Wienerberger Sustainability Report 2016 Wienerberger Sustainability Report 2016

Smart Solutions

Smart Solutions Sustainable Solutions Demand
Holistic Thinking and Acting

For years, Wienerberger has made every effort to integrate classicfinancial optimization with a style of corporate governance guidedby sustainability targets. A holistic and integrated approach provides the basis for our successful corporate strategy and our self-imposed commitment to continuously improve our ecological, social, societaland economic performance. We are consistently pursuing the ambitious targets laid down in our Sustainability Roadmap 2020. We are convinced that, in the long term, companies acting in full awarenessof their responsibility, contributing to the improvement of people’squality of life today and ensuring the wellbeing of future generations, will be among the more successful ones.

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Essentials 2016

Indicators from the Wienerberger Group 2016 compared to the previous year:

Quantitative targets and our performance in 2016

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Introduction by the Chief Executive Officer

Heimo Scheuch
Heimo Scheuch Chief Executive Officer Wienerberger AG

Ladies and Gentlemen,

We have the courage to take a new approach. The Wienerberger Group is the technology and innovation leader of its sector of industry. Looking toward the future, we are ready to embark on a course of continuous further development. This is our way of addressing the challenges confronting us in an environment of ongoing transformation. The essential issue for us is to put the right questions – and to find adequate answers. This is how Wienerberger generates “Smart Solutions”.

The world is facing major challenges: preserving peace, fighting against poverty and hunger, providing food, drinking water and energy for a growing world population, supporting and integrating refugees and displaced persons, generating sustainable economic growth while ensuring humane working conditions, health and education for all, reducing inequalities within and between countries, limiting the volume of greenhouse gas emissions and adjusting to climate change, adopting responsible consumption patterns in view of the growing scarcity of resources, preserving eco-systems, coping with urbanization and strengthening the resilience of urban communities. The United Nations have incorporated these challenges in their 2030 Agenda for Sustainable Development and defined 17 Sustainable Development Goals to be reached by 2030. As the technology and innovation leader of our industry, we consider it our duty to contribute to the achievement of these goals, especially in view of the fact that many of the challenges referred to, such as climate change, the scarcity of resources, humane working conditions, urbanization and demographic change, directly or indirectly concern Wienerberger.

In 2016, we succeeded in reducing our specific energy consumption by 1.3% from the previous year’s level, and the specific CO2 emissions from our ceramic production came down by 3.3%. We are going to consistently pursue this course.

Climate change demands that we fight against its root causes and adjust to its consequences. The main cause is well known: the rise in greenhouse gases present in the atmosphere as a result of the world’s increasing consumption of fossil sources of energy, above all oil and coal. Our products are highly energy-intensive: in 2016, Wienerberger’s total energy consumption amounted to approx. 7,590 GWh. We are making consistent efforts to reduce our energy consumption and to rely, above all, on energy sources generating the lowest possible volume of specific CO2 emissions. Our goal is to achieve a 20% reduction in the specific energy consumption of our major business units by 2020, as compared to 2010.

At the same time, we are developing forward-looking smart solutions that should enable us to better cope with the consequences of climate change, such as the increasing frequency of extreme rainstorms. In 2016, for instance, we completed a lighthouse project for the construction of tornado-proof houses in Tuscaloosa, Alabama, in cooperation with Habitat for Humanity.

Today, more than half of the world population lives in cities; by 2050, according to a UN study, it will be two thirds. If so many people are to live together peacefully in a confined space, healthy, affordable and socially acceptable housing as well as functioning infrastructure solutions are indispensable. Wienerberger is continuously working to develop new, innovative products, system solutions and services for these applications. In this context, we regard an innovation-oriented corporate culture and proximity to our customers as crucial factors of success. In 2016, we invested close to 1% of our revenues in research and development and in future-oriented products. As a strong partner in new residential construction, renovation and infrastructure, we generated 27% of our revenues through innovative products. All our business units achieved or outperformed their individual targets. We intend to further pursue this course in the years to come.

Wienerberger currently employs a workforce of almost 16,000 people. They are the key to the successful future development of our company. Our objective is to be the preferred employer in our markets. We attribute great value to diversity and equal opportunities, a motivating work environment, the consistent involvement of our employees, a culture of open communication, and attractive initial and further training options.

As an industrial producer, ensuring occupational health and safety for all our employees is our top priority. Zero accidents throughout the Group is our yearly target.

Thanks to our Group-wide safety standard and the individual safety programs of our business units, we were able to reduce the frequency of accidents by 18.4% and the severity of accidents by 15.5% in the Wienerberger Group, as compared to the previous year. Despite our efforts, one fatal occupational accident each occurred in the Wienerberger Group and in a 50% subsidiary of Wienerberger’s. We deeply regret these accidents. We have further intensified our efforts to improve the safety of our employees.

Cultural diversity and decentralized structures characterize Wienerberger’s corporate identity. We regard regionally recruited teams as a crucial factor of our success. In our human resources planning, we therefore make every effort to employ local staff and executives, which enables us to gain a better understanding of the local market and to consider the specificities of the region in decisions taken at Group level. It is our policy to give preference to women for new appointments to senior management and executive positions, provided the candidates’ qualifications are equal. In 2016, 12% of Wienerberger’s senior management positions were held by women, which corresponds to a 50% increase over the previous year’s level. The satisfaction and motivation of our employees are the basic prerequisites for positive human resources development. The average length of service with the company remained high at 13 years in 2016. We regard this as a strong vote of confidence in the Wienerberger Group from our employees. The ongoing employee survey will be rolled out to all local companies of the Wienerberger Group by 2018; its results will provide the basis for measures to further improve the degree of employee satisfaction.

In a world of digital transformation, Wienerberger is directly affected by issues of data usage and data security. Digitalization concerns every segment of our company and covers the entire range of our value chain.

In our production, we see great opportunities in networking and in advanced technologies, as this enables us to meet individual requirements at short notice and to adjust to our customers’ needs.

At present, we are working on the implementation of our digital agenda. It covers a broad range of topics, from product development to webshop marketing, from production processes to supply chain management, from customer apps to integrated 3D planning in real time. Within the framework of our digital agenda, we are working intensively on projects for all our product groups. We are opening up new fields of business and playing a leading role in the digital transformation of our industry. As regards data security, we apply strict rules to protect the interests of our customers, employees and suppliers.

When we signed the UN Global Compact in 2003, we officially acknowledged our responsibility as a corporate citizen. We actively promote business ethics, we see to it that the ten principles of the UN Global Compact are consistently implemented, and we advocate “good corporate citizenship” throughout the Wienerberger Group. Our 2016 Communication on Progress in respect of the UN Global Compact is reproduced on pages 96 to 100.

In the coming years, we will continue to work intensively on the achievement of our targets and the implementation of the corresponding measures. I will be pleased if you continue to follow our progress.

Heimo Scheuch

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Management Approach

Management Approach

Wienerberger is determined to provide an appropriate and well-balanced insight into the essential issues addressed by our group of companies and the related impacts. We also want to disclose information about how we manage these impacts at Group level and in our business units.

We therefore decided to focus our report above all on those issues that are of material importance not only for Wienerberger, but also for our stakeholders. This approach meets the requirements of the GRI Guideline which we follow in our reporting. This chapter therefore comprises four main parts:

  • Our Management approach: Presentation of our management approach for the individual topics andthe way we pursue our economic, ecological, socialand societal targets

  • Global challenges and megatrends: Description of the global challenges confronting Wienerberger and theway in which the company deals with them

  • Our 2014 materiality analysis: Presentation ofthe issues and aspects classified as material by our stakeholders

  • Our Sustainability Roadmap 2020: A self-imposed commitment to continuously improve Wienerberger’s ecological, social, societal and economic performance

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Employees

Employees

Principles, Processes and Instruments

Our employees are the basis of our success and a key factor for the successful development of our company. It is our task to create the necessary basis and the best possible conditions for the safety, health and satisfaction of our employees. To this end, we are making every effort to achieve continuous improvements in the fields of occupational health and safety, diversity and equal opportunities, and initial and further training. A culture of open communication in our company, the consistent involvement of our employees, and a motivating working environment are essential in this context.

Results of our 2014 Materiality Analysis

At Group level, the following social aspects were identified as being of material importance for our employees:

  • Safety
  • Health
  • Communication and employee involvement
  • Employee satisfaction

As a differentiated analysis of our various product groups showed, the aspects described in the following are almost equally relevant for all of them.

Wienerberger is fully aware of its responsibility forits employees. As an industrial producer, our top priority is to avoid and/or minimize potential hazards to the health and safety of our employees, especially in our plants. We not only take the necessary structural, technical and organizational measures, but also make every effortto foster a culture of safety, for instance through training programs and incentive systems.

Wienerberger is an international Group with operations in thirty countries. Therefore, creating possibilities for all our employees to interact, exchange information and become involved in the life of the company are highly relevant factors that influence their well-being and their personal development. At the same time, the degree of employee satisfaction has a considerable impact on the performance of the company. The general conditions at the workplace and the specific instruments available to employees for the performance of their tasks play important roles in this context. It is our responsibility to create the prerequisites for dialogue and exchange across business units, promote knowledge transfer and support efficient cooperation.

The results of our materiality analyses provide the basis for our five-year plan of action, the Wienerberger Sustainability Roadmap 2020. The employee-related targets and measures within the framework of the Wienerberger Sustainability Roadmap 2020 are summarized at the end of this chapter under “Targets and Measures Relating to Employees”.

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Production

Production

Principles, Processes and Instruments

Wienerberger strives to produce as environmentally friendly as possible. For us, the conservation of resources isa key aspect in production. In particular, we focus on the responsible use of raw materials, energy and water. We constantly work on contributing to the fight against climate change through greater energy efficiency and the reduction of our CO2 emissions. At the same time, we strive to increase the amount of recycled material usedin all business units, provided this is technically and economically feasible.

Research and development (R&D) are among the priorities of Wienerberger’s strategic planning. One of the core activities of R&D is to optimize production processes and product development. R&D expenditure in 2016 amounted to € 14.9 million, which corresponds to 0.5%of the Group’s revenues.

Environmentally relevant aspects have also been integrated into the company’s quality management systems (QMS), which are certified according to ISO 9001 at almost all our production sites. Where appropriate, some production sites have also been certified according to ISO 14001 (Environmental Management Systems).

Technical controlling systems have been installed inall production areas of the Wienerberger Group. These systems record all production-related data required for the management of the company and permit the internal benchmarking of production sites against one another.

Results of our 2014 Materiality Analysis

At Group level, the following environmentally relevant aspects of production were identified as being of material importance:

In our production
  • Energy efficiency
  • Climate protection
  • Sparing use of water
  • Resource efficiency and waste management
In our supply chain
  • Availability of raw materials
  • Use of recycled material
  • Avoidance of hazardous substances
  • Protection of local residents, nature conservation and re-use of depleted extraction sites

In the course of a differentiated analysis of our various fields of production, specific environmentally relevant factors of influence from our production processes were identified. Detailed descriptions are contained in the 2014 Sustainability Report on pages 18 to 31 or under http://sustainabilityreport14.wienerberger.com/en/sustainability-at-wienerberger/

The results of our materiality analyses provide the basis for our five-year plan of action, the Wienerberger Sustainability Roadmap 2020. The production-related targets and measures of the Wienerberger Sustainability Roadmap 2020 are summarized at the end of this chapter

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Products

Products

Principles, Processes and Instruments

A central principle of product development at Wienerberger is the creation of lasting value for our customers by supplying them with durable and innovative building material and infrastructure solutions. In our opinion, the relation between a product’s useful life and its impact on the environment during raw material extraction, production, transport, installation, use and disposal plays an important role. Wienerberger brick products are an integral part of sustainable building concepts. They guarantee a high quality of life and contribute to climate protection, for example through their heat storage capacity. In the field of pipes and pavers, we offer system solutions for all present-day challenges, including the demands on water management resulting from climate change and increasing urbanization.

Research and development

In view of what users and developers expect of a modern building, and considering the numerous regulatory requirements to be met, such as the Energy Performance of Buildings Directive (EPBD), a system-based approach to building construction is getting more and more important. Integrated system solutions enable us to combine the outstanding properties of individual products of the Wienerberger product portfolio with products supplied by our partners in the field of building services and facilities in order to obtain the best possible results.

Wienerberger operates several research centers in Europe, each of them specializing in a different product group. Our product management specialists cooperate closely with the marketing and sales departments of the individual business units in order to adapt new developments to the needs of our customers. The market launch of new products across several countries is managed centrally, but the products are adjusted to local market conditions by our specialists on site. Thus, successful developments can be rolled out quickly and efficientlyto the entire Group.

Wienerberger aims to secure and further strengthen its market positions through cost and technology leadership and product innovations. Therefore, research and development (R&D) are among the priorities of Wienerberger’s strategic planning. R&D expenditure amounted to € 14.9 million in 2016, which corresponds to 0.5% of the Group’s revenues.

Environmental product declarationsand certifications

For many years, Wienerberger has been working intensively on the voluntary preparation of eco-balances and environmental product declarations (EPDs) for its entire product range.

All ceramic pipes and fittings produced by Steinzeug-Keramo as well as selected Semmelrock product lines have been certified according to the Cradle to Cradle® concept. This means that our products need not be disposed of as waste at the end of their useful life, but can be returned into the production cycle as feedstock for new products. Regular re-certification ensures a continuous improvement of the products according to the Cradle to Cradle® principles.

Results of our 2014 Materiality Analysis

At Group level, the following aspects relating to our products, their useful life and their “end-of-life” disposal were identified as material:

  • Innovative and durable products
  • Recyclability, recycling and re-use of products
  • Sustainability in construction and demolition
  • Ease of installation
  • Renewable energy for buildings
  • Contribution to the energy efficiency of buildings

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Social and
Societal Commitment

Social and
Societal Commitment

Principles

Wienerberger views the economy as an integral part of society that has the obligation to serve people and create value for all. Wienerberger takes its role as a responsible member of society very seriously. For us, this responsibility encompasses the observance of ethical principles in all our actions, honest communication, active involvement in the creation of a transparent economic environment, personal accountability for what we do, and acting as a reliable and useful member of society.

Results of our 2014 Materiality Analysis

In the course of a differentiated analysis of the impact of our various fields of production on society, business ethics and compliance were identified as aspects of material importance that are equally relevant to all operating segments. Details relating to these issues are contained in the chapter “Management Approach”, which also outlines our quantitative targets and the corresponding measures.

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About this Report

Reporting Profile

Wienerberger reports once a year on the Group’s non-financial indicators. In accordance with past practice, publication of a full Sustainability Report alternates with a concise update presenting the most essential facts and figures. The 2015 Sustainability Update was published in June 2016. The 2017 Sustainability Update will be published in June 2018.

This Sustainability Report covers Wienerberger’s activities in 2016. The figures contained in this report also refer to the years 2014 and 2015 to show a three-year trend. The report focuses on the ecological and social aspects of Wienerberger’s activities and their impact on society. For more detailed information on Wienerberger’s economic performance, its organizational profile and its corporate governance structure, please refer to the 2016 Annual Report

annualreportwb.com/de/ | annualreportwb.com/en/

This report covers the fully consolidated subsidiaries of the Group with operations in the wall, roof, façade, ceramic pipe, plastic pipe and concrete paver product groups. A list of all companies covered by the consolidated financial statements is contained in the 2016 Annual Report of Wienerberger. Sustainability reporting follows the scope of consolidation of the Wienerberger Group, but includes Tondach Gleinstätten only from the reporting year 2015. The majority of Tondach Gleinstätten, the leading producer of clay roof tiles in Central and Eastern Europe, was taken over in July 2014 and is now part of the Clay Building Materials Europe (CBME) Division of the Wienerberger Group. As the structures required for the collection of non-financial indicators first had to be integrated in the course of 2014, the indicators and activities of Tondach Gleinstätten are not yet included in the data for 2014. Deviations from the reporting scope are indicated in the respective sections. Moreover, the data presented in the chapter “Production” only refer to our production sites, whereas all other data include all sites of the Wienerberger Group. For details on the scope of consolidation and the segmentation of the Wienerberger Group, please refer to Wienerberger’s Annual Report.

The topics and key indicators presented in the report were elaborated by subject-specific working groups in cooperation with the Corporate Sustainability Officer. The decisions were taken by the Wienerberger Sustainability Steering Committee (SSC).

This Sustainability Report was prepared in accordance with the current G4 guidelines of the Global Reporting Initiative (GRI), “core option”.

The data presented in this Sustainability Report are based primarily on internal statistics. Important topics were validated by an independent external auditor. In the year under review, the audit focused on facts and figures regarding occupational safety, health, employee turnover, energy consumption and emissions. The audit also covered the underlying sustainability management system and the processes employed to collect data and to implement the sustainability strategy.

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UN Global Compact:
Communication on Progress 2016

The activities of big industrial companies, such as Wienerberger AG, have a strong impact on society and the environment. Such companies therefore bear a special responsibility and should act in an exemplary manner. The minimum standards to be complied with include, above all, the principles of the UN Global Compact regarding human rights, labor standards, environmental protection and the fight against corruption. Through its accession to the UN Global Compact in 2003, Wienerberger officially committed to the ten principles and undertook to foster their implementation within the framework of the company’s possibilities. Once a year, we report on progress achieved in this respect.

The 2016 Communication on Progress in respect of the Global Compact forms part of our 2016 Sustainability Report. In order to ensure maximum transparency andto make it easier for our readers to find the individual examples, we have aggregated the most important state-ments on the ten principles and, in addition, marked the corresponding indicators in the GRI Index and added references to the pages concerned.

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Mission Statement

Mission Statement

Our Vision

We want to be the most highly regarded producer of building materials and infrastructure solutions and the preferred employer in our markets. We share our values, our knowledge, our experience and our success.

Our Mission

We improve people’s quality of life by providing outstanding, sustainable building material and infrastructure solutions.

Our Goal

The primary goal of our entrepreneurial activities is to achieve a sustainable increase in the value of the company in accordance with ecological, social and economic principles.

Our Values

Expertise – Passion – Integrity and Respect – Customer Orientation – Entrepreneurship – Quality – Responsibility

Our values form the basis of our entrepreneurial activities. We live by our values and share them in our day-to-day cooperation.

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Smart Solutions

Annual Report 2016

If you want to know more about the indicators of Wienerberger please click here:

annualreportwb.com

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