SONOCO PRODUCTS CO
For the period ended Apr 17, 2024. Filed Mar 15, 2024.
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Apr 17, 2024 · Filed Mar 15, 2024
Contents
Commitment to Sustainability
COMMITMENT TO SUSTAINABILITY
At Sonoco, our daily commitment to “Better Packaging. Better Life.” underscores the responsibility we have to create positive, meaningful, and sustainable impacts in the lives of our customers, our employees, our communities, and our planet.
As a leading provider of highly engineered packaging solutions serving consumer and industrial customers, we believe it is of utmost importance to address environmental challenges, such as climate change, based on data-driven scientific criteria. In parallel, Sonoco is committed to building on our people-centered culture to foster a community spirit that upholds our commitment to diversity, equity, and inclusion throughout our internal and external engagements.
These actions, aligned with our dedication to govern our activities with ethical practices and policies, form the foundation of our Sustainability Program, which is comprised of five tenets:
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| | | 1. GOVERNANCE | | | 2. SUSTAINABLE OPERATIONS | | | 3. SUSTAINABLE PRODUCTS | | | 4. PEOPLE | | | 5. LOCAL COMMUNITIES | | |
Our five tenets arose from a priority-based approach to our disclosures, in line with good governance practices. Beginning in the fall of 2023, Sonoco completed its updated materiality assessment of our priorities. Our analysis of topics relating to sustainability included consideration of each of the Global Reporting Initiative Standards.
Our Board of Directors (the “Board”) and its committees work to ensure that sustainability principles are integrated into our business strategy in ways that optimize opportunities to make positive impacts while advancing long-term goals. We are committed to conducting our business in a safe, environmentally responsible, and sustainable manner, and in a way that reflects our responsibilities to our stakeholders, which includes our investors, employees, customers, and communities, as well as our environment.
In 2023, we continued to enhance our efforts around our sustainability strategy and monitoring the effectiveness of our sustainability initiatives. Our Executive Committee is tasked with driving results in these areas given their strategic importance. Against this backdrop, we have engaged with our internal and external stakeholders on our sustainability topics to help further inform our future direction and priorities.
Since 2009, the Board’s Employee and Public Responsibility Committee has been tasked with the responsibility of overseeing policies, strategies, and programs related to sustainability of our products and operations. The Vice President, Global Environmental, Sustainability, & Technical Services, who serves as the head of the Sustainability Council, reports to the Employee and Public Responsibility Committee quarterly. Additional information about Sonoco’s sustainability efforts, including our Corporate Sustainability Report, is posted on our website at sonoco.com/sustainability. The information posted on or accessible through our website, including this information, is not incorporated into this Proxy Statement.
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Governance
| | | | Sonoco is committed to strong governance policies and practices that foster accountability to all our stakeholders. In line with our Guiding Principle of “Doing the Right Thing” and our Core Values, we operate our business with integrity and high ethical standards. | | |
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| | We have implemented programs to ensure compliance with applicable laws and regulations governing ethical business practices, including our relationships with suppliers, customers and business partners, and our industry. Sonoco’s Corporate Governance Guidelines, along with the Restated Articles of Incorporation and By-Laws, establish a comprehensive framework for the governance of the Company to promote accountability and transparency for our Board of Directors and management team. Our governance policies and practices include: • Board comprised of a majority of independent directors (with nine of 11 directors being independent as set forth by the guidelines of the New York Stock Exchange); • Regular meetings of independent directors without management present; • Appointment of a Lead Independent Director with defined and significant responsibilities; • New director orientation and continuing director education opportunities provided by the Company; • Annual self-evaluations and individual performance reviews of directors; • Stock ownership guidelines for directors and executive officers; • Shareholder right to request a special shareholder meeting at 15% ownership threshold; and • Majority vote standard in an uncontested director election. | | |||
We are subject to rigorous controls and audits, and our Board and Audit Committee actively oversee our audit and enterprise cybersecurity practices. Our risk management teams, including our management Risk Management Committee, work to promote compliance with applicable laws and regulations and to identify, monitor, and mitigate material risks. Our cybersecurity risk management program leverages the National Institute of Standards and Technology Cybersecurity Framework for identifying, assessing, and managing material risks from cybersecurity threats. This approach combines prevention and detection techniques, informed by internal and external sources, to identify and analyze potential threat activities. Cybersecurity tenets are also incorporated into our technology policies.
We routinely engage with our stakeholders to better understand their views on governance, sustainability and corporate responsibility matters, carefully considering the feedback we receive and acting when appropriate. For more information, please visit our website at investor.sonoco.com.
Sustainable Operations
| | | | Sonoco believes that in order to achieve our mission of improving the quality of life for people around the world, we must do our part to address global climate change. | | |
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| | We are committed to advancing our environmental progress by setting ambitious targets to reduce our global greenhouse gas emissions in line with the Paris Climate Agreement—to limit global temperatures to warming to well below 2° C above pre-industrial levels. • Sonoco is committed to reducing absolute scope 1 and 2 greenhouse gas (“GHG”) emissions by 25% by 2030 from a 2020 base year. • Sonoco is committed to reducing absolute scope 3 greenhouse gas emissions by 13.5% by 2030 from a 2019 base year, by working with our customers and suppliers to develop innovative packaging solutions that reduce packaging waste and improve recyclability. | | | |
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These targets have been validated by the Science-Based Targets initiative as meeting their requirements for being science-based in June 2021.
In addition to Sonoco’s robust operational policies, Sonoco endorses key international human rights standards including the International Labor Organization Declaration on Fundamental Principles and Rights at Work and the United Nations Universal Declaration of Human Rights. Sonoco joined as a participant of the United Nations Global Compact to align our strategies and policies with universal principles. We also endorse EcoVadis, a provider of sustainability ratings, intelligence and collaborative performance improvement tools for global supply chains.
Sustainable Products
| | | | As a leading recycler in the United States, with recycling capabilities across the globe, Sonoco is positioned to understand the challenges of packaging associated with both the beginning and end of life and, as such, is investing in packaging design as well as infrastructure within our own material recovery facilities to expand the slate of packaging that can be successfully collected, sorted and processed for recycling. We are also engaged in partnerships across trade, academia, and our supply chain aimed at driving creative solutions to the challenges around packaging and end of life. | |
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| | We continue to develop our EnviroSense® portfolio of more sustainable packaging which includes recyclable packaging, such as paper-based packaging, mono-material and paper-based flexible packaging, and recyclable thermoformed packaging, among other attributes, including bio-based materials, recycled content, and overall improved environmental footprint versus alternative packages. | | | |
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People
| | | | Sonoco’s core belief that “People Build Businesses” underlies our efforts to attract, develop and retain talented employees for our global businesses. | | |
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| | We bring more to packaging than just the package. Our integrated packaging solutions help define brand personalities, create differentiated customer experiences, and enhance the quality of products and the quality of life for people around the world. We depend on our employees to achieve our mission of creating sustainable packaging solutions that: • build our customers’ brands; • enhance the quality of their products; and • improve the quality of life for people around the world. We work towards this goal by establishing a foundation for actions that support: • health and safety; • diversity, equity and inclusion (“DEI”); and • talent development. | | |||
Sonoco believes that a strong focus on human capital through the talent we hire and retain is critical to maintaining our competitiveness. This focus on human capital is reinforced through increasing employee awareness and education, communication, and training. Integrity is a hallmark of the Sonoco culture as is evidenced by our long-standing Code of Business Conduct and Ethics. Sonoco’s Board believes that effective human capital management is essential to our success and the Board is actively engaged and involved in talent management and succession planning. The Board oversees and annually reviews leadership development and assessment initiatives, as well as succession plans for our CEO and senior management. Working closely with our CEO and the Chief Human Resources officer, the Board regularly reviews our talent strategy, including to ensure we have a strong, diverse, and experienced leadership team and are cultivating a strong pipeline for future leadership.
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HEALTH AND SAFETY
We take the health and safety of our employees seriously. Protecting the health and safety of our employees is a priority, and we are committed to providing a safe and healthy working environment for all our associates. We expect each employee to follow our safety standards and protocols.
| | | | We use global and local incident data along with a strong set of leading indicators to create program and safety improvement action plans to reduce exposures that lead to at-risk situations. Sonoco tracks safety performance indicators with a goal of reducing safety incidents and improving upon the previous year’s performance. Injury rates were stable year-over-year with a decrease overall across the organization as compared to 2022. We continue to focus on preventing serious and disabling injuries across the organization and have demonstrated solid progress in reducing exposures to high-risk hazards within the manufacturing operations. | |
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| | To promote the prevention of more significant Life Changing Events, which are injuries or incidents that cause or have the potential to cause permanent disabilities or the loss of life: • We continue to engage with outside experts to conduct assessments of high-risk activities and leverage learnings globally. • Focused audit processes, detailed standards, executive leadership, and dedicated capital is driving long-term exposure reductions with a 97% completion rate on our annual safety improvement plans. • Finally, our operations leadership developed a safety playbook which was implemented globally to further train our employees. Do Safety Differently, a global initiative, was launched to further strengthen the culture around safety leadership and employee engagement. | | | |
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We believe tracking and reporting of Sonoco’s health and safety data increases accountability and provides important insights into processes that need improvement or enhancement. Our focus on continuous improvement of our health and safety practices, as well as training, has resulted in steady improvement of our safety performance.
Other employee wellbeing resources include wellness courses and a variety of online training classes, as well as other programs to promote mental and physical health. We continue to utilize employee feedback and surveys to gather information to best serve our team members. Members of our human resources department annually review benefits to ensure we can meet the well-being of our employees and their families.
DIVERSITY, EQUITY, AND INCLUSION
Our commitment to DEI starts with our goal of developing a workforce that is diverse in background, knowledge, skill and experience. Sonoco engages in efforts aimed at hiring diverse talent, including initiatives focused on gender, underrepresented ethnic groups, LGBT+ individuals, people with disabilities, veterans and others. We have implemented policies and training focused on non-discrimination and harassment prevention. We embrace DEI, which we believe fosters leadership through new ideas and perspectives.
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As of December 31, 2023, approximately 25% of our total work force and 18.9% of our senior leaders globally identified as female, while approximately 34.5% of our total US work force and 13.3% of our US senior leaders identified as a member of an underrepresented ethnic group. From our global workforce, our employees were located in the following geographic regions: 56.3% in North America; 16.6% in Europe, Middle East and Africa; 17.7% in Latin American; and 9.5% in Asia Pacific.
In connection with its diversity initiatives, Sonoco periodically requests that its employees and Board members self-identify based on specified diversity categories. The preceding table is based on self-identifications as of December 31, 2023.
We have labor unions in all regions of our operations, and in North America, approximately 19% of our employees are represented by unions. We rely on the unique qualities and talents of our employees to help us meet our strategic priorities.
| | Our efforts include increasing the representation of women and racial minorities into more salaried and senior leadership positions. We are working toward this by focusing on leadership development, mentorships and coaching from a retention standpoint. We also believe that having a diverse pool of candidates and new hires is critical to the foundation of a strong, diverse leadership pipeline; therefore, we are pursuing opportunities to engage more candidates at the middle and high school levels to learn about manufacturing and create a larger, more diverse pool interested in going into this field of work. In the US, 25% of employee hires were female and 42.6% were a member of an underrepresented ethnic group in 2023. | | | | | | | |
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| | 2023 female new hires | | | | 2023 minority new hires | | ||
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| | | | For the past 12 years, Sonoco’s employees have expanded and improved our Global Diversity, Equity and Inclusion Council (the “DEI Council”), which is chaired by our President and CEO. An important part of our DEI efforts includes Sonoco’s Employee Resource Groups, which are groups of employees who support our DEI strategies by leveraging the unique perspectives of their members. | | ||||
In 2023, we continued to focus DEI Council activities on workforce representation (diversity and equity) and work environment (equity and inclusion) by addressing intersectionality, or the interconnectedness of our employees across social, ethnic, and gender categories.
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| | We have continued to build our Supplier Diversity program since 2004, integrating DEI into our procurement process by laying a strong foundation with key internal and external stakeholders. We developed policies, practices, and procedures to ensure equal opportunity and enable access. As part of the Supplier Diversity Program, progress is reported to the CEO and Executive Committee and to the DEI Council, which in turn reports to the Employee and Public Responsibility Committee of the Board. | | | | | | Dedicated SupplierDiversity programfor 20 years | |
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TALENT DEVELOPMENT
Attracting, developing and retaining talented employees is critical to our success and is an integral part of our human capital strategy. We have created a Global Talent Acquisition and Organization Development team to provide a more holistic approach to managing and enriching the employee lifecycle through continuous training and comprehensive succession planning.
| | | | In 2023, we reviewed and developed leadership competencies needed for all salaried positions in the organization and plan to publish those competencies in our global HR system. The addition of competencies in our system is intended to provide employees with a transparent guideline on what’s needed to learn and progress in the organization. Sonoco University, our internal learning resource, supports employee development needs through e-learning, in person and virtual instructor led training. | |
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In addition, we conduct regular talent succession assessments along with individual performance reviews in which managers provide feedback and coaching to assist with the development of our employees, including the use of individual development plans to assist with individual career development.
We are also committed to pay equity and regularly review our compensation model to ensure fair and inclusive pay practices across our business. We offer competitive benefits packages that we believe reflect the needs of our workforce. In the United States, we provide medical, dental, and vision benefits, life and disability coverage, education reimbursement, and paid time off. We provide retirement benefits including a 401(k)-match program. In addition to base salary, our employees participate in incentive plans that support our organizational philosophy of pay for performance. Our executive compensation program is designed to align incentives with achievement of the Company’s strategic plan and both short- and long-term operating objectives.
Local Communities
| | | | Through strategic nonprofit partnerships, pro bono work, volunteerism and philanthropy, our corporate responsibility efforts are focused on contributing to the creation of a better world. Going forward, we continue to partner with nonprofit organizations that work to increase our community initiatives, decrease the number of individuals facing economic barriers, and make our communities reflections of our commitments and Core Values. | | |
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| | | | | We are focused on making a positive impact in our communities through: • charity and fundraising, • educational sponsorship, and • local community development. | |
We strengthen our communities by supporting individual employees who volunteer with local community groups and by direct participation in philanthropic initiatives. Our management team believes we have the responsibility and the resources to enable positive change in building a more sustainable, resilient future for those we serve. Recent highlights include:
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| | 2023 PHILANTHROPIC HIGHLIGHTS | | |||
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| | In 2023, the Sonoco Foundation launched a $300,000 multi-year grant to help launch and develop the high school program at Butler Academy, Hartsville’s first public charter school. | | | The Sonoco Foundation donated $150,000 to E4E Relief to establish a global crisis grant program for Sonoco employees. | |
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| | We provided approximately $425,000 in financial support to Coker University in Hartsville, South Carolina for academic programs and facility improvements, as well as providing scholarships primarily based on financial need. | | | A multi-year grant totaling $500,000 was awarded to the Darlington County Humane Society to create an educational center and mentoring facility. | |
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