SOURCE: CNH IndustrialDESCRIPTION:
In our inaugural Sustainability Report address as Chairperson and Chief Executive Officer, we wish to outline the results achieved Company-wide from our work in sustainability in 2018 and share our strategic vision and targets for CNH Industrial going forward.
We feel that it is only appropriate to begin by citing the important changes that 2018 saw in our Company’s leadership structure, and how our roles in the Company will contribute to its future trajectory and efforts in sustainability.
The CNH Industrial Board of Directors and its previously entitled Group Executive Council were impacted by the sudden and unexpected passing of Chairman Sergio Marchionne, in July 2018. It was an event that marked a personal and professional loss for the entire organization. This followed the April resignation of former Chief Executive Officer and Executive Board Director, Richard Tobin, who was temporarily replaced by Derek Neilson as Interim Chief Executive Officer for four months. We would like to take this opportunity to thank Derek, who has now been appointed President Agriculture, for his leadership, which ensured that the Company successfully navigated this period of transition.
These developments led to us joining CNH Industrial as Chairperson in July 2018 and Chief Executive Officer in September 2018, respectively. Our appointments to the Company’s Board of Directors were approved by the Extraordinary General Meeting of Shareholders held on November 29, 2018.
These have been intense and dynamic months for us since coming on-board and we are working hard to enhance CNH Industrial’s strengths to make it the world’s leading capital goods provider. As Executive Directors, it is one of our chief priorities to reaffirm our commitment to sustainability and see that it becomes ever more integrated with all of our Company’s day-to-day operations.
To this end, in 2018, we made a point of establishing even more frequent meetings with the Governance and Sustainability Committee (a sub-committee of our Board of Directors) to discuss sustainability matters, particularly projects and targets for employee safety, a key priority, and the fight against climate change.
With regards to the latter, a theme of great resonance in the global debate, we have updated our key targets to reflect CNH Industrial’s commitment to taking on this challenge. We have set even more ambitious goals for 2030: committing to cut CO2 emissions per production unit by 60% (compared to 2014) across our plants worldwide and to obtaining 90% of our total electricity consumption from renewable sources.
Our sustainability targets are not limited to these aspects alone: for years, some of our key targets have focused on other areas of sustainability, based on the priorities set by our senior management and stakeholders through the materiality analysis – a tool we have been using for six years now to direct our improvement efforts. In 2018, some of our key targets for 2022, originally set at regional level, were turned into global targets that are in line with the Company’s new organizational structure and will lead to the creation of new synergies. These targets concern training activities, flexible work locations, volunteering activities, and local community initiatives.
In the medium-to-long term, we will be developing our new organizational structure so that our Company can become:
- More customer centric, by focusing on its five strong operating segments whose mission will be to meet and exceed customers’ expectations;
- More entrepreneurial, by simplifying and empowering these operating segments, while retaining appropriate corporate control;
- More lean and agile, by streamlining decision processes and the organizational structure;
- More innovative, by enabling faster and more market focused hardware and software innovations as well as new business models;
- More sustainable, by increasing the integration of sustainable practices into how we conduct business.
Looking at our product strategy and growth drivers, we intend to lead the Company towards a further expansion in digitalization and automation, while adopting a decarbonization strategy that centers on biofuels and electrification solutions.
Sustainability highlights during 2018 saw our efforts once again acknowledged internationally. CNH Industrial was re-confirmed as Industry Leader in the Dow Jones Sustainability Indices (DJSI) World and Europe for the eighth consecutive year. Furthermore, we once again scored an A- in the CDP Climate Change Program, in acknowledgment of our measures to optimize energy use, cut CO2 emissions, and mitigate the business risks of climate change. We were also one of 31 companies to be included in the CDP Water Program’s 2018 ‘A List’ for our efforts in water management.
Stakeholder engagement on the material topics that are fundamental to our business continued during the year, specifically focusing on Agricultural Equipment, Construction Equipment and Powertrain customers. The analysis revealed that the two most quoted material topics were the ‘circular product life cycle’ and ‘CO2 and other air emissions.’ Specifically, from a circular economy perspective, the circular product life cycle material topic was considered as the most relevant to CNH Industrial by both the Company and its stakeholders, highlighting the importance of adopting alternative solutions that minimize the impact of the entire product life cycle. The importance attributed to CO2 and other air emissions reflects the impact not only of manufacturing processes, but also of the entire value chain, from logistics to supply chain and product use.
When it comes to CO2 and other air emissions, 2018 brought about significant developments across our plants – a 13% year-on-year reduction in CO2 emissions per hour of production, and over 70% of electricity consumption is now derived from renewable sources. In terms of logistics, the year’s CO2 emissions from global inbound and outbound distribution fell in line with our targets.
We remained committed to fostering our most valuable resource of all – our people – with our focus on safety at an all-time high, enforcing specific management systems and continuing to implement our World Class Manufacturing program. We also continued to develop numerous engagement activities, seeking to enhance employee wellbeing and training, with a 22% increase in training hours delivered in 2018 compared to the previous year.
Always mindful of the needs of the communities in which we operate, we were delighted to continue to endorse projects and activities that encourage local economic, social, and cultural development. During the year, we further developed projects that were in line with the priorities of our Company strategy (youth training and quality education, food availability, and measures to combat climate change), continuing our long-standing partnerships with Pastoral do Menor in Brazil, Telethon in Europe, and Habitat for Humanity, United Way and Team Rubicon in the United States. In 2018, CNH Industrial continued to support relief efforts during several natural disasters, in large part through our latter-mentioned partnership between CASE Construction Equipment and Team Rubicon, a non-profit veteran-led disaster response organization. In partnership with U.S. Fish & Wildlife Service, the brand has trained Team Rubicon members on heavy equipment operations since 2015.
We are proud of all we have achieved in 2018 through our sustainability efforts. Despite the significant changes that took place, we were able to make a real difference for the better. Our main priority going forward is to boost CNH Industrial’s global growth and profitability while maintaining a high level of sustainability, and delivering even greater long-term value in this respect to all of our stakeholders. We thank you for your continued support and encouragement.
Suzanne Heywood Hubertus M. Mühlhäuser
Chairperson, CNH Industrial Chief Executive Officer, CNH Industrial
Learn more about CNH Industrial's sustainability initiatives in their full 2018 Sustainability Report.
Tweet me: .@CNHIndustrial plans to obtain 90% of its total electricity consumption from #renewable sources by 2030. Hear from CNH leaders about the other ambitious #sustainability goals the company is setting in their latest Sustainability Report http://bit.ly/2KOe6Fj
KEYWORDS: NYSE:CNHI, CNH Industrial, renewable resources, CO2 Emissions, GHG emissions, manufacturing