2015 INTEGRATED REPORT Corporate Responsibility C NTENTS 09 27 35 THALES, FOR CHALLENGES STRATEGY A SAFER WORLD 28 In a world that is AND OUTLOOK increasingly mobile, 10 Key figures and leadership 36 Our strategic vision interconnected 12 Value creation and interdependent 42 Outlook and Performance 28 Continuous dialogue 17 Our mission 32 In touch with Society's 18 Our founding principles expectations 21 Thales 5 major markets 24 A balanced business model 45 75 85 POLICIES GOVERNANCE INDICATORS IMPLEMENTED 76 Ownership structure 87 Environment and corporate governance 46 Policy baseline, 88 Social the foundation of Thales’s 81 Internal control 91 Societal management principles and compliance 53 R&D, the key to competitiveness 83 A culture of ethical and growth business conduct 56 Responsible purchasing 58 Leveraging human capital 63 Stepping up to major environmental challenges 70 A policy of global and local commitment 2015 INTEGRATED REPORT 1 2 2015 INTEGRATED REPORT FOREWORD FOREWORD BY PATRICE CAINE OUR RECORD RESULTS IN 2015 STAND AS A TESTAMENT TO THE ENGAGEMENT AND HARD WORK OF ALL THALES EMPLOYEES AND THEIR UNIQUE SET OF CAPABILITIES. WE HAVE REGAINED MOMENTUM TO SUCH A DEGREE THAT WE CAN EMBRACE EVEN MORE AMBITIOUS OBJECTIVES WITH THE ASSURANCE THAT THE STRATEGY WE HAVE PURSUED FOR THE LAST SEVERAL YEARS IS SUCCESSFULLY DELIVERING PROFITABLE, SUSTAINABLE GROWTH. The merits of this strategy are best measured in terms Our solutions protect critical national infrastructure and of the Company’s overall performance. Our strategic hyper-sovereign assets. They address the challenges priorities are thus shaped by the values upheld by Thales of today and tomorrow, from cybersecurity to the air for more than 15 years and a continuing commitment transport system of the future, from urbanisation to to the principles of corporate responsibility embodied environmental conservation. They help to create value in the United Nations Global Compact(1). In 2015, the for all our stakeholders, and for society in general, as Thales strategy was widely recognised as coherent and expressed in the Company’s motto: Together. Safer. effective, with Transparency International, the Dow Jones Everywhere. Sustainability Index and the Carbon Disclosure Project The publication of this first integrated report reflects even ranking Thales as an industry leader. Thales’s determination to share its engagement with In a world that is increasingly mobile, interconnected and all the stakeholders in its ecosystem. Structured around interdependent, security is a basic prerequisite for the the framework proposed by the International Integrated sustainable development of our societies. Thales serves Reporting Council (IIRC), the new report demonstrates a number of vital sectors(2) in which safety and security how Thales is creating value for the short, medium and are crucial. long term and how we are preparing for the challenges of the future. We have a unique value proposition and we play a central role in protecting people, property and information. We know that technology has the potential to make the world a safer place. Driven by a constant quest for innovation and performance, we are proud to be exploring this potential in a responsible manner. Patrice Caine Chairman & CEO THALES SERVES A NUMBER OF VITAL SECTORS IN WHICH SAFETY AND SECURITY ARE CRUCIAL. (1) Thales signed the United Nations Global Compact in 2003 and is one of 500 companies around the world that has successfully submitted its Communication on Progress at the “Global Compact Advanced” level. (2) Aerospace, Space, Ground Transportation, Defence, Security. 2015 INTEGRATED REPORT 3 ABOUT THIS REPORT For more than 15 years now, Thales has METHODOLOGY This integrated report is part of Thales’s implemented a stringent, proactive policy An internal working group under the guidance long-term improvement approach. of social responsibility and continues of the Ethics and Corporate Responsibility to attach the utmost importance to Department, and comprising members ethical business practices. In line with from several functional departments, was TO FIND professional best practices and based involved throughout the process to provide OUT MORE on our experience in this area, we have the underlying structure for this information. decided to publish our first “integrated report” based on the guiding principles We decided from the outset to focus the [email protected] of the International Integrated Reporting integrated report on Thales strategic Council (IIRC). priorities, and to select and explain only SCOPE its most important facets. The integrated This 2015 integrated report explains report supplements the Registration The report covers the 2015 financial year how our strategy, governance, and Document 2015(1) and refers to it in (1 January 2015 to 31 December 2015). financial as well as extra-financial many instances. It includes medium and long-term outlooks (environmental, social, governance and and thus provides a forward-looking view societal) performance create value for The report also includes the results of of the Group within its environment. stakeholders. We believe this document the materiality assessment of Thales’s will contribute to a better understanding of goals, which was carried out internally Thales’s business activities, the complexity in 2015 on the basis of studies and of our working environments and our level cross-functional workshops devoted to of commitment to all of our stakeholders. environmental, social and economic issues. The materiality assessment was also reviewed by stakeholders and a consensus was reached before the results Accessibility of PDF Documents were released. (1) Can be downloaded from: www.thalesgroup.com/en/investors 4 2015 INTEGRATED REPORT ABOUT THIS REPORT OTHER THALES PUBLICATIONS REGISTRATION DOCUMENT 2015 THALES BROCHURE 2015 www.thalesgroup.com www.thalesgroup.com “Investor” section “Global\Group\Overview” section Shares/credit investors • SR investors, SR Investors • NGOs • Customers and individual shareholders • NGOs • partners • Suppliers • Shareholders • national authorities Employees • Civil society Document complies with French and European regulations, Presentation of Thales’s missions, values, and includes, in particular, the annual financial report principles and business activities and the Board’s management report, as well as social, environmental and societal information and information on corporate governance THALES GROUP PRESENTATION INNOVATIVE SOLUTIONS www.thalesgroup.com TO FIGHT CLIMATE CHANGE “Global\Group\Overview” section www.thalesgroup.com “Global\Commitments\Environment” section SR Investors • NGOs • Customers and partners • Suppliers • Shareholders • SR Investors • NGOs • Customers and Employees • Civil society partners • Suppliers • Shareholders • Presentation of Thales’s solutions: Employees • Civil society – for improved understanding of climate phenomena; – for cleaner skies; Presentation of Thales’s missions, values, – for more sustainable mobility; principles and business activities – for smarter cities. 2015 INTEGRATED REPORT 5 6 2015 INTEGRATED REPORT PRINCIPLES OF RESPONSIBILITY PRINCIPLES OF RESPONSIBILITY Launched in 2000, the United Nations Global Compact (UNGC)(1) is both a policy platform and a practical framework for companies that are committed to sustainable business practices. It seeks to align business operations and strategies everywhere with 10 universally accepted principles. About 12,000 organisations around the world, including 8,600 companies, have joined the Global Compact. Thales signed up to the Global Compact in 2003 and has adopted its 10 principles. Since 2012, through its annual Communication on Progress (COP), Thales reached Global Compact Advanced level under the Global Compact Differentiation Programme, which evaluates companies on the basis of 21 specific criteria and represents the highest standard of sustainability performance and reporting. Thales is one of just 500 companies worldwide to have achieved GC Advanced level. HUMAN RIGHTS PRINCIPLE 1 Pages 16, 28, 30-31, 47-48, Businesses should support and respect the protection of internationally proclaimed human rights. 52, 56-58, 70-73, 81-83, 88-89 PRINCIPLE 2 Pages 16, 28, 30-31, 47-48, Businesses should make sure they are not complicit in human rights abuses. 52, 56-58, 81-83, 88-89 LABOUR PRINCIPLE 3 Pages 16, 28, 30-31, 47-48, Businesses should uphold the freedom of association and the effective recognition of the right to 56, 58-62, 79, 82-83, 88-89 collective bargaining. PRINCIPLE 4 Pages 16, 28, 46-48, 56, Businesses should uphold the elimination of all forms of forced and compulsory labour. 60-61, 82-83, 88-89 PRINCIPLE 5 Pages 16, 28, 46-48, 56, Businesses should uphold the effective abolition of child labour. 60-61 82-83, 88-89 PRINCIPLE 6 Pages 16, 28, 30-31, 46-48, Businesses should uphold the elimination of discrimination in respect of employment and occupation. 56, 58-62, 82-83, 88-89 ENVIRONMENT PRINCIPLE 7 Pages 16, 28, 30-33, 43, Businesses should support a precautionary approach to environmental challenges. 46-48, 56, 67-68, 82-83, 87 PRINCIPLE 8 Pages 16, 28, 30-33, 43, Businesses should undertake initiatives to promote greater environmental responsibility. 46-48, 56, 63-69, 82-83, 87 PRINCIPLE 9 Pages 16, 28, 30-33, 43, Businesses should encourage the development and diffusion of environmentally friendly technologies. 46-48, 56, 67-69, 82-83, 87 ANTI-CORRUPTION PRINCIPLE 10 Pages 3, 16, 20, 28-31, 46-52,