20 CORPORATE SOCIAL RESPONSIBILITY REPORT 16 CONTENTS 1 5 CREATING SHARED AND LASTING VALUE 1 REDUCING THE ENVIRONMENTAL 1.1. A CSR programme fully integrated into IMPACT OF MANUFACTURING the Group strategy 2 AND LOGISTICS OPERATIONS 183 1.2. CSR in the value creation model 13 5.1. The Group’s environmental protection policy 1.3. Transparency and CSR commitment: tangible at manufacturing level: organisation and strategy 186 results for the Group and its stakeholders 22 5.2. Energy and carbon footprint of manufacturing and logistics operations 192 1.4. Governance geared towards sustainable growth 35 5.3. Industrial waste and pollutants managing the impacts on the environment and local residents 205 5.4. Waste and materials cycle: optimising processes to use the strict minimum in terms of resources 2 and recover waste 209 A TRENDSETTER IN SUSTAINABLE 5.5. Controlling the water cycle in facilities 216 5.6. Protection of natural environments and actions MOBILITY 41 to promote biodiversity 220 2.0. Address environmental issues beginning 5.7. Reporting scope and methodology 223 at the innovation and design phases of products and services 47 2.1. Reducing greenhouse gas emissions 61 2.2. Air quality 73 2.3. Vehicle quality and safety 79 6 2.4. Environmental impact of materials: circular ETHICAL PRACTICES, ECONOMICS economy and sustainable materials management 91 AND CORPORATE GOVERNANCE 227 2.5. A presence on all mobility segments 102 6.1. Ethical practices in business relations 229 2.6. Scope and reporting methodology 112 6.2. Distribution of added value 239 6.3. Transparency and integrity of infl uence practices 243 6.4. Governance principles 251 6.5. Integration of CSR into governance 255 3 6.6. Reporting scope and methodology 256 HUMAN RESOURCES: ENABLER OF PERFORMANCE 113 3.1. Social dialogue 116 3.2. Responsible employment and skills management 120 7 3.3. PSA Group, builder of talent 128 THE GROUP’S COMMITMENT TO SOCIETY 257 3.4. Well-being, health and safety at work 139 3.5. Equality and diversity 149 7.1. Involvement in host communities 260 3.6. Scope and methodology of reporting 155 7.2. The Group’s sponsorship and philanthropy strategy 260 7.3. Socially responsible mobility: the Foundation’s initiatives 261 7.4. Local philanthropic investment 264 4 7.5. Information and respect for customers 266 RESPONSIBLE SUPPLY CHAIN MANAGEMENT 157 4.1. Suppliers: major links in the value creation chain 160 4.2. Suppliers: linchpins of the sustainability chain 171 8 4.3. Reporting scope and methodology 182 APPENDICES 275 8.1. CSR reference guides followed by PSA Group and external commitments 276 8.2. Forums for dialogue with stakeholders introduced by PSA Group 277 8.3. Concerning this report 279 8.4. Reporting scope and methodology 280 8.5. Cross-reference tables 283 8.6. Auditor’s Examination Report 295 1 CREATING SHARED AND LASTING VALUE 1.1. A CSR PROGRAMME FULLY INTEGRATED INTO THE GROUP STRATEGY 2 1.1.1. Message from the Chairman of the Managing Board 2 1.1.2. PSA Group: a global car manufacturer pioneering effi ciency and a leading mobility services provider 4 1.2. CSR IN THE VALUE CREATION MODEL 13 1.2.1. Risks and opportunities in all areas of CSR as they relate to future fi nancial performance and long-term prospects 13 1.2.2. PSA Group’s key issues and materiality matrix 18 1.2.3. PSA Group’s value creation model 19 1.3. TRANSPARENCY AND CSR COMMITMENT: TANGIBLE RESULTS FOR THE GROUP AND ITS STAKEHOLDERS 22 1.3.1. The Group’s CSR policy 22 1.3.2. CSR commitments and roadmaps: the PSA Group, an “impact player” 23 1.3.3. Tangible results for PSA Group stakeholders 25 1.4. GOVERNANCE GEARED TOWARDS SUSTAINABLE GROWTH 35 1.4.1. CSR in the Group’s governance 35 1.4.2. Operational management of CSR 37 1.4.3. Internal control system 39 PSA GROUP - CORPORATE SOCIAL RESPONSIBILITY 2016 1 1 CREATING SHARED AND LASTING VALUE 1.1. A CSR programme fully integrated into the Group strategy 1.1. A CSR PROGRAMME FULLY INTEGRATED INTO THE GROUP STRATEGY 1.1.1. Message from the Chairman of the Managing Board G4-1 2016 brought new forward momentum for the PSA Group. The year can be summed up in three words: performance, responsibility , transparency. First, performance. The efforts made in 2014 and 2015 as part of the “Back in the Race” plan have paid off. The Group has rebuilt its economic fundamentals, while its CSR performance remains one of the best in the world: it features in the CDP’s A List, and for the first time in its history has joined the Dow Jones Sustainability Index, where it is the second highest performing car manufacturer. It is also listed in all of the leading global SRI indices. In parallel, our three automotive brands have consolidated their pricing power. The product offensive that began in 2016 will continue, with the Core Model Strategy offering our customers new vehicles showcasing the technological achievements of our Core Technology Strategy. This year has seen a stream of new product announcements, technological choices hailed for their environmental performance, a new brand poised to revolutionise mobility services, equity investments in numerous start-ups, new partnerships, and the 2016: PERFORMANCE, penetration of new markets with new production plants. I firmly believe that lasting performance is only possible if a company can offer sustainable responses to its stakeholders: its customers, RESPONSIBILITY , employees, shareholders and long-term investors, supply partners and host countries. Our new strategic plan Push to Pass, unveiled TRANSPARENCY in the spring of 2016, is a performance plan that effectively distils their expectations over the long term. Our responsibility towards these valued stakeholders is the mainspring of our performance. Second, then: responsibility. Our Group has a long-standing commitment to Corporate Social Responsibility. It has consistently renewed its support for the ILO conventions and the principles of the UN Global Compact, and has long embraced its responsibility towards society and the environment. These are deeply embedded in its culture and values. The PSA Group supports the 17 global Sustainable Development Goals published in September 2015 by the Member States of the United Nations in a bid to put an end to poverty, fight inequality and injustice and tackle climate change. 2 PSA GROUP - CORPORATE SOCIAL RESPONSIBILITY 2016 CREATING SHARED AND LASTING VALUE 1 1.1. A CSR programme fully integrated into the Group strategy I FIRMLY BELIEVE THAT LASTING PERFORMANCE IS ONLY POSSIBLE IF A COMPANY CAN OFFER SUSTAINABLE RESPONSES TO ITS STAKEHOLDERS Our commitments and initiatives are enshrined in a proactive For the Group, accountability also means being committed to roadmap based on the three pillars of our Company’s Corporate business ethics right across the board. This alone can guarantee a Social Responsibility policy: sustainable mobility, a contribution to strong and fair economy. There can be no accountability without local economic development and socially minded co-innovation. transparency. p In sustainable mobility, our ambition is to become our customers’ Transparency. Clearly 2016 marked a major turning point for the preferred mobility services provider through our Core Mobility Group. Having always had the lowest CO2 emissions, we decided Services Strategy. Modern society has a growing need for mobility. that we had a responsibility towards our customers and civil As a solutions provider, we have a major role to play. Our strategy society to be open about our vehicles’ fuel consumption in real is based on a clear choice: first, to channel our R&D investments driving conditions. In partnership with two NGOs, Transport and into solutions that reduce pollutant emissions from our vehicles, Environment and France Nature Environnement, we developed a while ensuring that our technology appeals to the mass market brand new protocol to measure these emissions, thus demonstrating and is priced accordingly so that it can have a real environmental that business and civil society can work together in the common impact; second, to be present in the strategic segments of new interest. This measurement protocol is now open source. We are the mobility through equity investments in start-ups. All of our only car manufacturer to date that has chosen to publicly disclose mobility solutions come under the umbrella of our new brand all of its CO2 emissions, and invite other car manufacturers to follow Free2Move, which was launched in September 2016. our lead in this. We will continue this policy in 2017 by developing a p In addition, the Group is fully conscious of its responsibilities as measurement protocol for nitrogen oxide emissions. a core player in economic development for its host countries. Our duty is to provide all of our stakeholders with accurate and Through its supplier network, it implements a local supplier pertinent information so that they can make informed buying, integration policy in each of its major operational regions, collaboration and investment decisions. accompanied by responsible purchasing founded on CSR Our annual CSR Report describes how we harness our values and principles. It is also a committed player in the social and solidarity expertise to implement a sustainable business model creating economy of its host countries. Through its foundation, it works shared and lasting value. to put an end to the hardship that can hinder the mobility of the most vulnerable members of society. We hope you enjoy reading it. p Lastly, the Group builds on its long tradition of social dialogue to co-invent innovative solutions with employee representatives to support its transformation and sustain its growth. With its Global Framework Agreement on Corporate Social Responsibility, it has chosen to involve more than 90 unions around the world in its CARLOS TAVARES strategy.