Responsible Business

RESPONSIBLE BUSINESS

As a leading manufacturing company, we are firmly embedded in society and are deeply aware of our responsible role in society. Compliance with laws and the constant attention to a safe and healthy working environment are key priorities for our group. Aalberts Industries endorses the OECD and ILO guidelines concerning responsible business. To integrate this responsibility into our day-to-day operations, Aalberts Industries has developed a substantive structure for our group companies that provides them with references and direction. The Aalberts Industries Management Board provides the framework within which activities are developed. The Management Board is actively involved in efforts to improve accident and absenteeism figures, innovation and energy consumption. Ongoing interactions with the group companies enable us to share best practices. Responsible business is also part of the annual budget meetings. Hauck Heat Treatment as a group company of Aalberts Industries is compliant and actively involved in the Aalberts Industries responsibility process which is described below. Any detailed information regarding the policy of an individual Hauck Heat Treatment company can be provided by the individual company itself.

RESPONSIBLE BUSINESS FRAMEWORK

Our responsible business pillars are health & safety, the environment and integrity. In 2015 Aalberts Industries focused on various topics within this responsible business framework. There was an increased focus on safety campaigns, safety culture and safety management. Environmental focus made us intensify our efforts in energy reduction, waste and recycling and investment in the environment. Integrity takes a very important place at Aalberts Industries and made us increase our actions relating to the Code of Conduct, compliance with laws and the renewed Speak Up! procedure. The 2015 focus is endorsed by several cases from our group companies.

SUSTAINABLE SOLUTIONS

A large proportion of the products and services of Aalberts Industries has a positive impact on our social responsibility as a company. Aalberts Industries supplies solutions for heat and cold storage, solar collectors, irrigation systems and water supplies. These products enable our customers to reduce their energy consumption, be efficient with water, and construct sustainable buildings. As a result of the heat and surface treatments which Hauck Heat Treatment provides to its customers, we extend the lifecycle of many metals. This means less metal ends up in landfills.

LIFECYCLE IMPROVEMENT

Many Aalberts Industries companies use a sustainable lifecycle concept as a common thread in their services. The idea to subject products to the entire lifecycle, from purchasing to production, and to the integration of these products into the technical solutions of our clients, and – after many years – in dismantling and recycling and giving them a second life. On the other hand Aalberts Industries improves its sustainability by conserving and recycling water, energy and chemicals and substituting hazardous substances. This also contributes to lifecycle improvement. For example, in our Industrial Services business we improve the lifecycle by sustainable metallurgy and in our Climate Control business by producing energy-efficient products.

CERTIFICATION

Many of the Hauck Heat Treatment plants have ISO 9001 quality management standard certification. A number of this group companies have also had their environmental management systems certified in accordance with the ISO 14001 standard and have received certificates for the automotive (ISO/TS 16949), aerospace (AS9100 and/or Nadcap) or medical (ISO 13485) industries. A few group companies are striving for ISO 26000 sustainable management or ISO 50001 Energy management certification.

Health & Safety

For us everything revolves around safety. We are focused on preventing incidents that may be harmful to our employees and neighbouring communities, or incidents that may cause environmental damage. We continue to invest in a culture in which people know what their responsibility is to make Aalberts Industries a safe place to work.

We roll out special safety incentive programmes which require perfect attendance for participation, e.g. one half paid day off per quarter with no lost-time accidents and birthday off with pay. Our policy focuses on improving procedures at all group sites that do not perform as well as the other group companies or our peers.

In addition, we set up special projects to improve health and safety at those companies where this is necessary. This policy, which we have pursued since 2010, has significantly reduced the annual accident rate. In 2015 our LTI (Lost Time Injury) Frequency ratio showed a further decline, the Average of Days Lost per LTI was reduced, the absenteeism rate remains low and worldwide our rate is well below the national average and well below the industry average in the countries where we operate.

The cases below are group company examples of an integrated, ongoing health & safety policy and health & safety actions.

ENVIRONMENT

To use materials as efficiently as possible, recycling and re-use are key focus areas in the policy of Aalberts Industries. We strive to produce as little waste as possible.

Efficient energy consumption is a key performance indicator for our operations. We consider it our responsibility to work as energy-efficiently as possible, so that both emissions and energy costs can be reduced.

Aalberts Industries started measuring energy consumption (electricity and gas). Energy-efficiency plans are being developed and/or improved for our group companies. We aim to measure energy consumption for at least 35% of our group companies in 2016 and to increase this percentage from then on.

Nearly all our companies invested in further optimising their resource usage, decreasing their energy usage, minimising their environmental impact and reducing cost. At the same time some group companies have set up an integrated sustainable development plan.

INTEGRITY

CODE OF CONDUCT

Aalberts Industries is committed to conducting its business with honesty and integrity, to follow the law and to make sure that each employee and business partner is treated respectfully. The company is proud of its excellent reputation as a responsible and reliable employer and business partner. The Code of Conduct of Aalberts Industries contains the seven main business standards as rules of ethical conduct all Aalberts Industries employees must follow. The themes around business integrity concern strict compliance with fair competition laws, compliance with economic sanctions and export control regulations and anti-bribery laws, fair and timely disclosure of information, responsible supplier management, responsible work conduct and work environment, corporate responsibility and proper authorisations and approvals. The Code of Conduct is integrated into the employment agreements of all senior staff and management throughout the group. All Speak Up! notifications are promptly investigated and the relevant cases are reported to the Management Board and Supervisory Board. We began developing an online compliance training course in 2015 to educate colleagues on anti-bribery, corruption and the Speak Up! procedure. This course is mandatory for all purchase, sales and management staff and other relevant employees. New modules will be developed and implemented in 2016.

Where possible, we contractually bind our suppliers to adhere to the principles of our Code of Conduct. Various key suppliers have already contractually agreed to adhere to these principles. In 2015 a formal supplier code was developed which includes the principles of the Code of Conduct. This supplier code will be fully implemented in 2016.

RESPONSIBLE TAXATION

We believe that a coherent and responsible tax policy is an important element of our responsible business strategy. Over the years Aalberts Industries has applied a conservative and cautious tax policy in line with the OECD Guidelines. We do not seek to avoid taxes through ‘artificial’ structures in tax haven jurisdictions. Aalberts Industries contributes to society by creating jobs as well as by paying direct and indirect taxes and other charges in jurisdictions of the group companies and production countries, such as Poland and China.

INTEGRITY CASE

FAIR WAGE IN CHINA

Employees in our Industrial Services factory in China are paid a fair wage, which is competitive with average wages in the host countries. Our wages are composed and paid in accordance with the OECD Guidelines and ILO guidelines. This fair wage enables our employees to properly support their families.

CONFLICTING JURISDICTION

Some of the Aalberts Industries group companies are doing business at remote locations. At such locations they ask local auditors for custom local practices which could qualify as bribery, corruption or fraud under other jurisdictions. These local practices might be acceptable in the jurisdiction of the remote location but not under the businss integrity rules of the Code of Conduct. In this manner local conduct can be aligned adequately with the conduct expected at Aalberts Industries as requested by the Code of Conduct.

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