March 2012 SABIC’s Innovative Plastics business is a leading, global supplier of engineering thermoplastics with a 75-year history of breakthrough solutions that solve its customers’ most pressing challenges. Today, Innovative Plastics is a multi-billion-dollar business with operations in more than 35 countries and approximately 8,800 employees worldwide. We continue to lead the plastics industry with customer collaboration and continued investments in new polymer technologies, global application development, process technologies, and environmentally responsible solutions that serve diverse markets such as automotive, consumer electronics, building & construction, energy, transportation, and healthcare. Innovative Plastics’ extensive product portfolio includes thermoplastic resins, coatings, specialty compounds, film, and sheet. Our business is founded upon a commitment to performance with integrity. It is the legacy upon which this company is built and it is the foundation upon which we will continue to grow our business around the world. We hold ourselves to the highest standards of ethical conduct every day, in every transaction and everywhere we do business. By doing so, we earn the confidence of our employees, our customers, our business partners and our communities, which helps to fuel our growth. Integrity and operating with the highest standards of ethical business conduct are embedded in our culture. These standards include our commitment to strong and effective programs for fulfilling our environmental, health, safety and security (EHSS) obligations, for ensuring the sustainability of our operations and products, and for implementing the ten principles of the United Nations Global Compact. Strong operating systems and mechanisms to achieve these goals have been in place for years and have been enhanced over time to help ensure our vision of continued compliance and preventive action. See the attached discussion on “Our Compliance Culture” for additional details. As a business that uses or produces chemicals throughout the globe, we are dedicated to having strong EHSS policies and programs to ensure safe, responsible and efficient operations that minimize negative impacts on the environment. Protecting the environment and the health and safety of employees is not only required by law but is an integral component of our culture as well. Through management leadership and employee engagement we believe in working together to conduct our operations in a safe, responsible and sustainable manner that minimizes adverse environmental impacts and prevents injuries and accidents. In addition to our own operations, we have programs to help our suppliers and customers improve key aspects of their EHSS

2

performance, including the environmental impact of operations and products. See the attached discussions on “EHS&S and Sustainability” and “Product Responsibility” for additional details. Part of our relentless drive for and commitment to sustainability goes beyond just our own plant operations, and extends to the development of products that use fewer natural resources and/or allow our customers to use our materials in products that reduce the use of energy and impacts on the environment. One key to our competitive strength is our diverse workforce that includes people from many different cultural backgrounds. Wherever we operate, we comply with all applicable labor and employment laws, including those prohibiting all forms of discrimination. However, even where local law does not address these issues, we follow the principles for fair treatment and non-discrimination as described in our Fair Employment Practices Policy, which includes local and regional policies. We are committed to creating and fostering a culture of respect and fair employment practices and to ensuring that our employees are well trained, fairly treated, and safe in their workplaces wherever they work around the globe.

Keith Smith Executive Vice President Innovative Plastics

3

OUR COMMITMENT

Long before sustainability became a popular term, SABIC Innovative Plastics implemented programs that have formed the backbone of our current corporate sustainability programs.

Integrity and operating with the highest standards of ethical business conduct were key original values, and are maintained in our current culture. Strong operating systems and mechanisms to maintain compliance have been in place for years and have been enhanced over time to help ensure our vision of continued compliance and preventive action.

Our Environmental, Health, Safety & Security (EHS&S) Policy describes our dedication to safe, efficient operations that minimize negative impacts. SABIC Innovative Plastics is a global business, with just under half of our sites located outside the U.S. and European Union. To ensure our tough standards are followed at all locations, we have implemented consistent Programs worldwide.

In addition to our strong compliance efforts, we are actively committed to SABIC’s global sustainability program. Sustainability is at the top of SABIC’s leadership agenda touching every business and operation around the world. The company is focused on continuously reducing the intensity of our global operational footprint including reducing carbon intensity, improving energy and water use, and increasing material efficiency.

Within the marketplace, we’re making strategic investments and working more closely than ever with customers to develop products and applications that respond to their sustainability needs. We continue to raise the bar as one global organization – building on our sustainability progress to date with even greater focus, resources and commitment.

EHSS Policy

Protecting the environment and the health and safety of employees is the law. But at our Company, compliance with law is the minimum we must do as part of our commitment to the environment, our employees and our communities. Everyone in our business understands that we must all work together to conduct our operations in a safe manner that minimizes adverse environmental impacts and prevents injuries and accidents.

In addition, we must protect the security of our people, workplaces and information systems. We all have a responsibility for maintaining and supporting a rigorous and comprehensive security and crisis management program designed to prevent terrorist and other criminal acts from impacting our employees, facilities and information technology (IT) infrastructure. For further information, see our Code of Ethics.

Our Compliance Culture

SABIC Innovative Plastics recognizes that it can best succeed by having a culture based on integrity,

devoted to quality and innovation, and responsible for maintaining high standards for the environment,

health and safety, fair employment and sustainability. Our compliance culture and processes are

designed to fulfill these goals, and are a core part of our commitment to how we do business. The

framework of our Compliance Culture lies in our Code of Ethics. In 2010, SABIC adopted a Code of

Ethics that consists of 13 policies covering three broad areas: (a) Our Global Environment; (b) Our

Workplace; and (c) Protecting our Assets. The SABIC Code of Ethics requires all employees to obey the

4

law, be honest and trustworthy. These policies reflect our commitment to integrity and corporate

citizenship, including our commitment to the United Nations Global Compact.

In addition, we believe there are two fundamental elements to create an effective compliance culture --

leadership engagement and employee commitment. Our leaders are responsible for creating the basic

systems of preventing, detecting and responding to compliance issues and for creating a culture of

compliance through leading by example. At the same time, each employee is responsible for

understanding the compliance risks that impact his/her job. All of our employees are asked to

acknowledge their understanding of the Code of Ethics annually and to complete assigned training on the

policies contained in the Code of Ethics. We ALL have a responsibility to raise integrity concerns or

violations promptly - failure to do so can have significant adverse consequences for our company,

ourselves, our fellow employees and the communities in which we live. We strictly prohibit retaliation of

any kind against anyone for raising or helping to address an integrity concern.

Our Compliance Processes

We operationalize our compliance culture through a variety of processes and operating rhythms

described below:

1. Compliance Helpline Leaders: To promote an atmosphere where our employees feel free to raise

concerns without fear of retaliation, we have established a global organization of Compliance Helpline

Leaders who are responsible for receiving concerns and ensuring that all concerns are properly

investigated and addressed. In addition, employees are all trained that they can also raise their concerns

with any manager, or with the Human Resources or Legal organizations. The number and type of

concerns raised to the Compliance Helpline Leaders are measured and tracked, and are periodically

discussed at several regional Compliance Review Boards established by the Company.

2. Compliance Review

For several years, SABIC’s Innovative Plastics business has conducted a Compliance Review process

that is designed to engage our employees to assess compliance processes, prioritize key risks and

develop mitigation plans to address those risks. The process includes a Bottoms Up Review during which

each exempt Manager must meet with his/her direct reports and cover the following:

a. a review of each policy in the Code of Ethics;

b. a review of Bottoms Up output from prior reviews; and

c. a general discussion encouraging employees to freely surface compliance concerns without fear of

retaliation. Each compliance concern that is raised is recorded by the Manager and addressed

either during, or within a reasonable time after, the Bottoms Up Review is over.

In 2008 and 2009, the participation rate of the relevant population in the Bottoms Up reviews was over 90

percent The results of the Bottoms Up review are then discussed by management which develops a

summary of the issues raised and any other existing and emerging risks that could adversely impact the

organization. This process results in the development of risk mitigation or action plans for the highest

priority risks. These plans include assigning the responsibility for mitigation actions to particular

individuals, with required dates for completion. The progress towards completion of the plans is tracked

on a monthly basis, through a digitized system tracker and is also discussed at the periodic meetings of

the Compliance Review Boards (see below).

5

In 2011, SABIC initiated a global Code of Ethics review for senior-level employees. The new process

consists of a Bottoms Up Review of the Code of Ethics in manager-led discussions, with over 2500

employees participating. As with the previous process, the results of these reviews are discussed by

management and risk mitigation plans are developed and tracked for the highest priority risks.

In 2012, SABIC will institute a global bottoms-up compliance review program as well as a global review

for all enterprise risks.

3. Compliance Review Boards

Oversight of SABIC’s compliance program is performed by a network of regional Compliance Review

Boards. These Boards meet periodically to identify any new significant compliance concerns, review the

activities of the Compliance Helpline Leaders, and monitor the completion of the integrity training required

of our employees.

4. Compliance Training

One way that we try to ensure compliance with our Code of Ethics is to require all employees to be

trained on the specific requirements of the Code. In an effort to better equip employees to recognize and

respond to increasingly complex compliance challenges, our company’s Legal team developed a

comprehensive web-based compliance training program. This program reviews each policy in detail, and

includes questions that must be answered correctly to show understanding of the requirements.

Currently, our company requires that all employees take four General Awareness courses on the basics

of all of the policies. In addition, there are another 31 advanced courses that are more detailed and are

assigned to employees based on their roles within the company. This approach allows employees to

complete training with particular focus on those compliance policies and practices that pertain most

directly to the issues they face in performing their job duties. Our employees are required to take an

average of about 15 advanced courses during a two year training cycle. Several of our compliance

courses are available in the languages most commonly used by our employees. In 2010, the rate for the

completion of required training in Innovative Plastics was 97percent for General Awareness courses, and

90 percent for advanced courses. For 2011, the respective completion rates were both over 98 percent.

Another feature of our compliance training program is the executive level training delivered by our

company’s senior leadership, with the support of the Legal team. This training is designed to train senior

management on the compliance responsibilities of a leader, emerging compliance risks, how to conduct

compliance investigations and a review of our compliance infrastructure. In 2008, 98 percent of the

executive staff participated in this program. During 2010, the executive level training was rolled out to

SABIC businesses outside of the Innovative Plastics business, and was given to 95 percent of the target

audience. Additional Leadership training will be conducted periodically.

In addition to Code of Ethics specific training, we also conduct live training on high-risk areas (e.g. EHSS,

International Trade and Antitrust). For example, we track required training in EHSS, and the completion

rate for 2008 was 99.8 percent, 2009 was 93.86 percent, and 2010 was 99.39 percent; the training

completion rate for training on International Trade Sanctions was 95percent of the relevant population. In

2010 the training was rolled to SABIC businesses outside of Innovative Plastics and targeted global

audiences were trained in Anti-dumping, International Trade, EHSS Compliance, Antitrust and Intellectual

Property. In 2011, over 3500 employees were trained in these risk areas.

6

5. Supplier Qualification Process And Contracts

We have implemented a program to help ensure that our suppliers adhere to ethical standards and

comply to the fundamentals of our Code of Ethics and EHSS policies, including: fair employment

practices, no underage or forced labor, reasonable hours of work and wages, no discrimination, freedom

of association and EHSS matters such as providing a safe work environment, pollution prevention, waste

minimization and recycling, and safe and secure transportation of materials. We perform EHSS due

diligence on all direct material suppliers at varied levels dependent on each suppliers’ risk potential. For

all suppliers, we undertake inquiries that range from questionnaires, to interviews, to thorough on-site

EHSS inspections. We have performed reviews of over 2700 suppliers in over 50 countries, including

over 700 on-site inspections. On-site EHSS inspections have been performed for over 80 percent of

Innovative Plastics’ annual direct material buy for manufacturers located in emerging countries. In

addition, our standard forms of contract contain multiple provisions designed to ensure our suppliers meet

our integrity standards and EHSS expectations.

6. Digital Tools and Periodic Compliance Messaging

Several digital tools enhance the robustness of our compliance program. Our watch list screening system

screens orders to ensure we comply with all applicable government sanctions and trade restrictions and

that we are doing business only with reputable entities. In addition, our leadership team has been

committed to engage our employees through frequent communications on compliance responsibilities.

Compliance is consistently made an agenda item at staff meetings.

7

EHS&S and Sustainability

Innovative Plastics has manufacturing facilities located globally in the Americas, Europe and Pacific

regions. It has implemented a global environmental management system (EMS) at all of its

manufacturing facilities that meets the requirements of ISO 14001. More than 95 percent of our

manufacturing facilities are ISO 14001- certified. Modifications to our global environmental manual and

management system have been made to incorporate the modifications established by the ISO

14001:2004 standard. The ISO14001 certificate is shown in the Awards section.

The Innovative Plastics business is also in the process of implementing Responsible Care® at all of our

chemical manufacturing sites worldwide. Our two Mexico facilities received their initial Responsible Care

certification in 2010 through Asociacion Nacional de la Industria Quimica (ANIQ) and were recertified in

2011. Our Bergen op Zoom, Netherlands facility is self-certified through Vereniging van de Nederlandse

Chemische Industrie (VNCI). In addition, our Cartagena, Spain manufacturing facility is working towards

self-certification through Federación Empresarial de La Industria Química Española (FEIQUE) and our

headquarters in Pittsfield, Mass., and our chemical sites in the United States are working to obtain

Responsible Care® certification pursuant to the Responsible Care® 14001 international standard through

the American Chemistry Council (ACC) before the end of 2013.

Innovative Plastics has implemented world-class Environmental, Health, Safety & Security (EHSS)

programs at all of its manufacturing facilities globally. Innovative Plastics became part of SABIC in August

2007, and is now proceeding to modify its systems and standards to comply with the SABIC Health and

Environmental Management Standards (SHEMs). The SHEMs seek to establish a world-class approach

to ensuring excellence in EHSS performance. The foundation and core principles of our EHSS programs

are based on the goals of

• 100 percent compliance

• safe operations

• minimized environmental impact

• healthy employees

• strong security systems

• good relationships with the communities in which we operate

These programs tie in closely with our strong governance and integrity policies. We have clear

management commitment to compliance and protecting the environment, our employees and our

communities, and we have policies and guidelines in place to meet expectations. . All Innovative Plastics

manufacturing sites perform regular self-assessments and are periodically audited by off-site teams. Any

potential issues identified in these self-assessment or audits are assigned a corrective action plan and are

tracked to closure

We have a long history of controlling and continuously improving our EHSS performance, and each year

we have established new goals and objectives for continued improvement. Progress on meeting our

EHS&S objectives and targets is closely monitored through a performance tracking system.

The Innovative Plastics sites use a comprehensive electronic EHSS management system that consists of

more than 40 digital applications with multi-lingual interfaces. This system has allowed consistent

documentation of site operating data, event and incident tracking, management tools, permit & regulatory

compliance information, and other data from across all our sites for accurate comparison and consistent

8

management. It also promotes clear communication with employees in their local languages through

multiple methods, including websites, email, meetings, bulletin boards, training sessions, and handbooks.

Management Accountability

Innovative Plastics’ management representatives at our facilities have been empowered and assigned

responsibility to ensure compliance with environmental health and safety laws. They are supported by

corporate environmental and health and safety specialists at each of our manufacturing sites, our regions,

and our headquarters.

The responsibility of our Operations teams are key to program success for both compliance and

performance. The following aspects of Operations are reviewed periodically by the business management

of Innovative Plastics and the SABIC EHSS regional and global teams:

• Global progress in meeting goals and site-specific objectives and targets

• Possible modifications to elements of the EHS&S Management System

• Key accomplishments in the last 12 months

• Critical actions, programs and projects planned for the next 12 months

Our goal is to be a global EHSS leader, have world-class programs and performance and continuously

strive for improvement in all of our operations.

Safety

We are committed to operate our facilities safely and responsibly, and we strive to continuously improve

our programs to promote safety and minimize employee injuries.

Process Safety Management

The company’s manufacturing facilities with hazardous operations and regulated by process safety

management regulations have implemented numerous PSM programs, including: Hazardous Operability

Studies; Process Hazard Analyses, Standard Operating Procedures, Training, Mechanical Integrity

Assessments, Management of Change Procedures, Inspections, Pre-Startup Safety Reviews, Risk

Assessments and Audits. The protocol is consistent with OSHA’s Process Safety Management and U.S.

EPA’s Risk Management Planning requirements. We have developed this into a globally applied Process

Safety Management program that also meets the SEVESO II requirements in Europe.

Our Process Safety Management (PSM) program seeks to prevent significant events in our hazardous

operations. Manufacturing facilities that involve hazardous operations and are regulated by PSM

regulations have implemented PSM programs that include the 14 Elements of the OSHA Rule “Process

Safety Management of Highly Hazardous Chemicals” in addition other applicable requirements, such as

the Seveso II requirements in Europe. All of these covered plants have practices, policies and

management systems that are designed to meet the program elements.

Injury Prevention

Innovative Plastics is committed to injury prevention through a robust implementation of a world-class

Safety and Health management systems. We use a comprehensive online measurement system to

9

communicate and implement expectations for H&S performance. Our program is designed to assure that

all of our facilities have a strong safety culture, clear procedures and participation by the workforce.

The Innovative Plastics plants have demonstrated their commitment to the recognition of Safety and

Health program excellence at our facilities through participation in government-sponsored programs,

including the United States OSHA VPP process, the Mexico VPP process, and the Canadian Alberta PIR

process

Seven facilities have been awarded the OSHA VPP Star, and 2 facilities awarded the Mexico Star. We

have actively participated in the OSHA VPP process since our first facility, Selkirk, New York, obtained

STAR status in 1987.

0

0.2

0.4

0.6

0.8

1

1.2

1.4

2006 2007 2008 2009 2010 2011

Innovative Plastics OSHA Rate

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

2006 2007 2008 2009 2010 2011

Innovative Plastics Days Away from Work Rate

10

The Environment

SABIC has implemented a global environmental management system (EMS) at all of its manufacturing

facilities. Nearly all of our plastics manufacturing facilities have been certified to the ISO 14001:2004

standard by LRQA, an accredited 3rd party auditor. Our programs are designed for both compliance and

pollution prevention, as discussed in more detail below.

Water. Our water program includes systems to assure that all effluent streams are properly permitted and

maintain a very high level of compliance with discharge limitations. Water treatment processes focus on

upstream contaminant reduction in addition to effluent treatment. All sites are expected to have storm

water pollution programs in place. The plans contain preventive steps such as secondary containment,

inspections and spill prevention. Training is provided to sites through general awareness training modules

in addition to site-specific training.

Most of our sites are not located in water scarce regions and therefore focus most of their attention on

maintaining and improving discharge quality. However, we recognize the importance of water resources

and have focused our water usage reduction efforts in regions with greater stress. Most of our sites

recycle water for cooling to minimize water usage and water reduction efforts are considered with

emphasis on water scarce regions.

Cartagena, Spain Water Usage Reduction: In the Murcia region of Spain, water is relatively scarce. In

response, the Innovative Plastics’ Cartagena plant uses micro-filtration to clean and reuse process

wastewater from multiple sources within the plant. Since the plant started micro-filtration in late 2007, it

has saved more than 1,600,000 cubic meters of raw potable water.

Campinas, Brazil Water Usage Reduction: The site reports a 20 percent decrease in water usage

between 2009 and 2010. This is a significant reduction, and made even more so due to a 16 percent

increase in production over the same time period. The water savings were gained in two ways: first, old

underground water supply pipes are checked for leaks and leaky pipes were repaired; second, reuse of

treated industrial wastewater has been implemented.

Waste Minimization. We recognize that our planet's resources are limited and we strive to use raw

materials efficiently and to find re-use options for our waste materials. Waste materials are controlled

using a consistent global plan that includes auditing of waste transportation and disposal vendors,

tracking and characterization of waste streams, and implementing procedural controls such as training,

inspections, material handling and storage practices.

All of our sites are encouraged to follow pollution prevention and waste minimization practices. Typical

practices include:

Recycle of packaging wood and cardboard

Reuse of wood pallets for raw materials

Milling and reuse of compounding drools

Sale of scrap plastic that formerly went to landfills

11

Thermal oxidation of high caloric value waste streams, resulting in steam generation

and reduction in fossil fuel usage.

Sale of intermediate products to other users

Mount Vernon, Ind., By-Product Recovery/Waste Reduction

The Innovative Plastics Ultem* resin plant at Mt. Vernon, Ind. introduced a new process that converts

waste into commercial value sodium nitrite. . The new process reduces the waste treatment cost to

produce Ultem resin by 90 percent and the Mt. Vernon offsite nonhazardous waste shipments by ten

percent. 10,000 tons per year of this by-product are now recovered and sold. In September 2011, the site

won the National Pollution Prevention Roundtable’s Most Valuable Pollution Prevention Project award for

their efforts.

Rayong, Thailand, Site Material Recycle/Recovery

Canon and Innovative Plastics worked hand in hand to recycle Canon copy machine bodies and electrical

boxes. Canon regrinds the material and sends it to the plastics plant. More than 900 MT of material per

year has been recycled through this program.

Selkirk, NY, Site Waste Reduction Projects

Generation of a process waste stream was reduced by 50 percent over two years by implementing a new

control program to increase the efficiency of the heat exchangers used in the process and by installing a

new filter. Toluene from the material is then recovered for re-use. Additionally, a new toluene back-

flushing procedure used to clean a system of filters extended their useful life and resulted in a 96 percent

reduction in waste generation.

Material Substitution. We recognize that materials are finite resources and should be carefully chosen

and efficiently used in our operations. Through advances in our technology and constant investigation of

alternative raw materials, we have taken steps to reduce overall impact from our operations. For example,

in 2006 we began to convert a key raw material in the production of Valox* polybutylene teraphthalate

(PBT) resin from non-renewable resources to post-consumer recycle using our Valox iQ* resin process

technology. Today there are over twenty grades Valox iQ* and Xenoy iQ* resins. Additionally, we have

introduced post-consumer recycle grades in our Lexan EXL*, Noryl*, and Cycoloy* resin families. To

learn more, please visit www.sabic-ip.com/sustainability .

Valox iQ* Technology

Valox iQ and Xenoy iQ resins were developed as a result of a successful two-year initiative that examined

our manufacturing processes to redefine how products could be made cleaner and more environmentally

responsible than traditional materials. Valox iQ and Xenoy iQ resins are the leading elements in an effort

to consider the substitution of non-renewable materials with recycled and renewable feed-stocks.

Discarded PET Bottles are Reborn as Innovative Plastics' Valox iQ* Resin, achieving “Silver Cradle to

Cradle Certification” which measures achievement in environmentally intelligent design.

The Society of Plastics Engineers (SPE) awarded the Valox iQ* resin process the 2007 Environmental

Award for New Technologies during their Global Plastics Environmental Conference

Air Emissions. Most of our chemical production facilities around the world have government-imposed

limits on the types and quantities of compounds released to the air. Compliance with these limits requires

specific expertise, infrastructure, and focus on complex regulations in many regions of the world. The air

emission compliance program is based on identification and location of emission sources and

implementation of emissions reduction steps. Processes are continuously monitored as part of an overall

program to ensure that air emissions remain below permissible limits. The complexity of restrictions on

12

the operations of our processes and the stringency of limits on air emission releases for our major U.S.

sites have increased significantly over the last two decades as a result of new requirements such as

MACT standards and Title V air permitting. European Union (EU) standards, such as increasingly

stringent Best Available Technology limits, have affected our facilities located in the EU. Innovative

Plastics has greatly expanded operations in the Pacific region in the past two decades. Government

programs regulating air emissions in countries in that region have also expanded and become more

stringent. We strive to avoid any air excursions through application of rigorous implementation of

management systems and operational attention.

Climate and Energy

SABIC is committed to implementing its global sustainability program. Sustainability is at the top of

SABIC’s agenda touching every business and operation around the world. The company is focused on

continuously reducing the intensity of our global operational footprint including reducing carbon intensity,

improving energy and water use, and increasing material efficiency. Within the marketplace, we’re making

strategic investments and working closely with our customers to develop products and applications that

respond to their sustainability needs. We continue to raise the bar as one global organization – building

on our sustainability progress to date with even greater focus, resources and commitment.

SABIC’s Innovative Plastics business first began tracking both direct and indirect Greenhouse gas (GHG)

emissions and energy usage for all our manufacturing facilities in 2002, we have conducted

comprehensive annual updates to this GHG inventory each year since then. The data collection system

was modeled after the World Resources Institute/World Business Council on Sustainable Development

GHG Protocol Corporate Standard.

We have implemented numerous projects that will improve the energy efficiency of our operations and

thereby reduce our GHG emissions. The overall efficiency of our chemical operations is significantly

increased by cogeneration facilities co-located with four of our largest sites.

Our GHG reduction and energy efficiency strategy represents a mix of energy conservation actions and

prioritized capital project implementation and includes multi-site efforts such as:

Re-lamping with high-efficiency fluorescent lamp fixtures

High efficiency motors and variable frequency drives

Steam trap surveys and focused maintenance programs

Steam insulation surveys and replacement projects

Energy pinch studies and heat integration projects

Energy use measurement and process automation upgrades

Various process equipment efficiency improvements

Between 2010 and 2011, over 80 energy efficiency and GHG reduction projects were implemented with a

combined reduction of more than 360,000 GJ and 24,000 metric tons of GHG emissions (CO2

equivalents). In the recent past, the business has shifted focus to driver fewer, but much larger, more

strategic energy reduction projects at the manufacturing sites. These projects often have longer payback

times and reflect the long term commitment the business has in reducing its energy footprint

13

Almost all of our GHG emissions come from the usage of indirect and direct energy for our production and

office facilities. Therefore, GHG and energy trends are similar. The GHG inventory and energy usage

results for Innovative Plastics are provided in the charts below:

Decreases in energy consumption are evident in two periods: from 2006 to 2009 and from 2010 to 2011.

Our greenhouse gas emissions show a generally declining trend from 2006 to the present. Greenhouse

gas emissions in 2009 were particularly low due to the weak economy.

Innovative Plastics Wins 2007 National ENERGY GLOBE Award for Brine Recovery Project at Bergen Op

Zoom Facility

Innovative Plastics was named the national ENERGY GLOBE Award overall winner for the Netherlands in

recognition of its Brine Recovery project in Bergen op Zoom. The company was honored for its efforts in

achieving significant environmental benefits made possible by an innovative brine recovery process,

2.5

2.7

2.9

3.1

3.3

3.5

3.7

3.9

2006 2007 2008 2009 2010 2011

Mill

ion

Me

tric

To

ns

CO

2 E

qu

ivila

nt

GHG Emissions

25,000

27,000

29,000

31,000

33,000

35,000

37,000

39,000

41,000

2006 2007 2008 2009 2010 2011

Tho

usa

nd

MM

BTu

s

Energy Use

14

which purifies and re-uses salt in polycarbonate (PC) production. Recovering and reusing 72,000 tons of

sodium chloride from this “brine stream,” results in a 73 percent reduction in sodium chloride

consumption, elimination of 8,900 tons/year of CO2 emissions, and a 10 percent reduction in waste water

discharged into the sea. The emission reductions stem from lower energy requirements to mine and

transport the virgin “vacuum” salt. Investment in eco-responsible solutions enables SABIC Innovative

Plastics to provide customers with state-of-the-art products while minimizing the impact of manufacturing

processes on the environment. The ENERGY GLOBE awards, the most prestigious in the world,

recognize extraordinary environmental efforts. Projects from all over the world that conserve and protect

the Earth’s resources or employ renewable energy are showcased by country. Full details can be found

on our website at http://www.sabic-

ip.com/gep/en/NewsRoom/PressReleaseDetail/may_27_2008_sabicinnovativeplasticswins.html

Columbus Energy Efficiency

The University of Dayton Industrial Assessment Center conducted an energy assessment of the site and

the U.S. Department of Energy recognized the site with an Energy Saver Award for saving over 7.5

percent of total energy use. In spite of increasing production levels, the Columbus facility has also

managed to reduce Greenhouse gas emissions by 15 percent over 3 years by establishing an aggressive

and unique system of Energy conservation. The business unit launched a contest that enabled all

employees to submit energy saving ideas. Columbus was the global winner of the contest with a project

that eliminated non-essential shipping dock heaters. The site also completed an Energy audit that

resulted in approximately 500MT CO2 reduction. In addition, the site hosted an energy conservation

consulting team from the University of Dayton which provided a detailed project list that enabled the plant

to save an additional 300MT CO2.

Selkirk Site GHG Reduction Award and Donation

The Selkirk site won a corporate award for reducing GHG emissions by approximately 7 percent by

implementing projects such as burning natural gas instead of evaporator bottoms in a process heater,

implementing steam trap controls, and using real-time energy monitoring in control rooms for line-of-site.

The Selkirk site presented the award check to the local Ravena-Coeymans-Selkirk High School (RCS) to

support a Solar Powered Greenhouse that will help promote a fun and hands-on environment for learning

about ecology, energy conservation, and resource management. This project will inspire students and

encourage imagination, two values we believe in at SABIC-Innovative Plastics. The funds will specifically

be used to safely install and optimize a solar panel that will be used to heat planting beds and to provide a

highly efficient, radiant heating system to minimize GHG emissions.

Selkirk Site Waste Energy Recovery

The Selkirk, NY site won a sustainability award from the American Chemistry Council in 2011 for an

energy savings project. The site operates a 40-year old process that requires steam at a pressure of 30

psi, but the steam supply at the site is at 150 psi. Historically, the steam pressure was reduced using a

control valve and the energy in the 150 psi steam was lost. The site installed a 1000 kW steam turbine

electric generator as a replacement for the control valve and now captures the previously lost energy. All

of the electricity generated is used on the site and this eliminates 7.7 million pounds of greenhouse gas

emissions annually.

Security and Crisis Management

At Innovative Plastics, we are committed to ensuring that the Security and Crisis Management function is

a core competence of our business. We have adopted the American Chemistry Council Responsible

Care Security Code (RCSC) of Management Practices at our US sites to help ensure the protection of

15

our people, property, products, processes, and information. Outside the U.S., our sites have adopted the

equivalent Responsible Care program in their host countries.

Our Security Program incorporates not only comprehensive security measures for deterring/preventing

terrorist and other criminal acts but also specific Crisis Management Plans to protect and maintain the

integrity and continuity of our manufacturing operations during emergency situations.

Key aspects of our Security Program include:

Leadership commitment

Analysis of threats & vulnerabilities

Cyber security and information protection

Personnel surety

Documentation of processes & procedures

Training, drills and guidance

Communications and information exchange

Response to threats and incidents

Audits and verification procedures

In conformance with RCSC principles, we seek continuous improvement in our security performance

using a risk-based approach to identify, assess, and address vulnerabilities, prevent or mitigate security

incidents, enhance security training, readiness and response capabilities, and maintain and improve

relationships with key stakeholders.

Product Responsibility

Our commitment to the environment, our employees and our communities includes dedicating resources to evaluate the safety and health aspects of our products and raw ingredients. Our Product Stewardship and Toxicology experts develop programs to assess and manage risks to human health and the environment, and to communicate information to our employees and customers. Meeting our commitment includes developing internal processes and programs and to comply with the increasingly complex product and chemical regulations and restrictions.

The company believes the stewardship of our natural resources and the responsible development of

sustainable materials and processes will enhance the growth of our business, support growth for our

customers’ businesses and help to solve environmental challenges. Understanding impacts across our

product lifecycle helps to focus efforts in the most important areas. The product lifecycle areas where we

can have the most significant impact are using more sustainable raw materials such as recycled and bio-

based feeds, improving the operational efficiency of our own manufacturing sites, helping our customers

to develop more sustainable designs, and continuing to strive for less impactful chemistry in our final

products.

Our sustainability programs go beyond how we operate our business and include what we design and sell

in the market. We have a culture of innovation and product development that has delivered sustainability

benefits to our clients and stakeholders throughout our history. Today, we continue this tradition of

sustainable innovation by developing materials that are inherently more sustainable than common

practice in the market (e.g., recycled content) and by working with our customers to use plastics

16

effectively to achieve sustainability benefits beyond the gates of our business (e.g., automotive light-

weight design for fuel economy, energy efficient window materials). We see continued innovation in the

area of environmental sustainability as a growth initiative for our business and we continue to invest

accordingly. More information on our Sustainability Programs can be found on our website.

The company’s sustainability claims are validated by recognized third party standards and, where there

are no third party standards, they are verified by Life Cycle Assessment (LCA) methods. We also score

ourselves via the Life Cycle Inventory (LCI) methodologies, based on the ISO 14040 and ISO 14044

standards and Green Chemistry Screen (GCS): This component of the scorecard guides the assessment

of the chemical composition of the product, including impurities, byproducts and catalysts, against well-

established toxicological, regulatory and industry standard criteria. The results of the scorecard are used

to develop environmental benefit claims that are subjected to a rigorous, independent review by

GreenOrder.

Product Stewardship

We are committed to compliance with all applicable chemical and product regulations and we have

allocated resources to ensure that company-tailored Product Stewardship and Toxicology business

practices are in place. The required health and safety aspects of our products are evaluated and the

potential risks to human health and the environment are assessed. Potential risks are identified and

managed appropriately. Hazards and risks of our products are communicated proactively to our

employees, customers, distributors and communities.

We work closely with our customers and take the time to understand their changing needs. The

application limitations of our products are clearly communicated to them and internal processes exist to

review intended customer uses that give SABIC reason for concern. Through multi-generation product

planning, we are continuously introducing new, "greener" materials and products, taking into account the

potential impacts on health and the environment. We have rigorous programs in place to conduct

toxicological evaluations for existing and new raw materials and products. In addition, through pro-active

monitoring and targeted compliance activity, product stewardship acts as partner to product development

by guiding the design of products that will be market-ready around the globe through timely chemical

registration and notification.

Government legislation and customer standards that apply to product compositions continue to increase

in numbers, complexity and stringency. The company has established internal processes to ensure

compliance of our products with these regulations and customer standards through raw material

controllership and design, product design, and rationalization of potentially non-compliant products.

Global inventory compliance allows us to manufacture and/or sell our products in regulated markets (such

as the U.S.A., EU, Canada, Japan, Australia, Korea, China, Philippines, Switzerland and New

Zealand). Our Product Stewardship and Toxicology team working closely with other functional groups

within SABIC such as the Procurement and Supply Chain organizations ensure product compliance. We

constantly and proactively monitor and study regulatory changes (e.g. enforcement of new

rules/regulations such as EU REACH, listing/delisting of substances from chemical inventories, etc.) and,

where needed, conduct the required safety assessments and submit data to the appropriate regulatory

agencies.

Finally, the Product Stewardship and Toxicology team regularly monitors and advises the company on

new product regulations, legislation, and standards. Part of Stewardship’s role is to advocate to make

17

sure that changes and developments in regulations, legislation and standards are fair to SABIC and the

chemical industry overall by actively engaging in trade organizations and industry groups globally.

REACH Readiness

On June 1 of 2007, a new regulation revolutionized the way in which chemicals are regulated in Europe.

This regulation, known as Registration, Evaluation and Authorization of Chemicals (REACH), is the most

comprehensive chemical regulation in the world to date. All manufactured and imported chemicals,

whether by themselves or contained in mixtures or articles, are within the scope of REACH.

Manufacturers, importers and downstream users are all responsible for compliance.

Objectives

With the implementation of REACH, the European Chemical Agency (ECHA) places the burden of

ensuring the safety of chemicals and their supported uses squarely in the manufacturers’ court. By

imposing a requirement that manufacturers and importers of a chemical share data and work together to

compile a single data dossier, redundancies – in particular redundancy in animal testing - is avoided. By

expanding the safety data sheets to include supported uses and the corresponding risk management

measures, ECHA introduces the concept of “safe” or “supported” uses and other uses, which either have

not yet been assessed or have been assessed and found to be unsafe. Lastly, with this new regulation

ECHA creates an incentive for industry to innovate with directionally safer chemicals.

The Innovative Plastics "REACH Readiness" program is designed to ensure continued availability of

finished goods (polymer preparations, film, and sheet) for our customers with operations in Europe. The

program focuses on those finished goods that Innovative Plastics produces within the EU or imports into

the EU as importer of record.

Substance pre-registration

On December 1, 2008, Innovative Plastics finalized its substance pre-registration program. Pre-registered

substances represent both raw materials for the manufacture of polymers, and various purchased

chemicals, which are subsequently used for the manufacture of polymer preparations (such as Lexan *,

Noryl * or Valox * resin grade/color combinations), film, and sheet. Innovative Plastics will not

communicate ECHA substance pre-registration numbers since this potentially could imply revealing

business confidential details of our material technology.

In addition, Innovative Plastics completed its supplier evaluation program. This part of our "REACH

Readiness" effort was set up to ensure that downstream users will have continued access to sourced raw

materials for use within Europe.

Substances of Very High Concern

Through a press release on October 28, 2008, ECHA confirmed the identification of 15 Substances of

Very High Concern (SVHC) that may become subject to authorization. Since then, and through the end of

2010, an additional 31 substances have been added to the SVHC list with more expected to be added

annually by the European Union (EU). Innovative Plastics continually reviews its database of approved

raw materials and identifies the use of any of these candidate substances as a raw material to produce

finished goods within the EU or to produce finished goods which Innovative Plastics brings into the EU as

importer of record. If we were to determine that an SVHC is used, all attempts would be made to eliminate

the material and/or find a substitute. In the future, any relevant SVHC information will be conveyed

through updated Safety Data Sheets.

18

Safety Data Sheets

Safety Data Sheets for Innovative Plastics finished goods have been adapted to meet REACH format

standards and can be requested through productinquiries@sabic-ip.com.

Registration

Innovative Plastics has successfully registered all required chemical substances in 2010 and received

REACH registration numbers from ECHA. This will allow continued manufacture, use, and importation

into the EU for these chemicals. Also, SABIC is actively preparing for future registration needs for

upcoming registration deadlines where necessary. SABIC continues to participate in Substance

Information Exchange Forums (SIEFs) and consortia as appropriate.

Customer Queries

The Innovative Plastics business receives a large number of REACH related customer requests. These

customer requests all differ in format and include requests for declarations, compositional information,

participation in customer programs, etc. It is not possible to manage and sign up to various “REACH

Readiness” customer initiatives in parallel. Instead, Innovative Plastics decided to ensure “REACH

Readiness” through one global, cross-functional program and to respond to customer queries through

“REACH Readiness” program statements.

We are committed to continue providing regular “REACH Readiness” progress updates throughout the

(pre-)SIEF and registration phases. Our customers, however, remain responsible for complying with their

own specific obligations under REACH.

Supplier Qualification Program

SABIC’s Innovative Plastics business has administered a rigorous supplier qualification program since

1998 with special focus on suppliers from emerging countries and contract manufacturers. This program

is designed to evaluate the Environmental Health & Safety, Security and Labor Practices performance of

these suppliers. All suppliers and service providers are expected to:

Provide safe working conditions for all employees and prevent workplace injuries, illnesses and

violence

Maintain compliance with applicable regulations for Fair Labor Practices with regards to minimum

age, discrimination, wages, overtime and freedom of association

Design and operate their manufacturing facilities with effective process safety programs to

minimize safety risk

Comply with applicable EHS&S regulations and maintain required management system

Ensure safe transportation of all materials into and out of their facilities

All suppliers and service providers are initially screened to determine potential risk of non-compliance with

our expectations. Any potential arrangement deemed a risk of adherence to these expectations must

complete a questionnaire or submit to an on-site audit. Since 1998, more than 2700 supplier

arrangements have been evaluated including manufacturers from over 50 countries. In addition, more

than 700 on-site compliance audits have been completed.