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2020 SUSTAINABILITY REPORT Contents CEO Message Our Sustainability Priorities Corporate Governance Valuing Our People AGCO Agriculture Foundation

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2020 SUSTAINABILITY REPORT Contents CEO Message Our Sustainability Priorities Corporate Governance Valuing Our People AGCO Agriculture Foundation 2020 SUSTAINABILITY REPORT Contents CEO Message Our Sustainability Priorities Corporate Governance Valuing Our People AGCO Agriculture Foundation Sustainable agriculture is fundamental to our shared future and is imperative to fulfilling our Purpose. Together, the AGCO team is prioritizing the sustainability actions and investments that make the greatest and most immediate positive impact on farmers and our industry. Learn more about Our Sustainability Priorities 3 CEO Message 13 Elevating Employee Health, in our 2020 Annual Report 4 Megatrends Informing Safety and Wellbeing Our Sustainability Priorities 14 Prioritizing Animal Welfare 5 Identifying What Matters Most in Food Production 6 Engaging Stakeholders 16 Corporate Governance 7 Our Sustainability Priorities 17 Valuing Our People 8 Advancing Soil Health and 19 AGCO Agriculture Foundation Soil-Carbon Sequestration 21 About this Report 10 Decarbonizing Our Operations 21 Forward-Looking Statement and Products AGCO 2020 Sustainability Report 2 Contents CEO Message Our Sustainability Priorities Corporate Governance Valuing Our People AGCO Agriculture Foundation Q&A with Eric Hansotia operations, protecting the health and Q: How has COVID-19 shaped your solutions and practices. Developing the safety of our employees and managing thinking on sustainability? products and solutions farmers need to our business to reduce our environmental reduce soil compaction, plant cover crops, impact are key priorities. Together, these A: At AGCO, we place farmers at the center and use no-till farming practices is a key actions establish us as a trusted partner to of everything we do, and that’s never been opportunity. our farmers, dealer and supply partners and more clear than during the pandemic. the communities we serve. Our employees around the world have Within our own operations, we’ve announced been united in their shared commitment to our ambition to reduce our manufacturing protecting each other’s health and safety carbon Scope 1 and 2 emissions intensity by Q: How do AGCO’s new Purpose and keeping the world’s farmers farming. 20% and increase our renewable energy use to 60% by 2026. These ambitions, combined and Vision strengthen its We don’t want a global health crisis to become a global hunger crisis. with our product and service innovations commitment to sustainability? for farmers, are essential to reducing global Eric P. Hansotia The pandemic has underlined the important carbon emissions and doing our part to A: As the world’s population rapidly grows role agriculture plays in society and the mitigate climate change. Chairman, President towards 10 billion people by 2050, feeding and Chief Executive Officer role we play at AGCO — as employers, as that population in a sustainable way is manufacturers and as important members We are excited to advance AGCO a challenge and opportunity for our industry. of our communities. I was already convinced and agriculture on many impactful Our Purpose is to deliver “farmer-focused that AGCO had a larger, more defined role sustainability fronts! solutions to sustainably feed our world” to play in sustainability, and COVID-19 and our Vision is to be farmers’ most reinforced my thoughts and pushed our Q: What does sustainability “trusted partner for industry-leading, global team to think big and act bigger. smart farming solutions.” Together, these Sincerely, mean to AGCO? Our new sustainability strategy will be statements reinforce our commitment the launch pad for focused creativity and to rapid innovation and the evolution innovation in the years to come. A: Achieving economic, social, and of precision agriculture solutions to environmental performance in today’s help farmers produce more with less dynamic business climate requires a environmental impact. sustainability strategy that is executed Q: Where do you think AGCO has ERIC P. HANSOTIA with discipline year after year. In 2020, Today, perhaps more than ever, people want the greatest opportunity to reduce we established a new global team that is Chairman, President to do meaningful work for companies that the impacts of climate change? and Chief Executive Officer working towards integrating sustainability share their values. Our global AGCO team is into our core business functions to create united by our desire to help farmers protect A: Fundamentally, agriculture can be a long-term stakeholder value. This effort and grow the global food supply. Living our starts with supporting farmers to reduce tremendous force for good when it comes Purpose, especially during the pandemic, to climate change. Agricultural soils play their emissions, preserve agricultural helps us retain and attract talented soils, and ensure the welfare of farm a crucial role in both food security and employees around the world. Leveraging our climate change. Globally, soils can sequester animals, which are areas where we have diversity and promoting inclusion creates an opportunity to make the biggest a significant amount of carbon from the an environment that unlocks innovation and atmosphere if paired with the right farming impact within agriculture. Within our own employee creativity to address farmers’ most pressing challenges. AGCO 2020 Sustainability Report 3 Contents CEO Message Our Sustainability Priorities Corporate Governance Valuing Our People AGCO Agriculture Foundation Megatrends Informing Our Sustainability Priorities LEARN MORE We’re committed to doing our part to address the biggest issues facing our industry and our world. Population growth and food security Urbanization Speed and scale of changing Digital agriculture consumer preferences From 7.3 billion in 2015 to 9.8 billion by 55% of the world’s population lives in cities, Precision farming investments will 2050, the planet’s growing population will growing to 68% by 20501. Concomitant with Consumers continue to seek transparency in continue to improve yield and reduce costs put additional stress on the environment increasing sizes of farms is an increasing food production. And increasing demand for and environmental impacts. and societies. risk of labor shortage in rural areas. animal protein has driven a greater need of feed and grain2. Shifting socioeconomics Increasing focus on animal welfare Land use Climate change and growing divides As human standards of living rise around Land is simultaneously a source and a sink of Climate-related risks pose a threat to Emerging and developed markets continue the globe, driving demand for animal protein, CO2. Land degradation in agriculture systems economies around the world. Extreme events— to see gaps in nutrition and health, educational so do concerns about animal welfare and can be addressed through sustainable fires, freezes, floods, high winds—are occurring systems, economical resilience and how to find more sustainable and productive land management, with an ecological and with unprecedented frequency and already environmental rights. ways to raise healthy animals. socioeconomic focus, with co-benefits for reshaping the world’s socio-economic outlook. climate change adaptation4. The food sector contributes over 20% of total GHG emissions, with the agri-food chain accounting for ~30% of the world’s total energy demand3. Sources: 1 United Nations, 2 World Health Organization, 3 FAO – Energy-Smart Food for People and Climate, 4 International Panel on Climate Change - Climate Change and Land AGCO 2020 Sustainability Report 4 Contents CEO Message Our Sustainability Priorities Corporate Governance Valuing Our People AGCO Agriculture Foundation Identifying What Matters Most LEARN MORE MATERIALITY MATRIX Our success depends on understanding MATERIALITY MATRIX and responding to the changing world in Climate Smart Digital Agriculture Agriculture which AGCO operates. In 2020, we updated Climate Smart Digital AgricultureClimate Smart AgricultureDigital our materiality assessment to identify Agriculture Agriculture the environmental, social, economic and governance issues that are perceived as being most important to our stakeholders. In addition, Sustainable Food Systems we also benchmarked the key sustainability Sustainable ecanisation Climate Ris Sustainable FoodSustainable Systems focus areas of our peers and researched Animal Sustainable ecanisation Climate Ris Food Systems Sustainable ecanisation Climate RisDecarboniation industry megatrends to establish a broad view Welare Animal Animal Decarboniation of current sustainability issues. The resulting Rigt to Welare Decarboniation Welare insights informed our sustainability approach, utrition Rigt to Transparency Rigt to Consolidation mployee ealt strategy, and reporting. This ensures that we utrition and raceability utrition Transparency o Farms and Saety Consolidation mployee ealt consider the issues that matter most to our andTransparency raceability Consolidation o Farms andmployee Saety ealt Product Liecycle Soil ealt and and raceability o Farms stakeholders, and which we can influence. and Saety Steardsip Soil-Carbon Seuestration Product Liecycle Food Loss Soil ealt and Community Inestment Soil ealt and SteardsipProduct Liecycle and aste Soil-Carbon Seuestration Sareoler Conern Sareoler and Sills Development Food Loss Soil-Carbon Seuestration Community Inestment Steardsip andFood aste Loss Rural Community Inestment Sareoler Conern Sareoler and Sills Development and aste Alignment With UN SDGs Conern Sareoler Resilience Water Availability Supplier and Sills Development Rural and Rigts Dependency ResilienceRural Water Availability Supplier Resilience
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