Sustainability Report FY2018 - Vanderlande

Core and brand valuesWE AIM TO BE THE BESTCONTINUOUSLY LEARN,DEVELOP AND INNOVATETAKE PERSONALRESPONSIBILITYTO MINIMISEOUR FOOTPRINTWORK TOGETHERAS A TEAMIN A SAFE AND ENGAGINGWORKING ENVIRONMENTOur core values define Vanderlande. If we have a drive towin, we will finish projects ahead of schedule and beat ourcompetitors. However, we’re always learning to do thingsevery day better.We care, not only about our own colleagues, but alsoabout our customers. Creating a safe base is vital insafeguarding everyone’s wellbeing, so we can all work in apositive environment.Teamplay is how we work together, how teams are builtand cooperating effectively at all levels. Finally, ownershipis about performing to the highest level and takingresponsibility for your actions.Our brand values are how our customers define theirexperience of working with us. Reliable: predictability and trustworthiness are paramount – reliable products, technology, service andpeopleTogether: we enjoy working as a team and aim tosupport our customers in every waySustainable: we embrace the triple bottom linecommitment to people, planet and profitTrendsetter: we surprise our customers with innovativesolutions to enhance their businesses – and in doingso, set the standardBest customer value: our customer insight and industryexpertise allows us to create added valueVanderlande headquarters in Veghel, The Netherlands Vanderlande Sustainability Report FY20187

Company locationsA global presenceAlthough its headquarters are located in Veghel, The Netherlands,Vanderlande’s employees are involved in a variety of activities across theglobe. To support them, the company utilises a network of strategicallyplaced offices. From these, more than 100 service teams and many othersite-based personnel actively support Vanderlande’s customers with systemmaintenance, logistics management and business improvement processes.Vanderlande’s core focus remains project-based and it accepts fullresponsibility for the supply of materials to these projects. In addition, thecompany is committed to reducing its environmental impact. It proactivelyseeks ways to lower both its logistics and transportation costs. In addition,it has organised its supply chain as efficiently as possible in response tointernational growth, and retains three dedicated centres in Europe, NorthAmerica and Asia.Vanderlande has also accommodated the significant growth and furtherdevelopment of its suppliers. For example, it opened an additionalmanufacturing facility in the USA and sees many exciting future innovationswithin the company’s product groups. These include other companies it hasacquired with a solution-specific focus, such as Vanderlande Beewen andVanderlande Smatec.In its supply chain, Vanderlande is currently redesigning its processes in orderto manage the company’s growth. The aim is to be more flexible and effectivein ordering, manufacturing and shipping, as well as executing installationsand commissioning on site. By working in a smarter way, Vanderlande’s dailyglobal activities are contributing to its overall efficiency, and progressing itscircular economy ambitions.Consolidated legal entitiesVanderlande Industries Holding B.V., Veghel, The Netherlands — Vanderlande IndustriesB.V.,Veghel,The Netherlands — Vanderlande Industries Contracting B.V., Veghel,The Netherlands — Equipment Supply International B.V., Veghel, The Netherlands —Vanderlande Beewen Verwaltungs G.m.b.H., Siegen, Germany — Vanderlande BeewenG.m.b.H. & Co., KG, Siegen, Germany — Vanderlande Industries Holding DeutschlandVerwaltungs G.m.b.H., Mönchengladbach, Germany — Vanderlande Industries HoldingDeutschland G.m.b.H. & Co., KG, Mönchengladbach, Germany — Vanderlande IndustriesG.m.b.H., Mönchengladbach, Germany — Vanderlande Industries G.m.b.H., Dortmund,Germany — Vanderlande Industries United Kingdom Ltd., Hampton—in—Arden, UnitedKingdom — Vanderlande Industries Espana S.A. Sociedad Unipersonal, Barcelona,Spain — Vanderlande Industries Santpedor S.L.U., Santpedor, Spain — VanderlandeIndustries Logistics Automated Systems (Shanghai) Co., Ltd., Shanghai, China —Vanderlande Industries Hong Kong Ltd., Hongkong, China — Vanderlande IndustriesPrivate Ltd., New Delhi, India — Vanderlande Industries Software Private Ltd, Pune,India — Vanderlande Industries Inc., Marietta GA, USA — Vanderlande Industries BHS,LLC, Marietta GA, USA — Vanderlande Industries Manufacturing USA Inc., Calhoun GA,USA — Vanderlande Industries Singapore Pte, Ltd, Singapore, Singapore — VanderlandeIndustries Canada Inc., Vancouver, Canada — Vanderlande Industries S DE RL DE CVJalisco, Ciudad Granja, Mexico — Libyan Airport Technology Joint Venture Company,Tripoli, Libya — Vanderlande Industries OOO (LLC), Moscow, Russia — VanderlandeIndustries LLC, Dubai, Dubai — Vanderlande Industries Do Brasil Comercializacao,Importacao e Instalacao de Sistemas de Bagagem Limitada, Sao Paulo, Brasil —Vanderlande Industries Australia Pty, Ltd, Sydney, Australia — Vanderlande Industries(Thailand) , Ltd, Bangkok, Thailand — Optosecurity Inc., Quebec City, Canada —Optosecurity Corp., Delaware, USA — Optosecurity B.V., Amsterdam, The Netherlands.Vanderlande has an investment in Smart Robotics (The Netherlands), which is notincluded in the consolidation.8 CanadaPermanent: 875Temporary: 2 Mexico Colombia ChileVanderlande officesVanderlande supply chain centresVanderlande site-based teams

Veghel, The Netherlands(Headquarters) NorwayPermanent: 3,234Temporary: 349 Germany Russia United Kingdom France SpainUSA PolandPermanent: 425Temporary: 191 Italy SwitzerlandPermanent: 144Temporary: 56 South Korea United Arab Emirates Shanghai Hong Kong Oman India Saudi Arabia Malaysia SingaporePermanent: 106Temporary: 2Permanent: 117 Brazil Australia ArgentinaTotal employees5,501(Headcount - 31 March 2018) Vanderlande Sustainability Report FY2018Permanent:Temporary:4,901600FemaleFull timePart timeMaleFull timePart 88429

Sustainable ambitionWith the continuous growth and increasing lifeexpectancy of the global population and therise in average wealth and social opportunitiesof developing nations, natural resource use,escalating greenhouse gas levels and equalityissues are becoming a global challenge. Everyoneis required to act responsibly and contribute toeffective solutions.Vanderlande believes that by working hard today, in joint effortwith its employees, customers, suppliers and other stakeholders,it can make a difference for its future and make the world oftomorrow a better place. By establishing – and working towards– the company’s long-term ambitions on sustainability, it cancontinuously drive and challenge itself to perform better every daybased on the following three key global drivers:Establishing a healthy and fair societyThis is a fundamental need that drives sustainable development.Clean water and air, and healthy and available food sources arethe most primary needs for the world’s population.The basic UN sustainable development goals aim to eradicatepoverty, end hunger, and to ensure clean water and sanitationfor everyone. These goals also go further to build on the needfor social and economic development that supports the creationof an inclusive, healthy and fair society, and proactive andresponsible governance. Vanderlande’s approach incorporatesthese principles.A safe base is at the heart of Vanderlande’s business and it believesthat the highest levels of health and safety are fundamental.Through active engagement and training, the company alsodevelops a working environment in which its employees cancontinually learn and develop, while Vanderlande believes thatstrong leadership is the key for a successful and sustainablefuture.Respecting the natural capacity of our planetThis relates to the long-term ability of our ecosystems to maintainthemselves. It is becoming increasingly evident that the worldclimate is changing, resulting in an increased risk of floods,droughts and other natural phenomena that are reported to bestrongly related to global warming.With the energy transition in progress, steps are being taken toestablish a low-carbon economy. It is important to support theUNFCCC Paris Climate Agreement, which world economies havesigned up to, with the outcome of driving down greenhouse gasemissions. This currently provides the most pressing exampleof the need for a collaborative approach towards protecting ourplanet.10Vanderlande cares about how its business activities impact on theenvironment and the part it plays in resource availability, waste,energy use and climate change. The company is also dedicatedto reducing its energy use, and continuously engages with itscustomers on a range of initiatives to achieve this.Establishing a circular-based economyThis driver requires governments, businesses and otherorganisations to use less scarce raw materials for economicgrowth. By accelerating the circular economy, outcomes includinga reduction in raw material resource use, waste and emissions willhelp to close energy and material loops, and optimise the use ofresources.Vanderlande can contribute to establishing a circular-basedeconomy through its corporate governance, which enablesproactive cooperation with a multitude of partners both locallyand globally. The company is also committed to developingcircular services and products and supporting initiatives that helpto accelerate these.The three drivers translate to Vanderlande’s pillars of sustainability– people, planet and profit – which have been rooted to the coreof the company’s strategy for several years.The company is able to share its knowledge and expertisewith partners throughout the entire value chain. By doingso, sustainability will deliver a range of benefits, broadenVanderlande’s horizons and create opportunities to respond to arapidly changing world.However, its sustainable ambitions cannot be achieved inisolation. To succeed, Vanderlande must work closely with allstakeholders to realise a sustainable business and a better worldfor all communities.Vanderlande believes that embracing sustainability and makingthis an integral part of its daily activities is the only way to have astrong profitable business, to contribute to the protection of theplanet and to take care of its people.The company holds itself accountable for the effect that itsactivities and decisions have on people and the environment.The company’s ambition is to implement sustainable solutionsworldwide and it considers the processes and work involved inachieving these to be both rewarding and worthwhile.Although there are many challenges ahead, Vanderlande is makingconsiderable progress in its performance on sustainability and hasset itself clear targets. With the knowledge, skills and enthusiasmof employees and partners, it will succeed in achieving significantresults.“Vanderlande cares about how its businessactivities impact on the environment and thepart it plays in resource availability, waste,energy use and climate change.”

CorporategovernanceDesign safetyand ergonomicsCircularsolutionsHealth andsafety at workResponsiblesourcingEnergy useproducts and systemsEstablishing acircular-basedeconomyEmployeedevelopmentand trainingSustainableproduct designEmployeeengagementEstablishing ahealthy andfair societyRespecting thenatural capacityof our planet Vanderlande Sustainability Report FY201811

Stakeholder inclusivenessStakeholdersAs Vanderlande continues to drive its business forward in thepursuit of sustainable development, it actively encourages itsstakeholders to join forces in the realisation of common goals. Thisis because the focus on sustainable development and the impactof business operations are not just about what Vanderlande doesin isolation. It involves the entire value chain and the companyunderstands that it is only one of the links in this process.EmployeesCustomersSuppliersOther stakeholdersVanderlande is confident that through open, transparentand systematic engagement with its stakeholders (includingemployees, customers, suppliers, local communities, governmentorganisations and industry bodies) it can jointly lead the way.By obtaining feedback from all stakeholders, the company cancontinuously review and update its strategy, policies and generalconduct on sustainability.To achieve this, Vanderlande regularly connects with itsstakeholders via customer engagement, key customer focusprogrammes, conferences and supplier audits, as well ascooperating on industry initiatives and conducting employeesurveys. The key topics raised from engagement relate to a widerange of subjects. As an example, the action to investigate theneeds of the company’s more mature employees was developedfrom the extensive employee surveys. In addition, the internalsafety climate surveys led to behavioural programmes beingdeveloped and rolled out on a global basis.Vanderlande has also experienced an increasing demand for theenergy management of its systems by engaging with customers.For this report, Vanderlande has identified – and engaged with –internal sustainability representatives by assessing factors suchas their expertise, enthusiasm, location and leadership skills.By exploring the topic of sustainability together, Vanderlande canhave a greater impact and create more opportunities for tangiblebenefits relating to the environment – both now and in the future.12Stakeholder engagement (employees)“Vanderlande actively encourages itsstakeholders to join forces in the realisationof common goals.”

Materiality assessmentMaterial matrixIn sustainability reporting, ‘materiality’ is the principle thatdetermines which topics are sufficiently important to report on.Through positive stakeholder engagement, and by assessingtheir input, via a workshop based on GRI reporting principles amateriality assessment is undertaken. This is used to gatherinsights into the relative importance of specific economic,environmental and social impacts, and highlight whereVanderlande can have the most significant impact.The company’s previous materiality assessment was carried out inthe process of writing its second Sustainability Report (FY2015).For the FY2018 report, Vanderlande has updated its materialityassessments by reviewing the sustainability issues it faces afresh,reconfirming its long-standing focus areas, and clarifying andshaping its strategy.The topics in the four upper right-hand sections fall above themateriality threshold for the purpose of this report and are deemed‘material’. Those mentioned below the materiality threshold areconsidered ‘non-material’. It is important to note that some nonmaterial topics can be mentioned in this report if an overlap orother instance of contextual relevance occurs.Working with the materiality matrix enables Vanderlande to focuson the areas in which it can have the greatest positive impact,minimise negative impacts, and identify emerging issues and newleadership opportunities. Targets have been set regarding each ofthe materiality topics deemed important by its stakeholders.Further information about the issues covered by the materialitymatrix, and corresponding GRI disclosures, can be found in theGRI Content Index (page 38).The materiality matrix maps out topics by their relative importanceto sustainable development and Vanderlande’s businesssuccess. All topics are categorised based on the three pillars ofsustainability – people, planet and profit.MAJORCircular solutionsHIGHEnergy use (manufacturing andshipping)Equal opportunity and diversityEnergy use (products and systems)Employee development trainingHealth and safety at workWaste managementDesign safety and ergonomicsProduct packagingCorporate governanceEmployee engagementResponsible sourcingMEDIUMSustainable product designWater managementEnergy use (facilities andbusiness travel)Supporting local communitiesQuality, reliability and performanceIT securityTransparancy, accountabilityreportingLegislationCustomer-driven solutions andengagementBribery, corruption and businessethicsMINORSignificance of economic, environmental and social impact to sustainable developmentMateriality Assessment Vanderlande FY2018MINORMEDIUMHIGHMAJORRelative importance to Vanderlande business successPeople Vanderlande Sustainability Report FY2018PlanetProfit13

Materialtopics14

Health and safety at workUpholding the highest standards of health and safety isfundamental to all of Vanderlande’s stakeholders, whether it bein the initial design phase or during daily work activities. Creatinga proactive health and safety culture drives the company’sreputation as a leading international employer and supplier.The company’s operations involve a number of high-risk activities,which – if not strictly controlled – create the potential for fatalor life-changing injuries. In addition, activities can impact onthe health of Vanderlande’s employees in regards to shift work,ergonomics, hazardous substances and business travel.As Vanderlande continues to grow, it is welcoming many newrecruits across the globe. Every employee expects – and deserves– to work in a safe environment that not only protects them fromthe risk of an accident or ill health, but also promotes good mentalhealth and a healthy lifestyle. Vanderlande’s care for the whole ofits workforce is driven by a basic respect for human rights and theestablishment of a fair and equitable society.No matter where it does business, Vanderlande’s expectation isthat every employee can return home safely at the end of everyday. This is non-negotiable and the promotion of a proactiveapproach to health and safety provides the foundation on whichits approach is developed.Workforce engagement, active involvement and the promotion ofthe right safety behaviours are fundamental to achieving a stronghealth and safety culture. This also ensures that employees arecommitted to promoting high standards and making continualimprovements. Employee safety climate surveys are utilised inthe business to identify potential areas for development andbenchmarking is also undertaken.Visible safety campaigns are designed to initiate conversationsregarding safety and communicate coherent safety messages.Vanderlande’s commitment to its people means not only investingin incident prevention, but also looking at long-term ergonomicand social challenges. There is an increasing focus on issuesincluding mental health, fitness and overall wellbeing, whichcomplements Vanderlande’s health and safety activities.The boundary of Vanderlande’s health and safety activities aredriven by the scope of its global operations. This encompasses alllocations around the world, and includes work on Vanderlande’sown and third-party sites. As an international company, itappreciates that cultural maturity and standards can vary, and areinfluenced by local legislation, customers, contractors and otherparties, as well as the company’s own teams.It is important to influence a wide range of stakeholders in respectto safety, as the poor performance of one could have a negativeeffect on others. Vanderlande has the ability to have a positiveinfluence on many of its stakeholders, including its supply chainpartners, and

Vanderlande Sustainability Report FY2018 3 About this report This report addresses the sustainability approach, position and performance of Vanderlande Industries Holding B.V., a fully owned subsidiary of Toyota Industries Corporation (TICO). It has been prepared in accordance with the GRI standard: core option.