CSR Report 2017 2017 CSR Report summary We create value beyond our financial return by bringing direct and indirect benefits to Our corporate social responsibility is based on five pillars that SOCIETY. underpin the value of our brand and contribute to the Group’s economic performance. We create employment, welcoming local people into our workforce, and we contribute to our suppliers’ financial strength to add stability to their business. Beyond our sponsorship or direct financial contributions for social initiatives, we benefit communities where we operate by developing projects that often redress a social and economic imbalance within a community and/or ensure and We promote PROFESSIONAL optimise the proper use of their resources. EXCELENCE as an essential element to develop our business.
Applus+ has a workforce of 20,700 professionals worldwide, employing people from a variety of age groups, cultures and Through INNOVATION, we promote the backgrounds. We encourage internal promotion, and we are pleased growth and sustainable development of to report that we filled approximately 70% of every available management position internally. Training is a key element to our society and we become our customer’s develop, maintain and improve our team’s capabilities; so, in 2017, partner of choice. we increased training hours by more than 90% on the previous year. We actively participate in the process of creating the necessary In pursuit of good health and safety practice, our actions reduced media, technologies and infrastructure to sustainably improve severe accidents by 20% with no fatalities, although, at a global level, safety and quality of life in our society. there was an increase in total accidents. This increase came mainly from vehicle accidents, and, as a consequence, we set up specific In 2017, we carried out 199 innovation projects that addressed various training for defensive driving and established new safety controls. sustainability goals, with 761 employees developing these projects and devoting about 264,241 working hours. Our innovation process also led to 13 new patents, and we collaborated with 85 external bodies to share our capabilities and resources, helping us to increase our knowledge base and explore new technological solutions.
CORPORATE GOVERNANCE and BUSINESS ETHICS help to build-up Throughout our projects and services, trust among our stakeholders. our clients achieve their objectives while Applus+ guarantees compliance with the principles governing the minimizing their potential ENVIRONMENTAL conduct of our employees through a specific regulatory framework, which includes the Code of Ethics; the Global Anti-corruption Policy IMPACTS. and Procedure; and the Compliance Management System for Criminal Our approach to environmental management is focused on minimising Risks. The Board, through the independently chaired CSR Committee, the direct environmental impacts of our activities, which are energy oversees this framework and its deployment. and water consumption and CO2 emissions. In 2017, we reduced our total energy consumptions by more than 13%, as well as more than In 2017, we received 89 communications reporting possible non- 12% of our total CO emissions. compliance with our Code of Ethics, and these were opened for 2 investigation into potential breaches. Out of the 89 cases, 79 were Beyond the internal control of our direct impacts, our key contribution closed in 2017 and 10 continue under investigation. In only 30 out of to the environment is the services our divisions provide to our clients. 89 cases, evidence was found for irregular behaviour, which resulted These services lead to a reduction, either directly or indirectly, in the in some type of correction or disciplinary action. potential environmental impacts of our clients’ business operations. Index
01 05 Company description 06 CSR performance 34
02 06 About this report 18 Definition of the 38 report's contents
03 07 CSR approach 22 Our CSR commitment 46
04 08 Letter from the Chairman 28 Annexes 84 and the CEO 01 Company description 8 | CSR REPORT 2017 CSR REPORT 2017 | 9
Applus+ at a glance
Applus+ is a premier choice for services in testing, inspection and certification (TIC), chosen by national and OUR SERVICES multinational companies in a diverse range of product, service and industry sectors around the world.
Testing Inspection ONE OF THE GLOBAL LEADERS IN TIC Our wide range of leading and Our inspection and verification internationally recognised services are world leading and laboratories helps to determine serve to verify that the assets, Total the characteristics of industrial processes and services of our revenue or consumer products. We clients comply with regulatory also manage testing in clients’ or voluntary standards. Countries million €1,583 facilities (e.g. non-destructive testing-NDT). >70 Adjusted operating profit Certification Engineering and consulting €143.0 million Employees Our certification services assure Our engineering and consulting Adjusted operating that client products, personnel services are responsible for cash flow or their management systems designing, developing and 20,700 comply with the appropriate improving technical solutions €136.0 million standards or given specifications. to optimise products, services, facilities and systems.
GLOBAL PRESENCE OUR SECTORS
Spain Employees 6,800 %total revenue 20% Rest of in 2017 Europe (ex. Spain) Employees 3,500 %total revenue 28% in 2017 Oil and gas Statutory vehicle Automotive testing Power inspection and engineering
US and Canada Asia Employees 2,200 Pacific %total revenue 21% Employees 1,600 in 2017 %total revenue 11% Construction Mining Aerospace Telecommunications in 2017
Latin America Middle East Employees 4,200 and Africa %total revenue 9% in 2017 Employees 2,400 Industrial Electrical and IT products and Government and %total revenue 11% in 2017 manufacturing electronic products smart devices public organisations 10 | CSR REPORT 2017 CSR REPORT 2017 | 11
Our history
The company's origins Applus+ Group history
1907 LGAI 1996 Revenue Agbar Automotive established The General Laboratory for Testing and 2003 €200M Research (Laboratori General d’Assaigs i IDIADA joined the Group Investigacions, LGAI) was established in Laboratories joined the Group Barcelona in 1907 as a public testing and research entity.
1937 RTD Welding engineer, Lambertus van Ouwerkerk, founded his firm, the non-destructive testing (NDT) specialist RTD, in 1937. He built a successful business by realising that X-ray inspection techniques could be utilised to check 2004 Revenue Norcontrol acquired welds on ship hulls. Van Ouwerkerk believed 2007 that non-destructive testing would play a €675M RTD acquired crucial role in the use of welding techniques as a replacement for traditional riveting in steel construction.
1971 IDIADA IDIADA started in 1971 as the Institute for Applied Automotive Research at the Polytechnic University of Catalonia's Higher Engineering School. 2008 Revenue 2014 20 businesses acquired €1,619M VELOSI acquired 1981 Norcontrol Applus+ IPO Norcontrol was set up in 1981 as a subsidiary of Unión Fenosa to respond to the Group's needs related to maintenance and environment.
Albert Einstein's visit to the LGAI 1982 VELOSI Laboratories in 1923 VELOSI was founded in 1982, when the 2015 company opened its first office in Kuala Lumpur Revenue New 2017 Energy & Industry Division (Malaysia). The business offered conventional €1,583M Seven acquisitions including non-destructive testing (NDT) to local clients. In 1987, VELOSI became the largest inspection Inversiones Finisterre company in the country. Capital increase 12 | CSR REPORT 2017 CSR REPORT 2017 | 13
Business model
Progress requires supervision. The testing, inspection and certification (TIC) sector ensures this supervision, and the expertise at Applus+ positions us as the ideal partner for companies striving to progress.
Our clients face ever-increasing levels of operational require in TIC services: a global leader, a trusted complexity and increased scrutiny, with a need to partner and with passion for improvement. continuously change as the result of globalisation and technological advances. These developments These three pillars guide the business strategy demand greater controls, more regulation and strict across the Group’s divisions. The attributes within standards with independent oversight. each pillar support our long-term growth in international markets by improving our services The Applus+ Group responds to these challenges and technology across the industry sectors in of our industry sectors and regional markets by which we operate. WHAT DOES Applus+ DO? working with manufacturers, governments and industry associations to innovate processes and Our brand promise captures the essence of these products. Our services’ extensive range and scope pillars: TOGETHER BEYOND STANDARDS. Applus+ develops and deploys technical solutions across complex industry sectors to enhance operational efficiency, to allow our clients to take informed decisions for their improve product quality and to reduce risk for its clients and the public. These value-adding services have made Applus+ a technological reference point for bespoke TIC activities. With our portfolio of global accreditations, we reinforce our businesses. capabilities through internationally recognised competence, spreading global expertise with local market knowledge across five continents. We have created a strong and sustainable business model by harnessing our collective knowledge, talent and innovations to deliver what clients
Technology Accreditations Human capability Global+local Applus+ leads the TIC sector Accreditations play a key The engineers and Applus+ provides local due to the use of advanced role in the TIC sector. Our technicians at Applus+ are market knowledge supported technology. This helps our accredited services allow our key asset. We develop by global resources across clients to find a solution to clients to access global their expertise and talent, 70 countries in the world’s the difficulties arising from markets and demonstrate and this commitment to key markets. Our their industrial practices and our integrity and expertise training delivers specialised management services manufacturing processes. across the sectors we serve. skillsets for our clients’ support clients’ operations We design inspection and projects. when operating in unfamiliar testing equipment for This expertise allows the regions or sourcing from industry as technology Applus+ Group to develop Clients also benefit from overseas, and we also guide evolves; we customise enhanced-knowledge of our workforce’s specialist their teams to develop the tools for our clients’ industry-wide best practice knowledge of each sector prerequisite understanding for challenges; and we integrate when new standards come across the globe. success in new surroundings. technological advances into force. As manufacturing We help our clients to into our service portfolios. processes and products deploy services to multiple With this strategic focus, progress, the divisions countries at one time, we add value to our service at Applus+ secure new supplying and integrating local capabilities and create new accreditations to support our teams for effective project processes to benefit our clients’ businesses. management. clients. Braking system development for high-performance vehicle at Applus+ proving ground, Spain 14 | CSR REPORT 2017 CSR REPORT 2017 | 15
WHY DO CLIENTS CHOOSE Applus+? HOW DOES Applus+ PROMOTE CONTINUOUS IMPROVEMENT?
Applus+ is a dynamic and responsive company, adapting its technical resources to its clients’ projects. With teams of Applus+ strategically invests in innovation to ensure continuous improvement. Across our divisions, we build best practice by multidisciplinary problem-solvers, we offer services – from conventional applications to advanced solutions – to provide our working with companies, government legislators and industry associations to help develop better, industry-wide operations and clients with the right answers for the challenges of their activities. In doing so, we ensure that our ability to make decisions standards. To respond to our sectors’ challenges, we invest in our teams’ talent. Added to this commitment to people, our strong objectively and independently remains and we retain the trust of our clients. corporate social responsibility meets the environmental and social expectations of all our stakeholders.
Flexibility Versatility Integrity Impartiality Innovation Responsibility Motivation Excellence Our teams work closely with We retain our position as a Across the Applus+ Group, The Applus+ Group is a Innovation sets us apart We help clients protect their Our talented teams Delivering better services, the client to deliver unique partner of choice by adapting our divisions deliver publicly listed company, as a partner of choice. Our operations with our specialist have a broad range of technology and skills drive solutions for new challenges. our service portfolio to services where international with diverse international teams work with clients and skills and innovative tools to qualifications, specialist the teams at Applus+. This In each sector we serve, our clients’ projects. Each compliance, business ethics shareholders, representing sector agencies to provide minimise hazards and keep backgrounds and skills. motivation is essential for we evolve our technology sector presents different and social responsibility no single interests. The innovative solutions to fulfil people safe. Our advances in Their work and dedication our clients and agencies and processes to bring challenges; and each new are paramount to our majority of our Board of the requirements of industry. technology help to protect reinforces our reputation as owing to their need to more effective and efficient challenge demands unique clients. We embed values- Directors are independent This focus drives our natural resources and a service partner of choice, meet ever-increasing services to industry. As skillsets. Our people’s management into our members, and this business. We pioneer new reduce the environmental so we support them to safety standards, stringent industries change, Applus+ mindset and versatility allow operations, and our CSR impartiality underpins our methods in the TIC sector as impacts of our clients’ build upon their abilities. quality levels and greater has the vision to integrate Applus+ to orchestrate Committee ensures we live activities. In the services we new technologies, products services and products. As a We design programs for operational efficiency. new procedures, adding and deliver services with a by these values. Through deliver, this independence and manufacturing systems Group, Applus+ maintains our people to master new greater scope to services and comprehensive appreciation strengthening ethical safeguards the trust come to market. And our a strong dialogue with tools and equipment. In leading best practice in the of our clients’ requirements. controls, we champion and probity required to advances reduce costs and our diverse stakeholders addition, we also offer sectors. social responsibility and verify, monitor and certify improve efficiency while through a governance model work opportunities that deliver sustainable growth. obligations between delivering a higher quality of aligned to the principles of match their aspirations for third parties and different service. compliance, independence professional development. agencies. and transparency. 16 | CSR REPORT 2017 CSR REPORT 2017 | 17
Our value chain
We invest in innovation to add value to our Innovation customers' products, assets and services.
Strategic We partner private companies and public bodies alliances to advance global technology solutions.
We employ talented people, who are specialists, Knowledge technicians and engineers with high technical qualifications.
We are trusted by clients and partners. Our Accreditations accredited and certificated services confirm our and certifications TIC sector expertise and create value for clients.
We reduce risk in our clients’ projects by offering Service delivery knowledgeable advice and excellent service.
We have a systematic approach to developing Quality quality in our services to achieve client satisfaction.
We communicate proactively to support our clients’ Communication goals and to highlight the benefits of our services.
We respond quickly and flexibly to the changing Customer needs within industries and markets. To go beyond orientation standards, we focus on operational excellence to exceed client expectations. Quality control and technical assistance in building, Spain 02 About this report 20 | CSR REPORT 2017 CSR REPORT 2017 | 21
About this report
For the third year, the Applus+ Group’s CSR Report follows the criteria, principles and contents defined in the Global Reporting Initiative (GRI- G4), according to the “core-option”.
The indicators in this report refer to all of the yearly evolution, the report also presents the data activities performed by the Applus+ Group in regions for 2015 and 2016. Our CSR Report is published where the company’s divisions operate. annually.
The information provided reflects the Group’s This year, we report by including five of the newly operations and activities during 2017 (1st January – revised GRI Standards, in anticipation of these new 31st December). To compare the data and show its requirements as from 1st July 2018.
GRI Standards requirement CSR Report section 03. CSR Approach (Our CSR Framework) GRI 101 – Section 1 (Principles for defining report content) 08. Annex I: Principles underlying this report and Section 2 (Principles for defining report quality) 06. Definition of the report's contents GRI 102 - Disclosure 102-44 Key topics and concerns 07. Our CSR Commitment (Key topics and concerns) raised GRI 102 - Disclosure 102-46 Defining report content and 06. Definition of the report's contents topic Boundaries 08. Annex I: Principles underlying this report GRI 103 - Disclosure 103-1 Explanation of the material 06. Definition of the report's contents topic and its Boundary GRI 103 - Disclosure 103-2 The management approach 07. Our CSR commitment (Key topics and concerns) and its components
In respect of non-financial information This Directive amends Directive 2013/34/EU of and diversity, this report complies with the 26th June 2013 on the annual financial statements, Spanish Royal Decree-law 18/2017, 24th consolidated financial statements and related November which implements reports of certain types of undertakings. Directive 2014/95/EU, 22nd October 2014.
Spanish Royal Decree-Law 18/2017 CSR Report section 01. Company description (Applus+ at a glance / Our history / Our value chain) First article. Two. “6” 06. Definition of the report's contents (Identification and evaluation of impacts) First article. Two. “6.a)” 01. Company description (Business model) 06. Definition of the report's contents (Identification and evaluation of impacts) First article. Two. “6.b)” 07. Our CSR commitment (Key topics and concerns / Our people / Safe people / Sustainable performance) First article. Two. “6.c)” 07. Our CSR commitment First article. Two. “6.d)” 06. Definition of the report's contents (Identification and evaluation of impacts) First article. Two. “6.e)” 07. Our CSR commitment (KPIs tables) Second Article. Three. 07. Our CSR commitment (Corporate governance) Wireless device testing, Spain 03 CSR approach 24 | CSR REPORT 2017 CSR REPORT 2017 | 25
Our CSR framework
In 2017, Applus+ adopted the United Nations Sustainable Development “Cities are hubs for ideas, commerce, culture, science, productivity, social development and much more. At their best, cities have enabled people to advance socially and Goals (SDGs) as a framework for designing our corporate social economically. The challenges cities face can be overcome in ways that allow them to responsibility goals. The following nine of the UN’s 17 SDG goals are continue to thrive and grow, while improving resource use and reducing pollution and relevant to the Applus+ Group’s businesses: poverty.”
“Ensuring healthy lives and promoting the wellbeing for everyone at all ages is essential to sustainable development. Many more efforts are needed to fully “Sustainable consumption and production aims at “doing more and better with less,” eradicate a wide range of diseases and address many different persistent and increasing net welfare gains from economic activities by reducing resource use, emerging health issues.” degradation and pollution along the whole lifecycle, while increasing quality of life.”
“Gender equality is not only a fundamental human right, but a necessary “Climate change is now affecting every country on every continent. It is disrupting foundation for a peaceful, prosperous and sustainable world.” national economies and affecting lives. People are experiencing the significant impacts of climate change, which include changing weather patterns, rising sea level, and more extreme weather events. Companies can be part of the solution by committing to decarbonise their operations and supply chains.”
“A continued lack of decent work opportunities, insufficient investments and under- consumption lead to an erosion of the basic social contract underlying democratic societies: that all must share in progress. Sustainable economic growth will require societies to create the conditions that allow people to have quality jobs that stimulate the economy while “A successful sustainable development agenda requires partnerships between not harming the environment. Job opportunities and decent working conditions are also governments, the private sector and civil society. These inclusive partnerships built upon required for the whole working-age population.” principles and values, a shared vision, and shared goals that place people and the planet at the centre, are needed at the global, regional, national and local level.”
“Inclusive and sustainable industrial development is the primary source of income generation, allows for rapid and sustained increases in living standards for all people, and provides the technological solutions to environmentally sound industrialization. Technological progress is the foundation of efforts to achieve environmental objectives, such as increased resource and energy-efficiency. In interviews with stakeholders, they highlighted six SDGs goals (see Without technology and innovation, industrialization will not happen, and without industrialisation, development will not happen.” page 67), the majority are the same as those related to the Applus+ business:
“There is growing consensus that economic growth is not sufficient to reduce poverty if it is not inclusive and if it does not involve the three dimensions of sustainable development – economic, social and environmental. To reduce inequality, policies should be universal in principle paying attention to the needs of disadvantaged and marginalised populations.” 26 | CSR REPORT 2017 CSR REPORT 2017 | 27
Our CSR Policy CSR management
Our approach to CSR is expressed in five pillars that contain at least two SDGs within each: The CSR Committee leads corporate social The corporate managers undertake many aspects responsibility at Applus+. Whilst this is not a of the CSR process, including policy drafting, mandatory committee in Spain, the Board created training, monitoring compliance and reporting on this committee to be in line with international performance to the Committee. CORPORATE GOVERNANCE AND BUSINESS ETHICS best practice. We appointed the Chairman of the • To implement the measures that fulfil our fiduciary duties, including measures related to Board to chair the committee, and the CEO is a The Board of Directors approves the Corporate transparency and the internal financial control and corporate-governance reporting, as well as member to ensure the committee’s actions are Social Responsibility Report, and the CSR Committee risk-management or monitoring practices. embedded across the Group. coordinates the process for reporting non-financial • To develop and implement global policies, such as anti-corruption to prevent wrongdoing. • To ensure ethical behaviour is integrated across all business units through our Code of Ethics, information, in accordance with applicable regulations the Corporate Social Responsibility Committee and the Chief Compliance Officer, and with the The committee members define the CSR goals and international standards. This has allowed us to be involvement of management. and targets, as well as leading the initiatives prepared to comply with the latest requirements in • To promote impartiality, independence and integrity as the cornerstones of our Code of Ethics. and monitoring their application throughout non-financial reporting. the organisation. To develop these duties, the Committee partners with corporate managers. The Internal Auditing Department supervises and 1 controls CSR monitoring. OUR PEOPLE
• To encourage working conditions based on human and employment rights. • To maintain a commitment to our QHSE Policy at the highest level and STAKEHOLDER ENGAGEMENT to deploy effective health-and-safety • To work to fulfil our clients’ needs programmes which promote awareness through high service-standards and and involve all employees at Applus+. high-quality procedures across all of our • To foster internal promotion. divisions. • To develop specific training and • To meet the communication internal-capacity programmes. requirements of the global investor • To foster diversity amongst staff based community to allow for well-informed on our Non-Discrimination2 Policy. investment decisions. • To strive to consider the demands of society. 3 INNOVATION
• To foster and share innovation across all business units that embeds corporate social responsibility into our employees' technical expertise and into the services developed internally, as well as within SUSTAINABLE PERFORMANCE our clients’ operations. To reduce potential environmental • To create a working environment that • impact within the communities where nurtures innovation by organising our clients operate. initiatives to promote innovative To work to prevent, environmental thinking amongst employees. • impacts by implementing 4 environmental-management systems based on international standards.5 Wind farm inspection, Spain 04 Letter from the Chairman and the CEO 30 | CSR REPORT 2017 CSR REPORT 2017 | 31
Letter from the Chairman and the CEO
INTRODUCTION nine Board members are independent, one of whom is female. Our Board bring a wide range of different perspectives, experience and skills, and we will We are delighted to publish the Applus+ Group’s continue to seek this diversity in our merit-based third CSR Report and detail the active steps we have appointments. taken to spread our renewed practices across the Group. As stewards of a Group whose activities help protect clients’ assets, public life and the environment, In 2017, we strengthened our CSR policies and we embrace our responsibilities to ensure robust sustainability reporting following the Global business ethics that prevent, detect and stop Reporting Initiative GRI-G4 and with the early any behaviour contravening our well-established adoption of some revised GRI Standards in principles of conduct. anticipation of the 1st July 2018 requirement. In addition, this year our CSR framework incorporates In 2017, we put in place the Compliance Management the United Nations’ sustainability goals. System control model to better mitigate risks at Group level, and the new internal procedures and As part of this review, we also consulted with our policies are supported throughout our divisions with Christopher Cole stakeholders as we improved our CSR framework Chairman of the Board of Directors focused training-bulletins. and integrated nine of the UNs sustainability goals to shape our policies. Through these discussions, our CSR Policy framework now reflects a more shared OUR PEOPLE perspective for growing our business sustainably and responsibly. Providing a healthy, safe and motivating work environment is one of our priorities. In 2017, our Acting responsibly and governing well requires our actions reduced severity rate by 20% with no constant focus and engagement, which underpins fatalities, although, at a global level, there was our excellent progress and determination to an increase in total accidents. This increase came continually improve. mainly from vehicle accidents and other incidents requiring less than three days leave. As a result of To this aim, we would like to highlight our progress this unfortunate increase in vehicle accidents, we set on the key areas upholding this commitment to up specific training for defensive driving and put in developing our CSR vision. place new safety controls.
CORPORATE GOVERNANCE AND These measures were in addition to our continual BUSINESS ETHICS deployment of health and safety programmes, such as training, safety inspections and safety campaigns. We will work hard to further promote preventative Fernando Basabe In 2017, we made significant improvements in our and proactive behaviours against accidents and to Chief Executive Officer (CEO) corporate-governance model. reduce the accident rates.
Spain introduced new company laws covering To develop the Group’s talent, in 2018 we will the disclosure of non-financial information and enrol selected managers on the new Global diversity in late 2017, and we value these changes Management Development Programme to ensure that bring fresh outlooks to managing our Group. they receive the training and support to reach their professional objectives. Over the next few We are therefore pleased to report that the years, approximately 100 managers from Applus+ Appointments and Remunerations Committee will attend the programme. and the Board have been paying close attention to promoting greater diversity of gender, age and In addition, in 2017 we completed our Global experience on the Board. Satisfaction Survey, which has been periodically carried out since 2007. This year, employees told us Since our public listing in 2014, we have appointed that they value the Applus+ Group’s collaborative three Independent Directors, and today, seven of the workplace, diversity and inclusion, along with our Metallic materials testing laboratories, Norway 32 | CSR REPORT 2017 CSR REPORT 2017 | 33
health and safety programmes. Importantly, our to increase the voting at the AGM to 68% of • Detect dangerous or hazardous equipment and safety, protect the natural world and safeguard people feel their work contributes to their division’s shareholders in 2017. This is above the Spanish failures or breakdowns. Our advances to apply living ecosystems. We have detailed many examples and Group’s goals. average. We publish the AGM reports on our leading-edge technology to pipelines and of these projects and their sustainable contribution website, alongside the Chairman’s speech, as storage facilities allow clients to reduce physical later in this report. For this externally managed survey, more than 500 recommended by the Spanish National Securities intervention, thereby lowering the risk for organisational units received feedback reports from Market Commission (CNMV). inspectors, costs and pre-inspection time. From a social perspective, we participate and assist the survey’s results. This feedback will be used to those communities where we operate throughout • We researched the reduction of CO emissions create action plans to achieve our goal of constant 2 our divisions. Apart from providing employment, INNOVATION and impact throughout the lifecycle of improvement. transferring best practices and purchasing from aeroplanes; and led research proposals at the local suppliers, we support numerous social causes European regulatory level to control the emission We invest in innovation to create value for our across the world at a local level, either through DIALOGUE WITH STAKEHOLDERS of NO emitted by vehicles on the road. customers and our Group through the development x direct financial contribution, sponsorship or active of products, services and technical expertise. Further in this report, we have listed many examples participation. As well as employee engagement, we have Innovation at Applus+ also makes a contribution to of these projects and how they have real world continued to ensure transparency through activities reducing the environmental impact of the sectors application and therefore a return on investment to engage wider stakeholders and investors. and clients we serve. Therefore, innovation for from a broad point of view. IN CONCLUSION sustainability improves our competitive position, Applus+ hosts a corporate governance road contributes to our performance and builds our To spread innovation, we worked with external Our corporate social responsibility is developing well show for shareholders and proxy advisors every reputation. bodies and participated in conferences to share our at Applus+, although our journey of doing business year in January. This dialogue, with the corporate knowledge and learn from our peers. governance departments of our top shareholders In 2017, we participated in 199 different projects for better cannot stop and we have to continue doing and at the non-executive Director level, has helped research and development, involving 761 people, things better. improve transparency and gather personal feedback with the majority in the automotive and oil and gas ENVIRONMENT, SUSTAINABLE from investors. sectors. Our projects developed a range of new DEVELOPMENT AND SOCIAL With our knowledge and skills in technology and products and services within the different sectors, CONTRIBUTION innovation, we can and do play an essential role This dialogue, as well as our active discussions each addressing a variety of goals with a subsequent in delivering sustainable contributions to society. prior to the Annual General Meeting (AGM), helped sustainability benefit. Two highlights include: Innovation in the services we offer our clients is As a service organisation, our consumption of also providing new growth areas for the Group by natural resources and emissions are not substantial protecting the safety of assets and the wellbeing of but nevertheless require managing. Energy and people and their communities. water consumptions and vehicle emissions are our most significant environmental impacts. In addition, within our CSR framework, we add to the talent of our workforce, giving them opportunities We therefore collect global indicators on these and for personal growth with new skills in a fair and implement global and local measures to control diverse workplace. We promote business ethics and reduce impacts. We deploy our environmental- throughout the company as a fundamental value in management systems at a local level, and these the services they deliver, while implementing best are certified and periodically audited to meet the practice in the governance of our Group. international ISO 14001 standard. Clearly, CSR is fundamental to a sustainable world. We are pleased to say that environmental data Therefore, we would welcome your feedback on this reported here covers 98% of our business, and we progress we have made this year. have reduced our energy index by 12% thanks to business integration activities and initiatives such as our project to renew light installations to low consumption.
In addition to reducing the Group’s direct environmental impacts, our divisions’ services lead to a reduction, either directly or indirectly, in the impacts of our clients’ operations. Our services also help clients and sectors to improve workplace health 05 CSR performance 36 | CSR REPORT 2017 CSR REPORT 2017 | 37
CSR in figures Our main CSR achievements
ECONOMIC PERFORMANCE
Revenue: Adjusted operating profit: Established € 1,583 million €143.0 million 1 United Nations' Sustainable Development Goals (SDGs) as our HUMAN CAPITAL CSR Policy framework to design our Maintained engagement CSR objectives and increased transparency Employees: Training hours: from 2017-2030. 4 through a governance road show and 20,700 750,000 Annual General Meeting SOCIETY notifications.
Countries: Local employees: Approved four new policies and a procedure >70 90% 2 for dealing with compliance, anti- Developed our INNOVATION money laundering, supplier and customer first Global Management management and for regularising 5 the operation of our communication Development Programme Hours invested Employees involved for approximately in innovation: (not full-time dedicated): channel for reporting any incidents of non-compliance. 100 high-potential managers at Applus+ 264,241 761 to participate over the next few years.
BUSINESS ETHICS
Ethics Non-compliance training: notifications: 89 only 30 breached 100 % the Code of Ethics, and were addressed Developed Extended our Compliance methodologies and ENVIRONMENT Management 6 information systems to respond to the 3 guide lines System new GRI Standards Energy Water for Criminal Risks (CMS) consumption: for the content consumption: across the Group. requirements from 1st July 2018. 796,144 GJ 679,029 m3 06 Definition of the report's contents 40 | CSR REPORT 2017 CSR REPORT 2017 | 41
Materiality analysis MATERIALITY MATRIX Material topics To define and develop this report, Applus+ has covered and Anti-bribery and integrity prioritised the topics in accordance with the principles of materiality, Codes of Ethics and compliance sustainability context, stakeholder inclusiveness, and completeness. HIGH Corporate governance Economic performance Health and safety We assign relevance to these, topics, or materiality, To begin materiality analysis, the assessment Independence, accreditations and certifications based on their importance concerning the economic, established which stakeholders to consult with Innovation of products and services environmental or social impact of our organisation; the initial list of topics. Quality of service and customer satisfaction or because the topics directly influence the decisions MEDIUM Risks and opportunities management of our stakeholders. Under the principle of stakeholder inclusiveness, Sustainable and safety products and services the Group Management Team and the in-house Talent attraction and retention As with the past two years, Applus+ has conducted professionals’ team identified the key stakeholders the materiality analysis, the CSR Committee as: delegated this task to an in-house team, which STAKEHOLDERS FOR RELEVANCE LOW MEDIUM HIGH provides similar services to our clients.
RELEVANCE FOR Applus+
Em rs p to ncial mar lo Prioritisation of material topics s ina ke y e F ts e te P e v era ub We evaluated the material topics to reflect their • Indirect impacts (principle of completeness): op lic s n a I e d relative priority by assessing: those directly related to entities within our w m e r in value chain. e i • Direct impacts (principle of sustainability): the h s t w r type and range of influence; and their relation to • The influence of these impacts on our
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To identify the topics, we reviewed the validity of Next, we consulted senior management to weight the previous year’s 28 topics. And by benchmarking the relevance of each topic. Each topic was rated against competitors and main sectors, we included as high, medium or low in respect of its internal four new topics and downgraded two to produce (Applus+) and external (stakeholders) importance. this year’s definitive list of 30 topics. The initial 30 topics were refined to 11 material ones and approved by the CSR Committee. 42 | CSR REPORT 2017 CSR REPORT 2017 | 43
IDENTIFICATION AND EVALUATION OF IMPACTS
Our direct impacts Our indirect impacts To identify our direct impacts, we considered the issues intrinsic to the Group’s commitments and When assessing priority, we also considered both the direct impacts of our activities and those to which we management, as well as the concerns identified and published by different community experts. We assign a contribute in respect of the direct impacts of entities that are involved within our value chain. high, medium or low value, based on our management focus and performance during 2017, to determine the The table below shows the entities involved in our value chain (see 01. Company description section importance of these impacts. [Our value chain, page 16]).
TYPE AND MATERIAL TOPIC DIRECT IMPACTS SDGs LOCATION Entities within our value chain Compliance with government regulations 9, 17 G Infrastructure and resources Anti-bribery and integrity Good governance 5, 10, 17 G Leasing and sale Utilities IT products and Banking Good reputation 5, 10, 11, 12, 17 G of property smart devices Support entities Travel agency Insurance Fulfilment of human rights 3, 5, 10 G Rental and purchase Office supplies Software and External auditors of vehicles
Codes of ethics and Removal of inequalities 5, 10 G hardware compliance Crime prevention 11, 17 L Non-compliance risks 9, 17 L Operating entities Customer orientation Greater transparency, independence, and stakeholders’ Corporate governance 17 G confidence. Clients Increased confidence of investors and clients 8, 17 G Oil and gas 4. Accreditations and Economic performance Job creation and increased local service contracts 3, 8 L Statutory vehicle inspection certifications Community development 8, 17 L 5. Service delivery Automotive testing and Accreditation and Electrical and electronic certification entities 3. Knowledge Health and safety Preventing occupational risks and eliminating accidents 3, 8 L engineering equipment Head-hunter and Independence, Power Tools and machinery recruiter accreditations and Compliance with industry's regulation 11, 12 L certifications Civil infrastructures Proficiency testing Construction Rental and purchase of vehicles Operational efficiency 9 , 12 G Quality Innovation of products Mining and services Pollution reduction 11, 12, 13 G Aerospace 2. Strategic alliances Improvement of quality standards for products, services and 9, 12, 13 L Telecommunications facilities Sectorial and technological partners Quality of service and Industrial manufacturing customer satisfaction Brand value maintenance and improvement 9, 17 G 6. Communication Universities and R&D Electrical and electronic centres Improve company’s economic performance 8, 9 G products Leasing printing equipment 1. Innovation IT products and smart devices Electrical, electronic and Risk and opportunities Contextualised business strategies 8, 9 L Government and public mechanical equipment management Risks reduction and take advantage of the opportunities 8, 9 L organisations Tools and machinery Operational eco-efficiency 11, 12, 13 L Sustainable and safety Consumption (energy and water) 11, 13 L products and services To assess our contribution to the impacts across the When assessing the magnitude of our contribution Climate change (emissions) 11, 13 G entities involved in our value chain, we identified and to the impacts identified, we have limited quantitative Specialisation, knowledge and experience 8, 9 G grouped the entities' main impacts into five sections, information because of the Group’s extensive global Talent attraction and as we did with the direct impacts: economy, society, presence, our decentralised contracting of services and Quality-work environment 3, 8 G retention environment, business and integrity. our responsibility for client confidentiality. Therefore, we Community development 11, 17 L assigned a high, medium or low value to each impact To complete the evaluation, we separated the entities based on a qualitative justification of our contribution: into two large groups: our clients and the rest of L Local G Global entities. We established these based on our ability to Economy Society Environment Business Integrity either directly control or influence their decisions. 44 | CSR REPORT 2017 CSR REPORT 2017 | 45
Applus+ Contribution PRIORITY MATRIX
MATERIAL TOPICS ENTITIES' MAIN IMPACTS CLIENTS REST OF ENTITIES To complete the materiality analysis, we determined By cross-referencing the impacts’ significance with the ECONOMY how these impacts could influence on stakeholders’ influence on stakeholders’ decisions, we obtained the Job creation Our services enhance their business development and assessments and decisions. To do this, we assigned relative priority of our material aspects: sustainability. An optimal service and a reasonable price- Community development service ratio generates a relationship of trust that provides We collaborate in developing the a high, medium and low score to the feedback we continuity to our commercial relationship, and gives us business, social and economic Economic performance received during the interviews for determining the opportunity to transfer our good practices. For some environment when contracting Improvement of economic sectors (Statutory vehicle inspection, automotive testing and products and services. materiality. performance engineering or NDTs), we become drivers of improvement in defining work standards. Prioritisation of material topics SOCIETY
Codes of ethics and Fulfilment of Human Rights 1. Independence, accreditations and certifications compliance We have strong vetting processes 2. Health and safety Removal of inequalities to ensure external suppliers and Due to our position in our supply chain, our influence on partners meet our commitment HIGH 3. Codes of Ethics and compliance Preventing occupational risks social aspects is not significant. We apply our Code of Ethics Health and safety to ethics. These processes include and eliminating accidents and principles when we deliver customer services. 4. Corporate governance verifying compliance with certain However, in the case of the prevention of occupational risks, social aspects before contracting, 5. Quality of service and customer satisfaction Specialisation, knowledge our contribution is significant because of the nature of our especially those contracts and experience services. 6. Anti-bribery and integrity Talent attraction connected with the prevention of occupational risks. 7. Sustainable and safety products and services and retention Quality work environment We also contribute to improving the specialisation and knowledge of our clients' staff when we provide 8. Economic performance Currently, these vetting and Community development technological services or develop innovation projects. MEDIUM verifying processes cover 40% of 9. Talent attraction and retention Application of good practices all Applus+ suppliers. Our goal is 10. Risks and opportunities management Quality of service and and standards of quality, to cover 100% in the short term. customer satisfaction 11. Innovation of products and services safety and environment
ENVIRONMENT ASSESSMENTS AND DECISIONS ASSESSMENTS We require suppliers in our ON STAKEHOLDERS INFLUENCE Operational eco-efficiency vetting processes to meet LOW MEDIUM HIGH Definitely, our services improve our client’s sustainable environmental legislation in their performance. In addition, we reduce their environmental work. In addition, we positively Sustainable and safety Consumption impact through the development and application of new value the application of good products and services SIGNIFICANCE ON ECONOMIC, ENVIRONMENTAL AND SOCIAL IMPACTS services, in many cases, as a result of our innovation environmental practices, or the projects. implementation of environmental Climate change management systems complying with international standards. BUSINESS We ask suppliers to be active Operational efficiency in respecting the environment. Likewise, we require suppliers to In developing and implementing innovation within projects, Innovation of products provide us with innovative tools our aim is to improve our clients' processes, bring efficiency, and services to optimise their services to us reduce costs and prevent pollution. for improved efficiencies. These Pollutant reduction terms are set out in our technical descriptions for supplied services.
INTEGRITY
Anti-bribery We have implemented a Compliance Management System for Criminal Risks (CMS) to support Good governance We comply with their codes. We apply our policies, and the the application of the Code’s Anti-bribery and integrity values and principles of our Code of Ethics. principles related to the criminal Good reputation acts. We have deployed internal controls at Group level to mitigate Crime prevention risks.
Independence, We vet suppliers and require Compliance with industry's Our services to clients improve compliance with national and accreditations and them to comply with national and regulation international regulations and standards. certifications international regulations.
Having evaluated our direct impacts and our contribution to the impacts of the entities of our value chain, we cross- referenced both valuations to obtain the significance of economic, environmental and social impacts. Statutory inspection in a cable car, Spain 07 Our CSR commitment 48 | CSR REPORT 2017 CSR REPORT 2017 | 49
Corporate governance The key developments in corporate governance questionnaires. The Board discussed leadership- during 2017 include: succession strategy and cyber-security, and they and business ethics met with first line of Management Team in the • Shareholder engagement: in view of the Group. constructive dialogue held with institutional • Revision of new regulations: the Audit CORPORATE GOVERNANCE • The Board reflects a broad diversity of skills and investors and proxy advisors, in 2017 we carried Committee reviewed and analysed the CNMV's experience to manage the Group’s challenges out a new corporate governance road show in Technical Guide on Audit Committees in Public and plan for the future, who include professionals line with our Policy for Communication and Contacts The Board of Directors has prioritised good governance Interest Entities to assess compliance; and from industry, academia, finance, law and human with Shareholders, Institutional Investors and Proxy since the Group became a listed company. Since 2014, assessed the company’s adaptation to new resources. Advisors. In addition, we encouraged an open the Board and Management Teams have devoted requirements under the recent Royal Decree-law dialogue with stakeholders at the Annual General time to evolve the Group’s governance model and 18/2017 of November 24th, in matters of non- Meeting (AGM), in which participation increased framework. This framework includes the By-laws, the The Board of Directors ensures good governance financial information and diversity. Regulations of the Board of Directors and the policies through three specialised Committees: the Audit considerably to 68.03% of the share capital. • CSR Committee: continued to review and follow approved, which included the Directors' Selection Policy, Committee, the Appointments and Remunerations • shareholders at the Changes to share capital: up on the level of the good corporate governance, the CSR Policy, the Policy on Communication and Contacts Committee and the Corporate Social Responsibility AGM approved a 5-year authorisation to increase submitting conclusions and proposals to the with Shareholders, Institutional Investors and Proxy Committee. share capital up to 50% of share capital with pre- Board of Directors. Likewise, the Committee Advisors, and the Remuneration Policy for the Directors. emptive rights and 10% of share capital without adopted the United Nation’s SDGs framework for Independent Directors chair all three Committees, pre-emptive rights. In line with international best CSR reporting and improved health and safety The Applus+ Group has been developing corporate and only Independent Directors sit on the practice, this 10% is more stringent than both the reporting procedures. governance by following of some international best Audit Committee and the Appointments and legal 50% limit in Spain and the widespread 20% practice. It should be highlighted in its model of good Remunerations Committee. limit in the spanish market. The capital increase • Compliance procedures and management: in the governance: was executed through an Accelerated Bookbuild Compliance Management System for Criminal Risks, Our CSR Committee, which is not mandatory in Offering (ABO), and this facilitated the acquisition we introduced new controls to mitigate criminal • Nine-member Board to allow for a diversity of Spain, is comprised by the Chairman of the Board, of 80% of the shares in Inversiones Finisterre in risks at Group level. We re-defined the compliance opinion and keep decision-making effective. together with another Independent Director. The September. function and improved employees training. Chief Executive Officer sits on the Committee to • Chairman and CEO role-separation. • Registered office changed to the Applus+ Group’s ensure policies and actions are embedded into the • Self-evaluation process: the Board enhanced operations in Madrid. • Seven out of nine (78%) Independent Directors. Group’s strategy and day-to-day management. All self-evaluation process with one-on-one interviews with the Chairman, in addition to • Independent Chairman of the Board. three Committees report quarterly to the Board and provide a yearly report on their progress. specific topics within the self-assessment 50 | CSR REPORT 2017 CSR REPORT 2017 | 51
that they facilitate the selection of female The following table reflects the diversity of experience and backgrounds the Applus+ Board of Directors: Approach to diversity Directors.” • Directors’ Selection Policy: Among its “Objectives on the Board of Directors and Main Principles”, the policy highlights that “[…] the Applus+ Board of Directors shall ensure that the selection procedures favours diversity in EXECUTIVE INDUSTRY PRIMARY In December 2017, the Board was presented with NAME NATIONALITY EXPERIENCE FUNCTIONAL EXPERIENCE GEOGRAPHIC CATEGORY the new requirements under Spanish Royal Decree- gender, experience and knowledge and that they EXPERIENCE law 18/2017 of November 24th in matters of non- do not suffer from implicit bias that might imply any discrimination[…]” financial information and diversity. Mr Christopher UK Engineering Chief Executive Officer Worldwide Independent As a result of the application of these regulations: Cole The Board of Directors at Applus+ is committed to promote diversity throughout the Group. We have • The Board appointed its first female Director in 2016. company policies and regulations in place to prevent Energy Mr John Daniel President any gender discrimination from occurring in our • Four out of nine Directors (44%) come from USA Industrial Worldwide Independent selection processes: Hofmeister HR Group Director outside Spain to account for more than 70 manufacturing • Board’s Regulations: Art. 14.3 stipulates that countries where Applus+ business is present. ”[...] the Board of Directors shall ensure that the • Age range of between 43 and 76 years-of-age Energy appointment procedures of its members promote (average: 63) to account for a rapidly changing Infrastructure President Spain and Mr Ernesto Mata Spain Independent gender diversity and a diversity of experiences business environment, while preserving valuable Consultancy Vice-president Latin America and knowledge and have no implied bias that experience. Finance might entail any discrimination and, in particular, Mr Richard UK TIC Chief Executive Officer Worldwide Independent Nelson
Mr Fernando Finance Spain Chief Executive Officer Worldwide Executive Basabe TIC
Infrastructure Chief Executive Officer Mr Nicolás Villén Spain Worldwide Independent Pharma Chief Financial Officer
Ms María President and Managing Europe, Latin Consumer Cristina Spain Director America, and Independent Pharma Henríquez Chief Financial Officer Israel
Mr Scott Cobb USA Private equity Managing Partner Worldwide Proprietary
Senior Vice-president Mr Claudi Oil and gas President Spain Worldwide Independent Santiago Private equity Chief Executive Officer Chief Operating Officer Automotive stilying development, China 52 | CSR REPORT 2017 CSR REPORT 2017 | 53
Our people BUSINESS ETHICS Anti-corruption Policy and Procedure. The divisional Executive Vice-presidents, under the leadership of the CCO (Chief Compliance Officer), are responsible For Applus+, business ethics are as important as the for monitoring Applus+ professionals and third services we provided. Therefore, the Group has an parties to comply with the Global Anti-corruption Policy ethics model, which commits to robust compliance The outstanding professionals at Applus+ are the distinguishing and Procedure. and evolves with on-going reviews. This model, and its feature of our services. We have a workforce of 20,700 worldwide, and underlying ethical values, brings credibility and build • In 2016, the Board of Directors approved the we employ and train a wide range of specialist technicians, from young stakeholder confidence. Compliance Management System for Criminal Risks (CMS), which had been launched in 2015. The people developing their skills to qualified professionals furthering their Applus+ guarantees compliance with the principles implementation of this system enables Applus+ to specialism. governing the conduct of our employees through a detect possible criminal offences under the Spanish specific regulatory framework: Criminal Code, UK Bribery Act and the US Foreign To support the success our employees' work brings, we prioritise and promote a healthy, safe and motivating Corrupt Practices Act. • The Applus+ Code of Ethics provides our Directors, work-environment, and we encourage our employees to develop their personal and professional skills. employees and third parties with a strict code of Our Code of Ethics, the Global Anti-corruption Policy and conduct by setting out the values and commitments Procedure, and the CMS are included in the scope of that govern their activities within the company. the periodic controls carried out by the Internal Audit Each has a dedicated communication channel for Department. EMPLOYEES BY DIVISION reporting any incidents of possible non-compliance with our Code of Ethics (whistleblowing.channel@ In 2017, we reinforced and raised awareness for REGION 2017 2016 2015 applus.com). our Code of Ethics and the Global Anti-corruption Energy & Industry Division 13,100 12,500 12,620 Policy and Procedure, with specific training bulletins In 2017, there were 89 communications received on the policies and procedures of the compliance Automotive Division 4,400 3,500 3,400 area. We also conducted training on these two and opened to investigate potential breaches. Out IDIADA Division 2,400 2,200 1,980 of the 89 communications received, 79 have been internal regulations, for new recruits as part of their closed in the year 2017 and 10 continue to be open induction training. Laboratories Division 800 800 700 and are being investigated and managed by the Chief TOTAL 20,700(1) 19,000 18,700 Compliance Officer. Out of the 89 cases there was This year we also deployed the Compliance evidence found in 30 cases of irregular behavior or Management System (CMS) control model across (1) The increase is due to acquisitions made in the year, and mainly from Inversiones Finisterre. with breaches of the Code of Ethics' values and Global our four divisions and their subsidiaries around Anti-corruption Policy and Procedure, which resulted in the world. We also reviewed the Risk Maps, and we some type of correction or disciplinary action. further implemented our Action plan approving the following internal procedures and policies: EMPLOYEES BY REGION Out of the 89 cases, 75 came from internal sources, • The Compliance Terms of Reference Norm. and 14 from persons external to the Group. Sixty- REGION 2017 2016 2015 seven per cent of the cases used the company's • The Applus+ Whistleblowing Procedure. formal communication channel of the company to • The Anti-Money Laundering Policy. Spain 6,800 6,000 5,700 send the allegations, and the rest came in via the Rest of Europe (ex. Spain) 3,500 3,700 3,630 Management Team, audit process or other sources. • The Suppliers Policy. • To prevent, detect, investigate and remediate any • The Customer Policy. USA and Canada 2,200 2,100 2,520 corrupt act within the Group, we have a Global Latin America 4,200 3,300 3,080 Middle East and Africa 2,400 2,000 1,800 Asia Pacific 1,600 1,900 1,970 TOTAL 20,700 19,000 18,700 54 | CSR REPORT 2017 CSR REPORT 2017 | 55
• In South Africa, Applus+ has implemented several forces, who have suffered injuries because of EMPLOYEES BY ORGANISATION LEVEL AND GENDER initiatives to promote community development the armed conflict. These personnel tend to join 2017 and, especially, to reduce inequalities. These Applus+ at entry-level positions and develop initiatives are related to ownership, management within the organisation. Level Male Female Total employees control, skills development, enterprise and supplier, and socio-economic development. Human TIER 1 and 2 84% 16% 1% We strive to provide a work environment based Resources has been involved in various processes on respect, ethics, equality and diversity. Our TIER 3 79% 21% 2% with actions to implement ethnic shareholding Non-Discrimination Policy and our Code of Ethics . TIER 4 82% 18% 7% and the inclusion of women in top management guides our people to consider which behaviours • In Colombia, Applus+ has implemented a are expected from them in their work, and in their Operational employees and others 82% 18% 90% Corporate Social Responsibility Programme relations and interactions between themselves and TOTAL 82% 18% 100% focused on the recruitment and professional with our stakeholders. development of personnel with disabilities. The programme was led by Human Resources team This year, Applus+ has promoted Global Management Local Human Resource teams have gathered the overall consistency. This analysis also guarantees to prioritise employees with disability status in Development Programme to support the long-term quantitative and qualitative data presented in that the information reflects potential changes in administrative roles, where there is equality of sustainability of our business, and we also ran the this report, following the guidelines for the specific the global economic situation; any labour market competencies between candidates. In addition, Global Employee Satisfaction Survey, which we have information requested by Corporate Human trends in the countries in which we operate; and any we are developing a plan to incorporate and periodically carried out since 2007. Resources. specific changes in the TIC sector or our divisional develop personnel from the military and police industry sectors. To verify and control this process, the corporate team compared previous years' data to validate
HUMAN RESOURCES MODEL AND KPIs
During this year, we concluded the implementation HR KPIs 2017 2016 of a decentralised model of Human Resources, which allows us to give more autonomy to our teams, Voluntary turnover 15.4% 10.2% resulting in improved efficiency. Decentralisation has rate demonstrated the flexibility of our management, Employees covered 35% 37% allowing us to adapt more quickly to changes in the by collective Countries: 21 Countries: 18 market and satisfy the needs of our customers and bargaining society. Internal promotion 70% 68% rate In this respect, we can highlight two actions completed by Human Resources at local level:
Radiographic Testing (RT), USA 56 | CSR REPORT 2017 CSR REPORT 2017 | 57
Global Management Development Programme Global Employee Satisfaction Survey SAFE PEOPLE During 2017, Applus+ has been developing its In 2017, Applus+ carried out a Global Employee professional development model. In addition to Satisfaction Survey amongst its employees. The Our three management pillars enhance individualised development plans focused on satisfaction of our employees is key to maintaining geographical or business environment, we now develop the excellence services we provide and directly affects the potential of our people using a global development the company's results. Golden Safety Rules Health-and-safety model. Health and Safety Policy, programme to eliminate programmes at a local The survey results provide valuable information to which applies to all divisions or mitigate risks associated level, in accordance with the This model aims to stimulate innovation, foster enable dialogue across the divisions, encourage and countries, reviewed in with the 11 activities, which international OHSAS 18001 knowledge-transfer among teams and promote a communication between teams and continuously 2017. have historically led to a wider standard. global, inclusive and diverse organisational culture. improve. When analysing the results, we benchmark range of serious incidents or different global industries to compare and evaluate injuries. From a pool of high-potential managers, we selected our engagement and satisfaction in relation to other 30 participants from 18 countries to participate in the markets, collaborating with a recognised company first round of our Global Management Development with more than 40 year's experience surveying HEALTH AND SAFETY other incidents requiring less than three days leave. Programme. Forty per cent of the participants are employees on satisfaction. 2017 2016 2015 INDICATORS As a result of this unfortunate increase in vehicle Spanish, and we are especially proud that 30% of accidents, we set up specific training for defensive Number of occupational attendees on our first programme will be women. Regarding the results obtained, one of the areas 0 0 0 driving and new safety controls. evaluated in the survey should be highlighted: fatalities This programme complements, but not substitutes, (1) • Collaboration: defined as the ability to achieve Lost-time injuries rate 0.98 0.71 0.79 Local Health and Safety (H&S) teams in each the individual development plans on which we have results that would be difficult or unlikely to country follow the H&S reporting policy and historically based our strategy of development and Recordable cases rate(2) 1.27 1.01 1.13 be achieved individually. Our employees value procedure and report H&S indicators through succession. positively this cooperation and the possibility to (1) Rate refers to the number of lost-time injuries occurring per the corporate Governance Risk Compliance Tool. generate synergies between different teams. In 200,000 hours worked. Corporate H&S monitor and analyse the reported The first Global Management Development Programme (2) this category, Applus+ far exceeds the benchmark, Rate refers to the total number of recordable cases for every quantitative and qualitative data, and the Internal will begin in 2018. The programme will have a blended confirming our collaborative relationships as a key 200,000 hours worked. Audit team, external certification bodies and , where participants can foster the exchange of format cultural attribute within our growth. clients verify and control H&S information. ideas and experiences. The project outcomes will be In 2017, our actions reduced the severity rate presented to the Applus+ Management Team, and the by 20% with no fatalities, although, at a global programme aims to spread knowledge and create new In addition, employees gave notable scores in areas level, there was an increase in total accidents. This synergies across the divisions. such as: increase came mainly from vehicle accidents and • Performance management: Applus+ employees Over the next few years, around 100 managers felt their work had a direct impact on achieving at Applus+ will participate. The Global Management the company's objectives. Development Programme will strengthen and develop our managers' skills for the future to ensure the Group's • Health and safety: Applus+ employees continuous development, success and sustainability. considered that their direct managers, as well as the company in general, provide the level of training and the necessary equipment to guarantee they can work safely. • Diversity and inclusion: employees at Applus+ positively value our open environment and diversity within the company, such as gender, race, and religion.
More than 500 units across the Group received feedback and shared these reports with their teams to establish on-going action plans for our company's goal: the constant striving for excellence.
Celebration of the Safety Day, Abu Dhabi 58 | CSR REPORT 2017 CSR REPORT 2017 | 59
Safety awards at a local level to value employees’ Time for safety ideas or actions which safeguard health and safety. In the year’s final quarter, we celebrated our fourth These awards, which started several years ago Awards and recognitions Safety Day under the catchphrase “Make time for in some countries, have been extended locally to safety”. Across the Group's divisions and regions, more countries, for example: Applus+ ACE Award Our clients and partners have recognised • Applus+ in Peru was awarded in the ninth management and employees participated in the programme in the USA, Canada, Middle East, our efforts to prevent occupational risks and edition of the recognition programme Safety Day to engage in presentations, debates, Oceania and North Europe; Good Catch programme protect health: organised by Pacífico Seguros in August workshops and games. These activities reinforce in USA, Canada, Singapore and Brazil; and Valoramos 2017. This year, Pacífico Seguros highlighted • Applus+ in UK was awarded with the our best practice in health and safety by increasing tu Plus en Seguridad (Beyond the Call of Safety) in the work of 25 companies, which show high gold award by RoSPA (Royal Society for knowledge and awareness. Spain. Prevention of Accidents) for a continuous standards in the prevention of occupational risks and health. focus on the industry’s associated risks. In 2017, localised activities for awareness also Awareness and motivation tools included: This year, we launched a new awareness campaign • Applus+ in Brazil joined the brazilian movement under the banner “Time for Safety”. The campaign called “Maio Amarelo” (“May yellow”). This MOTIVATED AND SKILLED PEOPLE included: movement was created to highlight the high rate of traffic deaths and injuries worldwide. Each • Published bulletins to reinforce the Applus+ citizen, entity or company could wear the "Yellow Our employees are our greatest asset. To recognise implementing the good practices adopted by our Golden Safety Rules. Themes have included: May ribbon" to raise awareness for actions in the this, Applus+ fosters a competitive compensation employees, we acknowledge their excellent work “Fitness for Work”, “Hazardous Substances”, month of May and throughout the year where system, which is aligned to our sector. at a global level, and we incorporate the resulting “Travel Security”, “Driving Security”, “Working possible. best practice into the routine of the company’s at Heights”, “Coordination Activities” and In Spain, Applus+ celebrated its third edition of operations. “Toolbox talks”. The bulletins were placed in the • Applus+ staff in Singapore, Korea and Brazil took Valoramos tu Plus (Beyond the Call) programme. By workforces' common areas. part in training workshops in our “Stop before it stops us” campaign to promote responsible • Sent emails to all employees with specific behaviour. The campaign encourages employees messages about security, under the banner to stop performing tasks in the event of a safety “Lessons learned”. concern and reassess their work for a safer How does it work? • Promoted and targeted specific banners on outcome. the Applus+ Global Intranet. 1 Quarterly requests for applications are made for nominations.
The heads of departments propose a candidate, demonstrating and explaining the reason for the 2 nomination.
3 The 10 finalists are chosen in a voting process that evaluates the employees’ best practice in respect of:
Customer or Director Business increase satisfaction
Cost reduction Extraordinary behaviour
Innovative character Improved work climate
Exportable or replicable practice in the division 60 | CSR REPORT 2017 CSR REPORT 2017 | 61
Stakeholder Training programmes We invest in our people to ensure we provide quality In 2017, we organised approximately 750,000 engagement across the Group’s divisions. We recognise the need hours of training, including on-the-job training for good professionals, and we value the talent hours (averaging 36 hours per person) to contribute they bring to Applus+. Moreover, since our people to their life-long learning. As well as training related MARKET FOCUS are fundamental to the Group, at Applus+ we take to new technical abilities, we also ran courses on Oil and gas our responsibility seriously to provide training and quality management, languages, health and safety We design and execute services covering the qualifications for our employees. In fact, we owe our and the environment. economic, environmental and social expectations of • Applus+ in Singapore obtained ISO 17025 SAC prestige to our highly qualified people. all stakeholders. Our passion for improvement drives (SAC Accreditation in Advanced and Conventional us to go beyond standards for our clients, and we NDT Services) to add to its growing list of fulfil this motivation with a sense of eagerness and internationally recognised certification. creativity. TRAINING PROGRAMMES 2017 2016 2015 Technical skills 51% 42% 46% During November, Applus+ employees across the Group were sent the campaign celebrating the QHSE 30% 27% 33% World Quality Day (WQD). To this purpose, an informative video was prepared encouraging people Language 6% 11% 10% to be quality leaders. Other 13% 20% 11% Certifications We deploy our quality and environmental- management systems at a local level, and these are certified and periodically audited in accordance with the international ISO 9001 and ISO 14001 standards. In 2017, actions included: • Applus+ in Australia joined National Association of Testing Authorities (NATA). NATA represents • We adapted to the new requirements of the ISO Australia at high-level international forums 9001:2015 and ISO 14001:2015 in some legal related to practices and policies laboratory, entities of the following offices: UK, Italy, UAE, inspection body, reference material producer and Kuwait, Saudi Arabia, the USA, Canada, China, proficiency testing service-provider accreditation. Thailand, Australia, Norway, Mongolia, Indonesia, Papua New Guinea, Angola, South Africa, Colombia and Spain. • We have expanded our ISO 14001:2015 scope Industrial manufacturing (Environmental-management systems), including in Ireland. • Applus+ has been accredited as an Inspection Entity for Environmental Monitoring and Control of Industrial Activities (ECMCA) in the Valencia Accreditations region, Spain. This accreditation follows ISO Applus+ maintains the necessary accreditations and 17020 standard, which will serve as a basis for homologations in multiple jurisdictions across the entities accredited by ENAC (Spanish accreditation globe, which assures the quality, safety and integrity body) to be registered in the Registry of ECMCAs of both our services and our clients’ assets. In 2017, for the Group’s services in site-surveillance and we acquired many new accreditations, amongst field control. which are:
Training to work at height, UK 62 | CSR REPORT 2017 CSR REPORT 2017 | 63
Construction • Applus+ has also been recognised for carrying out Awards and recognitions ENplus tests, dedicated to the valuation of forest • Applus+ in Panama has been accredited by the biomass. Applus+ has obtained the accreditation Technical Board of Engineers and Architects. according to the ISO 17025 standard, and this Our passion for improvement continually by the Auto Awards, voted for by private The Technical Board governs the professional recognises Applus+ as an ENplus accredited test drives Applus+ towards an excellence that customers, workshops and a jury. laboratory. allows us to exceed the expectations of our practice of engineers, architects and other related • Applus+ in China has received the 2017 Visa clients. In recognition of this motivation, both technicians in the Republic of Panama. Excellence Award, recognising our Shanghai our customers and our commercial partners IT laboratory as the best device-laboratory rewarded our services for high quality: IT products and smart devices 2016-2017. Visa representatives presented the award on the 9th June 2017, at the Power • Applus+ in Ireland was awarded with the Go • Applus+ in Europe and China achieved AMEX annual Visa Vendor Forum in San Francisco, Best Service Award within the programme Enabled accreditation for Express Pay type- which brings together clients, test tool called “Government Opportunities (GO) • Applus+ in Korea has been audited to provide approval on contactless terminals. Applus+ is providers and all the laboratories accredited Excellence in Public Procurement Awards”. Global Wind Organisation (GWO) accredited now ready to offer a complete Amex validation by Visa. This award recognises and acknowledges courses for basic safety training for the global service to point-of-sale manufacturers and kernel the work by Applus+ employees to • In the Rio Pipeline Conference & Exhibition wind-turbine industry. The training provides developers. th th constantly improve the services offered to 2017 (held on 24 to 26 October 2017), the basic skills to work safely and to meet over two million people in Ireland annually. the technical committee selected a emergency response requirements. The courses technical paper prepared by Applus+, comprise four modules written and presented • For the third time (2015, 2016 and 2017), which reviews our propriety IWEX imaging with reference to the unique challenges posed by Electrical and electronic products Applus+ in Denmark has been nominated technology. working in the wind-turbine industry. With this for Best inspection station in Denmark service line, Applus+ is the first GWO-accredited • Applus+ has been recognised and designated, by training provider in Korea, and we deliver the US Federal Communications Commission (FCC) course in both English and Korea to make the to test Radio Frequency devices. Applus+ is now course accessible for many more clients. an ISO 17025-accredited laboratory for testing Radio Frequency devices (intentional radiators) to conform to FCC regulations.
Others
• During 2017, the new branch of Applus+ in Albania achieved the extension of accreditation No OC-I/034 at the office in Tirana (Albania). This extension refers to inspections based on the European Lift Directive Rio Pipeline Conference & Exhibition 2017, IWEX imaging technology, Rio de Janeiro. (Directive 2014/33/UE Lifts). 64 | CSR REPORT 2017 CSR REPORT 2017 | 65
DIALOGUE WITH STAKEHOLDERS
In our approach to stakeholder inclusiveness, we concentrate on organisations or individuals who Suppliers we consider to be significantly affected by our Working with suppliers, Applus+ has a vetting process to ensure that services and on actions that can affect our ability external suppliers and partners adhere to our commitments to ethics, to successfully run our business. To improve society and the environment. Currently, this vetting process covers our responses to their expectations and needs, 40% of all Applus+ suppliers. we continue consolidating and improving our communication channels with them. We also develop supply-management through our membership in the Spanish Association of Purchasing, Contracting and Procurement Professionals (AERCE). This organisation shares experience, publishes information, imparts knowledge and conducts research on issues related to purchases in Spain.
Clients We organise open days, road shows, conferences and technical forums for our clients. In addition, our divisions periodically survey clients on their Shareholders, investors and proxy advisors satisfaction. We also have local systems for Last year, we approved the Policy for Communication complaint management to analyse and quickly and Contacts with Shareholders, Institutional Investors remedy issues raised from any claim. Finally, we and Proxy Advisors to promote our commitment communicate continuously with our clients as we to maintaining a good dialogue with the investor develop projects, by holding periodic meetings to community. Our main communication channels with review the progress of our projects. our shareholders are the following:
• Our Investor Relations Vice-president, who is exclusively dedicated to managing communications with the investment community. • An annual institutional investor and proxy advisor road show, where the largest investors are invited to meet with some of our senior management, and a Non-Executive Independent Director. • The shareholders’ Annual General Meeting (AGM), where we provide a platform for those wishing to participate, either personally or through representation. Employees • Our website at www.applus.com, Investor Applus+ periodically surveys our employees Relations can be contacted for information. on satisfaction. This year, the Global Employee Satisfaction Survey showed our employees highly In 2017, we attended 153 meetings and conference rated areas such as collaboration, performance calls, of which 81 were first contacts with Applus+ management, health and safety and diversity and since the IPO (Initial Public Offering) in May 2014. inclusion. We detail this further in section 07. Our In addition, we attended nine conferences and four CSR commitment section (Human Resources model road shows. and KPIs, page 56) 66 | CSR REPORT 2017 CSR REPORT 2017 | 67
mobility. The C-ITS’s objective is to facilitate the Other Stakeholders convergence of investments and regulatory Key topics and concerns Our involvement in organisations and associations frameworks across the EU to realise the deployment allows us to foresee new regulatory changes and to of mature C-ITS services in 2019 and beyond. understand the needs of the stakeholders, who are • Applus+ is a member of ASTM International. STAKEHOLDER INDICATING linked to those organisations' or associations' activities. KEY TOPICS AND CONCERNS MANAGEMENT APPROACH Over 12,000 ASTM standards operate globally. THE TOPIC ASTM standards enhance performance and bring In the principal and for the sectors in which we operate confidence when purchasing goods or services. activities and services we provide, we are members of: Financial markets ASTM harnesses the expertise of over 30,000 • Annual account audit • The International Federation of Automotive members to create consensus and improve 1. Economic performance • Financial Statements Report Suppliers Engineering Societies (FISITA). A non-profit performance in manufacturing, materials, products, SDG: 1. No poverty • Corporate Governance Annual Report organisation that acts as the global voice for processes, systems and services. • Directors’ Remuneration Report the automotive industry. FISITA members share Investors The divisions at Applus+ also participate in associations knowledge on automotive engineering and specialised in quality, CSR and ethics: contribute to the development of new technologies Public administration worldwide. • Several Applus+ divisions joined the UN Global Compact group, committing to “Ten Principles” • The Investors • QHSE Policy Spanish Association of Defence, Aerospace and related to human rights, labour, the environment and 2. Quality of service ), representing • Quality-management systems at a local level Space Technology Companies (TEDAE anti-corruption. and customer satisfaction Civil society • Customer satisfaction surveys and promoting its members’ interest both nationally SDG: 12. Responsible • Applus+ works closely with the European • Local complaint-management systems and internationally. consumption and production Standardisation Committee (CEN). European • World Quality Day • Clients European Telecommunications Standards Standards (ENs) are based on a consensus, which Institute (ETSI). An organisation that produces reflects the economic and social interests of 34 CEN globally applicable standards for information and Competitors Member countries, channelled through their national communications technologies, including fixed, standardisation organisations. mobile, radio, broadcast, internet and aerospace. Suppliers Applus+ is actively involved in the development of • We are also members of the Club for Excellence in 3. Anti-bribery and integrity • Code of Ethics new test standards. Management, which is a not-for-profit business SDG: 8. Decent work and Civil society • Compliance Management System for Criminal association. Applus+ has been a Primary Partner of • ), economic growth Risks (CMS) Pipeline Research Council International (PRCI the EFQM since 1994. which is a community of the world’s leading pipeline Competitors companies and their vendors, service providers, • At FORÉTICA – a leading association for corporate equipment manufacturers and other organisations social responsibility and sustainability businesses Employees supporting this industry. and professionals in Spain and Latin America-. • Code of Ethics • European Strategy on Cooperative Intelligent • Applus+ is a patron of the ADCOR Foundation Financial markets • Non-Discrimination Policy 4. Talent attraction and Transport Systems (C-ITS) adopted by the European (Disabled adults from A Coruña), which is a non-profit • Global Management Development Programme retention Commission in 2016, which is a milestone initiative organisation dedicated to improving the lives of Suppliers • Global periodic survey of employee SDG: 5. Gender equality, towards cooperative, connected and automated adults in situations of dependency. • satisfaction 8. Decent work and economic Investors • Annual training programmes growth and 10. Reduced • “Valoramos tu Plus” (“Beyond the Call”) inequalities Civil society local programme • Competitive compensation system Sectors where we operate
Investors • QHSE Policy Clients • Health-and-safety programmes at a local level 5. Health and Safety OHSAS 18001 standard) SDG: 3. Good health and Competitors • Golden Safety Rules programme well-being • Local safety awards Sectors where we operate • Safety Day and awareness campaigns • Local awareness actions Civil society 68 | CSR REPORT 2017 CSR REPORT 2017 | 69
SOCIAL CONTRIBUTION Caring for long-term illness STAKEHOLDER INDICATING KEY TOPICS AND CONCERNS MANAGEMENT APPROACH THE TOPIC • In October 2017, Applus+ in Panama, from its headquarters in Ciudad del Saber, commemorated • Code of Ethics Financial markets Direct financial contribution or sponsorship Cinta Rosada (Pink Ribbon) against breast cancer • Compliance Management System for Criminal to raise awareness for the early detection of Risks (CMS) We are involved in many kinds of social initiatives to 6. Codes of Ethics and Suppliers breast cancer through the initiative “Vístete de • Global Anti-corruption Policy and Procedure support disadvantaged groups; to contribute to care compliance Rosa” (“Dress up in Pink”). Civil society • Compliance Terms of Reference Norm for life-threatening illness; and to promote safe and SDG: 5. Gender equality and • Applus+ Whistleblowing Procedure healthy lifestyles. • Applus+ contributed to “TV3 Marathon” 10. Reduced inequalities Competitors • The Anti-Money Laundering Policy (Catalonia, Spain) to foster public engagement. Supporting disadvantaged people • The Suppliers Policy During the event, Applus+ opened its vehicle- Sectors where we operate • The Customer Policy • Hogar San Ricardo shelters 144 children and inspection centres in Barcelona on a public holiday. Applus+ donated the funds raised to Financial markets adults with different capacities, physical limitations and in cases of family abandonment. fight against infectious diseases. 7. Risks and opportunities Suppliers During December and January 2017, Applus+ in management • Risk Control and Management Model • Together with a key client, Applus+ in the donated products such as nappies, dietary SDG: 8. Decent work and • Internal Audit process Chile Netherlands sponsored the Cycling Race for Investors supplements, sugar, olive oil and pasta. economic growth Sophia Child’s Hospital. The money collected by Applus+ helps to research diseases, advance Sectors where we operate • In March 2017, Applus+ in the UK sold the old furniture from their Westwick office, donating treatment methods and improve the patients’ Public administration the money to contribute to the children’s hospice stay in hospital. 8. Independence, • We maintain and obtain the accreditations EACH (East Anglia’s Children’s Hospices). accreditations and Investors and certifications required by government certifications • Applus+ in the USA is an active supporter of the regulations and industrial standards to SDG: 9. Industry, innovation Civil society Center for Companies that Care AIM High action operate in the global market and infrastructure programme. AIM High facilitates relationships Clients between companies and students in Chicago’s low-income, inner-city neighbourhoods. The Financial markets • By-Laws and Regulations of the Board of Directors. programme’s mission is to ensure 100% of Suppliers • Long Term Incentive Plan for the CEO (LTIP) participating students that graduate from high 9. Corporate governance • Directors’ Selection Policy school enter college and gain the skills needed Investors to succeed in tomorrow’s workplace. Applus+ SDG: 8. Decent work and • Policy on Communication and Contacts with • Applus+ in Korea participated in the “Rope for economic growth and Shareholders, Institutional Investors and Proxy provides financial support, event sponsorship and Civil society employee volunteers and mentors. Hope” charity event to support children who are 17. Partnerships for the goals Advisors fighting against incurable disease. Families and • Remuneration Policy for the Directors • Major social contributions from Applus+ in participants dressed up as superheroes and Sectors where we operate • Implementation of the recommendations of Panama supported children in rural and descended from a 17-story building to deliver a the CNMV disadvantaged communities, campaigning with positive message of hope to the children: they • QHSE Policy our collaborators to raise funds for toys and food can overcome fear. The children’s families and 10. Sustainable and safety • Environmental-management systems at a bags and organising a Christmas party for those volunteers participated and many had no prior services local level communities. abseiling experience. Applus+ provided all of the SDG: 12. Responsible Sectors where we operate • Global or local awareness campaigns amongst necessary safety training, equipment and rigging consumption and production • Applus+ in Mexico, as a commitment to the our employees to make sure the abseiling heroes descended and 13. Climate action company's local communities, donated to the • Innovation projects development communities affected by the earthquake in fearlessly and safely. Employees September 2017. Our employees collected basic supplies and delivered them to local, dispersed 11. Innovation of products and Public administration and remote villages. We sent the donation of services • Innovation Report food, clothing and toys to localities in the State SDG: 3. Good health and well- Investors • Innovation projects development of Oaxaca and to the Paredón in the State of being, 9. Industry, innovation • Continuous collaboration with universities, Chiapas. All of these communities suffered severe and infrastructure and Civil society R&D centres and other innovating companies damage to their homes, and some communities 12. Responsible consumption have high levels of poverty. and production Clients Sectors where we operate 70 | CSR REPORT 2017 CSR REPORT 2017 | 71
Promoting safe and healthy lifestyles Protection of Vulnerable Road Users (VRU) Ensuring and optimising the proper use of The role of our projects and services resources • In 2017, Applus+ in Mexico implemented the • Led by the Applus+, the project PROSPECT Redressing the social and economic imbalance occupational health programme, integrating (Proactive Safety for Pedestrians and Cyclists) is • Applus+ in Panama provides services to expand activities focused on health care and disease a European Union funded road-safety programme • Applus+ in Australia, is working in partnership general education through the construction of prevention. Amongst the activities were: a 5 with 17 participating partners. Together, they aim with Indigenous Workstars and a major oil educational centres. We aim to innovate the km sports race; an eating habits contest “One to improve the effectiveness of active VRU safety company to increase indigenous participation in building of school infrastructure to guarantee day without meat ”; psychological intervention systems compared to current systems. our Australian businesses, specifically targeting access to basic and secondary education in "Emotional first-aid attention" to the employees our in-service contract with this oil company. By targeted areas, constructing model schools, affected in the earthquake of Mexico City; and a To do this, the project team is expanding the scope sourcing candidates from local, traditional owner- supporting classrooms and expanding the current “Circuit of Health” for detecting eye and dental of accident scenarios covered and improving the groups in Queensland, Applus+ has created educational offer. disease and for administrating vaccines for overall performance of the system. They perform opportunities for five new indigenous team seasonal influenza. statistical accident studies and naturalistic urban members in 2017. We provide new employees observations, and study how to improve VRU • Applus+ in Spain ran several road-safety with on-the-job training and mentorship by sensing and advanced system-control strategies. awareness campaigns for children. In 2017, senior Advanced Non-Destructive Testing (ANDT) Applus+ held more than 15 events for children technicians. The programme is expected to in Madrid, and the Canary Island participated in expand further in 2018. Salón de la infancia (Juniors’ Hall). In Barcelona, Applus+ with Parc Motor School taught children Applus+ works closely with Indigenous Workstars how to react to the most common risks on the to support new recruit activities and to provide road. With these campaigns, Applus+ pass on cultural awareness guidance for our supervisors, good road sense, habits, responsibility and civil managers and human resource teams. This attitudes for school children to avoid traffic environment to learn and advance is creating accidents. career pathways that increase accessibility and participation for local and indigenous communities in our business and industry. • Contributing to social equality and inclusion, Applus+ in South Africa achieved Level IV BBBE-E • Applus+ in Colombia ensures different (Broad Based Black Economic Empowerment) contractors are in full compliance when providing certification. The BBBE-E is an initiative by multi-sectorial services for the Government of the South African government to redress the La Guajira, by carrying out an external supervisory apartheid-era legacy of the social and economic role. Applus+ ensures the adequate use and imbalance. allocation of resources for health services, Sustainable and economically viable mobility education and food for children, agricultural, Our local management have set up schemes, business and tourism, environmental, social and • Applus+ is also leading the C-MobILE (Accelerating such as training and charitable donations, to indigenous affairs, disaster management and C-ITS Mobility Innovation and deployment in commit to using ethnically owned small medium socio-environmental emergencies. Europe) project, for fully safe and efficient road enterprises (SME) as part of our supplier list. transport without casualties and serious injuries This accreditation allows Applus+ to tender on european roads. The project team envisages for work with state-owned companies in the a congestion-free, sustainable and economically infrastructure, power and energy sectors. viable mobility, minimising the environmental impact of road transport in complex urban areas • In Saudi Arabia, as part of our commitment to and for vulnerable users. the Saudi’s 2030 Vision, we developed the Saudi National Inspection Training Programme. This The role of our innovation projects The C-MobILE project will run across Europe, programme converts 59 Saudi National Inspection Our greatest social contribution is to actively evaluating research pilot sites to deployment Engineers to Approved Inspection Engineers. participate in the process of creating the methods, locations of sustainable services supported by local This training shows that the partnership technologies and infrastructures required to authorities. Their research will develop a common between Applus+ and our clients contributes to improve the safety and quality of life in our society. approach to technology to ensure interoperability professional development in society. and the seamless availability of services. The The following projects are an example of the social project is funded under EU H2020 and 37 entities character of our innovation activity: are participating, ranging from city councils and european organisations to companies and universities. 72 | CSR REPORT 2017 CSR REPORT 2017 | 73
• The “Todos Somos Pazcífico” (“All of us are The Automotive Division in Galicia currently has 20 Innovation Pazcific”) plan has been set up by the Colombian colleagues with intellectual disabilities occupying government and is financed by the Word Bank and the position of porter, which is covered exclusively the Inter-American Development Bank. The plan with people with this diversity function. Their aims to generate and strengthen the conditions for supported employment includes orientation and We invest in innovation to create value for our customers through economic, social and environmental development individualised mentorship that is provided by job by improving the conditions for the regional coaches and trainers in the workplace. The project the development of products, services and technical expertise. Our population and by reducing the gaps in the social has a period of training in the company prior to innovative approach generates efficiency improvements, as well as indicators between coastal populations and employment. populations at the centre of the Colombian Pacific new revenue streams, which benefit our company, our clients, society region. The plan generates investment to promote and the environment. peace and post-conflict management. Volunteer program: “Roll up our sleeves”
Within the framework of this plan, Applus+ “Arremangados” (”Roll up our sleeves”), is the name OUR INNOVATION IN FIGURES develops technical, administrative, financial, legal, of the Automotive Division's programme in Costa environmental and social supervision services Rica, through which employees identify and promote social welfare projects for their neighbouring to implement electrification and modernise of Numbers of Employees electricity networks in Chocó, Valle del Cauca, communities. In an internal contest, the different stations presented their projects for budgetary Innovation Hours worked involved Cauca and Nariño. These regions have the greatest projects: on innovation projects: (not full-time needs for infrastructure and experiences fragile approval to develop them with voluntary labour. dedicated): social and economic levels. Our actions will ensure 264,241 the proper use of resources and promote the This initiative, which started in 2016 as a pilot plan, 199 761 regional inclusion when supplying personnel, celebrated its first work in 2017: goods and services. • To restore the area around the bus stop located During 2017, we carried out 199 innovation projects: 91 in the IDIADA Division; 64 in the Energy & Industry on route 32 (San Miguel de Santo Domingo de Social and workforce integration of people with Division; 26 in the Laboratories Division; and 10 in the Automotive Division. In addition, we ran 8 information Heredia station) functional diversity technology projects at the corporate level. • To construct a special cage to give quality of life • One of the most outstanding actions carried to a small tapir which was blinded prior to being OUR INNOVATION PROJECTS out by the Automotive Division in Galicia rescued by a wildlife refuge (Marina de San Carlos (Spain) is the social and labour integration of station). people with functional diversity through the • To create a playground of recycled tyres in “Bajo Our innovation projects have led to the developed Son Capaces (They are Capable) project. The Las Esperanzas” School of Pérez Zeledón town for of a range of new products and services within Division pioneers this field and the project is 5 year-old children to help develop their fine- different sectors, which addressed various considered as an example of coexistence that motor control and ensure their safe play (Pérez sustainability goals. enriches our lives. Zeledón station).
Oil and gas Awards and recognitions • As an important step to safeguarding assets, The Automotive Division in Galicia (Spain) Capaces” (“They are capable”) project. The Applus+ has developed a new fibre-optic received the 2016 ANADE Foundation Award objective of this award is to recognise the monitoring system. Fibre-optic monitoring for Social Integration, which recognises the continued work in favour of this group, and increases spatial coverage of the data collection work of the Division in favour of the group entities or people working to improve the to detect pipeline movement and temperature of people with disabilities, through its “Son quality of life of these citizens. changes caused by a possible leak. Potential problems can be identified and rectified early to prevent possible environmental damages. 74 | CSR REPORT 2017 CSR REPORT 2017 | 75
• DTI Trekscan for marine terminals inspection. These new systems contribute to detecting Marine terminals present very important damages that could be potentially dangerous Mining Applus+ has also been working on other operational challenges, when inspecting for for the environment, and reduces physical projects to study new procedures for inspecting safety. Our DTI Trekscan provides 100% inspection intervention to minimise risks for inspectors. • Applus+ in Spain has developed an energy- vehicle emissions. Our work demonstrates our of both the pipe's internal and external wall, and valuation model to obtain high-precision volume commitment, as a control entity, to ensure the the technology contributes to preventing leaks to robustness of new inspection methods. Our Aerospace measurements of coalfields. To achieve this, the marine environment. Applus+ uses a novel tool called Topodrone to innovations for environmental protection and reduce the margin of error due to environmental better industry standards include: • Applus+ is working on European R&D Projects or human factors during inspection. The method • DYNAMIC EMISSIONS project to study new to introduce thermoplastic composites in the has led to higher levels of coordination and procedures to inspect vehicle emissions in load manufacturing of aeroplane structures. Led safety during the plants’ activity, with quicker conditions. by Applus+ and funded by Clean Sky 2, Project volume measurements, and simpler collection of • With AECA-ITV, the OBD (On-board diagnostics) FORMIT (Forming and Modular Integration of field samples for subsequent analysis. Thermoplastics) is adapting the Applus+ patented project to validate methods and control of Glideforming manufacturing process to these new vehicle emissions. materials. Statutory vehicle inspection IT products and smart devices
• Through our membership of the Council of CITA • To guarantee security, privacy and control of (the International Motor Vehicle Inspection vehicle information access, the IDIADA Division Committee), the Automotive Division significantly is researching and developing a new service to participates in the SETII study (Sustainable evaluate the resilience of connected vehicle Emission Test for Diesel vehicles involving nitrous against the threats and possible cyber-attacks. oxides). Their work aims to establish a system Called CIVICO, Applus+ project is funded
for periodic inspections of NOx emissions, based by Minetur (Spain) with the support of the on the appropriate and commercially available Automotive Cybersecurity LAB (ACLAB) of Eurecat. tools. Applus+ is the only company undertaking • In the field industrial of cyber-security, Applus+ comparative tests of testing equipment by means is working on the INSYS project to develop the of a dynamometer, testing three different brands know-how and tools necessary for the cyber- of equipment to compare the results. In 2017, we security evaluation in industrial processes. This presented our conclusions to establish proposals project will provide answers to the emerging risks Industrial manufacturing to control the emission of NO emitted by x associated with the Industry 4.0 (new automation . vehicles and data exchange in manufacturing technologies) • ODORA+ Innovation Project: a new field and with the Internet of Things (IoT) applications. procedure to measure odours. Following two To mitigate these risks, we are studying years of development, Applus+ has launched the innovative technology Trusted Execution an alternative new service to measure the level Environment (TEE), which combines software and of odours and any associated discomfort. This hardware security. system takes measurements in situ and tests Applus+ also partners in the European project can be performed without processing in the NHYTE (New Hybrid Thermoplastic Composite laboratory. The new service contributes to society Aerostructures manufactured by Out of Autoclave by providing a quick and flexible tool to detect and Continuous Automated Technologies) to develop quantify odours produced by industrial activities testing and characterisation for manufacturing or urban pollution. technologies using hybrid thermoplastics.
• Applus+ in Australia has designed several These new materials reduce CO2 emissions and systems for more environmentally-friendly environmental impact throughout the lifecycle of inspections to allow non-contact inspections. an aircraft thanks to: The LiDAR (Light Detection and Ranging) system • Manufacturing processes with reduced on a drone takes high-resolution 3D interactive energy consumption by removing the need for models for measuring assets. In 2017, our autoclave curing engineers developed the external laser scanning, • Lighter aerostructures and therefore less fuel and air-ground interface inspection systems to consumption in flight measure corrosion. • Easily recyclable material 76 | CSR REPORT 2017 CSR REPORT 2017 | 77
INNOVATION THROUGH COLLABORATION In 2017, these events included: • Applus+ organised several workshops in Australia INTELLECTUAL PROPERTY • Applus+ organised the "Body Efficiency in 2017. These covered two series of periodic Workshop" (24th March 2017) to define the sessions called “Lunch and Learn”. One workshop Sharing capacities and resources helps us to approaches, actions and roadmap for the focused on Advanced Non-Destructive Testing INTELLECTUAL 2017 2016 2015 increase our knowledge-base and to explore new strategies and new services for assisting solutions, and the other focused on inspections PROPERTY technology solutions for our clients. Continuing this using drones. We designed the workshops for the automotive sector’s original equipment Accumulated work in 2017, Applus+ entered into agreements manufacturers to reduce CO emission levels. inspection engineers from the relevant oil and gas 71(*) 61 57 2 patents granted with 85 external bodies: 42 at the Energy & Industry The event involved 30 high-level experts and we companies. These events contribute to spreading Accumulated patent Division, 28 at the IDIADA Division and 15 at the organised a variety of group sessions. our knowledge and experience and promote the 35 35 32 Laboratories Division. Our collaboration covers a use of advanced inspection solutions to prevent families • Applus+ in Spain organised the 7th Annual range of relationships, either to form consortiums failures that could lead to severe environmental New applications Intercompany Meeting on Integrity of Oil and for collaborative projects or for the eventual transfer damage. filed (for new and 7 6 15 Gas Pipelines on 13th November at our Bellaterra of proprietary technology. existing families) complex (Spain). The event was well attended from different companies in the sector and they (*)13 of these patents were granted in 2017 ACTIVITIES TO shared knowledge and experience related to PROMOTE OUR 2017 2016 2015 cathodic protection and inspection of buried INNOVATION WORK metal structures. This exchange contributed to advancing knowledge to minimise environmental Awards and recognitions Technical events 93 93 78 risks and to optimise preventive maintenance. Technical 50 74 53 Our clients and commercial partners have also • In 2017, the Energy & Industry Division in publications recognised our innovation activity: North Europe was awarded the Commercial Training sessions 87 113 38 • At the Automobile Barcelona - Spain Success Award by a major oil and gas company (previously known as International Motor for our CU24. The CU24, an innovation by Show) in May 2017, the XI Automobile Show Applus+, is an HD camera mounted on a Awards were presented. These prizes reward telescopic crane that can inspect at heights work in various aspects of the automobile up to 24m and down to -2m. The technology sector, and this edition focused on the work replaces people working at dangerous heights, of companies in innovation, technology and while being ten times faster and generating vehicle development for the future. The “Be considerable savings on pipe-racks inspections. Safe” prize was awarded to IDIADA Division to recognise our activities in active and passive safety projects for our clients.
Commercial Success Award for our CU24, North Europe. Use of smart glasses in pilot schemes 78 | CSR REPORT 2017 CSR REPORT 2017 | 79
Sustainable To optimise the design and the implementation of global and local measures, we focus on minimising the direct environmental impacts of our activities, and we collect global indicators of energy, fuel, and water performance consumption.
The direct environmental impact of our company's activities is CONSUMPTION 2017 2016 2015 mainly related to our office activities and fieldwork. Therefore, our Energy Index (GJ/K€) 0.51(1) 0.58 0.77 approach to environmental management is focused on the most Total energy consumption (GJ) 796,144(1)(2) 920,050(2) 1,146,542 significant impacts: energy and water consumption and vehicle Total water consumption (m3) 679,029(2)(3) 625,246(2) N.A. emissions. (1) The energy index and total energy consumption have decreased as a result of the reduction in liquid fuel consumption, closely linked to the volume and type of the projects executed in 2017. ENVIRONMENTAL MANAGEMENT (2) The reported scope covers 98% of the revenue, and in 2016 covered 90% (for energy consumption) and 71% (for water consumption). (3) The increase in consumption comes from testing vehicles on the test tracks.
We deploy our environmental-management be environmentally-friendly. With this initiative, systems at a local level, and these are certified we reinforced the diffusion of our values and and periodically audited in accordance with the corporate policies. GHG EMISSIONS(1) 2017 2016 2015 international ISO 14001 standard. At Applus+, we • As the world celebrated Earth Hour by switching (2) also fulfil our commitment to the environment Scope 1 emissions (tCO ) 41,954 50,733 61,910 off all non-essential lights on 25th March 2017, 2 by running global or local awareness campaigns (3) Applus+ in United Arab Emirates acknowledged Scope 2 emissions (tCO ) 19,155 18,268 14,864 : 2 amongst our employees this initiative by switching off the lights and non- • In 2017, Applus+ in Panama proposed a game essential electric equipment for one hour on 23rd (1) Emissions calculated based on the GHG emission factors provided by the International Energy Agency. called "Integral Police", which consists of March 2017. (2) Scope 1 emissions have decreased as a result of the reduction in liquid fuel consumption as indicated in note (1) of the previous table. (3) creating teams made up of active collaborators Scope 2 emissions have increased. There have been changes in consumption linked to operating variations in the different countries • Applus+ in the USA participates annually on Earth that have generally been compensated; however, new legal entities have been incorporated (up to 98% of the Group, 90% in 2016) that who monitor the negative activities towards the Day by donating money to plant trees through only contribute to the water and electricity items in the 2017 reporting process. environment that the other collaborators may the Arbor Day Foundation. In 2017, we raised the implement. A group of judges called "General equivalent to 13,340 trees. The trees are planted Squadron" reward those activities that strengthen in areas that have been stricken by natural internal environmental programmes and which disasters. allow us to improve our work environment and Currently, the verification and control of these in the EV100 initiative with our main supplier. energy, water and fuel indicators is carried out EV100 is a global initiative bringing together by contrasting the information collected with the forward looking companies committed to information included in the invoices of our suppliers. accelerating the transition to electric vehicles (EVs) and making electric transport the new Here are the active steps we have taken to reduce normal by 2030. The EV100 initiative has been emissions and energy consumption: launched by ºC, an international non-profit founded in 2004 with offices in London, Beijing, • The Applus+ ( ) offices located in Bellaterra Spain New Delhi and New York. The global aim of ºC is are completing a lights renewal project, changing a world of under 2°C of global warming without the current fluorescent lights for new and efficient delay. LED lights. This change will reduce CO2 emissions by approximately 227 tons per year and generate • Applus+ in Galicia (Spain) has developed a cost savings of up to €100,000 every year. The Sustainable Mobility Plan to reduce commuting investment will be amortised in two and a half accidents and increase vehicle sharing. The years. initiative proposes the use of public transport and includes BlablApplus+, our new initiative • We have achieved a progressive reduction of designed for those employees who wish to share emissions by renewing our vehicle fleet to more their vehicles to work. We assisted participants efficient models. with bus schedules, stops and city bus maps for • We are conducting a test of electric vehicles for their commute and distributed the best-practice the Applus+ fleet, and we actively participate methodology to join the BlablApplus+ service. 80 | CSR REPORT 2017 CSR REPORT 2017 | 81
THE ROLE OF OUR PROJECTS Statutory vehicle inspection AND SERVICES Power Propierty management Once the construction is finished, we continue providing our environmental services, as in the case • Applus+ performs over 20 million regulatory • From conventional to renewable energy, Beyond the internal control of our direct of the development of vehicle inspection every year in Europe, North Applus+ supports the energy sector with a wide plans for the sustainable environmental impacts, the Applus+ Group’s key . With a growing demand for greener America, Central America and South America, range of independent inspections, audits and use of water contribution to the environment is our services that buildings, our network of experts helps our clients to supporting safety for road-users and the public. consultancy services. We monitoring power reduce the potential impacts within our clients' maximise the energy efficiency of the buildings. We Independent of manufacturers, our technical networks to ensure their proper operation and operations. advise our clients to obtain the following sustainable development teams design new technology for to prevent environmental impacts. We provide certifications: , and . emissions tests, and we work closely with the our clients with preventative mechanisms to BREEAM LEED GREENLIGHT Additionally, as an (Energy Service Companies testing sector to provide new procedures for minimise the impact of their activities, such as ESCO Aerospace under the Directive 2006/32/CE), we also propose a validating controls for vehicle pollutants. carbon and water footprints, environmental series of measures in order to obtain energy savings risks analysis and environmental impact in our client's facilities, including the replacement and • Collaborating with the world’s leading aircraft assessments. In the improvement stage, we investment in new equipment. developers, our testing solutions innovate also provide adapted services, for example processes in design and manufacture and environmental management systems and good ensure compliance with international standards environmental practice in facilities management and regulations. Our innovation projects work and maintenance. Civil infrastructure on incorporating new composites materials into aircraft manufacturing systems to reduce • Our knowledge spans project management to the weight of aircraft and to improve fuel procurement. Applus+ provides essential services for consumption. The results are leading to better construction safety and environmental protection transport efficiency, reduced CO emissions and 2 to minimise impacts and ensure sustainability on lower environmental impacts. large-scale civil building projects. We offer clients the most advanced tools in topographic services Oil and gas and environmental monitoring to ensure the sustainable integration of the infrastructure within its setting. Through our environmental monitoring • Our clients operate in complex environments with services, our network of experts carry out exhaustive high risks, and their assets and facilities therefore monitoring of the measures included in the works' demand the best-adapted devices and techniques environmental impact statements. We also for preventative maintenance and fuel-leak provide these services during the restoration of the reduction. Through our innovation projects, we surroundings after the work’s completion and during provide our customers with NDT technology to the infrastructure’s subsequent operation. early identify and rectify hazards. These services assist in avoiding possible environmental damage to land and marine life. Additionally, we provide other services focused on the prevention Construction of pollution, such as environmental risks analysis, preliminary assessments of soil contamination, development of carbon footprints and emissions • Our inspection services provide works, waste analysis. and energy audits, focus on the prevention of the Automotive testing and engineering pollution in the construction of new buildings and the refurbishment works. We ensure compliance with environmental and quality standards of construction • Our engineering services are spearheading the materials through physical and chemical innovation and integration of technology into tests. Additionally, we elaborate plans for the new powertrain and safety systems. In 2017, we management and minimisation of waste to prevent have developed a significant number of projects the impact of the construction work. In the case of to research alternative systems for electric the refurbishment work, we also carry out audits vehicles. Through these projects, we promote for the asbestos detection and its subsequent the uptake of hybrid and electric vehicles and disposal. Finally, we advise our clients to improve contribute to alternative fuel use, which will the management and adequacy of machinery reduce the emissions from road transport around depots, thus avoiding the pollution produced by the the world. maintenance of the machinery.
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Mining management systems. Finally, we assist our Electrical and electronic products Others clients to design and implement integrated waste • Mining is an industry driven by the need to management systems by the life-cycle analysis • We help our clients to design equipment or products The Applus+ network of experts helps public optimise recovery without compromising on safety, of their products and, within the framework of the that perform with a lower energy consumption, administrations and companies to establish joint plans environmental sustainability and asset integrity. We Packaging and Packaging Waste Directive (PPWD), which enable them to obtain the energy efficiency for the reduction of waste generated; to make effective are a strategic partner in the mining industry and we prepare the statements of packaging and labelling for their products, and ensure the the use of waste to generate new materials; and to provide testing, process engineering and production packaging waste placed on the market by our compliance with the Directive on the restriction of foster the use of second-hand markets. These plans optimisation services. Among the services we clients. the use of certain hazardous substances in electrical respond to the Circular Economy strategy launched by provide to our clients are the topographic studies, and electronic equipment (RoHS). To promote waste the European Commission in 2016. or the periodic sampling of water and soil to ensure reduction and materials recovery, we also assist our the absence of contamination as a result of the Telecommunications clients to design and implement integrated waste In many cases, we generate benefits for both the operational activities. When the mine is closed, we management systems by the life-cycle analysis of community and the environment through the their products, according with the Directive on waste execution of a single project. For example, we develop offer our clients environmental monitoring services • Our network of experts help our clients to adapt to electrical and electronic equipment (WEEE). an agroindustry project with the largest petroleum to ensure the application of restoration plans, the next innovation challenges within the sector, company in Colombia, as part of its alternative helping our clients to restore land that has been such as cyber-security and network access to 5G energy development plan to produce process and mined to a natural or economically usable state. or Internet of Things (loT) technologies. We support commercialise alcohol fuel, based on sugarcane and its our customers to integrate telecommunication Government and derivatives. installations into their surroundings; through public administrations landscaping integration studies; the development of environmental impact assessments; and the • Applus+ works closely with governments and public application of good environmental practices administrations through a network of experts to help in the maintenance and management of these design legal norms for the environmental regulation installations. of all types of activities. We guide sectors or other social agents to apply these regulations through the development of specific guides, and, as an authorised agency of several public administrations, we evaluate and ensure compliance with the current technical, industrial and environmental legislation. Through our services, we also help governments and Applus+ conducts independent supervision for the public administrations improve the environmental construction of the ethanol fuel-production plant management of their public services and facilities, called “El Alcaraván”, and ensures the inclusion of the providing expertise on the strategic environmental community through the provision of local products assessments (SEA-Directive 2001/42/EC), design and services. The project generates a source of direct of specific environmental indicators, sampling of employment and indirect income in the region, making environmental parameters, implementation of the production of sugarcane both profitable and environmental management systems, and through sustainable. the identification of new energy-efficiency solutions. Industrial manufacturing
• We assist industrial manufacturing companies to navigate the dynamics of change and to deploy Awards and recognitions cutting-edge solutions. We support manufacturers to comply with industrial and environmental legislation, both nationally and internationally. Our clients and commercial partners have • Applus+ has received the recognition of In addition, our technicians advise our clients how also recognised our commitment to the the Galician Programme of Sustainable to minimise the environmental impact of their environment: Municipalities 2000-2020. The award processes. Our services include: environmental • The Syndicate of Industrialists of Panama recognised our commitment to the risks analysis, studies for the remediation of (SIP) awarded Applus+ in Panama for environment and to Galicia (Spain). The contaminated soil and noise studies. Additionally, the implementing environmental best award also praised our valuable contribution we delivery sampling waste water services and practices. Applus+ has incorporated the and active participation in implementing this emissions analysis; we provide energy efficiency environmental dimension into the projects, initiative throughout Galicia over the past 15 solutions (ESCO); and we implement environmental from design to service provision. years. 08 Annexes 86 | CSR REPORT 2017 CSR REPORT 2017 | 87
Annex I: Principles underlying this report
PRINCIPLES FOR DEFINING • The interests and expectations of stakeholders PRINCIPLES FOR DEFINING Comparability REPORT CONTENT specifically invested in the organisation, such as REPORT QUALITY employees and shareholders. Broader economic, • The report and its information can be compared social, and/or environmental interests and topics on a year-to-year basis. The reporting of the raised by stakeholders such as suppliers and civil organisation’s performance can be compared with Stakeholder inclusiveness society. The main topics and future challenges for Accuracy appropriate benchmarks; a sector, as identified by peers and competitors; The report’s content draws from the outcomes of • The report indicates the data that have been • Any significant variation between reporting periods our stakeholder-engagement processes, which • Laws, regulations, international agreements, or measured. The measurements for data, and bases in the list of material topics, topic boundaries, are undertaken specifically for the report (see voluntary agreements of strategic significance to for calculations, are adequately described, and length of reporting period or information covered in 06. Definition of the report's contents section the organisation and its stakeholders; can be replicated with similar results. The margin the report can be identified and explained; [Materiality Analysis]). The outcomes inform of error for quantitative data is not sufficient to decisions taken for the report and are consistent • Key organisational values, policies, strategies, substantially influence the ability of stakeholders • When they are available, the report utilises the with the material topics included in the report (see operational management systems, goals and to reach appropriate and informed conclusions; generally accepted protocols for compiling, 06. Definition of the report's contents section and targets; measuring and presenting information. • The report indicates which data have been 07. Our CSR commitment section [Key topics and • The core competencies of the organisation and estimated, and the underlying assumptions and concerns] sections). the manner in which they can contribute to techniques used for the estimation, or where that sustainable development; information can be found; Reliability Sustainability context • Consequences for the organisation related to its • The qualitative statements in the report are • The organisation can identify the original sources impacts on the economy, the environment and/or Applus+ presents its performance with reference consistent with other reported information and of the information in the report; society (for example, risks to our business model other available evidence. to broader sustainable development conditions or reputation); • The organisation can provide reliable evidence to and goals, as reflected in recognised sectorial, support assumptions or complex calculations; local, regional or global instruments (see 03. CSR • Material topics are appropriately prioritised in this Balance • Representation is available from the original data Approach section [Our CSR Framework]). report. • The report covers both favourable and or information owners, attesting to its accuracy unfavourable results and topics. The information within acceptable margins of error. Materiality Completeness in the report is presented in a format that allows In defining material topics, Applus+ considers the • Comprehensiveness mainly covers the following users to see positive and negative trends in Timeliness following factors (see 06. Definition of the report's dimensions: performance on a year-to-year basis; • Information in the report has been disclosed while contents section [Materiality Analysis]): • List of material topics covered in the report • The emphasis on the various topics in the report reflects their relative priority. it is recent and relative to the reporting period; • Reasonably estimable economic, environmental, • Coverage of the theme and time and/or social impacts, identified by expert bodies • The information in the report clearly indicates with recognised credentials; the time period to which it relates, when it will Clarity be updated, and when the latest updates were • The report contains the level of information made, and separately identifies any restatements required by stakeholders, but avoids excessive of previous disclosures along with the reasons for and unnecessary detail. Stakeholders can find restatement. the specific information they want without unreasonable effort through tables of contents, maps, links or other aids; • The report avoids technical terms, acronyms, jargon, or other content likely to be unfamiliar to stakeholders, and includes explanations (where necessary) in the relevant section; • The information in the report is available to stakeholders. 88 | CSR REPORT 2017 CSR REPORT 2017 | 89
Annex II: GRI Table
Corporate governance and business Report whether and how the precautionary approach or principle is SPECIFIC STANDARD DISCLOSURE G4-14 ethics addressed by the organisation.
STRATEGY AND ANALYSIS Market focus List of the externally developed economic, environmental and social G4-15 charters, principles, or other initiatives to which the organisation GRI CODE SECTION GRI INDICATOR Dialogue with stakeholders subscribes or which it endorses. Statement from the most senior decision-maker of the List of memberships of associations (such as industry associations) G4-1 Letter from the Chairman and CEO organisation. G4-16 Dialogue with stakeholders and national or international advocacy organisations in which the organisation participates somehow. ORGANISATION PROFILE IDENTIFIED MATERIAL ASPECTS AND BOUNDARIES GRI CODE SECTION GRI INDICATOR GRI CODE SECTION GRI INDICATOR G4-3 Applus+ at a glance Name of the organisation. List of all entities included in the organisation's consolidated G4-17 Reference to Annual Report financial statements or equivalent documents. G4-4 Applus+ at a glance Primary bands, products and services. Explain the process for defining the report content and the Aspect G4-18 Definition of the report's content Applus Services, S.A. Boundaries. Parque Empresarial Las Mercedes List of all the material Aspects identified in the process for defining G4-5 Location of the organisation's headquarters. G4-19 Definition of the report's content Campezo, 1, Edif. 3, 4ª planta reported content. 28022 Madrid Report the Aspect Boundary within the organisation for each G4-20 Definition of the report's content Number of countries where the organisation operates and material Aspect. names of countries where either the organisation has significant Report the Aspect Boundary within the organisation for each G4-6 Reference to Annual Report G4-21 Definition of the report's content operations or that are specifically relevant to the sustainability material Aspect. topics covered in the report. Report the effect of any restatements of information provided in G4-22 Without restatements previous reports and the reasons for such restatements. G4-7 Applus Services S.A. Nature of ownership and legal form of the organisation. Report significant changes from previous reporting periods in the G4-23 Without significant changes Applus+ at a glance Markets served by the organisation (including geographic Scope and Aspect Boundaries. G4-8 Identification and evaluation of breakdown, sectors served and types of customers and STAKEHOLDER ENGAGEMENT impacts (Our indirect impacts) beneficiaries). GRI CODE SECTION GRI INDICATOR Scale of the organisation (number of employees, number of G4-9 Reference to Financial Statements operations, net sales, capitalisation broken down in terms of debt G4-24 Materiality analysis List of stakeholder groups engaged by the organisation. and equity and quantity of products or services provided). Number of employees by employment contract and gender; Report the basis for identification and selection of stakeholders G4-25 Materiality analysis number of permanent employees by employment type and gender; with whom to engage. G4-10 Our people workforce by employees and supervised workers and by gender; Organisation's approach to stakeholder engagement, e.g. frequency G4-26 Dialogue with stakeholders workforce by region and gender. of engagement by type and by stakeholder group. Percentage of total employees covered by collective bargaining Key topics and concerns raised through stakeholder engagement G4-11 Human Resources model and KPIs agreements. G4-27 Key topics and concerns and description of how the organisation has responded to those key topics and concerns. G4-12 Reference to Annual Report Organisation's supply chain. REPORT PROFILE Report any significant changes during the reporting period regarding the organisation's size, structure, ownership, or its supply GRI CODE SECTION GRI INDICATOR chain, including changes in the location of, or changes in, operations including facility openings, closings and expansions; changes in the G4-28 About this report Reporting period (such as fiscal or calendar year). G4-13 Reference to Annual Report share capital structure and other capital formation, maintenance and alteration operations (for private sectors organisations); G4-29 May 2017 Date of most recent previous report (if any). changes in the location of suppliers, the structure of the supply chain, or in relationships with suppliers, including selection and G4-30 About this report Reporting cycle (such as annual, biennial, etc.) termination. 90 | CSR REPORT 2017 CSR REPORT 2017 | 91
Provide the contact point for questions regarding the report G4-31 [email protected] ENVIRONMENTAL CATEGORY or its contents.
Report the “in accordance” option the organisation has ENERGY G4-32 About this report chosen the GRI Content index for the chosen option, the reference to the External Assurance Report (if any). GRI CODE SECTION GRI INDICATOR This is the 3rd CSR Report and has Organisation's policy and current practice with regard to G4-33 not been submitted for external G4-EN3 Sustainable performance Energy consumption within the organisation. seeking external assurance for the report. assurance G4-EN5 Sustainable performance Energy intensity. GOVERNANCE
GRI CODE SECTION GRI INDICATOR EMISSIONS
Governance structure of the organisation, including GRI CODE SECTION GRI INDICATOR Reference to Corporate committees of the highest governance body. Identify any G4-34 Governance Report committees responsible for decision-making on economic, G4-EN15 Sustainable performance Direct greenhouse gas (GHG) emissions (Scope 1). environmental and social impacts.
ETHICS AND INTEGRITY G4-EN16 Sustainable performance Energy indirect greenhouse gas (GHG) emissions (Scope 2).
GRI CODE SECTION GRI INDICATOR Corporate governance and business ethics Describe the organisation's values, principles, standards and G4-56 norms of behaviour such as codes of conduct and codes of Our people ethics. Business model
ECONOMIC CATEGORY
ECONOMIC PERFORMANCE
GRI CODE SECTION GRI INDICATOR
G4-EC1 Reference to Annual Report Direct economic value generated and distributed.
SOCIAL CATEGORY
SUB CATEGORY LABOUR PRACTICES AND DECENT WORK
OCCUPATIONAL HEALTH AND SAFETY
GRI CODE SECTION GRI INDICATOR Type of injury and rates of injury, occupational diseases, lost G4-LA6 Safe people days and absenteeism and total number of work related fatalities, by region and by gender.
SUB CATEGORY PRODUCT RESPONSIBILITY
COMPLIANCE
GRI CODE SECTION GRI INDICATOR Monetary value of significant fines for non-compliance with G4-PR9 0 laws and regulations concerning the provision and use of products and services. www.applus.com