Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Gradual shift from solvent-based coatings to water-based paints, drastically reducing emissions.
• Installation of a photovoltaic system at the Campodarsego facility (to be operational in 2020).
• Significant reductions in costs achieved in the negotiation of electricity and methane gas supply contracts. Use of electricity coming 100% from renewable sources continued at Italian sites.
• Waste reduction programs launched in 2014 led to relatively stable results.
• Specific waste reduction programmes implemented, focusing on non-recyclable waste.

Social Achievements

• Launched various social initiatives, including discounted tickets for cultural events for employees.
• Carraro India Cricket Tournament with over 850 collaborators.
• Celebrations marking Carraro’s 20 years in India.
• Open Factory event at the Campodarsego facility.
• Carraro China Value Season team building activities.

Governance Achievements

• Compliance with the Corporate Governance Code published by the Committee for Corporate Governance of Listed Companies in July 2015.
• Establishment of a Sustainability Operating Committee.
• Implementation of an ESG risk analysis integrated into the ERM 2018.
• Adoption of a Code of Ethics and the Organizational Model pursuant to Italian Legislative Decree no. 231/2001.
• Implementation of a whistleblowing reporting channel.

Climate Goals & Targets

Environmental Challenges

• Evolving and increasingly stringent environmental regulations in different countries.
• Fluctuating market demands impacting production volumes and supply chain management.
• Risks associated with climate change and its unpredictable effects.
• Risks associated with the spread of epidemics (Covid-19 mentioned).
• Managing human resources in a multinational context.

Mitigation Strategies

• Alignment of all operating units to the most rigorous environmental standards.
• Continuous monitoring of the labour market and implementation of adequate training programs.
• Development of a risk management model inspired by national and international best practices.
• Implementation of a whistleblowing system.
• Focus on energy efficiency and reduction of energy intensity.

Supply Chain Management

Supplier Audits: Pilot project on a sample of suppliers of Siap Spa focusing on the environment and occupational health and safety.

Responsible Procurement

• Preference for recyclable and reusable packaging materials.
• Use of reusable containers for material exchange with suppliers.
• Verification and redefinition of raw materials to reduce waste.

Climate-Related Risks & Opportunities

Physical Risks

• Unpredictable weather changes

Transition Risks

• Stringent anti-pollution regulations

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Standards (GRI Standards), Core option

Certifications: ISO 9001:2015, IATF 16949:2016, OHSAS 18001:2007, ISO 14001

Third-party Assurance: Deloitte & Touche Spa (limited assurance)

UN Sustainable Development Goals

• Goal 3 (Good Health and Well-being)
• Goal 4 (Quality Education)
• Goal 5 (Gender Equality)
• Goal 6 (Clean Water and Sanitation)
• Goal 7 (Affordable and Clean Energy)
• Goal 8 (Decent Work and Economic Growth)
• Goal 9 (Industry, Innovation and Infrastructure)
• Goal 10 (Reduced Inequalities)
• Goal 11 (Sustainable Cities and Communities)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)
• Goal 16 (Peace, Justice and Strong Institutions)

The report shows how various initiatives contribute to these SDGs.

Sustainable Products & Innovation

• Direct Drive solutions, ECOlogy Mode system, Twin ShiftTM drive systems.

Awards & Recognition

• Caterpillar ‘Gold Medal’ (Carraro China Drive Systems Co Ltd)
• John Deere ‘Partner Supplier’ (Carraro Drivetech do Brasil Ltda)
• Open Factory award in the ‘Corporate and community welfare’ category

Environmental Metrics

ESG Focus Areas

• Health and Safety in the Workplace
• Company welfare
• Product safety and quality
• Reduction in waste produced and adoption of responsible waste disposal methods
• Reduction of energy consumption and reduction of greenhouse gases
• Ethics and integrity in business management processes
• Anti-corruption
• Focus on technology and product innovation
• Engagement, dialogue, customer satisfaction and quality services
• Protection of human and workers’ rights
• Brand value and reputation
• Well-being and work-life balance
• Training and skills development
• Sustainable products and processes
• Diversity, equal opportunities and inclusion
• Reduction in water consumption and waste management
• Responsible procurement and use of materials
• Management of the supply chain and use and optimisation of local suppliers
• Performance management and employee remuneration
• Dialogue and internal communication
• Attraction, development and retention of resources
• External relations and transparent communications among stakeholders, also in reference to sustainability
• Community development
• Internal control and risk management procedures

Environmental Achievements

• Conversion of solvent-based coating systems to water-based systems to eliminate atmospheric emissions
• Installation of two photovoltaic systems producing 92,430 KWh in 2020
• Upgraded co-generation plant to a tri-generation system at Siap Spa plant in Maniago
• Installation of a new 999 KWe tri-generation plant at Siap Spa plant in Maniago
• Significant reductions in costs achieved in the negotiation of electricity and methane gas supply contracts. Use of electricity coming 100% from renewable sources continued at Italian sites.
• Significant reductions in non-recyclable waste since 2014
• Sharp reduction in plastic water bottle consumption (-70% at some plants, -100% at others)

Social Achievements

• Launched employee well-being programs including flexible working hours, part-time options, and remote working
• Established a prayer room for Muslim workers
• Implemented a Share the Culture initiative to encourage book and media sharing among employees
• Provided a virtual Open Factory experience
• Fundraising campaign to support families of two colleagues who died from Covid-19 (€57,000)
• Donation of 300 bottles of disinfectant to local police and donation to a local hospital in India
• Donation of over 40 computers to schools in Italy

Governance Achievements

• Compliance with the Corporate Governance Code
• Established Control, Risk and Sustainability Committee
• Implemented a Risk Management Procedure
• Adopted a Code of Ethics and Organisational Model pursuant to Italian Legislative Decree no. 231/2001
• Implemented a new supplier assessment model focused on sustainability

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the Covid-19 pandemic
• Cyber attack in September 2020
• Climate change and its potential impacts on business
• Water scarcity in some operating regions

Mitigation Strategies

• Developed alternative sourcing strategies to mitigate supply chain disruptions
• Implemented short and medium/long-term mitigation and remediation plans to improve cyber security
• Adopted a risk management model to address climate change risks and opportunities
• Implemented a judicious water management program to reduce water usage

Supply Chain Management

Supplier Audits: Around 100 strategic suppliers assessed via questionnaire at the end of 2020

Responsible Procurement

• Code of Conduct
• Supplier sustainability requirements
• Assessment of supplier adequacy in terms of technological and production capacity, quality, certifications, financial position, and respect for Carraro's Code of Ethics

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Increased average temperature
• Reduction in rainfall
• Reduced water availability

Transition Risks

• Changes to subsidies and incentives
• Changes to the regulatory framework for greenhouse gas emissions
• Market uncertainty
• Changes to reputation
• Changes to technology

Opportunities

• Self-production of energy
• Increased incentives for low-emission vehicles
• Improved reputation
• Development of new product technologies
• Resilience to economic changes

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Standards (GRI Standards) - In accordance - Core option

Certifications: ISO 9001:2015, IATF 16949:2016, ISO 45001, ISO 14001

Third-party Assurance: Deloitte & Touche Spa (limited assurance)

UN Sustainable Development Goals

• Goal 3: Good Health and Well-being
• Goal 4: Quality Education
• Goal 5: Gender Equality
• Goal 6: Clean Water and Sanitation
• Goal 7: Affordable and Clean Energy
• Goal 8: Decent Work and Economic Growth
• Goal 9: Industry, Innovation and Infrastructure
• Goal 10: Reduced Inequalities
• Goal 11: Sustainable Cities and Communities
• Goal 12: Responsible Consumption and Production
• Goal 13: Climate Action
• Goal 16: Peace, Justice and Strong Institutions

Carraro's initiatives contribute to these goals through various programs and policies related to employee well-being, training, diversity, environmental protection, responsible procurement, and ethical business practices.

Sustainable Products & Innovation

• eTB220 gearbox for electrifying compact operating machines
• 48V Mild Hybrid system for agricultural tractors

Awards & Recognition

• Carraro Tractors recognized at Fieragricola 2020
• SIAP SQEP recertification by Caterpillar