Vestas |Sustainability

http://www.vestas.com/en/about/sustainability[02-02-2014 21:03:20]

PROFILE DISCOVER WIND PARTNERING SUSTAINABILITY FIND VESTAS TRACK RECORD

POWERING SUSTAINABILITY COMMITMENTS SUSTAINABLE PRODUCTS MANAGING SUSTAINABILITY

REPORTING

Making wind workTogether we power the future

View Vestas' track record Our commitment to sustainability

For more than 30 years our efforts have been devoted to raising the profile of wind as a mainstreamenergy source.

Vestas |Sustainability

http://www.vestas.com/en/about/sustainability[03-02-2014 21:55:14]

Powering sustainabilityThe use of energy is growing rapidly and the resources of our planet are already under great pressure. We need to change the way we produce our energy. We need toproduce more renewable energy, and the most promising source of energy is the power of wind.

At Vestas, we believe energy to be an important catalyst for founding a better quality of life. A stable energy supply is an essential part of the infrastructure for adeveloped society. Energy is central to nearly every major challenge and opportunity the world faces today. Be it jobs, security, climate change or food production -access to sustainable energy is essential for strengthening economies, protecting ecosystems, reducing poverty and achieving equity.

Read a statement from our President and CEO.

Vestas |Sustainability

http://www.vestas.com/en/about/sustainability[02-02-2014 21:04:15]

SafetyVestas’ goal is zero injuries. We are of the belief thatall injuries can be prevented if every hazard ismanaged and if the right behaviour is in place.

We work closely together with customers to fulfil thedemand for the highest level of safety in ouroperations as this adds certainty for their businesscase. Also, we actively join hands with partnersacross the industry to mitigate general risks andimprove training.

By putting safety first we have significantly improvedour incident rate* for seven years in a row.

However, we recognize that working with windturbines is not hazard-free. Heavy components,dizzying heights, unpredictable weather conditionsand demanding processes presents a challengingwork environment.

Safety must be rooted in the business culture and inV t thi t t t th t M t i

Vestas this starts at the top. Management isaccountable, but all employees shoulder their shareof responsibility for their own and their colleagues'well-being. A focus on the individual employeeenforces that working safely is a condition foremployment at Vestas. We view the employee as themost critical factor in our collective effort to staysafe.

Through root cause studies it’s become apparent thatmore than 90 per cent of industrial injuries arerelated to people’s behaviour. Central to decreasingthis trend is our zero-tolerance approach towardsactions or decisions that could undermine any aspectof safety, no matter how minor.

At Vestas, we believe that by being aware of safetyhazards it is possible to change behaviour andprevent injuries.

Vestas has developed a safety roadmap tomethodically approach safety challenges. Theinitiatives identified are spilt into yearly businessplans to ensure that all activities and objectives arerolled out in a coordinated manner across all ofVestas.

*Incidence of industrial injuries per one millionworking hours – Lost Time Injury

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Vestas |Sustainability

http://www.vestas.com/en/about/sustainability[03-02-2014 09:06:39]

Safety awareness

Fostering a safety culture through awarenessBeing aware of the safety hazards are key to managing and preventing them. Since 2007, Vestas has deployed a Safety Awareness Programme for employees andmanagers to raise the awareness of safety with the ultimate objective of eliminating all industrial injuries. All operational managers and team leaders in factories, serviceand construction sites and offices attend courses to strengthen the safety culture throughout Vestas and instil safe behaviour.

Through safety awareness, recognition programmes and safe behaviour programmes Vestas is moving towards establishing a team-based responsibility for safety. Topmanagement’s commitment to keep all employees safe and emphasize safe behaviour is being expressed through their participation in safety awareness programmes andtheir completion of Safety Walks.

A Safety Walk is an opportunity for managers in production, construction, service or administration to discuss safe behaviour and ways of improving safety withemployees in their actual job function. The programme has been running since 2007 with consistently more managers participating every year. In 2013, 12,460 SafetyWalks were conducted whereby the ambition of an average of twelve Safety Walks per manager was reached again.

Building on the manager’s training, Vestas introduces more in-depth courses on how to become a better safety leader, how to change perceptions about safety,optimising behaviour change during safety walks, managing human behaviour and growing the safety culture. Studies indicate that managers and supervisors should betrained together as their alignment and collective buy-in to safety is essential.

Vestas prioritizes the implementation of global Safety Awareness programmes to cover all production and service managers and employees as well as administrativestaff. Adapting the programme to local production facilities or sites has a positive impact on the injury statistics.

Maturing our safety culture through Behaviour-Based Safety programmes is an initiative which was piloted in production and service in 2012. These initiatives are run atselected sites to ensure maximum results and safe behaviour improvements.

At Vestas, we continue to recognize and reward great safety behaviour with our Safety Ranger and the Safety Medal programmes. In 2011, Vestas introduced the globalSafety Ambassador Award recognizing a company-elected employee who promotes safety. In 2013, Michal Drozd, Service Technician from Northern Europe in Polandwon the award as he always puts safety first and actively promotes safety improvements.

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Vestas |Sustainability

http://www.vestas.com/en/about/sustainability[03-02-2014 21:07:25]

Towards zero injuriesVestas is on a cultural journey, moving towardstaking a collective responsibility for safety. Since ourjourney began in 2006, the incidence of industrialinjuries per one million working hours at Vestas hasbeen reduced, and average of 28 percent every year.It is now at the level of 2.1 per one million workinghours.

In 2015 the target is 0.5 – a significant step in thejourney towards eliminating industrial injuries entirely.Achieving a 0.5 rate will challenge the company atevery level, but we will not rest until our workenvironment is free of injuries.

Tragically, a Vestas supervised contractor suffered afatal accident in Germany in the second quarter of

2013. The root cause of the accident has beenidentified as human error.

Near miss reporting andhazardous observationsAt Vestas we register near misses and hazardobservations as well as injuries. This is an importantstep towards achieving a zero injury culture. In 2013the near miss reporting and hazardous observationswere at the same level as 2012 with a total of 15055reports filled. The number of near miss andhazardous observations per lost time injury has from2012 to 2013 risen by 45% to 228, which indicatethat more people are anticipating injuries before they

th b ti i j i

occur thereby preventing more injuries.

Incidence of lost time injuriesPer one million working hours

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Vestas |Sustainability

http://www.vestas.com/en/about/sustainability[02-02-2014 20:34:32]

Climate changeClimate change poses one of the most seriouschallenges for mankind. The predicted effects couldbe both devastating and irreversible. According to theIntergovernmental Panel on Climate Change (IPCC),the effects of climate change will be broad-ranging,affecting water supplies, ecosystems, food availability,health and the economy and will devastate coastalregions. It is crucial that greenhouse gas emissionsare limited, and that low carbon energy generationtechnologies take over.

Even though wind energy’s lifecycle carbon footprintis extremely low when compared to other sourcessuch as oil and gas, we continuously work to reducethe carbon footprint of wind energy. Our goal is to

k t bi t l t 15 t b

make our turbines at least 15 per cent more carbonefficient emitting only six grams of CO per kWhduring their lifetimes.

Fossil fuel-based power generation causes poor airquality, contributes to global climate change andconsumes significant amounts of water. As waterbecomes more scarce in many regions (a tendency tobe amplified by climate change), existing watersupplies will not be sufficient in many countries tosupport the installation of new water-intensive powerplants – putting economic growth at risk.

To mitigate climate change, power generation mustglobally become low carbon, and wherever water

locally is or is expected to become scarce, powergeneration must become low water. During operation,wind power plants do not consume water nor do theyemit climate-changing greenhouse gases. Windpower is among the solutions to the challenges ourworld is facing today.

Caring for ClimateVestas is participating in the Caring for Climateinitiative under the United Nations Global Compact.Caring for Climate is aimed at advancing the role ofbusiness in addressing climate change. It’s donethrough a commitment by businesses who pledge totake action and a call to governments, incorporatingtransparency on their environmental strategies.

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Vestas |Sustainability

http://www.vestas.com/en/about/sustainability[03-02-2014 21:08:03]

Carbon footprintBy 2015, Vestas’ aim is that turbines will be at least15 per cent more efficient, emitting only six grams ofCO per kWh during their lifetimes. Today, Vestascontributes approximately seven per cent of the totalCO emission for the V112-3.0 MW turbine. Of theremaining amount, approximately 85-90 per cent iscontributed by material and component suppliers, and4-10 per cent is for transport of materials andcomponents for construction, decommissioning andrecycling.

One of the main components in reducing the carbonfootprint of the turbine is to reduce the impact ofSF . SF is a potent greenhouse gas used to rapidlyquench electric discharges in the switchgear andthereby preventing fires and electrical hazards.

Vestas uses SF as its properties make it possible tosignificantly reduce the size of the switchgear in high-voltage solutions - something that other alternativessuch as air or dry nitrogen cannot do.

The downside of using SF is that SF is asignificant greenhouse gas. One kilo of SF has thesame global warming effect as 22,800 kilo of CO .On average, there are seven kg SF in theswitchgear of a turbine. If emitted to the atmosphere,it equals 10 per cent of the CO emitted duringthe entire life cycle of the turbine, from

mining,through production, operation anddecommissioning of the entire wind power plant. Tenper cent roughly compares to the entire transportcarried out in the life cycle of a wind power plant.

Vestas will take actions to control the emission ofSF and look at future opportunities to phase outSF in order to minimize the effect on climatechange. A take-back scheme for switchgearscontaining SF is in place to return and recycle theSF from worn-out switchgears in the best possibleway and to reduce any emission during operation andwhen the turbine reaches end of life. Additionally, toreach the target of only six grams of CO per kWhdelivered to the grid, Vestas needs to makesignificant energy reductions in productiondevelopment, in our factories and within the supplychain, as well as improve wind turbine performance.

Quick factsTarget for 2015:

ReduceCarbonFootprint by15%In 2013: 6.3g CO2/kWh*

The sum of the net greenhousegas emissions that contribute toglobal warming. Quantified bysix grams CO2equivalents/kWh.

*Baseline is the Life Cycle Assessmentperformed on the V112-3.0 MW (ClassIECII wind turbines, 8m/sec wind speed)

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2

6 6

6

6 66

26

2-eq

66

66

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Vestas |Sustainability

http://www.vestas.com/en/about/sustainability[03-02-2014 21:08:39]

Renewable energyAs a company, Vestas aims to decrease our overalluse of energy, increase our use of renewableenergy, and use less carbon-intensive energy forms.

Vestas aims to lead by example, showing othercorporations how businesses can reduce their impacton the environment and spearhead the drive for alow-carbon society. The objective is for 100 percentof the total electricity consumption to come fromrenewable sources. Vestas has a commitment to source renewableelectricity where available, which is done throughlocal renewable purchase agreements. In addition tothis, Vestas currently owns some wind turbines,which are used to balance out the non-renewableelectricity from units where local renewable electricitypurchase is not possible.

Vestas' share of renewable electricity reached 100per cent already during the first quarter of 2013 and itis still at 100 per cent. Vestas achieved the 25 percent WindMade™ certificate for its global operationsin January 2013.

Sustainable Energy for AllUp to 1.3 billion people across the globe currentlylack access to affordable and reliable electricity –with dramatic consequences for human health,education and economic well-being. These numbersshow us that there is still much work to be done toensure a sustainable global energy supply. I 2011 th UN S t G l t t hi Vi i

In 2011, the UN Secretary General set out his Visionfor Sustainable Energy for All and 2012 was the yearof sustainable energy for all. The vision is centeredon three goals to be achieved by 2030. These are:

Ensuring universal access tomodern energy servicesDoubling the rate ofimprovement in energyefficiencyDoubling the share ofrenewable energy in the globalenergy mix

Vestas’ supports demand for renewable energy intwo ways, firstly through our own procurement andinvestment in renewable energy and secondly bysupporting others in their own renewable energyprocurement and investment (see WindMade and theTransparency Agenda). Another initiative is the Windfor Prosperity business model that combines robust,factory-refurbished wind turbines with advanceddiesel power generation to form hybrid systems thatare well-suited for operation on mini-grids in remotelocations with limited infrastructure. The initiative

creates an opportunity for business, government andfinancial institutions to combine their talents toimprove people’s lives and generate returns forprivate investors.

Quick factsTarget for 2015:

Increaserenewableenergy to55%In 2013: 56%

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Vestas |Sustainability

http://www.vestas.com/en/about/sustainability[02-02-2014 21:05:04]

SuppliersOur business partners play an important role in Vestas’ drive to reach oursustainability goals and in promoting wind energy as a beneficial solution forsociety as a whole.

In order to improve the sustainability of our products, Vestas works closely withsub-suppliers of components and raw materials, which today account for morethan 80 per cent of the energy consumed in the product manufacturing process.

In order to ensure the health and safety of all persons involved, customers andsub-suppliers must be both aware of – and follow – the Vestas safety rules andprocedures, during all stages of the turbine installation process through toservice.

In order to support this partnership, Vestas has prepared a Code of Conduct inaccordance with the UN Global Compact, the International Bill of Human Rightsand the International Labour Organization conventions. Vestas works diligentlyto ensure that partners also respect the Code of Conduct, and, to the greatestextent possible, will prioritise working with business partners who are dedicatedto and support Vestas' view on sustainability, with particular emphasis on thefollowing:

ensuring that work is carried out safely – thefirst priority in any situationrespecting the freedom of association and theright to collective bargaining with respect tolegislation in the country the business partneroperates ineliminating all forms of forced laboureliminating all forms of corruptioneliminating child laboureliminating all forms of work-related

discriminationprotecting the environment

A wind turbine consists of several thousand components each with its own sub-suppliers. Thus, Vestas' supply chain is complex. Vestas Business Units havetheir own procurement functions, which are responsible for handling theirrespective business partners. In total, there are several thousand partnersworldwide.

Responsible Supplier ManagementVestas is devoted to the principle of Responsible Supplier Management. All purchase agreements presented to our suppliers today include our policiesregarding human rights and environment, as well as a commitment to work withour suppliers on initiatives relating to sustainability going forward. Vestas’commitment to sustainability, visible to our suppliers in the contracts we enterinto with them, is driven by a number of stakeholders across Vestas. Thesestakeholders are the corporate Sustainability department defining the policies,the Legal departments drafting specific wording, CategoryManagement/Procurement teams agreeing on these with suppliers as well asSupplier Quality and Development Teams monitoring progress.

With 95 per cent of our signed purchase agreements based on Vestastemplates, and with all of these including either directly or by reference theabove principles, we believe we are well on the way.

Vestas also takes action to ensure that suppliers comply with our polices. That’sdone through our manufacturing units, who are using the responsible suppliermanagement system. They also screen significant suppliers on sustainabilityissues, including human rights and labour standards.

When so-called red flags are identified – that is when suppliers are not living upto the Vestas standards - the suppliers are requested to take corrective action. As part of this system the production business units use the responsiblesupplier management assessment tool. In 2013, 74 suppliers were assessed in21 countries. Of these 53 were approved and 16 are under approval.

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Vestas |Sustainability

http://www.vestas.com/en/about/sustainability[02-02-2014 20:37:02]

Anti-corruptionSince 2010, Vestas has been a signatory to thePartnering Against Corruption Initiative (PACI). PACIis a business-driven global anti-corruption initiativewithin the World Economic Forum. The signatories toPACI firmly believe that corruption cannot becountered without leadership and commitment fromthe top management.

While the United Nations Global Compact offers aprinciples-based approach to fighting corruption,based on its 10th principle, PACI offers animplementation framework, developed by companiesfor companies - the UN Global Compact recognizesPACI as a means of implementing its 10th principle.

In addition to providing a framework for the designand implementation of effective policies and systemsto prevent, detect and address corruption, PACI alsooffers a platform to help companies benchmarkinternal practices against global best practice throughpeer exchange and learning and level the playingfield through collective action with other companies,governments and civil society.

Vestas Code of Conduct set forth a zero tolerancepolicy towards any form of bribery which is requiredunder the PACI principles. Since becoming a signatory to PACI, Vestas hasdeveloped further supporting guidelines andprocedures to implement the PACI principles and willcontinue these efforts during the coming years. Inparticular, Vestas has developed an anti-corruptiondue diligence program for its business partners. Thisis currently being implemented throughout Vestas.

As part of Vestas’ anti-corruption initiatives and aspart of the Code of Conduct, Vestas has establisheda process for registering gifts, entertainment andhospitality. All Vestas employees are obliged toregister gifts, entertainment and hospitality whencertain criteria are met. Approval from a manager orexecutive is needed when the value of the receivedgift, entertainment or hospitality reaches a certainlevel. A more stringent procedure for gifts,entertainment and hospitality towards governmentofficials has been developed but not yet fullyimplemented. In 2013 detailed instructions onavoiding Conflict of Interest in connection to

l ´ i t t i V t t bi

employees´ investments in Vestas turbines wasimplemented and the Integrity Committee wasestablished. The role of the Integrity Committee is toagree on disciplinary actions in EthicsLine cases andmanage the approval process of employees´investments in Vestas wind turbines.

To enhance awareness of the Code of Conduct andto track compliance, all employees at IPE Level 54+(Specialist/Manager and above) must acknowledgeon an annual basis that they understand the Code ofConduct and are not aware of any unaddressedviolations of the Code of Conduct. All new employees are being introduced to theVestas Code of Conduct as part of their induction.They also take part in compulsory e-learning, someof which is tailored for particular job roles. Examplesof specialized e-learning subjects are: ‘RecognisingConflicts of Interest’, ‘Gifts, Entertainment &Hospitality’, ‘Global Bribery and Corruption’. Thesethree e-learnings are available in five languages(nine languages for Gifts, Entertainment &Hospitality).

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Vestas |Sustainability

http://www.vestas.com/en/about/sustainability[02-02-2014 20:37:29]

Human rights and labourVestas' two global policies concerning human rightsand freedom of association and collective bargainingoutline our commitments and basic approaches. Theyapply to Vestas’ global operations, and cover bothVestas business as well as our approach to businesspartners.

The policies are communicated to relevantstakeholders by providing all employees with accessto the policies and related Vestas standards andprocesses, and by communicating internally andexternally on progress in implementing thesecommitments. Complaints by employees andbusiness partners about breaches of the policies maybe submitted to the Vestas EthicsLine.

In the Human Rights Policy Vestas has committed toidentifying the human rights impacts andopportunities of Vestas operations on localcommunities. As a first step in implementing thepolicy, in 2012 Vestas developed an obligatory socialand environmental due diligence process for turnkeyprojects in emerging markets. Social andenvironmental due diligences have been completedduring 2013 for turnkey projects in South Americaand the Middle East and more are in process inAfrica, South America and Eastern Europe. Going

forward, Vestas aims to perform due diligences for alarger part of its activities. Additionally all newmarkets are screened for human rights and labourrisk before first projects in those markets areapproved by management.

Internal trainingIn the end of 2012 fundamental global labor standarde-learning was launched targeting all humanresources business partners as well as employees inkey functions operating in emerging markets and ormanaging employees in emerging markets.

Covering Mexico and Caribbean 103 hours of Socialawareness training to 60 Vestas employees and 35contractors/outsourcing employees have beenperformed during 2013.

Assessments and remediationDuring 2011 Vestas executed the Global LabourStandards Self-Assessment Project. This was done inorder to assess how Vestas supports the globallabour standards and to develop a fact-based actionplan.

Based on the assessment findings, Vestas developeda labour standards toolbox and made it available tothe business in 2012. The toolbox includes guidelinesfor implementation of the Vestas freedom ofassociation policy, guidelines on child labour, achecklist on forced and compulsory labour andchecklists for forced labour and child labour in vendormanagement. The toolbox was actively promoted aspart of the global labour standard e-learning.

Vestas‘ social and environmental due diligenceprocess for engineering, procurement andconstruction contracts in emerging markets,developed to spearhead the implementation of theHuman Rights policy, ensures the integration ofsocial and environmental risk assessment into thesales process. This process includes documentreview, customer dialogue, and additionally site visits,and thereby establishing a sound basis for preventingand mitigating risks and potential negative impactsduring project execution.

Site visits were made to seven sites in South Africaduring 2013 to prepare the social and environmentaldue diligence. A social and environmental risk profileformat was developed and rolled out to businessunits operating in emerging markets for integrationinto their new market entry analysis.

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Vestas |Sustainability

http://www.vestas.com/en/about/sustainability[02-02-2014 20:38:48]

Commitments

Vestas is committed to an array of global initiatives, such as the United Nations Global Compact and World Economic forums Partnering Against Corruption Initiative.These commitments support our intent to power sustainability, both within the organization and beyond.

We support our global operations and employees through an expanding set of sustainability policies. Most recently, policies on human rights and freedom of associationhave been embedded to enforce human rights practices and ethical behaviour in the business, especially when entering emerging markets.

Vestas |Sustainability

http://www.vestas.com/en/about/sustainability[02-02-2014 20:39:14]

Code of ConductAs a global company with more than 70 different nationalities employed ,Vestas is home to a wide range of cultures, religious beliefs and political views. This calls forcommonly agreed upon ethical practices and standards. The Vestas Code of Conduct is the guiding ethical document outlining Vestas' global commitment and expectations to people, environment, sustainable goals and ourbusiness partners. It clearly states what is expected and what is acceptable behaviour from employees and people acting on behalf of Vestas.

Vestas aims to ensure a high degree of business integrity and compliance with the code from an employee's first day on the job. All new employees are introduced to theVestas Code of Conduct as part of their induction.

To anchor the values and principles in the organisation, commitment from top management is mandatory. Acknowledgement of the Vestas Code of Conduct was carriedout for the first time in 2011 for top management and the scope has been expanded year by year to now include all employees on manager/specialist level and above.The acknowledgement is an annual activity where employees confirm that they have read and understood Vestas Code of Conduct and that they are not aware of anyunaddressed violations of Vestas Code of Conduct. Acknowledgement is expected as part of our commitment to UN Global Compact and the commitment to the WorldEconomic Forum’s Partnering Against Corruption Initiative.

In addition, all employees are informed of Vestas’ EthicsLine which can be used for reporting violation of company policies and to seek guidance when faced with anethical dilemma.

Related InformationCode of Conduct

Quality and Sustainability policy

Human Rights Policy

Freedom of Association Policy

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Vestas |Sustainability

http://www.vestas.com/en/about/sustainability[02-02-2014 20:39:40]

EthicsLineVestas’ whistle-blower system, EthicsLine, was introduced in 2007Vestas is committed to securing an ethical environment in our company, and Vestas' EthicsLine has been established to ensure that inappropriate behavior or incidentsare brought forward and handled.

The purpose of the EthicsLine is first to ensure that Vestas employees, business partners or anyone associated with Vestas have a place to report any inappropriatebehavior or practices which may be experienced within the Vestas workplace. Secondly, the EthicsLine provides guidance when in doubt about ethical issues.

Vestas' EthicsLine can be used to:report malpractice that has been observed or is suspected;ask questions about Vestas policies, or difficult issues of behaviour or ethics, when the answers cannotbe found elsewhere

Vestas' EthicsLine is operated by an independent company. Except where specifically prohibited by local law, anyone using Vestas' EthicsLine may remain anonymous.Subject to applicable laws, all matters reported through Vestas' EthicsLine will be investigated. Everyone involved will be treated fairly. Vestas will not tolerate retaliationagainst anyone who files a report in good faith, regardless of whether or not the claim can be substantiated.

Related InformationVestas EthicsLine

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Vestas |Sustainability

http://www.vestas.com/en/about/sustainability[03-02-2014 09:14:46]

UN Global CompactVestas committed to the United Nations Global Compact in 2009. We identify business ethics and social responsibility as vital for both our sustainability focus and ultimatebusiness success as it aids to build competitive advantage by being a preferred partner for ethically-conscious customers.

The United Nations Global Compact is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universallyaccepted principles in the areas of human rights, labour, environment and anti-corruption.

With the participation in United Nations Global Compact, Vestas commits to report and publish its progress on implementing these principles in the organisation on anannual basis. The implementation of these requirements in the organisation is an integral part of the Vestas Sustainability Management System.

Local networksAt Vestas, we have made an effort to demonstrate our sustainability leadership locally by joining the United Nations Global Compact Local Networks including, the Indianand Nordic networks. Vestas considers this as an opportunity to promote stronger sustainability efforts for businesses in their local context.

Nordic NetworkIn the buildup to Rio+20 Vestas collaborated with a number of other members from the Nordic Network to put forwards three recommendations to the Global CompactCorporate Sustainability Forum and international community. These were:

Establish an international Energy Maturity Rating for countries. This would aim to measure their capacityand capabilities to attract private sector investments in the energy sector and in energy efficientproduction of services and goods.Establish a common platform that facilitates formation of strategic public private partnerships scaling upof, or co-investments in developing countries in areas such as energy access, efficiency and renewableenergy.Agree on Sustainable Development Goals for Energy Access, that encourage innovation within theenergy sector, low-carbon development solutions, high energy efficiency, and innovative investmentregimes.

Vestas |Sustainability

http://www.vestas.com/en/about/sustainability[03-02-2014 09:14:46]

IndiaIn 2013 Vestas India and The Global Compact Network India (GCNI) jointly with Deloitte has organised training program on Sustainability titled ‘Looking BeyondCompliance – Embracing Effective Corporate Governance and Sustainability Practices’, at Chennai to provide a forum for Indian companies and organizations toexchange experiences, network and work together on activities related to the Ten Universal Principles of the Global Compact, with a focus on the best known practices.

MembershipsWindMade, founding partner Global Wind Energy Council (GWEC) World Economic Forum American Wind Wildlife Institute, founding member (AWWI) Global Green Growth Forum (3GF) Member of more than 25 national wind associations around the world

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Vestas |Sustainability

http://www.vestas.com/en/about/sustainability[02-02-2014 21:05:51]

Sustainable productsA single Vestas wind turbine will generate more than 25 times the energy than it uses in its entire lifecycle and return this back to society. And, a single Vestas windturbine only emits around one percent of carbon dioxide when compared to a coal power plant.However, it’s important that we acknowledge that when producing solutionsto harness wind energy a small negative impact on the environment is made. Vestas is committed to reducing this impact to the extent possible together with oursuppliers and customers. This is achieved through a range of initiatives and programs that simultaneously reduce stress on the environment and improve business casecertainty for our customers.

Vestas |Sustainability

http://www.vestas.com/en/about/sustainability[03-02-2014 09:11:28]

Life cycle assessmentVestas strives to continually improve people’s lives through having a responsible interaction with the environment, respect for society and a productive economy. To makethat goal a reality Vestas works with Life Cycle Assessments (LCA) to develop increasingly energy-efficient products and production whilst mitigating the environmentalimpacts throughout the turbine's lifetime.

Transparency, in all instances, and especially in regards to the environmental impacts and benefits of wind power, is vital to affirm Vestas’ product performance andfinancial competitiveness when stating the Cost of Energy.

Since 1999, Vestas has been developing Life Cycle Assessments of wind power to give a ‘cradle to grave’ evaluation of the environmental impacts of Vestas’ productsand activities. These concentrate on two key actions:

Document the environmental performance of Vestas wind turbinesAnalyse the results to improve or develop wind turbines with less environmental impact

The studies assess a wind turbine’s entire bill-of-materials accounting for the approximately 25,000 parts that make up a wind turbine. In a Life Cycle Assessment, acomplete wind power plant is assessed up to the point of the electricity grid, including the wind turbine itself, foundation, site cabling and the transformer station.

Life Cycle Assessment scope

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Vestas |Sustainability

http://www.vestas.com/en/about/sustainability[02-02-2014 20:40:40]

Available reportsOnshore

Turbine

V80-2.0 MW Yes (2004)

V80-2.0 MW GridStreamer Yes (2011)

V90-1.8/2.0 MW No

V90-1.8/2.0 MW GridStreamer Yes (2011)

V100-1.8 MW/V100-2.0 MW No

V110-2.0 MW No

V100-2.6 MW Yes (2013)

V90-3.0 MW Yes (2013)

V112-3.0 MW Yes (2011)

V112-3.3 MW No

V117-3.3 MW No

V126-3.3 MW No

Offshore

Turbine

V90-3.0 MW Offshore Yes (2006)

V112-3.3 MW Offshore No

V164-8.0 MW No

TM

TM

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Vestas |Sustainability

http://www.vestas.com/en/about/sustainability[03-02-2014 09:10:36]

Benchmark performanceVestas’ wind turbines are designed to meet different functional requirements for both onshore and offshore environments, as well as the wind class for which they aredesigned to operate. The wind class determines which turbine is suitable for a particular site, and influences the total electricity output of the wind power plant.

When benchmarking an array of wind turbine’s performance it is important that it’s done on an equivalent functional basis, so they can be compared within similar windclasses. There are three wind classes for wind turbines which are defined by an International Electrotechnical Commission standard (IEC), corresponding to high (IEC I),medium (IEC II) and low (IEC III) wind.

The various Vestas wind turbines have been designed to operate under high, medium or low wind conditions. For each study the specific wind conditions have beenselected to evaluate the turbines environmental performance.

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Vestas |Sustainability

http://www.vestas.com/en/about/sustainability[02-02-2014 21:06:24]

SiteLCA™Vestas offers customers the opportunity to acquire acustomised Life Cycle Assessment, called VestasSiteLCA™, of their own wind power plant. Thisdetermines key indicators of environmentalperformance and takes into consideration the windturbine type, site specific conditions and theproduction supply chain.

The environmental performance of a wind powerplant is site and layout specific and varies across theglobe according to local site performance andmanufacturing supply chain. SiteLCA™ providescustomers or project developers with transparentenvironmental facts (such as carbon footprint, returnon-energy, water-use or environmental benefits, etc)of a specific wind plant. These fact-based indicatorsincrease business case certainty by supporting thecustomer’s energy strategy (energy case, power plantbenefits, index ratings, etc) and supporting the projectplanning / permitting process (e.g. decommissioningplan, public acceptance, consultation and response).

By identifying key environmental indicators early inthe project, customers are well-placed for successful

and trustworthy external communications of powerplant performance and to inform their energy strategyutilising fact-based information. SiteLCA™ may alsoquantify the power plant's key environmental benefits(such as turbine recycling or repowering options atend-of-life) and identify potential management risksof the plant, such as providing material breakdown fordecommissioning plans or identifying potential keyenvironmental impacts.

Vestas Site LCA™ is delivered by experiencedexperts and builds upon a long track-record ofdisclosing turbine environmental performance datasince 1999. The service utilises advanced turbinemodels developed in-house by Vestas, complyingwith international ISO standards and third partyreview, which have been critically acknowledged asstate-of-the-art analysis of wind power .

Garrett, P., Rønde, K., (2012). Lifecycle assessment of wind power:comprehensive results from a state-of-

the-art approach. International Journal ofLife Cycle Assessment (DOI)10.1007/s11367-012-0445-4

Relatedinformation

The Vestas SiteLCA™brochure

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Energy paybackComparing energy paybackThe long-term impact on the environment for a wind turbine’s life cycle of 20 years is minimal when compared to that from average European electricity production byother means.

The energy balance of a wind power plant shows the relationship between the energy requirement over the whole life cycle of the power plant (i.e. to manufacture,operate, service and dispose) versus the energy generated by the wind power plant. This energy payback period is measured in 'months to achieve payback', where theenergy requirement for the life cycle of the power plant equals the energy it has produced. Alternatively, energy payback may be measured by 'number of times payback',where this shows the number of times more energy the wind plant generates over its lifetime versus the amount consumed during its lifetime.

For Vestas wind turbines, the breakeven period generally ranges from around five to 12 months, for instance a V112-3.0 MW wind power plant has a payback period ofseven months for medium wind conditions. While over the life cycle of a V112-3.0 MW wind power plant it will return 30 times more energy back to society than itconsumed. So when 1 kWh is invested in a wind energy solution you get 30 kWh in return. Whereas if you invest 1kWh in coal you typically get 0.28 kWh in return .1

Sources:1. World Coal Association. Coal & the Environment - Coal Use & the Environment - Improving Efficiencies. 2. The Offshore Valuation: A valuation of the UK’s offshore renewable energy resource. Published in the United Kingdom 2010 by the Public Interest Research Centre.ISBN 978-0-9503648-8-9 www.offshorevaluation.org. 3. PE International (2012). PE International - GaBi 6 databases 2011, LBP, University of Stuttgart and PE INTERNATIONAL GmbH4. PE International (2011) Life cycle assessment of electricity production from a V112-3.0 MW wind plant - February 2011, PE International, Leinfelden-Echterdingen,Germany.

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Material useBy knowing how Vestas’ products and materialscontribute to the environmental performance of thewind plant it is possible to make fact-based andinformed decisions that will minimise overallenvironmental impacts. Life Cycle Assessment isused to provide the detailed knowledge regarding thematerial composition of the wind plant from a lifecycle perspective. The figure shows a typical materialbreakdown of a V112-3.0 MW turbine which iscomposed of around 85% metals (e.g. steel, iron,copper and aluminium), 12% polymers and compositematerials, and the remainder a mixture ofelectronics/electrical items, lubricants and fluids, etc.

Rare Earth Elements from a LifeCycle Assessment perspectiveRare earths elements are naturally-occurringelements that, once mined and processed, can beused in a variety of industrial applications such aspermanent magnets in wind turbines, hybrid carmotors, components for military hardware and otherhigh-tech applications. In Vestas, rare earth elements are used in themagnets found in the tower and in the permanent-magnet generators in some of the newer modelssuch as the V112-3.0 MW and 2.0 MWGridStreamer™ platform. The rare earths elementsare used to improve the performance of turbines bymaking the generators more efficient and more grid-compatible. This allows Vestas to reduce the size ofthe generator and therefore use fewer otherresources (steel, composite structural materials, etc.)and create a smaller carbon footprint. It is important to understand the difference between

different types of turbine designs and how eachdesign uses rare earths elements. There are twotypes of turbine drive train concepts using rare earthelements: conventional geared drive train and direct-drive (without a gearbox). The amount of rare earthselements used in direct-drive turbines is substantiallyhigher – up to 10 times as much as a generator in aconventional drive train. Today, all Vestas turbinesare based on proven technology using conventionaldrive trains. The contribution of rare earth elements (such asneodymium and dysprosium) used in the turbinegenerator magnets, and also in the magnets used inthe tower, make a negligible contribution to totalresource depletion, contributing below 0.1% of totallife cycle impacts .

End-of-life solutionsConstantly and simultaneously lowering the Cost ofEnergy for wind and the environmental impact ofwind power is the focus of end-of-life solutions.Through research and application on how best torecover and recycle the various components andmaterials in a wind turbine, after its power productionceases, the end-of-life phase enhances the overallenvironmental performance seen from a lifecycleperspective. The studies also supplement knowledge on how bestto design the next generation of wind turbines froman environmental perspective, as well as, how to gainthe most value at end-of-life from both existingturbines and new turbines being developed.

Material breakdown of a

Vestas turbine

SourcesPE International (2011) Life cycle

assessment of electricity production froma V112-3.0 MW wind plant - February2011. PE International, Leinfelden-Echterdingen, Germany.

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RecyclabilityVestas abides by a strict definition of recyclabilityWhen recycled, both the value and the essential properties of the materials must be preserved. By this definition, 80 per cent of Vestas V112.3.0 MW can be usefullyrecycled at the end of its lifetime. Because Vestas believes that a sustainable product should leave the smallest possible environmental footprint when decommissioned, itaims to increase the recyclability of its turbines to 85 per cent by 2015.

Vestas is working proactively on initiatives to improve the recyclability of its turbines. The range of these initiatives run from the research on how to recycle glass andcarbon fibres, to exploring the full recycling of test nacelles.

In 2013 Vestas joined the GenVind Innovation Consortium to develop enabling technologies for a sustainable recycling of plastic composites and demonstrate the reuseof composite waste.

In 2011/12, Vestas carried out a complete dismantling of a wind turbine nacelle to trace additional possibilities for increasing the recyclability rate of Vestas’ wind turbines.

Quick factsTarget for 2015:

Increase Recyclability to 85%In 2013: 81%

A material which maintains its initial properties when recycled, including re-use for the same function. Quantified by% weight of the materials that can be usefully recycled.

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Product responsibilityVestas’ wind turbines, options and service offeringsare the result of not only a thorough developmentprocess but also comprehensive analysis of marketforecasts. The top-level Vestas process which allowsus to fulfill our customer requests is known as theVestas product market strategy. The product marketstrategy is the result of a complex series of analysesincluding market forecasts, customer trends,competition, technical predictions and gridrequirements. Macro-economic factors such asnational government targets for renewable energy arealso studied. Based on this input, a series ofstrategic decisions are made regarding whichproducts, technologies, configurations and serviceofferings to make available in which markets andwhen. By involving relevant stakeholders in thedevelopment process, requirements can be built intothe design of the products at an early stage.

By knowing how Vestas’ products and materialscontribute to the environmental performance, it ispossible to make fact-based and informed decisionsat an early stage in the product design anddevelopment phases. Life Cycle Assessment is usedto provide in-depth knowledge regarding theenvironmental ‘hot spots’ of the wind plant life cyclei.e. from raw material production, through tomanufacturing, operation, servicing and plantdecommissioning.

When designing our products, sustainabilityrequirements are taken into consideration andensured through Vestas' development process, the'Vestas Way to Market.'

Vestas Way to MarketTo ensure a true integrated development processacross the Vestas organisation enabling us to reachour overall business targets, a first version of Vestas'Way to Market was launched in 2008. The processhas since been refined and updated in 2011 and2013.

Vestas' Way to Market is Vestas’ global frameworkfor planning, managing and executing technology andproduct development projects and actively involvingthe whole value chain in our company. As such, westrive to ensure that these projects start and end withcustomer requirements in focus.

The core of Vestas Way to Market is the stage-gateprocess consisting of seven stages and seven gateswith a group of gatekeepers at each stage. Thegatekeepers decide whether to let the project moveon to next stage, whether to rethink some aspects orstop the project. This process ensures, amongst otherthings, that the specification requirements are met.The specifications are based on internal Vestascommitments such as Vestas’ chemical black list,international legislation such as the Europeandirectives, and internationally recognised codes andstandards such as the ASMA, ISO and IEC.

In order to ensure regulatory compliance, it’s ourambition to share knowledge of how regulatoryrequirements, including transportation and HSErequirements and grid codes requirements as well asstandards and certification should be complied with inth ti d t t i V t Th i

the respective departments in Vestas. The purpose isto strengthen Vestas’ product regulatory complianceto ensure market access.

It is vital to identify business risks early in thedevelopment process in order to ensure that theproject will not have a negative impact on Vestas’business and strategy, reputation etc. as well on ourcustomers’ business. Risk management is acontinuous process throughout the entire project, anda business risk overview is presented and reviewedat each gate meeting. It is the project manager’sresponsibility to identify and assess key risks andpresent mitigation actions. The risk analysis mustinclude input regarding health and safety aspects,product and commercial issues, process riskanalyses as well as an investigation into the IPRissues.

Continuous ImprovementPart of Vestas’ business approach is to constantlydevelop new and better technical solutions that canimprove the performance of our current operatingfleet or the safety connected to operating theproducts.

Use of new technical solutions will very often have apositive influence on the Lost Production Factor (LPF)for a given wind farm. The LPF is the share of thepotential energy from the wind not harvested by theturbines. The LPF has been substantially reduced inrecent years. The average LPF has been below twopercent since 2012.

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Impact assessmentWhen establishing a wind farm, an important part ofplanning should be an assessment of the proposedlocation and the surrounding environment. Thisincludes the local communities and how the proposedwind farm could potentially impact the physical andsocial environment. In many countries, environmentaland social impact assessments are required by law,or are part of the sustainability requirements ofinternational financial institutions which supportinfrastructure projects. In most cases Vestas’ mainbusiness partner – our customers – have the primaryresponsibility for undertaking the environmental andsocial impact assessment and for developing theenvironmental and social management systems forthe wind plant. Vestas will work closely together withour customers according to Vestas’ contribution tothe project.

The environmental aspects of such an environmentaland social assessment typically take into accountdirect and indirect impacts, including, for instance:

Landscape and visualimpressionsFloraFauna (e.g. Birds)NoiseShadows

The social aspects typically identify issues such as:

Community health andsecurityLand rights

Cultural heritageLocal employment andlivelihoods including jobcreation

To view publicly available environmental and socialimpact assessments for wind farm projects, see theEuropean Bank for Reconstruction andDevelopment’s database at Environmental and SocialImpact Assessments [EBRD - Projects].An example of an environmental impact assessmentof an offshore wind farm – Horns Rev Reef inDenmark – provides interesting reading. This includesstudies on the environmental impact the finishedproject had locally on birds, fish, porpoises, sealsand fauna. You can find these at www.hornsrev.dk.

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Managing sustainabilityTo encourage a company-wide sustainability culture, Vestas invests in nurturing and developing knowledge and skills of our employees, so everyone is empowered towork towards a shared vision of sustainability. At every level of the organisation awareness is raised to minimize sustainability risks. Decisions should always take intoconsideration not only the financial impacts, but also the ecological and social consequences.

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Stakeholder engagementAs a global company, Vestas has many stakeholderswho are interested in our sustainability performance. We understand that our sustainability performance isan important determinant of our relationship withstakeholders. We proactively engage withstakeholders to understand their needs andconcerns, and in return we address these in ourdecision making process.

Transparency is a fundamental concept in ourengagement strategy and this underpins our differentengagement efforts. We publicly disclose keysustainability information in our annual report and onVestas.com whilst also entering into more detaileddialogues with key stakeholders.

We actively collaborate with stakeholders to positivelyinfluence not only our own sustainability performancebut also that of the wider communities we operate in.For example, Vestas took a leading role in the GlobalWi d O i ti d l i t d d f B i

Wind Organisation, developing a standard for BasicSafety Training within the framework of theorganisation. We also co-founded WindMade, aninitiative leading to the first global consumer labelidentifying products and companies made with windenergy. This was done together with other globalplayers like WWF and Bloomberg.

Vestas, at the Group level, has both categorised andprioritised stakeholders in an effort to rationalise andfocus engagement efforts. Initially stakeholders arecategorised based on their relationship with Vestas,for example, customers, NGOs and policy makers.Subsequently, each stakeholder is considered in thecontext of a number of criteria to determine howrelevant Vestas’ sustainability performance is to themand conversely how important they are to Vestas’sustainability performance. Engagement can rangefrom forming active partnerships to address commonsustainability issues to a more passive engagement

through, for example, the publication of the annualreport. The priority given to a stakeholder is used todetermine the most appropriate approach toengagement.

Our ambition to build closer partnerships and supportour stakeholders is reflected in Vestas' materialityanalysis.

Contact us!Sustainability

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Main stakeholdersOur main stakeholdergroupsHere at Vestas, we have manydifferent stakeholder groups with whomwe interact. These include customers,shareholders, employees, politicians,suppliers and sub-suppliers, non-governmental organisations,communities and the media.

1. CustomersWe prioritise customers as our numberone stakeholder group, and to ensurean open and honest dialogue we haveimplemented a Customer Loyaltysurvey. Vestas is working withcustomers on an on-going basis toaddress sustainability issues.

2. ShareholdersTransparency is at the heart of ouroutreach to the investment community.The stock market experts look atSocial, Economic, Environmental andHealth & Safety initiatives to rate listedindustrial companies.

3. EmployeesEmployees are Vestas’ most importantasset and we have a range of offeringsaimed at them to ensure continuouslearning and development as well ascompetitive benefits. We reach out to employees throughdifferent channels to ensure that theyare engaged and committed toSustainability issues. One channel isVestas’ Safety Walks. A Safety Walk isan opportunity for managers inproduction, service or administration todiscuss safe behavior and ways ofimproving safety with employees intheir actual job function. We also useour Employee Survey to measure theemployees’ perception of their workingenvironment. The survey is followedup by the drafting of action plans in alldepartments in order to act on thefeedback we receive.

To ensure that employees can reportmalpractice or ask questions they mayneed an answer to if faced with ethicaldilemmas at work; a Whistle-blowersystem, named EthicsLine is available.Except where specifically prohibited by

local law anyone filing a report mayremain anonymous.

4. PoliticiansAt Vestas, we work closely withpolitical stakeholders to drive themarket for clean, renewable windenergy.

We hold regular discussions withpolitical leaders, public servants,interest groups and non-governmentalorganizations all over the world. Weoffer advice and information to thepublic about the potential of windpower, both in individual markets andworldwide. During 2013 Vestasengaged with policy makers in theUSA, Canada, Australia, China, Japan,Germany, Denmark, the UK, SouthAfrica, Kenya, Brazil, Mexico andnumerous other countries, advocatingreforms and providing best practiceexperience.

5. CommunitiesVestas has developed CommunityDevelopment Guidelines, including atoolbox, which can be used where

Vestas makes social investments.

In India, Vestas has been engaging insocial initiatives since 2007. Theinitiatives are built upon a local‘Societal Policy’ and the three focusareas for investment Education,Environment, and Health. One suchinitiative is the project Little Dreamsinitiated in 2007 to identify and supportdeserving rural children to pursue theireducational aspirations and for holisticdevelopment of schools in terms ofinfrastructure and enhanced learningenvironment.

Reviewing social risks in emergingmarkets came onto the agenda in2012 as Vestas developed a socialand environmental due diligenceprocess for turnkey projects inemerging markets. This Workcontinued in 2013. Identifying socialand environmental risks tocommunities during the sales processand while planning major wind farms isan essential step in ensuring thatVestas and its business partnersrespect the human rights of theseimportant stakeholders.

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Material issuesUnderstanding our stakeholders’ opinions andpriorities enables us to make better decisions andensure that we are both a successful company and aresponsible member of the community. We havetherefore engaged with internal and externalstakeholders to define what matters most to themand in doing so have identified what the materialsustainability issues are for Vestas.

A materiality analysis is mapping topics andindicators that reflect the organization’s significanteconomic, environmental, and social impacts. Byidentifying material issues we can focus oursustainability-related programs on the areas that are

most important to Vestas and our stakeholders. Themateriality analysis also influences how we report onsustainability issues. For example, we comment onthe most material issues in the annual report andprovide additional information and updates onVestas.com.

The formal identification of material issues wasperformed in 2011 through an internal stakeholderconsultation involving many parts of the organization.To prioritise issues, we used internal knowledge ofstakeholder expectations, Vestas surveys, externalstakeholder sustainability reports, consultant inputand global sustainability studies.

In 2012 we enhanced the materiality analysis byconsulting directly with external stakeholders such ascustomers and investors. Doing so gave us additionalinsight into their priorities and provided a usefulplatform for meaningful dialogue.

The Vestas materiality analysis has identified a rangeof sustainability issues. Amongst these, Health &Safety, Business Performance, Climate Change,Quality & Reliability, Product EnvironmentalPerformance and Community Impact are understoodto be some of the most important sustainabilityissues.

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Management systemsAt Vestas, all employees must work according toManagement Standards for the Environment andOccupational Health and Safety.

To support this drive, Environmental Management iscertified in accordance with the requirements of ISO14001, Health & Safety Management in according toOHSAS 18001, and the Quality Management Systemin line with ISO 9001.

The Sustainability Management System, coveringHealth, Safety, Environment, Security and BusinessEthics and Social Responsiblity, serves to put allexternal and internal Vestas Sustainabilityrequirements systematically, efficient and effectively

into practice. It is Vestas’ intent to makeSustainability an integral component of all businessprocesses.

In order to ensure continual improvements forSustainability performance in each area, our dailyworking practices are governed processes andsupported by various tools – including databases, ITsystems and catalogues of ideas.

For example, in order to enhance communication weinsist on regular internal reporting on all significantSustainability incidents through various channels. Thishelps us identify and investigate the most relevantissues to be addressed. The solutions implemented

to these issues help to continuously improve theoverall Vestas Sustainability performance throughoutthe organisation.

Vestas is currently in the process of updating andaligning our Vestas Management System towards aglobal approach ensuring that all processes areunified throughout the organisation.

CertificatesVestas is fully covered by an umbrella certificate forthe management system standards OHSAS 18001,ISO 14001 and ISO 9001.

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Organising sustainabilityResponsibility for Sustainability performance lies inthe line organisation. To support the line organisationthe following departments are responsible for globalpolicies, procedures, and overall guidance related tosustainability: Health, Safety and the Environmental ismanaged by the Global Quality, Safety &Environment (QSE) department, Business Ethics &Social Responsibility and Corporate Security aremanaged by the Group Risk Managementdepartment, and the EthicsLine whistleblowerf ti i d b th C li d t t

function is managed by the Compliance department.

Board committeesVestas board committees oversees Vestas’ focus onsustainability. Two out of three committees discusssustainability issues at their meetings. The boardcommittees that touch upon Sustainability issues arethe Audit Committee and the Technology &Manufacturing Committee. In 20123, the AuditC itt h ld i ti d th T h l &

Committee held six meetings and the Technology &Manufacturing Committee held four meetings.

The Audit Committee evaluates the adequacy andeffectiveness of Vestas' ethics and anti-corruptionprogramme pursuant to Vestas' Code of Conduct andthe World Economic Forum Partnering AgainstCorruption Initiative (PACI). The cases filed in Vestaswhistle blower system, Vestas Ethics Line, arereported here.

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Safety standardsCustomers and employees expect a unified approachto safety regardless of region or country. Vestasagrees. That’s why we have developed a wide varietyof global processes, such as:

Incident managementA sustained effort to increase the flow of knowledgein regards to corrective and preventive actionsagainst safety is a priority. Global knowledge sharingon a monthly basis enables proactive learning toestablish best practices for reducing the number ofinjuries.

Contractor safetyAs Vestas’ own safety performance has improvedstrongly over the years, the performance ofcontractors has become increasingly important toprotect both Vestas’ and its contractors’ employees

from potential harm as well as to live up to customerexpectations of safe operations. Measuresimplemented so far to improve the performance ofcontractors include pre-qualifications, standardisationof safety requirements and intensified tracking ofsafety performance.

Safety Induction programmesA safety induction programme for managers andemployees is part of the induction programme fornew employees. We do this as employees mustknow what to expect - and what is expected of them- as soon as they arrive.

Electrical safetyGlobal standards on “Electrical Safety” and “Controlof Hazardous Energy” have been developed in orderto eradicate electrical injuries. The global

implementation initiated in 2012 was completed in2013 by a range of Master Instructors who cascadedtheir knowledge into the business.

Risk and opportunitiesAs part of Vestas’ strive for continuousimprovements, its process of assessing risks andopportunities has been enhanced to accommodate agrowing demand for alignment across areas ofSustainability. The updated process will ensure thatall sustainability-related risks and opportunities aresystematically and effectively identified, quantified,mitigated and monitored in an aligned way throughoutthe organisation. The scope of the process is toinclude the identification and assessment ofsignificant Environmental Aspects, Health and safetyHazards and Corporate Social Responsibility Impactsand Security Threats.

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Chemical managementBeing in control of the chemicals we use in Vestas ispart of our management system and essential for asustainable company. Only when we are in control of the kind of chemicalswe use, are we able to ensure a healthy workplacefor our employees and minimum impact to theenvironment.

Vestas has, in cooperation with a global provider ofchemical, regulatory and compliance informationservices, implemented a global chemicalmanagement system. This includes an online systemwhere all employees can enter and obtain essentialinformation about the chemicals used in Vestas.

A global chemical database, as well as a chemicalapproval process, is part of that system. The globalapproval process is made to ensure that chemicals

are assessed similarly and that they are okay to usefrom an HSE perspective. Also, that minimumstandards based on best practice, are adhered to. In 2013, Vestas has expanded the chemicaldatabase to include Safety Cards. Safety Cards aresimilar to COSHH- and other workplace assessmentsand describe on a detailed and understandable levelhow employees work safely with the chemicals.

Vestas also has a Material and Chemical Blacklistwhich identify substances that are banned orrestricted with the aim of phasing out their use in ourproduct or production. The ban or restriction can bebased on legal requirements or decided by VestasManagement.

It is expected that our suppliers fulfill therequirements on the blacklist. Vestas cannot work

with suppliers using substances that are prohibited. Ifthe suppliers use chemicals or materials restricted onthe blacklist and an action plan for phasing out thesubstance is expected.

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EmployeesEmployees are crucial to stayingcompetitive and providing customerswith the best service. The company’sPeople Pipeline – employee lifecycle –ensures that the right people are in theright functions throughout theorganisation. It enables Vestas toattract, employ, reward, develop andretain the best. The different elementsof the pipeline are continuously beingrefined to ensure that Vestas stayscompetitive.

At Vestas we know the importance ofunderstanding the culture andbackground of our customers in orderto offer them the best service possible.Therefore, Vestas attempts to fosteran inclusive and diverse environmentto attract employees of differentnationalities, while remaining true tocore company values such as SafetyFirst, Quality and the Vestas Code ofConduct. We are also dedicated tocontinuous improvement ofcompetences. We do that through avariety of internal learning possibilitiesas well as career development. Vestashas among other thingsdeveloped three leadership tracks andattractive benefits.

Being a global businessentails employing people of differentnationalities and cultures. Theb i t b ‘i th i f th

business must be ‘in the region, for theregion.'

RecruitingVestas is active in over 70 countriesand is constantly seeking opportunitiesto expand into new markets. Wealways seek to hire the best-suitedcandidates for vacant positions, basedon background and merit. We dothorough assessments of both externaland internal candidates, and valueopportunities to promote qualifiedinternal talents.

TrainingIn 2013, 375 courses were offered and322,496 hours of training completed.98 percent of the course participantsparticipated in classroom training and 2percent participated in online self-paced training. On average eachemployee received 19 hours of trainingin 2013 with a span from managementlevels receiving 4 hours of training toother employees receiving 23 hours oftraining.

DevelopmentThe Performance and DevelopmentDialogue (PDD) and People Revieware two of our key tools within the

area of employee development.

The People Review aims to createinsight into the performance andpotential of our employees, and tohave a structured and proactiveapproach to performance, actionplanning, and succession planning. Allemployees at Manager level (IPE 54+)or above are mandatory to review, butmany business units choose to reviewall employees.

The People Review creates thefoundation for the PDD’s, which takeplace after the People Review. ThePDD’s are discussions betweenmanagers and their staff. They ensurethat all employees receive feedbackon their performance and behaviour forthe year and set goals for the coming12 months – including competencedevelopment, such as training. Theaim is for all Vestas’ employees tohave a yearly PDD that is followed upmid-year.

93 percent of Vestas’ employeesresponded to the Employee Survey in2013 and 83 percent of themconfirmed that they conducted aPerformance and DevelopmentDialogue with their manager.

Compensation &

RewardVestas is a global company and,inevitably, this means pay practicesand market rates may differ by region.However, the company aims toapproach each location in the samemanner and with the same guidelines.Thus Vestas seeks to ensure thatcompensation and reward levelsremain fair when comparing, forinstance, locations and gender, andremain competitive when comparing toindustry standards.

ExitAll employees leaving Vestas,regardless of the reason for theirdeparture, are offered an interview aspart of the exit process. This way, thecompany learns more about why theemployee has chosen to leave Vestas,and can devise new methods formaking the company more likely toattract and retain talent in the future.

When having to lay-off employees inlarge numbers, Vestas always ensuresnegotiations are conducted as quicklyas possible and result in decentseverance packages for all thoseaffected. Vestas also offers laid-offemployees support for furthereducation and outplacements

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Reporting

At Vestas we believe in being open about the way we operate with regard to the sustainability aspects of our business. To demonstrate this, we report and document thefacts using two readily accessible tools:

Our annual reportThe annual report describes our overriding objective for our work in the context of sustainability. It also contains statistics on key indicators, as well as expectations forthe future.

Statistics on our environmental and health and safety performanceQuarterly reporting gives detailed data on significant environmental and health and safety aspects.

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Reports and ratings

Sustainability data

Selected environmental data

Sustainability reports

Annual Report 2013

Annual Report 2012

Annual Report 2011

Sustainability Report 2010

Annual Report 2009

Annual Report 2008

Annual Report 2007

Annual Report 2006

Annual Report 2005

Environmental Statement 2004

Environmental Statement 2003

Environmental Statement 2002

Environmental Statement 2001

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Environmental Statement 2000

RecognitionsMember company of the ECPI Thematic Indices(Carbon, Climate Change, Renewable Energy)

Member company of the STOXX ESG Leaders indices

Member company of the Global Challenges Index

Carbon Disclosure Project, fourth year included in Nordic 200

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GRI and GC indexVestas bases its reporting on the Global Reporting Initiative’s SustainabilityReporting Guidelines and has followed the G3 guidelines since 2010. TheGuidelines provide a disclosure framework of management approaches andperformance against indicators for economic, environmental and social impacts, aswell as a company profile.

Based on the GRI guidance and requirements, we are self-declaring anApplication Level of B for the combined reporting in the Annual Report and online.The index lists references in the Annual Report as well as online information.

Vestas signed up to the United Nations Global Compact in 2009. We report on ourimplementation of the ten Global Compact Principles in the areas of human rights,labour, environment and anti-corruption. In addition to the GRI reporting elements,this online index also contains details of topics relevant to the Global CompactPrinciples. The ten principles have been linked to the GRI indicators.

Vestas is implementing the UN Global Compact Advanced Programme. SeeVestas’ status on realizing the UN Global Compact Advanced.

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