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 CEO, CNH Industrial 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. 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; C technologies, 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 A our 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.