SUSTAINABILITY REPORT PARTNERING & INNOVATING TO BUILD & POWER A BETTER WORLD CEO LETTER .......................................................................................1 ABOUT FINNING ................................................................................ 2 SUSTAINABILITY AT FINNING ..............................................................4 Our approach to sustainability ..................................................................... 4 UN sustainable development goals ............................................................... 5 Materiality assessment ............................................................................ 6 Reporting scope ..................................................................................... 6 Sustainability roadmap ..........................................................................8–9 PEOPLE ........................................................................................... 10 Safety and health ...................................................................................11 Health and wellbeing...............................................................................11 Inclusion and diversity .............................................................................14 Employee and leadership development ..........................................................16 Employee engagement and labor relations ......................................................17 ENVIRONMENT ................................................................................ 18 GHG emissions and energy use ...................................................................19 Protecting our environment ..................................................................... 22 Waste management ...............................................................................21 Spills and wastewater .............................................................................24 PRODUCTS ....................................................................................... 26 Customer safety ................................................................................... 27 Customer performance and loyalty ............................................................. 29 Product stewardship .............................................................................. 30 Responsible supply chain ........................................................................ 32 COMMUNITIES ................................................................................. 34 STEM education ................................................................................... 35 STEM activities .................................................................................... 36 Skills development ................................................................................ 38 Indigenous engagement .......................................................................... 38 ETHICS AND GOVERNANCE ................................................................ 40 Ethics ................................................................................................41 Governance .........................................................................................42 PERFORMANCE TABLE ...................................................................... 44 GRI INDEX ........................................................................................ 48 FORWARD-LOOKING STATEMENT ....................................................... 51 1 FINNING | SUSTAINABILITY REPORT 2019 CEO LETTER to reduce our greenhouse gas (GHG) emissions year over year, and in 2019, we saw a decrease of 4% in absolute GHG emissions compared to 2018. To accelerate our progress, we signed an agreement in 2019 to procure zero- emission electricity for our UK and Ireland business for the next three years. WHERE OTHERS SEE CHALLENGES, WE SEE OPPORTUNITIES. The need for continuous reduction of environmental impacts associated with economic growth, the transition to a low carbon economy, stringent emission standards for engines, and high diesel costs are just a few of our customers’ challenges. Our products and services help our customers work smarter, safer and more efficiently, helping them to reduce their environmental footprint. We estimate that in 2019, through our dual-engine sales, more than 15 million litres of diesel were displaced and replaced with cleaner-burning natural gas. Autonomous mining is giving us a TO OUR STAKEHOLDERS, CUSTOMERS, PARTNERS glimpse of what the future of safe mining AND EMPLOYEES, FINNING looks like. And a 10% increase in demand I am pleased to share with you our third IS FUNDAMENTALLY A for components in our remanufacturing sustainability report, which reflects on PEOPLE BUSINESS. business in 2019 is a case study for how our progress towards our sustainability a circular economy can be a win-win Our commitment to employee health goals in 2019. At Finning, sustainability opportunity when it comes to meeting and safety is unwavering and we are A circular is a journey, and we are continuing to not only our customers’ needs, but our proud to report that we decreased our learn, grow and evolve our approach own needs as well. economy can total injury frequency by 23% and our as we progress on our roadmap. Our total recordable injury frequency by be a win-win passion and commitment to sustainability BUILDING AND POWERING A BETTER 4% in 2019 from 2018. We are also is continuing to grow, not only in how we WORLD IS NOT POSSIBLE WITHOUT opportunity actively cultivating an inclusive culture, approach our work, but in the way we ENGAGING THE NEXT GENERATION. one where everyone feels valued, when it comes to embed sustainability in how we interact accepted and psychologically safe. We invest in the communities where with partners, shareholders, customers, meeting not only All Finning executives, including myself, we live and create a better future by employees and all our stakeholders. our customers’ are committed to building an inclusive supporting STEM education. We support training programs for women, girls and needs, but our THE WORLD DOESN’T STAND STILL team and have set concrete goals to work towards. In 2019, we invested Indigenous youth because providing AND NEITHER DO WE. own needs more than $7.6 million in training and we training makes a fundamental difference in the communities where we live and as well. We have been in business for more will continue to invest in our people to than 85 years and we continue to adapt, strengthen our safety and health culture contributes to a stable workforce for embrace rapid technological changes and to help them lead the industry Finning and our industry for years to come. and evolve with customer, shareholder by thinking ahead, anticipating customer and societal expectations. New advances needs and creating efficient solutions I want to thank all Finning employees, in e-commerce, machine connectivity for the benefit of everyone we do shareholders and customers for and remote monitoring are some of the business with. their continued support as we work ways we deliver an enhanced customer together towards our shared vision. experience. In 2019, we launched ENVIRONMENTAL RESPONSIBILITY You are the reason we are making a my.finning.com, a self-serve portal STARTS WITH OUR OWN difference, every day. that allows access to capabilities that OPERATIONS. meet our customers’ needs, whenever We aim to reduce our environmental and wherever they need us. We also L. SCOTT THOMSON completed a strategic acquisition of footprint by focusing on energy 4Refuel, a Canadian leader in on-site efficiency, emissions reductions, finding President and Chief Executive Officer refueling services, which broadens and ways to reuse and recycle our waste Finning International Inc. enhances the industrial services we offer. streams and being vigilant about the impacts of our facilities on land and water. Through these efforts, we continue FINNING | SUSTAINABILITY REPORT 2019 1 SUPPLY CHAIN FINNING CUSTOMERS OUR CUSTOMERS WORK IN: EMPLOYEES 13,13,188146 CONSTRUCTION MINING OUR LARGEST POWER SYSTEMS SUPPLIER ~200214 87 SUPPLY CHAIN AND PARTNERFINNING LOCATIONS COUNTRIESCUSTOMFORESTRYERS PLUS GOVERNMENT FINNING OIL AND GAS 68,,000+000+ 2,500 200271XX,XXX 4REFUEL ADDITIONAL SUPPLIERS EMPLOYEES XX,XXX SERVICE VEHICLES TRUCKS TO SUPPORT AND CONTRACTORS PICKUP TRUCKS & MOBILE ON-SITE WORLDWIDE CUSTOMERS 13,13,188146 OTHER SMALL VEHICLES REFUELING WORLDWIDE EQUIPMENT Finning, the world’s largest CaterpillarUSED With our broad product support RENTALS SIGNIFICANT EQUIPMENT OUR CUSTOMERS OUR LARGEST dealer, has been delivering unrivalled5% 3% infrastructure and exceptional service service for more than 85FUEL years. AND We capabilities, we deliver solutions that OPERATIONAL CHANGES SUPPLIER ~200214 OTHER7 WORK IN: sell, rent and provide parts8% and service enable customers to lower their overall AND PARTNER LOCATIONSfor equipment and enginesCOUNTRIES to help cost of ownershipNEW while maximizing On February 1st, 2019, we completed customers in a wide range of industries productivity.EQUIPMENT CONSTRUCTION36% the acquisition of 4Refuel. 4Refuel PLUS maximize their productivity. is the Canadian leader in mobile on- ABOUT FINNING $7.8 FinningMINING is headquartered in Vancouver, site refueling, supporting customers BILLION Since 1933, when Finning was founded BC and operates in three regions: in the construction, transportation, REVENUE in Vancouver, Canada by Earl