Our Commitment to Sustainable Development

CNH Industrial believes that growth has value only if also sustainable and, therefore, considers the management of the environmental and social impacts of its activities to be fundamental. The full integration of environmental and social considerations with economic objectives enables the Group to identify potential risks and seize additional development opportunities, resulting in a process of continuous improvement. Sustainability is a core element of CNH Industrial’s Corporate Governance, with top management playing a direct and active role. Within the Board of Directors, the Governance and Sustainability Committee is responsible for strategic oversight of sustainability-related issues and reviews the annual Sustainability Report, which discloses the Group environmental and social performance, expanding on and completing the information provided in the Annual Report. The Group Executive Council (“GEC”) - the Group’s highest decision-making body after the Board of Directors - defines the strategic approach, evaluates the congruity of the action priorities and commitments of sustainability with business objectives, and is regularly updated on the Group’s sustainability performance. The Sustainability Unit, which is part of CNH Industrial’s Finance organization, has operational responsibility for promoting a culture of sustainability throughout the Group. It facilitates the process of continuous improvement, and contributes to managing risks and strengthening the relationship with and perceptions of stakeholders, in addition to managing sustainability reporting and communication.

The principles that are the foundation for the Group’s operations are set forth in the Group’s Code of Conduct, one of the pillars of the CNH Industrial Corporate Governance System, which regulates the decision-making processes and the approach used by the Group and its employees to interact with stakeholders (see also Corporate Governance Section and the Sustainability Report).

For a detailed account of the environmental and social initiatives carried out in 2014 reference should be made to the Sustainability Report. The Sustainability Report, prepared on a voluntary basis applying the Global Reporting Initiative’s guidelines (GRI-G4), integrates the economic aspects described herein with an all-encompassing view of the environmental and social performance of CNH Industrial’s operations, and includes the Sustainability Plan, which reports on the progress of existing projects and new targets to drive continuous improvement in the Group’s sustainability performance.

Materiality analysis

The materiality analysis continued in 2014 with the engagement of a number of stakeholder categories. Since a multi-year approach was taken to enable a more detailed analysis, additional stakeholder categories will be engaged next year. Specifically, the stakeholders involved in the first year were: dealers, suppliers, local communities and NGOs, journalists and opinion leaders, public institutions, environmental experts and investors. The choice of who to engage was made by the internal representatives interacting with stakeholders on a daily basis, endorsed by the regional Chief Operating Officer (“COO”) and the Chief Executive Officer (“CEO”). Engagement occurred mainly through direct interviews (face-to-face or via conference call); suppliers, however, received an online questionnaire preceded by a business presentation during regional meetings previously scheduled by the relevant department.

The 25 aspects, considered material for CNH Industrial according to last year’s internal assessment with top management, were the starting point for the analysis. In this second phase of the materiality analysis, stakeholders were asked to evaluate the importance of the 25 aspects, from their point of view, for a company such as CNH Industrial, with specific reference to their needs and expectations in relation to the Group. The analysis involved 112 stakeholders worldwide, with particular focus on the countries where CNH Industrial operates. The engagement process also provided an opportunity to identify any additional issues for consideration in a future review of the materiality analysis, along with other suggestions on improving the management of stakeholder relations.

The stakeholder engagement results were thus reported on the materiality matrix, by repositioning the 25 material aspects along the vertical axis (significance to stakeholders), while the significance within CNH Industrial of the individual aspects identified last year remained unchanged. The results were presented to the members of the GEC and reviewed by the CEO.

The matrix confirms the greater relevance of business-related aspects. All 25 aspects are considered material, but, from a social point of view, the aspects considered as most material, in terms of priority, involve the capacity for innovation related to product safety, product quality, and customer engagement. Lastly, the most relevant environmental material aspects involve product innovation related to environmental protection and the management of atmospheric emissions (especially greenhouse gases) and waste.

The stakeholder engagement results were also analyzed at regional level to provide COOs with a management tool highlighting the characteristics of each region and the action priorities according to local stakeholders.

Environmental and social issues to be included in the Annual Report were selected on the basis of the materiality analysis and are focused on key phases in the product life cycle. For further information on the materiality analysis, see the 2014 Sustainability Report.

For CNH Industrial, acting sustainably means managing the social and environmental impacts of its activities in a manner that takes into account of the expectations of all stakeholders.

Inclusion in the social responsible indexes

In 2014, CNH Industrial’s values and commitment were recognized internationally, as evidenced by the appraisals of major sustainability rating agencies and international organizations. CNH Industrial’s achievements were also recognized through the inclusion in leading sustainability indexes, such as the Dow Jones Sustainability (DJSI) World and Dow Jones Sustainability Europe as Industry Leader, ECPI EMU Ethical Equity, ECPI Euro Ethical Equity, ECPI Global Agriculture Equity, ECPI Global Developed ESG Best in Class Equity, Euronext Vigeo Europe 120, Euronext Vigeo Eurozone 120, Euronext Vigeo World 120, FTSE ECPI Italia SRI Benchmark, FTSE ECPI Italia SRI Leaders, FTSE4Good, MSCI Global Sustainability Indexes, STOXX Europe Sustainability Index, EURO STOXX Sustainability Index, STOXX Global ESG Environmental Leaders Index, STOXX Global ESG Leaders Index, and STOXX Global ESG Social Leaders Index.

Furthermore, CNH Industrial received a top disclosure score in the CDP Italy Climate Disclosure Leadership Index (CDLI) 2014, and the highest score in climate change performance in the CDP Climate Performance Leadership Index (CPLI) 2014. It also achieved the RobecoSAM Gold Class 2015 award, the RobecoSAM Industry Leader 2015 award, and the Oekom PRIME status.

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