2016

CNH Industrial N.V. 25 St. James’s Street, London, SW1A 1HA, UK. WELCOME/INTRODUCTION Who we are

t is 175 years since Jerome Increase Case set up We also tell the story of how our people are on the shore of the Root River in Racine, encouraged to take sustainability home, and how IWisconsin, USA, and invented an innovative we harness their energy and commitment to make threshing machine that transformed the lives of our company better farmers. Today, the principles of the founders and more sustainable behind all of CNH Industrial’s brands live on – to places in which to From autonomous tractors make the most of cutting-edge technology and work. We look at the provide our customers with products that enable systems in place that that are raising the bar in them to work more efficiently and profitably. encourage innovation In a world of finite resources, however, that is and are driving R&D farming to automated systems not enough. Across the company, we are also across the group; from committed to achieving our goals sustainably. autonomous tractors in truck platooning, we are Climate change, food scarcity and security, and the that are raising the bar rapid advances in technology that are creating a in farming productivity leading the way in sustainable connected, digital world are megatrends that have a to automated systems profound effect on everything we do, from the in truck platooning, industrial development design of our products to the way we conduct we are leading the way ourselves at our plants around the world. in sustainable industrial We are increasingly focusing on integrating these development. There is even a nostalgic look back at megatrends into our sustainability principles and, in our history of pioneering change in our industries. turn, into our commitment and performance. Finally, we examine what it all means for CNH By combining telematics, data analytics, new Industrial in the years to come and how we plan to software programs, sensing technology and autono- stay ahead of the megatrends. We consider our mous piloting technology, we can create pioneering sustainability actions a core competency of CNH products – innovative blends of hardware and soft- Industrial and we are proud of the examples that ware – that deliver new levels of performance. we are able to share with you in this publication. To see the full 2016 Sustainability Report and find he practical examples in this report tell in a out more about all of the projects covered here, powerful way how all these trends are coming visit www.cnhindustrial.com Ttogether in the world of CNH Industrial. From field to plate, we like to say, sustainability is in every- Richard Tobin thing we do. We look at the benefits of World Class Manufacturing, an integrated management model focused on maximizing efficiency in our production facilities. We take in the relentless drive to reduce emissions and having all our products and facilities contributing to safeguarding the environment. You will read, too, about the many projects that we undertake around the world. With 64 manufacturing facilities and a commercial presence in 180 countries, we are fully aware of the potential impact of our operations on local communities. And we believe that fostering a positive symbiotic relationship with these communities is a key material aspect of our success. From sponsoring cultural events in Sete Lagoas, Brazil, and water management schemes in Tunisia to fighting homelessness in the USA and collaborating with the Slow Food association in Europe, we strive to make a positive impact in the communities where we operate.

2 3 OVERVIEW

In 2016, we continued to make progress on our journey towards being a successful and responsible long-term company

KEY INDICATORS OF OUR PERFORMANCE +13% 1,024 +14% World Class stakeholders hours of Manufacturing engaged employee supplier plants training 56%

proportion of electricity +10% -2% from renewable sources active accident patents owned frequency rate

$6.7m -5,483 -5% invested in improving tons of CO2 in water  energy performance logistics processes withdrawal per hour of World Class Manufacturing production 90 91% +6% collaborative amount natural gas research of waste engines projects recovered invoiced 14 Silver Award plants 22 Bronze Award plants 4,700 100% remanufactured new suppliers spare parts and evaluated as per -10% components available sustainability criteria 12.7 $112m hazardous waste generated suggestions per employee collected under saved through projects in the per hour of production the World Class Manufacturing program World Class Manufacturing program Data refers to 2016; variations are compared with the previous year.

4 5 SUSTAINABILITY IN ACTION

FROM FIELD TO PLATE: SUSTAINABILITY IS IN EVERYTHING WE DO +70% rise in value that precision farming, including autonomous driving, could contribute to farm yields by 2050, Today's farmers must do more with less as the world farming solutions that allow needs and then help others across the whole group according to estimates from population continues to grow. Our 49 R&D centers farmers to use data to to use what has been learnt. Goldman Sachs make better decisions. We work also with universities worldwide to find are committed to making machines more efficient and Our tractors and innovative sustainable solutions. For example, a reducing the impact their use has on the environment trucks can run on project started in 2009 with the biofuels made from State University of New York NH Industrial is more than a manufacturing CNH Industrial, the stover har- looked at using the quick-growing The US Department group. Yes, we make vehicles and develop we take it that vested from the willow tree to produce biofuels; C‌technologies, but the sum of what we do much further; very fields in which this led to a harvester that can of Agriculture estimates involves us in every stage of getting food from the sustainability runs they work – and work with willow to produce the field to your plate. From the machines that prepare through our every our machines are necessary biomass. that using precision the fields and plant and harvest the crops, to the process, through all highly fuel efficient, transport that takes them to processing plants, to our machinery, our reducing pollution s more of our machines farming practices could the last-mile logistics of delivering food to super- technology and all our and running costs. run on biofuels, more of markets and even to your front door. people – from morning The US Department A‌our R&D projects are save 16m gallons of fuel On the way, the machines we make are involved to night and from field to of Agriculture estimates delving deeper into that area and in the construction of the roads, bridges and ports plate. We have adopted that using precision also into recyclable materials. Our a year in the USA alone through which that cargo passes. We help build World Class Manufacturing farming practices could 49 research and development your offices, schools and homes – and the buses on (WCM), an efficiency program save 16m gallons of fuel a year centers worldwide are committed which you travel. Our excavators, tractors, trucks, that encompasses our whole group, in the USA alone. to making machines more efficient, reducing vehicle engines and technology alongside a Sustainability Plan, both of And we are at the cutting edge in impact on the soil, cutting pollution – air emissions are integral to feeding which make us strive continually to become autonomous vehicle design, unveiling the and noise – improving safety and developing new We are at the cutting the planet and building more sustainable in everything we do. Case IH and New Holland Agriculture Autono- technology to achieve these. our sustainable future. mous Concept tractors. Used in conjunction with For example, our new seed and fertilizer systems edge in autonomous and Because of the telematics and precision farming techniques, such were confirmed in 2015 by the University of multiple roles that large FARMING OF THE FUTURE autonomous vehicles could contribute to Nebraska as best in class, delivering the most precision vehicle design industrial companies play, a 70 percent rise in farm yields by 2050, power and best fuel and fluid efficiency. and always conscious of Today’s farmers are required to do more with less; according to estimates from investment bank Projects such as these have a real impact on the world’s finitebetter management of fertilizer and pesticides, Goldman Sachs. the ground, helping to optimize the use of local, resources, we must all foster and promote smart water systems, micromanagement of yield in For those involved in the autonomous vehicle natural resources to reduce carbon emissions. sustainability – and help bring communities, farmers, every corner of every field. program, it’s about realizing the future today. The Similar projects in Brazil and the USA work with industries and decision-makers together. But at At CNH Industrial, we are developing precision priority is to develop what the customer wants and sugarcane, wheat and corn, and the output is not →

6 7 SUSTAINABILITY IN ACTION

ooking ahead, we’re excited about the impact of new technologies such as 3D printing and WORLD CLASS Lrobots. We believe that 3D printing will have an enormous impact on low-volume, highly complex MANUFACTURING: manufacturing. Components that are today made far from where they are assembled will soon be TOWARDS THE ZERO able to be made locally and robots will make just used in transport. These biofuels are used to reuse water reduced consumption by more than manufacturing safer – lifting heavy loads, for example. IMPACT PLANT power the refineries that process the crops, heat 13,000 cubic meters. In fact, some 91 percent of It’s not just our own sustainability. We also en- the homes of those who work there and fuel the our waste is now recovered and reused, with just courage our suppliers to adopt our best practices kitchens in which we cook. 3.4 percent sent to landfill. and today have 170 of them in our WCM program. hen it comes to sustainability, we should be more than the sum of our parts; the more early 56 percent of the electricity CNH Wconnected our efforts, the greater the impact SUSTAINABLE Industrial consumes comes from renew- ORGANIZED TO MAINTAIN will be. This is why 10 years ago CNH Industrial adopted the MANUFACTURING Nable sources. In 2016, over $6.7m was OUR FOCUS principles of World Class Manufacturing (WCM), an invested in improving energy performance, leading integrated management model focused on It is crucial, of course, that the plants to a reduction in energy consumption of over Programs such as these help maximizing efficiency. in which we make our tractors and 164,000GJ and a corresponding reduction in CO2 CNH Industrial to attract and We take seriously our responsibility 56% OF THE ELECTRICITY harvesters, our transport trucks and emissions of 10,000 tons. retain the best staff, foster as a major global manufacturer to CNH INDUSTRIAL urban buses, our construction Other projects are small scale, but no less a healthy workplace and FPT Industrial's Sete Lagoas engine plant reduce our impact on the CONSUMES IS FROM equipment and powertrains and important. They might change the way materials burnish our reputation. achieved a Silver Award in World Class environment and to make the Manufacturing (2016) RENEWABLE components, are also sustainable and are introduced to a production line to save time or For the second year most of all resources we use. SOURCES as efficient as possible. Some 52 of our energy, for example, or perhaps alter a process to in succession, CNH We strive to incorporate as plants were part of our WCM program reduce damage. Industrial has been much of our business as in 2016. We also look at innovative technologies that named among the possible into the WCM WCM projects are having a significant impact. promise to help make the workplace safer and 150 best com- program; of our 64 plants, In Spain we are recovering heat energy from the more sustainable. In 2015, for example, we were panies to work for 52 are in the program, 14 painting process at the Valladolid IVECO plant to involved in tests for Google Glass virtual reality in Brazil by Você of which have received chill water for the cooling circuit of the plant’s technology in Brazil. The trial successfully cut human SA magazine. Silver level designation assembly line, cutting CO2 emissions by error, and improved productivity and execution in In 2016, we with a further 22 currently 230 tons a year. Similarly, in Brazil one project to our Sete Lagoas vehicle plant. achieved significant at Bronze level. milestones. For the WCM is so successful sixth consecutive because it throws down year, the Dow Jones constant challenges to every Sustainability World and corner of the group. It requires Europe Indices (DJSI) continuous effort and has Our IVECO Eurocargo city named us an Industry Leader enjoyed huge support from CNH and we were included in the Industrial personnel. truck was named Truck of CDP A List, the highest recognition Site audits are conducted twice a year by for action against climate change. external parties and help to promulgate the the Year 2016 and its These accolades are no accident. Sustainability sharing of industry best practice. Processes are challenged Planning and Reporting, based in Turin, Italy, is re- and new targets set. environmental credentials sponsible for monitoring over 200 key performance indicators and implementing our stringent Sustain- ome 10,000 processes have were a key factor ability Plan, which covers everything from sourcing been documented as part $112 million: to production, resource consumption to delivery, Sof the program, covering recruitment to training and community projects. everything from energy use, value of savings The unit reports to the Chief Sustainability Officer, environmental impact and waste who is also the Chief Financial Officer. It helps keep to health and safety. But not generated us focused on sustainability – and produces results. every process or project comes from the top or is the result of an from WCM audit. Employees are encouraged FROM THE COUNTRYSIDE to make suggestions and last year TO THE CITIES more than 465,000 were put forward (an increase of 10 percent on 2015) – that works out to an average of 12.7 Once food is harvested and processed, it needs to suggestions per employee. get to our urban centers. Here our attention is also The result was an amazing 14,443 projects. While some focused on efficiency, carbon footprint and safety. might have been small – encouraging operators to switch off Our IVECO Eurocargo city truck was named → engines when vehicles aren’t in use, for example – others →

8 9 REDUCING ENVIRONMENTAL IMPACT

OUR SUSTAINABLE COMPANY

Truck of the Year 2016 and its environmental credentials, efficiency, maneuverability, comfort, low cost of ownership and safety all played a key role. We also recently took part in the world’s first REDUCE, cross-border autonomous truck platoon demon- stration, in which a two-truck IVECO convoy traveling 10 meters apart used connectivity REUSE technology and automated driving support systems to go from Brussels in Belgium to Rotterdam in the Netherlands. The system allows the lead truck to set the pace, with the following truck copying its AND behavior. It is designed to cut drag, improve safety and fuel efficiency, and ensure optimal road use The Case IH St Valentin plant awarded Silver status in World Class Manufacturing (WCM) thereby cutting congestion. Research suggests that it could cut CO2 emissions by 10 percent, with fuel RESTORE savings of between 5 and 10 percent. were more substantial and the total benefits amounted to a Our logistics too are increasingly efficient, emitting Sustainability best practice starts at home, which is why significant $112m in savings. 5,483 fewer tons of CO2 a year. For example, the CNH Industrial is taking relentless action to safeguard the When we first adopted WCM, our focus was reactive – Commercial Vehicles segment continued to optimize changing the way we do things for the better. But as we achieved packaging in Europe for shipments to Latin America environment at its numerous plants around the world. our goals, the focus has shifted and Australia. As a result, the use of wood crates sent Remanufacturing is just one way to save energy, conserve so that today we integrate to Australia was cut by approximately 24 percent, natural resources and lower the cost of ownership It’s relentless, sustainable practices in any new with a reduction in wood shipped of some 14 tons. processes from the outset. granular. It’s A decade since the program uch of this technology can be applied to a started, and there is still lots of broad cross-section of vehicles, and pervasive and rigor and logic in pursuing our Malready we are producing eco-buses that NH Industrial is a truly global company. reported that the biomethane-powered vehicle company’s journey. Last year six run on compressed natural gas as well as bio- And we are an acknowledged leader in performed and felt just like a “normal” tractor, and it’s connected new plants earned the Bronze methane alongside those with hybrid and electric C‌sustainability. Fundamental to that position produced less engine noise to boot. WCM award and four the Silver. powertrains, helping to improve air quality in our is how we safeguard the environment within and “We’re focusing on medium-sized tractors, the cities and towns. around our numerous plants. ones that give farmers the most flexibility for ut WCM doesn’t stop at our door. We encourage Our construction equipment, used to help build With each passing year we strive to be more different applications – plowing, front loader work, suppliers to embrace the program, extending its impact those towns and cities, is also equipped with cutting- productive with the use of fewer natural resources transport,” explains Stefano Fiorati, lead engineer B‌like a ripple in a pool. Some 170 of our suppliers have edge technology such as telematics to ensure and to develop ever more eco-friendly products. on the methane tractor project. signed up to WCM, encouraging their own contacts to minimize precision work and maximum efficiency and safety, And the numbers unfailingly show we are making The environmental impact will be startling: their environmental impact and become more sustainable too. keeping the carbon footprint and environmental progress: in 2016 the amount of waste generated biomethane produces almost none of the → The whole program is perfectly summed up by Tom impact to a minimum. per hour of production dropped 4 percent. In Verbaeten, CNH Industrial’s Chief Manufacturing Officer: “It’s addition, some 56 percent of our electricity now relentless, granular. It’s pervasive and it’s connected and that is comes from renewable sources. We are working The New Holland how we can and always will make sure we improve. The ultimate BEYOND BUSINESS continuously to improve these figures. tractor offers farmers the goal, after all, is to have a zero-impact plant.” opportunity to All this has a direct effect on the communities in use the waste Spain: the IVECO plant in Madrid has which we operate and where we source our THE TRACTOR THAT RUNS from cows and other animals on recently been presented with a prestigious materials. While we maintain a strong dialogue with ON METHANE Kaizen Award. These recognize success in their farms – achieving lean operation – one of the key all those communities, these relationships are further refined to goals of CNH Industrial's World Class strengthened by our commitment to promote The work being done by the innovation unit based produce biomethane Manufacturing program social and economic development worldwide. in Modena, Italy, offers a striking example of how In 2016, we invested $4.5m in local community CNH Industrial’s advanced engineering can help projects ranging from charitable donations to customers work more sustainably without volunteer work, both of which are key aspects in sacrificing performance. The methane-powered North America. Projects include those assisting prototype New Holland tractor they have been returning veterans in finding skilled jobs in developing since 2012 offers farmers the construction and manufacturing to helping street opportunity to use the waste from cows and other children in Brazil. animals on their farms. Methane is produced from From field to plate, from the office to your home, this 'digestion' process and then refined into pure we strive to make the journey as efficient as possible biomethane – it is this gas which is eventually used to make the world’s resources go as far as possible. as fuel to power their tractors. Prototypes have That informs everything we do, because that is our been tested on working farms in Germany, the duty and that is our way. ■ Netherlands, the UK, Italy and Spain, and farmers

10 11 REDUCING ENVIRONMENTAL IMPACT

compatible. They are used for commercial vehicles and buses worldwide, and the brand has supplied CNG-powered engines to Beijing Public Transport Holdings for more than 10 years. In Brazil, CNH Industrial is the country’s number one supplier of sugarcane harvesters through its Case IH brand. There FPT Industrial has been developing bi-fuel engines that run on diesel blended with up to 40 percent ethanol, as well as engines that run on 100 percent ethanol. The ethanol can be produced from the sugarcane leaves that are discarded during harvesting, enabling producers to gain an energy supply from a waste product.

CUTTING LAST-MILE EMISSIONS IN LOGISTICS

How to reduce emissions in cities and make the “last mile” of urban deliveries more sustainable is a

Up to subject CNH Industrial is tackling head-on. In line particulates that are produced by diesel engines with European Commission recommendations, we invested in the remanufacturing industry, which An engine before remanufacturing and, when running on biomethane, a tractor’s make not only natural gas-powered engines, but returns used or worn items to like-new condition. (right) and once the remanufacturing process has been completed (left) 25% carbon footprint is virtually zero. also diesel-electric hybrid technology, and pure lower fuel bills for The fact that the farms are producing their own electric vehicles for cities. t CNH Industrial Reman plants around the natural gas compared biomethane on site cuts out the emissions produced In 2015, IVECO introduced the New Daily world, such as those in Garchizy, France, to diesel all along the journey of getting oil from a well, Electric – 100 percent electric and ideal for urban A‌and Springfield, Missouri, USA, worn parts creating the fuel and bringing it to the vehicle – in deliveries and public transport. are saved from being sent to landfill and brought those terms, from well to wheel, it makes the Hybrid buses are another significant strand of back to life using advanced technology in state-of- biomethane tractor’s CO2 impact the same as an our sustainable transport commitment. By 2015, the-art facilities. equivalent electric vehicle. more than 50 percent of IVECO Bus city buses In Springfield, engines, drivelines, fuel injection produced in Europe were either powered by natural products, hydraulics, and rotating electrical and Remanufacturing gas or had an electric hybrid configuration, resulting electronic components are taken apart, cleaned and brings substantial A RANGE OF ECO-FRIENDLY in significant environmental benefits. verified. The plant in Garchizy is focused on engines savings because FUEL OPTIONS and transmission, fuel injection and turbo products. there is no mining for raw materials, In both facilities, worn components are replaced smelting or This biomethane tractor is just the latest innovation. REMANUFACTURING – SAVING with new and salvageable components are re- casting required CNH Industrial has been investing in natural gas as ENERGY, CONSERVING NATURAL machined. Finally, the components are assembled a fuel for years; IVECO has been researching its use RESOURCES AND LOWERING THE and tested again for original performance levels. since the 1980s and our first ever methane- COST OF OWNERSHIP Despite all this work, remanufactured engines, powered Daily van prototype was developed in for example, use 80 percent less energy than 1995. The new Stralis NP (Natural Power) truck As well as using advanced engineering to develop building new, because there is no mining for raw launched by IVECO in 2016 features a Cursor 9 more eco-friendly products, CNH Industrial has materials, no smelting or casting. And because the engine running on both compressed natural gas (CNG) To remanufacture an or liquefied natural gas (LNG), delivering significant benefits in The CNH Industrial Reman plant engine takes 80 percent efficiency, emissions and also in Springfield, Missouri maintenance. less energy than making The savings in terms of total cost of ownership associated a new one with natural gas vehicles can be as much as 10 percent compared with a diesel-powered one. Natural gas is also markedly less expensive than diesel and can reduce fuel costs by up to 25 percent. FPT Industrial makes the widest range of natural gas engines on the market, with seven CNG engine models which are also 100 percent biomethane- →

12 13 REDUCING ENVIRONMENTAL IMPACT

of responsibility in using energy both wisely and MAKING OUR PLANTS EVEN water consumption index by 48 percent compared appropriately. MORE SUSTAINABLE to 2014 (the baseline year) and 16 percent The efforts made at Rorthais over the past few compared to 2015. years have led to a reduction in energy consumption Around the world, projects to reduce energy and In Annonay, France, at the same production levels, cutting CO2 water consumption and to manage waste better adding reusable plastic emissions by 205 tons per year. are benefiting our business and the areas in which it liners to the paint-mixing Day by day, we see operates. At our plant in Lecce, southern Italy, drums reduced the installing energy-efficient LED lights in and around amount of hazardous incremental improvements GETTING ALL OF OUR the factory’s welding area resulted in a reduction of waste by 45 tons. In PEOPLE INVOLVED CO2 emissions by 258 tons a year. partnership with our in myriad ways Energy use was brought down at our plant in Belo supplier, new packaging Actively involving staff and the local community in Horizonte, Brazil, by an assessment of how high for air-conditioning parts environmental improvement processes at our temperatures were used in painting pre-treatment reduced the amount of waste from wood packaging plants across the world creates a firm foundation stages. This showed three high-temperature stages by 63 tons. for this work. could be combined into one by using different We also look for ways to help our staff reduce In Italy, a number of environmental improvement chemicals. For a total investment of a little over their environmental impact when they are not at initiatives implemented at our plant in Jesi led to a $2,500, in 2016 alone the factory recorded 2,662GJ work; our plant in Madrid installed a charging reduction in paper consumption of about 800kg, less energy consumption, and a reduction in CO2 station where staff can charge their electric vehicles. the equivalent of 20 trees. In collaboration with emissions of 150 tons. The station has already cut CO2 emissions by 3.45 the nearby regional nature reserve, Oasi WWF tons per year and more charging points are due to Ripa Bianca, 20 new trees were planted and, in ore efficient HVLS (high-volume, low- be added to meet demand. the coming years, this first copse will be expanded as speed) fans allowed our plant in Grand the plant continues to cut paper consumption. MIsland, USA, to cut energy use and emissions. Following this partnership, employees and their They replaced two hot-air generators previously SO WHAT’S NEXT? families had the chance to go on guided tours of the used to keep the working area at an appropriate The Reman site is raw material is already there, remanufactured parts "oasis" itself. temperature. The total investment of $28,000 led to Our efforts to minimize fuel consumption and the leading the way towards cost less – something that is most appreciated by Our plant in Piracicaba, Brazil, took inspiration 2,105GJ less natural gas consumption and a reduction emission of CO2 and other pollutants, and to a circular economy our customers. from young people, using environmental slogans in CO2 emissions of 100 tons per year. maximize efficiency in our use of resources, are 258 TONS CNH Industrial understands the importance of created by employees’ children on posters Day by day, we see incremental improvements pivotal to our commitment to sustainability. We will the reduction in CO2 emissions by having this as a solution for customers. The latter throughout the plant, which featured a photo of the in myriad ways. Plants at Curitiba, Brazil, and Plock continue to achieve our goals by developing installing energy-efficient LED lights in and around the factory’s welding area are looking not just at buying a machine, but at all employee and their offspring. Over 400 members in Poland both began reusing water from the innovative products that respect the environment at our plant in Lecce, southern Italy the elements of maintaining it; the cost of owner- of staff also volunteered to clean up waste from the painting pre-treatment process. Doing so enabled while meeting customers’ needs for efficient, high- ship over many years. If there are parts out there city's streets and the riverbank. the Plock plant to reduce its water consumption by performance vehicles and through continual that are just as good as new and just as reliable, about 45,000 cubic meters and improved its improvements in our own plants. ■ that’s something on which they can depend. Reman in CNH Industrial can trace its roots back to 1989 and the plant in Garchizy. The North American site is also advising CNH Industrial brands in countries including Russia and Australia on establishing remanufacturing in those places, as well as on the supply of remanufactured parts. The circular economy is growing worldwide and we are leading the way.

REDUCING OUR FOOTPRINT

The second pillar of our environmental commitment is 800KG continually taking steps to lessen our own footprint – the reduction in paper protecting the ecosystems around our facilities and consumption at our Jesi plant in improving our own processes and use of resources. Italy – the equivalent of 20 trees A standout example is our plant in Rorthais, France, which continues to work towards becoming a Usine Verte – or Green Plant – by reducing energy consumption and the greenhouse gases produced as a result. There have been practical changes – transitioning to using LED lighting and reducing gas In Brazil, sugarcane harvesters supplied under the Case IH brand consumption during idle periods – as well as a run on ethanol produced from cultural shift; appealing to plant employees’ sense discarded leaves

14 15 WORKING WITH LOCAL COMMUNITIES

Working with the community

We strive to be a force for good in every country where BENEFITS of we have a presence – helping Wherever we operate we seek children and the disadvantaged BIODIVERSITY to make a positive contribution ith a commercial presence in some 180 countries, CNH We are committed to protecting WIndustrial and its brands are and enhancing the variety of embedded in lots of different communities. plants and wildlife in the areas Some of our employees work and live in surrounding our sites, and since affluent, developed nations, while others are 2010 have worked with the CNH Industrial in parts of the world where access to basic healthcare and education scientific community to monitor has a highly- cannot be taken for granted. developed and measure biodiversity in areas which are At the engine production facility in Foggia, Italy, an tradition of Wherever we operate, we seek to make a positive contribution to protected or of particular environmental interest. initiative was trialed in 2014 to add more native community the local community and we support projects and activities that plants to the green areas of the site. Following the involvement in encourage sustainable development, promote stronger communities Brazil. Many NH Industrial has made an in-depth study biodiversity study, the list of native plants was projects focus on and improve the lives of young people, especially through education. of the ecosystems around seven plants extended, drawing on recent work by the Puglia young people Whether it’s by means of financial support, donations of equipment C‌worldwide located within, bordering or region, the National Institute of Agricultural and vehicles for training purposes or our employees giving up their near protected and high biodiversity areas: our site Economics and the University of Bari. As a result, a time for a cause, we always aim to support projects that will help to making heavy-duty diesel engines at Bourbon-Lancy greater variety of trees has been planted around the make a difference to the communities around us. Across the world, in France; the agricultural equipment factory at factory, including olive, fig, citrus and pomegranate, that takes shape in very different ways. Curitiba in Brazil; the engine factory at Foggia, Italy; and there are plans to add vines and carob. truck production facilities at Madrid in Spain, The assessment carried out at the plant in Suzzara in Italy and Sete Lagoas in Brazil; and a Curitiba, Brazil, in 2013 happily showed that it made HELPING DISADVANTAGED CHILDREN IN BRAZIL firefighting vehicle factory in Ulm, Germany. a negligible overall contribution to man-made We assessed the range of plants and animals to pressures on the surrounding area. Despite no We have a highly-developed tradition of community involvement in be found within a radius of about 5km around the improvement being required, during 2015 about Brazil. For example, we support Próximo Passo, launched by IVECO in seven sites and looked for possible measures to 130 native species were added around the site to 2007 in Sete Lagoas, which helps foster environmental citizenship and improve them. The studies evaluated two factors: encourage biodiversity. community sustainability; CASE Multiação is a project set up by CASE the man-made pressures generated by industrial, Construction Equipment and Case IH that focuses on personal ~ 1 3 0 agricultural and urban activities and infrastructure ur plant at Bourbon-Lancy in France was development and further education near plants in Piracicaba and native species were in the area (known as the anthropic pressure index) CNH Industrial’s first to assess its Sorocaba; and we are involved in Pastoral do Menor, also in Sorocaba, added around the Curitiba and the biodiversity to be found on land and in biodiversity value in 2012. In 2015, we which works to reduce the number of children and teenagers living site during 2015 O water, using the most common biological indicators. carried out a new monitoring program to measure on the streets. The great news is that the studies showed these the outcome of voluntary steps taken over the plants contributed no more than 1 percent of the intervening three years. These included planting n 2015, CNH Industrial spent more than $240,000 refurbishing the man-made pressure on their surrounding areas. hedges and shrubs, as well as attempts to contain building that Pastoral do Menor uses for education and to provide As a result, no specific improvement measures Reynoutria japonica, the non-native and highly-invasive Isports and leisure activities. The classrooms, cafeteria, kitchen and were required. Japanese knotweed that drives gardeners mad. roof were renovated and a sports field was constructed. In 2016, 710 However, we never stop there: in line with our The new biodiversity values were in line with children benefited from Pastoral do Menor initiatives. commitment to protecting and enhancing bio- those previously recorded and the range of flora Each year in Curitiba, the Atleta do Futuro program gives 100 boys diversity within and around our sites, CNH showed a slight improvement due to knotweed and girls aged 6-14 the chance to play sport, particularly soccer. CNH Industrial has carried on with further improvements. removal. This work continued in 2016. Industrial has provided the space for the children to play in for more →

16 17 WORKING WITH LOCAL COMMUNITIES

4 DAILY VANS CNH INDUSTRIAL DONATED FOR MOBILE HEALTH SERVICES AROUND 7 THE WORLD TECHPRO2 TRAINING 4,500 CENTERS WORLDWIDE PATIENTS (BRAZIL, CHINA, ETHIOPIA, ASSISTED THE COMPANY ITALY, SOUTH AFRICA) INVESTED $4.5M IN 3 LOCAL COMMUNITIES AGRI TRAINING 100 CENTERS IN 2016, INCLUDING: 9,042 STUDENTS $718,000 IN NAFTA TRAINED IN ITALY DONATED TO 40,678 UNITED WAY IN EMEA

COMMERCIAL PRESENCE IN 4,810 8,298 IN APAC 180 LATAM COUNTRIES 250 FAMILY GARDENS INVOLVED IN THE 62,828 CNH 2,000 WATER MANAGEMENT EMPLOYEES WORLDWIDE YOUNG PEOPLE PROJECT INDUSTRIAL INVOLVED IN THE CASE MULTIAÇÃO IN NUMBERS PROGRAM

PLANTS WORLDWIDE R&D CENTERS WORLDWIDE 2016 Data refers to REVENUES 2016; variations 11 IN NAFTA 12 IN NAFTA are compared $24.9BN with the OPERATING PROFIT R&D previous year 33 IN EMEA 64 11 IN LATAM 27 IN EMEA OF INDUSTRIAL SPENDING 49 6 IN LATAM ACTIVITIES $860M 9 IN APAC 4 IN APAC $1.3BN

than five years. As well as improving their sporting Educational and cultural programs are a focus of FUNDING SCHOLARSHIPS a high-school or university diploma, or a university abilities, the children learn the value of teamwork, the projects CNH Industrial supports in Brazil. The AND AWARDS degree. In 2016, a total of $367,000 was awarded communication and other transferable skills that will Cooperaço para o Desenvolvimento e Morada in grants and scholarships – helping to improve the help them through their lives. When organizers Humana, in Contagem, offers training to community As part of our commitment to promoting growth life and education prospects of 280 deserving follow up with the children’s schools, they frequently leaders, careers skills workshops for young people and development opportunities for young talent young people. find that their work has improved. and youth activities such as judo and street dance. around the world, we support academic excellence CNH Industrial began working with the organization by providing grants and scholarship programs for n India, 35 children of employees received ther sports-related projects supported by in 2013 to help the growing district deal with its the children of employees. scholarships in 2016 as part of our Special Talent CNH Industrial include Esporte de Cidade poor infrastructure and lack of basic public services, Iprogram. And in the Czech Republic, where 2015 Oin Sete Lagoas and Contagem, which among them sanitation and drinking water. NH Industrial runs Student Achievement was celebrated as the Year of Technical Education involves 180 children and teenagers in judo and Employees volunteer their time to help with the Awards in every country where we have Support, students were invited to events at our football, and Bola da Vez in Sorocaba, which provides project, which also puts on community parties and C‌a significant presence. These special awards Vysoké Myto plant and a special awards day for sporting activities for 400 public school children. meet-ups for families. are open to employees’ children who have achieved scholarship winners. →

18 19 WORKING WITH LOCAL COMMUNITIES

2 DELIVERING HEALTH PROJECTS TRAINING THE TECHPRO NEXT GENERATION After education, healthcare is perhaps one of the OF INDIAN FARMERS In June 2016, seven young students from around the world came greatest needs in many of the regions in which we to Turin, Italy, for an awards ceremony. Two Italians were joined by operate. Yunnan, a mountainous part of south- In 2012, New Holland Agriculture an Ethiopian, a South African, an Indian, a Pole and an Argentinian. western China that covers roughly 400,000km2, is inaugurated its first agri training All were outstanding participants in the TechPro² youth technical difficult to navigate. Road building has boomed over center in India, in Bhubaneswar. training initiative, run jointly by CNH Industrial and Fiat Chrysler the past decade, but many routes there are still The center, opened in association Automobiles in collaboration with the Salesian Society. prone to landslides and flooding. with the Department of Agri- The training provides young people with valuable qualifications Workers who build these roads are exposed culture of the state government in the automotive and industrial machinery sectors and helps to a variety of challenging conditions, from of Odisha, provides young farmers industry by tackling a growing demand for technical skills. Over high altitude where oxygen is scarce and unemployed people with the one to four years, depending on their region, students to tropical rainforests with skills to find jobs in mechanized between the ages of 12 and 17 take their first steps on oppressive heat and agricultural farming. the road to becoming workshop technicians. humidity. Such conditions The course covers tractor mean that health maintenance and the overhaul of the main tractor 2011, CNH Industrial has donated more than CNH Industrial employees in NAFTA he length of the course varies because in problems can be sub-assemblies as well as repair and maintenance of $250,000 to HALO to create shelters, fund services volunteer to help build homes with Habitat for Humanity some parts of the world children leave common and medical other mechanized farming equipment. New Holland and support coordination activities. Tschool and begin work at a younger age, help is not always Agriculture provided special tools, engines and making longer study impossible. within easy reach. transmissions to help students learn. Students on the course also develop the skills As part of its annu- KEEPING SLOW needed to become mature professionals, capable al Customer Care ince then New Holland Agriculture has FOOD MOVING 102 employees of working as part of a team and using their Plan, CASE Construc- established two more training centers. The donated 556 volunteer communication and problem-solving abilities to tion Equipment teamed Ssecond opened in 2014 in Madhya Pradesh CNH Industrial supported the diagnose faults and build customer relationships. up with its local dealer – State as part of an initiative to raise awareness 2016 Slow Food Foundation main CNH Industrial began supporting the TechPro² Yunnan Anrui Mechanical among farmers and facilitate more eco-friendly and event, the Terra Madre Salone del hours to Habitat for scheme in 2011, three years after it was founded, and has and Electrical Equipment Tech- efficient agricultural practices. Gusto which was held in Turin, added programs in Brazil, China, Ethiopia, Italy and South Africa. nology Development – and the In 2015, New Holland Agriculture opened a third Italy, and welcomed some one Humanity projects While the Salesian Society is not present in China, it does share local government to back a free, three- training center, this time in the Assam region in million visitors. CNH Industrial teaching models and a curriculum with Yizhong-Edulife, the month medical consultation program for road- north-east India. was more than a mere provider of vehicles. The company that provides technical training. maintenance workers. Company’s Mobility and Transport Studies At CNH Industrial we are proud of TechPro²; it has become one It was an exercise that covered five different department analyzed the best way to transport of our most important projects. In 2015, a new program began in routes and more than 12,000km. As a result, more VOLUNTEERING WITH visitors, delegates and exhibitors so as to ensure the Johannesburg, South Africa, and trained eight students in its first than 15,300 workers received first-rate medical HABITAT FOR HUMANITY lowest environmental impact. Eight IVECO Buses year. It concentrates on commercial vehicles, through our IVECO services over the project’s 32-day duration with the were provided to meet visitors’ needs in downtown brand, and in order to help of 20 medical professionals from four highly- CNH Industrial doesn’t only support projects in the Turin, and all featured ultra-low emission systems better support students, regarded hospitals in Yunnan. developing world. Last year 102 employees donated and accessibility packages. FPT Industrial gave an F1A 556 volunteer hours to Habitat for Humanity engine and a generator to nother health project supported by projects, one of the core initiatives that we support the school to help them in CNH Industrial took place in the north in North America. OUR CONTINUOUS their studies. A‌Indian city of Greater Noida. The Founded in the USA in 1976, Habitat for COMMUNITY STRATEGY In December 2015, conurbation has grown fast in recent years and Humanity builds affordable housing in America and CNH added a new center alongside the rapidly rising population there has across the world. Since then it has helped almost CNH Industrial has been recognized as a leader in in Rome, the first to train been a marked increase in diseases such as HIV, 7m people to find shelter. sustainability for several years now. From drives to students to repair agricul- tuberculosis, malaria and dengue. New Holland CNH Industrial employees have helped with reduce CO2 emissions to moves to entrust more tural vehicles and machin- Agriculture partnered with the SMILE Foundation Habitat for Humanity projects in Burr Ridge, Illinois, than 95 percent of supply to local suppliers, we are ery, with an initial intake of to provide a mobile health unit called Smile Lebanon, Indiana, and Racine, Wisconsin. Our people constantly pushing ourselves to do more. Students of the TechPro2 program 20 students. New Holland on Wheels. took time away from their desks during working The same is true of our efforts in the local learning about an FPT Industrial engine Agriculture is supporting The vehicle is staffed by a doctor, a nurse/lab hours to carry out tasks including laying foundations, community. Over the past year, we’ve helped to used for agricultural machinery the program and provided technician and an ambulance driver, who deliver fitting windows and doors and installing siding. train hundreds of people around the world, our a T6 Auto Command trac- mobile care to the city and its surrounding villages. Since 2007, CNH Industrial has donated almost colleagues have donated hundreds of hours of their tor that students will use to apply their knowledge. Operating five days a week and equipped with first- $500,000 to Habitat for Humanity, including working time to charitable projects and we have In 2016, TechPro² and CNH Industrial trained 100 students in aid kits, preliminary diagnostic kits and basic $34,000 in 2016, some of which will help to fund given millions of dollars to community projects. Italy and the program continues to grow. It allows young people to medicines, the unit brought medical care to 4,500 builds that the charity has planned for 2017 in Fargo, The initiatives that we support are not centrally develop an enthusiasm for the profession and has the potential to patients between March and May 2016. North Dakota, and the Quad Cities region of the imposed but are determined at a local level. We will change lives. At the Turin event was Teshale Belay, an 18-year-old New Holland Agriculture also worked with the Midwestern United States. continue to strive to be in synergy with each region Ethiopian who was living on the streets when he joined the SMILE Foundation to support 200 children aged In Racine, CNH Industrial also works with the we work in, to benefit the community and to TechPro² course in Addis Ababa. He now has a full-time job and is 4-14 who enrolled at a SMILE school near the Homeless Assistance Leadership Organization enhance the satisfaction of our employees and their attending night school to gain further qualifications. company’s Greater Noida plant. (HALO), which aims to tackle homelessness. Since friends in the surrounding territory. ■

20 21 ENGAGING WITH SUPPLIERS AND EMPLOYEES

GOING GREEN IN INDIA

NH Industrial has a long and mutually develop green spaces that create the sort of beneficial association with India. As a manicured garden that’s a far cry from what one Ccommitted partner to this remarkable might expect at a traditional industrial facility. Our nation, and with agribusiness the country’s largest employees gather for the dedication of each new provider of livelihoods, we’ve always realized the tree and show their commitment to the Earth by importance of promoting sustainable methods of reciting an environmental pledge. working that build prosperity. Our three facilities are each exemplars of best practice and represent the aspirations of the A NEW BENCHMARK environmental pillar of our World Class Manufacturing approach. Meanwhile a new star is rising in our Indian At the plants in Greater Noida, near New firmament, with the construction of a state-of-the- Delhi, and in Pithampur, Madhya Pradesh, we art greenfield plant in Pune, which will manufacture operate a company-wide bus system where harvesting equipment and be the embodiment of we can collect workers, bring them to the our best practices so far. plants and return them again to a central point. In Delhi, for example, that means y learning from our existing plants, we’re employees travel every day on a low- automatically starting at a higher level. The emission bus. BPune facility was conceived as a Green Plant This guarantees the workers a reliable and we were able to incorporate every necessary transport system when it might be difficult sustainable aspect as we built it from scratch. for many to get to work via other means, and The new plant is not scheduled to start we’re cutting CO2 emissions, too. production until the end of this year, yet we have In Noida, we’ve also recently installed a already received Green Plant pre-certification water harvesting system, which captures and based on our original design from the India Green The IVECO Stralis NP: winner of the Ecological redistributes rainwater to irrigate the play- Building Council. grounds and green areas at a local school. This Industrial Vehicle of the Year award. With a range community service project, which we’ve undertaken in partnership with Oerlikon Graziano, IN PARTNERSHIP WITH NATURE of up to 1,500km, it is the first natural gas truck one of our key suppliers, as well as the Indian Society of Agribusiness Professionals, also saw us The outsides of our facilities are as important as designed specifically for long-haul operations install a drinking-water purification system at the what happens inside. In India, a collective Gautam Budh Balak Inter College, not far from commitment to biodiversity as well as local culture our facility. has helped us to create wonderful green spaces, We’ve used a similar system at our own facilities which have encouraged, for example, an increase in and the results have allowed us to plant trees and local wildlife visiting our plants. ■

22 23 ENGAGING WITH SUPPLIERS AND EMPLOYEES

EVALUATING AND ADDRESSING RISK

The second element of our annual sustainability assessment process is risk assessment, which identifies suppliers whose compliance with our set of sustainability criteria needs to be addressed in some way. Depending on the supplier’s risk classification as a SUSTAINABLE result of this assessment – low, medium or high – a decision is made on carrying out a sustainability audit.

hese take place at the supplier’s premises LINKS and are aimed at identifying potential Timprovement actions we can carry out together and monitor how they are implemented. Although there are procedures that can be used in REINFORCE THE the case of non-compliance, the aim of the audits is primarily diagnostic and restorative. In 2016, 70 audits were carried out, spread SUPPLY CHAIN evenly across all four regions. Ultimately, 28 suppliers were involved in nearly 178 action plans for improvement. Our goal for 2016 was to increase the number 400 suppliers – confirmed that all of these of audits carried out – a reflection of improvement environmental issues were being properly There's more to selecting a supplier than the quality and competitiveness of and our growing expectations – and also to addressed. For CNH Industrial, water is a its products. Firms seeking to work with CNH Industrial must comply with implement a program of sustainability training and particularly crucial resource because its scarcity information aimed at suppliers. could affect the continuity of production, and we a comprehensive list of social, ethical and environmental requirements The process also requires an effective means of see its protection as increasingly important. continuing a structured dialogue with our suppliers. Another key part of our approach to supplier ne of our senior managers was asked of new suppliers, based on the CNH Industrial We aim to create long-lasting relationships with engagement is the CDP Supply Chain project, recently: “Who is responsible for sustain- Supplier Code of Conduct. This requires them to partner companies, and everything we do is overseen by CDP, an international environmental Oability at CNH Industrial?” She just laughed demonstrate a commitment to fighting corruption, organized according to targets and priorities non-profit organization, which focuses on suppliers’ and replied: “Everyone!” protecting the environment, promoting health and identified at the beginning of the year. strategies for tackling climate change, and their current You don’t become recognized as one of the safety at work, ensuring non-discrimination, The audits focus on four key areas – Environment, or future initiatives for reducing CO2 emissions. world’s leading sustainable companies without an prohibiting forced and child labor, and recognizing Labor Practices, Human Rights and Impacts on Society integrated and committed approach. And while that freedom of association. – where we are continuously striving to enhance mindset pervades all our work, we stretch it still The scale of our industrial supply chain makes overall performance by identifying specific suppliers’ BUILDING AN ONGOING further into our relationships with our suppliers. managing relationships with partner organizations needs, whether they be in training, communications, RELATIONSHIP That allows us to make sustainability standards a core tremendously complex, but we have established an reviewing systems for verifying sustainability practices, part of the value chain; there can be no difference effective sustainability plan, embodying specific emergency planning, or others. As part of the continuing dialogue with suppliers, between how we think about working with our goals and sustainability targets. In addition we encouraging collaboration and shared goals, we colleagues and how we work with our partners – monitor and assist our existing suppliers through organize events such as the Suppliers across all sectors and all operating geographies. the following: COMMITMENT ON Advisory Council. This gets together Lab CNH Industrial has detailed procedures in place ENVIRONMENTAL IMPACT on a regional and global basis and ent or m P ■ n ra to ensure that the selection of its suppliers is based SELF-ASSESSMENT provides a platform for sharing o c ir t not just on the quality and As part of our commitment to moderate the objectives and results, while v ic n e competitiveness of their products, ■ RISK ASSESSMENT environmental impact of our activities, for example, spotlighting key projects and E s We have established but on how well they fit with its our suppliers are invited to optimize their use of benchmarking best practice. 4 y t social, ethical and environmental ■ SUSTAINABILITY AUDITS resources and minimize polluting emissions and We also hold a number of H key focus areas of e u i principles. greenhouse gases. Technology Days, providing op- sustainability audit c an effective sustainability m o We evaluate a company’s a S Suppliers are required to fill out a self-assessment We also encourage them to exercise the proper portunities through the year for n n R o potential to be an effective sup- questionnaire endorsed by a leading industry management of waste treatment and disposal, as suppliers to showcase innovation ig s plan, embodying specific ht act plier by means of a rigorous pro- standards body. They are expected to declare well as adopting appropriate methods of logistics and cutting-edge products. s Imp goals and targets cess. A PSA (potential supplier information on a diverse range of topics from the management. These aspects are also covered in the While our network of suppliers is assessment) identifies strengths environment, through ethics, diversity and human self-assessment questionnaire, in particular in a crucial to securing continuity, it also influences and weaknesses, looks at key rights, as well as health and safety. section dedicated to water management, which how public opinion reacts to our company’s social sustainability factors – explicitly health and safety This self-assessment is performed by a group of among other things covers behavior as it relates to and environmental responsibilities. Everything we and environmental management – and must be chosen suppliers every year, with an effort wetlands or natural habitats affected by the water do in our relationships with suppliers therefore carried out before a company can tender. underway to gradually increase the number of withdrawals or discharge from plants. demonstrates that our values are as central to our There is also a commitment declaration required participating companies year-on-year. The 2016 assessment process – covering nearly partners as they are to us. ■

24 25 ENGAGING WITH SUPPLIERS AND EMPLOYEES

Players at the Benson site were issued with a deck of Cool COOL COMPETITION Choices cards (above right) Last summer, almost 100 employees at CNH Industrial’s show which of the nine teams had won. There were plant in Benson, Minnesota, USA, signed up to play a prizes on offer for the teams with the most points and game on company time. But far from being a trivial random prize draws to motivate those involved. pursuit, this turned out to be the sort of pastime that had The tasks carried out the most by employees ranged some of the players shouting “Bingo!” from measures for more efficient use of energy at home to creating an environmentally-friendly commute to work. t’s usually said that the way to improve our environ- During the six-week game, a total of 6,451 individual ment is for us to think globally and act locally. Then sustainable actions were carried out, all of which con- Ithere’s hyper-locally – the areas in one’s immediate tributed in some way to energy-saving or raising environ- environment and behavior that can be changed quickly. mental awareness in our homes, workplace and community. Action there first can pay big dividends. CNH Industrial got to know about Cool Choices Staff across nine through our participation in the Wisconsin Sustainable departments in Benson Business Council’s Green Masters program – where we kicked off a challenge were honored for a third straight year. aimed at raising At the end of the initiative, Cool Choices carried out a THE TOP EIGHT ACTION CARDS awareness of exactly feedback survey that showed that a big part of the how these small, players’ positive experience with the game came through 1 Unplug and 6 Use air- recycle your home conditioning individual actions can interacting with their co-workers and discussing new space heater when driving over have a huge collective sustainability ideas. 40mph; turn off effect on the 2 Avoid ‘jackrabbit’ air-conditioning driving – sudden and open windows environment. even out of 10 respondents said they were proud of stops and starts when driving As part of the game, the changes they had achieved as a result of the 3 Remove and under 40mph which was designed by game and thought it formed an important part of recycle your second S 7 Adjust your Wisconsin-based non- the company’s sustainability initiatives. refrigerator or thermostat from freezer 68°F to 60°F when profit organization Cool A majority of respondents also said that the game had 4 Replace 85 no-one is home Choices, players are made them more conscious of their energy-use behavior percent of and/or while the issued with a deck of at home and reported an increase in sustainable behavior household is household cards, each showing a at work. Two out of three participants said that as a FPT Industrial’s Cursor 9 NG: the most powerful incandescent bulbs sleeping specific sustainableresult of the game they would be more likely to turn out with LEDs 8 Air-seal and action and the corre- lights in rooms that aren’t being used, for example. 5 Turn your engine insulate your home 9-liter natural gas engine to date. Biomethane produces off instead of idling to recommended sponding number of Obviously, as we look at ways to extend this kind of levels points the player can initiative to other plants across the company, we’re aware almost none of the particulates that are produced by earn for doing it. Our that different locations will have different priorities, but environmental health the outcomes from this first run have been positive. diesel engines and, when running on biomethane, and safety team helped Our aim was to plant a seed in employees’ minds to customize some of the card choices to reflect the about the effectiveness of making one small change and a product’s carbon footprint is virtually zero company’s World Class Manufacturing program. seeing how it can make a difference in all our lives. The Players carried out the energy-saving tasks either at game proved a fun and successful step in our constant home or at work and entered the points on the Cool progress in raising awareness of sustainable behavior Choices website. The numbers were then crunched to across the company.

26 27 SUSTAINABLE TECHNOLOGY

The autonomous tractors offer a vision for the future of sustainable farming and the market potential is huge LEADING THE WAY IN AUTONOMOUS VEHICLES

When unmanned tractors, trucks and buses become part of our lives they will bring improved fuel efficiency and safety. Technologies such as telematics and data sharing are driving this revolution – and will boost customer satisfaction

n August 2016, CNH Industrial offered a vision of sector within five years. The big attraction for fertilizer and water. While CNH Industrial’s desktop. The tractor can work round the clock, the future – the Case IH Magnum Concept farmers is the promise of combining the better use unmanned tractor is a concept vehicle, aimed at taking full advantage of optimal weather conditions. IAutonomous Tractor. Unveiled at the Farm of available skilled labor, the ability to exploit narrow stimulating debate and helping the company to Meanwhile automated routes optimize inputs Progress Agriculture Show in Iowa, USA, the concept weather windows for greater agronomic advantage understand how the technology can best be such as water, fuel, seed and chemicals and allow for tractor has no cab; instead it uses and the enhanced efficiency generated by com- applied, it’s clear the benefits could be considerable. the redeployment of skilled labor into value- the latest technology in guidance, puters. It’s computers that will calculate precise added tasks. Goldman Sachs forecasts data sharing, telemetry and plowing, planting, harvesting, fertilizing, weeding agronomic management to navigate and watering routes and send them to the FREEING UP FARMERS TO DRIVE orkers are freed from the restraints a rise in farm yields of 70 and work the fields. It’s highly automated machines to do the work. It means YIELD GROWTH of normal working hours and can be efficient, and alongside the cabbed machinery will last longer as Big Data analytics allow Wredirected to tasks that robots can’t percent by 2050 New Holland version offers a vision farmers to keep their kit in optimum condition. The Case IH and New Holland autonomous perform. The optimized path planning reduces for the future of sustainable farming; Farming today and tomorrow is about achieving concept tractors use GPS and sensor technology to overall soil compaction, thereby increasing yield the market potential is huge. more from less: increased yields, correct timing of navigate a field, while cameras send live visual potential, and the work becomes more consistent, According to investment bank Goldman Sachs, operations – micromanaged to the square inch of information to the farmer, who can remotely efficient and timely, further improving yields and autonomous technology could become a $240bn every field – and tight controls on the use of monitor and control operations on a tablet or crop quality. →

28 29 SUSTAINABLE TECHNOLOGY

commercial trucks to follow one another closely, some of the most advanced technology into its cutting drag, improving safety and fuel efficiency, design to monitor driver behavior, vehicle and ensuring consistently efficient driving practices performance and fuel consumption. It also has a and optimal road use, thereby cutting congestion. clever parcel management system that automatically Research suggests that CO2 emissions could be cut holds loads secure and a space management system by up to 10 percent as a result, with fuel savings of that speeds up loading and unloading. up to 10 percent. The whole vehicle acts like a travelling sensor, sending data to the driver, fleet manager and even ur technology is currently ahead of the road infrastructure such as regulatory framework needed to allow traffic lights and cameras, Oplatooning on our roads. But our position to maximize efficiency and Our technology is currently is clear: we want vehicles ready for market as soon safety. Central to its as the legislation is in place so that customers can concept is to make as small ahead of the regulatory reap the benefits immediately. The hope is that this an environmental impact will be within few years. as possible. framework needed to allow For freight companies, the technology promises Impressive features such to be a boon – not just cutting costs but reducing as the Vision’s dual energy platooning on our roads accidents and speeding up deliveries. With powertrain allow it to run approximately 70 percent of European freight going on electricity and in hybrid by road and congestion set to increase by 50 mode, cutting fuel consumption and CO2 emissions percent by 2050, the platooning technology is an by up to 25 percent and helping it to win the 2015 attractive and timely development. It can also be European Transport Prize for Sustainability. 50% used in agriculture in a vehicle-to-vehicle format to Similarly, our work on bus technology will also amount by which congestion coordinate the activities of combine harvesters and make public transport more efficient and is set to increase by 2050 grain carts, for example. sustainable. Connectivity will allow bus operators or farmers, all this means higher productivity. farm office, suppliers, consultants, mechanics – to optimize frequency of journeys, monitoring the ‌Goldman Sachs suggests that a fleet of smaller anyone involved in the growing cycle – in real time. number of passengers on board, those waiting at Fautomated tractors could lift farm revenues by This enables accurate decision-making from URBAN DELIVERY WITH VISION stops, traffic and the distance between buses on the more than 10 percent a year, with bottom-line wherever the farmer is – in the field, on the road same route. It will improve passenger service and benefits further boosted by saved input costs. or in the office. Where platooning is not an option – in built-up cut the inputs required by the operator. It’s about Goldman has also forecast a 70 percent rise in farm areas, for instance – IVECO has developed another doing more with less, being more efficient, being yields by 2050 – a big contribution to help feed a global concept vehicle, its Vision Van. The Vision integrates more sustainable. → population expected to reach 9bn by then. AUTOMATED TRANSPORTATION Richard Tobin, our Chief Executive Officer, has AND LOWER EMISSIONS said some form of autonomous technology German publisher Huss-Medien could be available within three to five For CNH Industrial, the possibilities for automation has awarded the European Transport Prize for Sustainability to years. Offering such profound go far beyond farming. IVECO, our truck brand, for the Vision concept van from IVECO benefits, the tractors are example, has been working on how to apply the next big leap forward automation and telematics to make freight in farming, building transport more sustainable. It recently took part on advances already in the European Truck Platooning Challenge, brought about by which saw the world’s first cross-border, smart precision techno- truck demonstration. logies and telematics – in which we have wo heavy-duty IVECO Stralis trucks played a significant successfully drove on motorways in convoy leading role. Tfrom Brussels in Belgium to Rotterdam in When the Case the Netherlands, with the second truck following IH and New Holland 10 meters behind the first using connectivity autonomous concept technology and automated driving support systems. tractors are combined The first truck acted as leader, with the subsequent with such precision ad- truck automatically reacting. If the leader applied vances, it results in a complete the brakes, the truck behind did so automatically. farming system – allowing the The follower truck, however, is not a mere ‘copy farmer to micromanage the land, using and paste’ of the leader. It is an ‘intelligent’ truck, data to control precisely how to work a field. The as it continually evaluates the situation and can most efficient courses can be mapped, taking into react differently to the lead truck if driving account multiple machines with simultaneous or conditions necessitate. consecutive tasks. The data is transmitted to the The platooning system is designed to allow

30 31 SUSTAINABLE TECHNOLOGY

GPS SAT

DATA SHARING (((((((( DIFFERENTIAL GPS allows the vehicle to TAKE A LOOK allows remote connect to others doing management of the vehicle related tasks so they can and for it to follow pre- coordinate activities UNDER THE HOOD OF THE CASE IH plotted routes. Along with RADAR MAGNUM CONCEPT the correction signal, GPS AND LIDAR AUTONOMOUS can position the vehicle used together are AUTONOMOUS VEHICLES TRACTOR to within 2.5cm the eyes of the machine. ((((((((((((((((((((((((((((((((( Our autonomous tractor accuracy They sense the Autonomous technology can make many industries more environment, detect uses an array of advanced ONBOARD (((((( efficient and productive. Farming is particularly ripe for ON BOARD technologies to help farmers obstacles, people and CAMERAS BRAIN other vehicles automation, but it can also be used to improve bus services optimize their resources and Our autonomous send a real-time video improve output and for truck platooning. feed to the management tractor digests all the center – a desktop, data into meaningful laptop or tablet actions computer ((((((( ONBOARD SENSORS TELEMATICS spot obstacles in the provide the two-way  vehicle’s path – so it can transmission of data – from the avoid accidents – and tractor to the operator or other indicate when any input, interested party and vice versa. “ eg fuel, seed, fertilizer It also transmits data to the cloud etc, is low. They can also HYDRAULIC from where it can be accessed and monitor soil quality, ACTUATORS analysed by the manufacturer, for humidity and quality on the steering example, or maintenance of the crop system use data engineers and fleet from the sensors managers for steering

TELEMATICS Transmit data from truck to truck and to central CAMERAS supervisor and GPS TRACKING SENSORS monitor traffic back again monitor the lead SMART BUSES and the bus’s SMART TRUCKS driver’s behavior environment for fatigue, stress, PLATOONING dangerous SENSORS DEMONSTRATION driving TELEMATICS report number of This took place between transmit data from passengers, picking up Rotterdam and Brussels. over-crowding or SENSORS the bus to the service SENSORS One smart truck followed

operator, traffic lights, under-use, for example, 10m behind the lead vehicle spot obstacles monitor driver HYDRAULIC ((((((((

bus stops and and the need for automatically copying in the truck’s behavior for ACTUATORS (((((( additional or reduced path and send back again fatigue, stress, speed, braking and on the steering system SENSORS capacity SENSORS alerts dangerous direction drive the following monitor tire monitor tire driving truck according to the pressure pressure lead truck’s path

BUILDING THE FUTURE machines helped with facility maintenance at the achieve optimum operational efficiency. This might This has been recognized by Dow Jones, which South Pole. comprise advice to reduce harsh braking to cut fuel named the company a sector leader in its There are also applications for autonomous We take connectivity as far as we can. Not only consumption, or for third-party manufacturers that Sustainability Indices for the sixth year running. vehicles, telematics, connectivity and precision data do we attempt to ensure that our machines can install our engines in their vehicles to alter the cab analytics in construction to help build and maintain work together as efficiently as possible, we also try design to reduce drag. Every anomaly, problem and NH Industrial believes sustainability- infrastructure. Such systems are particularly useful to help all our customers. “ inefficiency can be logged and acted upon to focused innovation is the right strategy. We when the location is remote or involves harsh For example, we are connecting our engines, the maximize the life of the engine and its performance. C‌believe the future is about optimizing all conditions. Our vehicles have already been very heart of the vehicle, made by FPT Industrial, It is innovations such as the autonomous concept resources for the short, medium and long term. successfully deployed in the some of the harshest our in-house powertrain brand, to the Cloud so tractor, truck platooning, the Vision van, intelligent Our products will deliver us new revenue streams environments: CASE Construction Equipment that their performance can be constantly construction equipment and the connected engine based on technology and data analytics that will vehicles were put to work on construction sites monitored. Any customer will be able to receive that have contributed to CNH Industrial’s make the whole market more sustainable. We are in deserts and New Holland Construction reports throughout the life of the guarantee to help reputation as a global leader in sustainable business. looking ahead to secure tomorrow. ■

32 33 SUSTAINABLEOUR SUSTAINABLE TECHNOLOGY COMPANY

The Case IH Magnum Concept Autonomous Tractor challenges old The supervisor of the autonomous concept tractors can A range of sensing and perception technologies are used to detect obstacles manage and track their operation in real time assumptions about every process involved in agriculture Using tech to transform vehicles

or CNH Industrial, research and development is all excessive speed, sharp braking and lapses in concentration. ‌about building more efficient, effective, safer machines Under the hood, the engine’s performance is monitored Fthat will help to make the world a more productive and and the data sent back to the fleet operator or maintenance sustainable place. Our 49 world-class R&D centers develop department by means of telematics, ensuring that it can be innovative technologies for all our vehicles, from tractors to kept in peak condition. Similarly, such information can also be delivery trucks, buses, construction equipment, vans and sent to the manufacturer to help refine and improve design even fire-engines. and performance. One big goal is to develop driverless vehicles for specific Enhanced, smart productivity is central to R&D. For tasks that always run at optimum performance. Already we example, should fuel be running low in a combine harvester, have two concept autonomous tractors – the Case IH but it is about to start raining, the operator would know that Magnum and the New Holland NHDrive – and have taken part it was not worth returning to the field once the tank was in an international platooning challenge where a lead truck refilled. On a busy public transport route, it would even be was followed by a second with fully autonomous capabilities. possible to send another bus to pick up waiting passengers if Both see the rise of truly innovative technology, from the first was near to full capacity. sensors that monitor tire pressure and engine performance, and spot obstacles, to GPS that can be accurate to less than 2.5cm. We believe driverless vehicles will be very much part of the future – many regulations, however, have yet to be brought up-to-date to deal with them – but a key element of our R&D strategy is to be prepared for the world that is being created. There are gains to be made from cross-divisional synergies; we ensure that innovations are applied to all relevant situations across our segments. Sensors developed for the autonomous tractor could be quickly integrated into our trucks, buses and vans.

e also use technology to help keep drivers and passengers safe. GPS plots the most efficient Wcourse – a tractor’s drilling route, a delivery van’s order of distribution or even how to avoid traffic jams – while sensors monitor driver behavior for fatigue,

34 35 SUSTAINABILITY IN THE WIDER WORLD

CREATING GREATER WATER priorities,” says Daniela Ropolo, Sustainability The project in Kébili demonstrates Development Initiative Manager, EMEA (Europe, CNH Industrial's commitment to improving agriculture in Africa SUSTAINABILITY Middle East and Africa) at CNH Industrial.

FROM COLLECTION IN THE DESERT TO CULTIVATION For this project in Kébili, we have teamed up with the Tunisian Directorate-General for the Development and Conservation of Agricultural 80% New Holland Agriculture is active in 34 African countries, including Tunisia. network, the specialization of our equipment and Lands, part of the Ministry of Agriculture, Water of Tunisia's natural the optimal relationships we have established over Resources and Fisheries. Over the next three years, water resources could Here a three-year pilot project aims to help build and repair traditional be lost by 2040 Tunis time with the local populations, we at New Holland our partners will build and repair traditional water water collection systems, improve agricultural practices and train farmers are fully capable and firmly determined to collection systems, improve agricultural activities, contribute in a significant manner towards making train local farmers on best practices and create ébili is a small agricultural town in south- That’s where we at CNH Industrial come in. We African agriculture a model of productivity and vegetable gardens for families, orchards and new TUNISIA west Tunisia. It is the capital of the Kébili agree that sustainable and consistent water supplies sustainability in the near future.” wooded areas. K‌governorate, near the Algerian border. Palm are necessary for sustainable and consistent economic During the first year, the FAO and Tunisian trees provide shade and in non-drought years there growth. In 2015, to help improve Tunisia’s water government will focus on the study and analysis of is water to help cool off. It is an oasis in the desert mobilization and irrigation, CNH Industrial (through CNH INDUSTRIAL LEADS THE FIELD the social and economic impact of the project Kébili with a population of 62,000. The region is prone to our New Holland Agriculture brand) donated itself, followed by project both extreme drought and devastating floods. In $150,000 to the Food and Agriculture Organization Sustainable management of water is also a strategic implementation in the 2013 and 2014, strong storms damaged greenhouses of the United Nations (FAO), in collaboration with the commitment for CNH Industrial across the whole remaining two years. This The mechanization ALGERIA and crops. In the Kébili region there are additional Government of Tunisia, for a three-year pilot water company. Our top management and stakeholders will include the repair and challenges, including a high rate of unemployment and management project in Tunisia. This grant covers recently identified 12 material topics for creation of traditional LIBYA of African agriculture is poverty (about 29 percent, compared to 6 percent nearly half of the $340,000 dedicated to the initiative. sustainability for the company. Water is one of water harvesting systems, in the city of Tunis), economic isolation and a lack of these 12. The others are: rainwater mobilization one of the most crucial quality infrastructure. hrough New Holland, we currently operate works, family gardens, According to a 2015 report by the World Resources in 34 African countries, including Tunisia, ■ Local community engagement basic infrastructures and challenges of our time Institute, Tunisia will be one of the 33 most water- Tproducing and distributing customized ■ Trade regulations and public debate grazing lands, while training stressed countries by 2040, with up to 80 percent of its tractors and agricultural equipment that can resist ■ Value-chain management and raising awareness natural water resources potentially lost. extreme climates. Our equipment protects cultivated ■ Autonomous vehicles among local farmers. “We wanted to design and soil, increases yield and decreases waste. ■ Self-sustaining food systems put in practice a project with a high level of NEW GOVERNMENT, “The mechanization of African agriculture is one ■ Digital workplaces sustainability and a synergy with one of our core NEW OPPORTUNITIES of the most crucial challenges of our time. Winning ■ Employee engagement businesses,” says Ropolo. it means not only guaranteeing food self-sufficiency, ■ Innovation-to-zero The Jasmine Revolution of 2011 led to a democratization but also work, peace and development for millions ■ Renewable energy REDUCE POVERTY, STRENGTHEN of the country and a change in focus. The new of people and future generations,” declared Carlo ■ Reducing CO2 and other air emissions CAPACITY, IMPROVE RESOURCES government has made a priority of the management of Lambro, Brand President of New Holland ■ Circular product life-cycle. natural resources and the development of an integrated Agriculture, at the first Italy-Africa ministerial con- The overall objectives of the project are to reduce and participatory approach, particularly with regard to ference in 2016. “Thanks to our firmly established “We want to work in Africa and help develop rural poverty and food insecurity in this arid region water and soil conservation. presence in Africa, the widespread coverage of our projects that are in line with our own sustainability by strengthening regional and local capacity to adapt →

36 37 SUSTAINABILITY IN THE WIDER WORLD

in agriculture as their main income generator. The main agricultural product of the region WISER WATER is the deglet nour (a cultivar of date), with more than 100,000 palm trees providing the sweet fruit to be exported around the PRACTICES BEGIN world. In addition, many families in the region have some sort of family garden. Through this project, we plan to increase the AT HOME number and robustness of vegetable gardens in particular. Our partners will work with the t CNH Industrial we practice what we local population to establish a preach. Our promotion of sustainable Our partners work with local and improving sustainable incomes in Kébili. With supply point for irrigation and the construction of A‌water development and improved communities in planning and our partners at FAO and the government of Tunisia, raised tanks, and to strengthen the capacities of water efficiency starts in our own manufacturing implementing projects we hope to help develop a comprehensive women and youth. plants and offices. participatory plan for economic and agricultural We are dedicated to increasing water efficiency development in the area. This plan will focus on ther aspects of the grant include in our manufacturing processes, increasing water engaging with the local population to improve establishing a community network of good recirculation, and reducing water consumption techniques and create simple, flexible solutions. Owater and soil conservation practices, and and the volume of water discharged at plants. producing and disseminating best practices and As the world’s population continues to grow unoff water is already an important resource guidelines for sustainable natural resource and economies develop, demand for water in the region. There are several ways that management and agricultural development. increases. We believe sustainable management R‌runoff water is currently collected, including Our partners at FAO and the government of of water is critical from a business perspective through small dams, such as tabias and jessours. Tunisia have been reaching out to local and regional as well as for the best environmental steward- Tabias are dams often constructed from soil, authorities to help implement these various ship. By 2018, we aim to reduce water usually 2-5m high and up to 100m long. Jessours are initiatives, among them community leaders (such as withdrawals per unit of production by 3 percent dams constructed across a streambed. Such dams women’s unions) and regional farmers’ unions, as across all our plants compared with 2014. are typical of the arid, mountainous region of well as other government partners, such as the In 2015, we introduced new water southern Tunisia. They trap soil particles and runoff Agency for the Promotion of Agricultural management procedures for all CNH Industrial water. Trapped soils are often more fertile and ad- Investments and the Tunisian Bank of Solidarity plants in our EMEA (Europe, Middle East and vantageous to crops than the local untrapped soils. (Banque Tunisienne de Solidarité). Part of the Africa) division. This project aims to rehabilitate existing tabias Ministry of Finance, the latter offers an alternative and jessours and create new ones to boost to the traditional banking system. ALL EMEA CNH INDUSTRIAL the network of water resources. PLANTS MUST: In addition, it aims to improve For example, our plant in Rorthais, France, is At our plant in surface water collection through BEYOND KÉBILI ■ Analyze consumption, structure recycling the water used for vehicle leak testing – Rorthais, France, recycled water is the construction and rehabilita- and management of water a move that is expected to reduce consumption used for vehicle tion of fesguias or storm-water Ideally, at the end of the third year, water and by 40 percent in 2017. And in water-stressed leak testing ■ storage units built down- agricultural resources will be collected and managed Identify and eliminate leaks Plock, Poland, our plant improved its degreasing stream, and to construct and more sustainably by local producers, and Kébili’s soil ■ Adopt changes and innovations procedures and adjusted water flow in the rehabilitate private rainwater reservoir capacity will be greatly improved. to boost efficiency, reduce degreasing tank, which led storage facilities. These act as If this pilot proves as successful as we anticipate, consumption and improve quality to a 36 percent reduction in supplementary irrigation and we will offer more water management projects in water consumption per hour In 2016, 27.5 percent of drinking-water supplies. other governorates, and potentially beyond Tunisia. ■ Promote water recirculation within of production in 2015. We will also be engaging, The need for successful innovations has never been manufacturing processes the water CNH Industrial through partners, in dialogue more urgent, as rising temperatures and rising ur drive for with the local population so that they populations strain the world’s groundwater supplies. All plants are also expected to raise awareness increased water used was recycled can share knowledge, learn new Some 40 percent of global food production relies among staff about responsible water use not only Osustainability has techniques and then apply certain principles on groundwater irrigation and, according to new at work, but also at home. pushed us to adapt and to their agricultural practices to improve the research from University College London, the The results speak for themselves. From 2014 to innovate. We have saved resources, saved money sustainability of resources in arid zones. This multi- volume of its depletion rose by 22 percent over the 2016, all CNH Industrial plants reduced total and engaged our staff and communities in wiser layered and participatory approach will help the past 10 years. water withdrawal by 626,000m3 and reduced water practices. It’s one of the reasons why CNH region balance improvements in living conditions Water is one of the most critical issues, not only total water discharge by 727,000m3. In 2016 alone, Industrial continues to win accolades, such as with the protection of water and other essential for our company and not only for the United 27.5 percent of the water CNH Industrial used being named a Green Master by the Wisconsin natural resources. Nations. Water resource sustainability is critical for was recycled. That is equal to 812 Olympic-size Sustainable Business Council, for leadership in More than one-third of the population is engaged the future of the entire world. ■ swimming pools. environmental sustainability.

38 39 SUSTAINABLE INNOVATION ƒ1872 Magirus launches ‚1932 Fiat produces TECHNICAL the sliding 'Ulmer ladder' one of the first mass-produced Enables firefighters to reach agricultural crawler tractors MILESTONES people higher up in burning Allows more people to be fed and buildings, saving countless lives helps build communities CNH Industrial can trace its evolution back over 175 innovation-packed years. Here are „1907 Fiat 1919 International just some of the ideas to have changed produces Harvester invents 1940 New Holland the world in which we live… its first bus the first commercial develops the first self-tying Improves mass power take-off, pick-up baler transport, making it which is premiered Improves harvesting efficiency easier to get to work in the 8-16 model while requiring less labor

„1918 Fiat manufactures „1947 The SIMIT one of the first tractors in company produces the world to be produced the first hydraulic ‚1903 Fiat produces its first on an industrial scale excavators – and commercial vehicle Mass production brings the was acquired by Offers a more efficient way to move goods possibility of global export, Fiat in 1970 around – boosting the local economy while the latest tractor Easier to 1869 CASE produces the first technology makes farming operate, it made steam-powered tractor more efficient and productive. construction, Brings mechanization to US farming – More land can be brought faster and improving productivity and reducing effort. into cultivation more efficient A fundamental tool for road building

company like CNH Industrial lives or dies being crucial to how we foster and promote by its ability to innovate. Thankfully, our innovation, and how we encourage our employees A‌ prognosis appears to be extremely healthy, to unleash their creativity. judging by the wealth of ideas our talented A healthy employees generate that move towards becoming registered patents. HOW THE PROPOSAL SYSTEM WORKS Currently, we hold some 8,500 active patents, of which 1,100 were granted during 2016. There are Employees who believe they have a patentable idea blend of another 3,750 patent applications pending, of which can enter their proposal by means of the portal, more than 1,000 were filed over the same period. along with any supporting materials – such as 1,134 The entire patenting process starts with the drawings, videos and PowerPoint presentations. patents were registered internal filing of ‘invention disclosures’: proposals Once they formally submit the proposal it can’t be in 2016 patents from engineers and developers to improve our modified, and the evaluation procedure begins. products. To streamline the handling process of Each new disclosure is assigned to one of our these disclosures and, as part of our corporate patent attorneys, who will determine if the idea is culture that encourages great ideas, a specific portal patentable, as well as to members of the review pending was developed that is the envy of our competitors. team, who will evaluate its potential technological, This Innovation Portal, administered by our strategic and commercial merits. They intellectual property team, is accessible from any can request additional information from company workstation worldwide and allows any the inventors at this stage. and granted employee in a technology-related area to submit an Then come the official review and idea concerning product design and development, patent search phases, when after more process improvement or any aspect of our activity. intensive discussions with the review team, the During 2016, some 850 disclosures were submitted attorney will conduct both due diligence to ensure to the Innovation Portal and were funneled into an there are no obstructions to using the idea and to Any employee with an idea for process improvement or evaluation process. In the majority of cases this verify its patentability. Technical drawing in support of the resulted in a patent application Then, if it turns out that the idea is patentable, patent application for an improved product design can submit it via the Innovation Portal. Around breakbolt setup on a flywheel baler The concept of the portal goes back almost 15 the patent protection process begins. When the The IVECO Z Truck concept half of those received each year are eventually granted a patent years and is still a work in progress, being constantly final draft has been signed off by the inventor, a has spawned 29 patents – and contribute to the company's success adapted to changing needs, but it is recognized as formal patent application is filed. →

40 41 SUSTAINABLE INNOVATION

‚1999 Fiat introduces „2013 New and patents Common Rail Holland produces ‚1947 ‚1957 CASE ‚1972 Magirus develops the „1975 Braud engine technology a working New introduces the first specific 8x8 aircrash vehicle​ introduces its first Brings improved operating prototype Holland first factory- for use in airports self-propelled grape efficiency, fuel saving and of the T6.140 introduces integrated tractor harvester responsiveness Methane Power the first loader backhoe Represents a tractor haybine Easy to use and highly technological leap Brings sustainability mower versatile – backbone forward – offering 2009 New Holland to the farm – highly conditioner of the building efficiency and better unveils its innovative efficient and with industry working conditions NH²™ hydrogen tractor lower emissions

„1977 International ƒ1996 CASE ‚2016 Case IH and New Holland Harvester introduces Axial IH launches the unveil concept autonomous tractors Flow single-rotor technology Quadtrac – the for combine harvesters first tractor on 2012 FPT Industrial four triangular becomes the first tracks manufacturer to introduce an SCR- only solution to meet the latest emission regulations in both on- and off- road applications​

From the time a disclosure is entered on the portal, that can be expensive and time-consuming to deal We know we have some of the smartest people in partners, creating plenty of local publicity. This all we aim to have an application filed in 6-12 months, with. The idea proposed changes to the flywheel the industry working for us, so we try to encourage helps to promote the portal and encourage our depending on the complexity of the original bearings to reduce wear and avoid unnecessary them to bring that knowledge and expertise to the people to bring forward their new ideas. proposal and the level of review required. stoppages. It took just five days between the idea fore. In the past few years we’ve worked hard to go Naturally, if there is an urgent require- being filed to the portal and a patent application being to all our 49 engineering facilities to provide training bviously just looking at raw numbers ment, the whole process can be reduced filed in Belgium; one of the fastest ever transitions on what it takes to prepare an idea for the patenting doesn’t reflect the complexity of to a single week, or even less. between those phases. But even when filing moves process and tell people about our awards system. Oindividual ideas, but there are some Normally we will file a priority quickly, it still takes a long time – up to two years in this people who over the course of their career have application, located in one country, say the case – for the patent to be granted. more than 50 patents to their name. USA, Italy or Belgium. This gives us an REWARDING INNOVATIVE THINKING Advanced 3D official start date and from then we have one year to nother innovation, which took a more modeling is used file in other countries. Sometimes, depending on conventional route through the process, was The Patent Award Program works slightly A SECURE ENVIRONMENT when developing circumstances, we can drop the first application and ‌to create a more efficient coupling mechanism differently in each region. In the EMEA (Europe, new projects A just continue with subsequent applications filed in the hitch apparatus used to connect implements to Middle East and Africa) region, for example, a pre- When the portal initially started in Europe, it was within that priority year. tractors. The improvement saves the operator time set monetary award is split between the inventors seen as a collaboration tool, allowing people to look The examinations take place in the patent offices and hassle in switching between different attachments. in proportion to their contribution – something at ideas their colleagues were working on. But over of the relevant countries and when approved by This application was filed in Italy and, again, took that is set out when they file the initial disclosure. In time we realized that there needed to be a more the examiner, a patent may be granted. From start about two years before it was granted. Corresponding the NAFTA (North America) and LATAM (Latin secure environment for our intellectual property. to finish the process can take two cases for both these examples are still pending in the American) regions an initial monetary award is Now a person’s access is limited to tracking their years or more, depending on the USA and Europe. given to the inventor upon filing, then a second, own submissions, while people on review boards From start to finish jurisdiction. In some countries, Of the 850 disclosures submitted in 2016, about larger amount is paid upon grant of a patent. can only see the ideas that are allocated to them. such as Brazil, it is not unusual for it 50 percent have a realistic chance of getting through Only the patent attorneys can see everything. the process can take to take 10 years or more to obtain the initial review, so we expect about 400 of those will here are plans for a revamped policy that will Each week a status update appears on the portal, a patent. eventually make it to a formal patent application. be consistent worldwide and reward people generated by the patent management system of the two years or more One hugely successful idea that In 2015, we filed around 350 new applications; an Tsooner in the process. We think that if you IP department. Thus all investors are kept up-to- came through the Innovation Portal, upward trend that we expect to continue. want to keep the inventive fire burning then it’s date on the progress of their disclosures – and and is now in use on all our New A sign that the project is expanding is that this year’s crucial to reward the spark of an idea quickly. specifically whether their case has advanced. Holland Agriculture BigBaler – large square baler – disclosures are spread well across our geographic It’s also important that we celebrate our We believe our Innovation Portal is second to products was a technical proposal to solve the locations – and the range of topic areas is also colleagues’ success, so yearly patent award dinners none and has allowed us to make the most of the problem of a breaking flywheel shear bolt, an issue well distributed. are organized for the eligible inventors and their inventiveness of our remarkable employees. ■

42 43 THE FUTURE OF SUSTAINABILITY

introduction of a materiality analysis; the material WHERE topics are our response to these megatrends. They will have a direct impact on our operations, and form DOES CNH the basis for long-term targets. e also updated our system of gover- INDUSTRIAL nance to better reflect the critical role Wof sustainability. Our Sustainability Steering Committee has been established to identi- – AND THE fy strategies, integrate sustainability into our everyday activities and provide a forum for our four operating regions and 12 brands WORLD – GO to come together to share what they are doing and to benchmark their activities. FROM HERE? We have also appointed a Chief Sustain- ability Officer, who is also the Chief Financial Officer, reporting to the Chief In seeking to identify and address the most Executive Officer. important global trends, we've had to develop As we set about identifying the most important global trends, one of the most a new way of thinking – one that is allowing us crucial sources of information has been to shape the future in line with the needs of the UN’s Sustainable Development Goals. employees, suppliers, dealers and customers Published in 2015, they define goals to be achieved by 2030. At CNH Industrial we are making our contribution to achieving them.

limate change, food scarcity and security, structure that underpins the entire operation – from MEGATRENDS: THE BIG THREE and an innovative and digital world. These roads and bridges to schools and warehouses. Our incredible opportunity to harness new ways of Award winners: the IVECO Stralis are among the most important issues alternative fuels program and drive to power our The first mapping we carried out identified 61 thinking and working. From the introduction of NP (opposite) and the Case IH C OPTUM 300 CVX (above) shaping not only our business, but the world we live plants using renewable energy is just one aspect of trends that were then grouped into 20 megatrends. precision agriculture to the use of automated in today – and its rapidly growing population. As a our contribution to combating climate change. They were presented to members of the Sustain- vehicles, there is a wide variety of new products global company with a big role to play, they shape In a world of finite resources, it is important that ability Steering Committee who, via an online and systems that will have profound effects on the the way CNH Industrial operates, too. everything we do is part of a drive towards greater internal survey, narrowed them down to three: way we operate, boosting agricultural yields. In fact we are committed to mitigate and limit the sustainability. This applies to the entire value chain, climate change, food scarcity and security, and the impact of the megatrends, or exploit and enhance from the behavior and contribution of our suppliers innovative and digital world. their positive effects, focusing on the topics that we to the lifetime environmental impact of our products. THE MATERIALITY MATRIX have identified as most material. These topics are Our efforts are recognized in the Dow Jones CLIMATE CHANGE assessed by our stakeholders in terms of how import- Sustainability World and Europe Indices (DJSI) and A broad theme, this encompasses political, judicial, Last year we took the materiality analysis to a new ant it is for us to manage the impact, in a positive way, in the numerous awards that our products collect. ethical, economic and scientific factors, and goes far level. No longer simply a reporting tool, rather it for each of them. We have identi- The IVECO Stralis NP – the first natural gas truck beyond the literal definition of natural climate has been transformed into a core business tool to fied key long-term targets within for long-haul operations – was voted Project of the variation. It has a severe impact on ecosystems – help identify real priority actions in those day-to- Everything we do is part these topics, and the targets have Year at the European Gas Awards of Excellence 2017. flooding and desertification are more obvious day parts of running a global business that are – and will continue to have – a The Case IH OPTUM 300 CVX was elected Tractor examples – and influences worldwide economies, affected by the big three megatrends – and through of a drive towards profound effect on everything we of the Year® at the prestigious awards of the same consumer purchasing decisions and quality of life. which we can shape the future and achieve our do. They cover everything from the name. These are just two from a long list of winners, goals. Employees as well as suppliers, dealers, greater sustainability design of our products to the way each one a contributor to the challenges of feeding, FOOD SCARCITY AND SECURITY customers and other stakeholders were all asked we conduct ourselves at our plants housing and sustaining the world, but there is a lot Meeting the rise in demand for food is the first what they considered to be the most important and facilities around the world. more to be done. The road to increased efficiency challenge; the second is to meet that demand in a issues. Twelve were identified, ranging from These powerful, inter-related megatrends create and sustainability is long, challenging but rewarding. way that is safe and can be sustained. To do this will renewable energy to CO2 and other air emissions serious challenges as well as amazing opportunities. depend on successful coordination of hugely to local community engagement and autono- At CNH Industrial we have a vital role to play in complex supply chains that incorporate agricultural, mous vehicles. feeding the world’s growing population, which is SUSTAINABILITY: processing, transport, manufacturing and logistics. The process helps us to identify the material ways estimated to hit 9bn people by 2050. Our products A NEW WAY OF THINKING we can respond to the global challenges ahead. not only prepare and plant the fields, then harvest INNOVATIVE AND DIGITAL WORLD Ultimately, this will mean we can set meaningful the crops, but they also transport food to processing To ensure we fully understand the impact of the Technology can help, too. Constant connectivity, long-term targets, in the Sustainability Plan, or our plants and provide the logistical support that delivers megatrends we have identified – and to then respond Big Data, sensor technology and the evolution of 'Vision 2022', that are based on potential risks and it to the local store or the consumer’s front door. in a dynamic and strategic way – we realized we mobile devices are rapidly changing the way people opportunities linked to our operations around the Our construction machines build the vital infra- needed a new way of thinking. The result was the work and communicate. This revolution gives us an world. For example, the plan has a target to reduce →

44 45 PLATOONING: BOOSTING LONG-HAUL EFFICIENCY

Automation will also transform the costs of long- haul logistics. As we have seen in this report, our innovative IVECO brand has been trialling platooning, an autonomous system that enables several trucks to travel in line with only a driver in the front cab making decisions. Each connected truck has GPS, a sensing platform based on radars and cameras, and enhanced safety systems such as co-operative adaptive cruise control.

ith congestion set to increase in coming years, platooning will help mitigate Wthe problem. Wind resistance is also CO2 emissions by 20 percent by 2022 compared to reduced because the lorries can run closer together, 2014; other targets include increasing by 20 percent so fuel efficiency rises by up to 10 percent. Research 2016 the number of employee volunteer hours in the suggests that CO2 emissions could be cut by up to IVECO successfully USA, Canada and Mexico, as well as involving 100 10 percent. IVECO’s Z Truck sums up what new demonstrates truck percent of employees in Latin America in campaigns technology can achieve. Protected by 29 patents, platooning technology aimed at promoting healthy lifestyles. this sleekly-shaped vehicle has enhanced aero- dynamics, will run on Bio-LNG and have a waste- heat recovery system. It can travel 2,200km while AUTONOMY: AN EXCITING producing almost zero CO2 emissions. And the cab CHALLENGE is a lifestyle pod where driver comfort is key. In addition to long-haul efficiency, some commer- By combining Big Data, connectedness, new soft- cial vehicles must be able to deliver into an urban ware programs, sensing technology and telematics environment where emissions – and noise – con- we can create pioneering products – innovative trols will increasingly demand the use of alternative blends of hardware and software – that deliver fuels or electric engines. That is why we are so whole new levels of performance proud of the IVECO Vision, a hybrid vehicle that to help feed the planet. can adapt its power source to the environment, All of us at CNH One of the 12 topics identified employing a more traditional engine on inter-city during the materiality analysis, for routes where speed is needed but switching to its Industrial are excited by example, was autonomous vehi- zero-emission electric mode in cities. cles, which have huge potential to the challenges ahead boost efficiency. We believe that he development of efficient powertrains they will appear first in agri- that use conventional and alternative fuels in culture, where there are fewer Tall market segments will help us to achieve human variables to manage and fewer regulations our objectives of sustainably increasing efficiency. than on the public road network. Used with Tractors that run on biomethane, delivery vans that telematics and precision farming techniques, they run on compressed natural gas (CNG) and other could lead to rises in farm yields in coming decades. vehicles relying on hydrotreated vegetable oils (HVO) will all have a role to play in the vehicle fleets of the t CNH Industrial we are very excited by future. As well as satisfying new regulatory frame- the work we are doing with our Case IH works and helping us move towards a more sustain- 1995 A‌and New Holland autonomous concept able future, these vehicles must also be designed to Case IH is the first manufacturer tractors – not least because they give us such a reduce total operating costs for our customers. to introduce precision farming fantastic insight into the farm of the future. GPS All of us at CNH Industrial are excited by the technology, known as AFS and sensor technology allows them to navigate a challenges ahead. Our materiality analysis is helping field while cameras send live information to the us to interpret significant megatrends and to farmer who can remotely monitor and control respond to them in a sustainable way. These operations on a tablet or laptop. The tractor can megatrends are giving us strategic thrust; as the work right round the clock, taking full advantage world around us changes, so all of us at CNH of good weather while automated routes Industrial are ready and able to change, too. optimize inputs such as water, fuel, seed and To see the full 2016 Sustainability Report and find chemicals. Skilled labor can be used instead to focus out more about all of the projects covered here, visit on value-added tasks. www.cnhindustrial.com ■

46 47 2016

CNH Industrial N.V. 25 St. James’s Street, London, SW1A 1HA, UK.