The Board's introduction to the progress report to the UN Global Compact

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1 The Board's introduction to the progress report to the UN Global Compact BSH joined the Global Compact in 2004 and played a leading role in drawing up a code of conduct based on the Global Compact for the European Committee of Domestic Equipment Manufacturers (CECED) in These principles are integrated in BSH s Business and are implemented throughout the Group. Our code of conduct for suppliers is also based on the UN Global Compact and ensures compliance with social and environmental standards in the upstream value chain. In 2015, our 23rd sustainability report has been published: Titled consistently responsible the report focuses on steering of sustainability activities and the alignment of the four fields of activity of BSH s sustainability strategy. Munich, June 30, 2015 Chairman and CEO of BSH Dr. Karsten Ottenberg Matthias Ginthum Brand Management and Sales Johannes Närger Finance and Labor Relations Director Dr. Michael Schöllhorn Production, Development and Supply Chain 1

2 Communication on progress of the realization of the UN Global Compact's principles The following table indicates the guidelines and management systems that BSH has implemented to support the Global Compact principles relating to human rights, labor standards, environmental protection and the fight against corruption. It also summarizes BSH's specific progress on realizing the Global Compact principles in Principle & systems Measures Results Human rights Principle 1: Support for human rights Business Principle 2: Non-complicity in human rights abuses Written acceptance of BSH Suppliers Code of by suppliers (social and ecological standards based on Global Compact and ILO Declaration) Social Compliance Programme continued for 200 key suppliers with work-intensive or environmentally relevant production processes, tracking measures of audited suppliers in 2013 Occupational Health and Safety Since 2013, gradually systematic audits of production materials suppliers by external certifiers and derivation of measures Since 2014, Social Compliance Newsletter for BSH procurement officers Labor standards Principle 3: Upholding freedom of association and collective bargaining Principle 4: Elimination of all forms of forced and compulsory labor Business Written acceptance of BSH Suppliers Code of by suppliers (social and ecological standards based on Global Compact and ILO Declaration) Social Compliance Programme continued for 200 key suppliers with work-intensive or environmentally relevant production processes, tracking measures of audited suppliers in

3 Principle 5: Abolition of child labor Since 2013, gradually systematic audits of production materials suppliers by external certifiers and derivation of measures Since 2014, Social Compliance Newsletter for BSH procurement officers Principle 6: Elimination of discrimination Business Diversity (emphasis on internationality, gender and age) as Group-wide Diversity Management developed further, process improved on diversity KPIs in the business plan and incentive systems Proportion of female employees (30.6 percent) and women among managers (22.8 percent) increased BSH Corporate Principles Annual Girls Day (female students get to know jobs in the field of IT, manufacturing, technology and engineering) Corporate project Demographic change in production supports a balanced age structure through age and health based working conditions 3

4 Environmental protection Principle 7: Precautionary approach to environmental protection Principle 8: Promotion of greater environmental responsibility Principle 9: Diffusion of environmentally-friendly technologies BSH's Environmental Policy Unified standards for planning and building of production plants ISO certification of BSH factories Product Environment Analysis (PEA) for continuous improvement of environment-related aspects during product development Design for Environment approach for the design and construction of new products Group project Resource Efficiency 2015 Certified quality assurance system for recycling fridges adopted by our disposal service providers in Germany Involved in the development of the World Wide Fund For Nature s and the Carbon Disclosure Project s climate reporting guide Objective for logistics: reduce CO 2 emissions resulting from goods transportation by 20 percent by 2020 compared to 2006 Since 2014, series production of a new vacuum cleaner model whose key components consist of recycled plastics Examination of the possibility of using biodegradable plastics for the transport packaging for our appliances All production and logistic sites in Germany as well as the site Cerkezköy in Turkey certified according to ISO 50001, the standard for energy management systems BSH received the Energy Efficiency Award of the German Energy Agency (dena) for the Group project Resource Efficiency 2015 Since the start of 2014, BSH has been involved in the 2 Foundation (companies commitment for limiting global warming) 4

5 Anti-corruption Principle 10: Action against corruption Business Integrated Governance- Risk-Compliance-Model throughout the Group Comprehensive web-based training program for senior and middle management as well as for officers and employees with customer and supplier contact as an integral part of the management training courses offered by BSH Academy External Ombudsman and anonymous reporting system for employees Expansion of Compliance Training: Adding goal-oriented components, worldwide over 400 classroom and 22,000 online training sessions on compliance in 2014 Since 2014, regional compliance officers have been responsible for each of the five BSH regions, full-time compliance officers have been appointed in sub-regions More orientation is provided by managers to help and support staff to do the right thing and to identify with the BSH Business 5

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