H E R C H O L D I N G S I N C. Our Commitment to Corporate Citizenship 2 0 1 8
Contents About Herc Rentals A Message from Our CEO About this Report Our Commitment to Ethics and Integrity Our Approach to Sustainability Our Safety Practices Supporting Our Team Members Our Responsibility to Communities Our Commitment to Corporate Citizenship 2018 1
About Herc Rentals Herc Rentals Inc. is a subsidiary of Herc Holdings Inc., shares of which are listed on the New York Stock Exchange under the stock symbol HRI. 2017 KEY FACTS 1 One of the leading North American equipment rental companies 1 Estimated 3% market share in a highly fragmented market 1 $1.75 billion in total revenues 1 $3.65 billion in fleet (OEC) * 1 4,900+ employees 1 Approximately 275 locations, principally in North America *Original equipment cost (OEC) as of December 31, 2017, based on American Rental Association guidelines. OUR VISION We aspire to be the supplier, employer and investment of choice in our industry. OUR VALUES We do what s right. We re in this together. We take responsibility. We achieve results. We prove ourselves every day. OUR MISSION To ensure that end users of our equipment and services achieve optimal performance safely, efficiently and effectively. Our Commitment to Corporate Citizenship 2018 2
A Message from Our CEO As one of the leading equipment rental suppliers in North America, Herc Rentals is committed to acting as a responsible organization every day and everywhere we operate. Our approach to corporate social responsibility reflects the central fact that we are a business comprising approximately 275 locations serving diverse markets throughout North America. As a result, our company is a citizen of many communities, in each of which Herc Rentals acknowledges its commitment to safe, healthy and environmentally sound operations in keeping with its civic responsibilities. Larry Silber President and Chief Executive Officer Our commitment to socially responsible business practices begins with our Values, with emphasis on our principal duty to act with integrity: We do what s right. We also believe that fulfilling our vision to be the supplier, employer and investment of choice in our industry is possible only by acting as a sound corporate citizen. And, we know that the continued growth of our company depends on earning and maintaining a trusted reputation as a company that conducts its business responsibly. At Herc Rentals our understanding of responsible value creation spans multiple social, environmental and economic areas, including ethics; safety; diversity and inclusion; sustainability; security; employee engagement; and community involvement. As a relatively new organization, having become an independent public company July 1, 2016, we are still developing many of the elements, processes, and programs that will help support and demonstrate progress in these and other critical areas of corporate social responsibility. We are committed to advancing these efforts with the urgency they warrant and reporting our progress on an annual basis. The safety of our people, our customers and our communities has been and will remain our foremost priority. With that in mind, safety receives heightened attention across our organization, and that focus is reflected by the progress we have made in our safety performance. Across our operations we have many opportunities to create a sustainable future and protect the environment. Our large geographic footprint means that even the small things we do to conserve energy, fuel, and water, or to ensure the integrity of our environmental processes and systems, can significantly benefit the communities in which we operate. Our approximately 4,900 employees, collectively known as Team Herc, represent the best and hardest working people in the equipment rental industry. We are committed to providing our people with safe and equitable work environments; opportunities for professional development Our Commitment to Corporate Citizenship 2018 3
In the aftermath of Hurricane Irma in September 2017, more than a dozen Herc Rentals employees, including President and Chief Executive Officer Larry Silber (center), helped to set up generators, cooling equipment and related gear that we provided for a relief camp in Bonita Springs, FL. and advancement; the ability to contribute ideas and feedback to improve our company; and competitive pay and benefits that reflect our performance-based culture. At the same time, we are committed to building an organization that embraces diversity and inclusion to enrich Team Herc with the many different backgrounds, perspectives and experiences that team members represent. We also seek to expand our impact across the many communities in which we operate. Whether through direct contributions, in-kind support or Team Herc volunteers, we strive to make a difference in the places where we work and live. Ultimately, through the people of Team Herc and the gear and services we provide, we are prepared to support economic growth and the well-being of our communities in a manner that reflects sound business and environmental practices. We are committed to fostering a culture of responsibility throughout our organization and I look forward to sharing our progress. Larry Silber President and Chief Executive Officer Herc Holdings Inc. April 20, 2018 Our Commitment to Corporate Citizenship 2018 4
About this Report Herc Holdings Inc., of which Herc Rentals is the primary subsidiary, became an independent public company on July 1, 2016, following its separation from the Hertz car rental business. Prior to becoming an independent company, Herc Holdings Inc. did not maintain dedicated resources related to sustainability and other areas of corporate social responsibility. The company has since established a pathway to develop a sustainability and corporate social responsibility framework, including organizational roles and resources to manage, measure and report on our safety, environmental, employee and community-related activities. This report reflects the company s first effort to collect enterprise-wide data to the extent of current capabilities, which also will serve as the baseline for future reporting. Our overarching intent for this inaugural report is to set forth the company s commitment to business practices that reflect our responsibilities as a corporate citizen. Celebrating our first day as a publicly traded company, July 1, 2016. In addition, we aim to provide a balanced and reasonable representation of Herc Rentals sustainability and citizenship efforts as currently structured. Further, we hope to inspire our team members, customers and other stakeholders about the company s long-term commitment to operating in a manner that is profitable for the business and our shareholders, while also mindful of our opportunities to benefit society and the environment. Our Commitment to Corporate Citizenship 2018 5
Our Commitment to Ethics and Integrity We are committed to a culture of ethics and integrity and to operating our business in a manner that earns and keeps the trust of our customers, investors, employees, communities and other key stakeholders. Our foremost value, We do what s right, sets the expectation that all team members shall uphold both the letter and the spirit of the law and treat everyone with respect. We have formalized this expectation through the company s Code of Ethics, which governs conduct across many areas of our business and offers guidance on asking questions or reporting concerns about potential violations of the law or company policies. To further enable a culture of ethics and integrity, we have established a Compliance Helpline to report suspected unethical behavior or violations of our company s policies, to seek guidance on our policies and procedures, or to offer suggestions. Team members can do all of this anonymously if they choose. Our Commitment to Corporate Citizenship 2018 6
Our Approach to Sustainability Herc Rentals has embedded sustainability into the operational fabric of the company. Our efforts to enhance safety, improve efficiency and reduce waste directly correlate to more sustainable outcomes. At the same time, every day we work with our customers to achieve more sustainable outcomes by helping them select the right equipment for their projects, offering gear that meets or exceeds fuel efficiency standards, and sourcing equipment that offers reduced environmental impact. We estimate that at minimum approximately 40% of our applicable equipment rental fleet is Tier 4 compliant, with that percentage expected to increase each year through normal fleet rotation. We expect to substantially achieve Tier 4 standards across our entire applicable fleet by 2022. We also are seeking to introduce energy-efficient products into our fleet where possible, such as LED-light equipped portable light towers and electric-powered industrial forklifts, which we now offer as part of our expanding rental solutions suite. Across our operations, we have deployed a closed-loop recycling program for used oil through a third-party partner. In 2017, this program recycled approximately 230,000 gallons of oil and avoided nearly 1,900 metric tons of greenhouse gas emissions, or the equivalent of approximately 210,000 gallons of gasoline consumed. We also continue to focus on reducing electricity and natural gas consumption across our facilities. Of note, nearly 30% of our North American branches have converted some or all of their facilities to energy-efficient LED lighting. In addition, we have installed solar-energy generating systems in select branches where feasible, which in 2017 created approximately 324,000 kwh of energy. Water consumption correlates to business activity and, in particular, the amount of cleaning required as equipment is processed from off-rent to ready-to-rent. In 2017, our business activity increased significantly compared to 2016, which contributed to higher water consumption year-over-year. We remain focused on reducing our water consumption, including through the use of recycle water wash systems, which we now employ in more than 70 of our North American branches. The instrument governing our sustainability efforts is our Environmental Management Policy (see page 8), which is reviewed annually. This policy is available on our public website. Our Commitment to Corporate Citizenship 2018 7
ENVIRONMENTAL MANAGEMENT POLICY Herc Rentals is committed to minimizing the impact of our equipment rental operations on the environment by implementing programs that incorporate sound environmental policy. We operate in accordance with all relevant local, state, and federal regulations and strive to use pollution prevention and best management practices throughout our branches to: 1 Handle, store, and dispose of substances that are defined as hazardous material in compliance with local, state, and federal regulation; 1 Reduce, reuse, and recycle our waste products as much as possible; 1 Minimize water consumption and ensure safe water treatment within our branches by incorporating innovative design of waste water treatment systems; 1 Minimize energy consumption by employing energy reducing initiatives; 1 Conduct regular training for staff working in and around petroleum storage tanks to inform on hazardous materials stored onsite, as well as regular inspections of storage tanks, dispensers, and critical safety devices; 1 Develop and maintain appropriate emergency and spill response programs as required by local, state, and federal regulations; 1 Whenever possible, purchase products and services that do the least damage to the environment and communicate this commitment to our vendors; 1 Monitor the environmental impact of our business practices and review our progress on a continual basis; and 1 Promote environmental stewardship and best management practices to our customers that utilize rental equipment. Our Commitment to Corporate Citizenship 2018 8
KEY ENVIRONMENTAL DATA ELECTRIC KWh NATURAL GAS MMBTU WATER Gallons 30 150 60 27,233,781 26,948,664 132,633 45,720,965 49,055,018 25 125 40 123,132 20 100 20 2016 2017 2016 2017 2016 2017 WASTE WATER Gallons RECYCLED OIL Gallons 40 250 36,676,702 241,275 229,141 33,055,754 30 200 20 150 2016 2017 2016 2017 Our Commitment to Corporate Citizenship 2018 9
Our Safety Practices As the centerpiece of our Mission, Vision and Values, safety is an integral part of everything we do at Herc Rentals. In fact, our definition of success extends beyond operational and financial measures; success also includes a commitment to improving safety, safeguarding human health, and protecting the environment. Ultimately, this broader definition of success is in the best interests of our employees, our customers and contractors, our stockholders, and the communities in which we live and work. Our safety mission extends to helping our customers worksites and people operate safely. We offer training on our equipment to ensure safe operating practices; we perform safety assessments at customer worksites and offer suggestions for improvement; we participate in customers safety teams as a partner in reducing workplace hazards; and we apply our own required safety protocols whenever we visit a customer worksite. We expect to achieve annual safety performance levels equal to or better than the industry average and we are committed to ensuring we have the training, tools and time necessary to keep safety at the forefront of everything we do. As we continue to build on our commitment to safety, in 2018 we adopted the concept of the Perfect Day. The Perfect Day is defined as a working day across our entire company in which we have: 1 No recordable incidents; 1 No U.S. Department of Transportation violations (or their equivalents in other jurisdictions); and 1 No at fault motor vehicle accidents. Along with other standard safety performance indicators, beginning in 2019 we intend to disclose the number of Perfect Days we achieve during each year. The Perfect Day concept is now embedded in our company as part of our Safety Commitment. Our Commitment to Corporate Citizenship 2018 10
SAFETY COMMITMENT Herc Rentals requires an active commitment to, and accountability for, safety and safety compliance from all employees and its contractors. Herc Rentals operations management has the key leadership role in communicating, implementing, and ensuring conformance to safety and compliance policies and standards. At Herc Rentals, we are all committed to: 1 Protecting, and striving for improvement of, the safety and health of our people at all times; 1 Eliminating non-conformance to safety procedures and accidents; 1 Meeting specified customer safety requirements and ensuring continuous customer satisfaction; 1 Setting safety performance objectives, measuring results, assessing and continually improving processes and services through effective safety programs and processes; 1 Planning for, effectively responding to and rapidly recovering from any emergency, crisis and business disruption; 1 Appropriately communicating our safety policies, standards, programs and performance; 1 Rewarding outstanding safety performance; 1 Improving our performance on safety issues relevant to our internal and external stakeholders and on which we can have an impact; 1 Complying with applicable legislation, regulations, and industry standards related to safety; 1 Building a culture where Stop Work is understood as an individual obligation and company responsibility; Our Commitment to Corporate Citizenship 2018 11
1 Identifying and effectively managing safety risks; 1 Allocating appropriate resources to implement safety-oriented operational practices and procedures; and 1 Making each day a Perfect Day. The commitments expressed here are in addition to our basic obligation to comply with the Herc Rentals Mission, Vision, Values and Code of Ethics, as well as all applicable laws and regulations where we operate. KEY SAFETY DATA TRIR Total Recordable Incident Rate DART Days Away/Restricted, Transfer Rate LTC Lost Time Case Rate 2.00 1.00 1.00 1.31 0.77 0.70 1.00 1.11 0.50 0.50 0.54 0.36 0 2016 2017 0 2016 2017 0 2016 2017 Our Commitment to Corporate Citizenship 2018 12
Supporting Our Team Members We know that our customers have many options when deciding who they rent equipment from. We believe our team members are the key differentiators in making Herc Rentals our customers choice. We are committed to attracting, retaining and empowering talented and dedicated people as part of building the best team in the equipment rental industry. We also seek to build a team that reflects the variety of people, cultures and communities we interact with every day and to create an inclusive, productive environment in which all team members feel valued and respected. We support our team members with classroom and online training curricula encompassing safety, sales, operations and managerial development. We also provide other personal and professional growth opportunities to enable team members to advance in their careers and contribute to the company s ongoing success. Our Vision We aspire to be the supplier, employer and investment of choice in our industry. Our Values We do what s right. We re in this together. We take responsibility. We achieve results. We prove ourselves every day. Our Mission To ensure that end users of our equipment and services achieve optimal performance safely, efficiently and effectively. Our Commitment to Corporate Citizenship 2018 13
Celebrating 2018 International Women s Day at our Bonita Springs, FL, Field Support Center. We are committed to hiring veterans across all areas of our business. In support of that commitment, we are proud to be recognized as a 2018 Military Friendly employer and to participate in the U.S. Army Partnership for Youth Success, a program that helps veterans transition into the civil work force following their service. In keeping with our commitment to diversity and inclusion, we seek to advance opportunities for women in our company and, by extension, the equipment rental industry. As of April 2018, Herc Rentals workforce included approximately 580 women. We offer our team members competitive pay and benefits, performance-based incentives and the opportunity to benefit from the company s success through our Employee Stock Purchase Plan. We also support our team members when natural disasters strike, through our Employee Disaster Relief Fund that, at minimum, matches every dollar donated by fellow team members. To support team members career progress, we perform annual performance reviews and seek to provide team members with feedback as part of that process and other informal methods to enable their continued development. Also, we provide team members with feedback opportunities of their own, including direct email access to our Chief Executive Officer, and we maintain an Open Door policy for all managers. In addition, all employees can anonymously communicate employment-related, ethical or legal concerns via a dedicated, third-party managed helpline. Ultimately, we seek to create a rich employee experience, based on core values, a shared mission and a unifying vision, to help Herc Rentals become the best equipment rental company in the industry. Our Commitment to Corporate Citizenship 2018 14
Our Responsibility to Communities With approximately 275 locations, principally in North America, we have the opportunity to play an important role in supporting various needs and causes wherever we work and live. We believe that our philanthropic and volunteer activities are best managed at the local level, with each of our equipment-rental branches basing their efforts on available resources and community needs. To maximize the impact of our community support, we have prioritized our charitable assistance in the areas of disaster relief and response, in-kind use of rental equipment, and services to assist children and families. This approach is evident in our response to natural disasters. In 2017, individual Herc Rentals branches and team members responded to flooding in the Midwest, Hurricanes Harvey and Irma, wildfires in California and severe winter weather in the Northeast, by staging and rapidly Our Commitment to Corporate Citizenship 2018 15
deploying equipment where urgently needed, and donating time, labor, supplies and funds to aid devastated communities. Our response often meant an important difference in saving homes, businesses and possessions; restoring a sense of normalcy in the aftermath of disasters; and providing peace of mind and comfort to the many lives we touched. Team members also provide ongoing support to community programs across North America, such as volunteering for litter removal, serving as youth recreation coaches, and mentoring disadvantaged youths. On a more formal basis, in 2017 the company established a philanthropic partnership with Youth Haven, which offers a safe harbor for traumatized, abused, neglected and homeless children in Southwest Florida. We are committed to expanding our community engagement efforts over time in keeping with our responsibilities as a good corporate citizen. Our Commitment to Corporate Citizenship 2018 16
HercRentals.com Herc Holdings Inc. 27500 Riverview Center Blvd. Bonita Springs, FL 34134 Our Commitment to Corporate Citizenship 2018 180420 2018 Herc Rentals 17 Inc.