Pc 13747 sustainability 2015

2015 Corporate Sustainability Ashland Report Summary

Chairman’s Message It’s much more than Ashland’s new tagline. It represents the promise we make to our customers, shareholders, employees and local communities every day. It also captures the essence of how we approach sustainability and our responsibility toward being a better steward of our people, products and planet.

Every day, our employees come to work with a passion for making a lasting, positive difference and are continuously seeking ways to better integrate our sustainability efforts into our daily actions. It’s how we collaborate with customers to deliver breakthrough products while reducing our environmental footprint.

And it’s how we give back to the communities where our employees live and work by supporting a broad range of non-profit organizations, including those that promote environmental responsibility.

William A. Wulfsohn Chairman and Cheif Executive Officer Ashland Global Holdings LLC

Whether it’s volunteering to plant cherry trees at primary schools near Shanghai, China, educating local children in Benicarló, Spain, on the importance of recycling, or clearing invasive plants at the Audubon Wildlife Reserve in Bernardsville, New Jersey, Ashland teams are committed to helping protect our environment and enhance our local communities. In addition, we continue to dedicate roughly one-third of our annual contributions to education-related activities, with a primary focus on science, technology, engineering and mathematics (STEM) initiatives.

Contents Chairman’s Message

2

Safety Performance

7

Ashland Vision and Mission

4

Responsible Care

8

Company Profile

5

Engaging the Community

9

Environmental Performance

5

Key Performance Indicators

11

2015 Ashland Sustainability Report

Ashland has made formal commitments to improve the environmental, health, safety and security performance for facilities, processes and products throughout our global footprint.

We deliver on these commitments through our comprehensive Responsible Care® program, a global industry initiative to advance the safe and secure management of chemical products and operations. Within Ashland, this program includes a global management system, employee involvement at every level of the organization, continuous improvement toward our goal of operating with zero incidents, ensuring 100 percent compliance, and reducing our environmental, health, safety and security impact.

As you’ll see in the sustainability section of ashland. com, we are dedicated to continually improving upon our sustainability efforts. Here are just a few highlights of Ashland’s progress during fiscal 2015: The American Chemistry Council (ACC) honored Ashland with its 2016 Responsible Care® Initiative of the Year Award, in recognition of its reinvigoration of the Zero Incident Program.

Responsible Care - two new Ashland sites were added to the company’s Global Certificate for RC 14001 in 2015.

Ashland achieved an 18% reduction in total environmental incidents, including a 50% reduction in significant incidents.

Three Ashland sites received Energy Efficiency Awards by the ACC during 2015.

Three-day ergonomics kaizen events held at Ashland facilities resulted in the company receiving a second place award from the Ohio Bureau of Workers’ Compensation 2016 Safety Innovator Competition.

During the events employees located and fixed more than 200 ergonomics hazards and duplicated many efforts at other Ashland facilities.

At Ashland, we are passionate about creating technologies and solutions to improve our customers’ products and processes, reducing our environmental impact, preserving natural resources and enhancing the quality of life within our communities. This year, Ashland developed Year 2020 environmental goals aimed at reducing our use of energy and water as well as reducing our emissions and environmental footprint.

Moving forward, our approach to sustainability will be guided by these goals, which target short- and

2015 Ashland Sustainability Report

long-term production weighted outcomes in five specific areas of focus: Energy: Reduce energy consumption and improve energy efficiency by 10 percent Greenhouse gas emissions: Reduce GHG emissions by 10 percent Hazardous waste: Reduce hazardous waste generation by 10 percent Nonhazardous waste: Track nonhazardous waste generation to establish a baseline for a future reduction goal Water: Develop a baseline for water use at Ashland sites in water-stressed regions of the world and/or maintain to base-year level.

These goals are just the beginning. Going forward, we will find ways to be more sustainable through innovative products, sustainable operations and supply chains, and new areas and ways we have not yet considered. To help us get there, we plan to create a Sustainability Council; we also intend to launch a sustainability engagement team, composed of employees from around the globe, that will work closely with the new council. At Ashland, the primary focus of engagement teams is to address a critical topic such as sustainability that can be improved. We envision a team that can represent customers, employees and stakeholder ideas while also helping the council expand the concept of sustainability to key areas such as the value of our products and our brand reputation.

I am proud of the more than 5,000 Ashland employees around the world who are dedicated to achieving the highest safety standards and are passionate about giving back to the communities in which they live and work. In the year ahead, we look forward to sharing the progress we’ve made toward the “Ashland Way” of respecting, protecting and advancing the people we work with, companies we serve, shareholders who invest in our future, communities we’re a part of, and planet we share.

Thank you for your support.

Bill Wulfsohn Ashland Chairman and Chief Executive Officer

3

The Ashland Way Our vision, mission, way, and values are the foundation for what makes Ashland, Ashland. What we aspire to accomplish, how we work every day toward that vision, and the way that we do things are what give substance to the promises we make to each other, customers, and investors.

Our vision is to make a better world by providing creative solutions through the application of specialty ingredients and materials.

Our mission is to develop practical, innovative, and elegant solutions to complex problems in applied chemistry, always pushing the boundaries of what’s possible, and advancing the competitiveness of our customers across diverse industries.

Our way is to respect, protect, and advance the people we work with, companies we serve, shareholders who invest in our future, communities we’re a part of, and planet we share.

Our Values Our values are enduring and at the core of who we are and how we act. Let them guide you every day and pass them on to those that join us over the years.

SAFETY Ensure that Ashland people, places and products are safe.

PEOPLE Recruit, retain, and reward passionate, tenacious, solvers.

ETHICS Do the right thing.

Always. Everywhere.

INTEGRITY Be open and honest.

Be personally accountable. Speak up.

Treat everyone with dignity and respect.

PARTNERSHIP Be a collaborative and proactive partner to customers and colleagues.

PASSION Committed to win. Take shared pride in our achievements.

Celebrate success.

FORESIGHT Consider the sustainability and long-term implications of our actions. Plan for contingencies and invest in the future.

2015 Ashland Sustainability Report

Ashland’s 2015 Corporate Sustainability Report The following summary report provides an overview of Ashland’ sustainability performance and efforts for fiscal year 2015. Ashland’s full corporate sustainability report is available online at ashland.com/sustainability.

Please visit our online report for full information on the various ways Ashland is working toward being a better steward of our people, products and planets,

Company Profile

In more than 100 countries, the people of Ashland provide the specialty chemicals, technologies and insights to help customers create new and improved products for today and sustainable solutions for tomorrow.

Chemical Intermediates and Solvents Composites Industrial Specialties Personal and Home Care Pharmaceuticals, Food and Beverage, and Agriculture

Environmental Performance

At Ashland we are focused on reducing the environmental footprint of our global operations, while continuing to provide products and sustainable solutions that our customers require. To realize this goal, we have implemented environmental, health and safety management systems through our Responsible Care® initiative to ensure that all Ashland operations achieve and maintain a high level of EHS performance.

Total Energy Consumption Ashland uses The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard for guiding the reporting of energy and greenhouse gas emissions. For reporting purposes we convert this number to gigajoules (GJ) for both our direct and indirect energy consumption.

Total Energy Million Gigajoules 20.00 15.00 10.00 5.00 0.00 FY13

FY14

FY15

Direct and Indirect Energy Consumption Direct energy consumption Direct energy consumption is the amount of primary energy combusted on site by Ashland.

Direct energy sources include natural gas, coal, liquefied petroleum gas, diesel and fuel oils, and gasoline.

Direct Energy Million Gigajoules 12.00 10.00 8.00 6.00 4.00 2.00 0.00 FY13

2015 Ashland Sustainability Report

FY14

FY15

5

Indirect energy consumption Indirect energy refers to the energy consumed

by Ashland that is generated by and purchased from external suppliers. Ashland consumes indirect energy through electricity and steam.

Indirect Energy Million Gigajoules 6.80 6.60 6.40 6.20 6.00 5.80 5.60 5.40 FY13

FY14

FY15

Greenhouse Gas Emissions Ashland’s greenhouse gases are the result of our consumption of direct and indirect energy sources.

GHG Emissions

Thousand Metric Tons 1,600

Direct

Indirect

1,400 1,200 790

1,000

800

800

710

600 400

640

200

510

444

FY14

FY15

0 FY13

Converting from Coal to Natural Gas In 2014, Ashland’s Calvert City Kentucky plant completed a project to install three 60,000 lb/hr natural gas fired Heat Recovery Steam Generators (HRSGs). The conversion to natural gas resulted in an annualized reduction in carbon dioxide emissions of approximately 68,900 metric tons. The facility received the American Chemistry Council energy Efficiency Award for this project.

Water Ashland’s manufacturing operations account for a majority of the company’s water footprint (96%).

Ashland estimates that an additional 4% of water use comes from non-manufacturing sites. The increased consumption of water was due to increased production at several manufacturing sites.

Total Water Usage Million Cubic Meters 17.5 17 16.5 16 15.5 15 14.5 14 13.5 13 12.5 FY13

FY14

FY15

Hazardous Waste Ashland has extensive global programs for waste minimization, recycling and treatment or disposal of generated wastes. We manage our hazardous waste in accordance with governmental regulations and our internal policies and procedures. Part of the increase of hazardous waste was due to changes in U.S. E.P.A.’s clean fuel regulations.

Total Hazardous Waste Metric Tons 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 FY13

FY14

FY15

2015 Ashland Sustainability Report

Waste Minimization, Reuse and Recycling In 2015, the Ashland Columbus Hilliard plant implemented a project to recover solvents from a manufacturing process that produces a cosmetic intermediate. Normally, these solvents would be disposed of as a hazardous waste through incineration. The project was quite successful, achieving a 95% recovery rate in its first year of operation. Approximately 685 metric tons of solvent were recovered and recycled, resulting in an estimated cost savings of $1.5 million dollars. An additional environmental benefit was also achieved. It eliminated the combustion of the waste stream by reducing CO2 emissions by 1,804 tons and NO2 emissions by 105 tons. As a result of the plant’s successful efforts, they were awarded the American Chemistry Council’s Waste Minimization, Reuse and Recycling Award.

Converting Waste to Product Ashland Performance Materials (APM) opened its second PET conversion facility in Benicarlo, Spain. This new facility represents an investment of $2 million. This investment will allow Ashland to develop better performing products for its customers, but also reinforces the importance of sustainability to Ashland. When fully operational, the facility will process up to 5,000 tons of recycled PET materials, which is equivalent to half a billion water bottles per year. The recycled materials will be used to manufacture a variety of products including kitchen counter tops, bath tubs or even a yacht. Annually, APM processes in excess of 14.2 million pounds of industrial-grade PET for the manufacture of composite materials.

Safety Performance Commitment to Safety

Workforce Profile

Ashland’s highest priority is the safety and health of employees, customers and the communities where we live and operate. The company believes all incidents are preventable, and preventing workplace incidents is an integral part of our business strategy.

Ashland reported approximately 10,500 employees of fiscal year-end 2015.Of these, approximately 98 percent were full time employees. Approximately, 12 percent of our operations are covered by collective bargaining agreements.

In 2015, thirty Ashland facilities achieved one or more years without a recordable injury. Of that total, thirteen achieved three or more years without a recordable injury.

Injuries and Illnesses

Ashland Employees by Region  North America 67%  EMEA 17%  Asia Pacific  Latin America 3%

Zero Incident Culture Cultivating a safety culture is intentional at Ashland and is best shown by our commitment to a Zero Incident Culture (ZIC). ZIC begins with the beliefs, values and actions of Ashland’s leaders demonstrating zero incidents are possible.

It means developing processes that promote compliance and allow employees to choose to be safe.

Total Recordable Injury Rate 1.15 1.1 1.05 1 0.95 0.9 2013

2014

2015

For 2015, our recordable occupational injury and illness rate of 1.04. Although the rate has been flat for the last three years, Ashland remains focused on continuously reducing workplace injuries.

2015 Ashland Sustainability Report

7

Responsible Care

®

Responsible Care is the chemical industry’s unique, global initiative that drives continual improvement in health, safety and environmental performance, together with open and transparent communication with stakeholders. Ashland is committed to Responsible Care and strives for zero incidents, no injuries, and no harm to the environment. We will publicly report our global environmental, health, and safety performance to ensure transparency in our progress.

chemical industry requirements. Currently, Ashland has 46 international sites participating on a group RC14001 certification, and we are working toward certifying all of our manufacturing locations. Also, as part of our commitment to health and safety, 17 of our sites have obtained an additional OHSAS 18001 certification, an international health and safety management system.

Because we are a global company, we also participate in similar organizations in other countries as well as the International Council of Chemical Associations. As an indication of our commitment to Responsible Care, we have obtained a thirdparty certification to RC14001, which includes the internationally recognized ISO 14001 certification and adds additional health, safety, security, and

Ashland employees Ryan Beasley and Marvin Davis

2015 Ashland Sustainability Report

Engaging the Community Our Employees in Action

We are committed to the communities in which we live, the countries in which we operate, our world and the people, animals and natural resources that are a part of it. Here are just a few examples of our employees demonstrating community commitment.

Red Clay Valley Clean-Up Sets Record Ashland’s Wilmington campus employees and their families joined over 800 volunteers in removing a record of more than 10 tons of trash from the Red Clay Valley. The valley covers over 83 miles of streams and roadways in Pennsylvania and Delaware. The Red Clay Valley Clean-up is an annual event hosted by the Delaware Nature Society to help remove garbage before the foliage begins to grow. Despite temperatures dipping below freezing, Ashland volunteers came out in force to help improve their community.

Vegetation Recovery Project in Brazil Ashland employees in Araçariguama, Brazil joined local citizens and an estimated 120 students and staff members of the EMEIF Rosalina Bonifácio elementary school in launching a vegetation recovery initiative. The project included planting native trees in open several areas around the school to enhance the school grounds and community.

Students Learn Ashland’s Culture of Safety Students at a primary school in Miszewo, Poland visited the manufacturing facility that supports Ashland Performance Materials customers. The children toured the plant and while learning how safety plays a major role in the way people work.

They discovered how Ashland employees protect themselves while on the job and took part in Personal Protective Equipment and Electrical Safety training. After the training session, the students walked away understanding Ashland’s culture and its commitment to safety and the environment.

2015 Ashland Sustainability Report

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Helping Those in Need Through Operation Feed During Dublin, Ohio’s, annual spring Operation Feed campaign, employees raised more than $12,700 and 233 pounds of food for the Mid-Ohio Foodbank. The campaign included a farmer’s market to encourage local awareness, overall wellness, and raise essential funds for the hungry in Central Ohio, while promoting healthy lifestyles.

Ashland volunteers with Habitat for Humanity Employees from Ashland’s Lexington, Ky., campus participated in the dedication of Ashland’s newest Habitat for Humanity home. More than 100 employees contributed their time and energy to help build a home for a local family sponsored by the Lexington campus. The build marked the 10th home that Ashland employees in Lexington have helped to construct, doing their part to eliminate substandard housing in the area.

Earth Day in China It was a team effort on Earth Day in China as Ashland employees throughout the country participated in a variety of Earth Day related activities. In Shanghai, plant employees took part in trash clean-up at multiple sites in the area and at a local park. Nanjing employees helped with waste classification promotion throughout the day as employees at the Jiangmen plant focused on restoring their local park by clearing debris. Ashland employees on the Changzlou campus dug in during the effort by planting trees throughout the area. The tremendous combined efforts in China by Ashland employees on Earth Day will benefit communities for years to come.

Contributions

The creation of good chemistry extends beyond the workplace into our communities. Approximately onethird of our annual contributions target education education-related activities, with a primary focus on science, technology, engineering, and mathematics (STEM) initiatives. We have a proactive, outcomedriven, corporate contributions program that partners with select organizations to help us achieve impact within our focus areas. In 2015, we contributed $972,600 in cash and in-kind donations.

2015 Ashland Sustainability Report

Performance Data 2015

2014

2013

Economic Performance Sales

$5,387

$6,121

$6,091

Operating income

$458

$46

$1,039

EBITDA

$796

$568

$1,515

Adjusted EBDITA

$1,1119

$1,078

$1,037

Income from continuing operations

$191

$72

$553

Net income

$309

$233

$683

Income from continuing operations

$2.78

$0.93

$6.95

Income (loss) from discontinued operations

$1.70

$2.07

$1.62

$4.48

$3.00

$8.57

$89

$580

$653

Diluted earnings per share

Net income Cash flows from operating activities from continuing operations Additions to property, plant, equipment Number of shareholders

$265

$248

$264

13,100

13,600

14,200

3,867,200

4,360,000

4,240,000

Environmental Stewardship Total energy consumption Electricity (gigajoules) Natural gas (gigajoules)

6,137,000

7,550,000

8,361,000

Other fuels (gigajoules)

1,180,000

1,552,800

1,746,500

Scope 1 (MT CO2 eq. emitted)

444,000

510,000

640,000

Scope 2 (MT CO2 eq. emitted)

710,000

800,000

790,000

Toxic release inventory (million pounds)

20.81

22.39

20.19

Hazardous waste disposal ( Metric Tons)

11,324

9,346

8,902

Water withdrawal (million cubic meters)

17.05

14.27

15.57

10,500

10,700

14,600

Employee recordable injury rate

1.04

1.01

1.03

Employee lost-time incident rate

0.40

0.38

0.47

0

0

0

$972,000

$853,755

$937,312

Greenhouse (gas emissions)

Social Responsibility Total employees at year end Safety performance

Employee fatalities Philanthropy Cash and in-kind donations (USD)

2015 Ashland Sustainability Report

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