Cosmetochem International AG • Sennweidstrasse 44 / 46 • CH-6312 Steinhausen Phone +41 (0)41 748 33 33 • www.cosmetochem.com • info@cosmetochem.ch

Version 1.0

Environmental Report 2010/2011Environmental Report 2010/2011Environmental Report 2010/2011Environmental Report 2010/2011

Legal ComplianceLegal ComplianceLegal ComplianceLegal Compliance

Energy ManagementEnergy ManagementEnergy ManagementEnergy Management

BiodiversityBiodiversityBiodiversityBiodiversity

ContentContentContentContent

1. Introduction

2. The Company

3 Our Environmental Policy

4. Compliance with National Law Concerning the Environment

4.1 Air

4.2 Water and Soil

4.3 Waste

5. Energy and Emissions

5.1 Energy Consumption

5.2 Energy Efficiency

5.3 Carbon Neutrality

6. Biodiversity

6.1 Check of Plant Protection Status

6.2 Palm Oil Engagement

7. Customers Contribution

8. Our Goals for 2012

V 1.0 2 / 8 Environmental Report 2010/2011

1.1.1.1. IntroductionIntroductionIntroductionIntroduction

The international year of biodiversity 2010 triggered Cosmetochem International AG to consolidate its activities towards an environmental action policy. This complies with Swiss national law and also includes new energy efficiency and biodiversity protection measures as well as the improvement of measures already implemented in this field. For seven years we have compared new plant raw materials against known databases for endangered species and dispose of our botanical waste in composting plants. Our activities will now go one step further, with accompanying measures, monitoring and improvement actions in the whole company.

We are pleased to present our first environmental report

2.2.2.2. The CompanyThe CompanyThe CompanyThe Company

Cosmetochem International AG, a manufacturer of high quality, botanical and natural actives and extracts for the personal care industry was founded in 1972 in the heart of Switzerland. Our experience in the international cosmetic industry formed the basis for today’s successful company. Adaptions to changing customer requirements, developing customer specific solutions and on-going development of new technologies have made our company a reliable partner in the cosmetics industry. 3.3.3.3. Our Environmental PolicyOur Environmental PolicyOur Environmental PolicyOur Environmental Policy

We acknowledge the importance of sustainable corporate governance as a vital part of our business philosophy. Cosmetochem International AG is committed to an effective strategy for environmental protection and does not only conform with the complex requirements of current environmental laws but goes beyond by respecting voluntary standards and in-house requirements. The policy is based on • Compliance with national law concerning the environment • Energy management • Protection of biodiversity Our environmental policy is an integral part of our certified ISO9001/2008 system, with all relevant parts such as documentation, continuous improvement and internal auditing.

V 1.0 3 / 8 Environmental Report 2010/2011

Compliance with regulations regarding the protection of air, water and soil Recycling of paper, cardboard, glass and botanical waste

4.4.4.4. Compliance with National Law Concerning the EnvironmentCompliance with National Law Concerning the EnvironmentCompliance with National Law Concerning the EnvironmentCompliance with National Law Concerning the Environment

4.1.4.1.4.1.4.1. AirAirAirAir Our waste air is checked regularly by external professionals against the threshold set by law and they send us a final report with the list of any non-compliant performance that has occured. No incident occurred in 2010 / 2011. 4.24.24.24.2 Water and SoilWater and SoilWater and SoilWater and Soil Our employees are trained to use chemicals responsibly and know how to handle hazardous substances. All chemicals in use are stored according to their hazards, e.g. in barrier basins. Our waste water gets treated with communal waste water in sewage works until it is fit for human consumption again. In order not to interfere with the microbiological system in the sewage works we collect laboratory reagents and other dangerous goods according to their hazards. Such chemicals as well as any off-spec batches are stored and periodically discharged according to their hazards by hazardous-waste professionals. Processes for the transportation of hazardous goods and the internal handling of such are set up by our Hazardous Materials Safety Manager and controlled regularly. No incident occurred in 2010 / 2011. 4.34.34.34.3 WasteWasteWasteWaste

As stated above, we store and dispose our special or hazardous waste according to Swiss Federal Ordinance on Movements of Waste (VeVA). Further, we collect and deliver paper, cardboard and glass as well as botanical waste from production to the recycling plant. The botanical waste is composted. All other waste such as bulky items, household waste, wood, mixed metals, electronic scrap, batteries and neon tubes are collected, separately stored and disposed of. In the case of batteries, electronic scrap, mixed metals or wood, parts of it are also recycled. No incident occurred in 2010 / 2011.

V 1.0 4 / 8 Environmental Report 2010/2011

Monitoring the use of energy Implementation of energy efficiency actions Carbon neutrality

5.5.5.5. Energy and EmissionEnergy and EmissionEnergy and EmissionEnergy and Emissionssss

5.15.15.15.1 Energy ConsumptionEnergy ConsumptionEnergy ConsumptionEnergy Consumption The total consumption has decreased by 3.4% from 2010 to 2011. The decrease of 1 % in the direct consumption as well as in the indirect consumption of -8.3% is most likely linked to the lower production volume in 2011 than 2010.

Our consumption decreased by 3.4% in 2011, linked to lower production volume

5.25.25.25.2 Energy EfficiencyEnergy EfficiencyEnergy EfficiencyEnergy Efficiency Our target is to save energy by setting internal environmental targets. In this respect, we obtain external support and technical advice from the Swiss Energy Agency for Industry (EnAW) amongst others. Together with the EnAW we have set up an energy efficiency plan. Each year within the 10 year action plan of this project, we implement defined energy efficacy measures and report them back to the EnAW. We introduced this project in 2010, and the following goals were achieved in 2011. Thermostat:Thermostat:Thermostat:Thermostat: all radiator-valves in the offices, the production, the storage areas and the entry have been checked and reduced to 23°C, in the office area, and to 20°C in the production. As a result, the temperature will not rise over 23°C. Energy saved: 6.5 GJ Server room:Server room:Server room:Server room: The maximum temperature of our server room used to be 20°C. Based on the input of the EnAW and of our IT specialist, the temperature was set at 23°C. This leads to a decreased energy use by the cooling system. Energy saved: 4.7 GJ Timer:Timer:Timer:Timer: The electricity supply of the coffee machine is timed and switches off during the night and on weekends. Energy saved: 0.9 GJ Total Saving in 2011: 12.1 GJ this is 0.5% of the total energy consumption. Total Saving in 2011: 12.1 GJ this is 0.5% of the total energy consumption. Total Saving in 2011: 12.1 GJ this is 0.5% of the total energy consumption. Total Saving in 2011: 12.1 GJ this is 0.5% of the total energy consumption. To raise awareness, the staff is advised to save energy with those small actions that count • To print out as little as possible and use waste paper as notes • To switch off the light and the screens when leaving With these efforts we cut down our energy consumption which has a direct impact on our carbon footprint.

Total consumption 2010 [GJ] 2011 [GJ] ∆ % Sum 2310.3 2231.4 -3.4 Direct consumption: Petroleum gas 1521 1506.9 -1 Indirect consumption: Electricity 789.3 724.5 -8.3

V 1.0 5 / 8 Environmental Report 2010/2011

Scope 3Scope 3Scope 3Scope 3 We are not yet able to report consistently about our plant materials emission since data concerning harvesting, drying, and transportation of our worldwide sourced plant material is not yet available.

Scope 1Scope 1Scope 1Scope 1 The release of GHG into the atmosphere as a direct result of an on-site activity such as the use of • Petroleum gas • Fuel

Scope 2Scope 2Scope 2Scope 2 The release of GHG into the atmosphere as an indirect result of an on-site activity such as the use of

• Electricity

Cosmetochem International AG is carbon neutral We support a Gold Standard project in rural Ethiopia which builds up solar lighting systems

5.35.35.35.3 Carbon NeutralityCarbon NeutralityCarbon NeutralityCarbon Neutrality Under the terms of the Green House Gas (GHG) Protocol, Scope 1 and 2. Using the carbon footprint as a measure of environmental impact is a recognized process. There are many other methods, yet we have decided to record our environmental impact with this process. In 2010 we got in contact with myclimate, a nonprofit foundation based in Switzerland and among the world leaders when it comes to voluntary carbon offsetting measures. It was our internal decision to report our carbon footprint according to the Green House Gas Protocol Scope 1 and 2.

Based on our annual consumption data myclimate calculated our CO2-eq emissions as indicated. This calculation bases on the eco-inventory database, ecoinvent V2.2 (2010) from the Swiss Centre for eco-inventory, the world's leading supplier of consistent and transparent life cycle inventory data.

As can be seen above the overall emissions decreased from 2010 (152 ton CO2-eq) to 2011 (148.8 ton CO2-eq) to about 3 ton CO2-eq. This is linked to the lower production volume in 2011 and the implemented energy efficiency goals, which saved 0.5% of the total energy consumption or 0.75 ton CO2-eq, around the amount of the fuel emissions generated in 2011. These emissions occur due to our small transporter which we use to carry the raw materials and products to our external stock.

152.3

32.7

119.0

0.6

148.7

30.0

118.0

0.70

20

40

60

80

100

120

140

160

Total Electricity Gas FuelCOCOCOCO2222----eq [t]eq [t]eq [t]eq [t]

Emissions Emissions Emissions Emissions 2010 2011

COCOCOCO2222----eq Emissions [t]eq Emissions [t]eq Emissions [t]eq Emissions [t] 2010201020102010 2011201120112011 Total Emission 152 148.7 Direct Emission:

Petroleum Gas Fuel

119.6 119 0.6

118.7 118 0.7

Indirect Emission: Electricity

32.7 32.7

30.0 30.0

V 1.0 6 / 8 Environmental Report 2010/2011

All Scope 1 and 2 emissions generated in 2010 and 2011 are offset by a myclimate gold standard project in rural Ethiopia. The final Scope 1 and 2 emission after offsetting is zero ton CO2-eq. Carbon Offset ProjectCarbon Offset ProjectCarbon Offset ProjectCarbon Offset Project Goal of the project Substitution of kerosene lamps with solar

lighting Location Ethiopia, several regions Emission reduction 50’000 ton CO2-eq per year (over 7 years) Situation without project use of kerosene lamps Standard Gold Standard VER Status Operation Start August 2010 The project’s objective is to supply a high number of villages in Ethiopia with Solar Home Systems to produce electricity for lighting at home. Most of the population in the rural areas of Ethiopia does not have access to electricity. Once the sun sets, the only source of light is a dim kerosene lamp producing hazardous to health smoke. By substituting the poor kerosene lamps with strong solar powered LED lights, environmental, social and economical benefits can be achieved. Education and training of local people is a key part of activities. To have well-trained personnel available who is able to professionally install and maintain the Solar Home Systems in Ethiopia, the “International Solar Energy School” has been founded. The use of solar lighting instead of kerosene lamps has positive effects on people’s health and leads to reductions of greenhouse gas emissions.

More than others are we relying on a sound biodiversity. We therefore check the plant raw material for plant species protection are engaged in the use of sustainable palm oil

6.6.6.6. BiodiversityBiodiversityBiodiversityBiodiversity

6.16.16.16.1 Check of Plant Protection StatusCheck of Plant Protection StatusCheck of Plant Protection StatusCheck of Plant Protection Status Cosmetochem International AG adheres to the following relevant laws concerning international and national protection of biodiversity and trade of endangered species: • CITES (Convention on International Trade in Endangered Species of Wild Fauna and Flora) • The IUCN Red List of Threatened Species • 92/43/EWG and its updates and amendments • (EG) Nr. 338/97 and its updates and amendments • (EG) Nr. 811/08 and its updates and amendments Before using a new plant we check these laws and databases for its protection status. If the plant is listed in any of these regulations or databases, we only purchase it from cultivated and well-documented sources. We check our plant portfolio annually against the CITES database. Any non-compliance results in new sourcing of this material from a cultivated source.

V 1.0 7 / 8 Environmental Report 2010/2011

Wild collection is only accepted after we have ensured with our supplier that there is no further local protection regulation and that the collection does not harm the population of the plant and the environment. In 2010/2011 no non compliance occurred. 6.26.26.26.2 Palm Oil EngagementPalm Oil EngagementPalm Oil EngagementPalm Oil Engagement We are aware of the threats created by the extensive use of palm / palm kernel oil and their derivatives. Before using a potential palm / palm kernel oil or derivate-containing raw material we ensure that it is either not derived from palm / palm kernel oil or based on the Roundtable on Sustainable Palm Oil (RSPO) quality palm / palm kernel oil. For current raw materials we support the production of sustainable palm oil through the GreenPalm programme. For every ton of palm oil and identified derivative that we use in our production, we pay a voluntary premium to a palm oil producer who is operating within the RSPO strict guidelines for social and environmental responsibility. In 2010 and in 2011 we used each 11 tons of raw material derived from conventionally produced palm / palm kernel oil. These amounts have been offset by supporting the production of sustainable palm oil.

Green Palm Compensation programGreen Palm Compensation programGreen Palm Compensation programGreen Palm Compensation programmemememe Palm oil and palm kernel oil producers which have gained RSPO certification are invited to register a quantity of their output with the GreenPalm programme. They are awarded one GreenPalm certificate for each ton of crude oil which has been sustainably produced. These certificates are then put up for sale on the GreenPalm web based trading platform. Manufacturers or retailers of products containing palm oil or palm kernel oil can then bid for and buy those certificates online, in order to support the production of sustainable oil. The palm oil itself is sold, processed and purchased in the usual way.

We hope, of course, that eventually all palm oil and palm kernel oil will be produced sustainably, but until then the GreenPalm programme is enabling us to do something practical to support sustainable production practices. Visit www.greenpalm.org for more information.

Giving our customers the choice to contribute 7.7.7.7. Customers ContributionCustomers ContributionCustomers ContributionCustomers Contribution

Since we have passed the initial audit in March 2011, we have an Ecocert-certified product range called Herbasol® Ecoverte. The Herbasol® Ecoverte extracts are certified by Ecocert according to Ecocert standards for Natural and Organic products as organic raw materials. They are preservative-free, 100% of the ingredients are from natural origin and over 90% of the total ingredients are from organic farming.

V 1.0 8 / 8 Environmental Report 2010/2011

Our Goals for 2012: we will stay Compliant Carbon neutral Energy efficient Informed Fair 8.8.8.8. Our Goals for 2012Our Goals for 2012Our Goals for 2012Our Goals for 2012

In 2012, we will enhance and strengthen the actions behind the environmental policy, such as: • Compliance with the national laws concerning environmental issues and CITES and relevant

databases concerning protection of wild fauna and flora • Carbon neutrality and energy efficiency with our offset projects and the

adopted measures of our energy efficiency plan We continue to stay: • Fair, by supporting sustainable produced palm oil • Informed, to keep ourselves updated in biodiversity issues such as the setting up of the Convention

on Biological Diversity Nagoya Protocol which promotes access and benefit sharing as well as national requirements concerning labelling of the carbon footprint on the basis of the product

• Interested in our customers feedback and requirements concerning environmental issues and eager to inform our stakeholders about our environmental initiatives

And we will set up the following projects: • Supplier assessment including the qualification of their environmental action • Extension of our ethical sourcing range • External compliance check against Swiss federal environmental laws and ordinances Data: Internal based on electricity / petroleum gas and further invoices Support by set up of energy reduction plan: Swiss Energy Agency for Industry (EnAW) http://www.enaw.ch Calculation of Carbon Footprint: performed by myclimate based on ecoinvent http://www.myclimate.org Carbon Offsetting: by myclimate with the WWF gold standard http://www.myclimate.org/carbon-offset-projects/international-rojects/detail/mycproject/105.html Text: rst