Consolidated social and environmental statement

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1 Consolidated social and environmental statement 17 Basis for preparation of the statement 17 Social performance 18 Environmental performance 11 The independent auditor s report

The Lemnhult wind power plant consists of 32 V112-3. MW turbines, producing enough electricity to support the residential consumption of 7, households in Sweden.

2 The Lemnhult wind power plant consists of 32 V MW turbines, producing enough electricity to support the residential consumption of 7, households in Sweden. Basis for preparation of the statement General reporting standards Combined with additional information about Vestas sustainability initiatives at this annual report constitutes Vestas Communication on Progress (COP) under the UN Global Compact. Vestas reporting contains Standard Disclosures from the GRI Sustainability Reporting Guidelines. The below description of accounting policies and development of social and environmental performance refer to the social and environmental key figures and indicators presented on page 9 of the annual report. All Vestas wholly owned companies are covered by the report. Newly established companies are included from the time of production start and for acquired companies from the time when coming under Vestas control. Companies are excluded from the reporting from the time when they leave Vestas control. Defining materiality Vestas bases its materiality assessment on an analysis of significant economic, environmental and social impacts of the Group s activities. The analysis is based on internal priorities as well as experience from dialogue with and direct involvement of customers, investors, policy makers, employees and media. The result of the analysis is incorporated in Vestas COP. Vestas has previously selected a number of social and environmental key figures that are relevant to understand Vestas development, results and financial position. These key figures have been maintained after the materiality assessment. The status of the key figures is monitored closely and for relevant key indicators specific targets have been defined. Change in accounting policies The same measurement and calculation methods are applied at all Vestas sites. No information provided in earlier reports has been restated. There have been no significant changes from previous reporting periods in the scope and boundary applied in the report. From 214, metals and other raw materials are no longer included in the environmental key figures. The previously reported figures only included metals and other raw materials handled by Vestas and not all materials used to manufacture a wind turbine. Indicators for environmental impact are therefore considered more accurate when relating resource consumption and emissions to MW. Social performance Occupational health & safety Occupational health & safety is measured for all activities under the organisational structure. Lost time injuries of all employees are stated on the basis of registration of incidents that have caused at least one workday of absence after the day of the injury. Injuries and working hours for external supervised employees are also included. The incidence of injuries is defined as the number of lost time injuries including fatalities per one million working hours. The number of working hours is measured on the basis of daily time cards registered in the payroll system for hourly-paid employees and prescribed working hours for salaried employees. For external supervised employees, the injuries are reported by Vestas, and working hours are reported by the external suppliers. Absence due to illness does not include absence caused by lost time injuries, maternity leave and child s illness leave. Absence due to illness is measured by means of registrations in the payroll system based on daily time cards for hourly-paid employees and absence records for salaried employees, respectively. 17 Vestas annual report 214 Consolidated social and environmental statement

3 The incidence of lost time injuries was 1.6 per one million working hours, reaching the target for 214. Absence due to illness decreased by.2 percentage points for hourlypaid and increased by.1 percentage points for salaried employees. Incidence of lost time injuries Per one million working hours Employees The number of employees is calculated as the number of employees who have a direct contract with Vestas and permanent staff employed through third parties. Employee information is determined on the basis of extracts from the company s ordinary registration systems with specification of nationality, gender and IPE level (Mercer s International Position Evaluation). During 214, the overall number of employees increased from 15,497 to 19,669, mainly driven by the ramp-up at the factories. Vestas employees at 31 December 214 Number Environmental performance Energy consumption, water consumption, waste generation and CO 2 emission are reported on the basis of significance. All production facilities are included as well as larger offices, warehouses and other facilities ensuring a comprehensive and sufficient statement of these environmental aspects. Utilisation of resources Electricity, gas and district heating are measured on the basis of quantities consumed according to direct meter readings per site including related administration. Consumption of electricity comprises electricity purchased externally and consumption of production from own wind turbines. Oil for heating is stated on the basis of external purchases adjusted for inventories at the beginning and at the end of the period. Fuel for transport has been recognised on the basis of supplier statements. Electricity from renewable energy sources is calculated on the basis of supplier statements. Renewable energy is energy generated from natural resources, which are all naturally replenished such as wind, sunlight, water and geothermal heat. Nuclear power is not considered to be renewable energy. Consumption of electricity from non-renewable sources purchased as a result of not being able to purchase renewable electricity at some locations, is in the Group statement balanced with renewable electricity produced by wind power plants owned by Vestas and sold to the local grid. The consumption of water is stated as measured consumption of fresh water. Cooling water from streams, rivers, lakes, etc. that is solely used for cooling and released to the stream after use without further contamination than a higher temperature, is not included. In 214, Vestas total energy consumption decreased by 15 per cent. When index-linked to MW Vestas energy consumption decreased 37 per cent compared to 213. Vestas share of renewable energy remained at 56 per cent and renewable electricity remained at 1 per cent in 214. Europe and Africa Americas Asia Pacific Total Manufacturing & Global Sourcing 4,971 3,279 1,842 1,92 Sales 3,757 1, ,214 Technology & Service Solutions ,265 Others 1, ,98 Total 11,43 5,132 3,494 19,669 The share of women in leadership positions increased by 1 percentage point compared to 213. Non-Danish nationals hold 54 per cent of the positions in the top management layers, which is a increase of 1 percentage point compared to 213. Energy consumption and share of green energy 1, MWh Index Energy consumption Share of green energy Energy consumption In 214, water consumption decreased by 29 per cent. When indexlinked to MW, water consumption decreased 47 per cent compared to Vestas annual report 214 Consolidated social and environmental statement

4 Consumption of fresh water 1, m 3 Index Consumption of fresh water Consumption of fresh water In October 213, Vestas machining and casting units were divested. The units accounted for 2-25 per cent of Vestas total energy consumption in 212 and 213 and the divestment is the main reason for the reduction in energy and water consumption in 214. The decrease has to some extent been outweighed by the increased activity level in 214 compared to 213. Waste is stated on the basis of weight slips received from the waste recipients for deliveries affected in the accounting period, apart from a few types of waste and non-significant volumes which are estimated on the basis of subscription arrangement and load. is based on supplier statements. In 214, the volume of waste was reduced by 28 per cent compared to 213. When index-linked to MW in 214, Vestas decreased its volume of waste by 48 per cent compared to 213. amounts of fuel for own transport and the direct consumption of oil and gas, with the usage of standard factors published by the Danish Energy Authority. Indirect emission of CO 2 is calculated on the basis of direct consumption of electricity and district heating, with the usage of national grid emissions factors published by International Energy Agency. Indirect CO 2 emissions from electricity consumption based on non-renewable sources is balanced out by CO 2 emission savings in the production and sale to the grid from Vestas owned wind turbines. Vestas decreased its direct CO 2 emissions by 11 per cent in 214, and the indirect CO 2 emissions by 34 per cent. When index-linked to MW in 214, Vestas decreased its CO 2 emissions by 42 per cent compared to 213. The divestment of Vestas machining and casting units is the main reason for the reduction in emission of CO 2. The decrease has to some extent been outweighed by the increased activity level in 214 compared to 213. Direct and indirect emission of CO 2 1, tonnes Index Direct emission of CO 2 Indirect emission of CO 2 Emission of CO 2 and share of hazardous waste 1, tonnes Index Share of hazardous waste In 214, 53 per cent of the total volume of waste was recycled, against 59 per cent the year before. The divestment of Vestas machining and casting units is the main reason for the reduction in waste and waste for recycling. The decrease has to some extent been outweighed by the increased activity level in 214 compared to 213. Emissions of CO 2 Direct emission of CO 2 is calculated on the basis of determined Local community Environmental accidents are accidental releases of substance and chemicals which are considered by Vestas to have a significant impact on the environment. Breaches of internal inspection conditions are stated as the conditions for which measurements are required, and where measurements show breaches of stated conditions. Vestas did not experience any environmental accidents in 214. The breaches of internal control conditions were due to Volatile Organic Compound (VOC) emissions exceeding permit levels at the blade factories in Denmark and Spain and waste water emission exceeding permit level at the generator factory in China. Products CO 2 savings from the MW are calculated on the basis of a capacity factor of 3 per cent of the MW, an expected lifetime of 2 years of the MW, and the latest updated standard factor from the International Energy Agency of average CO 2 emission for electricity in the world, at present 536 grams of CO 2 per kwh. The CO 2 savings over the life time on the MW in 214 increased by 38 per cent compared to 213, due to a higher amount of MW in Vestas annual report 214 Consolidated social and environmental statement

5 The independent auditor s report concerning social and environmental highlights for 214 To the stakeholders of Vestas Wind Systems A/S We have assessed the consolidated social and environmental key figures and indicators in the annual report of Vestas Wind Systems A/S (Vestas) for the financial year 214, stated on page 9 in the annual report for 214. Criteria for the preparation of reporting on social and environmental highlights Page 17 of the annual report for 214 includes Management s responsibility for selecting the social and environmental key figures and indicators relevant for integration in the annual report page 9. The social and environmental key figures and indicators have been included in the annual report for 214 according to the accounting policies for social and environmental highlights for the Group applied and described on page Management s responsibility Management is responsible for preparing the consolidated social and environmental key figures and indicators, including for establishing data collection and registration and internal control systems, with a view to ensure reliable reporting, selecting acceptable social and environmental accounting policies and choosing data to be collected for intended users of the report. Assurance provider s responsibility Our responsibility is, based on our work, to express a conclusion on the reliability of the consolidated social and environmental key figures and indicators in the annual report. Scope, standards and criteria used We have planned and performed our work in accordance with the International Standard on Assurance Engagements (ISAE) 3, Assurance Engagements other than Audits or Reviews of Historical Financial Information, to obtain limited assurance that the consolidated social and environmental key figures and indicators in the annual report are free of material misstatements and that the information has been presented in accordance with the social and environmental accounting policies here for. The assurance obtained is limited, as our work compared to that of an engagement with reasonable assurance has been limited to, principally, inquiries, interviews and analytical procedures related to registration systems, data and underlying documentation. Methodology, approach, limitation and scope of work Based on an assessment of materiality and risk, our work included: 1. Inquiries regarding procedures and methods to ensure that social and environmental key figures and indicators include data from the Group s operations, and that these data have been incorporated in compliance with the social and environmental accounting policies. 2. Assessment of the existing systems for data collection and registration, and procedures to ensure reliable reporting. 3. Analytical review of site data to be consolidated in the annual report On site review of documentation at reporting entities in Australia, Denmark, Italy, Spain and Sweden and assessment of selected documentation at Group level. We believe that the evidence we have obtained is sufficient and appropriate to provide the basis for our conclusion. Conclusion Based on the work performed, nothing has come to our attention which causes us to conclude that the consolidated social and environmental key figures and indicators presented in the annual report of Vestas for 214 (on page 9) are not free of material misstatements and has not been stated in accordance with the social and environmental accounting policies here for. Copenhagen, 11 February 215 PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab Lars Holtug State Authorised Public Accountant Claus Lindholm Jacobsen State Authorised Public Accountant 11 Vestas annual report 214 Consolidated social and environmental statement

Social and environmental performance

Social and environmental performance Vestas has a goal of zero injuries and firmly believes that all injuries can be prevented if every hazard is managed and the correct behaviour is in place wherever Vestas employees and contractors are