2011 Corporate Social Responsibility Report - Bombardier

Bombardier inc. 2011 CSR Report Executive messagesPierre BeaudoinInvesting in the PromiseBecause it’s our corporate responsibility as well as a soundbusiness practice, we’re investing in and helping build thecommunities in which we operate.We’re passionate about finding and developing localtalent, about establishing partnerships with customers,suppliers and academic institutions, and about engaging withcommunity groups and NGOs to find solutions that work forall of our stakeholders.Achieving leadership in aerospace and rail transportationcarries with it an implied promise to be at the forefront ofadvancing international CSR standards by: embedding the principles of the United Nations GlobalCompact across our organization protecting our employees through our Design for Safetyprogram and other measures investing in products like the CSeries commercialaircraft, the ZEFIRO very high speed train and ECO4rail technologies that are setting new global standardsof energy efficiency and eco-friendliness addressing the reporting standards established by theGlobal Reporting Initiative and following our new reportingcycle, which aligns our CSR Report with our AnnualReport to ensure our stakeholders receive informationwhen it is most relevant engaging with our employees around CSR issues, enablingthem with the right tools, trusting them to get us wherewe need to go, and soliciting their feedback through ourEmployee Engagement Survey so that we can make theirworking environment the best it can beDaniel DesjardinsIn the SAM Sustainability Yearbook 2012, we wererecognized as the SAM 2011 Sector Mover, ranking withinthe top 15% of our sector, Aerospace & Defence, and havingachieved the largest proportional year-over-year improvementin our sustainability performance.We also received the SAM Gold Class award, rankingwithin 1% of the Sector Leader’s score. These awards representinternational recognition of our sustainability practices and area testament to our performance over the past year.Evolving forwardAt Bombardier, The Evolution of Mobility is inextricably linkedto the evolution of CSR. Throughout 2011, we advanced CSRacross our entire organization, from product development andinnovation to talent management and community involvement.Take a look inside our CSR Report and browse our dedicatedCSR website at csr.bombardier.com to see how we continuedto move forward responsibly in 2011. Welcome aboard!Pierre BeaudoinDaniel DesjardinsPresident andSenior Vice President,Chief Executive OfficerGeneral Counsel andBombardier Inc.CSR Committee ChairmanBombardier Inc.Striving for excellence generates tangible results: followingour participation in Sustainable Asset Management’s (SAM)Corporate Sustainability Assessment, we were listed onboth the Dow Jones Sustainability North America and DowJones Sustainability World Indexes, benchmark indicators ofsustainability, for the fifth consecutive year.3

Bombardier inc. 2011 CSR ReportAs a leading aircraft manufacturer, we’re responsiblefor connecting the world. This responsibility representstremendous impact: contributing not only to investment andproduct innovation, but to an entire industry of people movingpeople.Beyond facilitating world trade, air transport offers alifeline to communities lacking infrastructure. In many remoteregions, access to the rest of the world and to essentialservices such as healthcare is often only possible by air.In these ways, our obligations to the global communityextend beyond addressing environmental challenges. While wedesign our products with the environment in mind, ultimatelythey’re designed by and for people. Our Design for Safetyprogram is a testament to this, ensuring that safety aspectsare considered from the earliest stages of a product’s lifecycle.We share our expertise with our industry, inviting leadingexperts to attend Safety Standdown forums on four continentsto present the latest thinking on ways to improve flight safetyand help ensure that connectivity remains safe.To secure the sustainability of the aerospace sectorand our world, our industry has set ambitious environmentaltargets. We collaborate with organizations within our sector tohelp reduce emissions and share knowledge. I’m proud that ourproducts and programs, such as our new CSeries aircraft, arepart of the solution.After more than 200 years of service, railway transportationis the most cost-effectve and environmentally responsiblemeans of moving large numbers of people and quantities ofcommodities over vast distances on land. The Climate is Rightfor Trains.At Bombardier Transportation, we’re passionate aboutmoving people more efficiently, bringing greater mobility tomillions of people around the world by developing new railtechnologies and extending the capabilities of existing railsystems.Our vision is one of interconnected modality with rail asthe backbone of national transportation infrastructures. Ournewest mass transit and e-mobility technologies mean thatintegrated sustainable mobility is achievable today, supportingthe urgently needed shift from road to rail to deliver a smallerenvironmental footprint. Our smart transport solutions strive tobe the fastest way to save the planet. And it’s our people whohelp us do this. Through innovative global talent managementincluding our renowned Global Graduate Program, we recruitand train talent from around the world, developing a diverseworkforce with a truly global perspective.We’re working hard to ensure that sustainable railtransportation continues to advance The Evolution of Mobilitythroughout this century and beyond.Guy C. HacheyPresident and Chief Operating OfficerBombardier AerospaceAndré NavarriPresident and Chief Operating OfficerBombardier Transportation4

Bombardier inc. 2011 CSR Report Our ApproachourapproachAt Bombardier, we strive to be the world’s leading manufacturerof planes and trains. To us, the word “leading” meansdriving progress universally by helping people get wherethey need to go, safely, efficiently, comfortably andwith the least possible burden on the environment.It means delivering innovative products of unsurpassedquality and generating ever-greater value for our shareholders.And, as we’ve learned during 70 years of operation,it means acting on the obligation to grow responsibly asa business enterprise. These are the keys to sustainingleadership in a highly competitive global marketplace.5

Bombardier inc. 2011 CSR ReportMoving Forward ResponsiblyOur corporate strategyRisks, challenges and opportunitiesCreating better ways to move the world is imperative, both onthe ground and in the air. It’s the answer to urban congestionand sprawl, escalating oil and energy prices, environmentalchallenges, aging air and rail fleets, and the overwhelming needto connect people in cities, countries and continents aroundthe world.In recent years, we’ve matured considerably in our approachto CSR. By consistently investing time, effort and resourcesin our evolution as a CSR leader, we’ve acquired an in-depthunderstanding of the sustainability risks, challenges andopportunities that we face in the two major industries inwhich we compete.As a result, our entire organization is working together to: roll out effective action plans to support ourCSR commitment help employees, suppliers and other stakeholdersunderstand our CSR commitment and what theycan do to reinforce it develop and report on key performance indicators improve our ability to track, compile and shareaccurate dataOur promise: The Evolution of MobilityWe’re the only company in the world to hold leadershippositions in both air and land transportation. This distinctivedual focus multiplies our opportunities to shape the Evolutionof Mobility.The Evolution of Mobility is the promise we make to allof our stakeholders. It’s what motivates our people to exceland our customers to choose Bombardier products andservices. Equally important, our commitment to CSR is partof its foundation.Our growth strategiesIn 2011, we distilled our strategic framework into threeinterrelated growth strategies for delivering theEvolution of Mobility.AT BOMBARDIER, WE’RE SHAPING THE EVoLUTION OF MOBILITY BY. Creating better waysto move the worldINVEST IN LEADINGMOBILITY SOLUTIONS Capturingglobal growthopportunities Strengthening ourcustomer-focusedexcellenceGROW LOCAL ROOTSIN KEY MARKETSACHIEVE FLAWLESSEXECUTION EVERYSTEP OF THE WAYOur growth lineactive riskmanagementOur competitive foundation6committedcorporate socialresponsibility

Bombardier inc. 2011 CSR Report our approachThe Six Pillars of CSRActing as a responsible citizenIn 2009, we identified the six areas in which we have thegreatest impact. These are the six pillars of CSR at Bombardier.At Bombardier, being a responsible corporate citizen meanscontinuously improving our positive impact. It entailsadvancing the development of our communities by investingthrough donations and sponsorships. It also involvesvolunteering to support community projects while engagingour employees.We’re committed to giving back, annually, 1% EBT(earnings before taxes) of the previous fiscal year to thecommunity through our donations and sponsorshipsworldwide, and through the J. Armand Bombardier Foundationfor Canadian charitable organizations.Our donations, sponsorships and employee volunteeringactivities are centred upon our 3E approach: Education,Environment and Entrepreneurship. These themes reflect ourspecific strengths as a business and our view of the mosteffective ways to apply our core competencies to give backto communities where we operate.Governing effectivelyThe turbulent economic climate of global financial marketshas been exacerbated by inadequate corporate governance.It’s clear that the key to surviving the economic falloutof these events is strong governance. At Bombardier, ourapproach to governance is grounded in our promise, solidcore values and rigorous application of our Code of Ethicsand Business Conduct.Valuing our employeesEmployees are arguably our most important stakeholdergroup. Our success depends on their full engagement inembracing our business ethics, values and operating principles.Engaged employees are innovative, dedicated and productive.By listening to, developing, rewarding and recruitingthe best, we promote the well-being and growth of ourworkforce worldwide.Building responsible productsBuilding responsible products is essential to moving forwardresponsibly—safe products that consume less energy andnon-renewable materials, and generate less noise, wasteand emissions. We’re committed to investing in innovativetechnologies that uphold best-in-class standards of safety andmake our products more environmentally responsible. This isone of the ways we help tackle climate change while reducingcustomers’ costs, a total lifecycle, bottom-line approach.Operating sustainablyWe want to minimize the environmental impact of ouroperations. To do so, we act on our commitment to innovation,improved efficiency and investing in our goals of switching torenewable resources where possible. We also aim to eliminatebanned and restricted substances and deliver a “zero waste”performance. Our overriding operational objective remainsworking to achieve carbon neutrality by 2020.Engaging our suppliersThe United NationsGlobal CompactWe’re dedicated to upholding theUnited Nations Global Compact, theworld’s largest corporate citizenshipand sustainability initiative. A signatorysince 2007, we’ve committed ourselvesto actively promoting its 10 principlesaddressing the issues of human rights,labour, the environment and anticorruption through our strategies andacross our operations. Its principlesare embedded in our Code of Ethicsand Business Conduct, providing clearguidance to our employees as to what isexpected of them as they carry out theirduties and responsibilities.Our supply chain is constantly evolving, with our suppliersbecoming increasingly integrated into our operations. This iswhy it’s more crucial than ever to work closely with them tomanage our supply chain responsibly. This entails ensuringthe efficiency and viability of our suppliers, enhancing thesustainability of our procurement processes, while at the sametime promoting the principles of the United Nation GlobalCompact throughout our supply chain.7

Bombardier inc. 2011 CSR ReportAssigning prioritiesTo successfully engage with our stakeholders, we need tomove forward responsibly by addressing their concernsand learning from their experiences. Meaningful dialoguebroadens our understanding of the world and provides uswith different perspectives that ultimately help us deliveron our growth strategies. This includes creating better waysto move the world, capturing global growth opportunitiesand strengthening our customer-focused excellence.In 2010, we began developing an organization-widestrategy and process for systematically engaging with ourstakeholders. Through industry benchmarking, informalstakeholder feedback and stakeholder impact assessmentsconducted for specific projects, we’ve been able to clearlyidentify our stakeholder groups, deepen our understandingof their expectations and interests, and implement a varietyof engagement mechanisms.The knowledge we gained about stakeholder engagementallowed us to identify and prioritize the CSR issues with thegreatest current or potential impact on our organization.This prioritization formed the basis of our first global CSRmateriality matrix in 2010.The table below summarizes our diverse stakeholdergroups and some of the ways we engage with them.EMPLOYEESCUSTOMERSSHAREHOLDERS, INVESTORSAND FINANCIAL ANALYSTSEmployee engagement surveys,union-management forums and workcouncil consultationsCustomer-led advisory committees,focus groups and customersatisfaction surveysAnnual meeting of shareholders,quarterly conference calls andone-on-one meetingsSUPPLIERSCOMMUNITIESACADEMIASupplier forums,supplier development programs,supplier recognition programsCommunity investments throughdonations and sponsorships,employee volunteeringJoint research projects, scientificcommittees, internships, lectures,in-kind donationsINDUSTRY PARTNERSHIPSAND ASSOCIATIONSNON-GOVERNMENTORGANIZATIONSGOVERNMENTS ANDREGULATORY AUTHORITIESAssociation memberships, participation incommittees and working groups, technicalsupport on regulatory and policy issues,involvement in standardizationOne-on-one meetings andconference calls, donationsand sponsorships, events,and conferencesOfficial meetings and briefings togovernment officials, regulatory filings,technical support on regulatoryand policy issues8

Bombardier inc. 2011 CSR Report our approachCSeriescommercialaircraftEngaging with stakeholders acrossthe six pillarsIn 2011, we solicited the feedback of our stakeholder groups todrive our business by:Addressing shareholderconcerns by adopting a“Say on Pay Vote”Listening to our employeesthrough our annual,globally aligned EmployeeEngagement SurveyPromoting product safetyeducation and awarenessthroughout the aerospaceindustry with our renownedSafety Standdown programGovernancep. 17Employeesp. 21Productsp. 41Leveraging employee insightto improve environmentalefficiency through ourGreen FundHosting supplier workshopsand recognition programsGiving back to thecommunity in the areas ofEducation, Environmentand EntrepreneurshipOperationsp. 48Supply Chainp. 58ResponsibleCitizenshipp. 60ZEFIRO 380 very high speed train9

Bombardier inc. 2011 CSR ReportThe 2011 materiality matrix assessmentIn 2011, we revisited our materiality matrix to reassess thescoring of our CSR issues with respect to their potentialor actual impact on our business. Using the same CSRprioritization methodology that was applied in 2010, weinterviewed several internal subject matter experts to identifyany changes in relevant issues and their material importance.Through this partial assessment, we identified key trendsimpacting the business in the areas of climate change, globaltalent management, health and safety, labour practices,product safety and supply chain, influencing the prioritizationof our CSR reporting.Our CSR Reporting Committee mapped the results of thisinternal review onto the matrix. The revised materiality matrix(see below) prioritizes the CSR issues that we face over thenext three to five years and defines our CSR reporting content.Refining the matrix in 2012The CSR Reporting Committee developed an action planto further improve the matrix. In 2012, we plan to conducta formal survey of our CSR priorities with key stakeholdergroups to continue refining our materiality matrix. This externalassessment will also serve to strengthen our stakeholderengagement process.Mapping what matters: our materiality matrix Governance Employees Products OperationsChain Supply CitizenshipHighImportance to StakeholdersClimate ChangeHealth and SafetyProduct SafetyTransparencyand DisclosureCorruptionEnvironmentallyConscious ProductsLabour PracticesHuman oyeeEngagementSupply ChainStakeholderEngagementRemunerationResource andwaste managementLow10Global TalentManagementCurrent or Potential Impact on Bombardier (3 to 5 years)High

Bombardier inc. 2011 CSR Report Our ApproachHighlightsof our 2011 RecognitionsBombardier Inc.Dow Jones SustainabilityIndex WorldDow Jones SustainabilityIndex North AmericaThe world’s 2,500 largest companies (based on the Dow JonesGlobal Total Stock Market Index) are invited to participate in SAM’sCorporate Sustainability Assessment every year. The survey resultsdetermine inclusion in the Dow Jones Sustainability Indexes (DJSI).Our DJSI rankings for 2011 represent our fifth consecutive listing onboth indexes.SAM Gold Class 2012Following SAM’s Corporate Sustainability Assessment, we rankedwithin 1% of the Sector Leader’s score.SAM Sector Mover 2012Following SAM’s Corporate Sustainability Assessment, we rankedwithin the top 15% of our sector, Aerospace & Defence, andachieved the largest proportional improvement in our sustainabilityperformance over last year.Bombardier AerospaceFlight Safety Foundation’sBusiness AviationMeritorious AwardAerospace was acknowledged by the Flight Safety Foundationfor raising safety awareness in several countries through its SafetyStanddown seminars.Platinum Business inthe Community AwardOrganizations scoring 90% or higher on Northern Ireland’s leadingenvironmental benchmarking assessment are awarded Platinumstatus in recognition of their achievements. This award recognizesthose who perform well with improved environmental efficiencies.As a recipient of this award, our Aerospace group demonstrates thatgood environmental performance makes sound business sense.Bombardier TransportationiF Product Design AwardOur Transportation group received the iF Product Design Awardfor the ZEFIRO 380 and its groundbreaking fusion of aerodynamicefficiency to reduce energy consumption with a distinctiveappearance reflecting our state-of-the-art technologies.Middle East Rail AwardAt the Middle East Rail Conference in Abu Dhabi, United ArabEmirates, Transportation won the Middle East Rail Award in thecategory “Most innovative use of technology” for our game-changingPRIMOVE system. Identified as the industry’s leading innovator, thejury recognized our passion for innovation and setting new standardsin electric mobility while providing a smart, competitive solution forurban transportation.For a complete list of our recognitions in 2011, visit csr.bombardier.com/recognitions.11

Bombardier inc. 2011 CSR ReportGOVERNANCEUpholding and expanding on our commitment to CSR ispart of the competitive foundation of our long-term growthstrategies at Bombardier. Reporting to our President andCEO as well as to the Board of Directors, our cross-functionalCSR Committee manages CSR issues by identifying anddeveloping priorities and implementing initiatives.In 2011, we worked towards a clearly defined set of corporateobjectives, listened to the concerns of our stakeholders, conducted arigorous internal audit of our CSR reporting processes and sustainedour commitment to ethics across the organization. This allowedus to make steady progress towards our goal of achievingworld leadership in advancing CSR standards and practices.12

Bombardier inc. 2011 C

This report focuses on Bombardier's corporate social responsibility (CSR) performance at all of our facilities worldwide. This includes joint ventures where we have operational control. For detailed information on the geographic scope of our performance indicators, consult the Measuring our performance section, pages 73 to 76.