Report Parameters

REPORT PARAMETERS
Here are listed the CNH Industrial plants included within the Report’s scope for aspects regarding environmental management, energy management and World Class Manufacturing. Further details are given in the following pages, including those regarding changes in scope compared to last year.
 
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OBJECTIVES AND SCOPE

CNH Industrial’s Sustainability Report aims to provide stakeholders a comprehensive overview of the Company’s operations, integrating financial results and economic commitments with environmental and social ones.

An internal materiality analysis identified the important aspects for sustainability, which were summarized in the Annual Report along with evidence, where possible, of their main financial impacts.

This is the first CNH Industrial Sustainability Report. Since CNH Industrial’s operational scope coincides with that of Fiat Industrial, data for 2012 and 2011 refers to Fiat Industrial. This document was prepared in accordance with the GRI-G4 Global Reporting Initiative guidelines, core *  option.

The topics covered in the CNH Industrial Sustainability Report originate from the materiality analysis, conducted for the first time in 2013 (see also pages 33-35). As per the new GRI-G4 reporting standard (core option), one or more indicators included in the guidelines were monitored for each material aspect (see also pages 232-235). The contents were integrated with the information requirements of Socially Responsible Investors (SRI) and financial and non-financial analysts who periodically review the Company’s sustainability performance (see also page 97). CNH Industrial’s strategic approach is set out in the Sustainability Plan, which identifies action priorities and defines commitments and improvement targets, consistent with, and integrated into, the Company’s business strategy.

Sustainability Report contents are selected through a process of sharing and comparison across CNH Industrial’s internal structures, through a network of representatives within the different organizational areas that oversee the implementation of initiatives and the reporting of performance in terms of sustainability.

Defining the contents of the report is a process based on principles of materiality, stakeholder inclusiveness, sustainability context, and completeness. This complex and systematic process, which takes place during the Report’s planning phase, in part through the materiality analysis (see also pages 33-35), focuses on defining the topics and scope considered important for CNH Industrial’s business and stakeholders owing to their economic, environmental and social impact. The Report provides as complete a representation as possible of the relevant information, defining environmental and social action priorities and timeframes, to permit a thorough evaluation by stakeholders.

Ensuring the quality of information, on the other hand, is a process that concerns principles of balance, comparability, accuracy, timeliness, clarity, and reliability as per the GRI. Indeed, the annual Sustainability Report describes positive trends as well as weaknesses and areas for improvement, with the aim of presenting a clear and balanced picture of CNH Industrial’s sustainability performance to its stakeholders. Furthermore, information and quantitative data is collected in such a way as to enable data comparability over several years and between similar organizations, with the aim of enabling an accurate reading of the information provided.

Unless otherwise stated, the scope of the Sustainability Report covers information and data for the year 2013 - which coincides with the calendar year - and for all CNH Industrial segments worldwide consolidated in the Annual Report as at 31 December 2013. Unless otherwise indicated, Company refers to CNH Industrial, while segments refer to Agricultural and Construction Equipment, Trucks and Commercial Vehicles, or Powertrain * . The Company is divided into the following Regions: APAC, EMEA, LATAM and NAFTA. The countries that make up these Regions are listed in the glossary (see pages 237, 238, 239, 240). It should be noted that the definition of plant used in the Sustainability Report is in line with that of the Annual Report.

The exclusion of any geographic area, company or specific site from the scope of the report is attributable to the inability to obtain satisfactory quality data, or to the immateriality of activities (as is often the case for newly acquired companies, joint ventures, or manufacturing activities not yet fully operational). In some cases, companies not consolidated in the financial statements were included within the scope of the Report because of their significant environmental and social impact. Any significant variations in the scope of the Report or in the calculation of specific data are expressly indicated in the text or tables in the appendix.

Specifically, regarding the scope of the Report:

  • World Class Manufacturing data relates to 56 plants consolidated in the Annual Report as at 31 December 2013. Within the scope of WCM, Sete Lagoas (Brazil) accounts for two plants owing to the manufacturing of two different types of products
  • occupational health and safety data relates to 68,276 employees, or about 95.9% of the total workforce 
  • environmental performance relates to 55 fully consolidated plants, representing over 99% of CNH Industrial’s industrial revenues1. The plant in Berlin (Germany), running at reduced productive capacity, is not included within the scope of consolidation for ISO 14001 certification 
  • energy performance relates to 54 fully consolidated plants, representing over 98% of industrial revenues.

The difference in the number of plants compared with the previous year is due to the reorganization of Trucks and Commercial Vehicles production in EMEA, leading to the concentration of production of the Heavy vehicles range at the plant in Madrid (Spain), and to the termination of these activities at one of the two plants in Ulm (Germany). At the same time, the production of firefighting vehicles was rationalized by closing the plants in Chambery (France) and in Gorlitz and Weisweil (Germany), and transferring production to the Ulm plant (Germany). The plant in Graz (Austria) was not operational in 2013, while a plant was opened in Cordoba (Argentina) for the Agricultural and Construction Equipment segment (not included within the scope of energy performance). These changes were due to a reorganization of manufacturing operations, so no restatement of data was necessary.

The realization of the Sustainability Report was contingent on a systematic information and data retrieval process, crucial to ensure the accuracy of sustainability performance reporting. Approximately two hundred Key Performance Indicators (KPI) were reported in this document. Where available, computerized management and control systems (e.g., the SAP HR platform for employee data, and System 11 for financial data on communities) were used to ensure the reliability of information flows and data accuracy. Other indicators were monitored through electronic databases (e.g., Standard Aggregation Data for environmental, health and safety data) or spreadsheets, populated directly by the representatives of each thematic area worldwide and verified by their supervisors.

To enable comparability over time, the data presented refers to the three-year period from 2011 to 2013. The 2012 and 2011 data refers to Fiat Industrial.

Normalized production unit indices were defined to evidence each segment’s medium and long-term trends in environmental and energy performance. The purpose was in fact to highlight enhanced performances resulting from process improvements, and not simply linked to variations in production volumes. Production units are specific to each segment’s nature and activity: hours of production for Agricultural and Construction Equipment and Trucks and Commercial Vehicles, and units produced for Powertrain. Improvement targets were set for each segment based on these normalized indices. The hours of production refer to the number of hourly-employee working hours required to manufacture a product.

In order to substantiate the Company’s commitment and the reliability of contents, the Sustainability Report was verified, analyzed and approved by multiple parties. In fact, it was:

  • drawn up by the Sustainability Unit, which reports to the Chief Financial Officer and coordinates across all concerned functions 
  • approved by the members of the Group Executive Council, CNH Industrial’s highest decision-making body after the Board of Directors 
  • reviewed by the Governance and Sustainability Committee, a subcommittee of CNH Industrial’s Board of Directors 
  • submitted to SGS Italia S.p.A.1, an independent certification body, for verification as per Sustainability Reporting Assurance (SRA) procedures and in compliance with both the GRI-G4 guidelines and AA1000 APS 2008 standard. SGS is officially authorized to provide assurance as per AA1000. It also assured the alignment of CHN Industrial’s sustainability management system with ISO 26000 guidelines on social responsibility2
  • presented along with the Annual Report at CNH Industrial’s Annual General Meeting, to provide a complete, up-to-date overview of the Company’s financial, environmental and social performance 
  • published and made available in the sustainability section of the corporate website.

METHODOLOGIES

DETAILS OF CALCULATIONS 

  • The added value, representing the value generated by corporate business activities, was calculated using an internal method as the difference between production value and the associated intermediate costs, net of depreciation. The global net added value was then divided among beneficiaries as follows: employees (direct remuneration comprising salaries, wages and severance pay, and indirect remuneration consisting of welfare benefits); government and public institutions (income taxes); financial backers (interest paid on borrowed capital); shareholders (dividends payable); Company (share of reinvested profits); and local communities
  • Economic data was collected directly rather than extrapolated from the Annual Report, and converted into euros using the average exchange rate as at 31 December 2013 
  • Human resources data refers to the entire corporate scope, unless otherwise specified
  • For the years 2012 and 2011, labor cost data was reformulated following the adoption of IAS (International Accounting Standards) 19 Revised 
  • Injury rates were calculated exclusive of commuting accidents, i.e., those happening to employees during normal commutes between place of residence and work 
  • Each manufacturing operative unit is required to report monthly safety data to the EHS regional department, which is accountable for data reporting and statistics on safety at Company level. Data collection and analysis is performed by means of specific information technology tools and software 
  • Investment data for local communities is based on accounting data and calculation methods, and also includes estimates. Figures in currencies other than euros were converted at the exchange rate as at 31 December 2013. The stated figure also takes into account the cost of employee time to manage and organize humanitarian initiatives promoted by the Company, and does not include initiatives solely focused on brand promotion. Figures relate to all CNH Industrial companies worldwide
  • With regard to environmental data, Standard Aggregation Data (SAD) was individually compiled for each production unit based on respective qualitative and quantitative data. Individual Standard Aggregation Databases only include data relevant to the activities of the production unit in question. Depending on data, the detection criterion was either measured, calculated or estimated1 
  • NOX, SOX and fine dust emissions were calculated based on historical average values 
  • The water sources considered as significantly affected by water withdrawals and/or discharges are water bodies that are protected, have high biodiversity value, or are affected by water withdrawals and/or discharges in excess of 5% of their average annual volume. A protected water body is a geographically defined area designated, regulated and managed according to specific conservation objectives. A water body with high biodiversity value is an area that is not legally protected, but recognized by government and non-governmental organizations for the presence of significant biodiversity 
  • Energy consumption is measured with specific measurement systems and converted into joules through specific equivalences based on the energy carrier. For example, when monitored as a secondary carrier, compressed air is indicated in Nm³ and, through conversion formulas, translated into kWh and then GJ. Direct energy refers to the forms of energy that fall within the scope of the organization’s operations; it can be consumed either by the organization within its boundaries, or it can be exported to other users. Indirect energy refers to the energy produced outside the scope of the organization’s operations, supplying energy for the organization’s needs (e.g., electricity or heating and cooling) 
  • For CNH Industrial, the only sources of greenhouse gas emissions, besides the CO2 emissions deriving from energy consumption, are related to the use of substances with Global Warming Potential (GWP) present in air conditioning and cooling equipment in production areas and machinery. The potential emissions from these substances (CO2 eq) are negligible compared to the emissions from energy production; with an incidence of less than 0.5%, they were not included within the scope of reporting 
  • CO2emissions were calculated according to GHG Protocol standards, implemented through Company guidelines, whereas the indirect emissions associated with energy production emission factors were calculated according to the standards published in November 2013 by the International Energy Agency. Furthermore, calculations were made using the lower heat of combustion reference value and the emission factors specific to the energy industry’s power generation stations, available in the second volume of the IPCC 2006 Guidelines. In terms of emission factors, only CO2 was taken into account as CH4 and N2O components were considered negligible and therefore de minimis.

As regards the infographics included in the document and in Facts and Figures, the percentages indicate trends calculated compared with 2012, unless otherwise specified.

Values expressed in tons refer to metric tons (1,000 kilos).

iconThis icon indicates CNH Industrial’s specific approach to the issue with regard to emerging markets as defined by World Bank list of economies (2013).

 

GRI-G4
G4-18; G4-20; G4-28; G4-29; G4-30; G4-32; G4-17; G4-20; G4-22; G4-23; G4-33; LA6; EN3; EN6; EN8; EN9; EN10;EN15; EN16; EN21; EN22
Sustainability Plan

Our commitments on page Materiality Analysis

Glossary
CO2 eq, GHG Protocol, Indirect emission, NOX, SAD, SOX, AA1000, ISO 26000, EMEA, ISO 140001, SAD, WCM, APAC, EMEA, GRI, LATAM, Material aspects, NAFTA, Stakeholders, SRI