Climate Change Data

Environmental Metrics

ESG Focus Areas

• Human capital
• Corporate governance and business ethics
• Innovation
• Market focus
• Environment

Environmental Achievements

• Implemented a global project to gather environmental KPIs to set targets for the Group.
• Reduced GHG emissions from business travel compared to 2014.
• Applus+ RTD North America installed a new lighting system resulting in estimated energy savings.
• Applus+ Norcontrol Spain reduced waste generated by its facilities by 37%.

Social Achievements

• Formalised commitment to sustainability through a global CSR policy approved at Board level.
• Appointed a Corporate Social Responsibility Committee.
• Created the new role of Chief Compliance Officer (CCO).
• Celebrated annual Safety Day.
• Undertook 133 R&D projects involving 434 Applus+ staff and 266,880 working hours.
• Implemented the Applus+ ‘Golden Safety Rules’ to mitigate risks.

Governance Achievements

• Formalised commitment to sustainability through a global CSR policy approved at Board level.
• Appointed a Corporate Social Responsibility Committee.
• Created the new role of Chief Compliance Officer (CCO).
• Increased the proportion of independent directors on the Board.
• Established an internal whistleblowing channel (44 cases investigated).

Climate Goals & Targets

Environmental Challenges

• Oil and gas-exposed parts of the Group faced increasingly difficult market conditions resulting in a decline in organic revenue.

Mitigation Strategies

• Adjusted cost base to respond to reduced and increasingly competitive business environment.
• Expanded activities globally through acquisitions.
• Disposed of two non-core businesses.
• Integrated businesses to benefit from synergies and create new opportunities.

Supply Chain Management

Responsible Procurement

• Promotion of local products, services, and staff.
• Requirement of certain CSR criteria for Applus+ suppliers (CSR programs, fair employment practices, energy efficiency, no child labor).

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI G4 Core Option

Sustainable Products & Innovation

• Glideforming technology
• Mobile HCE project (mobile app protection)
• HTHA project (NDT techniques for hydrogen attacks)
• PWI project (polyethylene weld inspection)
• DTI TREKSCAN project (ultra-high-resolution ultrasonic inspection)

Awards & Recognition

• Visa Ready Program accreditation
• MasterCard Cloud-Based Payments accreditation
• AMEX Enabled Program accreditation
• ENAC accreditation for semi-volatile compound tests
• Guided Waves Testing accreditation by Repsol and BP
• IRATA membership
• NADCAP, CAA EASA 145, and AS 9100 accreditations
• Smog DADdy technology recertification
• ISO/IEC 17025 certificate from Kraftfahrt-Bundesamt
• Euro NCAP accreditation
• Recognition by ACHS as one of the five safest companies in Chile
• EMAS bronze award
• RoSPA Award
• Boeing Performance Excellence Award

Environmental Metrics

ESG Focus Areas

• Corporate Governance and Business Ethics
• Human Capital
• Commitment to Stakeholders
• Innovation
• Commitment to the Environment

Environmental Achievements

• Reduced energy ratio (GJ/k€) from 0.77 to 0.58
• Reduced Scope 1 emissions (tCO2) from 61,910 to 50,733
• Reduced total energy consumption (GJ) from 1,146,542 to 920,050
• Measured water consumption at a global level (625,246 m3)

Social Achievements

• Welcomed first female member to the Board of Directors
• Reduced incident rates
• Continuous improvement on talent and performance management
• Integrated all online training programs into a single global platform
• 89% of workforce are local employees
• No serious incidents reported

Governance Achievements

• Designed and approved a Compliance Management System for criminal risks
• Reviewed Anti-corruption Policy and Code of Ethics
• Developed new policies for the Selection of Directors and Communication and Contact with Shareholders, Institutional Investors and Proxy Advisors

Climate Goals & Targets

Environmental Challenges

• Reducing energy and water consumption and vehicle emissions
• Maintaining high safety standards
• Managing compliance across diverse global operations

Mitigation Strategies

• Designing processes to reduce energy and water consumption
• Implementing health and safety programs and Golden Safety Rules
• Implementing a Compliance Management System for criminal risks, including a Criminal Risk Map
• Regular employee training on ethics and anti-corruption

Supply Chain Management

Responsible Procurement

• Vetting processes to ensure suppliers meet ethical and quality commitments

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI G4 core option

Certifications: ISO 9001, OHSAS 18001, ISO 14001 (local level), NADCAP (various sites)

Sustainable Products & Innovation

• A+ Glide Forming technology (lighter aircraft components)
• Applus+ DISCOVERY system (NDT without shutdown)
• InSite data-management solution (predictive maintenance)
• Wireless emission inspection device

Awards & Recognition

• Best Technical Paper from ASME PVP 2015
• Best International Paper prize at the SAE Brazil 2016 Congress
• Best ITS Congress Paper prize at the 23rd ITS World Congress

Environmental Metrics

ESG Focus Areas

• Corporate Governance and Business Ethics
• Our People
• Innovation
• Stakeholder Engagement
• Sustainable Performance

Environmental Achievements

• Reduced total energy consumption by more than 13%
• Reduced total CO2 emissions by more than 12%
• Reduced Scope 1 emissions (tCO2) from 61,910 in 2015 to 41,954 in 2017

Social Achievements

• Reduced severity rate of accidents by 20% with no fatalities (although total accidents increased due to vehicle accidents)
• Increased training hours by more than 90% compared to the previous year
• Filled approximately 70% of management positions internally
• Implemented several initiatives to promote community development and reduce inequalities in South Africa and Colombia

Governance Achievements

• Implemented the Compliance Management System for Criminal Risks (CMS)
• Received 89 communications reporting possible non-compliance, with 79 closed in 2017 and 30 resulting in corrective/disciplinary action
• Seven out of nine Board members are independent, one of whom is female

Climate Goals & Targets

Environmental Challenges

• Increase in total accidents, mainly from vehicle accidents

Mitigation Strategies

• Set up specific training for defensive driving and established new safety controls

Supply Chain Management

Supplier Audits: 40% of suppliers vetted

Responsible Procurement

• Vetting process to ensure ethical, social, and environmental commitments are met by suppliers

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI G4 (Core option)

UN Sustainable Development Goals

• 1, 3, 5, 8, 9, 10, 11, 12, 13, 17

Nine of the UN's 17 SDGs are relevant to Applus+'s business.

Sustainable Products & Innovation

• Fibre-optic monitoring system
• DTI Trekscan for marine terminals inspection
• ODORA+ for odour measurement
• LiDAR system for non-contact inspections

Awards & Recognition

• RoSPA gold award (UK)
• Pacífico Seguros award (Peru)
• Go Best Service Award (Ireland)
• Best inspection station in Denmark (Denmark)
• Visa Excellence Award (China)
• Be Safe prize (IDIADA Division)
• Commercial Success Award (North Europe)

Environmental Metrics

ESG Focus Areas

• People
• Corporate Governance and Business Ethics
• Stakeholder Engagement
• Sustainable Performance
• Innovation

Environmental Achievements

• Reduced energy intensity rate by 6.4%
• Reduced GHG emissions intensity rate by 6.3%
• Reduced water consumption by 1.4%

Social Achievements

• Filled 73% of management positions internally
• Increased average annual training hours per employee from 36 to 47 hours
• Implemented 78% of 500 action plans from employee satisfaction survey
• Launched first Global Management Development Programme

Governance Achievements

• Developed General Data Protection Regulation project
• Approved four new policies and procedures
• Investigated 104 ethics non-compliance notifications, resolving 44 irregularities

Climate Goals & Targets

Environmental Challenges

• One fatality at work in Honduras
• Addressing areas for improvement identified in employee satisfaction survey

Mitigation Strategies

• Full investigation into fatality, reinforcing safety procedures and training
• Implementation of action plans from employee satisfaction survey

Supply Chain Management

Supplier Audits: 19 legal entities audited for compliance with Global Procurement Policy and Procedures and Suppliers Policy

Responsible Procurement

• Global Procurement Policy and Procedures
• Suppliers Policy
• Code of Ethics
• Global Anti-corruption Policy

Climate-Related Risks & Opportunities

Opportunities

• Developing new services related to emission testing and compliance

Reporting Standards

Frameworks Used: GRI Standards, Core option, UN Global Compact

Certifications: ISO 14001

UN Sustainable Development Goals

• Goal 3
• Goal 5
• Goal 8
• Goal 9
• Goal 10
• Goal 12
• Goal 13
• Goal 17

Applus+ aligns its activities with several SDGs, focusing on areas such as good health and well-being, gender equality, decent work and economic growth, industry, innovation and infrastructure, reduced inequalities, responsible consumption and production, climate action, and partnerships for the goals.

Sustainable Products & Innovation

• Modular system for internal and external inspection of stainless steel assets
• On Board Diagnostic (OBD) system for monitoring engine malfunctions
• GEOAPP for geotechnical monitoring

Awards & Recognition

• Top Employer in Spain
• Best Inspection Station in Denmark (IDIADA Division)
• Awards from major oil companies
• TIC Galicia Awards for Best tractor company of innovation projects
• Best international paper at Congress SAE Brazil 2018

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• CDP (B score) and FTSE4Good IBEX in 2019
• €200 million revenue (11% Group) from services to reduce environmental impact

Social Achievements

• Development and programmes in place for inclusion
• Low voluntary turnover rate (12%)
• 10% fall in accident rate

Governance Achievements

• High adherence to recommendations (89%) CNMV
• Strong culture of compliance
• Annual Corp. Governance road show by Non Executive Director

Climate Goals & Targets

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI, UN Global Compact

UN Sustainable Development Goals

• 9

Environmental Metrics

ESG Focus Areas

• Our People
• Stakeholder Engagement
• Sustainable Performance
• Corporate Governance and Business Ethics
• Innovation

Environmental Achievements

• Reduced water consumption by 7%
• Reduced electricity consumption by 3%
• Offset CO2 emission from flights in Spain
• For the first time, reported Scope 3 GHG emissions related to business trips

Social Achievements

• Reduced accidents rate by almost 10%
• Reduced severity rate by 26%
• Approved the Applus+ Diversity and Equality Policy
• Drew up 137 development plans for individual personnel from the Group’s managers in 26 countries, including more than 406 actions
• Filled approximately 77.5% of all available management positions internally

Governance Achievements

• Increased diversity of the Group’s Board of Directors (eight Directors out of ten were independent, 30% were women)
• Implemented a Compliance Management System for Criminal Risks (CMS)
• Updated Code of Ethics
• 100% of employees were trained in 2019 on the Code of Ethics and Global Anti-corruption Policy

Climate Goals & Targets

Environmental Challenges

• Climate change related risks (physical risks, brand and reputation risks, technological shifts, current and emerging laws)
• Increased reporting obligations related to climate change
• Extension of reporting requirements to the monitoring and environmental control of the value chain

Mitigation Strategies

• Implementing investments in services, operations and facilities to reduce the carbon footprint
• Implementing an internal plan for gathering and following-up energy consumptions and GHG emissions
• Reporting Scope 3 GHG emissions for the first time
• Gradually adapting the vehicle fleet to reduce CO2 emissions

Supply Chain Management

Supplier Audits: 78% of new suppliers screened using environmental and social criteria (limited to countries covered in SAP, 47%)

Responsible Procurement

• Global Procurement Policy
• Supplier vetting process (fiscal, environmental, labour, human rights compliance; anti-corruption procedures; data protection)

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Impact on suppliers due to climate change

Transition Risks

• Technological shifts
• Regulatory changes

Opportunities

• Development of energy-efficient products and services in renewable energy, electric vehicles, and aerospace

Reporting Standards

Frameworks Used: GRI Standards, Core option, UN Global Compact

Certifications: ISO 9001, ISO 14001, ISO 45001 / OHSAS 18001, ISO/IEC 17020:2012, ISO/IEC 17025, ISO/IEC 17065, EMAS, IRATA

UN Sustainable Development Goals

• Nine of the UN SDGs

The Group’s CSR Policy is aligned with nine of the UN Sustainable Development Goals.

Sustainable Products & Innovation

• Smog DADdy OBD Data Acquisition Device
• Digital inspection and mapping methods
• A+ Glide Forming

Awards & Recognition

• FTSE4Good IBEX index inclusion
• CDP rating of B
• Various awards from clients for service excellence and innovation

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• 23% of electricity consumption at our facilities from renewable sources
• Reduction of the GHG emission intensity (scopes 1 and 2) by 19%
• 13% of revenue from green services

Social Achievements

• Numerous recognitions for our performance in the field of talent management, health and safety, employees’ commitment, corporate culture, diversity, inclusion and equal opportunities, and for our brand and communications strategy
• Reduction of the total recordable cases frequency by 39% and the severity rate by 15% since 2017.
• Numerous activities to support disadvantaged groups around the world

Governance Achievements

• Amendment of the Director’s Selection Policy to include the target for 40% of female directors by 2022
• Effective compliance rate of 87% of the recommendations of the National Securities Market Commission (CNMV)
• “AA” classification (“Leader” category) of MSCI ESG Ratings, “B” level for CDP (above industry average) and renovation of the Group’s inclusion in FTSE4Good IBEX.

Climate Goals & Targets

Environmental Challenges

• The coronavirus pandemic significantly impacted revenue and profit in 2020, particularly in the first half of the year.
• Challenging Oil and Gas and Automotive industry end-market situation and the unprecedented degree of forecast uncertainty relating to COVID-19 leading to impairment charges.
• Supply chain disruptions due to the pandemic

Mitigation Strategies

• Proactive financial management resulted in strong cash flow and liquidity.
• Tight cost control and the benefit of the various Government cost protection measures mitigated the fall in profit from the significant reduction in revenue.
• Adaptation of services and creation of specific services to continue meeting clients' needs during the crisis.
• Implementation of digital and remote tools to maintain operations during the pandemic.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Objective assessment of suppliers before working with the company, including assurance of compliance with fiscal, environmental, workplace, and human rights regulations.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (cyclones, hurricanes, floods, wildfires)
• Long-term impacts of climate change (rising energy costs, rising sea levels)

Transition Risks

• Non-compliance with new environmental regulations
• Costs associated with adapting or replacing vehicle fleet due to sustainable mobility regulations
• Lack of flexibility to adapt to new technologies in the low-carbon economy
• Market risks associated with the transition away from fossil fuels
• Reputational risks associated with climate change management

Opportunities

• Development of new services to assist clients in complying with new environmental regulations
• Growth opportunities in renewable energy sectors

Reporting Standards

Frameworks Used: GRI Standards, essential option, Spanish Law 11/2018, UN Global Compact

Certifications: ISO 9001, OHSAS 18001 (migrating to ISO 45001), ISO 14001 (in more than 23 countries)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Applus+ adheres to the UN’s Statement of Business Leaders to renew international cooperation; boost security, peace and human rights and development; and achieve the SDGs.

Sustainable Products & Innovation

• Digital and remote tools for inspections and testing

Awards & Recognition

• FTSE4Good IBEX Index inclusion
• MSCI ESG Ratings AA
• CDP B rating
• Top Employer in Spain and Latin America
• Personnel Today Awards for Talent Management and Development
• Numerous other awards for talent management, health and safety, corporate culture, diversity, inclusion, and communications

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduction of Scope 1 & 2 emissions of 38% since 2019 and Scope 1 & 2 carbon neutral in 2023
• SBTi validated the 2030 and 2050 science-based emissions reduction targets – commitment to be net zero by 2050

Social Achievements

• Reduction in Lost Time Injury Frequency (LTIF) by 31% since 2021
• Management and Corporate Services vacancies covered by women >40% (79% in 2023)

Governance Achievements

• Compliance with applicable CNMV (Spanish regulator) recommendations >90% (98% in 2023)
• Professionals complete the training and sign up to the Code of Ethics >98% (99% in 2023)
• Senior Management incentivised on ESG targets at 15% annual bonus and 10% of the long-term incentive plans

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: SBTi

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• CDP award an “A” Leadership rating
• Financial Times and Statista Europe Climate Leaders 2023
• Included within the inaugural list of IBEX ESG index

Environmental Metrics

ESG Focus Areas

• Emissions reduction
• Decarbonization
• Health and safety
• Equality
• Ethical behavior

Environmental Achievements

• Retained AA rating by MSCI ESG

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: MSCI ESG, Sustainalytics, Standard & Poor's Global Corporate Sustainability Assessment, Gaïa, Standard Ethics, CDP, FTSE4GoodIBEX, IBEX Gender Equality

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Europe Climate Leaders 2023 (Financial Times and Statista)