

Workforce health and safety

(1) Total recordable incident
rate (TRIR) (2) Fatality rate for
(a) direct employees and
(b) contract employee




See SHE key metrics table page 65

Description of efforts to assess, monitor and reduce exposure of employees and contract workers to long-term (chronic) health risks

Discussion and analysis



See Health and Safety performance section
pages 63 to 65

Product design for use-phase efficiency

Revenue from products designed for use-phase resource efficiency


Reporting currency


See Key Targets section pages 57 to 59

Safety and environmental stewardship of chemicals

(1) Percentage of products that contain Globally Harmonized System of Classification and Labelling of Chemicals (GHS)
and Category 1 and 2 Health
and Environmental Hazardous Substances


Percentage (%) by revenue


Less than 5% of revenue
is generated from substances we use that are regulated1 or are considered to be of international concern2.

100% of goods purchased and sold undergo hazard assessments. The hazardous substances, such as flame retardants and low levels of stabilisers, are non-hazardous in the finished products as they are bound into the polymer matrix

(2) Percentage of such
products that have undergone
a hazard assessment


Percentage (%)


Discussion of strategy to (1) manage chemicals of concern and (2) develop alternatives
with reduced human and/or environmental impact

Discussion and analysis



The risks relating to products of concern are reviewed in control committees. Continued use and substitution are discussed and, where possible, such substances are substituted

Genetically modified organisms (GMOs)

Percentage of products by revenue that contain GMOs

Discussion and analysis

Percentage (%)


No products
contain GMOs

Management of the legal and regulatory environment

Discussion of corporate position related to government regulations and/or policy proposals that address environmental and social factors affecting the industry

Discussion and analysis



Zotefoams follows all local regulations relating to Health, Safety and Environment as well as social factors. We have a low risk appetite towards safety

See pages 63 to 65

Operational safety, emergency preparedness & response

Process Safety Incidents Count (PSIC), Process Safety Total Incident Rate (PSTIR) and Process Safety Incident
Severity Rate (PSISR)


Number, rate


See OHSE table  
page 65

Number of transport incidents




Zotefoams had
no reportable
transport incidents

by reportable segment



Cubic meters (m³)
or metric tonnes (t)


7,911 tonnes of AZOTE® polyolefin foam and
1,635 tonnes of HPP
were manufactured.

There is a lag between manufacturing and sale

1                 Substances of very high concern under REACH and the EU’s Restriction of Hazardous Substances Directive or substances listed under California Prop 65.

2                 Substances controlled by the Montreal Protocol, Stockholm and Rotterdam Conventions, GHS category 1 and category 2 health hazards.

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