We don t wait for the future.

Transcription

1 We don t wait for the future. Sustainability Update 2013

2 What we strive for Goals Sustainability Goals Performance Employees Deadline Remarks Reduce the frequency of accidents to < 10 per million hours worked by The implementation of our safety initiative in 2010 led to a reduction in the frequency of accidents to 10 per million hours worked in Increase the data collection on respirable crystalline silica to > 95% of all ceramic plants by 2020 Increase the share of women in senior management to 20% by 2020 Increase the share of women in administration to > 45% by 2020 Increase the share of women in sales to 30% by % 84% The goal to extend data collection at the Group level to over 95% was reached in % 8% % 44.3% % 24.3% Women are given preferential treatment when qualifications are equal; the goal to increase the share of women in administration to > 45% by 2020 was reached in Environmental Protection in Production Reduction of specific energy consumption in ceramic production by 20% below 2010 level by 2020 Reduction of specific CO 2 emissions from ceramic production by 20% below 2010 level by 2020 Reduce the share of water drawn from public supply networks to 40% by % -8% These targets are very ambitious because we have made substantial progress over the past 10 to 15 years through the continuous implementation of various measures, above all to reduce energy consumption % na We will use the emissions in 2013 as the new calculation base for future development because the data from earlier years are not comparable due to the changeover to the third EU emission trading period in % 45% In 2013 we reduced the volume of water drawn from public supply networks to 38% and thereby met our goal for Sustainable Products Increase the share of revenues generated by innovative products to 30% in % 23.4% We are continuing to work on the introduction of innovative and sustainable products in our markets. Corporate Social Responsibility Expand WISBA to 12 countries by na The roll-out of the WISBA was redefined based on the experience gained during the first program. In 2014 the WISBA will be carried out in six countries. Stakeholder Management Introduce a stakeholder dialogue in 90% of our ceramic production network by % na The introduction of stakeholder dialogues at our ceramic plants is continuing and will be professionalized through the addition of concrete definitions. WISBA Wienerberger Sustainable Building Academy na not available (data has not been collected or is not comparable)

3 Key Data Sustainability Data by Product Group Clay Building Materials Europe Chg. in % Employees at year-end 10,014 9,414 9,447 0 Accident frequency Share of women in % Employee turnover rate 2) in % Specific energy consumption 3) Clay Blocks Index Roof Tiles Index Facing Bricks Index Specific CO 2 emissions 4) Clay Blocks Index na na 100 na Roof Tiles Index na na 100 na Facing Bricks Index na na 100 na Specific water consumption 3) m³/to Ceramic Pipes Chg. in % Employees at year-end Accident frequency Share of women in % Employee turnover rate in % Specific energy consumption Index Specific CO 2 emissions 4) Index na na 100 na Specific water consumption m³/to Plastic Pipes Chg. in % Employees at year-end 2,571 2,509 2,466-2 Accident frequency Share of women in % Employee turnover rate in % Specific energy consumption Index Specific water consumption m³/to Concrete Pavers Chg. in % Employees at year-end 1, Accident frequency Share of women in % Employee turnover rate in % Specific energy consumption Index Specific water consumption m³/to Explanatory notes: Operating EBITDA is adjusted for non-recurring income and expenses. Free cash flow equals cash flow from operating activities minus cash flow from investing activities plus growth capex data were adjusted to reflect the initial consolidation of Steinzeug-Keramo in Calculation methods can be found in the respective chapters of the report. Information on the reporting threshold can be found in the chapter About this Report. Rounding differences may arise from the automatic processing of data.

4 Wienerberger Products: Production 2013 Homes built: 140,000 Roofs covered: 180,000 km pipes installed: 360,000 m² pavers layed: 11,300,000 Key Data on the Wienerberger Group Corporate Data ) Chg. in % Revenues in mill. 1, , , Operating EBITDA in mill EBIT in mill > 100 Profit after tax in mill Free Cash flow in mill Net debt in mill Gearing in % Ø Employees 11,893 13,060 13, Employees Chg. in % Accident frequency Training hours / employee Ø Training costs / employee in Share of women in % Share of women in senior management in % Share of women in administration in % Share of women in sales in % Turnover rate 2) in % Environmental Protection in Production 3) Chg. in % Energy consumption MWh 7,704,325 6,744,796 6,684,478-1 Specific energy consumption Index CO 2 emissions 4) in to na na 1,861,353 na Specific CO 2 emissions 4) Index na na 100 na Waste in to 132, , , Water consumption in mill. m³ Water from public supply networks in % Sustainable Products Chg. in % Revenues generated by innovative products in % Corporate Social Responsibility Chg. in % Strike days in man-days na WISBA countries na na 3 na Stakeholder Management Chg. in % Ceramic plants that have a stakeholder dialogue in place in % na na ) The data were adjusted to reflect a change in accounting policies. 2) Excluding North America (analysis limited by special local legal regulations) 3) In the Clay Building Materials Europe Division, more precise data recording led to changes in specific indicators. The data from 2010 to 2013 were adjusted accordingly. 4) The emissions in 2013 will be used as the new calculation base for future development; the data from earlier years also for Wienerberger are not comparable because of the changeover to the third EU emission trading period in na not available (data has not been collected or is not comparable) We have set goals for these key data that we want to reach by 2015 or A summary of all goals can be found on the previous page. The individual goals are described in detail in the respective chapter of the report.

5 We create it.

6 Contents Introduction by the Chief Executive Officer Wienerberger at a Glance Sustainability at Wienerberger Employees Production 4 6 Company Profile 6 The Wienerberger 9 Wienerberger Principles of Sustainability History 6 Strategy and Business Model 7 The Year 2013 in Review 8 Corporate Governance at Wienerberger 10 The Sustainable Management Cycle 11 Processes and Instruments for Sustainable Development 12 Best Practice Examples of Sustainable Human Resources Management 14 Principles of Sustainable Human Resources Management 14 Processes and Instruments for Sustainable Human Resources Management 15 Employment Trends 17 Diversity and Equal Opportunity 19 Occupational Safety and Health 24 Training and Personnel Development 26 Remuneration 26 Industrial Relations 28 Best Practice Examples of Sustainable Production 30 Principles of Sustainable Production 30 Processes and Instruments for Sustainable Production 31 Key Data on Sustainable Production 36 Production of Ceramic Products, Plastic Pipes and Concrete Pavers 36 Future Measures in the Wienerberger Group

7 Wienerberger AG Sustainability Update 2013 Contents Products Corporate Social Responsibility Stakeholder Management About this Report 38 Best Practice Examples of Sustainable Products 38 Principles and Goals 40 Best Practice Examples of Corporate Social Responsibility 40 Principles and Goals 42 Best Practice Examples of Stakeholder Management 42 Principles and Goals 45 Report Profile 46 GRI Index 48 Auditor s Report Imprint Our Corporate Culture What we strive for Supplying outstanding sustainable building material solutions for a better quality of life. What we work for We develop energy-efficient, resourceefficient and sustainable building material solutions that set industry standards. We are committed to continuous improvement and technological leadership to create the highest added value for our customers. Quick Response (QR) Codes You will find QR codes at selected points in this sustainability update. Scan the codes with your smartphone and visit the linked websites for more detailed information. What we stand for Expertise Passion Integrity and Respect Customer Orientation Entrepreneurship Quality Responsibility

8 Introduction by the Chief Executive Officer What we strive for Dear Ladies and Gentlemen, Sustainability is what we strive for. It is the central element of our strategy. Wienerberger develops energy-efficient, resource-efficient and sustainable building material solutions that set industry standards. We are committed to continuous improvement and technological leadership to create the highest added value for all our stakeholders. For us, sustainability is an integrated process. Sustainability for the company and our customers With a view toward today s major challenges which range from climate change and the necessary increase of more efficient use of resources and energy to the related necessary actions we are following a sustainable strategy for our company and our customers: For our company: The consumption of energy and raw materials in our plants leads to greenhouse gas emissions. Our Environmental Action Plan is focused on the efficient use of resources in production, an increase in the share of renewable energy sources and the recycling of our products. For our customers: We provide sustainable, durable and innovative building material and infrastructure solutions that improve the quality of life and make energy-efficient building and living as well as sustainable infrastructure possible. Progress report on our 2012 sustainability program Our strategy was reinforced with the definition of specific goals and timelines in our 2012 sustainability report ( What we strive for ). This sustainability update draws an interim balance and shows whether we are on the right course to reach our goals. Every employee counts We can only meet these sustainability goals when sustainability remains an integral part of our corporate culture. In this context, every employee counts. These men and women are our sustainability ambassadors to the outside world and our most important resource. That is why they also come first in our sustainability program. Their health and safety have top priority. Previously implemented measures have allowed us to cut the accident frequency by half since This year we will continue our efforts to further improve occupational safety for our employees. Equal opportunity and the advancement of women Another important focus is to increase the share of women in management, administration and sales in the Wienerberger Group. The success of these efforts was reflected in an increase in the share of women in administrative functions to over 45% in 2013, which means we have already met our target for On December 10, 2013 the Supervisory Board set an extremely positive sign for the Group s goal to advance women in managerial positions by unanimously electing Regina Prehofer as its chairwoman. Production in harmony with the environment The goals defined in the Environmental Action Plan for the reduction of energy consumption and CO 2 emissions in ceramic production were very ambitious because of the significant progress made in recent years. All the same, we reduced specific energy consumption by further 10% below the 2010 reference year. 4

9 Wienerberger AG Sustainability Update 2013 XXXXXX XXXXX Heimo Scheuch, Chief Executive Officer of Wienerberger AG The Cradle-to-Cradle certification for all of Steinzeug-Keramo s products shows that our ceramic pipes meet the highest ecological standards and are also 100% recyclable. As the only supplier in the pipe industry with life cycle certification, Steinzeug-Keramo is a leader for highquality ecological municipal water supply and wastewater disposal. Sustainable products for municipal infrastructure We develop innovative products for buildings with a positive CO 2 and energy balance. The successful positioning of Wienerberger s mineral wool-filled clay block on the German market in recent years was followed in 2013 by further investments to create additional production capacity in Austria and the Czech Republic. With its excellent thermal insulating properties, this clay block supports the construction of energy-positive houses without additional exterior insulation and, at the same time, provides maximum safety and a healthy indoor climate for residents. Sustainable products for builders and residents In view of the global challenges posed not only by climate change, but also by urbanization, demographic shifts and globalization, we must continuously ask ourselves whether our strategy is still correct or must be revised. We have therefore established a sustainability advisory board with external experts as a platform for discussing current issues and their influence on the Group s development. Expansion of our dialogue with stakeholders We see sustainability as a continuous process. Consequently, I want to focus not only on the past, but also look ahead to the future. Our plans for 2014 include investments to further reduce specific energy consumption in facing brick production. We also plan to continue our dialogue with interest groups at our ceramic plants to better understand what our stakeholders expect from us. I look to the future with optimism and invite you to join us on this course. Looking ahead to the future 5

10 Wienerberger at a Glance Wienerberger: an international supplier of building material and infrastructure solutions Company Profile Wienerberger AG is an international supplier of building material and infrastructure solutions based in Vienna. We produce bricks for walls, facades and roofs, pipe systems made of plastic and ceramics, and pavers made of concrete and clay. Wienerberger operates 214 plants in 30 countries and currently has a workforce of over 13,000. with leading positions in bricks, roof tiles, pipe systems and concrete pavers The Clay Building Materials Division comprises the clay block, facing brick and roof tile product groups. Wienerberger is the world s largest producer of clay blocks, number one in facing bricks in Europe and the USA as well as the market leader for roof tiles in Europe. The Pipes & Pavers Division covers our activities in the areas of plastic pipes, ceramic pipes and concrete pavers. Wienerberger is one of the leading suppliers of plastic pipes and ceramic pipes in Europe and concrete pavers in Central-East Europe. From an Austrian brick manufacturer The Wienerberger History Wienerberger was founded in 1819 by Alois Miesbach on the Wienerberg in Vienna. This Austrian brick manufacturer became one of the first companies to trade on the Vienna Stock Exchange with its initial public offering in The first internationalization step was taken in 1986 with the acquisition of the German Oltmanns Group and continued with successful expansion into Eastern Europe, France and the Benelux countries during the 1990s. The founding of Pipelife (plastic pipes) as a joint venture and the development of the Group s ceramic pipe and concrete paver activities also occurred during this time. to a global player Further growth steps in Europe were followed by Wienerberger s development into a global player with the takeover of General Shale in the USA during Another key strategic milestone was set in 2003 with the Group s entry into the roofing systems market through the acquisition of Koramic and the steady expansion of this business in the following years. and an international system provider of building materials With the full takeover of Semmelrock (2010), Steinzeug-Keramo (2011) and the plastic pipe producer Pipelife (2012), Wienerberger completed its transformation into an international system provider of building materials that combines the Clay Building Materials and Pipes & Pavers businesses. Sustainable creation of added value as top corporate goal Strategy and Business Model The goal of our business model is to create and maintain a sustainable increase in the value of the company in accordance with ecological, social and economic principles. Accordingly, we want to create added value for all our stakeholders. Extensive structural adjustments completed Wienerberger has created a strong and healthy foundation for organic growth through extensive restructuring measures and targeted growth steps over the past five years. In order to bring the corporate structure in line with the market, fixed costs were cut by approx. 250 million and working capital as a percentage of revenues was substantially reduced. In addition to a restrictive investment policy, we are also continuing to focus on our internal target of less than 2.5 for the ratio of net debt to operating EBITDA at year-end. 6

11 Wienerberger AG Sustainability Update 2013 Wienerberger at a Glance Profile History Strategy and Business Model 2013 in Review Targeted takeovers led to the development of new business areas and expanded the Group s industrial base, while additional strategic flexibility was created through the gradual adjustment of the investment portfolio. These steps play an important role in reducing our dependence on new residential construction and expanding our activities in the areas of renovation and infrastructure. Expansion of industrial base through new businesses We are now a market-oriented company with a healthy corporate base and a focus on organic growth. Our customers are the focal point of our actions we want to create added value for them with innovative, high-quality and use-oriented system solutions. Comprehensive advising and service, starting with the project planning stage, are an important part of our improved sales activities. In this way, we develop long-standing customer relationships and can integrate our detailed understanding of our customers needs in the development of new products and services. The strategy for our core business is designed to establish and extend leading positions in all markets in which we are present. Clear focus on organic growth Wienerberger operates through the following divisions: Clay Building Materials Europe (clay blocks, facing bricks and roof tiles), Pipes & Pavers Europe (plastic pipes, ceramic pipes and concrete pavers) and North America (facing bricks, plastic pipes and concrete products). These businesses are managed by region on a divisional basis. The Wienerberger Group has a medium- to long-term EBITDA potential of approx. 600 million across all divisions, once the new residential construction market recovers. Wienerberger Group: EBITDA potential of 600 million The Year 2013 in Review Wienerberger increased revenues by 13% to 2,662.9 million and operating EBITDA by 9% to million in This sound development was recorded in spite of an ongoing difficult market environment during the past year. In particular, business in Europe was negatively affected by unusually severe weather during the first six months and by general weakness in the construction industry throughout the entire year. Although this region is responsible for roughly 90% of revenues, Wienerberger generated a solid increase in revenues and earnings. This growth was driven, above all, by a positive contribution from the pipe business, which benefited from international project orders for plastic pipes, and by good development in North America. Improvement in operating results despite difficult environment In spite of the difficult environment, Wienerberger successfully expanded its market positions in a number of countries during The restructuring measures launched in 2012 were implemented as planned, and net debt was substantially reduced through financial discipline and strict working capital management. The ratio of net debt to operating EBITDA equaled two years at year-end, which is clearly lower than the internal goal of two and one-half years. Even if the bottom line shows a small loss of 7.8 million for 2013, free cash flow of 92.9 million underscores the strength of Wienerberger s business model. Restructuring measures implemented as planned and ambitious financial goals met 7

12 Increase in workforce during 2013 The average number of employees in the Wienerberger Group rose to 13,787 during the reporting year. The rise in wages, salaries and employee benefits is explained by the growth in the workforce and compensation increases. Dividend and hybrid bond coupon lead to payments of 46.3 million A dividend of 0.12 per share, or a total of 13.8 million, was paid in 2013 from profit recorded for the 2012 financial year. As in the previous years, the payment of the hybrid coupon amounted to 32.5 million. Net debt was reduced by 10% year-on-year to million, which resulted in gearing of only 24. Payments of 38.7 million to the public sector Payments to the public sector, which represent taxes on income and other taxes (excluding deferred taxes) rose to 38.7 million in 2013 due to the improvement in earnings and the resulting increase in tax expense. Cash flows to stakeholders in mill ) Change in % Revenues and other operating income 1, , , Operating costs 2) -1, , , Employee wages, salaries and benefits 3) Payments to providers of capital (owners) 4) Payments to providers of capital (creditors) Payments to public authorities 5) ) The data were adjusted to reflect a change in accounting policy 2) Production costs plus selling, administrative and other operating expenses; excluding wages, salaries, benefits, depreciation and amortization as well as non-income based taxes 3) Excluding temporary personnel and company automobiles; including employee-related restructuring costs 4) The hybrid coupon and dividend are shown in the year in which payment was made 5) Excluding deferred taxes The Wienerberger Group received public financial subsidies of 1.1 million in 2013 (individual amounts over 50,000 are recorded). The major payments represent investments in product research and development ( 0.5 million), environmental protection and occupational safety ( 0.3 million) and other financial subsidies ( 0.3 million). Implementation of strict principles for good management and transparency Corporate Governance at Wienerberger Strict principles of good management and transparency as well as the continuous development of an efficient control system form the basis for corporate governance at Wienerberger. In 2002 we were one of the first companies to announce our support for the Austrian Corporate Governance Code, a voluntary framework for corporate management and control that exceeds legal requirements. We are committed to compliance with the code and met all rules and recommendations in Our actions are also based on guidelines that include a compliance code to prevent insider trading and a code of conduct for lobbying activities. 8

13 Wienerberger AG Sustainability Update 2013 Wienerberger at a Glance Corporate Governance Sustainability at Wienerberger Principles of Sustainability Sustainability at Wienerberger Wienerberger Principles of Sustainability Sustainability represents an integral part of Wienerberger s corporate strategy and corporate culture. It is found at every stage of the value creation process. Our sustainable products and system solutions form the focal point of our sustainability strategy. Wienerberger produces and sells a wide variety of building material products and solutions that are used for very different applications. One of our most important goals is to create added value for our customers through our products and solutions with their long service life, technical properties, low impact on the environment over the entire lifecycle and economy. In general, we see sustainability as a function between the service life of a product and its impact on the environment during production, transport, installation, use and disposal: Sustainability is integrated in the corporate strategy Sustainability strategy focused on products and system solutions SusTain ability = Service Life Impact on the Environment The sustainability of a product increases with its service life. Increasing the service life of a product reduces the use of resources and the effects on the environment over the entire lifecycle. In this same way, a reduction in the use of resources based on a constant lifecycle makes products more sustainable. Sustainability of a product increases with its service life This chapter provides an overview of Wienerberger s principles of sustainable management as described in the 2012 sustainability report, which deals in depth with these principles. Detailed information on the principles applicable to employees, production, products, stakeholder management and corporate social responsibility are presented in the following chapters. Additional facts and figures on the principles of sustainable management at Wienerberger and the milestones in our sustainable development can be found in the 2012 sustainability report and on the Wienerberger website. An important milestone in 2013 was the decision by the Sustainability Steering Committee to establish an independent external sustainability advisory board. Principles of sustainable management 9

14 Sustainability is an integrated process The Sustainable Management Cycle At Wienerberger, sustainability is embedded in all stages of the value creation process. We see sustainability as an integrated process that creates lasting value for all our stakeholders. 1 / Development of employees 5 / Added value for our stakeholders 2 / Environmental protection in production 4 / Responsibility for society 3 / Sustainable products Sustainability begins with our employees Sustainability begins with our employees. We place high value on their health, advancement and development because our success is based on the commitment of a workforce that believes in sustainability and acts as entrepreneurs. Our focus for production lies on the best possible conservation of resources and the recycling of materials. We produce innovative, long-lasting products and system solutions for residential construction and infrastructure that create sustainable value. In accordance with our donation guideline, we provide in-kind support for the needy with our products and also give young people an opportunity for training in sustainable construction. These measures demonstrate our commitment to sustainability and to society. This creates sustainable added value for our stakeholders, which completes the cycle. 10

15 Wienerberger AG Sustainability Update 2013 Sustainability at Wienerberger Sustainable Management Cycle Processes and Instruments Processes and Instruments for Sustainable Development A Sustainability Steering Committee (SSC) [formerly, the Sustainable Development Steering Committee (SDSC)] is responsible for the definition of Wienerberger s sustainability strategy, key indicators according to the Global Reporting Initiative (GRI) and goals for sustainable development. This committee consults regularly and meets at least twice each year. The Chief Executive Officer of Wienerberger AG, Heimo Scheuch, also heads the SSC, which ensures that sustainability always has top priority for the company. The SSC discusses progress on the sustainability process and options for further actions. It also defines goals and measures for implementation throughout the Group. In order to make our commitment to these goals transparent, we published them for the first time in our 2012 sustainability report. CEO also heads the Sustainability Steering Committee Wienerberger has strengthened its professional approach to sustainability management in recent years through integration at all organizational levels and the clear definition of responsibilities. In addition to sustainability officers at the Group and business unit levels, each country organization has designated a staff member who is responsible for sustainability and the implementation of the respective Group guidelines and programs. These local staff members report directly to the business unit sustainability officer. Sustainability management is anchored in all organizational levels The Wienerberger sustainability report transforms our commitment into an obligation. It is based on the standards defined by GRI and represents an integral part of a continuous process. All levels of management and our employees have taken on shared responsibility for the implementation of measures to support a continuous improvement in sustainability at Wienerberger. Sustainability report as part of a continuous process We publish a full sustainability report every two years because our sustainability principles generally remain constant. In the interim periods, we issue an update that presents the latest facts and figures as well as developments in specific areas. Wienerberger uses this report and update to present our progress in the area of sustainable development. This sustainability report was released by the SSC and provides information on developments during 2013 in the areas of employees, production, products, corporate social responsibility and stakeholder management. Sustainability principles are long-term Internal audit, a staff department that reports directly to the Managing Board, reviews individual aspects of the sustainability program as part of its operational audits and reports the results to the Managing and Supervisory Boards. These audits are based on an annual schedule and risk assessment that are approved by the Managing Board and coordinated with the Audit Committee of the Supervisory Board. Monitoring the internal control system in the accounting process is one of the most important responsibilities of internal audit. Another duty is the review of compliance with legal regulations and internal guidelines, for example the guidelines on business gifts and competition law. Internal audit also evaluates compliance with Wienerberger safety standards for employees and with selected areas of the Austrian Corporate Governance Code, whereby the latter is mainly a focus of activities by the external auditor. Internal audit reviews individual aspects of the sustainability program 11

16 Employees Switzerland Support for on-the-job health At ZZ Wancor, our brick subsidiary in Switzerland, a special committee is working continuously on measures to improve occupational safety for employees. A pilot project at one location involves mandatory protective glasses for all plant employees, including special optical glasses for employees with visual problems. The costs for these glasses are carried by ZZ Wancor, and the program will be extended to all plants in Switzerland if it is successful. In addition to occupational safety, the company has also implemented a range of measures to actively support employees health. Mondays have been designated as health days, and the employees are offered free fruit from the local region as well as information on the related positive health effects. Voluntary blood pressure and blood sugar measurements are also available. Corporate Values At Wienerberger we live our cor porate culture Quality, passion, customer orientation, expertise, integrity and respect, entrepreneurship, responsibility: these are the shared values that reflect our corporate culture. They were redefined in 2013 together with top management based on a critical analysis of the existing values and the Group s new strategic orientation. We see our corporate culture as a central success factor for Wienerberger s further development and have therefore implemented extensive measures to communicate these values to all employees in the Group. The managing directors of the business units introduced the newly defined values and explained their importance at their annual strategy presentations. This subject was also presented to and discussed by the local HR managers at our yearly international HR network meeting. Individual steps were also taken to fill these new corporate values with life. For example, poster campaigns were launched at Wienerberger plants and office locations to illustrate our shared values in action. Entrepreneurship is one important element of our innovation program ideas & more : Employees can submit their suggestions for improving work processes or optimizing products. An award is presented for the best idea submitted each month, with additional recognition following through Group-wide announcements. This and similar actions form a focal point of communications in our corporate newsletter and in the Intranet to achieve maximum visibility. That is how we work to demonstrate and actively live our values. Stefan Steinlechner Head of Production WZI Austria, on safety in production: In addition to the many demands of routine production, my top priority is to make sure that each and every one of our employees goes home safely at the end of the day. The safety measures implemented in the plant are an important part of our efforts in this area. Another central element is the continuous inclusion of all our employees in the safety process. Here our objective is to create a greater awareness that we should all work to keep safe and also watch out for our colleagues. 12

17 General Shale Blood pressure monitors at all locations Our US subsidiary General Shale is also active in the promotion of employees health. In 2013 blood pressure measurement instruments were installed in all plants to give employees an opportunity to check their blood pressure on a regular basis. These measurements are part of the company s voluntary health protection program and are, of course, free of charge. We were particularly happy to hear that this initiative was even able to prevent a threatening heart attack last year. One of the employees had been checking his blood pressure regularly, and increased levels led him to see a doctor. Together with the doctor s instructions and regular on-the-job measurement, his blood pressure is now under control. Wienerberger AG Sustainability Update 2013 Succession Management Long-term succession management for key positions protects Wienerberger s success In order to ensure continuity in positions that are critical for Wienerberger s success, we further professionalized our succession planning in The first step involved the designation of key positions in all business units and the preparation of succession concepts in a series of meetings with the Managing Board, business unit managers and Human Resources Department. We also identified internal talents and high-potentials who are possible candidates for these key positions in the future. The next step included the identification and analysis of the additional skills and experience required by these men and women to successfully take on senior management positions. A job profile was also prepared for plant managers, which defines the requirements for these positions in the respective business units. The collection of data across all business units is now in process to define the training requirements for succession planning in these key functions at the plant level. Through this structured succession planning and specially designed measures for the advancement of the employees, Wienerberger is working to ensure its sustainable success. Employees Best Practice Examples of Sustainable Human Resources Management 13

18 Employees Sustainable human resources management through creation of necessary framework Principles of Sustainable Human Resources Management Our employees are the basis of our success and a key factor for the successful development of our company. Wienerberger is well aware of its responsibility to its employees and is committed to sustainable human resources (HR) management. Specifically, that means the creation of the necessary requirements and optimal conditions for our employees in the areas of diversity and equal opportunity, occupational safety and health, training and a motivating working environment. Our human resources management is based on the following sustainability principles, which apply without limitation throughout the entire Group: Equal opportunity independent of age, gender, culture, religion and origin Healthy and safe workplaces Advancement and development of each employee High readiness to act and personal responsibility Entrepreneurial thinking and actions Wienerberger Social Charter guarantees fair working conditions With the signing of a social charter in 2001, Wienerberger formally confirmed its intention to work toward employment and working conditions in all Group companies that meet or exceed national law or collective bargaining agreements. The company is also committed to compliance with the recommendations of the International Labor Organization (ILO), which include the prohibition of child labor and discrimination, respect for the freedom of association and the right to collective negotiations as well as the provision of safe working conditions. Principles of human resources management QR Code This chapter provides an update of the information on employees that is presented in the 2012 sustainability report, which includes more detailed facts and figures on the general principles of Wienerberger human resources management. The 2012 sustainability report can be reviewed on the Wienerberger website. Employee development and counseling as central responsibility of human resources Processes and Instruments for Sustainable Human Resources Management The focal point of human resources management at Wienerberger is the counseling and development of all employees in line with the Group s strategic goals. The responsibilities of human resources include employee recruiting, international know-how transfer and exchange, talent management and succession planning, training and education platforms, appropriate compensation and bonus systems, occupational safety, internal communication and industrial relations as well as the socially responsible reduction of jobs in connection with restructuring programs. 14

19 Wienerberger AG Sustainability Update 2013 Employees Principles Processes and Instruments Employment Trends The following HR instruments support sustainable human resources management at Wienerberger: HR instruments for sustainable human resources management Management Review: Annual appraisal of senior management and succession planning for positions in senior management to ensure structured and transparent career and succession planning. The management database covered roughly 90 men and women in Safety Health and Education (SHE) Reporting: Quarterly data on occupational safety and health and on training to support specific measures and management development. wienerberger Safety Initiative: Mandatory reporting on safety standards to ensure maximum occupational safety in all Wienerberger plants. The following statistics include Steinzeug-Keramo beginning in 2011 and Pipelife for the full year starting in A different method was used to calculate the number of employees, and explanations are provided in footnotes to the relevant sections Employment Trends Number of employees The average number of employees in the Wienerberger Group increased 6% year-on-year to 13,787 in The Clay Building Materials Europe Division (CBME) reported workforce reductions due to the ongoing weakness in the economic environment, while the number of employees in the Pipes & Pavers Europe Division rose by 33%. This increase is explained, above all, by the initial consolidation of Pipelife for 12 months in 2013 (in 2012 Pipelife was only included starting in June). In North America, the number of employees rose by 14% due to the improvement in business. 6% increase in the workforce Ø Employees by operating segment Full-time equivalent ) 2013 Chg. in % CBME Western Europe 6,420 6,227 5,940-5 CBME Eastern Europe 2,618 2,516 2,383-5 CBME 9,038 8,743 8,323-5 Pipes & Pavers Western Europe 470 1,604 1, Pipes & Pavers Eastern Europe 1,052 1,440 2, Pipes & Pavers Europe 1,522 3,044 4, North America 1,127 1,064 1, Holding & Others Wienerberger Group 11,893 13,060 13, ) Pipelife is included as of June

20 Higher number of employees in all functional areas The 12-month effect from the Pipelife consolidation led to an increase in the number of employees in all functional areas during Ø Employees by functional area Full-time equivalent ) 2013 Chg. in % Production 8,048 8,673 9, Administration 980 1,142 1, Sales 2) 2,865 3,245 3, Total 11,893 13,060 13, ) Pipelife is included as of June ) Employees in sales, marketing and warehousing Of the total workforce employed by the Wienerberger Group as of December 31, 2013, 93% were full-time and 3% part-time. Temporary employees and persons with limited employment contracts represented 4% of the total. Decline in Group-wide turnover rate Employee Turnover An analysis by operating segment shows the only increase in employee turnover in the CBME Western Europe Segment, with a slight rise from 7.8% in 2012 to 8.6% in The higher turnover in this segment is explained, above all, by the reduction in jobs due to restructuring. Employee turnover declined in all other operating segments, falling from 10.6% to 9.1% in The relatively high average length of service in the Wienerberger Group increased further to 13 years in We see this as a clear vote of confidence by employees in favor of their employer. Turnover rate by operating segment 1) in % CBME Western Europe CBME Eastern Europe CBME Pipes & Pavers Western Europe Pipes & Pavers Eastern Europe Pipes & Pavers Europe Holding & Others Total, excluding North America North America 2) ) Turnover rate: ratio of persons leaving the Wienerberger Group (termination by the employee or employer as well as mutually agreed terminations) to the average number of employees in permanent employment; excluding temporary workers as well as workers with limited contracts; persons who retire or are on official leave are not included. 2) Analysis limited by special local legal regulations 16

21 Wienerberger AG Sustainability Update 2013 Employees Employment Trends Diversity and Equal Opportunity A total of 1,087 employees left the Wienerberger Group in 2013 (excl. the North America Division), whereby the restructuring program led to the reduction of 303 jobs. The remaining 784 employees who left the Group included 648 men and 136 women. A classification by age shows the following results: 180 of these employees were under 30 years of age; the largest number (455) was recorded in the age group of 30 to 49 years; and 149 employees over 50 years left the company. 1,087 employees left the company in 2013 Diversity and Equal Opportunity The principles of sustainable human resources management at Wienerberger ensure that all employees have the same rights and opportunities independent of age, gender, culture, religion, origin and political views. Wienerberger does not tolerate any form of discrimination whatsoever. Since the start of data collection by local HR management on possible discrimination, no such incidents were reported. No reports of discrimination since start of data collection Gender Wienerberger traditionally has a high share of male employees because of its concentration on production (heavy industry). Special efforts are therefore in progress to increase the share of women, above all in non-production areas, e.g. administration, sales and management. Due to national laws and cultural differences, the North America Division is not included in these efforts or the goal defined below. In the Wienerberger Group s senior management, two resignations reduced the share of women from 8% in 2012 to 7% in The goal is to raise the share ofi women in senior management to 20% by In the administrative area, the goal toi increase the share of women to over 45% by 2020 has already been reached. Our plansi also call for an increase in the share of women in sales to 30% by 2020, whereby the share of women in this area declined slightly during As of December 31, 2013 the share of women in the Wienerberger workforce equaled 13.6%, compared with 13.7% at year-end One of our previously implemented measures involves preferential treatment for women in new appointments when candidates qualifications are identical. With a 46.6% share of women in administration, the goal for 2020 has already been met 2020 Share of women by function 1) in % Production Administration Sales 2) Total ) Temporary employees and persons with limited employment contracts are not included. 2) Employees in sales, marketing and warehousing Wienerberger s HR activities are also directed to supporting the work-life balance and offering flexible working models to create suitable opportunities for reintegration in the Group after parental leave. Work-life balance in focus of HR activities 17

22 Measures to support female employees in senior management and key positions One specific measure to increase the number of women in senior management and other key positions in the Wienerberger Group is, in a first step, to create suitable career paths for female employees. For example, the nomination process for the Ready4Excellence international training program for future talents places a special focus on the potential of female employees and gives them preference in the selection process when qualifications are equal. We also consider it particularly important to offer our female employees not only the same opportunities as their male colleagues, but also an attractive working environment. 56% of employees are between 30 and 49 years old Age The long average length of service with the company is also reflected in the age structure of our workforce. In % of the employees were between 30 and 49 years old, 10% were younger than 30 years and 34% were older than 50 years. We are particularly interested in the training and education of young people and in long-term succession management. In order to ensure continuity in positions that are critical for Wienerberger s success, we improved the processes for structured and systematic succession management and further professionalized our succession planning in The first step involved the designation of key positions in all business units and the preparation of succession concepts. We also identified internal talents and highpotentials who will be gradually developed over the coming years as successors for these key positions through specially designed training programs. This process will protect our ability to fill key management positions at the right time with the right people who share our values and corporate culture. Increased awareness for the importance of our corporate culture Corporate Culture The corporate culture plays an important role in the Wienerberger Group. It makes our shared values understandable and visible and forms the foundation for our organization. Through continuous communications and established practice, we want to anchor and implement these values even stronger in the Group. We are committed to the principles of sustainability, respect for other cultures and opinions and entrepreneurial thinking and actions. Our human resources policies are also centered on these guidelines. The selection and development of employees on the basis of our shared values quality, passion, customer orientation, expertise, integrity and respect, entrepreneurship, responsibility is a focus of our efforts and was continued with various measures in In order to create a greater awareness for the importance of our corporate culture, we worked intensively with and on our values at all levels of the company during the reporting year. One focal point was the presentation of best practice examples to show how employees live our values in their day-to-day work. These examples were presented over various communication channels, including the Intranet, internal newsletters, posters and bulletin board announcements. The corporate values were also made available to the business units as an integral element for use in presentations. 18

23 Wienerberger AG Sustainability Update 2013 Employees Diversity and Equal Opportunity Occupational Safety and Health Cultural Diversity As a multinational corporation, Wienerberger believes in respect for local cultures and the support of diversity. We see regionally recruited teams as an important success factor. Our human resources planning is therefore directed to the employment of local workers, plant supervisors and managers to ensure that the Group viewpoint also includes a focus on local markets and regions. Job rotation strengthens the internationality of Group management and allows for better insight and new perspectives in many areas. This cultural diversity and these decentralized structures have a positive influence on Wienerberger s corporate cultural identity. Corporate cultural identity strengthened by regional appointments Occupational Safety and Health Wienerberger acknowledges its responsibility to provide safe working conditions and to protect the health of employees. Normal capex and standard maintenance activities in our plants are always carried out in line with the health and safety needs of our employees. The Wienerberger safety initiative was launched in 2010 to implement Group-wide safety standards and thereby reduce accidents. Investments in the form of protective equipment were the first step. The focus has now shifted to creating greater awareness for safety among all employees as a means of preventing accidents through a change in working habits over the long-term. Based on the safety goals defined by the Group, specific targets and timetables for implementation were established at the plant level in the individual regions. These targets are set in agreement with the respective plant managers and represent an element of variable remuneration. The Wienerberger safety standards also call for the installation of an occupational safety committee, the assignment of responsibilities and the introduction of comprehensive training. A toolbox of successfully implemented best practice examples is available to help the plant managers select the optimal measures to reach their goals. Safety initiative since 2010 with focus on high safety standards SHE reporting records all accidents that lead to the loss of at least one working day. The most common cause of accidents is carelessness. The commitment of local management supported the fast implementation of recommended measures and led to a significant reduction in accidents in nearly all operating segments. As a result of this commitment to occupational health and safety, the Group-wide accident rate has been cut in half since Our goal is to reduce thei frequency of accidents to less than 10 per million hours worked by Accident frequency for Wienerberger Group cut in half versus

24 Accident frequency by operating segment 1) CBME Western Europe CBME Eastern Europe CBME Pipes & Pavers Western Europe Pipes & Pavers Eastern Europe Pipes & Pavers Europe North America Holding & Others Wienerberger Group ) Accident frequency: number of work accidents / number of hours worked x 1,000,000; including temporary employees and persons with limited employment contracts Accident frequency in Pipes & Pavers Western Europe cut by 50% from 2012 to 2013 The CBME Western Europe countries of France, Italy, Netherlands and Switzerland recorded a particularly sharp drop in accidents. In the Pipes & Pavers Western Europe Segment, the accident frequency was reduced by more than half during the reporting year. This improvement resulted from the introduction of strict safety management measures and ongoing training in the plants. The Holding and Others Division includes Wienerberger s brick activities in India, where the accident frequency was higher than the previous year despite strict safety precautions. Decline in accident severity throughout the Wienerberger Group The severity of accidents, which is measured as the number of days lost per million hours worked, fell from 308 in 2012 to 301 in 2013 for the entire Wienerberger Group. The CBME Western Europe countries of Finland, Italy, Switzerland and Netherlands, recorded a significant decline not only in the frequency but also in the severity of accidents. The accident frequency rate for the entire CBME Western Europe Segment was lower in 2013, but the severity of accidents unfortunately increased because individual incidents in some countries led to a higher number of days lost. Sharp drop in accident severity for Pipes & Pavers Western Europe The implementation of the above-mentioned safety management measures also led to a substantial reduction in accident severity in the Pipes & Pavers Western Europe Segment. In the Pipes & Pavers Eastern Europe Segment, individual accidents led to a higher number of days lost. No fatal accidents in the Wienerberger Group There were no fatal work-related accidents in the Wienerberger Group during the reporting year. 20

25 Wienerberger AG Sustainability Update 2013 Employees Occupational Safety and Health Accident severity by operating segment 1) CBME Western Europe CBME Eastern Europe CBME Pipes & Pavers Western Europe Pipes & Pavers Eastern Europe Pipes & Pavers Europe North America Holding & Others Wienerberger Group ) Severity of accidents: accident-related days lost / number of hours worked x 1,000,000; including temporary employees and persons with limited employment contracts Pipelife has followed a zero accident strategy for many years. One of the most important measures to reach this goal is STOP (Safety Training Observation Program), a program that supports accident prevention. Employees use STOP cards to identify hazards and report occupational safety issues to the responsible managers. The entire workforce is therefore actively involved in eliminating potential dangers. These measures are intended to sustainably improve working conditions and reduce the frequency of accidents, while also creating a better awareness among employees for safe behavior. Pipelife remained accident-free in 19 countries during Zero accidents for Pipelife in 19 countries Semmelrock launched a new safety program Safety at Semmelrock during the reporting year. Work on the first goals started before the official kick-off and included, above all, the implementation of the AIRS reporting system ( Accident Investigation Report Semmelrock ) to centrally document, analyze and administer all accidents and incidents. The accident frequency rate at Semmelrock was reduced by 10% in % decline in accident frequency with Safety at Semmelrock Steinzeug-Keramo increased its investments in occupational safety and health during the reporting year. Safety instructions that are specifically designed for each workplace as well as an expanded offering of training courses on occupational safety and accident prevention led to a significant decline in accidents: the accident frequency rate fell by an impressive 64% in % decline in accident frequency at Steinzeug- Keramo In addition to regular physical examinations and vaccination campaigns, Wienerberger employees can call on company medical staff and arrange for ergonomic workplace analyses. Employee fitness is also supported, among others with reduced fees for health club memberships and special exercise courses to prevent vertebral problems. For example, events and outings for employees in Austria are frequently connected with sporting activities. Support for health protection and fitness in the Wienerberger Group 21

26 Average of 9.7 sick-leave days per employee All segments reported a decline in the average number of sick-leave days during At the Group level (excluding North America), the number of sick-leave days declined from 10.6 in 2012 to 9.7 in Sick-leave days per employee by operating segment 1) CBME Western Europe CBME Eastern Europe CBME Pipes & Pavers Western Europe Pipes & Pavers Eastern Europe Pipes & Pavers Europe Holding & Others Total, excluding North America North America 2) ) Including temporary employees as well as persons with limited employment contracts 2) Analysis limited by special local legal regulations (on sick-leave days) Protection against respirable crystalline silica Protection against Respirable Crystalline Silica The EU has collected comprehensive data on respirable crystalline silica from the involved branches in all member states since This survey is conducted every two years through NEPSI (Negotiation Platform on Silica), a shared online platform. The NEPSI system collects data, among others, on potential dangers to employees, health controls, training, the implementation of organizational measures, the distribution and use of protective equipment and technical measures such as the enclosure of involved production lines. The latest survey was conducted in 2013 over the NEPSI portal and covered the relevant data in all involved plants, including Wienerberger, in the European Union. First-internal Group-wide survey with standardized query system 2020 Wienerberger carried out its first internal survey with a standardized query system in 2013, which is designed to further improve transparency at the Group level. As announced in the last sustainability report, this analysis also covers the plants in Norway, the USA and Steinzeug- Keramo. The goal to reach a coverage ratio of over 95% by 2020 at the Group-level wasi met in Goal for 2020 to expand respirable crystalline silica measurement already met in 2013 The core indicators for respirable crystalline silica in the Clay Building Materials Europe Division show an increase in the share of employees who are potentially exposed to respirable crystalline silica since In all other core indicators, Wienerberger registered further improvements for the protection of employees. For example, the share of potentially exposed employees covered by monitoring was raised to over 91% and the share covered by health controls increased to over 96%. New technical and organizational measures were also introduced to reduce the generation of respirable crystalline silica and thereby provide greater protection for employees. 22

27 Wienerberger AG Sustainability Update 2013 Employees Occupational Safety and Health Core indicators on respirable crystalline silica for CBME 1) in % ) Reported locations Employees potentially exposed to respirable crystalline silica Employees potentially exposed to respirable crystalline silica covered by exposure monitoring Employees potentially exposed to respirable crystalline silica covered by health surveillance protocol Employees potentially exposed to respirable crystalline silica covered by training Locations with technical measures to reduce generation/dispersion of respirable crystalline silica 3) Locations with organizational measures to reduce generation of respirable crystalline silica 3) Locations with distribution and use of personal protective equipment ) CBME: Clay Building Materials Europe Division 2) Norway and Switzerland included for the first time in ) This indicator was only collected for the locations covered by NEPSI; Norway and Switzerland are not included In 2013 data was collected for the first time from the CBME Division, Steinzeug-Keramo and plants in the North America Division at the Group level. The results show a positive picture because the share of potentially exposed employees covered by health examinations totaled 92.6%. Personal protective equipment was also distributed at all locations to provide employees with the best possible protection in this area. Data collected from CBME, Steinzeug- Keramo and North America plants Core indicators on respirable crystalline silica at the Group level 1) in % ) Employees potentially exposed to respirable crystalline silica 75.5 Employees potentially exposed to respirable crystalline silica covered by exposure monitoring 89.4 Employees potentially exposed to respirable crystalline silica covered by health surveillance protocol 92.6 Employees potentially exposed to respirable crystalline silica covered by training 89.8 Locations with technical measures to reduce generation/dispersion of respirable crystalline silica 3) 98.4 Locations with organizational measures to reduce generation of respirable crystalline silica 3) Locations with distribution and use of personal protective equipment ) CBME (excluding Russia), North America, Steinzeug-Keramo 2) North America and Steinzeug-Keramo included for the first time in ) This indicator was only collected for the locations covered by NEPSI; Norway and Switzerland are not included. 23

28 Training hours per employee remain constant at 12.8 Training and Personnel Development Training At Wienerberger, we believe in advancing and supporting our employees as well as creating a climate that encourages the cross-border exchange of knowledge. An average of 12.8 hours per employee was spent on training in This indicator includes both internal and external programs, but excludes on-the-job training. Pipes & Pavers Europe nearly double training hours The number of training hours per employee declined in the Clay Building Materials Europe Division following the end of the Sales Academy program in The Holding & Others Division recorded a substantial reduction in 2013 because part of the corporate headquarters training hours were reallocated to the Clay Building Materials Europe Division and the training program in India was concluded. The number of training hours in the Pipes & Pavers Europe Division nearly doubled due to initiatives like the Pipelife Business School and University L6S. In total, the number of training house in the Wienerberger Group remained constant in year-on-year comparison. Average training costs of 206 per employee The average training costs per employee equaled 206 in 2013, compared with 257 in This decline resulted from an increase in the internal training offering as well as a reduction in international training costs. Training hours per employee by operating segment 1) CBME Western Europe CBME Eastern Europe CBME Pipes & Pavers Western Europe Pipes & Pavers Eastern Europe Pipes & Pavers Europe North America Holding & Others Wienerberger Group ) Including internal and external training programs; based on headcount 24

29 Wienerberger AG Sustainability Update 2013 Employees Training and Personnel Development In 2013 Wienerberger implemented the following programs to advance and support employees and to encourage the cross-border exchange of knowledge: Programs to advance and support employees Sales Academy: This main goal of this campaign, which was launched by the Clay Building Materials Europe Division and concluded in 2013, was to strengthen and improve selling activities in the local organizations through the creation of a know-how network and the international exchange of ideas. Sales Academy to professionalize marketing and sales activities Wienerberger Engineering Academy: This modular internal training program for the Clay Building Materials Europe Division offers courses in various technical fields (basic module, the Engineering Academy Advanced and the Plant Manager Course). Engineering Academy: training and know-how exchange for engineering personnel Basic module: international know-how transfer by Wienerberger experts on raw materials, processing, drying and firing technology as well as quality analysis to engineering employees. Engineering Academy Advanced: platform for the exchange of information between experienced and younger engineers on strategic issues such as plant and process optimization as well as energy and cost efficiency. Plant Manager Course: general training for production managers with a focus on personal development as well as global know-how exchange and networking with respect to the optimization of production processes and basic financial management. Cross-divisional training through the Ready4Excellence program: four modules for international key people with content and instruments for the global professionalization and targeted implementation of the Wienerberger strategy. Other topics include communications and familiarization with the feedback philosophy to support personal growth and the continuous development of the corporate culture. Ready4Excellence: training and international know-how transfer Pipelife Business School: a one-year training program that includes modules on management, communications, project management, self-management and finance. Pipelife Business School Pipelife University L6S and the Pipeschool: the first is a training course for employees involved in the implementation of Lean Six Sigma, a well-known management system that is focused on the delivery of qualitatively faultless products and services that completely and profitably meet customers needs. The Pipeschool is an online learning platform that offers lessons on general Pipelife subjects, Pipelife products, 5S and visual management. Pipelife University and Pipeschool 25

30 Training and personnel development All Wienerberger training programs are designed to support the creation of networks and the international transfer of know-how. These programs help employees to develop in their specific fields and also support long-term succession management. Additional information on human resources management, training and personnel development at Wienerberger is provided in the 2012 sustainability report. This information is also available on the Wienerberger website. Income that provides a secure livelihood Remuneration The Wienerberger Social Charter states that employees are entitled to receive wages, salaries and benefits in line with the normal payment for similar jobs in similar branches or industrial sectors in the region where the work is performed and also states that this remuneration should be sufficient to provide for a secure livelihood. Our employees are paid at or above the legal minimum wage or the minimum income defined by applicable collective bargaining agreements. Group-wide guideline for design of local incentive systems A group-wide guideline forms the basis for local incentive systems. Local circumstances (e.g. government minimum support programs) are taken into account and the rules are adapted to meet the respective market conditions. In addition to company pension plans plus disability and health insurance, Wienerberger employees and managers are also covered by travel insurance. Remuneration model for top management Wienerberger places high value on the sustainable development of the company. Consequently, the remuneration system for our top management is based, among others, on the attainment of medium- and long-term corporate goals (long-term incentive (LTI) program). A new structure was introduced for the short-term variable remuneration component for top and senior management in These bonuses are now linked to operating profit and cash flow targets and paid out over two years. The one-year delayed payment of this component is tied to the repeated achievement of the goals in the following financial year. Variable remuneration is an important component for Wienerberger as a performance-oriented company. Measurable criteria link the bonus systems to specific targets for employees in their respective areas of responsibility, whereby these targets are also based on Group-wide goals. Wienerberger Social Charter Industrial Relations The Wienerberger Social Charter was signed in 2001 by the Managing Board of Wienerberger AG and the chairman of the European Employees Council in Strasburg to formally confirm the company s intent to comply with the relevant agreements and recommendations of the International Labor Organization (ILO). With this charter, Wienerberger demonstrates its global commitment, among others, to human rights, to sufficient remuneration, against excessive working hours, to permanent employment and to respect for the freedom of association and the right to collective negotiations. 26

31 Wienerberger AG Sustainability Update 2013 Employees Remuneration Industrial Relations The European Employees Council was founded in 2011 on the basis of the European Forum, a social partnership board. It addresses European issues such as strategy, investments, reorganization and rationalization measures. The goals of the European Employees Council are constructive social dialogue and the creation of networks for employees representation committees. Currently, 10 countries are represented by 27 delegates. The steering committee of the European Employees Council is headed by Gerhard Seban and includes five elected delegates from Austria, the Netherlands, Germany and Poland. The European Employees Council meets twice and its managing board at least twice per year. Appropriate adjustments to the European Employees Council are in progress to reflect the acquisition of Pipelife. European Employees Council since 2011 The most important objectives of the European Employees Council are to improve workplace conditions and health protection. Another concern is to reduce the physical burden for older employees as a result of the increasing retirement age by providing jobs that require less physical labor. The European Employees Council also works to achieve fair and just remuneration. Improvement of workplaces and health protection In Austria, employees at all locations are represented by works councils. A central employees council that covers all Wienerberger companies was established in Austria during November It currently has eight members and is headed by Gerhard Seban. The central employees council meets at least four times each year or more frequently as required. Similar structures can be found in other European countries. Several employee representatives also serve as members of the Wienerberger Supervisory Board based on legal regulations in Austria and are therefore closely involved in the strategic development of the Wienerberger Group. National employees councils based on Austrian example Different regulations apply to employees in Europe, including collective bargaining agreements, laws and directives, union contracts and company or individual employment agreements. All employee representatives of Wienerberger AG are located in countries that recognize the right of employees to free assembly and collective negotiations. Company agreements, collective agreements or at least legal requirements 27

32 Production Pipelife Responsible handling of resources In 2013 Pipelife launched a number of projects to further improve the efficient use of resources. A new heat exchanger was installed at a Norwegian plant, which not only requires less energy to cool the pipes during production but also uses substantially less water. At Pipelife s subsidiary in Poland, a project was started to reduce energy consumption by recovering the heat released by the production process and recycling it to heat the production halls. This will also help to save energy in the future. Simple measures that brought significant energy savings for example, the insulation of production machines were also implemented at other Pipelife plants. Plans now call for the expansion and roll out of these and other similar projects throughout the company as part of a structured optimization program. Steinzeug-Keramo in Bad Schmiedeberg A prime example of energy efficiency Our colleagues at the Steinzeug-Keramo plant in Bad Schmiedeberg have proven that small, targeted optimization steps can also lead to major energy and cost savings in the production process. For example, the tunnel kilns were energetically optimized to reduce CO 2 emissions and energy consumption. The improvement of heat and airflow management in the kilns led to a significant reduction in energy losses through exhaust gas. The energy released when the pipes are cooled is now recovered and used in the drying process. Comparatively low investments, for example, in air pipelines and ventilators cut CO 2 emissions by 13% and also led to a noticeable reduction in energy costs. 28

33 Wienerberger AG Sustainability Update 2013 Production Best Practice Examples of Sustainable Production Sonja Böttcher Head of Production in Bad Schmiedeberg, on the success of these energy efficiency improvement projects This success is a direct result of our employees contributions and their strong commitment. We want to continue this course in the future and look forward to new ideas and further optimization. Netherlands 400 hectares for protected animals and plants Together with a number of NGOs, our brick subsidiary in the Netherlands celebrated the 20th anniversary of cooperation on the restoration of clay mining sites in The expert restoration of clay pits as part of the initiative has led to the creation of a huge nature reserve. This 400 hectare area near Nijmegen provides a new habitat for protected plants and animals: the Himalayan balsam and the crown vetch have found a new home here, just like the kingfisher, wild horses and beavers, whose population has now stabilized after a slow return since That makes Millingerwaard one of the most impressive and species-rich nature reserves in the Netherlands. Belgium A wind wheel for brick production The Belgian province of Limburg has set a goal to become climate neutral by 2020 and we want to help them meet this goal. Together with Limburg Win(d)t NV, our colleagues at the Wienerberger plant in Tessenderlo installed a wind wheel that should cover roughly 20% of the energy required for production with renewable wind energy over the short-term. The turbine on this 105 meter wind wheel is connected to the local electricity network and allows for the direct feed-in of surplus energy. This wind wheel makes Wienerberger a producer and consumer of renewable energy at the same time. 29

34 Production Production in harmony with the environment Principles of Sustainable Production Production in harmony with the environment is a matter of great importance to Wienerberger. We are well aware that industrial production processes always involve a certain degree of interference with the natural environment. Our goal is to minimize the environmental impact of our production processes. The responsible interaction with clay extraction sites, the best possible conservation of resources and an increase in the share of recycling materials are the central principles of our sustainable production. Principles of environmental management This chapter contains an update of the information presented on environmental protection in production in our 2012 sustainability report. This report, which is published on the Wienerberger website, contains details on the general principles of Wienerberger s environmental management in the following areas: Use of recyclable raw materials and responsible interaction with clay extraction sites Greatest possible conservation of resources Increase in the share of recycling materials R&D in production is a focus of strategic planning Processes and Instruments for Sustainable Production Research and Development Research and development (R&D) form an integral part of strategic planning at Wienerberger and represent key activities for the Group. In these areas we work to optimize production processes and to continuously improve and develop our products and system solutions. R&D at Wienerberger is managed centrally, but implemented locally based on close cooperation between the various R&D departments and on-site management and engineers. This ensures the fast and efficient rollout of successful developments throughout the Group. In 2013 R&D expenditures in the Wienerberger Group rose to 11.4 million (2012: 9.0 million). Research and development Detailed information on the focal points of research in the individual operating segments and product areas can be found in the 2012 sustainability report and on the Wienerberger website. 30

35 Wienerberger AG Sustainability Update 2013 Production Principles Processes and Instruments Key Data Environmental Management The environmentally relevant aspects of individual workplaces, e.g. the management of waste and residual materials or the prevention of noise and dust emissions, were integrated in the existing quality management systems (QMS). The QMSs in nearly all plants are certified according to ISO The criteria defined in the QMS form the starting point for the demands on production and the related processes. Environmental officers ensure the implementation of the relevant standards. A number of plants have been certified according to ISO 14001, but there are no plans for additional Group-wide certification under ISO or EMAS. Wienerberger believes the current QMS provides appropriate control and management for processes and their environmental impact. Ecologically relevant aspects in QMS Technical Controlling System A technical controlling system has been implemented in all production areas of the Wienerberger Group. This system collects the production-related data required for controlling activities and internal benchmarking among the plants. Statistics are compiled on production volumes, product quality, machine efficiency and energy consumption. The resulting analyses indicate the effectiveness of measures implemented to reduce the environmental impact of our production processes. Production data collected by technical controlling system Key Data on Sustainable Production Restatement of Production Volumes The further professionalization of data collection allowed for the more exact recording of production volumes during the reporting year. The new data collection structures and reporting systems led to the more precise allocation of production volumes to the individual product groups in the Clay Building Materials Europe Division (CBME). Wienerberger analyzed the 2013 data based on these new collection structures and identified variances from the previous recording method. In order to improve transparency and comparability, the key data for 2010 to 2012 were adjusted retroactively. Professionalization of data collection leads to more precise statistics on production volumes The more exact allocation of volumes to the individual product groups led to a shift in statistics for the CBME Division. This allocation adjustment also resulted in a change in the specific energy indicators for the CBME Division. Correction to CBME production volumes 31

36 More exact recording and allocation of production volumes Energy Consumption The following statistics cover the entire Wienerberger Group, including our pipe activities. Our ceramic pipe activities are included starting in 2011 and our plastic pipe activities beginning in June Energy consumption in MWh Chg. in % Natural gas 6,434,300 5,541,640 5,424,752-2 Coal 248, , , Heating oil 104,529 90,783 53, Liquid gas 75,715 62,338 45, Electricity 841, , , Wienerberger Group 7,704,325 6,744,796 6,684,477-1 Energy consumption in the Wienerberger Group declines by 1% Energy consumption in the Wienerberger Group fell by 1% year-on-year in The total production volume in the Clay Building Materials Europe Division remained constant at the 2012 level. The further decline in the Wienerberger Group s total energy consumption resulted from an improvement in specific energy consumption in nearly all product groups. The reduction in liquid gas consumption was achieved primarily in India through replacement with biomass. Heating oil consumption cut by over 40% year-onyear We are currently working on a number of projects to identify alternative energy sources as substitutes for coal and heating oil in order to reduce CO 2 emissions and costs. For example, the share of heating oil was reduced by more than 40% in At our plant in India, we converted part of our energy sources to biomass during the reporting year, and in Italy and Germany we are using electrical energy generated by our own photovoltaic equipment. Coal is used, above all, in North America. The higher consumption of coal in 2013 reflected the increased production volumes in the North America Division. A biogas plant was built near one of our ceramic pipe plants, which is fueled with biomass from the surrounding region. This biogas is used to operate a combined heat and power station, and the residual heat is used to dry the clay pipes. Share of renewable energy in electrical energy consumption rises to 37% Electrical energy consumption rose by 12% year-on-year in 2013, primarily due to the inclusion of the Pipelife Group for 12 months in The production process for plastic pipes is driven almost entirely by electrical energy, and Pipelife was only included in the 2012 data starting in June. An important achievement was the increase in renewable energy sources as a share of total electricity from 31% in the previous year to 37% in

37 Wienerberger AG Sustainability Update 2013 Production Key Data Chg Chg Index of specific energy consumption in % in % 1) Clay blocks Roof tiles Facing bricks Ceramic pipes Ceramic segments Plastic pipes Concrete pavers Wienerberger Group ) Compared with key data from 2010 because the target for specific energy consumption is based on The specific energy consumption in the above table represents a historical comparison of the individual product groups. This sustainability report uses 2010 as the basis for the specific energy consumption index (based on kwh/ton), which forms the starting point for the following goal. By 2020 we want to reduce the specific energy consumption in ceramic productioni 20% below the 2010 level. This is a very ambitious target, since we have already reduced energy consumption significantly over the past 15 years. We also made sound progress in the ceramic production area during 2013 with a 10% reduction in specific energy consumption compared to the 2010 reference year and a 2% reduction versus Specific energy consumption in ceramics production cut by 10% vs. reference year Our efforts in clay block and ceramic pipe production were particularly successful, with a 16% reduction in specific energy consumption by each of these areas compared with the 2010 reference year and a 5% reduction compared with A sound reduction in specific energy consumption was also achieved in the roof area with a decrease of 8% versus the 2010 reference year and 3% versus These developments underscore the success of the investments made in recent years to optimize the production processes for clay blocks, roof tiles and ceramic pipes. Reduction in specific energy consumption by nearly all product groups In the facade area, previously identified process optimization measures are necessary and will be implemented starting in Steinzeug-Keramo completed the conversion to renewable energy sources for its electricity procurement starting in The scheduled monitoring of energy consumption and optimization measures supported a further slight reduction in specific energy consumption for plastic pipe production in Process optimization investments for facade production defined and planned 33

38 Data collection on CO 2 emissions based on European Emissions Trading Scheme CO 2 Emissions Data collection on CO 2 emissions is based on the method defined by the European Union Emissions Trading Scheme (ETS system), which only records direct CO 2 emissions. Accordingly, only the CO 2 emissions from our ceramic production (clay blocks, facing bricks, roof tiles and ceramic pipes) are relevant. The CO 2 emissions from primary energy sources change in line with energy consumption. The so-called process emissions result from raw materials and, in clay block production, also from the use of pore-forming agents. Electrical energy is used in the production of plastic pipes and concrete pavers, and the related CO 2 emissions are attributable to the electric power producer as the calculation base for future development The European Union Emissions Trading Scheme entered the third trading period at the beginning of Changes were made to the calculation methods and to the criteria for selecting the facilities covered by the emissions trading system. Plants that were not included in the second emission trading period were also added. The data from earlier years also for Wienerberger are not comparable with 2013 because of these changes, and the EU Commission has explicitly noted this fact. The Wienerberger Sustainability Steering Committee therefore decided not to continue the internal Wienerberger index of specific CO 2 emissions based on the reference year 2010, but to use the 2013 emission data as the calculation base for future development. Therefore, the 2013 index was reset to 100% However, our goal remains intact to reduce the specific CO 2 emissions from ceramici production 20% below the 2010 level by This is also a very ambitious target because we have already reduced CO 2 emissions significantly in the past. CO 2 emissions in tons ) From primary energy sources 955,453 From the production process 682,328 Total within the ETS 2) 1,637,780 Plants outside the ETS 3) 223,572 From biogenic added materials 4) 257,986 1) The emissions in 2013 will be used as the new calculation base for future development; the data from earlier years also for Wienerberger are not comparable because of the changeover to the third EU emission trading period in ) Source: European Union Transaction Log (EUTL) 3) Calculated in accordance with national rules (Switzerland) or based on EU standard emission factors. Only the CO 2 emissions from the firing of primary energy sources are included for the plants in the USA. 4) Volumes from Wienerberger CO 2 monitoring in accordance with national rules 34

39 Wienerberger AG Sustainability Update 2013 Production Key Data Waste Statistics for 2013 show 141,591 tons of waste for Wienerberger. The year-on-year increase is attributable to the inclusion of Pipelife for 12 months in the reporting year as well as extensive renovation projects at plants in the Pipelife Group, which were carried out in 2013 to optimize production and improve environmental protection. Roughly 50% of the waste at Pipelife is recyclable and is collected and returned to the production process. In the concrete paver product area, optimization processes and the related implementation of new technologies led to a higher rejection rate at the start of production. Part of this waste is recycled in the production process or used for road construction. Most of the waste in the Wienerberger Group (nearly 100%) is non-hazardous waste that is collected. More than half is subsequently recycled, and the rest is disposed. The only hazardous waste represents relatively small amounts of workshop waste (oily rags) and oil separator contents (from refueling stations). Waste in tons Wienerberger Group 132, , ,591 Water Consumption The total water consumption in the Wienerberger Group rose by 19% year-on-year to 3.8 million m³ in 2013 due to the inclusion of Pipelife for the full 12 months. We attempt to use water that comes primarily from our own wells or ponds (rainwater). In the reporting year the volume of water drawn from public supply networks decreased to 38% following the inclusion of plastic pipe activities. In 2013 we met our goal to reduce the share of water drawn fromi public supply networks to 40% by Goal for 2020 to reduce share of water drawn from public networks already reached 2020 Water consumption Chg. in % Wienerberger Group in mill. m³ From public supply networks in %

40 Specific water consumption reduced substantially in nearly all segments Specific water consumption was reduced significantly in nearly all segments during the reporting year. Water plays a secondary role in the production of ceramic products. Plastic pipe production, in contrast, requires comparatively high volumes of water to cool the extruded pipes. Pipelife therefore uses water from its own wells or ponds (rainwater). Wienerberger is continuing its investments to optimize water management processes, above all in the plastic pipe segment. These efforts led to a further impressive reduction of 5% at Pipelife and to a 20% reduction in the volume of water drawn from public networks in The higher water consumption in the concrete paver area during the reporting year resulted from an increase in the share of premium products with special surface treatments. Specific water consumption in m 3 /t Chg. in % Clay Building Materials Europe Ceramic pipes Plastic pipes Concrete pavers Production in the various product areas Production of Ceramic Products, Plastic Pipes and Concrete Pavers Wienerberger s 2012 sustainability report provides detailed information on the following production-related measures in the individual segments. This information can be reviewed on the Wienerberger website. General principles and guidelines Energy consumption and CO 2 emissions Waste and recycling Water consumption Stronger integration of energy reporting Future Measures in the Wienerberger Group Since mid-2013 we have been working, as planned, to integrate our energy reporting systems even stronger with the SAP system and thereby increase the automation level of data queries. The next step involves the further development of the reporting system to optimize data collection on primary energy. Continued roll-out of measures to improve energy efficiency in ceramic production In the ceramics area, we will continue to roll out the measures defined in the Environmental Action Plan to reduce energy consumption and CO 2 emissions. The facing brick product group will represent a special focal point for the coming years. We want to make our production processes even more energy-efficient and increase resource conservation in the future. 36

41 Wienerberger AG Sustainability Update 2013 Production Production of Ceramic Products, Plastic Pipes and Concrete Pavers Future Measures The successful Cradle to Cradle certification of our ceramic pipes was expanded to cover the entire ceramic pipe systems product line (pipes and fittings) in This certification underscores our commitment to the continuous improvement of our production processes in the interest of sustainability and to responsible interaction with energy and resources. Recertification is scheduled for 2014 and will cover the completed conversion of electricity to 100% renewable sources. Additional measures were also implemented to improve the CO 2 balance. Cradle to Cradle certification for ceramic pipes Numerous smaller and larger measures will be implemented in the plastic pipe area over the coming years. One example involves the insulation of specific components in our extrusion and injection molding machines to gradually reduce energy consumption by preventing heat loss. The P.O.W.E.R. working group (Pipelife Optimization Workgroup for Electricity Reduction) was established to plan and implement these measures. We will also continue to invest in technological improvements that lead to an increase in energy efficiency. Numerous smaller measures for plastic pipes 37

42 Products Principles & Goals A central principle of product development at Wienerberger is the creation of sustainable value for our customers with long-lasting and innovative system solutions. We view sustainability as a function of the service life of a product and its impact on the environment during production, transport, installation, use and disposal. Wienerberger brick products form an integral part of sustainable building concepts. They guarantee a high quality of living and make an active contribution to climate protection. In the area of pipes and pavers we offer system solutions for today s challenges, including the demands on water management resulting from climate change or increasing urbanization. The many diverse demands on modern buildings from users, developers and regulatory requirements such as the Energy Performance of Buildings Directive (EPBD) have made the systems approach a key focal point of construction. Integrated system solutions can optimally combine and utilize the outstanding properties of individual products in the Wienerberger portfolio with products from partners in building technology Our goal is to increase the share of Group revenues generated by innovative and sustainable products from 20% in 2010 to 30% in In 2013 the share of Group revenues generated by innovative and sustainable products rose to 24.2%. Bart Lens Lens Ass Architect in Belgium I never would have thought that brick could be so sexy from an architectonic viewpoint. Ewa Kuryłowicz a Polish architect and member of the jury for the Wienerberger Brick Award 2014 spoke highly of brick regarding its energy efficiency, aesthetics and varied application possibilities: Brick is very economical, especially when it is locally available. Additionally, brick has great potential in terms of thermal energy savings. Moreover, it is simply beautiful; it is small in scale and therefore allows the implementation of architectural fantasies, and of very different design variants this is well demonstrated by many of the entries for the Brick Award. 38

43 General Shale A strong product for greater security and energy efficiency The newly developed ENDURANCE RS4 STRUCTURAL BRICK is one of the most revolutionary products ever launched by our US subsidiary. This clay block is an absolute innovation, above all in America where load-bearing walls are normally built with wooden frames. The block is characterized by high static stability and excellent thermal insulation values which makes it the ideal building material for regions that are frequently hit by heavy storms, tornados or earthquakes. It is not only ideal for residential construction, but also provides greater protection and safety in public buildings like schools, hospitals and police stations. Steinzeug-Keramo Environmental certificate for pipes and fittings Steinzeug-Keramo products were awarded the Cradle to Cradle certificate in This recognition highlights the company s standing as a pioneer and makes it the only supplier in the pipe industry with life cycle certification. Cradle to Cradle products must meet demanding ecological criteria and be 100% recyclable. The underlying principle for certification is the use of environmentally compatible, healthy and recyclable materials in a closed cycle. That eliminates waste and conserves resources. This certificate, which is tied to a specific product and the related production process, carries global validity. The certification of Steinzeug-Keramo s ceramic pipes and fittings by an independent institute is an outstanding acknowledgment that also underscores the sustainability of these products. Wienerberger AG Sustainability Update 2013 e 4 brick house 2020 Pipelife No more electro-smog XXXXXX Products XXXXX Best Practice Examples Principles and Goals Positive energy balance for singlefamily houses and residential construction A house built according to the Wienerberger e 4 brick house 2020 concept produces more energy than its occupants use for electricity and heat during a year. This standard already meets all requirements of the performance of buildings directive 2020, which requires all buildings constructed after 2020 to have a positive energy balance. The e 4 brick house 2020 concept integrates all Wienerberger product groups into a complete system solution. Up to now it has been used solely for the construction of single-family houses. A further important step is the application of this concept to larger residential buildings or other multi-family dwellings. Together with Oberwarter Siedlungsgenossenschaft (OSG) and the Austrian province of Burgenland, the Zukunftshaus 2020 with 12 residential units will be realized as a pilot project. This residential structure will be based on the e 4 brick house 2020 concept and built with Wienerberger Porotherm W.i plane clay blocks, which already include special heat insulation. The project planning was successfully completed in 2013, and the groundbreaking took place in spring A conscious decision in favor of a healthy lifestyle is the focal point for a growing number of people, who also want to minimize the harmful effects of their surroundings. In addition to clean air and healthy food, we also want to live and work in an environment with low radiation exposure. Pipelife now meets this wish with an important innovation: the EM EMV-H-Topspeed halogen-free electrical installation pipe reduces electromagnetic radiation to a minimum. This product sets new standards for cabling in both public and private buildings. The pipes and fittings are also 100% recyclable, which makes the system not only good for people, but also for the environment. 39

44 Corporate Social Responsibility Principles & Goals Wienerberger views the economy as an integral part of society. Its duty is to serve people and create value for all. Wienerberger takes its role as a responsible member of society seriously. We define responsibility as ethical actions, honest communications, active participation in the transparent development of our economic environment, personal accountability and actions that confirm our standing as a reliable and valuable member of society. With the signing of a social charter, Wienerberger committed to compliance with the recommendations of the International Labor Organization. We place particular value on healthy and safe working con ditions, fair compensation and our employees rights to the freedom of association and collective negotiations. As in the past, roughly 80% of all Wienerberger employees are covered by a collective agreement. This section represents an update of the information presented under corporate social responsibility in the 2012 sustainability report. The prior year s report presents Wienerberger s principles of corporate social responsibility as well as the principles applicable to specific areas (e.g. energy efficiency and climate protection, Wienerberger as a regional employer, Wienerberger s donation guideline, compliance and the political decision-making process). This report is also available on the Wienerberger website. Our charitable projects are based on our business expertise, i.e. the provision of building material solutions and know-how in sustainable construction. In 2013 two initiatives were coordinated and implemented by corporate headquarters in several countries. The Wienerberger country organizations also take part in social projects at the regional level in accordance with the Wienerberger donation guideline Jasmine Blaschek WISBA graduate: WISBA Wienerberger Sustainable Building Academy In cooperation with well-known European universities, Wienerberger launched an international educational program on sustainable construction in The Wienerberger Sustainable Building Academy (WISBA) is open to outstanding students from the fields of architecture and construction engineering, and provides additional practical training in sustainable construction. The program is organized in modules and takes place in several countries, for example in Austria, Germany and Poland during The students work for one semester on real-life sustainable construction projects in interdisciplinary and international teams under the guidance of experts from various scientific and business disciplines. Completion of the WISBA gives the students five ECTS points toward the completion of their studies. The successful completion of the first course will be followed by the expansion of the WISBA to six countries in The original plans called for the extension of the WISBA program to 12 countries by However, the experience gained during the first course led to a decision to reduce the roll-out to fewer countries in order to ensure quality education for each of the participating students. Especially in times of continuing cuts in educational budgets, Wienerberger s ambitious commitment through the international WISBA course provides essential impulses. The readiness to take on responsibility for the education of future generations of planners also from the position of a producer is, for me, a perfect example of sustainability. 40

45 Cooperation with NGOs Cooperation with Habitat for Humanity Wienerberger has been working with the NGO Habitat for Humanity for over one year to provide disadvantaged people with safe and livable housing. We provide building materials from all our product lines (walls, roof tiles and pipes), while our employees help out at the construction site free of charge and train other volunteers. We are particularly proud to be involved in the construction of the first hospice in Bucharest, Romania. This hospice has 30 beds for needy patients as well as an out-patient clinic that treats up to 5,700 children and adults each year. Together with Habitat for Humanity, Wienerberger realized 15 housing units in Romania as well as other social construction projects in Bulgaria, Great Britain and the USA during Wienerberger AG Sustainability Update 2013 Hungary Corporate Social Responsibility Best Practice Examples Principles and Goals Sustainable homes for large families For the third time our Hungarian brick subsidiary, together with other building material producers, provided support for the Big Families aid organi zation in the form of building materials. This Hungarian NGO helps socially disadvantaged families with three or more children to build their own home with enough room for everyone. Wienerberger supported this initiative with 8,500 of building materials in Based on the positive response in recent years, the project will also be continued in Alex Padureanu Director of the Casa Sperantei Hospice: Our partnership with Wienerberger and Habitat for Humanity is an example of efficient and heartfelt cooperation between NGOs and companies. The building of the new hospice in Bucharest was, from the very beginning a challenge, we knew it wasn t going to be easy to come up with the funds so Wienerberger s reaching out to us and generously offering ALL the bricks for the new building plus additional needed materials was indeed a huge help. This means a better, safer, more cost effective building for our patients. Pipelife s humanitarian campaign 27 months, 27 countries, 27 projects In 2012 Pipelife launched a humanitarian project together with the Austrian Red Cross. It involves the donation of one euro per employee at every Pipelife location throughout the world for the support of local charitable activities. The results in numbers: for 27 months, the company will support 27 humanitarian projects in the 27 countries with a monthly donation of roughly 2,600. Pipelife is working with the national Red Cross organizations and local aid groups and provides support for suitable projects. For example, two months of the aid program were directed to needy residents in the Philippines during the past year. A donation of 5,000 to the Austrian Red Cross supported an expert who focused on the stabilization of local drinking water supplies. 41

46 Stakeholder Management Principles & Goals Creating value in the interest of all stakeholders is one of Wienerberger s central principles. Accordingly, communication forms the focal point of responsible interaction with our stakeholder groups. Our efforts in this area are designed to provide our employees, customers, shareholders, local residents and suppliers as well as politics, the media and NGOs with relevant information, while also maintaining an open, proactive, continuous and transparent dialogue with these groups. This dialogue creates a better mutual understanding for the respective interests, needs and concerns, and creates added value for everyone involved. Our communication instruments include personal meetings as well as regular newsletters, information brochures, internet-based platforms and information events. The Clay Building Materials Division has established local stakeholder committees in several countries, which include Wienerberger management, residents, political representatives and NGOs. Regular meetings allow for the exchange of information and, wherever necessary, the joint development of measures to improve relations Stakeholder Committees Stakeholder committees in all Italian Wienerberger plants Our subsidiary in Italy set a good example by establishing stakeholder committees in all its plants during The committees met as required with environmental authorities at the regional and supra-regional levels as well as with local associations from the districts near the plant. This dialogue is designed to provide neighboring residents and other stakeholders with information on the plants and to learn more about their specific needs. The positive feedback received to date from the participants shows that we are on the right course. We also plan to continue this program in 2014 by extending the dialogue to other countries. We have set a goal for our ceramic production to collect information on our current efforts and to introduce stakeholder dialogues in 90% of our plants by In 2013 stakeholder dialogues had been established in one-fourth of our ceramic production plants. 42

47 Wienerberger AG Sustainability Update 2013 Stakeholder Management Best Practice Examples Principles and Goals Carlo Callegati HSE Coordinator & Quality Manager Wienerberger Italy: It is fundamental for Wienerberger to create a good relationship both with local, industrial associations and official authorities. It s only through the collaboration with them that we can continue to work in the right direction respecting environment and people around us. It s sometimes hard to find an agreement, it means discussions and diplomacy, it means time and sometimes patience, but it gives you the certainty and the pride to be the most advanced reality in Italy when we talk about modern, efficient, but also sustainable production systems. Barry Rogers Plant Manager in Warnham, UK: The new Liaison Com mittee has now been running for nearly a year and many of the previous issues and concerns of local residents have now disappeared because we have effective lines of communication in place. We maintain an open door approach to all local residents and any issues of concern are speedily resolved. 43

48 India Stakeholder Dialogue in Bangalore Wienerberger AG operates production facilities in 30 countries on three continents. That brings a wide range of market environments and challenges as well as different types of contacts with neighboring residents, communities and NGOs. Our plant in Bangalore, India, has taken on an outstanding role in this respect. CSR activities make an important contribution to establishing a dialogue with local stakeholders and the initially critical population. Insufficient healthcare was identified as an urgent issue for the region in which we operate. To support healthcare for masons and construction workers, Wienerberger founded the Wienerberger Brick Club to provide health insurance and access to government health services. One particularly important step for the local population was the establishment of a local clinic in Gottikere, the town adjacent to our plant, together with an NGO. An annual health day is also held at different locations, where more than 1,500 people have already received expert medical treatment. These initiatives for local residents as well as masons and construction workers have helped local management to develop a sound basis of trust. Photo: Jorg Hackemann, Shutterstock.com Kiran Kumar. Human Resources Wienerberger India The Health Care Center and periodic medical camps organized by Wienerberger India have helped the local population benefit immensely in getting medical facilities. This has helped in creating a sense of trust and bonding between Wienerberger India and the local population which in turn has proved beneficial in labour supply, local sales, etc. for the company. The local population is also more aware of Wienerberger India s work and sees the company as a socially responsible organization. 44

49 Wienerberger AG Sustainability Update 2013 About this Report Report Profile About this Report Report Profile Wienerberger reports indicators on the Group s sustainable development once each year. Since our sustainability principles cover the long-term and therefore generally remain constant, we only publish a complete sustainability report every two years. In the interim periods we issue an update that presents the latest facts and figures as well as our progress in specific areas. This sustainability update covers Wienerberger s activities in 2013, but selected indicators are also provided for 2011 and 2012 to present a three-year trend. Sustainability reporting at Wienerberger focuses on the ecological and social aspects of the company s activities. Information on Wienerberger s financial development, organizational profile and corporate governance is provided in the 2013 annual report (annualreport.wienerberger.com). Full report every two years with short report as interim update Sustainability update on activities in 2013 with three-year statistical trend The contents of this sustainability report are based on the fully consolidated subsidiaries in the wall, roof, facade, ceramic pipe, plastic pipe and concrete paver product groups. This reporting structure reflects the consolidation range of the Wienerberger Group and therefore includes our pipe activities (Pipelife plastic pipes and Steinzeug-Keramo ceramic pipes) beginning in Steinzeug-Keramo is included beginning in 2011 (the 2011 data were adjusted retroactively in the 2012 sustainability report). Data on Pipelife are presented in the chapter Environmental Protection in Production as of June 2012 (for seven months) and in the chapter Employees for the full 12 months of Any deviations from this procedure are explained in the respective sections. The data in the chapter Environmental Protection in Production only cover our production facilities, while the remaining statistics relate to all locations in the Wienerberger Group. Detailed information on the consolidation range and the segmentation of the Wienerberger Group is provided in our annual report. Reporting threshold: full coverage of investments Recommendations for the subject areas and indicators to be included in this report were made by the respective Wienerberger working groups and the sustainability officer. The final selection was made by the Wienerberger Sustainability Steering Committee (SSC; which was called the Sustainable Development Steering Committee, SDSC, in 2012) under the direction of CEO Heimo Scheuch. This sustainability update was prepared in agreement with the requirements of the Global Reporting Initiative (GRI). Core issues and key indicators defined by SSC The data presented in this update are based primarily on internal statistics. Selected information was validated by an independent external auditor, whereby the 2013 audit concentrated on a review of the content and indicators on energy consumption and emissions as well as occupational safety and health. The audit also covered the underlying sustainability management and the processes used to collect data and implement the sustainability strategy. This sustainability update reaches the GRI B+ level. External validation by independent auditor 45

50 GRI Level B+ GRI Index PwC Wirtschaftsprüfung GmbH evaluated this sustainability report and confirms the GRI B+ level. No. Indicator Page level of Fulfillment General Indicators 1.1 Statement from the most senior decision-maker SU Description of key impacts, risks, and opportunities SU Organizational profile SU 6; Report parameters SU GRI Content Index SU External assurance SU Governance, commitments, and engagement SU Stakeholder engagement SU Management Approach and Performance Indicators EC Economic Indicators DMA-EC Management approach: economy SU 14-15; 30-31; 38 Core EC1 Direct economic value generated and distributed SU 8-9 Core EC2 Risks and opportunities due to climate change SU 7 Core EC4 Significant financial assistance received from the government SU 8 Core EC7 Procedures for local hiring SU 14, Core EC8 Services provided primarily for public benefit SU 19, 27, 33 EN Ecological Indicators DMA-EN Management approach: environment SU 14-15; 30-31; 38 Core EN1 Materials used SU 31 Core EN2 Percentage of materials that are recycled SU 30 Core EN3 Direct energy consumption by primary energy source SU Core EN4 Indirect energy consumption by primary energy source SU Add EN5 Energy saved SU 28, 32 Add EN6 Initiatives for energy-efficient and renewable energy-based products SU 32 Core EN8 Total water withdrawal by source SU 35 Add EN9 Water sources significantly affected by withdrawal of water SU 36 Add EN10 Percentage and total volume of water recycled and reused SU 36 Add EN13 Habitats protected or restored SU 29 Core EN16 Total direct and indirect greenhouse gas emissions SU 36 Add EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved SU 36 Core EN22 Total weight of waste by type and disposal method SU 31, 36 Core EN26 Initiatives to mitigate environmental impacts of products SU 36 46

51 Wienerberger AG Sustainability Update 2013 About this Report GRI Index No. Indicator Page level of Fulfillment LA Social Indicators DMA-LA Management approach: labor practices and decent work SU 14 Core LA1 Total workforce by employment type, contract, and region SU Core LA2 Total number and rate of employee turnover by age group, gender and region SU Core LA4 Employees covered by collective bargaining agreements SU 40 Core LA7 Rates of injury, occupational diseases, lost days, and absenteeism SU Core LA8 Risk-control programs regarding serious diseases SR Core LA10 Average hours of training per year per employee SU 24 Core LA13 Diversity of employees SU HR Indicators on Human Rights DMA-HR Management approach: human rights SU 26 Core HR4 Incidents of discrimination SU 14, 17 Core HR6 Significant risk for child labour SU 14 Core HR7 Significant risk for incidents of forced or compulsory labor SU 14 SO Indicators on Society DMA-SO Management approach: society SU 40 Core SO1 Management of impacts of operations on communities SU Core SO2 Business units analyzed for risks related to corruption SR Core SO4 Activities taken to mitigate corruption SR Add SO7 Legal actions for anti-competitive behavior and anti-trust AR Core SO8 Fines and sanctions for noncompliance with regulations AR PR Indicators on Products DMA-PR Management approach: product responsibility SU 30, 38 Core PR1 Assessment of health and safety impacts of products SU 12 Core PR3 Product information requirements SR Complete Partial SU: Sustainability Update 2013 SR: Sustainability Report 2012 AR: Annual Report

52 Report on the independent limited assurance engagement in accordance with KFS/PG 13 To Wienerberger AG, Austria In accordance with our agreed terms of engagement, we performed procedures to obtain limited assurance on selected information of the Sustainability Update 2013 of Wienerberger AG. This engagement is subject to the General Conditions of Contract for the Public Accounting Professions (AAB 2011) as amended February 21, 2011, issued by the Austrian Chamber of Public Accountants and Tax Advisors. Our liability towards the Company and also towards third parties is limited in accordance with section 8 of the AAB We draw attention to the fact that the English translation of this Report on the independent limited assurance engagement is presented for the convenience of the reader only and that the German wording is the only legally binding version. Responsibility of the management The preparation of the Sustainability Update 2013 in accordance with the criteria set out in the Sustainability Reporting Guidelines Vol. 3 of the Global Reporting Initiative ( GRI criteria ) Materiality Stakeholder inclusiveness Sustainability context Completeness Balance Clarity Accuracy Timeliness Comparability Reliability is the responsibility of the management of Wienerberger AG. This responsibility includes the selection and application of appropriate methods for preparing the Sustainability Update 2013, making assumptions and estimates of individual sustainability disclosures that are plausible under the given circumstances, as well as designing, implementing and maintaining systems and processes where relevant for the preparation of the Sustainability Update Limitation of the scope of the engagement Our responsibility is to give an assessment, based on our work, on whether anything has come to our attention that causes us to believe that the quantitative disclosures in chapter Production on the issues of Energy Consumption and Emissions (pp. 31 to 34), as well as in chapter Employees on the issues Occupational Safety and Health (pp. 19 to 23) of the Sustainability Update 2013 have not been prepared in accordance with the GRI criteria as set out in the Sustainability Reporting Guidelines Vol. 3. Our review was limited to the key performance indicators in the cited areas of focus. We also performed the Global Reporting Initiative (GRI) Application Level Check to comprehend the application level declared by Wienerberger AG. Responsibility of the independent auditor We have performed our engagement in accordance with Expert Opinion KFS/PG 13 for assurance engagements. This standard requires us to comply with our professional standards and to plan and perform the engagement in a way that enables us to draw conclusions in accordance with KFS/PG 13. Engagement approach In a limited assurance engagement, the work performed is less extensive than in a reasonable assurance engagement and, therefore, less assurance is obtained. We performed our work, using appropriate random samples, based on our due judgment and to the extent required to obtain limited assurance. In the course of our engagement, we therefore obtained relevant evidence based on risk and materiality assessments in order to obtain this limited assurance on the compliance of the disclosures according to the scope of the engagement with the GRI criteria mentioned above. In doing so, our work performed at the headquarters of Wienerberger AG in Vienna, Austria, particularly included the following: Inspection of relevant documentation of the process for preparing the Sustainability Update 2013, as well as of existing documents and systems on the sustainability management and their sample testing Interviewing employees materially involved in the preparation of the report contents from the departments Corporate Controlling, Corporate Engineering, Human Resource Management and European Affairs of Wienerberger AG in Vienna. Sample comparison for a selection of disclosures included in the Sustainability Update 2013 according to the scope of the engagement with records provided by country organizations and recorded centrally, as well as any side calculations Reviewing the declaration of Wienerberger AG on the compliance with Level B+ of the GRI G3 guidelines Conclusion Based on our work, nothing has come to our attention that causes us to believe that the quantitative disclosures in chapter Production on the issues of Energy Consumption and Emissions (pp. 31 to 34), as well as in chapter Employees on the issues Occupational Safety and Health (pp. 19 to 23) of the Sustainability Update 2013, in all material respects, have not been prepared in accordance with the criteria materiality, stakeholder inclusiveness, sustainability context, completeness, balance, clarity, accuracy, timeliness, comparability and reliability of the Sustainability Reporting Guidelines Vol. 3 of GRI. Based on our work, nothing has come to our attention that causes us to believe that the Sustainability Update 2013 of Wienerberger AG does not meet the requirements according to GRI Application Level B+. PwC Wirtschaftsprüfung GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft Vienna, June 13, 2014 Dr. Aslan Milla Austrian Certified Public Accountant 48

53 Imprint Note The Sustainability Report 2012 and the Sustainability Update 2013 are available in German and English. They are available for download from the Wienerberger website ( Media Owner (Publisher) Wienerberger AG, A-1100 Vienna, Wienerberg City, Wienerbergstrasse 11 T , F sustainability@wienerberger.com, For additional information contact: Managing Board: Heimo Scheuch, CEO Corporate Sustainability Communications: Christine Vieira Paschoalique Concept & Realization: Mensalia Unternehmensberatung Photos: Wienerberger Ziegelindustrie GmbH, Shutterstock, Markus Esser, Pipelife Norway, Wienerberger AG, Henk Baron, Wienerberger NV/SA, Philippe van Gelooven, Christian Dusek, Holston Habitat for Humanity / Steve Clark, Volker Lannert, Andreas Bruckner, Dario Mantovanelli, Betty Sayer, Uwe Strasser, Lisa Wacula, Razvan Tautu, Wienerberger Téglaipari zrt, IFRC, Chikna-Thammaiah, Nikhil-Valluri, Habitat for Humanity International, Kurt Keinrath Translation: Donna Schiller-Margolis Printed by: Grasl FairPrint

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