Corporate Social Responsibility Report

CORPORATE SOCIAL RESPONSIBILITY REPORT 2014 CorporateCorporate SocialSocial ResponsibilityResponsibility ReportReport 20142014 Index FOREWORD 3 INTERVIEW 4 AVIATION INDUSTRY DEVELOPMENTS 7 FINANCIAL RESULTS 8 ithin a very rapidly-changing environment, the CSR HIGHLIGHTS 2014 9 Air France-KLM Group is pursuing its transformation initiated some three years ago. Demand for air GOVERNANCE 10 W transportation is growing and opening up new horizons. CSR approach 12 CSR strategy 14 To benefit from this growth and reinforce our competitive positioning, we Corporate governance 16 are investing in our products and services. We are developing our dual Shareholders 17 Paris-Charles-de-Gaulle and Amsterdam-Schiphol hubs, the gateways Safety 18 that Air France-KLM is opening to the world. This requires resolute efforts Risk management 19 to increase our attractiveness, competitiveness and communication with Ethics 20 all our stakeholders. Public positions 21 Air France-KLM is mobilizing to create the travel of the future, an experience ENVIRONMENT 22 we envision as caring, innovative and responsible. Conscious of the Objectives and main achievements 2014 24 leading role we can play with our customers, partners, suppliers and the Key figures 26 industry, we enshrine innovation alongside citizenship and environmental Climate change policy 27 commitment at the heart of our business strategy. This commitment is Carbon footprint 28 affirmed each year through our membership of the United Nations Global Sustainable biofuels 30 Compact. Noise 32 Air quality 33 Making sustainable development increasingly integral to operations, Waste 34 creating a growth dynamic with all our staff, finding original solutions in all Energy and water 36 areas, such are the goals which will enable us to Research and innovation 38 reinvent our business. Biodiversity 39 Air France-KLM In 2015, France will be host country for the COP21 SUSTAINABILITY IN THE CUSTOMER EXPERIENCE 40 Climate Conference. This is an opportunity Objectives and main achievements 2014 42 is mobilizing to show that Air France-KLM is committed to Our approach 42 meeting its customers’ needs more effectively Dialogue with customers 44 to create the travel and anticipating changes in our society. Sustainable procurement 46 Best practices 48 of the future, Alexandre de Juniac A sustainable and innovative product range 50 Chairman and Chief Executive Officer, an experience Air France-KLM RESPONSIBLE HUMAN RESOURCES 52 Objectives and main achievements 2014 54 we envision as Key figures 56 caring, innovative Group social policy 57 Health and safety at work 58 and responsible. Equal opportunities 60 International human resources 61

LOCAL DEVELOPMENT 62 Objectives and main achievements 2014 64 Economic value 65 Local development around our hubs 66 Local development at destinations 68 Social partnerships 70

PERFORMANCE INDICATORS 72

2 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 3 CorporateCorporate SocialSocial ResponsibilityResponsibility ReportReport 20142014 Index FOREWORD 3 INTERVIEW 4 AVIATION INDUSTRY DEVELOPMENTS 7 FINANCIAL RESULTS 8 ithin a very rapidly-changing environment, the CSR HIGHLIGHTS 2014 9 Air France-KLM Group is pursuing its transformation initiated some three years ago. Demand for air GOVERNANCE 10 W transportation is growing and opening up new horizons. CSR approach 12 CSR strategy 14 To benefit from this growth and reinforce our competitive positioning, we Corporate governance 16 are investing in our products and services. We are developing our dual Shareholders 17 Paris-Charles-de-Gaulle and Amsterdam-Schiphol hubs, the gateways Safety 18 that Air France-KLM is opening to the world. This requires resolute efforts Risk management 19 to increase our attractiveness, competitiveness and communication with Ethics 20 all our stakeholders. Public positions 21 Air France-KLM is mobilizing to create the travel of the future, an experience ENVIRONMENT 22 we envision as caring, innovative and responsible. Conscious of the Objectives and main achievements 2014 24 leading role we can play with our customers, partners, suppliers and the Key figures 26 industry, we enshrine innovation alongside citizenship and environmental Climate change policy 27 commitment at the heart of our business strategy. This commitment is Carbon footprint 28 affirmed each year through our membership of the United Nations Global Sustainable biofuels 30 Compact. Noise 32 Air quality 33 Making sustainable development increasingly integral to operations, Waste 34 creating a growth dynamic with all our staff, finding original solutions in all Energy and water 36 areas, such are the goals which will enable us to Research and innovation 38 reinvent our business. Biodiversity 39 Air France-KLM In 2015, France will be host country for the COP21 SUSTAINABILITY IN THE CUSTOMER EXPERIENCE 40 Climate Conference. This is an opportunity Objectives and main achievements 2014 42 is mobilizing to show that Air France-KLM is committed to Our approach 42 meeting its customers’ needs more effectively Dialogue with customers 44 to create the travel and anticipating changes in our society. Sustainable procurement 46 Best practices 48 of the future, Alexandre de Juniac A sustainable and innovative product range 50 Chairman and Chief Executive Officer, an experience Air France-KLM RESPONSIBLE HUMAN RESOURCES 52 Objectives and main achievements 2014 54 we envision as Key figures 56 caring, innovative Group social policy 57 Health and safety at work 58 and responsible. Equal opportunities 60 International human resources 61

LOCAL DEVELOPMENT 62 Objectives and main achievements 2014 64 Economic value 65 Local development around our hubs 66 Local development at destinations 68 Social partnerships 70

PERFORMANCE INDICATORS 72

2 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 3 Interview A look back at 2014 and the outlook for the next years

WHAT IS YOUR ASSESSMENT OF THE TRANSFORM PLAN? WHAT ARE offering for all European flights serving the Paris-CDG hub and the new THE RESULTS FOR THE AIR FRANCE-KLM GROUP? HOP! Air France proposition, mainly on departure from Paris-Orly. The aim Alexandre de Juniac is to meet market expectations more effectively and respond to our main The Transform 2015 strategic plan, launched in 2012, made way for a competitors. considerable improvement in Air France-KLM’s ability to compete. We We want to offer the best-in-class for the airline industry. By offering this com- reduced Group debt and implemented cost-saving programs. In parallel, plementary positioning, we are looking to address our entire customer base. we are pursuing an up-market move for our products and services, which we initiated three years ago. The Group has invested USD 1 billion to offer Pieter Elbers top-quality services on all its long-haul flights, aligned with the highest Political unrest around the world, a major economic crisis, spiralling oil prices, international standards. This enables us to again rank amongst the lea- competition from Middle Eastern airlines and low-cost carriers – all of these Alexandre de Juniac, Frédéric Gagey, Pieter Elbers, ding international airlines. The satisfaction scores of customers who have meant KLM had to make significant changes. Apart from that, the aviation Chairman and Chief Executive Officer, Chairman and Chief Executive Officer, Chairman and Chief Executive Officer, travelled in our new cabins have almost doubled, showing that we are on industry is still heavily regulated. However, KLM invested in its products and Air France-KLM Air France KLM the right path. services and in its fleet. We began installing our new World Business Class Deleveraging, cost savings and the upgrading of our products and ser- cabin interior aboard our Boeing 747 and 777-200 fleets. We phased out vices are all tangible results of the efforts made by the Group’s 100,000 our MD-11s, as part of our fleet renewal program, we welcomed new 777s, employees over the past three years. The next step is to win back market and our introduction team began preparing for the arrival of the 787. share with our new Perform 2020 plan. With Transform 2015, we have focused closely on structurally reducing our costs, reducing our net debt and, at the same time, improving our products In short and medium-haul travel, growth requires a response to THIS YEAR THE DEPLOYMENT OF NEW PRODUCTS AND SERVICES AND WITH AIR FRANCE AND KLM? and services. competition from low-cost carriers. This is the raison d’être of our CONTINUED AT AIR FRANCE AND KLM. IN YOUR VIEW, WHAT ARE THE Frédéric Gagey Transavia subsidiary, through which we plan to develop our low-cost DIFFERENTIATING FACTORS FOR AN AIRLINE? Transform 2015 proved effective and created a real momentum behind the HOW DO YOU SEE 2015 UNFOLDING FOR THE AIR FRANCE-KLM offer in Europe. Frédéric Gagey financial turnaround for Air France. We will benefit from its effects in 2015. GROUP? Concerning maintenance—where Air France-KLM ranks number two We are trying to differentiate ourselves by proposing innovative offers Air France is focusing on service quality and optimising on-board comfort. Alexandre de Juniac globally—we need to be closer to our customers, particularly in North attuned to our customers’ expectations. In 2014, we worked on in-flight In long-haul travel, we plan to continue to install our La Première suites The Group will begin to deploy the Perform 2020 plan. We need to reinforce America, the leading market. Lastly, we are continuing to restructure the comfort and on other aspects of travel such as airport customer experience. and new Business, Premium Economy and Economy cabins to offer all our our position as a major global player with strong foundations in Europe. cargo business. Within a year, we will carry almost all cargo in the bellies Our aim is to offer our customers a streamlined, autonomous airport expe- customers the highest possible level of comfort. We are playing the card of Our network gives us a competitive advantage but we are going to have to of passenger aircraft. Employees are at the heart of the process. We have rience through the deployment of digital tools and new self-service kiosks. French luxury and the excellence of our products and cuisine. We will also search for growth. The Summer 2015 schedule reflects this ambition. We begun to collate their transformation proposals by way of a “bottom-up” Thanks to these new developments, staff can focus more on building deploy this move up-market on our medium-haul network. are also reinforcing our partnerships, with a particular focus on Asia where process. I am impressed by the high response levels and by the ideas, caring and personalized relationships with customers. We have restructured our medium-haul operations across the Air France our challenge is to grasp every development opportunity. which are really interesting. I also believe that airlines have a citizenship role to play. Air France 2 316 3 87.4 1,3 1st hubs long-haul network destinations businesses million million Paris-CDG from Europe Passengers, Cargo, Maintenance passengers carried tons of cargo Amsterdam-Schiphol in 115 countries

4 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 5 Interview A look back at 2014 and the outlook for the next years

4 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 5 encourages innovation in the territories where it operates and we have and by equipping our frontline staff with tablets. This will further optimize signed the innovative SME Charter. We also support startups and engage customer service. As our staff is our main asset, we are also focusing on Aviation industry developments in partnerships. As another example of Air France’s commitment, I am maintaining a healthy workforce and improving employability. also to develop procurement from the protected sector. This year, the pro- AIRLINES BUSINESS CLIMATE CHANGE portion of our procurement reserved for businesses employing persons IN 2014, AIR FRANCE LAUNCHED ITS LAB’LINE FOR THE FUTURE The airline industry operates in a competitive environment, concerning a Mitigating climate change remains an important challenge in a context with disabilities again increased, thereby demonstrating our confidence PROJECT. CAN YOU TELL US MORE ABOUT THAT? highly cyclical business and stands out poorly in the value chain as ear- of resource scarcity and volatility of oil prices. Although oil prices have in them. Frédéric Gagey ning the lowest returns and bearing virtually the highest risk. The strong dropped substantially over the last year, a shift towards sustainable bio-

I am very proud of this project. I am convinced that the future of aviation will competition from low-cost carriers as well as expanding Middle Eastern fuels is crucial. Collaboration is needed to reduce CO2 by focusing on new Pieter Elbers involve innovation and increased respect for the environment. It is concrete airlines require adapted business plans and growth strategies. Traditional technologies, operational efficiency, improved infrastructure and economic KLM turned 95 in 2015 by being innovative, customer-centric and flexible. proof of Air France’s commitment to innovation and research. Since Sep- European hub-carriers are engaged in restructuring plans to restore ade- measures to fill the remaining emission gap. To ensure the high standard of our products, we continually invest in tember 2014, and for a one-year period, we have been operating weekly quate levels of profitability, particularly relative to competitors who benefit our business operations so that we can keep improving ourselves and flights between Toulouse and Paris powered by biofuel. Lab’line is an from a more dynamic context. CUSTOMER BEHAVIOR become more efficient. opportunity for Air France to showcase all its innovation aimed at more Customer behaviour has undergone a profound transformation in recent Our staff is developing innovative solutions by sharing knowledge and responsible travel, not only environmentally but also by expressing social GLOBAL ALLIANCES years. Customers are well informed and sensitive to the value of the ser- experiences to optimise products. Apart from investing in our fleet, our and citizenship dimensions. Aviation remains a link between mankind and Consolidation remains a key factor behind improving margins in the air vice offered. The need for a personalized service is growing, whatever the products and our services, we are also working on central security at Schi- economies. transport industry. Mergers, alliances and partnership agreements create class of travel. The development of mobile devices is changing established phol, which is a crucial improvement for our customers. Through this project, we aim to support the development of a full-fledged economies of scale and reduce operating costs. Traditional alliances such practice: Customers share their experiences online, and expect real time Since 2009, KLM has been a pioneer in service provision via social media. French biofuel industry. To this end, we are mobilising fourteen partners to as SkyTeam, Star Alliance and Oneworld continue their growth. The Middle information and quick response through social media. In addition, mobile KLM offers a 24/7, one-stop shop, in 14 languages on six platforms, create a real dynamic. We are passionate about this challenge. Eastern carriers also continue to develop partnerships and make condi- booking continues to grow. In the next few years, technological innovation through which we engage in authentic, open and personal dialogue. We tions challenging for European airlines. will also require changes in traditional distribution systems. believe that by engaging actively we can learn, innovate and make a diffe- FOR THE TENTH YEAR RUNNING, AIR FRANCE-KLM HAS BEEN rence for our customers. INCLUDED IN THE DOW JONES SUSTAINABILITY INDEX, THE STRUCTURAL GROWTH REGULATIONS KLM is working to enhance its position as Europe’s leading cus- LEADING INTERNATIONAL INDEX EVALUATING COMPANIES ON THEIR The air transport industry is growing by about 5% annually, and is expec- Strict regulations are applied to consumer protection and security, resul- tomer-centric, innovative, efficient network carrier. Our frontline staff SUSTAINABLE DEVELOPMENT PERFORMANCE. ted to develop even further over the coming two decades. High growth will ting in more restrictions for customers and higher costs for carriers. Varying already belongs to the top in Europe, but we strive to constantly outper- Alexandre de Juniac be concentrated in emerging markets in Brazil, China and Southeast Asia. passenger rights around the world creates difficulties for airlines. Unlike rail form ourselves in terms of customer-centricity. Only then can we maintain DJSI and the extra-financial rating agency RobecoSAM, ranked International Air Transport Association’s prediction for 2050 for aviation transport, aviation funds all of its own infrastructure costs, both on the our lead over our competitors. Air France-KLM as the Group leader of the “Airlines” category for the is 16 billion passengers travelling by plane and 400 million tons of cargo ground and in the air, as well as flight security and safety costs. The cost of tenth consecutive year. being carried. using this infrastructure has risen steeply in the past decade. WHAT ARE THE DEVELOPMENTS FOR KLM IN 2015? Furthermore, for the sixth year, Air France-KLM was named leader of Pieter Elbers the broader “Transport” category, grouping air, rail, sea and road trans- KLM has launched Flight Plan 2015. Of course, the operational side of portation, together with airport activities. Air France-KLM thus ranks AIR FRANCE-KLM NETWORK Perform 2020 includes CSR elements. We will focus on remaining at the amongst the twenty-four most sustainable companies in the world, top of the Dow Jones Sustainability Index. We have defined targets to each in their own sector of activity. Europe reduce our waste, further introduce responsible catering products and Ten years represents a real recognition of our commitment and strategy,

save energy. It is our ambition to reduce CO2 emissions by 20% through which has been built over the long term. It encourages us to continue 2020, in the air and on the ground. How? Through fleet renewal, by intro- our efforts and develop new projects. North ducing the 787-9 and by replacing our Fokker 70s with Embraer 175s, America 180 destinations and by pursuing our efforts to develop the market for sustainable biofuels. We will further digitize our processes by implementing a paperless cockpit Asia 20 Middle East destinations 24 destinations South America destinations12 Africa and Caribbean 52 25 destinations destinations Member Indian Ocean of SkyTeam 3 destinations 94,666 546 2nd largest alliance employees (FTEs) aircraft in operation 20 members more than 1 000 destinations

6 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 7 encourages innovation in the territories where it operates and we have and by equipping our frontline staff with tablets. This will further optimize signed the innovative SME Charter. We also support startups and engage customer service. As our staff is our main asset, we are also focusing on Aviation industry developments in partnerships. As another example of Air France’s commitment, I am maintaining a healthy workforce and improving employability. also to develop procurement from the protected sector. This year, the pro- AIRLINES BUSINESS CLIMATE CHANGE portion of our procurement reserved for businesses employing persons IN 2014, AIR FRANCE LAUNCHED ITS LAB’LINE FOR THE FUTURE The airline industry operates in a competitive environment, concerning a Mitigating climate change remains an important challenge in a context with disabilities again increased, thereby demonstrating our confidence PROJECT. CAN YOU TELL US MORE ABOUT THAT? highly cyclical business and stands out poorly in the value chain as ear- of resource scarcity and volatility of oil prices. Although oil prices have in them. Frédéric Gagey ning the lowest returns and bearing virtually the highest risk. The strong dropped substantially over the last year, a shift towards sustainable bio-

6 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 7 Financial CSR highlights results 2014

BREAKDOWN OF REVENUES AIR FRANCE LAB’LINE FOR THE FUTURE KLM CORPORATE BIOFUEL PROGRAM BY SECTOR OF ACTIVITY he Air France-KLM Group comprises a single holding company and two airlines, Air France and KLM, each of which retains its own 79 % T brand and identity. Its three main businesses are passenger trans- 14 partners 15 partners port, cargo transport and aviation maintenance services, for its own fl eet Passenger transport 11 % and those of other airlines. Cargo For the period between January 1 and December 31, 2014, consolidated 5 % One weekly ﬂ ight € Aviation maintenance Amsterdam - Aruba - revenues amounted to 24.91 billion, a 2.4% decrease but stable 5 % Toulouse - Paris ﬂ ights Bonaire on partly on biofuel Other businesses 20 (+0.3%) like-for-like. The result from current operations was negative at (Transavia, catering...) partly operated with biofuel €129 million (versus income of €130 million at December 31, 2013).

BREAKDOWN OF PASSENGER REVENUES FLIGHT NOISE EMPLOYEES Private sector Revenues BY DESTINATION OPERATIONS employer 90 % st u 33 % 19 % located in France Air France 1 24,912 m and in The Netherlands 38 % in the Paris region Europe 3.45 liters reduction compared rd North America fuel / passenger / 100 km to 2000 Result from current operations KLM 3 in the Netherlands Asia-Pacifi c 43.2 % of women Africa & Middle East 8 % 18 % u -129 m South America GROUND Training 9 % Caribbean & Indian Ocean 13 % 86 g. OPERATIONS

Energy consumption 28 CO2 / passenger / km Senior management hours DISTRIBUTION 6.7 % reduction compared and executive level / employee at Air France OF THE GROUP’S REVENUES to 2011 10 % women reduction u compared 26.3 % 20.5 % 3,229 CO2 Through its business activity and investments o 357 m o 458 m o 616 m to 2013 at Air France at KLM / employee at KLM o 2,589 m Others Aeronautical Fleet Air France-KLM contributes to economic Repayment of debt development at its hubs and destinations. o 1,583 m REVENUES o Loans SUSTAINABLE PROCUREMENT SOCIAL PARTNERSHIPS 24,912 m INVESTMENTS AIRPORTS AND DEVELOPMENTS o o 2,216 m Passengers Maintenance 623 m Disposal of aircraft of the 4,976 suppliers u 14 112.7 million STATE and fi nancial assets Taxes signed the Sustainable Development charter AND on tickets 75 % million Miles LOCAL (not included fi nancial support donated by Flying Blue Cargo EXPENSES AUTHORITIES in turnover) to community projects members Responsible catering products added 15 on board KLM fl ights DJSI / RobecoSAM o o o o o o o 206 m 7,316 m 920 m 1,473 m 6,629m 8,289 m 14 m million spending in the Airline industry since 2005 State and local Employees Airports Air traffi c control Suppliers Other Non-profi t in the Industry Group “Transportation” authorities (fees) (en route charges) (fuel) suppliers (sponsorship) (payroll tax o 2,001m) u th Data for 2014 fi nancial year in million euros. (taxes and fees) 18 by Air France in sheltered sector N°1 for the 6 year

8 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 9 Financial CSR highlights results 2014

8 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 9 CSR APPROACH AMBITION

CSR STRATEGY Our ambition is to set the standard in CSR CORPORATE GOVERNANCE and to remain the frontrunner in the air Governance SHAREHOLDERS transport industry.

SAFETY

RISK MANAGEMENT

ETHICS

PUBLIC POSITIONS

10 AIR FRANCE - KLM Corporate Social Responsibility Report 2014 11 CSR APPROACH AMBITION

CSR STRATEGY Our ambition is to set the standard in CSR CORPORATE GOVERNANCE and to remain the frontrunner in the air Governance SHAREHOLDERS transport industry.

SAFETY

RISK MANAGEMENT

ETHICS

PUBLIC POSITIONS

10 AIR FRANCE - KLM Corporate Social Responsibility Report 2014 11 GOVERNANCE

MATERIALITY MATRIX

CSR Importance for our stakeholders Safety and Security

Biofuel Noise and approach Human and Children’s Rights Air Quality Stakeholder Engagement Responsible Inflight Catering Fleet Development

Waste Biodiversity Risk Management Passenger Health

s a global business, Air France-KLM enables people, economies STAKEHOLDER ENGAGEMENT Training Health and Safety and cultures to connect, driving economic growth and social Stakeholder engagement plays a major part in Air France and Water Diversity and Equal Ethics at Work Customer Relations Opportunity CO Reduction A progress. The Group assumes its responsibilities and acts to KLM’s CSR strategy. Stakeholders are identified as actors that are 2 reconcile growth with environmental protection, social value and local significantly involved in the two airlines’ activities, and who can Ground Energy development at its hubs and destinations. affect Air France-KLM’s ability to successfully implement its strategy. Local Development As a worldwide operator, Air France-KLM interacts with various Local Partnership (NGOs) stakeholder groups. Quality of Life Sustainable Procurement In 2014, Air France-KLM identified and engaged with its major at the Workplace stakeholders through various channels, including: Sponsoring Climate Change internal barometers and events to monitor staff perception and Adaptation collect suggestions for improvement; Responsible Marketing and Communication external stakeholder sessions; Innovative and Responsible customer satisfaction and perception surveys; Products dialogue and evaluation of supplier CSR performance; CO Compensation exchange of best practices, benchmarks and working groups 2 Importance for Air France-KLM within the industry and with other large companies; dialogue with shareholders and investors, recommendations from non-financial ratings agencies; reviews and comments collected via dedicated email addresses, GOVERNANCE ENVIRONMENT CUSTOMER EXPERIENCE RESPONSIBLE HUMAN RESOURCES LOCAL DEVELOPMENT websites and social media; various engagement pathways to enable stakeholders to express grievances.

MATERIALITY ASSESSMENT STAKEHOLDER MAP In 2014, Air France and KLM carried out an integrated materiality process in order to map the material CSR topics related to their business and operations. Passengers and Distributors Employees Cargo In this process, amongst others, an Customers Maintenance Customers external study was conducted seeking National Policy Airports ARE DIRECTLY ENGAGED Makers the views of various stakeholder groups. To prioritize and rank the topics, internal Air Navigation Trade Unions International, European Local Residents’ and National Authorities Associaions Services and external stakeholder inputs were Local Business Suppliers used. Surveys were conducted amongst employees, customers, corporates, Media and Key Authorities Partners Opinion Leaders and NGOs mainly in France and The Netherlands. These included Air France- Humanitarian and KLM Group senior decision makers as well. From the results, a materiality CONTRIBUTE Development NGOs Air Transport and Industry Bodies Professional Local matrix was developed showing the most material aspects for the Group. Economic Associations Certification Rating and Bodies Players 28 material aspects have been identified including safety, risk management, CO2 Investors Authorities Environmental Agencies NGOs reduction, biofuels, sustainable procurement, ethics, human rights. To make Scientific the matrix easier to read, these aspects were clustered into the categories: Financial Partners Shareholders Community Governance, Environment, Customer Experience, Responsible Human INFLUENCE Resources and Local Development. In 2015, the materiality identification method will be further enhanced. The results of the materiality assessment are For more information about stakeholder dialogue, see p.74-75. shown above.

12 AIR FRANCE - KLM Corporate Social Responsibility Report 2014 13 GOVERNANCE

MATERIALITY MATRIX

CSR Importance for our stakeholders Safety and Security

Biofuel Noise and approach Human and Children’s Rights Air Quality Stakeholder Engagement Responsible Inflight Catering Fleet Development

Waste Biodiversity Risk Management Passenger Health

12 AIR FRANCE - KLM Corporate Social Responsibility Report 2014 13 GOVERNANCE

CSR GOVERNANCE AND IMPLEMENTATION

CSR BOARD OF DIRECTORS AIR FRANCE-KLM Approves the strategic orientation of the Group’s activities and ensures implementation Reviews management reports, which provide information, among other subjects, on CSR performance strategy The audit committee monitors the effectiveness of the Group’s internal control and of the Group’s risk management systems

GROUP EXECUTIVE COMMITTEE INTERNAL AUDIT Validates the Group's CSR policy, which is included in the annual Independently assesses the effectiveness of the risk management Group Strategic Framework system and performs assurance audits AT GROUP LEVEL AT Approves the annual audit plan he Group’s commitment is laid out in its Corporate Social Responsibility Statement, Social Rights and Ethics Charter and Climate Action T Plan. To integrate CSR in business and operations, Air France-KLM CSR strategy is centered around four pillars: AIR FRANCE BOARD OF DIRECTORS, KLM BOARD OF MANAGING DIRECTORS AND SUPERVISORY BOARD Approve strategic orientation, CSR policy and ensure implementation ENVIRONMENT Reduce our environmental CUSTOMER EXPERIENCE EXECUTIVE COMMITTEES AIR FRANCE AND KLM footprint by improving our Integrate sustainability within Determine the CSR strategy and policy and associated risks and opportunities operations, by innovating the entire value chain to offer Integrated Management System Review at Air France and Safety Review Board at KLM in the supply chain and our customers sustainable by mobilizing our staff and and innovative products and the industry. services. CSR DEPARTMENTS BUSINESS, OPERATIONS AND SUPPORT DEPARTMENTS AT AIRLINE LEVEL AT Defi ne and implement policy and objectives Integrate CSR policy and objectives Coordinate the Environmental Ensure the responsibility and monitoring of the Quality Safety Environment systems Management System Manage emergency and crisis situations

LOCAL DEVELOPMENT Create economic and RESPONSIBLE HUMAN social value, through our RESOURCES network, at hubs and SUSTAINABILITY IN BUSINESS AND OPERATIONS As such, in 2014 Air France renewed its CSR strategy, Air France Maintain a responsible social destinations. The Group Executive Committee reviews CSR strategy and perfor- Takes Care, centered around Governance, Environment, Customers, policy and encourage personal mance annually, as part of the overall Group Strategic Framework, Employees, Partners and Local development. Objectives for 2020 and development to ensure the which is reviewed and approved by the Board of Directors. annual action plans are set and progress is monitored annually. motivation and drive of our At Air France, CSR is driven by an Executive Vice President who is a Environmental objectives for 2020 are:

employees. member of the Executive Committee. At KLM this role is fulfi lled by the Aircraft energy effi ciency: 20% CO2 emissions reduction compared

CEO, who chairs the Executive Committee. Each airline has committees with 2011 (in g.CO2 / FTK); monitoring the integration of CSR and associated risks and opportuni- Ground energy efficiency: 20% reduction in overall energy ties. At KLM these are the quarterly CSR Council and the Safety Review consumption compared with 2011; Board, which meets six times per year. Air France reviews CSR objectives Waste recycling and recovery: 100% of non-hazardous waste and NATIONAL AND INTERNATIONAL COMMITMENTS Air France is a signatory of the Caring for Climate initiative led twice a year during the Executive Committee meeting dedicated to the 60% of hazardous waste recovered. Air France-KLM respects fundamental rights: The Universal by the UN Global Compact and the UN Environment Program. In Integrated Management System (IMS) objectives. Declaration of Human Rights, The Charter of Fundamental Rights 2014, Air France signed the Paris Climate Action Charter. Air France and KLM CSR offi ces defi ne and implement CSR policy, At KLM, within the KLM Takes Care strategy, the following ambitions of the European Union, The International Labour Organization’s KLM has been working in partnership with WWF-NL since coordinate the Environmental Management System, and monitor roll- for 2020 were set in 2013:

(ILO) Declaration on Fundamental Principles and Rights at Work, 2007 to develop a more sustainable air transport industry. out of policy within businesses and operational divisions. Smart Energy: 20% CO2 reduction for fl ight and ground operations and the Organization for Economic Cooperation and Develop- With partner UNICEF the Netherlands, KLM aims to develop Air France and KLM are ISO 14001 certifi ed for all fl ights and opera- compared with 2011 (tons/km); ment’s (OECD) guiding principles. guidelines for the industry based on the ten Children’s Rights and tions in France and The Netherlands. Responsible Catering: 100% responsible infl ight catering products Air France and KLM have been signatories of the United Business Principles. Employees are encouraged to contribute to the CSR objectives. (on fl ights from Amsterdam); Nations Global Compact since 2003 and 2006, and are com- With regards to sustainable procurement, Air France signed Through innovation programs they can share ideas that improve work Zero Waste: 100% recycling and recovery; mitted to respecting and promoting its ten principles (see p.82). the Charter for Public Companies in Favor of Innovative SMEs and processes, effi ciency and safety, or other types of CSR performance. Meaningful Community Involvement: All areas have a program in The Group promotes and encourages its partners and suppliers KLM signed the Sustainable Supply and Corporate Responsibility place positively impacting future generations. to commit to this path (see p.20 and 46). Manifesto, which aims to support the market for sustainable pro- OBJECTIVES AND MANAGEMENT INDICATORS

ducts and services. Every year, Air France and KLM senior executives formalize their com- The CO2 target is a common Air France and KLM objective for mitment to CSR, through action plans with specifi c targets. 2020.

14 AIR FRANCE - KLM Corporate Social Responsibility Report 2014 15 GOVERNANCE

CSR GOVERNANCE AND IMPLEMENTATION

employees. member of the Executive Committee. At KLM this role is fulfi lled by the Aircraft energy effi ciency: 20% CO2 emissions reduction compared

14 AIR FRANCE - KLM Corporate Social Responsibility Report 2014 15 GOVERNANCE GOVERNANCE Corporate Shareholders Governance

BREAKDOWN OF SHARE CAPITAL

Air France-KLM is a limited company with a Board of directors and is organized under French Law. The Board of directors operates according to French ursuant to the obligation for air December 31, 2014 on a quarterly basis. Members are corporate governance principles, as set out in the AFEP-MEDEF Corporate Governance Code. transport companies to moni- also invited to information sessions P tor and control their sharehol- at regional sites and to visits of Air ders, Air France-KLM implements France facilities. The Consultative BOARD OF DIRECTORS COMMIT 75.9% Others DIT TEE a procedure for their identifi cation. Committee for Individual Shareholders AU Diversity of Directors’ proﬁ les On December 31, 2014, Air France- is consulted on a regular basis French State - 5 female members: 35.7% of total Board KLM was 57.7% owned by French 15.9% to improve the way the Group members 14 interests (compared with 57.5% on Employees provides information and services - 4 Dutch nationals (FCPE) 6.8% - 6 independent directors, in view of the Group’s December 31, 2013) and more than to shareholders. The Committee is 6 members Treasury 1.4% ownership structure (notably the French State BOARD DIRECTORS 73% by European institutions. shares comprised of twelve members and and employees) and the specifi c rules governing 75% independent directors* December 31, 2014 ION C meets with senior leaders of the the appointment of a number of its Board 5 meetings; 87% RAT OMM NE I directors. Proportion of independent Directors: U TT INVESTORS Group four times per year, notably to attendance rate M E 50% within the meaning of the AFEP-MEDEF 11 DIRECTORS E E R Air France-KLM pursues regular dialogue with fi nancial analysts, prepare the annual general meeting. Corporate Governance Code*. appointed by the General Shareholders’ Meeting (of whom institutional investors and SRIs (Socially Responsible Investors). In 2014, the magazine Le Revenu attributed to Air France-KLM the two are representatives of the Beyond meetings organized to communicate fi nancial results, senior Super Silver Award for the quality of its shareholder relations, the Gold 6 members Combined functions of Chairman employee shareholders). NTS CO executives regularly take part in conferences on air transport in Europe Award for the best AGM and the Silver Award for the best website in TME MM 60% independent directors* and Chief Executive Ofﬁ cer IN IT and the United States. The Group organizes Investor Days, which are the “SBF 120 outside the CAC 40” category. PO TE P E 5 meetings; 97% The combination of the functions of Chairman A an opportunity to discuss its strategic decisions. 3 DIRECTORS attendance rate of the Board of Directors and Chief Executive representatives of the French The Group was awarded the Silver Award for “Best investor relations, EMPLOYEE SHARE OWNERSHIP Offi cer enables everyone’s energies to be State appointed by ministerial all categories” at the Investor Relations and Financial Communication Air France-KLM has one of the highest proportions of employee share mobilized around a single function aimed at decree. 3 members improving the company’s levels of performance. 67% independents directors* Forum in December 2014. The quality of information provided to ownership of the companies in the SBF 120 stock index: more than 5 meetings; 100% investors, especially when presenting the new strategic plan Perform 40,000 current and former employees own 6.8% of Group equity on attendance rate 2020 and the availability of Air France-KLM teams were key criteria. December 31, 2014. Two employee shareholder representatives sit on the Board of Direc- INDIVIDUAL SHAREHOLDERS tors. These are appointed by the employee shareholders themselves The Group pursues a policy of active dialogue among its individual and contribute to the work of the Audit Committee. DIRECTORS’ TERM ETHICS AND INTERNAL 12 MEETINGS OF THE shareholders. To address shareholder concerns and to present its OF OFFICE REGULATIONS BOARD OF DIRECTORS businesses, assets and growth potential, the Shareholders’Club provides access to all general and fi nancial information related to the 4 years (expiration dates for these terms of offi ce Two documents adopted by the Board and regularly updated: Average attendance rate: 90% staggered to facilitate the smooth renewal of the - internal regulations regularly updated and available online**; business. The ACTION’air letter is sent to the Club’s 7,000 members Board of Directors). - compliance rules. SHAREHOLDERS’ GENERAL MEETING, TRAINING OF BOARD MAY 20, 2014 DIRECTORS COMPENSATION ANNUAL EVALUATION

Newly appointed directors may carry out site visits, meet Information published in the Registration Document, in the Evaluation of the Board is carried out on an annual basis. One share equals one vote Yes with key managers from within the Group and undertake Management Report and on the Group’s website**: With respect to the 2014 fi nancial year it was carried out training organized by the company. - criteria and compensation amounts paid to executive by an independent fi rm. On appointment, they receive all the information directors; Number of shareholders present, 12,635 shareholders required to fulfi ll their mandates. - allocation modalities and directors’ fees. represented, granting power representing Should they leave the company, executive directors do not of attorney to chairman benefi t from any special indemnities. 171,490,146 shares 6.8 % or voting by mail Employee share For further information, see the Registration Document 2014 at www.airfranceklm.com ownership Attendance rate 57.9% * In application of §9.2 et 16.1 of the AFEP-MEDEF Corporate Governance Code, the two directors representing employee shareholders are not counted in the calculation of the percentages of independent shareholders within Boards of directors and Committees. ** www.airfranceklm.com, Governance section

16 AIR FRANCE - KLM Corporate Social Responsibility Report 2014 17 GOVERNANCE GOVERNANCE Corporate Shareholders Governance

BREAKDOWN OF SHARE CAPITAL

16 AIR FRANCE - KLM Corporate Social Responsibility Report 2014 17 GOVERNANCE GOVERNANCE Safety Risk management

afety is the absolute priority for CULTURE OF SAFETY ir France-KLM is exposed reported risks, members of the Air France-KLM’s Executive Com- Air France-KLM and covers all The safety of operations rests upon to general risks asso- mittee are responsible for reviewing the measures implemented to S measures taken to reduce the a shared commitment to rigor, vigi- A ciated with its business control these risks. risks associated with aviation. Avia- lance, individual responsibility and and has consequently imple- On a quarterly basis, a presentation on the most significant operatio- tion security aims to combat crimi- mutual trust. Employees play a key mented a system to identify, nal and financial risks is made by Internal Audit and Internal Control, nal and terrorist acts against aircraft, role in the system, which involves analyze, monitor, manage and and presented to the Air France-KLM Group Executive Committee employees and passengers. a continuous cycle of improve- control risks. and to the Audit Committee, together with the measures in place for ment. Air France and KLM pro- their management. INTERNATIONAL STANDARDS mote a safety culture, encouraging IDENTIFYING, ANALYSING The Air France-KLM Group Strategic Framework determines strate- All of the Group’s businesses are sub- employees to report possible unsafe AND MONITORING RISK gic risk (competition, economic growth, etc.) as well as related action ject to extensive controls and certi- situations, incidents or accidents. Strategic risk mapping and plans within the context of its work to establish the Group’s strategy. fication. They meet extremely strict It makes sure no action is taken operational risk mapping pro- These risks and action plans are also discussed with the France-KLM standards and the highest level of against employees who report, or cesses have been established Group Executive Committee. regulations in the industry, at European are involved in a safety occurence by all relevant entities, super- level with the European Aviation Safety or hazard. vised by senior management INDEPENDENT MANAGING AND CONTROLING Agency (EASA), and globally with the To maintain the highest level of staff and facilitated by Internal Audit In addition to this enterprise risk management system, Air France-KLM International Air Transport Association skills, the Group constantly impro- and Internal Control. These risk has put in place internal control and audit departments. Internal control (IATA), whose IOSA operational safety ves its training programs and imple- maps are regularly updated and is based on the new COSO 2013 framework (Committee of Sponso- audit is a standard for the industry. ments crisis prevention plans. Com- consolidated by Air France and ring Organization of the Treadway Commission). The 2013 Framework Following the IOSA safety audit in munication and promotion are key KLM and for the Air France- defines internal control as a process, affected by an entity’s board September 2014 and January 2015, in building a safety culture. In 2014, KLM Group. of directors, management, and other personnel, designed to provide Air France and KLM were IOSA re-cer- three Flight Safety workshops, Examples are risks specifically reasonable assurance regarding the achievement of objectives in the tified for a further two years. based on the re-enactment of a real linked to air transport, such as following categories: event, brought together over 700 the cyclical and seasonal nature Reliability of reporting, SAFETY MANAGEMENT employees from all Air France divi- of the business, flight opera- Effectiveness and efficiency of operations, To achieve the highest attainable standard of flight safety, both airlines sions. KLM issues SafetyF@cts and e-newsletters to inform mana- tional risks, the risk of terrorist Compliance with applicable laws and regulations. have been in the process of upgrading and updating their respective gers and employees on safety-related topics and safety principles. attacks, geopolitical instability Internal audits contribute to improving the operational processes, the Safety Management Systems (SMS). The SMS deals specifically with Safety Champions ensure awareness and inspire safe employee or sanitary events, regulatory assurance of safety and help in achieving objectives at Group level risk management in aviation. It is comprehensively integrated into the behavior in all divisions. risks such as rules related to or specific objectives in the business. For further information on risk organization, processes and culture of the company and is validated the treatment of passengers, management, see Registration Document 2014, chapter 3. at the highest level of management within the Group and by training SECURITY environmental risks, occupa- and awareness building initiatives among staff members. The Group’s security procedures aim to protect customers, tional risks or risks to IT sys- Air France’s Integrated Management System (IMS) covers the following employees and assets (aircraft, facilities and IT systems). This tems. Other risks are linked to domains: flight safety, health and occupational safety, quality of ser- includes various measures such as risk analysis of Air France-KLM’s the airlines’ activity, such as vice, operational performance, environment, food safety and security. business and operations, and the systematic inspection of aircraft, the impact of competition with It analyzes and manages risks in an orchestrated approach. The IMS passengers, baggage, cargo, and employees. These procedures, other carriers, or negotiating collective agreements and industrial dis- ensures safe performance, transverse consistency, continuous impro- which are subject to strict regulation, are carried out with a constant putes. Market risks (fuel, currencies and interest rates) are managed vement, global management, for all processes within these domains. concern for the privacy of passengers and employees. by the Risk Management Committee. KLM Integrated Safety Management System (ISMS) covers the To ensure the highest level of protection for their customers and Every three months, each Group entity updates the content of its ope- domains of operational safety, occupational safety, operational secu- employees in over 100 countries and 200 cities, Air France and rational risks by indicating the risk itself, the probability it will occur and rity and environmental safety. ISMS provides a framework for conti- KLM’s security departments constantly monitor international geo- its potential impact. These risks are discussed within the management nuously reducing safety risks in all these domains to an acceptable political developments. Dedicated teams are responsible for ensu- teams with ownership of the risks. level of safety. In 2014 KLM was successfully audited on the ISMS by ring continuous flight operations and where necessary, for imple- Both specific risks to each entity and transverse risks potentially affec- the Dutch Civil Aviation Authority (CAA). menting additional security measures. ting the whole Group are the subject of reporting. For each of the

18 AIR FRANCE - KLM Corporate Social Responsibility Report 2014 19 GOVERNANCE GOVERNANCE Safety Risk management

18 AIR FRANCE - KLM Corporate Social Responsibility Report 2014 19 GOVERNANCE GOVERNANCE Ethics Public positions

s signatories of the United Nations Global Compact, Air France made available to employees, SUPPORT FOR A GLOBAL CARBON EMISSIONS European Sky), ACARE (dedicated to aviation research) and AIRE (a and KLM strive to respect and support human rights and the fight such as two e-learning modules TRADING SYSTEM FROM 2020 transatlantic emissions reduction initiative), Air France-KLM is com- A against corruption, and to oppose all forms of child and forced on competition law, a dedicated The EU Directive establishing the EU Emissions Trading Scheme (EU mitted to implementing tangible measures. labor. competition law hotline and ETS) has applied to aviation since 2012. Air France-KLM supports specific training courses delive- the implementation of a market-based measures mechanism (MBM) SUSTAINABLE BIOFUELS HUMAN AND CHILDREN’S RIGHTS red by the legal staff. as it benefits its environmental targets far more than a straightforward Sustainable biofuels constitute the most effective measure to reduce Based on international standards on fundamental human rights, To enable staff members to tax, provided the mechanism is non-discriminatory, workable and cost air transport’s carbon footprint. Air France-KLM provides support for rights at work and children’s rights, the Group aims to protect its signal serious matters that efficient. EU ETS, limited to intra-European flights, is considered a first research and contributes to the emergence of an international market employees, customers, workers in its supply chain and communities. they may be aware of, such as step towards a worldwide system that should be defined at Internatio- for sustainable aviation biofuels that are environmentally friendly and The Social Rights and Ethics Charter affirms the Group’s commitment accountancy and financial fraud nal Civil Aviation Organization (ICAO) level. which positively impact economic and social development. The Group to foster a climate of trust and mutual respect in the workplace, a or corruption, both Air France Air France and KLM actively support this ICAO process with IATA and supports the European Commission’s Biofuel FlightPath 2020 initia- safe and healthy work environment and social dialogue. The Charter and KLM have a whistleblower some individual airlines. Following the 2013 ICAO agreement, the tive, which is conducted in partnership with Airbus, other European applies to Air France, KLM and all European subsidiaries’ employees. procedure. EU has adopted an amendment to EU ETS regulations, which the airlines and European biofuel producers. The Group assesses human rights risk factors within its businesses, At KLM this procedure is broadly Group welcomed. The amendment limits the application of EU ETS The Dutch Government and KLM have signed a Green Deal for the covering areas including health and safety, equal opportunities, work- applicable, enabling staff to to intra-European flights (excluding French overseas territories), and 2011-2015 period, to increase demand for sustainable biofuels and life balance and systems to protect the personal data of customers report any type of irregularity above all should ensure greater stability in European regulations on shift from single projects to continuous supply of sustainable biofuels

and staff. or suspected irregularity. The CO2 emissions from aviation until 2020, provided ICAO is able to reach for The Netherlands and Europe. To achieve this ambition, KLM was To manage respect for human rights in the supply chain, suppliers are policy applies to all employees an agreement in 2016 on implementation in 2020. one of the initiators of BioPort Holland, a 7-year initiatve aiming to asked to sign a Sustainable Development Charter based on the UN working for KLM and its subsi- The Group considers that beyond 2020, EU ETS should be replaced develop the first real bio jetfuel hub in Europe. Global Compact principles. This Charter will be supplemented in 2015 diaries in The Netherlands and by a global carbon emissions trading system. This would avoid unfair Air France is calling for the French government to give more support to with additional supplier guidelines (see p.46). abroad. competition between airlines and ensure that the effects of green- French stakeholders including Air France in creating a French biofuel Attention is paid to children’s rights in particular: since 2013, KLM has house gases emitted by aviation are tackled in the most effective way production pathway. worked with UNICEF the Netherlands on applying the Children’s Rights PUBLIC POSITIONS possible. and Business Principles (CRBP). In addition to implementing the CRBP Air France-KLM belongs to SUPPORTING THE COMPETITIVENESS OF EUROPEAN AVIATION in the organization, the aim is to develop airline industry guidelines. international bodies (Interna- SINGLE EUROPEAN SKY Air France-KLM supports the European Commission’s efforts to pro- tional Air Transport Associa- The Single European Sky (SES) is the result of two “legislative pac- mote a level playing field for aviation within and outside the EU. In a BUSINESS CONDUCT RULES tion, Association of European kages” adopted in 2004 and 2009 and is intended to overhaul air global marketplace, jobs and the competitiveness of European avia- As a framework for doing business ethically, the Group has several Airlines) and national bodies traffic control by reforming European Air Traffic Management (ATM). tion, and a fair treatment for airlines in the EU, must be at the heart rules of conduct. For example, the Air France-KLM procurement and that represent the air transport This would enable a three-fold increase in capacity, improve safety of any new regulation. New European measures must be compatible

Air France HR departments each have a code of ethics in force, which sector and advocate its public performance by a factor 10, ensure up to 10% less CO2 emissions and with practice and regulations in force in the rest of the world, and must is signed by members of these departments. The Board of Directors positions. Air France-KLM aims reduce ATM costs by 50%. promote competitiveness by adapting the European social and fiscal has adopted a Compliance Charter and a Financial Code of Ethics. to provide governmental repre- To date its implementation is environment. The problems faced by airlines due to significantly higher KLM has a Code of Conduct in place that sets out the main principles sentatives with information incomplete, resulting in an ave- infrastructure costs in Europe than in other parts of the world, parti- concerning financial and business integrity, confidentiality, compliance necessary to understand the rage additional distance of 42 cularly in areas such as air traffic control and airport charges, require and commitment to CSR. issues facing the airline indus- km per flight and additional car- particular attention. An “Air France and KLM Anti-Bribery Manual” was made available at try, to drive the changes that Air France and KLM feel are neces- bon emissions. Air France-KLM the end of 2013, accessible to all employees in French and English. sary, and to advocate the effective implementation and application welcomes efforts to give fresh CONSUMER RIGHTS 14,000 employees have been invited to complete the accompanying of national, European and international regulations to avoid any com- impetus to the Single European Customer service, punctuality and service reliability are at the heart e-learning module on anti-bribery and corruption. The objective of the petitive distortion. Sky, and supports the guiding of the Group’s business. Air France and KLM have all necessary training is to increase the level of awareness of the importance of pre- An Air France representative works directly with the French Parliament principles of the European Com- arrangements in place to ensure that all operational hazards are dealt venting bribery and corruption. and Government, and complies with codes of conduct in force in both mission’s “SES2+” package of with as quickly as possible. The Group contributes to the European Air France-KLM actively pursues its policy against anti-competitive Chambers. Air France and KLM each have a Public Affairs Delegate, measures. Through active coo- institutions’ work on consumer rights. It remains vigilant that rules are practices through its “Air France and KLM Competition Law Com- declared on Interest Representative Registers in the French and Dutch peration in the SESAR program proportionate and are applied equally to all airlines operating to and pliance Manual”. In addition, several other means of prevention are parliaments. (the technological pillar of Single from the European Union.

20 AIR FRANCE - KLM Corporate Social Responsibility Report 2014 21 GOVERNANCE GOVERNANCE Ethics Public positions

20 AIR FRANCE - KLM Corporate Social Responsibility Report 2014 21 OBJECTIVES AND MAIN ACHIEVEMENTS 2014 AMBITION

KEY FIGURES AIR QUALITY We aim to reduce our environmental footprint CLIMATE CHANGE POLICY WASTE by improving our operations and processes, Environment CARBON FOOTPRINT ENERGY AND WATER partnering and innovating in the supply chain

SUSTAINABLE BIOFUELS RESEARCH AND INNOVATION and by mobilizing our staff and the industry.

NOISE BIODIVERSITY

22 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 23 OBJECTIVES AND MAIN ACHIEVEMENTS 2014 AMBITION

SUSTAINABLE BIOFUELS RESEARCH AND INNOVATION and by mobilizing our staff and the industry.

NOISE BIODIVERSITY

22 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 23 ENVIRONMENT

OBJECTIVES SCHEDULE MAIN ACHIEVEMENTS 2014 OBJECTIVES SCHEDULE MAIN ACHIEVEMENTS 2014

CARBON FOOTPRINT LOCAL AIR QUALITY

KLM: 86 g CO / passenger / km or 3.45 liters of fuel / passenger / 100 km Estimated No emission reduction due to 4,250 hours less Reduce CO emissions by 20% compared to 2011 (tons/km) 2 x 2 2020 Minimize the use of APU by towing with external power 2014 6.7% reduction compared to 2011 APU use

Air France: Fuel saving: 50 million liters Increase electrically powered ground equipment 40% of KLM GSE at Schiphol Airport are electric Fuel Plan: 1% annual reduction in fuel consumption 2014 2014 (126,000 tons of CO2 emissions saved)

KLM: Fuel saving: 8.8 million liters WASTE Fuel Savings Plan: 5 million liters fuel saving 2014 (22,000 tons of CO2 emissions saved) Air France: Non-hazardous waste recycled: 90% 100% of non-hazardous waste and 60% of hazardous waste 2020 Hazardous waste recycled: 43% BIOFUELS recovered

Air France: One weekly Toulouse-Paris flight since September 2014: KLM: Non-hazardous waste recycled: 26% Operate regular flights powered by sustainable biofuel 2014 - 11 flights operated “No waste of resources and materials” ambition: 100% waste 2020 Hazardous waste recycled: 75% - Launch of the Lab’line initiative: 14 partners recycling and recovery

KLM: 20 flights with biofuel from Amsterdam to Aruba and Create a market for sustainable biofuels Bonaire ENERGY 2020 Volumes of biofuel tripled in 2014 (compared to 2013) 15 partners in KLM Corporate BioFuel program Air France: Energy efficiency of buildings improvement: Improve the energy efficiency of buildings through an 8% 2014 +14.6% compared to 2011 reduction in energy consumption (baseline 2011) NOISE KLM: Air France: +1.9% energy savings and 0.8% renewable energy 2% annual improvement in the energy efficiency of buildings Expand activity while keeping noise emissions below 2014 40.1% reduction in noise energy compared to 2005 2016 generated by KLM’s installations 2005 levels (10 major French airports) 100% green electricity from water power

KLM: 25.8% reduction in noise energy compared to 2000 Reduce noise at Schiphol in partnership with the aviation sector 2014 KLM implemented Noise Abatement Departure Procedure 2 BIODIVERSITY

Air France: Implementation of the 2nd phase of the project (2014-2017): Air France: A320s fitted with noise reduction kits by 2016 Madagascar project Fleet modernization 2015 2017 new partners and objectives KLM: Final 5 MD11s phased out

LOCAL AIR QUALITY Airport biodiversity 2015 Project HOP!: study carried out on 4 French airports

Air France: KLM: 15 new products added to responsible inflight catering offer 100% responsible inflight catering products (from Amsterdam) 2020 Thus far, 80% of non-sustainable soy and palm oil replaced Ground operations: Electrically powered equipment and APU use Almost 50% of ground support equipment are electric 2014 by responsible alternatives procedures 11% reduction in APU fuel consumption compared to 2013

30 electric vehicle-charging points installed in staff car parks Contribute to the reduction of polluting emissions caused 2014 Contributions to the inter-company travel plans at Paris-CDG by Air France staff commuting in Paris Region and Paris-Orly airports

Airport-Collaborative Decision Making project: 3 minutes reduction of taxiing time at Paris-CDG airport Implementation of fuel efficient taxiing solutions 2014 TaxiBot project: Towbarless towing taxiing operation for long-haul aircraft

24 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 25 ENVIRONMENT

OBJECTIVES SCHEDULE MAIN ACHIEVEMENTS 2014 OBJECTIVES SCHEDULE MAIN ACHIEVEMENTS 2014

CARBON FOOTPRINT LOCAL AIR QUALITY

KLM: 25.8% reduction in noise energy compared to 2000 Reduce noise at Schiphol in partnership with the aviation sector 2014 KLM implemented Noise Abatement Departure Procedure 2 BIODIVERSITY

LOCAL AIR QUALITY Airport biodiversity 2015 Project HOP!: study carried out on 4 French airports

24 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 25 ENVIRONMENT ENVIRONMENT Key Climate figures change policy

viation’s contribution to man-made greenhouse gas emissions CARBON FOOTPRINT NOISE is between 2 and 3%. However, growth in global air traffic over MAPPING OUT THE INDUSTRY A the coming decades will increase aviation’s contribution if no COMMITMENTS action is taken. 38% reduction Carbon 27.7 million tons CO Emissions 2 in global noise energy compared to 2000, No action with a 7% increase in movements INDUSTRY COMMITMENT TO CO2-NEUTRAL GROWTH FROM 2020 Air France-KLM supports the sector‘s global commitment to make a fair contribution in the collective effort to reduce CO emissions related BREAKDOWN OF CO EMISSIONS FOR WASTE 2 2 to air transport. In 2009, the International Air Transport Association FLIGHT AND GROUND OPERATIONS (IATA) set an ambitious worldwide commitment: Carbon neutral 57,895 tons 1.5% average annual fuel efficiency improvement until 2020 growth Non-hazardous waste (excluding economic measures); -50% by 2050 +5.3% compared to 2013 Carbon neutral growth from 2020 onwards;

A reduction in net aviation CO2 emissions of 50% by 2050, 2010 2020 2030 2040 2050 relative to 2005 levels. 5,808 tons Technology, operations, infrastructures Additional technologies, biofuel Hazardous industrial waste CLIMATE CHANGE ADAPTATION MEASURES 18% reduction compared to 2013 Economic measures 51% recycling In its 2014 report, the Intergovernmental Panel on Climate Change 0.3% 19.7% 80% (IPCC) evaluated the impacts of climate change. These impacts, inclu- Ground Short and Medium Long haul operations haul ding precipitation changes, wind changes, and more extreme weather SHARE OF TRANSPORT IN GLOBAL events, pose potential risks to flight operations. MAN-MADE CO EMISSIONS Above all, the goal of air transport is to guarantee flight safety, secu- 2 Source: GIEC, Stern Review rity, and to provide the best-possible service to customers. Due to FUEL CONSUMPTION WATER the Group’s large network and diverse fleet composition, Air France 2% - 3% and KLM are already accustomed to operating under different weather 3% - 4% conditions and are relatively flexible in adapting flight schedules when 3 8.8 million tons fuel 793,000 m necessary. Nevertheless, the Group regularly conducts comprehen- Air transport 15% - 17% consumed sive risk analyses to improve and optimize existing policies. Air France Marine transport 3.9% reduction compared to 2013 and KLM have developed special programs in which employees are Land transport 76% - 80% trained to manage emergency situations. Both airlines work together Other industries 3.45 liters 6.7% reduction with airports to ensure safe operational and passenger handling /passenger/100km compared to 2011 conditions.

AIR FRANCE-KLM’S CLIMATE ACTION PLAN stimulating the use of sustainable aviation biofuels and being The Group is mitigating impacts on climate change in the involved in research for renewable energy; FLEET ENERGY following ways: supporting environmental protection programs led by NGOs; pursuing fleet modernization and contributing to aeronautical providing customers with information on their travel-related research; CO emissions and the opportunity to offset these; 825,690 MWh 2 546 aircraft 10.7 years involving staff and external stakeholders on fuel reduction and supporting efforts towards achieving a global climate agree- in operation average age of the fleet Energy consumption (electricity, gas, other energy) 10% reduction compared to 2013 energy efficiency action plans; ment, with a fair contribution for aviation.

26 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 27 ENVIRONMENT ENVIRONMENT Key Climate figures change policy

26 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 27 ENVIRONMENT

CO2 EMISSIONS AND TRAFFIC % Carbon 135 130

125 123% footprint 120 115 TRAFFIC

110 CO2 105 105%

ir France-KLM aims to minimize its impact on the environment, 100 and has set the target to reduce CO emissions by 20% by 2 KLM Fuel Savings Plan A 2020, as compared to 2011. To achieve this ambition, a diverse 2002 2004 2006 2008 2010 2012 2014 KLM’s Fuel Plan aims to reduce fuel use through various set of measures has been laid out, focusing mainly on fl eet renewal, Air France and KLM fi gures operational effi ciency, sustainable biofuels, and carbon offsetting. projects, focusing on: fuel policies, fuel standards, accurate planning information, route optimization, AMBITION 2020 GROUP SPECIFIC FUEL CONSUMPTION and weight reduction. A total of 15,000 tons of CO Air France and KLM: Reduce CO2 emissions by 20% 2 Liters / Pax / 100 Km G CO / Pax / Km compared to 2011 (tons/km) 2 were saved by KLM in 2014 through this Fuel Savings 4,3 FLEET MODERNISATION Plan. The largest fuel savings project consisted 4,2 105 By investing in a modern, more energy- and fuel efficient fleet, of the implementation of a new take-off procedure. 4,1 Air France-KLM is improving both its economic and environ- 4,0 100 This is called Noise Abatement Departure Procedure 2 mental performance. The Group currently has standing orders 3,9 (NADP2), and is now in use for all fl ights departing for twenty-five Boeing 787 Dreamliners, and twenty-five A350s. 3,8 95 These are due to be delivered from 2015 onwards. 3,7 3,45 L / 86 g from Amsterdam, and on 90% of other fl ights. Other In 2014, Air France took delivery of its tenth Airbus A380. Two Boeing 3,6 90 fuel saving project examples include: introduction of 747-400ERFs, one A319ER and three A320s were withdrawn from 3,5 the fl eet. lightweight plastic PET-bottles for wine, reduction 2002 2004 2006 2008 2010 2012 2014 KLM phased out its remai- of the weight of cargo nets, ning fi ve MD11s. The routes and implementation of are now operated by A330- Air France Fuel Plan 2/300 and B777-200 aircraft, Air France’s Fuel Plan identifi es a more fuel-effi cient take- which are approximately 20% OPERATIONAL EFFICIENCY Optimizing the use of airspace USING SUSTAINABLE and implements all possible off roll procedure. more fuel efficient per seat, Reducing weight carried on board Improvements in fuel effi ciency are made through the optimization of BIOFUELS fuel saving measures, subject thus emitting 20% less CO2. The lighter an aircraft is, the less fuel it consumes. routes and fl ight paths, the reduction of aircraft waiting times and opti- Air France-KLM considers For more information on to strict respect for fl ight One kilogram less weight carried onboard an Air France fl ight mized altitudes (also see Public positions p.21). the transition from fossil fuels Air France-KLM fl eet, see p.78 saves around 69 tons of CO per year. Air Traffi c Control (ATC) impact on Air France Group’s fuel consump- to renewables a priority to safety. 150 measures have been 2 and Registration Document 2014. In 2015, Air France’s medium-haul fl eet will be fi tted with new tion has been estimated at 6% or around 70,000 tons per year. In 2014, ensure the future of commer- identifi ed, and over 30 have lighter seats. The total reduction in CO2 emissions will amount to Air France launched a program with ATC to reduce waiting times on the cial aviation. The Group’s strategy is to explore and contribute to already been put into practice. 1,400 tons for the A319 fl eet and 2,300 tons for the A320 fl eet. approach to Paris-CDG, and so reduce fuel consumption. the entire value chain from research to commercialization and to set

New Economy class seats will be installed in KLM’s Boeing Route optimization resulted in a CO2 reduction of approximately an example for the rest of the industry. Partnerships are important Eco-piloting, which was fi rst rolled out in 2013 thanks to the work of pilots 777-200 fl eet in 2015. They weigh only 11.6 kg, and are the lightest 4,000 tons for KLM in 2014. to accelerate the development of a market for sustainable biofuels. has been pursued, as has the optimization of the volume of drinking water in their class. For more information see p.21 and 30.

carried onboard long-haul aircraft. New initiatives with signifi cant impacts KLM has been digitizing its paperwork. KLM Cityhopper has Eco-piloting in the air and on the ground digitized the onboard cabin crew documentation and introduced Pilots are trained to apply the most fuel effi cient procedures possible: OFFSETTING EMISSIONS on fuel consumption have been developed for medium-haul aircraft, such as tablets to replace pilot fl ight bags. KLM Cityhopper is the fi rst fl ight plan precision, speed adjustments and optimized procedures, Air France and KLM offer a CO2 offsetting service for their customers.

single-engine taxi-out and take-off with a reduced fl ap confi guration. The European airline to have taxiing with one engine, and using of electric aircraft Ground Power Both airlines provide CO2 emission calculators on their websites, digitized all of its on board Units. which can determine CO emissions of a passenger based on the introduction of two new Airbus A320s fi tted with sharklets into the fl eet 2 documentation. Air France has extended the France-Italy WE-Free program to other distance fl own and fuel-effi ciency data of aircraft. has meant a reduction in fuel consumption of between 2% and 4%. Taken KLM Infl ight's efforts to European destinations with fl ights operated via direct routes, and so These emissions can then be offset via certifi ed all together, these initiatives have resulted in a 40,000 tons reduction in reduce the weight of infl ight 3.45 liters using less fuel. The Engage program ensures that speed and altitude sustainable carbon reduction credits. products have enabled a are optimized for fl ights between Paris-CDG and North America. These are obtained through Air France’s partnership fuel/passenger/100km CO2 fuel consumed in 2014, compared to 2013. CO2 reduction of almost In 2014, KLM implemented a new take-off procedure (NADP2) with GoodPlanet and KLM’s CO2ZERO program,

800 tons in 2014. which saved nearly 10,000 tons of CO2 emissions throughout the year. which invests in Gold Standard projects.

28 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 29 ENVIRONMENT

CO2 EMISSIONS AND TRAFFIC % Carbon 135 130

125 123% footprint 120 115 TRAFFIC

110 CO2 105 105%

800 tons in 2014. which saved nearly 10,000 tons of CO2 emissions throughout the year. which invests in Gold Standard projects.

28 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 29 ENVIRONMENT Sustainable

BIOFUEL FLIGHTS biofuels Since 17 September 2014, Air France has been operating a weekly fl ight powered by biofuel between Toulouse and Paris- Orly. These fl ights are operated by an Airbus A321 equipped CO2 with CFM56, fuelled with a blend of 10% biofuel (Farnesane). This biofuel is made from sugarcane by Total-Amyris and its production process has been certifi ed by the RSB. Thanks to he use of biofuel as compared to conventional fuel can reduce the support of 14 partners involved in this project, these fl ights

CO2 emissions by up to 80% when used on a large scale. Air will be operated for a year (see p.48). T France and KLM have shown that fl ying on biofuel can be done KLM operated 20 biofuel fl ights with an Airbus A330 to Aruba both safely and sustainably. The ambition is to stimulate the biofuel and Bonaire starting in May 2014. The biofuel for this series was market, whilst taking strict environmental, social and economic criteria sourced by ITAKA and supplied by SkyNRG. into account. Air France and KLM have entered into new and innovative partnerships both with corporate clients as well as suppliers, airports and logistic partners to increase supply volumes for bio-jet fuel. The use of different types of renewable feedstock is supported, provided they meet stringent sustainability criteria. These include substantial

reduction in CO2 emissions, a minimal impact on biodiversity, no competition with food production or the availability of food resources, and a positive impact on the social development of local communities.

SECURING STRICT SUSTAINABILITY CRITERIA To ensure sustainability of the feedstock, Air France and KLM joined the Roundtable on Sustainable Biomaterials (RSB) in 2008 as one of the founding Sustainable Aviation Fuel Users Group (SAFUG) members. In the SAFUG more than 30 major airlines are united to align sustainability policies for biofuels. BIOFUEL The standard of the RSB is included in the European Commission’s Regulation (RED) and was recognized by, amongst others, WWF, IUCN, and NRDC as best in class. KLM uses SkyNRG’s independent Sustainability Board, COLLABORATION TO STIMULATE THE MARKET SUPPORT REGULATORY INCENTIVES which includes WWF-NL, Solidaridad, and the Science Institute Air France and KLM collaborate with customers and other partners Air France and KLM also support regulatory incentives stimulating the Copernicus, as an advisory platform for sustainability issues to stimulate the offtake of sustainable biofuels for aviation. biofuel market. pertaining to the supply of biofuel. Air France is active in the the SYNDIESE project to produce biofuel from Both airlines have been participating in UN Sustainable Energy forestry waste conducted by the CEA (Atomic and Alternative Energies for All (SE4All) and European Commission Biofuel FlightPath 2020 Commission). internationally. The FlighPath aims to reach an annual production of KLM collaborates with the Dutch Government, Neste Oil, Port of 2 million tons of sustainably produced biofuel for aviation by 2020. Rotterdam, SkyNRG and Schiphol Airport to scale up production of In France, the Ini-FCA (Future Alternative Fuels Initiative) led by the sustainable jet fuels in The Netherlands in the joint initiative BioPort Holland. French Civil Aviation Authority, is working towards the production of The initiative won the Sustainable Bio Award for best collaboration of the year. 200,000 tons of biofuel in France by 2020. KLM Corporate BioFuel Program (including 15 partners in 2014) enables In 2014, the Dutch government announced it would join the KLM investment in the offtake of sustainable fuels for aviation (see p.49). Corporate BioFuel Program, to incentivize the biofuel market.

30 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 31 ENVIRONMENT Sustainable

30 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 31 ENVIRONMENT ENVIRONMENT

Noise Air BREAKDOWN OF EMISSIONS PER SECTOR IN PARIS REGION Source : Airparif 2013

ial ent R quality id oa s d GLOBAL NOISE ENERGY e t R ra n 20% s r s p % e o h r t t 125 O 19% 55% 107%

100 Aviation Air France mobility plan for employees activity 6% NOx 75 oise is one of the main themes of Air France-KLM’s environ- viation has an impact on

62% Air France is involved in the air protection plan in the Paris area,

mental policy. The Group aims to meet the increasing demand 50 the air quality in areas

noise energy movements through its employee business travel plan. The plan aims to reduce N for mobility, without compromising acceptable noise hindrance A surrounding airports, as 36% levels for people living near airports. 2000 2008 2009 2010 2011 2012 2013 2014 a result of emissions and par- emissions caused by commuting through measures promoting public 50% ticles from aircraft, engines, transport use and a car pooling website. Of the 44,000 employees 13% REDUCING NOISE ground operations and mainte- concerned, 79% travel to work by car and have an average daily Aviation 1% SO2 Renewal and modernization of the fleet have a major impact on the NOISE MAPS PER AIRCRAFT nance activities. Air France-KLM activity noise reduction at source. The Group is pursuing its ongoing invest- reduces the local emissions of its commute of 1 hour and 30 minutes. ment in fleet renewal. All aircraft operated meet the criteria laid out in YEAR OF ENTRY AIRCRAFT TAKE-OFF NOISE activities in three ways: through INTO SERVICE WEIGHT FOOTPRINT (85 DB) This topic is important both in terms of the environment the ICAO’s Chapter 4, the most demanding in terms of acoustics for fleet renewal, investment in 25% civilian aircraft. In 2014, KLM finished phasing out its MD11-fleet, which cleaner vehicles and equipment as well as health and safety at work. Air France is a partner in inter- 25% Airbus A380 was replaced by quieter aircraft to structurally improve noise impact. 2008 4 km2 and operational procedures. company travel plans at Paris-CDG and Paris-Orly airports, 20% 29% 510 tons in order to take effective joint action on responsible transport. 1% PM10 In addition, the Group is involved in developing noise abatement proce- Boeing 747-400 MEASURING EMISSIONS Aviation 1988 7.4 km2 activity dures. Both airlines are working to improve departure and approach 366 tons ON THE GROUND In 2014, employees at Villeneuve-le-Roi and Orly procedures, along with the French and Dutch civil aviation authori- AND AT LOW ALTITUDE tested electric bikes over a long journey and completed a

ties, which are assessing environmental benefits. KLM implemented Boeing 747-200 2 At both Paris-CDG and Schi- 1978 12 km 22% questionnaire on eco-friendly transport. To encourage the use 31% the new Noise Abatement Departure Procedure 2, which significantly 300 tons phol Airport, the majority reduces noise pollution and emissions in areas close by as well as of gases emitted are proof sustainable transport, Air France installed 30 electric vehicle- 16% 30% further away from the airport (see p.29). Night traffic is governed by duced by aircraft movements charging points in its staff car parks in 2014. 1% VOC strict rules on the number of allocated slots and the respect of sche- DIALOGUE WITH RESIDENTS (taxiing, takeoff and landing). Aviation duled times. Air France and KLM are The remainder is produced activity 38% members of local committees by ground activities, including noise reduction around the airports. These logistics and road access to compared with 2000 constitute the main forum the airport for passengers, employees and suppliers. OPERATIONAL PROCEDURES despite a 7% increase for dialogue between the air Over the past ten years, aviation’s contribution to emissions in the Together with Paris-CDG and Schiphol Airport, Air France and KLM New solutions for in movements transport professionals and local Paris region, which includes accessing and operating the airport, aim to lower emissions of NOx and CO2 of aircraft ground handling. As aircraft noise communities, thereby helping has remained stable. At Schiphol Airport the yearly measurements part of the Airport-Collaborative Decision Making project, Air France to orientate the environmental on particulate matter (PM) indicated that the local air quality has has succeeded in reducing taxiing time by 3 minutes at Paris-CDG. In 2012, following complaints from u measures accompanying improved slightly in recent years. Rather than using kerosene-powered APU (Auxiliary Power Units), Air residents living close to the airport about 31.5 m airport development. Air France France and KLM use electric FPU (Fixed Power Units) where possible paid in 2014 participates in the Environmental CLEANER VEHICLES AND EQUIPMENT to power aircraft and ACU (Air Conditioning Units) which maintain an a particular noise produced by the A320 for soundproofing Advisory Committees (CCE) Air France-KLM prioritizes electric vehicles for airport ground acceptable temperature on board aircraft. The GPUs, as well as an family of aircraft, Air France and the French and Advisory Committees for transportation. This plan extends to ground handling equipment that increasing number of aircraft towing trucks have been equipped with Civil Aviation Authority requested Airbus to Resident Assistance (CCAR) in is mainly powered by diesel. Almost half of the 1,000 items of ground automatic power shut down systems. the main French airports. KLM support equipment (GSE) used At Air France, maintenance, ground operations and flight divisions investigate the origin of the noise, which continues with its commitment to pursuing dialogue through Alders at Paris-CDG and 40% of the have been working to reduce the use of GPUs. In addition to this, led to a design modification which cancels Table and CROS (Schiphol Regional Consultative Committee). KLM GSE at Schiphol airport new air conditioning equipment has been introduced at Paris-CDG, this noise. This modification will be applied French and Dutch government policies include exposure to aircraft are electric. To reduce emissions Guadeloupe, Martinique and Réunion Island. This has resulted in an noise in urban planning considerations, and include financial help in the immediate environment 11% reduction in APU fuel consumption compared to 2013. Currently to new Airbus aircraft. On a voluntary basis, for soundproofing homes. Air transport is the only industry that fully of aircraft handling areas, KLM 70% of the Pre-Conditioned Air (PCA) units at KLM are electric. Towing Air France decided to progressively fit all finances such a comprehensive noise hindrance reduction system. In aims to increase the percentage aircraft using external power (not using APU) resulted in a saving of

of its A320s concerned (116 aircraft) with 2014, Air France-KLM paid 31.5 million euros towards soundproofing. of electric GSE equipment to more than 2000 tons CO2 emissions in 2014 at Schiphol. 60% in the coming years. noise reduction kits by 2016.

32 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 33 ENVIRONMENT ENVIRONMENT

Noise Air BREAKDOWN OF EMISSIONS PER SECTOR IN PARIS REGION Source : Airparif 2013

ial ent R quality id oa s d GLOBAL NOISE ENERGY e t R ra n 20% s r s p % e o h r t t 125 O 19% 55% 107%

100 Aviation Air France mobility plan for employees activity 6% NOx 75 oise is one of the main themes of Air France-KLM’s environ- viation has an impact on

62% Air France is involved in the air protection plan in the Paris area,

mental policy. The Group aims to meet the increasing demand 50 the air quality in areas

32 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 33 ENVIRONMENT Waste

% 69 Reducing Paper Waste Combustible waste With the increasing use of digital newspaper apps, KLM Infl ight services ir France-KLM aims to minimize waste generation and to (with energy campaign for its employees UPCYCLING noticed many leftover newspapers after fl ights. To reduce this paper recycle and reprocess whenever possible throughout the recovery) on wastage, loss and brea- In 2014, Air France conduc- A supply chain. For customers, handling waste in a sustai- king of goods. About 4,300 ted a study on waste mana- waste, the amount of newspapers stocked onboard has been optimized, nable manner is one of the main environmental issues the Group % employees took part in the gement within the company. varying for outbound and inbound fl ights. For example, should address. Air France and KLM follow four principles to 12 event. An e-learning module was on European Business Class reduce the impact of waste: redesign, reduce, re-use, and recycle. Paper & cardboard developed to raise employee AIRCRAFT PARTS AND awareness on waste recycling fl ights, newspapers are provided AMBITION 2020 METALS and compliance with legisla- for 60 % of passenger on board. Air France: 100% of non-hazardous waste % Air France and KLM have pro- tion. It also aims to optimize and 60% of hazardous waste recovered 8 grams for recycling aircraft transport solutions during the However, there is always a KLM: “No waste of resources and materials” ambition Other recycled maintenance waste. A propor- waste management process, minimum number of papers waste 100% waste recycling and recovery tion of this waste is re-used to decreasing not only transpor- provided. This initiative has manufacture new parts. 174 tation cost, but also environ- ONBOARD WASTE % tons of aircraft parts and 80 mental impact. resulted in 20% reduction of Throughout the year, the Group monitors sources of waste. Onboard 3 tons of metal were recycled in Air France and KLM work newspaper waste and a cost catering produces about 70% of all non-hazardous waste. The key Wood 2014 at KLM. with various partners to pro- reduction of around o 2 million to managing this onboard waste sustainably, is through preventing Air France has recycled 20.7 mote the circular economy % waste by redesign and by separating the waste correctly. 2 tons of aeronautic metal. In and to identify wider poten- over the past three years. At Air France a signifi cant proportion of reusable equipment, like addition, a dismantling and tial scope for recycling. In Organic At KLM’s Ground Services trays, drawers, blankets and trolleys, is recycled every year. Items recycling process has been 2014, both took part in fea- division, manuals are no longer designed with eco-design approaches, which take the entire life % set up to accompany the fi t- sibility studies to set up cir- cycle of products into account, are favored. Four families of mate- 2 ting of new seats on long-haul cular economy initiatives in available in hardcopy, but instead rials are recycled: Plastic, metal, textiles and paper. Most textiles are Glass aircraft. The process includes the area surrounding Paris- are provided digitally. These recycled and used in the manufacturing of insulation materials for procedures to reuse and reco- CDG and Schiphol airports. cars; plastics are mostly reused in the production of new materials % ver spare parts and to recycle Air France and KLM are also are constantly updated, which such as Air France’s drawers and serving trays. 1 used foam and metals. working on initiatives to upcy- constitutes an additional benefi t. Metals At KLM, waste has been reduced by decreasing the amount of Each year, KLM Engineering & cle waste into new uses. At This has resulted in a paper packaging used for onboard catering products. The redesign of Maintenance (E&M) assesses Air France, re-useable com- cardboard packaging for sandwiches has resulted in an annual 1% which waste streams can be ponents like medical equip- saving of over 375,000 sheets of saving of 20 tons of waste. Additionally, KLM has been separating re-used or recycled in KLM’s ment are recovered from paper annually. Plastics onboard waste with cup-collecting compartments in trolleys on all ScrapPlaza program. Where out-of-date on-board survi- European fl ights since 2013. This not only makes recycling easier, it Breakdown possible the principle of val kits. Outdated life vests also saves space by stacking the cups. Glass, cans, aluminum lids cradle-to-cradle is applied to are used to manufacture travel amenity bags and kits. In 2014, and PET bottles are also separated when collected, and recycled. of recovered bring waste back into a new Air France also transformed former tarpaulins and advertising During turnaround at the gate, aircraft are serviced and cleaned. non-hazardous production cycle with the goal boards into pencil cases. KLM’s cabin cleaning teams use special color-coded wheelie bins to waste at of streamlining and control- Since 2013, used KLM uniforms and old Business class carpe- separate paper and cardboard. Customers on intercontinental fl ights Air France-KLM ling all technical waste fl ows. ting were recycled into fibers used to manufacture the carpets for are invited to leave newspapers in the front row, for easier collecting. In 2014, ScrapPlaza focused the New World Business Class. The 90,000 kilos of textile that 587 tons of recyclable paper and cardboard are collected annually. on the plastics waste stream remained after the ladies uniforms were changed in 2010 was Due to regulations, food waste generated by intercontinental air and investigated reuse opportunities for plastic cabin components. transformed into a felt-like raw material, visible in the blue details transport has to be incinerated and is used to produce energy. Orange waste bins (iconic for separating plastics in the Nether- of the new carpet. All used carpets are recycled in collaboration Servair has developed a waste management program focused on: lands) were placed in all E&M buildings. Furthermore, used mainte- with carpet manufacturer Desso, as part of the Take Back™ pro- reducing waste, increasing the rate of recycling, and identifying spe- nance tools are auctioned amongst staff, and the money collected gram. In 2014, 39 tons of used carpet were given a new life. cialized recycling channels. In 2014, Servair launched an awareness is donated to a good cause.

34 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 35 ENVIRONMENT Waste

34 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 35 ENVIRONMENT Energy and water

ir France-KLM aims to reduce energy consumption, SUSTAINABLE ENERGY improve energy efficiency and increase the use of sus- Air France and KLM invest in sustainable energy for their ground opera- A tainable energy for its buildings, offices and warehouses. tions. Since 2002, KLM has been operating heat pumps with aquifers. Aquifers are underground water-bearing reservoirs in which ther- AMBITION 2020 mal energy can be stored. Currently, KLM uses 5 heat pumps Air France and KLM 20% energy efficiency improvement with aquifers, which generate enough energy to heat and cool (baseline 2011) 5 buildings. The amount of sustainable energy generated by these heat pumps in 2014 was an equivalent of 710,000 kWh electricity, and ENERGY CONSUMPTION AND EFFICIENCY 89,000 m3 of natural gas. At Air France, the target to reduce energy consumption applies to all divisions through annual objective contracts. The goal in 2015 is SAVING WATER to reduce energy consumption by 2% compared to 2014. As an airline group, the most To achieve this objective, the IT Operations division that manages significant water consuming two data centers has upgraded its site in Valbonne by combining divisions are catering (accoun- energy efficiency, innovation in sustainable development, with cost ting for about 45% of total and carbon footprint reduction. water usage), and engineering Suppliers play a key role with regards to saving energy. The Mainte- and maintenance (25%). nance division, which operates in large hangars, signed an energy KLM Catering Services has Energy Efficient Laundry supplier contract in 2013, including an annual target to reduce reduced the amount of water Lamme Textile Management cleans over 270,000 textile items, such as energy used by heating by 12.5% (at constant unified degree days). used for dishwashing though At the end of 2014, the goal had not only been reached, but went a series of preventive mea- pillow cases, blankets and uniforms for KLM every week. To improve on to be more than doubled, achieving a 30% reduction. sures including installing water the energy efficiency of this washing process, the company has laid At Servair, a total energy consumption audit was carried out in meters and eliminating the least out a diverse set of measures in their Energy Efficiency Plan. Recently, 2014. In addition, an assessment procedure identified excessive water-efficient machines. energy use at a site in Paris-CDG. As a result, the temperature To preserve water resources, drying temperatures were optimized saving 2,000 kWh of electricity, management system was changed to better regulate energy Servair has implemented and washing time was reduced, leading to a reduction of 3,000 kWh By using pads, this process demand during periods when heating was switched on. This invest- several measures to better uses 100 times less water than ment helped to reduce energy consumption by 50%, or more than control water consumption, of electricity. Between 2012 and 2014, per kilogram of laundry, Lamme the previous system: 100 liters to 600,000 kWh in the first quarter 2014, equivalent to the annual such as regular monitoring and Textile Management reduced the electricity consumption by 14%, and clean a Boeing 777, rather than electricity consumption of 75 people. by including water efficiency gas consumption by 8%. Moreover, logistical improvements decreased 10,000 liters previously. This has KLM implemented the Energy Efficiency Plan 2013-2016, outlining in its workshop processes. resulted in water savings of 8 a range of measures to reach the annual target of 2% efficiency Since 2010 in France, a 20% transport movement by 540 km per week. The company employs million liters, reducing the need improvement. reduction in water use has 40 people with disabilities, who make up the dedicated team that to treat wastewater. In 2015, In 2014, replacing cooling systems achieved significant energy been achieved (Continental KLM E&M will start piloting this facilitates eco-friendly washing for KLM on a daily basis. efficiency improvements. One building installed a cooling sys- France and overseas territo- procedure as well. tem utilizing more environmentally friendly refrigerants, saving ting systems designed to produce three times as much light, whilst ries). Servair is also committed Additionally the “Engine Water 190,000 kWh yearly. KLM’s data-center was equipped with new using 70% less energy, with an improved light productivity of 6%. In to reducing water pollution by Wash” method is used to chillers, which are expected to generate savings of 570,000 kWh 2014, E&M's distribution hallway was equipped with new LED-ligh- adjusting the concentration of wash engines efficiently. The

on an annual basis. The new cooling system within KLM Informa- ting, which is not only more energy efficient, but also reduces the detergent used in washing machines and for cleaning buildings, and system reduces fuel consumption and CO2 emissions and is also tion Services has meant a improvement of Power Usage Effec- chance of accidents by keeping employees more alert. by implementing recycling systems for edible oils. In addition, major environmentally friendly, as the water used for cleaning is collected and tiveness from 1.8 to 1.6. Furthermore, a new cooling installation Moreover, to reduce energy consumption, sensors were installed investments have been made in advanced wastewater pre-treatment purified. The water wash equipment sprays approximately 100 liters and heat recovery system for KLM Catering Services has reduced in one of the hangars to determine whether an aircraft is present. facilities. of water into the engine via the front of the engine several times. The KLM’s energy consumption by over 1,000,000 kWh per year. Both light and heating are now automatically turned off when there Reducing water consumption requires innovation. Air France engine continues to run throughout this process. The result is a washing KLM Engineering & Maintenance (E&M) has introduced new ligh- is no aircraft in the hangar. Industries uses the “EcoShine” method to clean the exterior of aircraft. machine effect, via which the engine cleans itself.

36 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 37 ENVIRONMENT Energy and water

36 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 37 ENVIRONMENT ENVIRONMENT Research Biodiversity and innovation

Sustainability labels

KLM aims to introduce at least ir France-KLM supports research and innovation to better CLIMATE RESEARCH ir transport affects biodi- 15 responsible catering products understand the environmental impacts of its businesses and to Since 2013, Air France has participated in the European project versity indirectly through on board each year including act on this effectively. IAGOS (In-service Aircraft for a Global Observing System) by carrying CO emissions, as well A A 2 MSC certified fish and Rondeel atmospheric measuring equipment on board an Airbus A340. The as through impact related to PROGRESS ON CLIMATE CHANGE, NOISE AND AIR QUALITY information collected is of great interest to researchers as destina- inflight food production. chicken and eggs. Some of The vice-chairman of Air France-KLM has chaired ACARE, the Advi- tions including the Caribbean and West Africa are served, which are these products are principally sory Council for Aviation Research and Innovation in Europe since not widely served by other airlines supporting this project. The data SUSTAINABLE CATERING 2013. ACARE advises the European Commission on aviation research, collected is made available to international meteorological centers Air France and KLM serve a total served on flights from Schiphol, policy and regulatory framework development, contributing to a more and scientists worldwide, which is particularly useful for studying the of 85 million meals and snacks because sourcing certified foods environmentally friendly aviation sector, while maintaining the competi- carbon cycle and verifying CO emissions. per year. Given the amount of 2 is challenging in certain areas tiveness of European airlines. This includes innovation in biofuel, aircraft products needed to produce design, passenger perceptions at airports and European certification EUROPEAN SKY these meals, the choices made of the world. However, success processes for aircraft components and systems. KLM is member of In 2014, Air France joined, the SESAR Deployment Alliance, an orga- regarding catering products can was achieved in Suriname where the ACARE NL steering board, chaired by the Dutch Ministry of Econo- nization in charge of planning and coordinating the comprehensive significantly impact biodiversity. locally caught MSC-certified mic Affairs and including members from other Ministries, the aeronautic modernization of European airspace. The organization is appointed by Air France and Servair favor industry, universities and Schiphol Airport. the European Commission and comprises 4 airlines, 25 airports and local, seasonal and responsible prawns were sourced and served Air France is a member of the steering committee of CORAC, the French 11 air traffic control services. It will be in charge of supervising the products for onboard catering. on flights to Amsterdam, a good ACARE national council. CORAC brings together all stakeholders in implementation of almost 3 billion euros worth of air traffic control In 2014, Servair used over 200 example what can be done to French aeronautics research to develop the aircraft of 2050. To move infrastructure improvements in Europe to enhance efficiency, reduce tons of organic produce, 8.7 from basic research to the development of a prototype, research areas delays and increase environmental performance. tons of AOP/AOC (Protected reduce biodiversity impact, as range from the airframe and Designation of Origin) cheese trawling of wild shrimps has a engines to energy systems. ELECTRIC TAXIING and 70,000 bottles of AOP/ Air France also participates in Air France has worked on AOC wine and Champagne. huge impact on the coastal area. various working groups: IRO- developing Honeywell and KLM strives for 100% Further goals include sustainable QUA aims to reduce aircraft Safran’s EGTS system responsible catering products soy and palm oil used in all noise, and the Ini-FCA works (Electric Green Taxiing Sys- by 2020 on flights from the propagation of sustainable alternatives to deforestation, and to vali- on the development of sustai- tem) on Airbus 320 since Amsterdam. This means catering products (currently 80%) date the project under one of the existing REDD+ international label. nable biofuels. 2013, which aims to signi- selecting products that are and the inclusion of fruits In 2014, HOP! Air France launched an innovative collaboration-based KLM participates in projects ficantly reduce the use of produced responsibly, come project to assess biodiversity around airports, identify best practices and nuts. that aspire to create a market engines and vehicles for with less packaging, a smaller and promote natural resource management, within the constraints for renewable aviation biofuel. aircraft ground movement. energy footprint, and which are of airport operations taking place. A study was carried out on four Through the project ITAKA, This reduces costs, as well respectful of animal welfare. volunteer airports in France by HOP!’s scientific committee, which is offtake of the fuel produced as the amount of gases The focus is on preservation of made up of researchers and multidisciplinary academics. The initiative, is guaranteed. The RENJet emitted and noise. Equip- biodiversity by paying particular attention to fish, palm oil and soy. which brought together HOP! staff, airports and local stakeholders is set project funded by the Cli- ping an aircraft with the To this end, KLM is a member of the Responsible Soy (RTRS) and to continue, with the aim of getting other partners involved in the shift mate KIC looks into various EGTS system can reduce Sustainable Palm Oil (RSPO) Round Tables. to a green economy. elements in the supply chain. nitrogen oxide (NOx) emis- Project BioReFly, in which sions by around 50%. In PARTNERING FOR BIODIVERSITY As part of its partnership with WWF-NL, which started in 2007, KLM KLM is consortium partner, 2014, Air France introduced The forest conservation project in Madagascar, supported by Air financially supports three conservation programs: the Coral Triangle focuses on the production a new Green Taxiing project France since 2008 and co-funded by the French Development Agency in Indonesia, the Bonaire Marine Park and the APRA program in the of renewable kerosene from for long-haul aircraft. (AFD) and the French Global Environment Facility (FFEM) since 2014, Amazon. The APRA program supports biodiversity programs across a lignin waste streams and ini- contributes to the development of local communities while protecting vast tract of the Amazon region (around 15% of the surface area and tiate the ASTM certification the biodiversity of the island. The second phase of the project (2014- 60 million hectares) to protect and enforce the recovery and conser- process. 2017) aims to strengthen conservation activities, expand and improve vation of biodiversity.

38 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 39 ENVIRONMENT ENVIRONMENT Research Biodiversity and innovation

Sustainability labels

38 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 39 OBJECTIVES AND MAIN ACHIEVEMENTS 2014 AMBITION

OUR APPROACH We incorporate our CSR commitments into DIALOGUE WITH CUSTOMERS the customer experience by offering high Sustainability SUSTAINABLE PROCUREMENT quality products and services. Together

BEST PRACTICES with our suppliers and partners, we take A SUSTAINABLE AND INNOVATIVE PRODUCT RANGE sustainability into account throughout the in the customer entire value chain. experience

40 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 41 OBJECTIVES AND MAIN ACHIEVEMENTS 2014 AMBITION

OUR APPROACH We incorporate our CSR commitments into DIALOGUE WITH CUSTOMERS the customer experience by offering high Sustainability SUSTAINABLE PROCUREMENT quality products and services. Together

BEST PRACTICES with our suppliers and partners, we take A SUSTAINABLE AND INNOVATIVE PRODUCT RANGE sustainability into account throughout the in the customer entire value chain. experience

40 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 41 CUSTOMER EXPERIENCE

Our SUPPLIERS approach

DEVELOP SUSTAINABILITY IN PRODUCTS PRODUCTS AND SERVICES DEVELOPMENT & SERVICES Eco-design ir France-KLM’s commitment to CSR extends to the develop- Applying eco-design principles in the ment of the products and services provided to customers. This product specifi cation process. A approach integrates sustainability in the value chain: Integrating environmental and social from the development stage to purchasing and delivery of products criteria into the product specifi cations and services; where relevant. based on customer dialogue, taking into account environmental Involving all stakeholders throughout the design process (branding, and social criteria in specifi cations; marketing, technical divisions, procurement, etc.) with an integrated sustaina ble procurement policy, collaborating CUSTOMERS with suppliers and partners. A sustainable procurement strategy At all stages of the procurement process, from the tender to the signature of the contract and through Supplier Relationship Management. Focusing on Code compliance, supply chain CSR risk management, and CSR opportunities. CUSTOMER DIALOGUE AND CO-CREATION PURCHASE Building a high level of awareness of CSR risks and opportunities During all stages of developing products PRODUCTS among buyers and product management. and services: & SERVICES - Customer behavior analysis, DELIVER For further information see p.46-47 - Identifi cation of requirements, PRODUCTS - Benchmark studies, & SERVICES - Customer trials. Monitor quality & customer satisfaction. Involve customers in CSR initiatives.

For further information see p.44-45 OBJECTIVES MAIN ACHIEVEMENTS 2014

SUSTAINABLE PRODUCTS AND SERVICES

Continue integrating Launch of Lab’line for the future: Air France started its operations OBJECTIVES MAIN ACHIEVEMENTS 2014 CSR principles with sustainable biofuel on a weekly Toulouse-Paris-Orly fl ight, into products and services making this route a showcase for sustainable innovation Complete deployment of the KLM new World Business Class CUSTOMER DIALOGUE on 747 fl eet and start overhaul 777 fl eet 3 new partners in KLM Corporate BioFuel Program Reinforce programs 20,000 members of Quality Observers program provided more than 15 new responsible catering products onboard KLM fl ights supporting customer 25,000 fl ight reports dialogue Up to 1 million answers to eSCORE surveys on customers satisfaction Deployment of Net Promoter Score as the indicator for customer SUSTAINABLE PROCUREMENT recommendation Strengthen the Supply chain CSR risk approach implemented sustainable 75% Suppliers signed the Sustainable Development Charter Further involve Further development of KLM Takes Care online platform procurement customers in CSR Lab’line for the future: study on the customers’ vision of responsible travel strategy 179 Suppliers assessed on their CSR performance initiatives of the future Supplier guidelines developed, in collaboration with UNICEF- NL

42 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 43 CUSTOMER EXPERIENCE

Our SUPPLIERS approach

For further information see p.44-45 OBJECTIVES MAIN ACHIEVEMENTS 2014

SUSTAINABLE PRODUCTS AND SERVICES

42 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 43 CUSTOMER EXPERIENCE Dialogue with customers

ustomer dialogue is key to customers and potential cus- STRIVING FOR EXCELLENCE providing high quality and tomers to understand their IN CUSTOMER SERVICE C sustainable products and needs; Air France and KLM undertake services. Customer complaints are numerous initiatives designed analyzed and reported monthly, to achieve excellence in cus- CUSTOMER INSIGHT to understand key product and tomer service. In 2014: The Air France-KLM Customer service challenges, and defi ne Air France integrated the Insight department conducts possibilities for improvement; Signatures of Services values, INVOLVING CUSTOMERS IN OUR CSR INITIATIVES research on customer unders- In 2014, the Net Promo- aimed at a “caring attitude”, as CSR monitor study tanding and customer satisfac- ter Score (NPS) indicator was an overall standard of conduct The CSR perceptions study carried out among Flying Blue customers tion. It also carries out bench- deployed as the standard indi- for the entire organization, was updated in 2013. This study aims at determining which CSR marking, specific customer cator used to monitor customer including managerial attitudes initiatives are considered as a priority for the Group. As shown in the research and data analysis, with recommendation. and staff recognition schemes. fi gure below (the size of text corresponding to the level of relevance), a constant respect for the pri- The Signatures of Service were deployed in more than 100 the top three items quoted were: Investing in a modern fl eet, reducing vacy of customer data. Benchmarking Air France-KLM outstations (50% of the total number) and an waste and supporting aviation research and renewable energies. Market research and indus- empowerment approach is being deployed to promote front line Co-creation try-wide studies (such as Airs@t staff initiatives. KLM Takes Care platform The customer is placed at the center of products and services development. and the IATA Frequent Flyer Program benchmark) enrich analysis of KLM Lost & Found: a dedicated service was set up to return KLM launched its KLM Takes Care online platform and logo in June For example in 2014: the competitive environment. Part of this information is shared within items found by cabin crew or by KLM airport staff to their owners 2012. KLM Takes Care brings together all of KLM’s corporate social Air France carried out several customer tests on new long-haul the Group via a dedicated intranet. Benchmarking and collaboration is as soon as possible, using all available information like seat and responsibility activities under a single name. klmtakescare.com is catering. Customer feedback was integrated into the development pro- also done with other companies with similar customers, such as the phone numbers and social media details. The service was launched dedicated to providing information on all relevant topics, engaging in cess; Accor hotel group, with whom a joint project was carried out about with the successful “Sherlock” campaign, and initial results show dialogue and providing a forum for discussion on sustainability. a co-creation program was implemented with top-members of the hotel and airline bookers’ purchasing behavior. that around 80% of found items are now returned. KLM Takes Care makes it easy to identify CSR initiatives both online Flying Blue program; and offl ine, and the logo increases visibility. KLM organized a study on customer expectations about services Monitor customer satisfaction specifi cally targeted at families and children. Air France-KLM fully rolled-out its innovative “Quality Observer” program in 2014. Flying Blue customers who are members of this Customer analysis community can perform quality audits, to check if services are delive- CSR PRIORITIES VIEWED BY OUR CUSTOMERS Air France-KLM carries out surveys, infl ight trials and focus groups to red according to standards. Around 20,000 frequent customers have ensure that customer feedback is systematically taken into account now signed up to this program, using an app and a dedicated website sustainable save during the development of new products and services: to provide over 25,000 quality observations annually. procurement reduce Around 35 tailored studies are carried out per year among 22,000 2014 was the fi rst full year for eSCORE. This online program measures local development onboard energy FB@home customers and 500 Intouch customers; passenger satisfaction on all Air less waste weight and water 35 studies were conducted among other Air France-KLM BEFORE France and KLM fl ights, with spe- FLIGHT cifi c and tailored questions. The humanitarian CO2 compensation information gathered contains projects for customers modern ﬂ eet promote passenger profi les and choices, diversity SOCIAL MEDIA AFTER sustainable FLIGHT as well as satisfaction scores and equality A cornerstone of Air France catering research GROUND covering the entire customer expe- reduce and KLM customer dialogue. SERVICES rience. Over 1 million responses noise and renewable 71% increase to 13,151,570 fans were received and analyzed to sustainable 79% increase to 2,163,485 followers constantly improve and customize biofuels Eco-designed energies 287% increase to 157,841 followers INFLIGHT products and services. products SERVICES

44 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 45 CUSTOMER EXPERIENCE Dialogue with customers

44 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 45 CUSTOMER EXPERIENCE

RESPONSIBLE CATERING SAVING FUEL AND ENERGY WITH MOBILE AIR-CONDITIONING UNITS Sustainable With its fuel savings program, Air France aspires to reduce energy consumption and noise pollution caused by aircraft Auxiliary Power Units (APU). APUs provide electricity and air-conditioning to pla- nes when they are on the ground. Pilots, engineers, maintenance procurement service and outstations are involved in replacing these APU with mobile Air-Conditioning Units (ACU), where possible and profi table. In 2014, 3 new ACUs at Charles de Gaulle airport resulted in an energy reduction of 25% at aircraft parking. ECOVADIS ASSESSMENT RESULTS - 4,976 s a large purchaser of various products suppliers and services, ranging from fuel to onboard 179 SUPPLIERS A catering products, Air France-KLM aims KLM enjoys a leading position in the aviation industry in the fi eld of to integrate sustainability in the supply chain by 21% responsible catering and aims to remain a frontrunner in this area. sourcing products and services that minimize The objective is to offer 100% responsible infl ight catering products our environmental footprint and have a positive 15% 75% on fl ights departing from Amsterdam by 2020. social impact. Working together with around of suppliers signed Focus is on biodiversity impact, with particular attention paid to fi sh, 4,976 suppliers, a proactive role for procurement the Sustainable palm oil and soy. Suppliers are given catering criteria and collabo- 25% Development Charter is essential. The most signifi cant purchases are ratively, more responsible options are sought. For example, in 2014 aircraft, fuel, airport and navigation fees, onboard 40% one supplier switched to sustainable palm oil for its entire range of products and Engineering & Maintenance. Given cookies, while another supplier obtained GlobalGAP certifi cation for the significant amounts spent, optimization, Gold its apple and orange juices. This standard for fruits and vegetables innovation and the integration of CSR in the Silver 179 sets requirements for safe production methods, employee health suppliers assessed supply chain are priorities. Bronze and safety, responsible use of resources, and animal welfare. on their CSR performance No medal

REDUCING PRINTING E&M ELECTRIC BOOM LIFT AIR FRANCE-KLM SUSTAINABLE PROCUREMENT STRATEGY IS FOCUSED ON FOUR AREAS Launched in early 2014, the Air France Econoprint program aims at rethinking the way paper printing is managed in administrative Code compliance Managing non-commitment/non-compliancy work positions. Principles are simple: Buyers sign a code of ethics. Suppliers are asked to sign the Air In 2014, a non-compliancy policy was formalized and is being Reduce the number of printers per workstation, France-KLM Sustainable Development Charter, which is based deployed progressively. All suppliers are asked to sign the Sustainable on the UN Global Compact principles, or to send an equivalent Development Charter, and those identifi ed as high risk take part in Improve the monitoring of printers, to ensure a better service quality, document to be approved by Air France-KLM. a CSR assessment conducted by Ecovadis. If a supplier does not Ensure secure access for each member of staff, to limit paper waste, In 2014, additional guidelines were developed based on obtain a minimum score of 37, he is asked to provide a corrective Lighter paper (-37% compared with previous), sourced from international standards including the Universal Declaration action plan. The policy focuses on continuous improvement. sustainably managed forests. of Human Rights, the UN Guiding Principles on Business and The objectives of this project to reduce printing by 36% were Human Rights, the Children’s Rights and Business Principles, the reached after few months of deployment (47.8 million sheets of Core Conventions of the International Labour Organization (ILO) CSR opportunities paper were saved in 2014). and the OECD Guidelines for Multinational Enterprises. KLM’s Engaging suppliers on their CSR performance and challenges helps partner UNICEF the Netherlands provided feedback on child- to identify CSR opportunities. In part, this is achieved by integrating related aspects. environmental, social and ethical criteria in product/service specifi cations and contracts where relevant. Air France-KLM also In 2014, KLM supplier Riwal launched a major innovation by contributes to supply chain sustainability by closely collaborating converting an articulating boom lift from diesel to electric power. with suppliers to develop innovative and sustainable solutions. This was done following KLM’s request for a 26 meter high aerial Supply chain risk assessment Procurement also cooperates with organizations and companies work platform for aircraft maintenance inside hangars, that would Air France-KLM uses the EcoVadis online platform for assessing in the sheltered sector on multiple projects, representing a not expose employees to emissions or loud noise. As no machines supplier CSR performance. Suppliers are scored on social, total expenditure of u18 million. Air France also focuses on the environmental, ethical and supply chain management criteria development of small and medium-sized companies and start- meeting these requirements were available, Riwal offered an inno- through a questionnaire. Depending on their score they are given ups, the creation of an innovation counter, participation in business vative solution by replacing the diesel engine and fuel tank by an a bronze, silver or gold “medal” in recognition of their performance incubators and on specifi c themes such as the Lab’line for the future electric engine, battery pack, charger and control mechanism. (see above). A risk-based approach was developed in 2014, project. In 2014, Air France obtained the “label SME” for its actions Currently three electric boom lifts are used at KLM. This success focusing on suppliers in higher risk sectors and countries. as part of the "innovative SME Charter". demonstrates the value of working closely with suppliers.

46 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 47 CUSTOMER EXPERIENCE

46 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 47 CUSTOMER EXPERIENCE Best practices

LAB’LINE FOR THE FUTURE Beginning in September 2014 for a period of more than one year, Air France is showcasing innovation for sustainable development. Reflecting its commitments to CSR and to innovation, it is involving its customers in the challenges and solutions on the path to more sustainable travel.

14 11 Raising awareness about responsible travel The initiative is supported by an awareness-building campaign, Corporate partners Toulouse-Paris-Orly including a web series. The series is available on the internet flights via social media and at the airport, it takes an informative approach to exploring Inventing the transport of the future: Air France’s positions on more responsible, more sustainable sustainability and solutions Once per week, over the course of a year, an Air France Toulouse- for responsible travel in the Paris-Orly flight is being powered using 10% sustainable biofuel, future. to showcase responsible travel (see page 30). The initiative aims to shape the responsible customer experience of the future, with a commitment to reducing environmental impact and increasing BIOFUEL societal value.

CORPORATE BIOFUEL PROGRAM Co-innovation Since June 2012, KLM has To maximize innovation, Air France is working together with other been the first airline in the world stakeholders who share the same values: to enable corporate customers 14 partners also present projects and innovations on Lab’line, Paris to become partners in the KLM NEW WORLD Employees, customers, partners and startups. Corporate BioFuel Program, BUSINESS CLASS Innovating together All stakeholders are making a contribution, through challenges, Aircraft of and to meet part of their travel In 2014 KLM completed the the future project tenders and innovation seminars. needs with biofuel-powered overhaul of its new World Eco-mobility flights. Participants pay a sur- visuel en attente Business Class on the whole The 4Rs* charge that covers the diffe- Boeing 747-400 fleet and intro- rence in cost between biofuel duced the new cabin interior on Local development Employees Partners Innovative SMEs and traditional kerosene. This the Boeing 777 fleet. In addi- partner and Startups Well-being surcharge is fully used for the tion to full-flat seats, the interior Sustainable biofuel purchase of sustainable biofuel. features new carpeting, panel Through these partnerships, decorations, curtains, lighting, Toulouse members confirm their lea- blankets, cushions and uphols- dership and actively contribute 15 tery. The carpets are produced using high quality recycled materials One year to make a difference to the development of a market Corporate BioFuel partners including old KLM crew uniforms. In addition to the World Business Over the course of the year, various themes of responsible travel for sustainable aviation biofuels. Class, designer Hella Jongerius has also designed a new Economy are being addressed, ranging from local development to the aircraft Brainstorming Calls In 2014, new partners joined the Class interior. A key improvement is the lighter seats, weighing just of the future. The initiative will enable Air France and its partners Creativity Tests to tender Program, including City of Ams- 2 11.6 kg compared to 17 kg for the old seats. This weight saving of to showcase their best practices, and to trial innovation for more Conferences and trials terdam, Friesland Campina, Series of 10 multi-leg flights 5.4 kg per seat ensures lower fuel consumption and therefore lower sustainable travel. Amsterdam - Bonaire - Aruba Perfetti van Melle and Ricoh. CO2 emissions. * The 4Rs: Rethink, Reduce, Re-use, Recycle

48 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 49 CUSTOMER EXPERIENCE Best practices

48 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 49 CUSTOMER EXPERIENCE

6 8 RESPONSIBLE CATERING RECYCLING

Onboard KLM fl ights, products are offered which have limited impact Air France and KLM recycle onboard equipment at the end of its life A sustainable on biodiversity and that are respectful of animal wellbeing. In 2014, cycle (such as trays, drawers, blankets and trolleys). 15 new products were added, including GlobalGAP certifi ed juices and ASC certifi ed salmon. Air France serves local and seasonal products on its fl ights. Babies 9 and children are offered organic meals. In 2014 Air France renewed AIRCRAFT INTERIOR and innovative its ISO 22 000 food security certifi cation. KLM has redesigned its New World Business Class and has equipped its Fokker 70 with new, lighter seats. The seat covers are made of eco-leather, which is produced in an environmentally friendly product range 7 way, using leather off-cuts. MEAL TRAY

An eco-designed meal tray was introduced in Air France’s Economy and Premium Economy cabins in 2013.

6 9 5 11 12 7 3 4 8 2 1

13 10

BIOFUEL

1 INFLIGHT ENTERTAINMENT SOCIETAL In-fl ight entertainment includes a number of fi lms on sustainability. ENVIRONMENT Air France offers reusable headphones in its Economy class. Not only do these generate less waste, they are also refurbished by a sheltered sector company and provide improved sound quality.

4 PRODUCTS FOR CHILDREN 2 BLANKETS 10 12 LIGHTER AIRCRAFT EQUIPMENT CO CALCULATION AND OFFSETTING KLM introduced the “Bluey” playset for children and Air France CO 2 100% of Air France economy class and crew blankets are cleaned deployed its “Kids” program, so that children and their parents 2 by a sheltered sector company in the Paris region. Similarly, KLM experience a comfortable fl ight. Air France-KLM-Martinair Cargo works with innovative, lightweight Passengers and cargo customers are given the opportunity to

works with Lamme Textile Management to clean blankets and other nets to save weight and reduce CO2 emissions. Lightweight baggage calculate and offset their CO2 emissions. In addition, corporate textiles in an eco-friendly way. containers are used in Air France’s long haul fl eet. accounts are offered emissions reporting.

3 5 11 13 BIOFUEL PROGRAMS LOCAL CULTURE PROGRAMS PASSENGERS WITH REDUCED MOBILITY NEWSPAPERS BIOFUEL

Air France’s “Phoenix” and KLM’s “Route Dedicated Service” Air France’s “Saphir” and “KLM Cares” by KLM, are designed to offer Digital newspapers and magazines are progressively being made In 2014 Air France launched Lab’line for the future. KLM extended programs are especially geared towards the culture and needs a personalized service to passengers with reduced mobility available onboard Air France fl ights in close cooperation with all its Corporate BioFuel Program for corporate accounts. of passengers. or special medical needs. stakeholders.

50 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 51 CUSTOMER EXPERIENCE

6 8 RESPONSIBLE CATERING RECYCLING

An eco-designed meal tray was introduced in Air France’s Economy and Premium Economy cabins in 2013.

6 9 5 11 12 7 3 4 8 2 1

13 10

BIOFUEL

3 5 11 13 BIOFUEL PROGRAMS LOCAL CULTURE PROGRAMS PASSENGERS WITH REDUCED MOBILITY NEWSPAPERS BIOFUEL

50 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 51 OBJECTIVES AND MAIN ACHIEVEMENTS 2014 AMBITION

KEY FIGURES We aim to create a safe and motivating GROUP SOCIAL POLICY environment for our employees. We continue Responsible HEALTH AND SAFETY AT WORK developing skills to ensure the professionalism

EQUAL OPPORTUNITIES and employability of our staff, to achieve the INTERNATIONAL HUMAN RESOURCES best results for our business. human resources

52 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 53 OBJECTIVES AND MAIN ACHIEVEMENTS 2014 AMBITION

KEY FIGURES We aim to create a safe and motivating GROUP SOCIAL POLICY environment for our employees. We continue Responsible HEALTH AND SAFETY AT WORK developing skills to ensure the professionalism

EQUAL OPPORTUNITIES and employability of our staff, to achieve the INTERNATIONAL HUMAN RESOURCES best results for our business. human resources

52 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 53 RESPONSIBLE HUMAN RESOURCES

Air France KLM

OBJECTIVES MAIN ACHIEVEMENTS 2014 OBJECTIVES MAIN ACHIEVEMENTS 2014

SOCIAL POLICY SOCIAL POLICY

Promote effective 5 meetings of the European Works Council Stimulate 195 employees took part in career programs dialogue with 14 meetings of the Air France Corporate Works Council employability Divisional mobility centers introduced employees and their through mobility representatives 3 meetings of the French Corporate Works Council, bringing together the employee representatives from the 9 new young professionals in the KLM Management Trainee Program and 4 in the IT Management Program Air France Group’s various subsidiaries 88 collective labor agreements signed in the Air France Group More direct & intensive 49% response rate on employee engagement survey contact between Around 1,100 employees attended interactive town hall sessions to discuss the Perform 2020 plan manager and employee Enhance mobility Mobility kiosks at Paris-CDG, Orly and regions (use dialogue as 900 jobs posted in the internal Job Exchange inspiration) 1,400 employees received individual support to change jobs 1,600 employees took part in themed conferences Implement e-HRM MyHR launched for all KLM staff (MyHR) Internship 1,550 apprentices (710 FTE, 2% of total staff), representing a 7% increase (in FTE) compared with 2013 development TRAINING

Facilitate training Total training cost: €3,229 per FTE (+22.4% as compared as 2013) and personal 112 employees gained vocational training diplomas TRAINING development 91 employees started a vocational training program Partnership with Schiphol Aviation College continued Train staff members 90% of ground staff and 100% of flight deck and cabin crew completed training to develop their 28 training hours per employee Launch of the Develop Yourself Tool employability € 186 million spent on staff training Personal training entitlements (DIF): 12% of overall training HEALTH AND SAFETY

Become world Further roll-out of integrated health policy and three-year activity plan leader within 3 serious accidents involving hospitalization HEALTH AND SAFETY aviation safety and target a “Zero Initiation of a program to accelerate and deepen the integration of occupational safety into ISMS accident” situation Reduce the number Number of workplace accidents: +2%. Annual objective 2015: -5%. Frequency rate: +5%. Severity rate: -1% of workplace OHSAS 18001 certification accidents Signature of the Ground Staff agreement improving organizations, working conditions, quality of day-to-day life Decrease Absenteeism levels: Increase from 5.3% in 2013 to 5.77% in 2014 in the workplace and preventing risks and hazardous situations absenteeism rate Health and lifestyle programs: - “FeelFit” within the Ground Services division - “Hello Fysio” for flight deck and cabin crew EQUAL OPPORTUNITIES - Two health themed events organized

Pursue A diversity section in the Air France Jobs website DIVERSITY commitments to Signature of the 2013-2015 “Generation Contract” promote diversity Percentage of female staff among senior management and executive level: 26.3% Support diversity Diversity Manager appointed Disabled employees: employment rate 5.22 % (4.95 % in 2013). 23 new employees with disabilities hired Launch of a diversity perception survey of KLM 5 Diversity Council meetings: focusing on how to promote diversity across the organization and raise awareness.

54 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 55 RESPONSIBLE HUMAN RESOURCES

Air France KLM

OBJECTIVES MAIN ACHIEVEMENTS 2014 OBJECTIVES MAIN ACHIEVEMENTS 2014

SOCIAL POLICY SOCIAL POLICY

54 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 55 RESPONSIBLE RESPONSIBLE HUMAN RESOURCES HUMAN RESOURCES Key Group social figures policy

MEETING ECONOMIC CHALLENGES Divisional programs: KLM Business Campus and Ground Services TOTAL STAFF 2014 (HEADCOUNT) WOMEN The Corporate Social Responsibility Statement and the Social Rights have re-engineered the learning program for new Passenger Handling and Ethics Charter form the foundation of the Group’s commitments employees; by reaffi rming the values and fundamental rights that guide its social Employability Services supported 195 employees in a voluntary 43.2% and ethical policy. career orientation program. Within a context of the on-going turnaround – completion of Transform 99,277 MEN 2015 and the launch of Perform 2020 – and return to profi tability, Air YOUNG PROFESSIONAL AND INTERN DEVELOPMENT 94,666 FTEs France and KLM are committed to maintaining high-quality workplace As part of the sixth Internship Charter, Air France is continuing to fulfi ll 56.8% dialogue. This workplace dialogue is transformed into a series of its responsibilities towards young people entering the labor market: strategic plans over a fi ve-year timeframe, which are rolled-out across 1,550 new interns welcomed in 2014, from further and higher individual divisions based on a “bottom-up” process, which takes into education backgrounds; account market realities. Initiatives to support access to employment for apprentices in the HEADCOUNT BY CATEGORY OF STAFF 2014 PART-TIME EMPLOYEES local area: Workshops for job seekers, jobs fairs, networking with TRAINING AND MOBILITY employers in the Paris-CDG Ground staff Flight Deck Crew Cabin Crew Air France-KLM maintained a high level of access to training in 2014. airport employment area. 65,545 8,450 25,282 Mobility enables employees to grow professionally. In 2014, Servair demonstrated 27.7% Priority areas for training are: its commitment to helping 66% 8.5 % 25.5 % supporting the Group’s transformation projects; young people by recruiting meeting regulatory requirements, particularly in the fi eld of safety; HR Connect & MyHR almost 140 people through the providing support for mobility and retraining; Emplois d’Avenir program. KLM’s HR Connect strategy was GEOGRAPHICAL DISTRIBUTION OF EMPLOYEES developing the skills of employee to improve their employability; supporting employee career progression. defi ned to translate the Transform Although KLM maintained its principle of limited external Europe (except France 2015 objectives into the human and The Netherlands) At Air France in 2014: hiring, in place since 2008, a % Mobility Centers continue to offer specialist career mobility resources domain for 2012-15. number of young professionals 4 guidance; Within this framework, new were welcomed to the % 900 jobs posted in the company via the Management 30 initiatives included designing % % The Netherlands internal Job Exchange received Trainee and IT Management 1 59 7,000 applications; decentralized mobility centers Program. In addition, the high Continental France North America % 1,400 employees received and promoting the concept of number of applications for the 2 individual support to change jobs; traineeships and internships % Asia and Pacifi c leadership and its development in <1 % 1,600 people took part in illustrates the attractiveness of themed conferences presenting the future. One of the highlights in KLM as an employer. Caribbean 2 Africa and 28 (incl. French the airline’s different businesses. Over 800 interns joined KLM Middle East 2014 was the launch of the e-HRM overseas territories) in 2014; environment, MyHR, for all KLM % KLM continues to focus on hours KLM was ranked amongst training and development, of training per employee staff. With MyHR, staff can manage the ten Best Dutch Employers 1 at Air France South America while containing costs. Several in Effectory’s “Best Employer” their HR matters any time and any % training programs were offered survey. <1 in 2014: place, easier and faster. MyHR has Indian Ocean KLM Academy has launched resulted in signifi cant cost savings the Develop Yourself Tool, an u 3,229 and has reduced paper waste by online platform for staff to learn Training expenditure anywhere, anytime; per FTE at KLM almost 3,500 kg in 2014.

56 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 57 RESPONSIBLE RESPONSIBLE HUMAN RESOURCES HUMAN RESOURCES Key Group social figures policy

56 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 57 RESPONSIBLE HUMAN RESOURCES

Our colleagues know where to find us ergocoaches. It is becoming Health and more and more accepted that we engage in dialogue with colleagues about unsafe or unhealthy work situations. Together with the other safety at work ergocoaches we deal with issues concerning ergonomics and safety. Management supports us, and we also get the time we need to really fulfill the role of ergo coach. Ergo coach at KLM Engineering and Maintenance he health and safety of staff in the workplace is a key priority leakage from aircraft engine oil into the air conditioning system. In res- QUALITY OF LIFE lifestyles. for Air France-KLM, as well as maintaining good quality of ponse to this, KLM Health Services (KHS) experts organized several IN THE WORKPLACE In the SafetyF@ct videos, useful One example is the “Fit on the Ramp” lifestyle program at Ground T life. meetings with the Working Group Aircraft Related Dangerous Oil and The Group pays particular atten- information on safety is covered. Services which became “FeelFit” in 2014. This program offers many Fumes (ARDOF). Aircraft manufacturers have demonstrated that during tion to quality of life in the work- I can access the program any time, activities such as health screening and individual and group training on OUR KEY ISSUES normal operation there is no health risk for passengers or crew. Mea- place. Various initiatives help any place and it takes only five healthy lifestyles (e.g. on quit- Ensuring Health and safety at work is a topic with social and financial surements on board KLM’s 737 and a consecutive risk assessment employees with their work-life minutes of my time, but it makes ting smoking). Furthermore, a aspects and a direct impact on business. Therefore, reducing risks, have confirmed this. balance, which also improves me more aware of safety pilot program “HelloFysio” was occupational illnesses, and workplace accidents are high priority performance. during my work. launched for flight deck crew areas. At Air France, a new agreement De-icing operator at KLM and cabin crew, which offers As part of the Integrated Management System at Air France, specific was signed at the end of 2014, online physiotherapy by expe- annual performance target contracts are signed by the senior execu- aiming to ensure improvements Change the way rienced physiotherapists. Our ‘Pilot-Pads’ have a new tive of each entity. These contracts formalize quantified commitments to organization, working condi- we work Additionally, KLM has started MAIN TYPES OF ACCIDENTS section dedicated to Health to reduce accidents at work through action plans. In 2014, Air France tions, quality of life in the work- organizing Health Theme Events. AT WORK AT AIR FRANCE IN 2014 and Safety at work issues. This As part of its “Change the obtained OHSAS 18001 certification for its health and safety manage- place, risk prevention and to Two events took place in 2014, provides quick access to practical ment system, in force at all levels of the company. physically demanding jobs. The way we work” program, focusing on self-management and concrete information on In terms of safety, KLM’s ambition is to become a world leader in avia- agreement builds upon initia- which aims to renew working and on healthy lifestyle promo- related subjects such as malaria or tion safety. The objective of a "zero accident" situation has been set to tives already in place and sets tion. Managers and professio- practices, Air France will expand minimize the number of workplace incidents. This objective is pursued out a new package of mea- barometric otitis. nals from both inside and outside by the Integrated Safety Management System (ISMS) (see p.18). sures. These include support for Occupational safety coordinator telecommuting. More employees the company shared knowledge 37% 28% 11% at Air France members of staff facing personal now have the opportunity to work and best practices. RISK PREVENTION Physical constraints, Barometric otitis Falls difficulties, the roll-out of mana- handling from home one day per week. The Being vigilant and taking action are now more of a priority than ever. To gement practices to promote I work at Cargo. We have been place accident avoidance and a culture of risk prevention at the heart quality workplace relationships, using vacuum lifting devices for initiative aims to boost motivation our palettization operations, since of its business, the Group is taking action in several areas: the development of ergonomic by reducing stress related to integrating occupational safety criteria into project management approaches during the design of 2014. Because they reduce the and in the development of ergonomic procedures; projects, and the expansion of weight of the loads that we have work travel, to improve work-life involving field managers and staff to identify potentially hazardous new working methods, such as to carry, they prevent the risk of balance, and to offer greater situations and to encourage preventive action; home-working. musculoskeletal disorders. GLOBAL FREQUENCY RATE, AIR FRANCE independence to employees in the feedback systems to share experience of incidents and best practices; To date, more than 18,000 Cargo operator at Air France building awareness and providing information on occupational health Number of lost-time employees have responded to a way they organize their work. Since injuries per million risks and their prevention, through dedicated conferences and forums; hours worked questionnaire evaluating occupa- its launch, about 600 employees maintaining skills by offering risk prevention training, updated on tional stress. The questionnaire have enrolled in the project. a regular basis to keep pace with changes in regulations and tools 35 has become a key tool for mana- available, as well as taking into account change and the emergence Frequency rate: +5% ging and preventing psychoso- of new risks. Severity rate: -1% cial risks within the company.

Objective

RESULTS AND OBJECTIVES 25 Frequency Since 2013, KLM has an integrated approach to all health-related mat- Following several years of progress, in 2013 and 2014 Air France rate: -5% ters to pursue a more concrete and efficient policy. A three-year plan,

recorded a deterioration in terms of workplace accidents in some divi- and a detailed action plan for 2014 present a common vision on com- sions. However there was a decline in the severity rate of accidents. pany-wide goals for health and safety. The implementation of this policy KLM has reached its goal of fewer than four accidents, however the is reviewed annually and updated if necessary. This new policy pursues 15 number of workplace accidents leading to time off work rose slightly to the positive and effective initiatives that are underway, but also intro-

above target. Recently, media reports have suggested possible health 2005 2010 2011 2012 2013 2014 2015 duces a shift in focus with increasing investments in preventive health- risks for passengers and crew associated with chemical substance care, to improve working conditions and promote healthy employee

58 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 59 RESPONSIBLE HUMAN RESOURCES

Objective

58 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 59 RESPONSIBLERESPONSIBLE RESPONSIBLERESPONSIBLE HUMANHUMAN RESOURCESRESOURCES HUMANHUMAN RESOURCESRESOURCES Equal International opportunities human resources

DIVERSITY offered an appropriate position A WORLDWIDE SOCIAL POLICY DEVELOPING LOCAL TALENT In line with its Social Rights and Ethics Charter, Air France-KLM pur- without having to undergo a 9,956 employees, accounting for 10% of Air France-KLM staff, Additionally, various local management and talent development initia- sues a social policy based on integration through work, respect for new application process. are located at international establishments, which are the local tives are in place. equal opportunities, combating discrimination and promoting diversity. In 2014, KLM employed 750 Air France-KLM offices. The “Spice Trail” is a combined talent program of the area Asia Pacific At Air France, internal recruitment and selection processes are employees with disabilities. Guided by the Social Rights & Ethics Charter, the Group applies local and the Middle East, Gulf and India area at Air France-KLM. Each year, governed by a code of ethics. Materials are available to managers, and collective labor agreements, agreed with unions or other relevant twelve talents are chosen by local management teams to follow this one more broadly to all staff members, including an e-learning module on GENDER EQUALITY parties, according to local standards. Due to these local contexts, year program that includes 360 degree feedback, managing change “Diversity and Discrimination Prevention”. Professional equality between labor agreements and standards can vary per country. successfully, project management and culture and communication trai- Air France is a signatory of national charters such as the Diversity Char- men and women remains a key As part of on-going workplace dialogue, the Air France-KLM ning. Other parts of the program include visits to various establishments ter and the Good Parenting Charter. The airline signed the 2013-2015 issue and progress area in HR employee satisfaction survey Reflect was conducted in 2014, to to get to know the market and the colleagues and share best practices. “Generation Contract”, the French government agreement for sustai- management. Air France has measure the satisfaction and expectations at work of all staff wor- The first “Africa’s Got Talent” program began in October 2014 nable employment for young and older people, and the passing on of made a commitment to redu- ldwide. They were asked to give their opinion on subjects such as and will run until May 2015. Twelve local talents from all six knowledge and skills. cing wage disparities between their own role in the organization, experiences at work, opportuni- African establishments experience an eight-month program in KLM’s Diversity Council, set up in 2014, examines ways of promo- men and women. The percen- ties for personal development, communication, leadership, mana- four sessions, focused on ting diversity in the organization and increasing awareness. As a result, tage of female staff among gement and overall impression including questions about CSR. The business and organizational diversity is one of the themes of divisional Management Development senior management and exe- overall participation rate was 62%, and 87.4% of the respondents information, managerial skills plans, and a Diversity Manager has been appointed effective February cutive level rose to 26.3%. indicated they think that Air France-KLM is committed to CSR. In and personal development. 2015. At the end of 2014, a survey was conducted in cooperation Air France signed the Conven- 2015 the departments and establishments will analyze the results of Local management at each with Leiden University to gain insight in the perception of diversity in tion for Occupational Gen- the survey, discuss findings with the employees and develop plans establishment selects the the workplace. der Equality with the French for improvement. participants. The goal of the Ministry of Women’s Rights, Another focus point in 2014 was the e-learning on Anti-Bribery and program is to identify and DISABLED PEOPLE formalizing a number of com- Corruption (see also p.20). Although this is a key part of the Air foster talent with a view to local Air France-KLM has a proactive approach to helping people with mitments, such as those on France-KLM overall ethics framework, particular attention was paid mobility in order to prepare disabilities into work. Air France signed the 2015-2017 Disability work-life balance, increasing to the international establishments, where a larger share of staff was new managers for the future. Agreement in 2014, which aims to pursue and strengthen initiatives to the number of women on stee- asked to participate, including lower management levels. Furthermore, the program promote improved, career-long support for employees with disabilities. ring committees and providing focuses on development of In 2014: support for equality initiatives FOCUSING ON SERVICE QUALITY personal and management the share of employees with disabilities within the total workforce among SME subcontractors For Air France and KLM, service is a key part of differentiating skills and competences, a continued to grow to 5.22% in 2014 compared to 4.95% in 2013; and suppliers. the offer and building customer loyalty. The entire service chain wider business perspective, 23 people with disabilities were recruited by Air France (16 in 2013); At KLM Group, the percentage is involved at all destinations to ensure customers receive quality and achieving higher motivation staff with disabilities were aided in retaining their jobs, through of female staff grew to 42.6% service throughout their journey, from levels. support and adaptation initiatives; in 2014, from 42.3 % in 2013. check-in to baggage collection. increased use of companies and organizations in the sheltered This increase also translated Training projects for staff throughout the sector: 18 million euros of purchases from this sector. to the senior management world are deployed in order to foster a and executive level, where the true customer-centric culture among KLM is fully committed to actively furthering the vocational integration percentage of female staff rose from 19.8% in 2013 to 20.5% in employees. The Signatures of Service of people with disabilities and to maximizing their potential economic 2014. training program is being rolled out in over contribution. Based on government guidelines, occupational physi- KLM is committed to equality and respect for sexual orientation. The 100 local establishments. In 2014, this cians evaluate employees’ potential contribution. In cooperation with “Over the Rainbow” LGBT network brings together gay, bisexual and training was extended to Tokyo, Bangkok, specialists, consultants and employees, adjustments are made to wor- transgender employees. It provides advice to ensure fair treatment, Hong Kong, Abidjan, and Montreal, with king hours, types of work and work station adaptation needed to opti- regardless of sexual orientation. The network has steadily grown to cultural differences taken into account for mize the potential of employees with disabilities. The return to work for around 350 members. On Coming Out Day in October 2014, the each country. For example, in Bangkok, employees with disabilities is proactively supported. When employees themes of gender equality and diversity were addressed during a the famous Thai "wai greeting" was are unable to return to their jobs due to disability, they are automatically lunch event. included as a standard part of welcoming customers.

60 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 61 RESPONSIBLERESPONSIBLE RESPONSIBLERESPONSIBLE HUMANHUMAN RESOURCESRESOURCES HUMANHUMAN RESOURCESRESOURCES Equal International opportunities human resources

60 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 61 OBJECTIVES AND MAIN ACHIEVEMENTS 2014 AMBITION

ECONOMIC VALUE As an airline group, we connect people LOCAL DEVELOPMENT AROUND OUR HUBS around the world. We strive to add Local LOCAL DEVELOPMENT AT DESTINATIONS economic and social value in the areas

SOCIAL PARTNERSHIPS where we operate. By working together with local partners, we create new business development opportunities and support projects that contribute to future generations and local communities.

62 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 63 OBJECTIVES AND MAIN ACHIEVEMENTS 2014 AMBITION

62 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 63 LOCAL LOCAL DEVELOPMENT DEVELOPMENT

OBJECTIVES MAIN ACHIEVEMENTS 2014 Economic LOCAL DEVELOPMENT AROUND OUR HUBS

Contributing to Promoting regional attractiveness and development: economic value - Air France and KLM: 356,000 jobs induced in France by Air France and 90,000 jobs induced by the Dutch value aviation industry in the Netherlands - KLM, Schiphol and the City of Amsterdam: Continued cooperation for regional competitiveness and sustainable development - KLM & Amsterdam Marketing focusing on the development of the Amsterdam region - Air France and 6 leading companies formed an association in the Paris-CDG to facilitate employees mobility and access to employment ith hubs in Paris and Amsterdam and destinations worldwide, and reasserted the major impor- Supporting SMEs and innovation projects: Air France and KLM contribute to economic and social deve- tance of the aviation sector and - KLM: Invested in 8 startups through the Mainport Innovation Fund lopment, both locally and at the national level, through direct Schiphol airport for the Dutch - Air France: Supported 70 Small and Medium Firms through a coaching program in the Paris-CDG area W and indirect activities. economy. This policy aims to achieve an innovative and Contributing to Knowledge and talent development of young people through education programs: DRIVING THE LOCAL ECONOMY competitive economy within a knowledge and - KLM: Extended the ROC partnership and welcomed 182 pupils on a JINC mini-internship skills for future The hubs at Paris-CDG, Paris-Orly and Amsterdam Schiphol provide sustainable environment. Optimum international accessibility by air is - Air France: 13,000 students informed on aviation careers during education fairs by Airemploi generations and highly attractive business environments. With 90% of the Group’s a key condition for achieving these goals. Moreover, the government Supporting people with distance to the labour market: vulnerable people employees based in France and The Netherlands, Air France and KLM has identifi ed 9 sectors that are key to the economy and has brought - KLM: 15 young people in Schiphol Aviation College program contribute signifi cantly to their national economies. With more than together business, scientists and government agencies to collaborate - Air France: 360 young unemployed trained or provided with guidance by JEREMY (including 134 at Air France) 40,000 employees in Ile-de-France, Air France is the largest private sec- on boosting the international competitiveness of these sectors. - Air France’s sourcing from sheltered sector companies: €18 m tor employer in the Paris region, while connections to French regions KLM partners with Schiphol Airport and the City of Amsterdam to contribute to development and strengthen the competitiveness and development of the region, by enhance regional attractiveness. working on sustainability themes, including circular economy. In 2014, LOCAL DEVELOPMENT AT DESTINATIONS Air France has demonstrated its it led to the introduction of 168 Tesla "e-taxis" at Schiphol airport. This commitment to the Paris region has improved air quality and raised awareness of electric transport. through a u 45m investment in KLM and Amsterdam Both organizations are also partners in the Corporate BioFuel Program. Contributing to Creating positive impact on local development through: a new maintenance facility at Marketing economic value - Air France-KLM: large network of 316 destinations in 115 countries Paris-CDG, due to open in Sep- GROUND TRANSPORTATION - Air France-KLM: over 2,500 local suppliers located at destinations In 2014, KLM and Amsterdam tember 2015. Air France-KLM takes particular interest in ground transportation, With 26,656 FTEs, KLM Group Marketing renewed their as the accessibility of airports is an important factor in the deve- Developing - KLM: 5-year support for chair Sustainable Tourism of Wageningen University and 4 participants in the is the third largest private sector partnership after the successful lopment and attractiveness Sustainable ShareBusiness program Tourism & Local employer in the Netherlands. of the Air France and KLM - Transavia: Launch of Travel Solid’Air online guide, which recommends 200 ecotourism initiatives Amsterdam 2013 campaign. Entrepreneurship Aviation's contribution to Dutch hubs. Air France works along- GDP is u 26 billion (including It aims to make Amsterdam a side other large companies catalytic effects). more competitive destination, based in the local area to 356,000 take effective joint actions and attracting more SOCIAL PARTNERSHIPS LONG TERM COOPERATION jobs induced by Air France on transport and to support ON MAJOR PROJECTS international visitors. activity in France public transport infrastruc- Stimulating social Investing in nature conservation programs: Air France supports projects KLM has also formed longer ture projects: at Paris-CDG in and environmental - KLM & WWF-NL: 7-year fi nancial support for various conservation projects set to shape the areas around AIR FRANCE September 2014, 7 leading development term “Holland Alliances” - Air France supports forest conservation project in Madagascar since 2008 its hubs over the coming twenty companies came together to Contributing to future generations through social projects: years, such as the Grand Roissy with Amsterdam Marketing, st form the R'PRO'MOBILITE - Air France: Air France Foundation (110 projects focused on childhood) project, the Nouveau Grand 1 organization, while at Orly, Amsterdam Airport Schiphol and - KLM: Working with UNICEF the Netherlands on applying the CRBP Paris and the Métropole du private sector employer Air France signed a PDIE NBTC Holland to develop and in the Paris region Engaging employees & customers: Grand Paris. KLM participates (intercompany travel plan) with = more than 40,000 employees - KLM: Wings of Support invested in 73 projects in the Dutch government’s execute marketing programs in 5 other businesses (see p.33). - Air France: a monthly article devoted to the corporate Foundation and Acting for Life’s projects within the SMASH program which aims emerging markets such as Russia, KLM GROUP Air France Magazine to optimize spatial planning and Brasil and China. An award - Flying Blue: 112.7 million Miles donated by Flying Blue members to NGO partners infrastructure around Schiphol. rd The Dutch government conti- winning campaign “Holland, The 3 nued the implementation of Original Cool” was also launched largest private sector its air transport policy (“Lucht- employer in The Netherlands vaartnota”), adopted in 2011, in the United States. = 26,656 FTEs

64 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 65 LOCAL LOCAL DEVELOPMENT DEVELOPMENT

OBJECTIVES MAIN ACHIEVEMENTS 2014 Economic LOCAL DEVELOPMENT AROUND OUR HUBS

64 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 65 LOCAL DEVELOPMENT Local development around our hubs

ENVIRONMENT SUPPORTING SMEs AND INNOVATION KNOWLEDGE AND SKILLS COMMITTED TO Air France-KLM supports innovation through collabora- BOUSSOLE Fair travel tickets FOR FUTURE GENERATIONS THE EMPLOYEMENT tion with small and medium firms (SMEs) and startups. In Business Travel Plan to contribute to the reduction of emissions for job seekers To ensure a match between OF VULNERABLE PEOPLE 2012, Air France signed the Charter for Public Compa- caused by employees commuting in the Paris region. the skills needs of the indus- Air France signed the o 1.9 nies in favor of Innovative SMEs. The airline also supports LANDSCAPE NORTH HOLLAND and scholarship try and the qualifications of Businesses and Neighborhoods SMEs through its participation in a coaching program A nature conservation organization in the Schiphol area. Through this students job seekers, Air France-KLM Charter, signaling its willingness billion (PLATO) involving 70 SMEs in the Paris-CDG area, and partnership, KLM supports projects that protect a vulnerable nature In 2014, Air France gave invests in various organiza- to make a real contribution to through the creation of a business association in the city reserve in the North Holland province. tions and education programs. priority neighborhoods. The Air France purchases a boost to job seekers by in France (exc. fuel) of Orly. Since March 2014, Air France has been a founder For example, the Group led airline also supports Second member of the ‘Welcome City Lab’, a startup incubator, signing a partnership with several initiatives in 2014 for Chance Schools in locations aiming to foster innovation in the tourism sector. the Toulouse Employment middle and high school stu- throughout France. KLM, Schiphol Airport, Rabobank and Technology dents: It also supports workers with Agency. Air France offers o University of Delft work together through the Mainport G 62 Air France staff disabilities by working with 26 D C reduced rates for job Innovation Fund. It aims to accelerate innovation in the - members volunteer to pro- sheltered sector companies: S aviation sector by investing in startups that contribute to I vide support to young people Air France’s spending in the

R seekers to help them in L

A billion sustainable, safe and efficient air transport. The fund has O from underprivileged back- sheltered sector represented P H their mobility related to u aviation's contribution invested in 8 innovative startups. P grounds up until their gra- 18m in 2014. Air France is I to the Dutch GDP H their search for work. duation from a business expanding its partnership with C

S LOCAL STRUCTURAL INITIATIVES school or university, through the sheltered sector year on T Toulouse Business School The Group is involved in various initiatives to strengthen R a partnership with the "Pas- year, for example, the pro- O the economic attractiveness, reputation, international P fraternities have joined the seport Avenir" association. portion of onboard blankets IR competitiveness, and sustainable development of its hubs. A Air France-KLM BlueBiz The OPEN internship cleaned by sheltered sector M A enables around 200 stu- companies rose from 15% in D loyalty program, allowing ER ST dents from ten local middle 2009, to 82% in 2014. AM scholarship students to schools to be informed on KLM is a partner of Schiphol Aviation College, which brings together use earned Blue Credits for the aviation industry, and aviation businesses, vocational education institutions and authorities for a selected number of to stimulate employment around Schiphol. An employment agency airline tickets. them to discover the airline. offers temporary assignments to people with limited access to the Air France employees, labour market, to enable them to gain valuable work experience and JOBS AND TRAINING representing the air- training. In 2014, Schiphol Aviation College also completed a pro- line’s key businesses gram for 15 unemployed young people, to help them access the LOCAL ECONOMIC DEVELOPMENT KLM runs several education programs to attract future talent through met with 500 middle labour market in the Schiphol region. collaboration with ROC’s, Schiphol Aviation College, JINC and “ICT in school students from the Seine-Saint-Denis area at a careers PAYS DE ROISSY ASSOCIATION the Clouds”. forum organized by the FACE 93 organization (Action Against Promoting socio-economic development of Paris-CDG area. JINC offers mini-internships at KLM for children aged between 8 Exclusion Foundation), of which Air France is a partner. Collaborate with more than 340 members (including elected and 16. KLM Engineering and Maintenance works with 5 Regional Com- representatives, businesses, institutions) on jobs, housing, “ICT in the Clouds”, initiated by the Montessori School of munity Colleges (ROC). To anticipate retirements in the coming economic development, transport and culture. Amsterdam, develops children with ICT talent. years, Avionics and Accessories collaborates with ROC Flevoland HUBSTART PARIS REGION AND AEROTROPOLIS AIR FRANCE is a founding member and partner of 4 associations to train new engineering talents. Electrical engineering students Promoting the hub region at an international level, facilitating involved in information and training programs on aviation careers: can follow a KLM Minor on aviation electronics, with courses given companies moving to Paris-CDG. Airemploi, Jeremy, AFMAé and Engineers For Schools. by KLM employees, to better match the education program with COLLABORATION AMSTERDAM/SCHIPHOL/KLM (ASK) Airemploi provides information about aviation careers to 3,000 students. work practice. Students who excel can intern at KLM in their 3rd Aiming to improve international competitiveness, promote destination AFMAé welcomes 624 apprentices at its training center (50% of and 4th year. Amsterdam, improve accessibility, education and sustainability. whom are at Air France).

66 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 67 LOCAL DEVELOPMENT Local development around our hubs

R seekers to help them in L

66 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 67 LOCAL DEVELOPMENT Local development at destinations

STIMULATING ECONOMIC DEVELOPMENT LOCAL ENTREPRENEURSHIP ENVIRONMENTAL PARTNERS With a strong presence in Africa and Asia, Air France-KLM promotes Local entrepreneurship drives development and economic growth. The forest conservation project regional economic and social development. Air France-KLM offers Therefore, in Ivory Coast, Air France and Chronopost have jointly in Madagascar, supported by frequent flights between Europe and Africa. The 2014 expansion of placed their expertise and logistical capacity at the disposal of local Air France since 2008 and the Kenya Airways joint venture added four new routes and doubled artisans, enabling them to increase their revenues. The initiative aims co-funded by AFD, FFEM and the number of weekly flights between Amsterdam, London Heathrow to cut out intermediaries and to create a direct link between artisans Madagascan authorities since 2014, contributes to the development of and Paris-CDG to East Africa. Value is also created through local and end customers, for example by providing them with a workshop. local communities while protecting the unique biodiversity of the island sourcing. Thanks to the involvement of the local authorities, the project aims to (see also p.39). The project has already reached 34,000 households, The Group also contributes to Latin American and Caribbean growth expand to other craft centers. 17% of which have adopted alternative agricultural techniques to through its large long-haul network from Europe to these destina- KLM works with social enterprise “ShareBusiness”, offering a program “slash and burn” (such as beekeeping, poultry, fish farming, cash tions. Air France-KLM serves 25 destinations in the region and offers in which managers can work in emerging countries for a limited period crops), increasing crop, crop diversification and income. over 200 weekly flights from Paris-CDG and Amsterdam Schiphol. In Gawad Kalinga & Air France-KLM, of time, to share knowledge with local entrepreneurs. As such, these 2014, a long-term strategic partnership agreement was signed with a sustainable partnership entrepreneurs benefit from Brazilian carrier GOL, improving connectivity in South America. fresh insights for developing For many years, the Group has supported the NGO Gawad Kalinga (GK), their business and KLM’s RESPONSIBLE & SUSTAINABLE TOURISM a Philippine-based NGO that aims to end poverty for 5 million families managers gain experience and KLM & WWF-NL Through its longstanding partnerships with a number of NGOs, inclu- in the Philippines by 2024. develop their skills. In 2014, KLM has provided financial support to a number of WWF-NL ding Acting for Life and Gawad Kalinga, Air France-KLM supports ini- 4 employees were assigned projects that work to protect nature reserves since 2007. A 2014 tiatives for sustainable tourism. Acting for Life promotes responsible GK employs a holistic model for development, relying on various initiatives, to cases in Ethiopia, Kenya milestone in the Living Amazon Initiative in South America was tourism, as a virtuous circle that minimizes negative social, economic such as building homes for the homeless with the help of thousands and India. For example, in the funding by the Brazilian government, WWF and partners and environmental impacts and generates greater economic benefits of volunteers: 2,400 organized communities have been created Kenya, the goal was to provide for local people. For example, in Djibouti, the NGO and the Djibouti recommendations for logistic for the Amazon Protected Areas (APRA) Program, a 215 million National Tourism Office partnered to build eco-bungalows to wel- and an Air France-KLM village consisting of 47 houses has been built processes for a company dollar project to take care of the largest protected area in the come travelers. thanks to sponsorship from the Regional Establishment of Air France-KLM. organizing smallholder farmers For a period of five years, KLM supported the Sustainable Tourism to produce and market fruits Amazon over a ten-year period. The project covers 15 percent of The Air France Foundation supported the School for Experiential chair at Wageningen University. The research focused on the role of and vegetables. the Brazilian rainforest and aims to protect 50 million hectares, and Entrepreneurial Development (SEED) in 2014, sponsoring 30 students. tourism in conservation and development in Eastern and Southern containing around Africa. The project budget was €2 million, and various studies were GK is also supported through tickets. GK develops social tourism programs, 15 billion tons of published on this topic. through a social entreprise, MAD (Make a Difference) Travel. Travelers In 2014, Air France conducted a study on social tourism to assess carbon dioxide. how to best support this kind of tourism. The rise in passenger are welcomed in eco-B&Bs , one of them financed by the Group. demand for inspiring and experiential travel is driving the Group to develop a more personalized offer, attuned to local culture. In 2014, Transavia launched “Travel Solid’air”, an online guide listing more than 200 ecotourism initiatives located in or nearby the cities served by the airline, in Europe o 12.8 and around the Mediterranean. Following their trip, customers have the opportunity to recom- billion mend new initiatives to the Long-haul revenues online community. Air France-KLM Group

68 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 69 LOCAL DEVELOPMENT Local development at destinations

68 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 69 LOCAL DEVELOPMENT

Social DISTRIBUTION OF GROUP’S CONTRIBUTION BY PROJECT CATEGORY partnerships 8% 58% 34% Environment Sports, culture, miscellaneous Humanitarian & education

Working on children’s rights GEOGRAPHICAL DISTRIBUTION OF PROJECTS AND SOME EXAMPLES The supply chain can have a major impact on people and communities. LONGSTANDING The “Friends of Air France Foun- PARTNERSHIPS This is why Air France and KLM pay particular attention to human and dation” network gets more than Air France-KLM has always children’s rights in their procurement processes. Through a workshop, 2,200 employees involved in Europe (incl. France and Benelux) played an active role in inter- buyers and product managers from Inflight Services learned more various voluntary, childhood-fo- and North Africa national development through cused projects in France. social, humanitarian and nature about human and labor rights risks, health and safety aspects and conservation projects, with environmental impacts that may occur in the supply chain. KLM’s ENGAGING CUSTOMERS 16% 36% many projects focusing in parti- Air France and KLM engage partner UNICEF advises in this process. The goal is to further embody, North America cular on future generations. passengers on social and huma- Air France helps disadvantaged safeguard and promote the rights of children within the industry. As nitarian programs they support. 2% Middle East, children through its Corporate such, the partnership centers in part on supply chain sustainability, by The Air France inflight magazine Gulf, Indian Foundation, which was invol- devotes a monthly article to a subcontinent 12% applying the Children’s Rights and Business Principles. ved in 110 projects in 2014. project supported by the Air 20% Asia Pacific In addition, Air France has had France Foundation and Acting for Africa a partnership with the NGO Life. Air France informs passen- Acting for Life for over 30 years. gers about the damage caused It promotes economic develop- by child sex tourism by financing ment and sustainable tourism: and broadcasting ECPAT Inter- 14% in 2014, Acting for Life sup- national’s prevention campaign, Latin America ported 37 projects. and by providing support to 9 Caribbean* Air France and KLM support the other ECPAT projects on child French and Dutch Aviation Wit- protection around the world. In hout Borders. This emergency its Holland Herald magazine, aid organization carries out air KLM focuses on various CSR * Including figures for Indian Ocean. transport missions, transports initiatives and highlights the cargo shipments with medical work of its partners. Flying Blue supplies to remote areas and arranges transport for sick children, who passengers can support NGO projects by donating Flying Blue miles. KENYA CENTRAL AFRICAN REPUBLIC are accompanied by Air France and KLM volunteers. Since 2014, the donation tool has been updated to provide members KLM Kenya - Northern Suburbs Clubs Rugby Program: Air France Foundation - Triangle Génération Humanitaire: KLM works with 5 other long term partners including its strategic with the opportunity of donating any amount of miles they wish, in real a two-year partnership to improve the lives of children Support for 8 centers for children living on the streets. partners UNICEF and WWF-NL, as well as Doctor2Doctor, Wings of time. A total of 112.7 million miles were donated by Flying Blue members aged 8-18 from informal settlements in Nairobi, by pro- Support, Get it Done, and Close the Gap. KLM has provided strong to NGO partners in 2014. moting the sport among talented youth. MADAGASCAR support to Close the Gap since it was founded. It aims to “bridge the Air France Foundation - Audition Solidarité: Providing digital divide” by obtaining high quality, used computers from compa- AFRICA hearing aids to deaf children and training for teachers. nies and distributing them to local educational, healthcare and entre- Close the Gap: Since 2004 KLM has donated over preneurial projects in emerging countries. In 2014, KLM sent 25 cargo CONTRIBUTION OF AIR FRANCE-KLM 12,000 computers, giving 300,000 students in countries CHILE, PERU AND COLUMBIA shipments to various projects and provided nearly 1,000 recondi- like Kenya, Tanzania and Congo access to knowledge Acting for Life: Poverty reduction program and support for tioned computers and printers. u 14 million 79,6 and training. disabled workers in the tourism industry. EMPLOYEE INITIATIVES FRANCE Financial support tons sponsored The Wings of Support foundation, founded in 1998, supports local pro- and donations by KLM Cargo PAKISTAN Air France - Ordyslexie: 2,000 reconditioned compu- jects at destinations. Both KLM flight crew and ground staff are actively ECPAT - Imtizaj II: Prevention, awareness and support ters donated to dyslexic students. Provided with touch involved in the work of the foundation. Wings of Support also organizes Air France tickets donated for local organizations to fight child sexual exploitation. screens and intuitive technology, they ease their work at an annual ‘BushCamp’ for orphaned children from all over Kenya. In 739 to more than 30 NGOs school and make them more independent. 2014, €633,000 were invested in 73 projects, helping 10,750 children.

70 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 71 LOCAL DEVELOPMENT

Social DISTRIBUTION OF GROUP’S CONTRIBUTION BY PROJECT CATEGORY partnerships 8% 58% 34% Environment Sports, culture, miscellaneous Humanitarian & education

70 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 71 DIALOGUE WITH OUR STAKEHOLDERS SOCIAL INDICATORS ENVIRONMENTAL INDICATORS AIR FRANCE-KLM GROUP'S FLEET NOTES ON THE METHODOLOGY Performance GROUP’S MAIN SUBSIDIARIES GRENELLE II INFORMATION STATUTORY AUDITOR’S ASSURANCE REPORT GLOBAL COMPACT AND GRI4 CORRESPONDENCE TABLE indicators INTERNATIONAL NON-FINANCIAL INDEXES AND RATING 2014 CONTACTS

72 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 73 DIALOGUE WITH OUR STAKEHOLDERS SOCIAL INDICATORS ENVIRONMENTAL INDICATORS AIR FRANCE-KLM GROUP'S FLEET NOTES ON THE METHODOLOGY Performance GROUP’S MAIN SUBSIDIARIES GRENELLE II INFORMATION STATUTORY AUDITOR’S ASSURANCE REPORT GLOBAL COMPACT AND GRI4 CORRESPONDENCE TABLE indicators INTERNATIONAL NON-FINANCIAL INDEXES AND RATING 2014 CONTACTS

72 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 73 PERFORMANCE INDICATORS PERFORMANCE INDICATORS

Dialogue with our stakeholders

GROUP’S MAIN ENGAGEMENT GROUP’S MAIN ENGAGEMENT MAIN ENGAGEMENT PATHWAYS OUTCOMES 2014 MAIN ENGAGEMENT PATHWAYS OUTCOMES 2014 STAKEHOLDERS TOPICS STAKEHOLDERS TOPICS

Shareholders Financial information Quarterly presentations to analysts Reporting improvement based on feedback (i.e. Vigeo, Suppliers Environmental and social Sustainable Development Charter and sustainability 75% of suppliers signed the sustainable development Investors CSR performance Dedicated financial website SAM, EIRIS, CDP) performance clauses in contracts charter Financial partners Annual publications Reporting with GRI4 guidelines. Supply chain CSR risk Assessment of suppliers CSR performance Supplier guidelines developed Non-financial rating Shareholder Club Dutch Association of Investors for Sustainable Development Eco-design CSR in Supplier relationship Management 179 suppliers assessed via EcoVadis platform (VBDO) awarded Air France-KLM “overall best score” based agencies Sheltered sector Air France committee to identify and follow contacts €18 m in purchases from sheltered sector Advisory Committee for individual shareholders on 7 sustainability themes collaboration with sheltered sector suppliers Participations in consortia for biofuel supply Yearly General Shareholders’ Meeting Other outcomes: see chapter Governance Biofuel VBDO - Dutch Association of Investors for Sustainable Other outcomes: chapters Environment and Customer Development (VBDO) Experience UN Global Compact (France & NL) COP Peer Review Sessions Airports Safety and security Member of international (IATA), European (AEA) and Green Deal Biofuels Air transport and Airport accessibility national bodies (European Regions Airline Association, Lab’line partnership stimulating a biofuel market in France FNAM, GIFAS, BAR) Passengers Customer satisfaction E-Score Survey and Quality Observer program Near 1 million answers to e-Score surveys, crew reports, industry bodies Ground handling CSR best practices of SkyTeam partners and distributors and service quality customer feedback analysis SkyTeam CSR working group Customer assistance desks, web care Air Traffic Control services ACARE chaired by Vice Chairman Air France-KLM (Maintenance Involvement in SESAR JU, ACARE, CORAC and Health and safety KLM Health Services and KLM Travel Clinics websites Quality Observer program: over 25,000 customer quality Fleet development customers) reports SAFUG Other outcomes: chapters Governance and Environment Flight related information (e.g.www.klmhealthservices.nl/nl/fit-to-travel.html) Sustainable biofuels for Cargo customers Member of Roundtable on Sustainable Biomaterials Accessibility Health and onboard comfort pages on Air France Feedback through KLM Takes Care platform aviation Business partners Member of the Biofuel Flightpath’s Core Team of the Innovative products website and international vaccination center Lauch of Lab’line: 14 partners, a survey conducted among Climate change European Commission CO calculation and compensation offers on Air France customers, collaborative working groups, launch of a call Reduction CO 2 Single European Sky 2 for innovative projects from start-ups and SMEs Air France partner of Ini-FCA emissions and KLM websites 4 new partners in KLM Corporate BioFuel Program Responsible Catering Lab’line for the future program KLM Corporate BioFuel Program DSGC publication on Sustainable Innovation Local authorities Noise KLM involvement in Alders Table and CROS Implementation NADP2 KLM participation in Dutch Sustainable Growth KLM stakeholder session Dec. 2014 : Feedback Takes Resident associations Air quality Air France member of the CCE and CCAR of the 10 Noise reduction kits on Air France A320s Coalition (DSGC) Care strategy Local economic Local dialogue biggest French airports ASK collaboration resulted, amongst others, in the Other outcomes: chapters Customer experience and players Social and economic Air France member of associations for the local introduction of e-taxi’s at Schiphol Airport. Environment development development and the international promotion of Paris- Feedback on KLM Takes Care Roadmaps CDG area Better knowledge of air PLATO programme in Paris-CDG airport area: Air France Employees Working Conditions and Staff surveys 88 collective agreements signed (Air France Group) transport issues 2 Air France staff dedicated to Pays de Roissy-CDG coach for 70 local SMEs managers workplace quality of life association Trade unions CSR trainings Surveys to measure employee satisfaction Air France founding member of the Welcome City Lab Working visits and tours at Air France and KLM Professional Health & Occupational Intranet and internal newsletters Safety Culture program further implemented business incubator aiming to promote innovation and safety facilities tourism in Paris area associations and Staff Innovation program Air France Safety at work annual meeting bodies Non-discrimination Cooperation KLM, Amsterdam, Schiphol (ASK) Other outcomes: chapter Environment and Local Air France Boussole mobility plan Participative innovation program: 6,700 suggestions (Air Diversity Development Air France and KLM CSR Week France) Training & mobility Negotiation and collective labour agreement Air France member of R’PRO’Mobilité (employee mobility Social dialogue and access to employment in Paris-CDG area) Scientific community Climate change IAGOS Program (Air France) Daily IAGOS records available to international scientists for Work Council committees focused on working Universities Operational procedures Research Technical University Delft (KLM) studying the carbon cycle conditions, CSR and HR policies Other outcomes: chapters Governance and Responsible human resources Research experts Technological Membership in IDUT and supporting the chair Advice on selected pathways feedstock for sustainable Inter-company working groups (Global Compact, performance Sustainable Tourism of Wageningen University biofuels ORSE, Comité 21, AFEP…) Participation in independent Sustainability Board Other outcomes: chapter Environment Partnerships with universities SkyNRG

International, Climate change and CO2 Dialogue and joint actions with national air transport Regular working visits of government officials Environmental NGOs Climate change KLM partnership with WWF-NL WWF-NL advise on biofuels and responsible catering European and national reduction authorities, airports and air traffic services Adopted amendment about civil aviation tax exemption for Fight against Air France reforestation project in partnership with ADF Launch of the second phase (2014-17) of the Madagascar authorities Safety and security Working group on new European regulations transit passengers, in the examination of the finance act deforestation and FFEM in Madagascar project National Policy makers Passenger rights Air France and KLM public affairs representatives Launch of the Lab’line with the French Minister of Ecology Preservation of KLM partner of Landscape North Holland to support Financial support for specific Nature Conservation projects Taxation working with national and European institutions and Sustainable Development biodiversity conservation work in the Schiphol region of WWF-NL European aviation Parliamentary hearings of the Group’s representatives KLM Green Deal Biofuels 2011-2015 Partnerships to Engagement with various NGOs on animal welfare, Other outcomes: see chapter Environment and Local competitiveness Proposal for amendments Other outcomes: chapters Governance and Environment challenge CSR sustainable resources and climate policies Development improvements Energy transition Attendance at seminars, conferences and thematic working groups Humanitarian and Human rights and Air France Foundation, Acting for Life, KLM Takes Care €14 million provided in funding for social and environmental Certification and Flight safety External follow-up and renewal audits Renewal audit ISO 14001 and ISO 22000, and obtainging development NGOs children’s Rights partners projects verification authorities Health and safety at Verification of CSR published information of the OHSAS 18001 certification (Air France) Education Employee engagement: Friends of the Air France UNICEF NL/Children’s Rights & Business Principles: work Annual follow-up audit ISO 14001 (KLM) Responsible Tourism Foundation, Wings of Support, Aviation without Supplier Guidelines developed and Inflight Services Human borders (France and NL) Rights Workshop Quality process IOSA renewal audits (Air France et KLM) Flying Blue Miles donation tool Air France Foundation involvement in 110 projects, Acting Environmental CSR reporting in the Group's management report, for life support to 37 programs management according to the French Grenelle II legislation Strategic partnership KLM - UNICEF the Netherlands, principally on Children’s Rights and Business Principles Donation of tickets and Cargo capacity (CRBP) Donation of Flying Blue Miles Other outcomes: chapter Local development

74 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 75 PERFORMANCE INDICATORS PERFORMANCE INDICATORS

Dialogue with our stakeholders

GROUP’S MAIN ENGAGEMENT GROUP’S MAIN ENGAGEMENT MAIN ENGAGEMENT PATHWAYS OUTCOMES 2014 MAIN ENGAGEMENT PATHWAYS OUTCOMES 2014 STAKEHOLDERS TOPICS STAKEHOLDERS TOPICS

74 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 75 PERFORMANCE INDICATORS PERFORMANCE INDICATORS

Social indicators Other social data for Air France Group Other social data for KLM Group (according to local legislation) (according to local legislation)

AIR FRANCE-KLM AIR FRANCE GROUP * KLM GROUP ** AIR FRANCE (100% OF THE STAFF HEADCOUNT, REGISTERED KLM (100% OF THE STAFF HEADCOUNT, REGISTERED AND PAID AT THE END OF THE CALENDAR YEAR) * AND PAID AT THE END OF THE CALENDAR YEAR) * Consolidated social data GROUP Air France Group from which Air France KLM Group from which KLM 2013 2014 14/13 2013 2014 14/13 1 1 for Air France-KLM Group 2012 2013 2014 14/13 2013 2014 2013 2014 2013 2014 2013 2014 ABSENTEEISM ABSENTEEISM Due to illness 3.91% 3.81% -3% Due to illness √ 5.20% 5.64% 8% HEADCOUNT AT 31/12 (PERMANENT CONTRACTS AND FIXED-TERM CONTRACTS) 1 √ Due to work accidents 0.68% 0.69% 1% Due to work accidents √ 0.10% 0.13% 30% Scope of NRE Social reporting √ 96% 96% 96% 0.0% 95% 94% 100% 100% 98% 98% 100% 100% √ Maternity leave √ 0.99% 0.88% -11% Maternity leave √ 0.54% 0.49% -9% Total staff √ 104,130 100,569 99,277 -1.3% 65,905 64,615 53,423 52,541 34,664 34,662 28,718 28,805 Ground staff 69,516 66,512 65,545 -1.5% 45,466 44,721 35,344 34,786 21,046 20,824 16,941 16,934 HEALTH AND SAFETY HEALTH AND SAFETY 2 Total workplace accidents 2 186 199 7% Cabin crew 25,863 25,548 25,282 -1.0% 15,450 15,081 14,215 13,991 10,098 10,201 9,086 9,055 Total workplace accidents √ 2,238 2,283 2% √ Number of fatal workplace accidents 1 0 Flight deck crew 8,751 8,509 8,450 -0.7% 4,989 4,813 3,864 3,764 3,520 3,637 2,691 2,816 Number of fatal workplace accidents √ 1 0 √ 3 Frequency rate for workplace accidents 3 4.01 4.25 6% Staff under permanent contract 100,273 96,368 94,592 -1.8% 63,262 61,680 52,029 50,881 33,106 32,912 27,926 28,155 Frequency rate of workplace accidents √ 29.56 31.04 5% √ Severity rate of workplace accidents √ 3 0.88 0.87 -1% Severity rate of workplace accidents √ 3 0.18 0.22 22% Recruitment under permanent contract at 31/12 √ 2 848 1,253 1,648 31.5% 782 884 313 388 471 764 430 694 TRAINING 4 Recruitment under fi xed-term contract at 31/12√ 2 4,313 4,249 5,643 32.8% 3,401 4,418 889 1,585 848 1,225 317 190 TRAINING 4 28 28 0% Total training costs in K€ 62,412 76,596 23% Departures at 31/12 3 8,571 9,975 10,577 6.0% 8,719 8,753 5,553 5,247 1,256 1,824 707 798 Number of training hours by employee √ √ 5 Total training costs in € per full time equivalent 2,638 3,229 22% of which redundancies (incl. Economic) √ 640 492 455 -7.5% 414 343 179 112 78 112 49 78 DISABLED STAFF Total staff with disabilities 1,727 1,699 -2% DISABLED STAFF Percentage of women at 31/12 √ 4 42.8% 42.9% 43.2% 0.7% 43.3% 43.5% 45.0% 45.2% 42.3% 42.6% 43.6% 43.4% √ Total staff with disabilities recruited during year 16 23 44% Total staff with disabilities 5 710 750 6% Percentage of part time employees at 31/12 √ 4 25.5% 27.4% 27.7% 1.1% 21.2% 21.5% 24.2% 24.5% 39.1% 39.1% 40.2% 40.3% √ √ Yearly spending in the sheltered sector in M€ 6 16 18 13% BREAKDOWN OF STAFF BY AGE AT 31/12 COLLECTIVE AGREEMENTS √ 0 0 COLLECTIVE AGREEMENTS √ 47 36 29 year and less √ 8,222 7,878 7,058 -10.4% 4,654 4,423 3,302 3,113 3,224 2,635 2,202 1,556 KLM SUBSIDIARIES 2013 2014 14/13 Between 30 and 39 year included √ 30,305 28,081 24,938 -11.2% 19,207 16,900 15,842 13,944 8,874 8,038 7,239 6,422 AIR FRANCE SUBSIDIARIES 2013 2014 14/13 Scope of reporting for KLM subsidiaries 94% 94% 0% Between 40 and 49 year included √ 37,255 37,259 36,823 -1.2% 24,371 24,519 19,908 20,144 12,888 12,304 10,970 10,514 HEALTH AND SAFETY 50 year and more √ 28,348 27,351 30,458 11.4% 17,673 18,773 14,371 15,340 9,678 11,685 8,307 10,313 Scope of reporting for Air France subsidiaries 73% 75% 3% Total workplace accidents √ 2 72 159 121% BREAKDOWN OF STAFF BY GEOGRAPHICAL AREA AT 31/12 HEALTH AND SAFETY Number of fatal workplace accidents √ 0 0 Europe (except France and The Netherlands) √ 4,607 4,483 3,733 -16.7% 2,204 1,505 1,584 1,504 2,279 2,228 933 930 3 Total workplace accidents √ 2 1,048 959 -8% Frequency rate for workplace accidents √ 6.77 15.25 125% North & South America √ 2,013 2,029 2,021 -0.4% 1,582 1,557 1,309 1,294 447 464 446 463 3 TRAINING Severity rate of workplace accidents √ 0.09 0.10 11% Caribbean/Indian Ocean (including French overseas territories) √ 5 1,109 1,042 1,034 -0.8% 986 979 780 774 56 55 56 55 4 Number of training hours by employee √ 4 20 18 -10% TRAINING Asia/Pasifi c√ 1,678 1,728 1,702 -1.5% 746 752 742 748 982 950 982 950 € DISABLED STAFF 5 Total training costs in K √ 18,524 27,320 47% Africa/the Middle East √ 1,607 1,531 1,466 -4.2% 1,021 985 997 958 510 481 510 481 € 2,885 47% Total staff with disabilities √ 609 622 2% Total training costs in per full time equivalent 4,238 The Netherlands √ 30,562 30,496 30,477 -0.1% 154 43 32 43 30,342 30,434 25,743 25,876 Total staff with disabilities recruited during year √ 22 16 -27% DISABLED STAFF Continental France √ 62,554 59,260 58,844 -0.7% 59,212 58,794 47,979 47,220 48 50 48 50 Total staff with disabilities 5 99 92 -7% COLLECTIVE AGREEMENTS √ 58 52 √ √ Indicators verifi ed by KPMG Audit, a department of KPMG SA, for 2014 (limited level of assurance). COLLECTIVE AGREEMENTS √ 2 7 * Air France Group: Air France and Air France subsidiaries. √ Indicators verifi ed by KPMG Audit, a department of KPMG SA, for 2014 (limited level of assurance). Air France subsidiaries: Aero Maintenance Group, Airlinair, BlueLink, Brit Air, CRMA, Régional, Sodexi, Transavia France and Servair group: ACNA, OAT, Passerelle, Servair SA, PAC SA. * Data in italics concerns only Air France in Continental France and the French overseas territories. √ Indicators verifi ed by KPMG Audit, a department of KPMG SA, for 2014 (limited level of assurance). ** KLM Group: KLM and KLM subsidiaries. (1) (2) (3) (4) (5) (6): See Note on the methodology. * KLM: Data concerns KLM without international staff. KLM subsidiaries: Cygnifi c, Cobalt Ground Solutions, KLM Cityhopper (UK and BV), Transavia, KLM Catering Services Schiphol B.V., KLM UK Engineering Limited and Martinair. (1) (2) (3) (4) (5): See Note on the methodology. (1) (2) (3) (4) (5): See Note on the methodology. WOMEN IN THE GROUP (IN%)

Board of Directors Air France-KLM 35.7% AIR FRANCE-KLM 6.7% Executive Committees AIR FRANCE 25% BREAKDOWN OF STAFF BY AGE (IN%) GROUP’S EMPLOYEES, FULL TIME EQUIVALENT (FTE) BREAKDOWN OF DEPARTURES BY CAUSE KLM 11.2% AIR FRANCE 27% AIR FRANCE-KLM GROUP AIR FRANCE GROUP KLM GROUP Senior managers/executives KLM 21.8% AIR FRANCE 32.3% AIR FRANCE-KLM GROUP Ground staff managerial 40% 4% 4% - REDUNDANCIES KLM 25.6% (INCL. 22% ECONOMIC) FINANCIAL YEAR 12% CABIN CREW 51.5% 37 38 35 2012 2013 2014 12% - RESIGNATIONS AIR FRANCE COCKPIT CREW 1.1% 30% 38% - OTHER Flight crew managerial 31 29 34 CABIN CREW 73.3% GROUND STAFF 69,994 66,535 65,088 38% DEPATURES (OF WHICH KLM 32% EMPLOYEES WHO COCKPIT CREW 3.5% 20% ARE NOT PRESENT 25 26 23 AIR FRANCE 40.6% CABIN CREW 22,347 21,779 21,552 AND UNPAID AND 45% Ground staff non managerial VOLUNTARY DEPARTURE KLM 30.3% PLAN) 10% 38% CABIN CREW 65.7% FLIGHT DECK CREW 8,403 8,103 8,027 7% - RETIREMENTS AIR FRANCE COCKPIT CREW 7.2% 7 7 8 Flight crew 7% 38% - END OF FIXED CABIN CREW 85.3% TOTAL 100,744 96,417 94,666 TERM CONTRACTS KLM 29 year and less Between 30 and Between 40 and 49 50 year and older COCKPIT CREW 5.4% 39 year included year included

76 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 77 PERFORMANCE INDICATORS PERFORMANCE INDICATORS

Social indicators Other social data for Air France Group Other social data for KLM Group (according to local legislation) (according to local legislation)

76 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 77 PERFORMANCE INDICATORS PERFORMANCE INDICATORS

Environmental indicators

Air Operations AIR FRANCE-KLM GROUP AIR FRANCE GROUP 1 KLM GROUP 2 Ground Operations AIR FRANCE-KLM GROUP AIR FRANCE GROUP 1 KLM GROUP 2

Unit 2012 2013 2014 14/13 2012 2013 2014 14/13 2012 2013 2014 14/13 Unit 2012 2013 2014 14/13 2012 2013 2014 14/13 2012 2013 2014 14/13 CONSUMPTION CONSUMPTION Consumption of raw materials: fuel √ √ ktons 8,956 8,755 8,755 0.0% 5,078 4,918 4,903 -0.3% 3,878 3,837 3,852 0.4% Water consumption √ Thousands m3 812 825 793 -3.9% 624 640 641 0.2% 188 185 152 -17.8% EMISSIONS Electricity consumption √ MWh 392,233 383,605 374,064 -2.5% 293,406 288,218 279,945 -2.9% 98,817 95,387 94,119 -1.3% Other energies consumption MWh 513,562 534,375 451,626 -15.5% 295,757 304,890 260,891 -14.4% 217,805 229,485 190,735 -16.9% Greenhouse gas √ CO √ √ ktons 28,210 27,576 27,577 0.0% 15,997 15,491 15,443 -0.3% 12,213 12,085 12,134 0.4% emissions 2 EMISSIONS

Emissions of NO low altitude (< 3,000 ft) √ ktons 9.2 9.5 9.9 4.2% 6.3 6.2 6.0 -3.2% 2.9 3.3 3.9 18.2% Greenhouse gas x CO √ tons 85,680 88,885 78,842 -11.3% 36,841 37,782 36,704 -2.9% 48,839 51,103 42,138 -17.5% substances contributing emissions 2 SO ktons 9.9 11.8 11.8 0.0% 6.4 6.8 6.9 1.5% 3.5 5.0 4.9 -2.0% to acidification 2 and eutrophication SO low altitude (<,3 000 ft) √ ktons 0.7 0.8 0.9 12.5% 0.5 0.5 0.6 20.0% 0.2 0.3 0.3 0.0% Emissions of volatile organic 2 Emissions of substances tons 146 135 107 -20.7% 102 87 55 -36.8% 44 48 52 8.3% contributing to compounds VOC √ Occurences of fuel jettison √ number 41 33 36 9.1% 27 23 20 -13.0% 14 10 16 60.0% photochemical pollution In-flight fuel jettison Emissions of HC tons 145 137 158 15.3% 86 76 100 31.6% 59 61 58 -4.9% Fuel jettisoned √ tons 1,839 1,104 1,283 16.2% 1,210 758 671 -11.5% 629 346 612 76.9% Other emissions HC low altitude (< 3,000 ft) √ ktons 0.8 0.8 0.8 0.0% 0.6 0.6 0.6 0.0% 0.2 0.2 0.2 0.0% Emissions of substances NOx √ tons 773 675 638 -5.5% 508 409 387 -5.4% 265 266 251 -5.6% contributing to NOISE IMPACT acidification and 12 Global noise energy indicator √ 10 kJ 1.69 1.62 1.54 -4.9% 1.16 1.12 1.03 -0.8% 0.53 0.50 0.51 2% eutrophication SO2 √ tons 16.1 15.8 14.5 -8.2% 12.9 11.4 11.1 -2.6% 3.2 4.4 3.4 -22.7%

WASTE √ Figures verified by KPMG Audit, department of KPMG SA, for 2014 (limited level of assurance). √ √ Figures verified by KPMG Audit, department of KPMG SA, for 2014 (reasonable level of assurance). Quantity of non-hazardous tons 57,060 54,966 57,895 5.3% 40,236 38,185 40,269 5.4% 16,824 16,781 17,626 5.0% 1. Air France Group scope: all flights under AF code operated by Air France and HOP!, flights operated by Transavia France. industrial waste √ 2. KLM Group scope: all flights operated by KLM, KLM Cityhopper, Martinair and Transavia. Martinair and Transavia are excluded for the global noise energy indicator. Quantity of hazardous industrial Waste production tons 7,009 7,073 5,808 -17.9% 4,474 4,420 4,280 -3.2% 2,535 2,653 1,528 -42.4% waste √

% of hazardous industrial waste % 58% 61% 51% -10 PTS 43% 44% 43% -1 PT 85% 89% 75% -14 PTS recovered √

EFFLUENTS Air France-KLM Group's fleet Nitrogen compounds √ % 100% 98% 100% +2 PTS 100% 90% 94% +4 PTS 100% 100% 100% 0 PT Compliance rate of effluents with regulatory Phosphorus compounds √ % 99% 97% 98% +1 PT 98% 93% 97% +4 PTS 100% 100% 100% 0 PT limits Metals3 √ % 98% 99% 100% +1 PT 98% 99% 100% +1 PT 100% 100% 100% 0 PT Aircraft in operation as of December 31, 2014: 546

Average fleet age: 10.7 years 1. Air France and subsidiaries: HOP!, Servair and its subsidiaries (France only), Sodexi, CRMA, BlueLink and Transavia France. 2. KLM and its subsidiaries: KLM CityHopper (KLC), KLM Equipment Services (KES), KLM Catering Services (KCS), KLM Health Services (KHS), Martinair and Transavia. EPCOR is included for waste in 2014. AIR FRANCE GROUP KLM GROUP 3. Cr, Cd, Ni, Cu, Pb, Sn and Zn. √ Figures verified by KPMG Audit, department of KPMG SA, for 2014 (limited level of assurance). AVERAGE AGE AIRCRAFT NUMBER OF AVERAGE AGE AIRCRAFT (years) TYPE AIRCRAFT (years) TYPE NUMBER OF AIRCRAFT BREAKDOWN OF TYPE OF ENERGY CO EMISSIONS OF GROUND ACTIVITIES A318, A319 737-700 2 SHORT AND MEDIUM-HAUL 10.8 128 8.3 48 A320, A321 /-800 /-900

A380, A330-200 A330-200/-300 LONG-HAUL 11.0 A340-300 106 12.2 777-200/-300 62 777-200/-300, 747-400 747-400 8% 19% 747-400ERF 47-400ERF/BCF CARGO* 9.0 4 17.6 10 777F MD11-F 12% 45% - ELECTRICITY 41% 41% - ENERGY REGIONAL FLEET 18% - NATURAL GAS 40% - GSE EQUIPMENT ATR, EMBRAER, 45% AIR FRANCE: HOP! 11.0 96 9.9 F70, EMB190 47 BOMBARDIER KLM: CITYHOPPER 17% 17% - DIESEL OIL/GASOLINE 19% - ENGINE TEST RUNS

OTHER FLEET 12% - SUPERHEATED/COOLED WATER 737-700/-800 AIR FRANCE: TRANSAVIA FRANCE 6.5 737-800 14 9.8 31 8% - OTHERS KLM: TRANSAVIA.COM 40% TOTAL 10.7 348 10.6 198 18%

(*) KLM Group cargo aircraft are operated by Martinair.

78 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 79 PERFORMANCE INDICATORS PERFORMANCE INDICATORS

Environmental indicators

Air Operations AIR FRANCE-KLM GROUP AIR FRANCE GROUP 1 KLM GROUP 2 Ground Operations AIR FRANCE-KLM GROUP AIR FRANCE GROUP 1 KLM GROUP 2

% of hazardous industrial waste % 58% 61% 51% -10 PTS 43% 44% 43% -1 PT 85% 89% 75% -14 PTS recovered √

OTHER FLEET 12% - SUPERHEATED/COOLED WATER 737-700/-800 AIR FRANCE: TRANSAVIA FRANCE 6.5 737-800 14 9.8 31 8% - OTHERS KLM: TRANSAVIA.COM 40% TOTAL 10.7 348 10.6 198 18%

(*) KLM Group cargo aircraft are operated by Martinair.

78 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 79 PERFORMANCE INDICATORS PERFORMANCE INDICATORS

Note on the methodology for the reporting Note on the methodology for the reporting of the social performance indicators of the environmental indicators

In 2005-06, under the aegis of the Disclosure Committee, and validated by the Frequency and severity rates In 2005-06, under the aegis of the Air France-KLM Group’s Disclosure Com- sion quotas (EU-ETS), so comparison is not meaningful. For KLM, there was a reduction in natural gas consumption (milder winter) and college of Statutory Auditors, the Air France-KLM Group’s social performance Note 1: The number of people employed by the Group (expressed as headcount) mittee, and validated by the college of Statutory Auditors, the Group’s environ- the exclusion of a building occupied by a laundry service provider.

indicators were defined in order to comply with the requirements of the French on both permanent (CDI) and fixed-term contracts (CDD) on December 31 of Air France: mental performance indicators were defined to comply with the requirements of SO2 and SO2 low altitude (LTO) emissions Since 2014, the offices of KLM Cargo, Transavia and Martinair have been in- New Economic Regulations law (Les Nouvelles Régulations Economiques, NRE, the reference year. Note 3: The frequency and severity rates are calculated: the French New Economic Regulations law (Les Nouvelles Regulations Économ- Note: the “low altitude” and “LTO” for Landing-TakeOff cycle denominations cluded in the reporting. May 15, 2001) and the European Regulation (EC 809/2004). For ground staff, based on the actual paid hours worked. iques, NRE, May 15, 2001) and the European Regulation (EC 809/2004). are equivalent.

In 2011, work to optimize these indicators was undertaken to align, as of this year, Recruitment on permanent contracts For flight crews, based on the hours of commitment. Since 2013, pursuant to the provisions of article L.225-102-1 of the Code of The calculation of the SO2 emissions from flight operations is based on the Emissions from ground operations (CO2, SO2 and NOX) the NRE social reporting with the requirements of article 225 of the application The number of days of sick leave recorded for the year corresponds only to the Commerce, CSR information communicated into Air France-KLM Management average sulphur content of the fuel loaded, respectively, on the Amsterdam and CO2, SO 2 and NOX emissions and their trends are linked to the energy consump- decree for the Grenelle II legislation. This update to the social performance indica- Note 2: The indicator concerns employees hired on permanent contracts (CDI). accidents having taken place during the same financial year. Report is also verified by our Independent Third-Party Body1. Paris platforms which is applied, respectively, to all fuel used during the year by tion listed above.

tors was submitted to the statutory auditors, KPMG Audit, department of KPMG For Air France, the calculation of the number of employees recruited on permanent Furthermore, the data relating to the “fuel consumption” and “CO2 emissions” KLM and its subsidiaries, and by Air France and its subsidiaries. For Air France, the NOX emissions related to engine testing are calculated based SA, for review before the beginning of the 2011 NRE social reporting process. contracts includes those initially recruited on fixed-term contracts (CDD) transferring KLM and KLM subsidiaries indicators linked to the air operations have been verified with the highest For the Air France Group, the increase is due to the higher average sulfur content on a methodology similar to the one used for flight operations which reflects Since the 2007-08 financial year, the Group has chosen to have a number of its to permanent contracts (CDI) during the year. Note 3: The frequency and severity rates are calculated for all the staff on the level of assurance, reasonable assurance (indicated by the symbols √ √) of the fuel used. For the Air France Group, the 20% indicated increase is in fact the actual testing conditions. principal social indicators verified by one of the Statutory Auditors, KPMG Audit, For KLM, only employees recruited directly on permanent contracts are taken basis of hours theoretically worked. since 2007-08. lower. The values to three decimal places show emissions at 0.560 kt in 2014 The emission factors used for the 2014 financial year are those in the ADEME department of KPMG SA. into account. The days lost for work-related accidents are tracked based on figures declared by versus 0.544 kt in 2013, i.e. a real increase of around 3%. Rounding to one V6 Methodology Guide, except for kerosene whose emissions are calculated Since 2013, pursuant to the provisions of article L.225-102-1 of the Code of the KLM entities in the Netherlands. SCOPE COVERED AND SCOPE N-1 decimal place mechanically generates a more substantial difference. based on the ICAO engine emissions databank. Commerce, CSR information communicated into Air France-KLM Management Departures For the KLM Group, the variation of 0% due to rounding is in reality 15% The emissions from the ground operations for the 2015 reporting campaign Report is also verified by our Independent Third-Party Body1 . Training For the flight operations,the environmental consolidation scope covers: (move from 276t to 325t) due the expansion in the scope of this indicator to will be based on the emission factors in the ADEME Carbon Database, http:// Note 3: The reasons for departure are detailed in the notes to the Air France-KLM’s All the commercial flights under the AF code operated by Air France and Martinair and Transavia. bilans-ges.ademe.fr/

REPORTING SCOPE 2014 Corporate Social Responsibility Report. Air France and Air France subsidiaries its subsidiaries HOP!, and Transavia. CityJet was sold in 2014 and is no The decrease in NOx emissions is mainly due to the reduction in off-road diesel Only redundancies of employees under permanent contract are taken into account Note 4: The “Number of training hours by employee” indicator is calculated based longer part of the Group. NO and HC low altitude emissions (LTO) fuel used by runway equipment. The Air France-KLM Group’s social reporting consolidation scope is based on x in the number of redundancies (including economic). on all the training sessions, independently of whether or not their nature requires All the commercial flights under the KLM code operated by KLM and its The methodology used for the calculation of low altitude emissions, i.e. below For KLM, the NOx emissions from vehicles and runway equipment are deter- the number of employees (expressed as headcount) on the payroll at the end them to be included in the 2483 Regulatory Declaration. subsidiaries KLM Cityhopper (KLC), Martinair and Transavia. 3,000 feet, is common to Air France and KLM. It is based on the LTO (Landing- mined either from direct measurements from manufacturer data or from external of the calendar year. Percentage of women - Organization of working time The hours of training for the subsidiaries of the Air France Group are calculated TakeOff) cycle and on engine data communicated by the ICAO2. The taxiing databases. The NRE reporting scope covers 96% of the average employees in the Air France- without the data related to the Transavia France subsidiary. For the ground operations, the consolidation scope for the environmental time taken into account is the actual taxiing time, which is more precise than KLM Group at the end of the calendar year, expressed in full-time equivalent. Note 4: These indicators enable the percentage of women to be evaluated relative reporting is unchanged on last year since CityJet had not been included standard values recommended by the ICAO methodology. Note that, since the VOC emissions The subsidiaries of Air France and KLM over which the Group has at least 50% to the workforce and the proportion of part-time employees on both permanent KLM and KLM subsidiaries and covers nearly 100% of the sites in France and the Netherlands (some actual taxiing is not available for Transavia France, the standard ICAO values VOC emissions are calculated based on the direct emissions of solvents con- control, whose acquisition dates back at least one full year and which have at least and fixed-term contracts at December 31 of the reference year. Note 4: KLM does not currently have a centralized reporting procedure solely for very small subsidiaries being excluded). The international outstations are not have been used for this subsidiary. tained in the products used. VOCs contained in disposed waste are excluded. 250 employees, are included in this NRE social reporting scope. the costs of training within KLM and its subsidiaries. Note that the disclosure of taken into account. For Air France, using a more precise value the low altitude HC emissions are, For the Air France Group, the decrease between 2013 and 2014 is mainly due Two entities exceeding the above thresholds, NAS Airport Limited and Bluelink Employees by geographical zone at December 31 the total number of training hours is not required by Dutch law. Air France consolidated subsidiaries are: HOP!, CRMA, Sodexi, BlueLink, Ser- in fact, down by nearly 5%. to fewer aircraft being painted in 2014. International CZ, are excluded from the scope due the difficulties currently being vair and its subsidiaries (only the activities in France) and Transavia France. encountered with their inclusion in the reporting process. Note 5: For 2014, the Air France Group employees in the French Overseas Ter- Note 4: The reported costs of training take into account the external costs of Furthermore, for Air France, the indicators in the domestic outstations are In-flight fuel jettison HC emissions Note that the number of employees for Air France and KLM comprises their entire ritories and Dominions, i.e. 700 employees, are included in the Caribbean and training invoiced, employee costs, the functioning costs of the training departmetns not reported when there is no detail available on the charges invoiced by An exceptional operation (less than one flight in 10,000 in 2014) involving the Hydrocarbon (HC) emissions include the emissions from vehicles and ground workforce including staff employed internationally. Indian Ocean geographical zone. and the productivity costs linked to the mobilization of the individuals trained. The airports. The contribution of the domestic outstations affected by this issue jettisoning of a quantity of fuel in flight to avoid an overloaded plane on landing support equipment, engine testing and aircraft fueling. The increase between latter are estimated by multiplying the number of hours of training declared by is, however, marginal compared with the reported data. whenever a flight is aborted. Each operation is effected in close coordination with 2013 and 2014 is explained by the expansion in the reporting scope to the For the 2014 financial year, the Air France consolidated subsidiaries are: “Other social data” tables each employee by the average salary in the department. KLM consolidated subsidiaries are KLC (KLM Cityhopper), KES (KLM Equip- air traffic control under strict conditions governing geographical location (avoiding emissions from Servair trucks. Aero Maintenance Group, Airlinair, Bluelink, BritAir, CRMA, Regional, Servair ment Services), KCS (KLM Catering Services), KHS (KLM Health Services), urban zones) and altitude (generally at or above 2,000 meters). Group (ACNA, Orly Air Traiteur, PAC SA, Servair SA and Passerelle), Sodexi The indicators reported in the other social data tables are subject to different Number of disabled employees Transavia, Martinair and EPCOR (for a portion of the indicators). For the KLM Group, from 2013 the in-flight fuel jettison data includes Marti- Hazardous industrial waste and Transavia France, representing 75% of the employees of the subsidiaries qualification and legal reporting obligations in France and the Netherlands, nair’s operations. When the quantity of hazardous waste has not been communicated by service in the Air France Group. meaning that they are not comparable and need to be presented separately for Air France and Air France subsidiaries REPORTING TOOLS providers at the end of the reporting campaign, the quantity mentioned in the For the 2014 financial year, the KLM consolidated subsidiaries are: Cygnific, Air France and KLM. The subsidiaries concerned in these tables are listed in the Note 5: For Air France and Servair, the number of disabled employees are those Total noise energy specification slip is taken into account. This is, however, estimated to be marginal. Cobalt Ground Solutions, KLM UK Engineering Limited, KLM Cityhopper (UK and Reporting scope section above. who, based in Continental France and the French Territories and Dominions, were The environmental indicators are assembled at local level via two reporting This indicator was established by the Air France-KLM Group to manage the The reprocessing channels taken into account are those in the European regulation. B.V.), Transavia, KLM Catering Services Schiphol B.V. and Martinair, representing on the payroll for at least one day in the year and for whom a valid certificate, tools: Osyris (Enablon software) for Air France and CaeSaR for KLM, which are evolution in the noise footprint of its activity. The total noise energy indicator is The reduction for the KLM Group is explained by the fact that a portion of 94% of the employees in the subsidiaries of the KLM Group. Absenteeism – Health and safety in the workplace pursuant to French law (article L5212-2 of the French labor code), is available. available, respectively, at each Air France and KLM subsidiary. calculated according to the methodology defined by the DGAC3 . It applies to all KLC’s used water is no longer deemed to be Hazardous Industrial Waste by Note that the data for international employees is reported based on local legislation. The reliability of the reporting process is supported by definitions of each flights with the AF or KLM commercial code operated, franchised and chartered, the local authorities. In 2014, Airlinair was included in the reporting scope of the Air France subsidiaries A significant portion of the work-related accidents reported by Air France is due to For the other Air France subsidiaries, the reported number of disabled employees indicator and user guides for contributors available in both French and English. code share excepted. while CityJet and VLM were withdrawn due to the disposal of these subsidiaries. cases of barometric otitis and musculoskeletal disorders which are recognized refers to the employees on the payroll at December 31, 2014 and for whom a Consistency tests have also been implemented. The noise energy calculation for the KLM Group excludes the aircraft operated Effluents The reporting scope for the KLM subsidiaries remains unchanged. as work-related accidents in France whereas they are recorded as sick leave valid certificate, pursuant to French law, is available. The consolidation of the Air France-KLM Group’s environmental data is carried by Martinair and Transavia. Both Air France and KLM entities are required to comply with the French and The reference number of employees for calculating the coverage rate of the NRE by KLM in accordance with Dutch law. The number of disabled employees recruited corresponds to the number of per- out by the Air France Environment department. The trends in noise energy and traffic are determined by comparing total noise Dutch legislation on effluents. Each relevant site has regulatory limits on effluents social reporting is the average number of employees in full time equivalent during The absenteeism rate is not communicated for the Air France and KLM sub- manent and fixed-term employment contracts signed during the year; an employee energy calculated for the calendar year with its level in 2000. and the frequency of measurement. 2014 derived from the Management Control division’s BFC tool. sidiaries, the follow-up measures being in the verification process at the level recruited on a fixed-term contract who then transfers to a permanent contract DETAILS AND METHODOLOGY, COMMENTS The reported data reflects the number of times a regulatory threshold is exceeded The reporting period for the Group’s social information is based on the calendar of these entities. during the year will be reported twice. ON VARIATIONS GROUND OPERATIONS relative to the number of measurements for each type of effluent. year to ensure consistency with the social performance indicators of other French Note that the rate of employment of disabled employees for 2014 was not yet For 2014, the results, expressed in terms of the number of times regulatory limits companies. Note that, since 2011, the financial year has also been based on Air France known on the date the figures for the reporting of the NRE social indicators were At Air France-KLM Group level, the regulatory requirements and the reporting Water consumption are exceeded as a proportion of measurements, were, respectively: the calendar year. Note 1: The absenteeism rates are calculated on the basis of a ratio of number produced within the framework of the Management Report and Registration and consolidation principles are outlined in a document entitled the Instruction The consumption of water is taken into account for all ground activities. Water For Air France, 1/16 for Nitrogen compounds, 2/64 for Phosphorus compounds of the hours of absence over the hours theoretically worked (excluding leave). For Document. Memo Environment, which is updated annually. The modalities for the assem- used on board flights is not included. and 4/810 for metals. REPORTING TOOLS Air France flight crew, absenteeism is broken down into days then converted into bly of the data, calculation methodologies and operational consolidation are The decline in water consumption for KLM is explained by the transfer of a For KLM, 0/52 for Nitrogen compounds, 0/52 for Phosphorus compounds hours by multiplying by 5 hours. KLM and KLM subsidiaries laundry service provider occupying KLM premises to another building in the and 0/280 for metals. The indicators are compiled and consolidated using the Osyris (Operating SYstem defined in procedures which are specific to Air France and KLM, and which The absenteeism rate for accidents in the workplace also takes into account Note 5: The definition of a disabled person varies according to the local legislation are harmonized whenever possible. airport. This consumption had been reported since 2012. for ReportIng on Sustainability) reporting software at the disposal of contributors travel-related accidents. governing the entities in the Netherlands and the United Kingdom. Note that the metals reported are Cr, Cd, Ni, Cu, Pb, Sn and Zn. from Air France, KLM and their subsidiaries across the entire reporting scope. Within the framework of an approach based on continuous improvement, the For KLM and KLM’s Dutch subsidiaries, an individual is deemed to be disabled if Consumption of other energies Precise definitions of each indicator and user guides for contributors to the Osyris methodologies used for some performance indicators are constantly being KLM and KLM subsidiaries unable to carry out his or her work or any other work at an equivalent salary level. The indicator includes the different sources of energy consumed: tool are available in both French and English. improved and, notably, the precision of their definitions. When these changes Note 1: Since the 2014 financial year, the absenteeism rates due to work-related This requires the employer and the employee to look for another position with a Natural gas for heating buildings, aircraft painting workshops in Maintenance Consistency tests have also been incorporated within the tool. The data are veri- have a significant impact on the data, comparison with the figures for previous accidents or illness have been reported separately. These indicators have also salary as near as possible to the previous level and gives the employee the right and cooking (the catering activity in particular). The conversion factor of the fied and approved locally at the level of each subsidiary by a local verifier who is years is not meaningful. been calculated for the 2013 financial year. to government benefits to compensate for any difference. quantity of gas used as energy is calculated by taking into account the quality responsible for the HR statistical data. When the data is not available, the figure reported for the year is estimated The absenteeism rates are calculated by expressing the number of calendar days For KLM’s UK subsidiaries, the reported number of employees with disabilities of gas specific to France and the Netherlands. This system is supplemented by a meeting to launch the process and by a general based on the value reported for the previous year. of absence as a percentage of the calendar days theoretically worked (365*FTE refers to the employees on the payroll at December 31, 2014, for whom a valid Superheated and iced water for climate comfort. For Air France, superheated reporting procedure which defines the process for compiling, calculating and The reporting period for the Group’s environmental data is set at a rolling days theoretically worked). certificate, pursuant with national legislation, is available. and iced water is supplied by ADP (Aéroports de Paris) at the Orly and Roissy consolidating the indicators, based on an instruction memorandum circulated by twelve months from October 1 N-1 until September 30 N. Absenteeism is tracked on the basis of figures declared by KLM entities in the sites. The KLM facilities do not consume this type of energy. the Air France-KLM Group’s Finance Division. Netherlands. Air France Jet fuel A1 for testing engines. The consolidation of the Air France-KLM Group’s social information is carried out FLIGHT OPERATIONS Note 6: “Yearly spending in the sheltered sector” indicator. This concerns useful Domestic Fuel Oil (DFO) for power generators. by Air France’s Sustainable Development department. Health and safety – work-related accidents revenues (which is to say linked to the cost of labor) expressed in millions of euros Off-road diesel fuel for a portion of the Air France runway equipment. CO2 emissions generated with companies in the protected sector. This is an estimated figure as of The Air France Group’s CO emissions were broadly stable between 2013 and Petrol and diesel fuel for Air France and Servair vehicles and Air France and DETAILS AND METHODOLOGY/COMMENTARY 2 There are significant differences in the definition’s criteria for work-related accidents the date of publication, ahead of the final submission of the declarations within the 2014, in line with activity. KLM ground support equipment. ON CHANGES IN THE INDICATORS between France and the Netherlands (see paragraph on absenteeism). framework of the DOETH (mandatory declaration of employees with disabilities). Note that there are differences between the scope of the CO2 emissions reported “Consolidated social data for the Air France-KLM Group” table and those of the European Emissions Trading Scheme for greenhouse gas emis- The decrease seen between 2013 and 2014 for the Air France Group is mainly This table presents the indicators relating to employees, recruitment, departures, Air France and Air France subsidiaries together with KLM and KLM subsidiaries explained by the reduced consumption of gas and superheated water for heating. the proportion of women employees and the percentage working part time. These Note 2: Work-related accidents taken into account are work-related accidents indicators are consolidated at the level of the Air France-KLM Group. involving time off work (at least one day of absence from work). Travel-related The notes below refer to the references in the tables on pages 76 and 77. accidents are not included in the indicator but are the subject of specific monitoring and action plans. 1. The review work was conducted in accordance with the International Standard for Assurance Engagements (ISAE 3000) specific to the verification of extra-financial data Employees 2. International Civil Aviation Organization. 3. French Civil Aviation Authority (Direction Générale de l’Aviation Civile). 1. The review work was conducted in accordance with the International Standard for Assurance Engagements (ISAE 3000), specific to the verification of extra-financial data.

80 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 81 PERFORMANCE INDICATORS PERFORMANCE INDICATORS

Note on the methodology for the reporting Note on the methodology for the reporting of the social performance indicators of the environmental indicators

80 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 81 PERFORMANCE INDICATORS PERFORMANCE INDICATORS

Group’s main subsidiaries Assurance report by one of the Statutory Auditors on a The table presents the Air France-KLM structure and main subsidiaries over which the Group has at least 50% control, whose acquisition dates selection of environmental and social indicators of back at least one full year and which have a significant number of employees. Air France-KLM group for the year ended December 31, 2014 AIR FRANCE BRIT AIR

Passenger transport, HOP ! REGIONAL The text below is a free translation into English of the sponsibility experts. Conclusion Maintenance, Cargo AIRLINAIR Statutory Auditor's report issued in French and it is We conducted the procedures below in accordance Based on our work, we did not identify any material TRANSAVIA provided solely for the convenience of English-speaking with International Standards on Assurance Engage- anomalies likely to call into question the fact that the readers. This report should be read in conjunction with, ments ISAE 30001 and in compliance with the profes- Data in the tables “Environmental indicators” and “So- BLUELINK SERVAIR SA and construed in accordance with French law and pro- sional guidelines applicable in France. cial indicators” of the 2014 Corporate Social Respon- CRMA ACNA fessional auditing standards applicable in France. sibility Report, identified by the symbol√ , have been SERVAIR PAC SA As requested and in our capacity as Statutory Auditor Limited assurance prepared, in all material respects, in accordance with SODEXI OAT of Air France-KLM S.A., we have performed a review Nature and scope of our procedures the above-mentioned Protocol.

AERO MAINTENANCE GROUP PASSERELLE in order to provide: We conducted interviews with the people responsi- a limited level of assurance the environmental and ble for preparing the Data in departments in charge Observation KLM KLM CITYHOPPER B.V. social indicators for the year ended December 31, of data collection processes and, where appropriate, Without qualifying our conclusion above, we draw your AIR FRANCE-KLM Passenger transport, TRANSAVIA AIRLINES C.V. 2014 selected by Air France - KLM Group and identi- those responsible for internal control procedures and attention to the following point, which is indicated in Maintenance, Cargo KLM CATERING SERVICES SCHIPHOL B.V. fied by the symbol √ , risk management, to: the note on the methodology for the reporting of the

CYGNIFIC B.V. a reasonable level of assurance on the indicators assess the suitability of the Guidelines in terms of their social performance indicator: the indicator “Total staff ‘Fuel consumption’ and ‘CO emissions’ relating relevance, completeness, reliability, impartiality and with disabilities” is not calculated using the same meth- COBALT GROUND SOLUTIONS LTD. 2 to air operations for the year ended December 31, understandability, taking into account best practice, odology across the different entities of the Group. The KLM EQUIPMENT SERVICES B.V. 2014, identified by the symbol √√. where appropriate; various methodologies are detailed in the Note on the KLM HEALTH SERVICES B.V. This selection of indicators (‘the Data’) is presented in verify that a data collection, compilation, processing methodology for the reporting of the social performance

KLM UK ENGINEERING LTD. the tables ‘Environmental indicators’ and ‘Social indica- and quality control process has been implemented indicators. tors’ of the 2014 Corporate Social Responsibility Report to ensure the completeness and consistency of the MARTINAIR HOLLAND N.V. of Air France-KLM Group (“the Group”). Data selected and review the internal control and risk Reasonable assurance EPCOR B.V. management procedures used to prepare the Data. Nature and scope of our procedures INTERNATIONAL AVIATION SERVICES LTD. Responsibility of the company We determined the nature and scope of tests and qual- Concerning the Data selected by the Group and iden- KLM LUCHTVAART SCHOOL B.V. The Data were prepared under the responsibility of Air ity control processes, based on the type and impor- tified by the sign √√, we conducted the same work France’s Environment and Sustainable Development tance of the Data with respect to the characteristics of as the one described on paragraph hereinabove, but Passenger Maintenance Cargo (logistic Ground Catering Aircraft Call center Medical Assistance to Training division, in accordance with internal performance re- the company, the social and environmental impacts in a more extensive way, particularly concerning the transport or freight transport) services cleaning services passengers porting procedures (hereinafter ‘the Protocol’), which of its business activities, its sustainable development number of tests. having limited mobility may be consulted upon request to the Environment and strategy, and industry best practices. The entities selected represent 91% of the Data identi- Sustainable Development division of Air France-KLM. At parent entity level, we performed analytical proce- fied by the sign √√. The method used to collect the data and calculate the dures and verified, using sampling techniques, the In our opinion, our work allows us to express a reason- Grenelle II social, corporate citizenship social and environmental indicators is explained in the calculations and consolidation of the Data. able assurance on the Data selected by the Group and notes accompanying the tables ‘Environmental indica- At the entity level, for a representative sample of entities identified by the sign √√. and environmental information tors’ and ‘Social indicators’. selected2 on the basis of their activity, their contribution Pursuant to article 225 of the application decree of the French Grenelle II Legislation of July 12, 2010, the social, societal and environmental repor- to the consolidated indicators, their location and risk Conclusion ting found in the 2014 Management Report of Air France-KLM Group that has been approved by the Board of Directors on the 18th of February Independence and quality analysis, we conducted interviews to verify that the In our opinion, the indicators ‘Fuel consumption’ and 2015. This information can also be found in the 2014 Registration Document of Air France-KLM Group. control procedures were followed correctly and to identify any ‘CO2 emissions’ related to air operations, identified Our independence is defined by regulations, the French undisclosed data, and we performed tests of details, by the symbol √√ in the 2014 Corporate Social Re- Social, societal and environmental reporting Air France-KLM Registration document 2014 code of ethics governing the audit profession and the using sampling techniques, in order to verify the calcula- sponsibility Report, have been prepared, in all material Social Information provisions of Article L.822-11 of the French Com- tions made and reconcile the data with the supporting respects, in accordance with the above-mentioned Employment, work organization, training, labor relations Pages 113 to 118 mercial Code. We have also implemented a quality documents. The selected sample represents 83% of Protocol. Health and safety Pages 118 to 122 control system comprising documented policies and headcount, between 31% and 100% of quantitative Equal opportunities Pages 122 to 124 procedures for ensuring compliance with the codes of environmental information. Paris La Défense, April 14, 2015 Social indicators Pages 128 to 131 ethics, professional auditing standards and applicable law and regulations. We believe that the sampling methods and sample sizes KPMG S.A. Corporate citizenship information used, based on our professional judgement, were suffi- Territorial, economic and social impact and and sponsorship Pages 134 to 137 Statutory auditor’s responsibility cient to enable us to provide limited assurance; a higher Jean-Paul Vellutini, Partner Relations with stakeholders Pages 132 to 133 Our responsibility is to issue conclusions on the Data, level of assurance would have required us to carry out Eric Jacquet, Partner Subcontractors and suppliers Pages 137 to 138 based on our work. The conclusions given below more extensive work. Due to the use of sampling tech- Philippe Arnaud, Partner, Climate Change and Fair business practices, human rights Page 133 relate solely to the Data and not to Air France-KLM niques and other limitations intrinsic to the operation Sustainability Services Environmental information Group’s 2014 Corporate Social Responsibility Report of information and internal control systems, we can- Environmental policy Pages 139 to 141 as a whole. not completely rule out the possibility that a material The work has been performed by our corporate re- irregularity has not been detected in the Data selected. Pollution, waste management and sustainable use of resources Pages 141 to 143 1. ISAE 3000 – Assurance engagements other than audits or reviews of historical information Climate change and biodiversity Pages 143 to 146 2. Environment: Air France Industrial Division (Orly and Roissy), Air France and KLM ground vehicles & equipment, Servair 1, Acna Roissy, KLM Schiphol for ground operations. Air France, HOP!, KLM & KLM CityHopper for air operations. Environmental indicators Pages 150 to 153 Social: Air France in France, Servair S.A. in France, KLM in the Netherlands and Transavia in the Netherlands.

82 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 83 PERFORMANCE INDICATORS PERFORMANCE INDICATORS

Global Compact and GRI4 correspondence table

GLOBAL COMPACT ADVANCED LEVEL G4 GENERAL STANDARD DISCLOSURES LOCATION OF DISCLOSURE GOVERNANCE

STRATEGY AND ANALYSIS G4-34 Governance structure Corporate governance p.16 Criterion 19: CEO commitment and leadership G4-1 Statement from CEO about the sustainability and the group's strategy Editorial p.3; Interview p.4 G4-35 Authority delegation for sustainability CSR strategy p.14 G4-2 Key impacts, risks, and opportunities Aviation industry developments p.7 G4-36 Responsibility for economic, environmental and social topics CSR strategy p.14 ORGANIZATIONAL PROFILE Criterion 1: Mainstreaming GC Principles into corporate functions and business units G4-38 Composition of the board and its committees Corporate governance p.16 G4-4 Primary brands, products and services Key figures p.4 to 7; Financial results p.8 Criterion 20: Board adoption and oversight G4-42 Board and executives’ roles in setting the sustainability strategy CSR strategy p.14 G4-5 Organization's headquarters Details p.87 Part of the Air France-KLM CEO's remuneration depends on CSR G4-44 Evaluation of the board's performance regarding sustainability G4-6 Countries where the organization operates Key figures p.4 and p.7 criteria, Registration Document Section 1.1.6.

G4-7 Nature of ownership and legal form Corporate governance p.16; Shareholders p.17 G4-51 Remuneration policies for the board and senior executives Corporate governance p.16

G4-8 Markets served Key figures p.4 to p.7 ETHICS

G4-9 Scale of the organization Key figures p.4, 5, 8, 56 and 76 G4-56 Code of conduct Ethics p.20 Criterion 3: Robust commitments, strategies or policies in the G4-10 Breakdown of employees Social indicators p.76 area of human rights Criterion 14: Effective monitoring and evaluation mechanisms G4-57 Helplines or advice lines for employees Ethics p.20 Criterion 8: Monitoring and evaluation mechanisms for the integration of anti-corruption G4-11 Coverage by collective bargaining agreements Objectives table p.54 and 55; Social indicators p.77 of labor principles integration G4-58 Mechanisms for reporting concerns about unethical or unlawful behavior Ethics p.20

Criterion 2: Integrating GC Principles into the value chain G4-12 Organization's supply chain Customer experience approach p.42; Responsible procurement p.46 ECONOMIC G4-13 Changes during the reporting period No significant changes g4-dma* ECONOMIC PERFORMANCE FINANCIAL RESULTS P.8

G4-14 Precautionary approach Safety p.18; Risk management p.19 EC1 Direct economic value generated and distributed Financial results p.8

G4-15 External charters, principles or initiatives endorsed National and international commitments p.14 EC2 Risks and opportunities due to climate change Climate change policy p.27; Sustainable biofuels p.30

Criterion 17: Advocacy and public policy engagement G4-16 Membership in associations or advocacy organizations Public positions p.21, p.74; Local development p.66 to 70 Financial Assistance received from government- Presence of the EC4 Corporate governance p.16; Shareholders p.17 government in the shareholding structure IDENTIFIED MATERIAL ASPECTS AND BOUNDARIES g4-dma* INDIRECT ECONOMIC IMPACTS LOCAL DEVELOPMENT P.65, 66 AND 68 G4-17 Entities included in the financial statements Group's main subsidiaries p.82 Development and impact of infrastructure investment and services EC7 Local development chapter p.65, 66 and 68. Criterion 15: Core business contributions to GC goals supported G4-18 Process for defining the report content CSR approach p.12 Criterion 16: Strategic social investments and philanthropy EC8 Significant indirect impacts Local development p. 65 to 68 G4-19 Material aspects Materiality Matrix p.13 Criterion 1: Mainstreaming GC Principles into corporate functions and business units g4-dma* PROCUREMENT PRACTICES LOCAL DEVELOPMENT P.66 G4-20 This report includes data from both airlines, separately reporting Boundaries within and outside the organization G4-21 on each airline individually where relevant. Criterion 2 : Integrating GC Principles into the value chain EC9 Spending on local suppliers Local development around our hubs p.66

G4-22 Restatement of information No significant restatement ENVIRONMENT G4-23 Changes from previous reporting periods No significant changes g4-dma* MATERIALS WASTE P. 34; ENERGY AND WATER P. 36 STAKEHOLDER ENGAGEMENT EN1 Material used by weight or volume Environmental indicators p. 78 G4-24 Stakeholder list CSR approach p.12; Dialogue with stakeholders p.74

G4-25 Stakeholder identification CSR approach p. 12 EN3 Energy consumption Energy and Water p.36 Criterion 21: Stakeholder engagement G4-26 Approach of stakeholder engagement CSR approach p. 12 EN6 Reduction of energy consumption Objectives p. 25; Energy and Water p.36 G4-27 Topics raised through stakeholder engagement Dialogue with stakeholders p. 74 g4-dma* WATER ENERGY AND WATER P.36 REPORTING PROFILE Criterion 9: Robust commitments, strategies or policies in the area of environmental stewardship EN8 Total water withdrawal by source Energy and Water p.36; Environmental indicators p.79 G4-28 Reporting period From 01/01/2014 to 12/31/2014 Criterion 10: Effective management systems to integrate the environmental principles g4-dma* BIODIVERSITY BIODIVERSITY P.39 G4-29 Most recent previous report CSR report was released on May 20, 2014 Criterion 11: Monitoring and evaluation mechanisms for EN12 Significant impacts on biodiversity Biodiversity p.39 environmental stewardship G4-30 Reporting cycle Annual EN13 Habitats protected or restored Partnering for Biodiversity p.39; WWF-NL partnership p.69 G4-31 Contact point Details p.85 g4-dma* EMISSIONS CARBON FOOTPRINT P. 28 As this is the first time transitioning to GRI4, we report in accordance - Core. Certain "Comprehensive" indicators are EN15 Direct greenhouse gas emissions (GHG) Carbon footprint p.28; Air Quality p.33 G4-32 In accordance option, GRI index and external assurance Report already included. External assurance has been done on the environmental and social data p. 76 to 81. EN19 Reduction of GHG emissions Carbon footprint p.28; Air Quality p.33

G4-33 External assurance for the report Statutory Auditor's Assurance Report p.83 EN21 Nox, Sox and other significant air emissions Carbon footprint p.28; Air Quality p.33

84 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 85 PERFORMANCE INDICATORS PERFORMANCE INDICATORS

Global Compact and GRI4 correspondence table

GLOBAL COMPACT ADVANCED LEVEL G4 GENERAL STANDARD DISCLOSURES LOCATION OF DISCLOSURE GOVERNANCE

G4-7 Nature of ownership and legal form Corporate governance p.16; Shareholders p.17 G4-51 Remuneration policies for the board and senior executives Corporate governance p.16

G4-8 Markets served Key figures p.4 to p.7 ETHICS

G4-14 Precautionary approach Safety p.18; Risk management p.19 EC1 Direct economic value generated and distributed Financial results p.8

G4-33 External assurance for the report Statutory Auditor's Assurance Report p.83 EN21 Nox, Sox and other significant air emissions Carbon footprint p.28; Air Quality p.33

84 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 85 PERFORMANCE INDICATORS PERFORMANCE INDICATORS

g4-dma* EFFLUENTS AND WASTE WASTE P. 34 International non-financial indexes and rating 2014 EN23 Waste by type and disposal method Waste p.34

EN24 Significant spills Environmental indicators p. 78

Criterion 9: Robust commitments, strategies or policies in the EN25 Waste deemed hazardous Environmental indicators p. 78 area of environmental stewardship Air France-KLM is assessed annually by the major international non-financial rating agencies, including RobecoSAM, Vigeo, Eiris and Oekom Research. Criterion 10: Effective management systems to integrate the g4-dma* PRODUCTS AND SERVICES CUSTOMER EXPERIENCE APPROACH P. 42 environmental principles For the tenth year running, the Group is recognized by two Dow Jones Sustainability Indexes (DJSI World and DJSI Europe) and has been ranked Climate change p.27; Carbon footprint p.28; Biofuelp.30; th Criterion 11: Monitoring and evaluation mechanisms for EN27 Impact mitigation or environmental impacts of products and services leader in the Airlines industry by RobecoSAM. Moreover, for the 6 year running, Air France-KLM is ranked leader of the broader Transportation Responsible catering p. 39; Customer experience approach.42 environmental stewardship category, covering air, rail, sea and road transport as well as airport activities. In this way Air France-KLM perpetuates the ranking at the 24 g4-dma* SUPPLIER ENVIRONMENTAL ASSESSMENT RESPONSIBLE PROCUREMENT P.46 most sustainable companies in the world. EN32 Environmental assessment of new suppliers Responsible procurement p.46 Thanks to this performance the Group retained its listing on FTSE4Good Index Series, on the Vigeo indexes (World 120, Europe 120, Eurozone 120, France 20) and on the Ethibel Sustainable Index (ESI) Excellence Europe. Oekom Research classifies Air France-KLM as "Prime". SOCIAL

GROUP SOCIAL POLICY P.57 ; SOCIAL g4-dma* EMPLOYMENT INDICATORS P.77 ; REGISTRATION DOCUMENT SECTIONS 4.1 AND 4.1.1

LA1 New employees hired Group social policy p.57 ; Social indicators p.77

g4-dma* LABOR MANAGEMENT RELATIONS REGISTRATION DOCUMENT SECTION 4.1.1.

LA4 Minimum notice periods for operational changes The Group respects national legislations where it operates

g4-dma* OCCUPATIONAL HEALTH AND SAFETY GROUP SOCIAL POLICY P. 57

LA6 Injury, occupational diseases, absenteeism, and fatalities Health and safety at work p.58

Criterion 6: Commitments, strategies or policies in the area of labor LA7 Workers with high incidence or high risk of diseases Health and safety at work p.58 Criterion 7: Management systems to integrate the labor principles LA8 Formal agreements with trade unions Registration Document Section 4.1.3. Criterion 8: Monitoring and evaluation mechanisms of labour principles integration g4-dma* TRAINING AND EDUCATION GROUP SOCIAL POLICY P.57

LA9 Average hours of training per year Group social policy p.57

LA10 Skills management and lifelong learning Group social policy p. 57

g4-dma* DIVERSITY AND EQUAL OPPORTUNITY EQUAL OPPORTUNITIES P. 60

LA12 Composition of governance bodies and diversity indicators Governance p 16; Social indicators 77

Criterion 2 : Integrating GC Principles into the value chain LA14 New suppliers screened with labor criteria Responsible procurement p.46 Document produced by

g4-dma* NON-DISCRIMINATION EQUAL OPPORTUNITIES P.60 Air France KLM Royal Dutch Airlines Criterion 4: Management systems to integrate the human HR4 Freedom of association and collective bargaining Ethics p.20; Responsible procurement p.46 Environment and CSR Division CSR Office rights principles 45, rue de Paris Postbus 7700 Criterion 5: Effective monitoring and evaluation mechanisms of human rights integration HR9 Operations subject to human rights impact assessment Responsible procurement p.46 95 747 Roissy-CDG cedex 1117 ZL Schiphol France The Netherlands g4-dma* LOCAL COMMUNITIES LOCAL DEVELOPMENT P.66, 69 AND 70 For more information please visit: Criterion 16: Strategic social investments and philanthropy http://corporate.airfrance.com and www.klmtakescare.com SO1 Operations with implemented local community engagement Local development p.66, 69 and 70 Criterion 18: Partnerships and collective action g4-dma* ANTI-CORRUPTION ETHICS P.20 If you have any question, you can send an e-mail to: [email protected] and csr@klm.com Criterion 12: Robust commitments, strategies or policies for anti-corruption SO4 Communication and training on anti-corruption policies Ethics p.20 Criterion 13: Effective management systems to integrate the Conception, rewriting and execution: BETC Content – Art direction and infographics: Katkar anti-corruption principle Artwork execution and engraving: La Compagnie Des Couleurs – Cover: Havas Worldwide Paris

Criterion 2: Integrating GC Principles into the value chain SO9 New suppliers screened using criteria for impacts on society Responsible procurement p.46 Photographs: Air France, Servair and KLM photographic librairies, Joël Raveloson/ WWF-MWIOPO, Photo/UNICEF, Bilum, Photo/Etc Terra, Corbis/Hollandse Hoogte, Monireth g4-dma* PRODUCT AND SERVICE LABELING Photo credit illustration: We are Ted PR5 Results of customer satisfaction Customer dialogue p.44 As part of the Group's CSR approach, this report is printed using the most environmentally-friendly process at each step and a PEFC paper. * DMA: Generic Disclosures on Management Approach The report is printed by La Galiote-Prenant.

10-31-1570

86 AIR FRANCE-KLM Corporate Social Responsibility Report 2014 87 PERFORMANCE INDICATORS PERFORMANCE INDICATORS