CSR Report 2019 Contents CEO letter 03 Our business 04 Governance 05 Commitments 07 Human rights 09 CSR risks 11 CSR strategy 12 Environmental Footprint 13 Support Marine environment 14 Newbuildings and ship recycling 15 Responsible neighbour 16 Reducing sulphur 18 Improve Air Quality 19 Decarbonisation 21 About this report Logistics 23 This report constitutes DFDS’ Communication on Progress to the Caring employer 24 UN Global Compact. It covers the DFDS Group’s CSR approach and Well-being for all employees 25 activities for the financial year 1 January to 31 December 2019. Health and safety 27 The report is an integral part of the management review of DFDS’ Inclusive workplace 28 Annual Report 2019 and by publishing this document, we fulfil Providing opportunities to do good 31 the requirements of Sections 99a and 99b of the Danish Financial Statements Act. ESG Key figures 33 Definition of terms 34 www.dfds.com CSR Report 2019 2 CSR at DFDS 2019 was the year when we increased emissions reduction by 2030 set by the International Maritime engagement and efforts in integrating CSR Organization (IMO). with our business strategy, while at the same To be a sustainable company, we must also be a diverse company. time world attention on the growing urgency Having an inclusive workplace is important to us. We have set a of tackling climate change intensified. gender diversity target of 30% by 2023 to make sure we maintain our focus on increasing diversity. Across civil society, politics and many industries, awareness CSR is now built into all our future plans. We have integrated of sustainability issues has increased significantly, and the sustainability into the new ‘Win23’ strategy, which we initiated transport industry is no exception. In both ferry- and land-based this year. Through four strategic pillars, we intend to grow solutions transportation, investors and stakeholders are calling on us to for selected industries; digitise services to accelerate growth; document that we are doing business sustainably. Our industry develop and expand the network, and create more value for pas- has a large carbon impact which we need to address responsibly. sengers. Sustainability is the thread that joins our CSR and Win23 However, we also have a huge potential to make a significant strategies, and supports and enables Win23’s four strategic pillars. difference when it comes to reducing the environmental impact of our activities. It is therefore critically important that we con- Collaborating to cut emissions tinue actively to consider how we can cut our CO2 emissions. Working together with stakeholders is essential to enable us to deliver on our own targets, and for the industry to achieve the Getting to Zero Coalition and ZEEDS (Zero Emission Energy Strengthening our efforts in line with our CSR strategy 50% absolute reduction in GHG emissions by 2050 set by the Distribution at Sea). Looking ahead, we are excited about growing In 2019, the new CSR strategy we presented in 2018 came into IMO. Our approach is to work with partners on immediate solu- our sustainability activities, and working together with existing full effect. The strategy’s two cornerstones of reducing our tions to reduce our fleet’s fuel consumption, and also to develop and future partners. ‘Environmental Footprint’ and being a ‘Caring Employer’ link to long-term solutions for future vessels based on new technologies six ambitions and five of the UN’s Sustainable Development and viable alternatives to fossil fuels. I hope you find this report useful and informative. It describes Goals. Collectively, these have driven our work on our CSR our CSR strategy, ambitions and actions, as well as our contin- activities even more strongly in 2019. This year, our commitment to finding, testing and scaling substi- ued mission to do business responsibly across all these areas. tute fuels was highlighted by our investment in biofuel producer It reflects our commitment to our purpose, ‘we move for all to We want to be progressive in cutting greenhouse gas (GHG) MASH Energy. Their CO2 neutral biofuel will be used in ships, and grow’ – and to the principles of the UN Global Compact and the emissions. So this year, we have set our own challenging in 2020, our plan is to work towards testing this in a DFDS vessel. UN Sustainable Development Goals. CO2 emissions targets for the future. Our target is to reduce gCO2 per GT-mile to 12.4 in 2023 and 9.6 in 2030. We aim at In addition to these immediate steps, we joined several industry a 45.1% reduction from the 2008 baseline to 2030, and our partnerships in 2019 which aim to develop long-term solutions Torben Carlsen target is therefore complementary to the target of 40% CO2 for decarbonising the industry. We are proud to have joined the President and CEO of DFDS Group CSR Report 2019 3 Narvik Bodø Fauske Ports & Operational Offices Mo i Rana Operational Partner Offices Mosjøen Ferry Network Sideport Services Network Trondheim FI Container Network Ålesund Rail Partner Network Lerwick Our business Florø NO Bergen Kotka Oslo St. Petersburg Haugesund We move freight and passengers on 23 ferry Drammen Hanko Kapellskär Stavanger Larvik Moss Tallinn routes in Europe and we also provide logistics Fredrikstad Fort William Aberdeen Brevik Halden Kristiansand solutions for a wide range of businesses SE Paldiski EE Greenock Bellshill Lilla Edet RU Larkhall Gothenburg Ventspils Newcastle LV Ballina IE Belfast Riga Liepaja Mullagh ia Manchester ic Karlshamn Dublin Liverpool Esbjerg CopenhagenMalmö Freder Klaipeda Warrington DK LT Cork Immingham RU UK Vilnius Moscow Grimsby Kiel Kaliningrad aterford BY W Chesterfield Cuxhaven Lübeck Minsk Felixstowe Amsterdam Hamburg Gravesend Brugge RotterdamNL Poznan AvonmouthPeterborough Dover Zeebrugge Antwerp Duisburg PL Newlyn Dunkirk Paignton Calais Ghent Genk Newhaven Boulogne- sur DE 8,400 21 Dieppe-Mer 8 35 BE Dourges LU Cologne employees ferry routes port terminalsBettembourg Prague logistics locations UA Paris CZ – incl. 9 passenger routes Ludwigshafen SK Munich FR Wels Salzburg CH AT Ilyichevsk Lyon HU Gyula Tibod SL Busto Melzo Trieste RO Maia Novara amas/Avignon Mir Sète Le Boulou Marseille IT PT ES Ambarli Pendik Valencia Bari Yalova GR TR 45% Forwarders and hauliers 39% Manufacturers and retailers 16% Passengers Our ferry routes mainly carry trailers for forwarders The key customers of our logistics and ferry solu- The key passenger groups are people travellingPatras in Mersin and hauliers. This is typically fast-moving freight tions are manufacturers of automotives, fresh and their own car, and mini cruise passengers enjoying a destined for delivery within days. frozen foods, forest & paper products and other Tunis maritime experience and the on-board facilities. industrial goods, as well as retailers. TN CSR Report 2019 4 Governance A strategic approach to CSR needs dedicated This year, we also made significant efforts to drive CSR engage- Strategic CSR committee work. At DFDS, we have structures and pro- ment at all levels and in all areas of the business. We mapped and integrated every identified CSR activity into a new, single, cesses in place to make sure we stay commit- interactive, digital platform. Every DFDS employee can now find EMT ted, align CSR governance with our ambitions, out about current initiatives; report new local initiatives to the and prioritise the right initiatives in the business. CSR team; and suggest ideas. CEO CFO The Poseidon Principles CTO EVP, Logistics Anchoring ambition in strategy and governance External influence on responsible governance is increasing. The CSR team reports to the Strategic CSR Committee, which In 2019, a group of international banks officially introduced is made up of the Executive Management Team (EMT) and the the ‘Poseidon Principles’. EVP, Ferry EVP, People Operational CSR committee. The four principles provide a framework for integrating climate The Strategic CSR Committee provides the right level of atten- considerations into lending decisions, which, in turn, promotes tion, responsibility and decision-making power. It meets quarterly international shipping’s decarbonisation. We fully support these Operational CSR Committee and gives a mandate for our CSR direction, ambitions and policies. principles, as they set a level playing field for the industry and There is also continuous dialogue between the CSR team and the positively influence our governance. Procurement Logistics Strategic CSR Committee. Whistleblowing With representatives from Ferry, Logistics and Group functions, To make sure all our people understand and follow our principles Technical Organisation Investor Relations the Strategic CSR Committee deepens integration across our for responsible behaviour, we have a whistleblowing scheme operations. This integration helps us continually assess risks, covering the whole Group. Communication analyse what issues are relevant and adjust our actions as a result. 18 cases were reported in 2019, compared to 16 cases in 2018. The reported cases cover discrimination or harassment; In 2019, a new EMT started to take shape following the appoint- substance abuse; employee relations; accounting and auditing ment of our new CEO. It now includes IT/Digital. With the new matters; theft, and company policy violation. We take all viola- CSR Team set-up, commitment to CSR remains strong. Setting an example tions seriously, and we make every effort to investigate reports Head of CSR Director, for the Group, 33% of the EMT are women, meeting our gender and learn from them to prevent future cases. Each incident is Environment & split target of 30/70 across DFDS. discussed at our audit committee. Sustainability CSR Report 2019 5 We take responsibility together It takes the commitment of everyone to fully reach our responsibility goals. Whether at sea or ashore, in offices or in operations, the behaviours and actions of individuals make an important difference. Commitments We want to take responsibility for the societies and environments that we affect.