Living out values

Franz Haniel & Cie. GmbH has been owned by the Haniel family for 260 years – and it has successfully shaped change for the same amount of time: founded in 1756 as a trader in colonial goods, today it manages a diversified portfolio from its headquarters in Duisburg. Alongside this dynamic approach, firmly anchored principles provide direction and ensure that the company maintains a good balance: the Haniel values, which are borne by the owner family and the management alike. They stand for what Haniel has successfully achieved in the past and for what characterises its action in the present – the ability to combine a sense of community and a sense of business throughout generations.

Business divisions and employees are committed to the Haniel values at all levels: they serve as a compass and indicate the direction in which Haniel would like to develop. That is why it is important that the employees possess a uniform understanding of values and are guided by the same principles of behaviour. These are laid down in the code of conduct, which the company reviewed and updated for all employees in 2014. The divisions also issue comparable regulations on this basis. Among other things, the code of conduct is aligned with the ten principles of the UN Global Compact. By signing up to this initiative of the United Nations, Haniel has undertaken to comply with the principles in the areas of human rights, labour standards, environmental protection and combating corruption and to see that they are disseminated. The divisions are also members of the UN Global Compact or are committed to its guiding principles.

Corporate responsibility is taken to mean in the company today what Franz Haniel, who gave his name to the company, exemplified in the 19th century through his own life as an "honourable businessman". He invested with foresight in promising businesses while at the same time bearing in mind the welfare of his employees and of the company. This latter consideration remains even today a key pillar of the CR strategy. As a family-owned company, Haniel assumes responsibility for its employees and ensures that they can develop their skills and abilities. Moreover, the employees' awareness of the need to protect resources and the environment is raised, while each and every individual's responsibility in thought and action requires them to commit themselves to more sustainability in the day-to-day business. The shared self-perception of the Haniel family and of the company understands that economic success imposes a requirement to provide added social value. That is why Haniel traditionally plays an active role at its location in Duisburg as a corporate citizen.

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UN Global CompactProgress report 2015

Principle Obligations and management systems

Measures in 2015 Performance in 2015 Further information

Human rights and labour standards

1. Supporting human rights2. Excluding human rights

abuses3. Safeguarding the freedom

of association and the right to collective bar­gaining

4. Eliminating all forms of forced labour

5. Abolishing child labour6. Eliminating discrimination

Code of Conduct Human rights aspects and labour standards embedded in the code of conduct; divisions are required to issue appropriate regulations to the extent permitted by law

Continual 2015 CR report: Living out values (#URL)

Investment and business valuation guidelines

Integration of CR aspects and the principles of the code of conduct in the guideline

All applications for approval for investment projects of the divisions with integrated CR aspects

2015 CR report: Living out values (#URL)

A: Management processes throughout the invest­ment cycle phases

B: Decision­making pro­cesses relating to financial investments

Integration of appraisal criteria in accordance with the principles of the UN Global Compact in key man­agement processes throughout the investment cycle phases and in the decision­making process in financial investments

A: Application of negative industry list and CR criteria catalogue (in all potential acquisition opportunities)

B: CR aspects were taken into consid­eration in all decision­making pro­cesses in new financial investments in 2015

2015 CR report: Enhancing value (#URL)

Development and continued education

A: Continuation and establishment of the employee dialogue with the aim of achieving 100 per cent penetra­tion

B: Offer of an extensive training pro­gramme at the Haniel Academy as central building block of HR devel­opment within the Haniel Group

C: Extensive offer for participation in external education and training

A: In 2015, managers held interviews with 100 per cent of the holding company’s employees about their skills and potential and agreed individual development plans as required

B: ContinualC: Launch of a monitoring system for

external education and training

2015 CR report: Enhancing value (#URL)

Health management Further development of the company health management in line with requirements

Holding of a health day and offer of dietary advice for all employees as well as development of an employee brochure giving an overview of all ben­efits on the subject of health

2015 CR report: Living out values (#URL)

Family and staff­friendly conditions

A: Works agreement on trust­based working hours and on telecommut­ing / home office

B: Further development of the parental leave concept in line with requirements

C: Member of the Fair Company Initia­tive

D: Expansion of the information offer for employees

A: Employees whose area of work can be done by telecommuting or with trust­based working hours were able to make use of these options in 2015

B: Introduction of a patron model in 2015 for employees on parental leave

C: ’Family­friendly company’ award in 2015 from the Duisburg Family Alliance

D: Offer of a meeting to exchange ideas with the FHC Management Board for each corporate depart­ment

2015 CR report: Living out values (#URL)

Corporate responsibility is an integral component of Haniel’s corporate strategy. That was confirmed by the holding company when it signed up to the UN Global Compact on 27 March 2014. In its second progress report, the Haniel holding company reports on management systems and measures to implement the 10 principles in the areas of human rights, labour standards, environmental protection and anti­corruption.

Do you have any questions about corporate responsibility at Haniel?Please contact responsibility@haniel.de.

Page 2/2Do you have any questions about corporate responsibility at Haniel?Please contact responsibility@haniel.de.

Principle Obligations and management systems

Measures in 2015 Performance in 2015 Further information

Environmental protection

7. Precautionary environ­mental protection

8. Promoting greater envi­ronmental responsibility

9. Diffuse environmentally friendly technologies

Code of conduct Environmental aspects embedded in the code of conduct; divisions are required to issue appropriate regula­tions to the extent permitted by law

Continual 2015 CR report: Living out values (#URL)

Increasing employee aware­ness

A: Employee training and presenta­tions on the topic of CR

C: Internal communication on the topic of CR, including an action week with extensive information of the issues of water, paper, mobility and energy

A: CR ’Smartie’, onboarding process for new employees

B: Continual

2015 CR report: Living out values (#URL)

Reduction of the holding company’s ecological impacts

A: Increase in energy efficiency at the business location

B: Procurement of electricity from renewable energy sources

C: Launch of a project to test alterna­tive drives in the vehicle fleet

A: Installation of heating and cooling generation equipment with the goal of reducing energy consumption from 2016 onwards by 15 per cent in comparison to 2014.

B: The holding company procures 100 per cent of its electricity from renewable energy sources

C: Procurement of a pool vehicle with an electric drive

2015 CR report: Living out values (#URL)

Reduction of the divisions’ ecological impacts

Agreement of targets with the divi­sions that contribute to a reduction in the ecological footprint

A: Paper consumption at TAKKT was reduced in 2015 from 20.8 tonnes to 18.2 tonnes per EUR 1 million in sales

B: CWS­boco has equipped 80 per cent of the service drivers in 6 countries with a route tool and has been able to reduce the distance driven by 1.2 million kilometres

C: ELC has conducted a study on saving CO² emissions when using recycled material in comparison to primary raw materials

2015 CR report: Enhancing value (#URL)

Fighting corruption

10. Measures against corruption

Code of conduct Compliance­related issues, e.g. anti­corruption aspects, are embed­ded in the code of conduct; divisions are required to issue appropriate regu­lations to the extent permitted by law

Continual 2015 CR report: Living out values (#URL)

Compliance management system

Continued safeguarding of compli­ance with statutory and internal com­pany regulations through preventive measures, including a compliance reporting system, a compliance officer and a compliance helpline

Continual 2015 annual report:Corporate governance (page #)

Raising awareness of employees

Training in compliance­related issues Implementation of e­learning mod­ules on the issues of ’corruption pre­vention’ and ’practical questions of competition law’ for all executives and employees who require training based on their work

2015 annual report:Opportunities and risks report(Page #)

UN Global CompactProgress report 2015

Responsibility for employees

Well-trained employees are a key factor in the company's long-term success. That is why Haniel encourages the professionalisation, development and networking of specialists and managers within the Group. A central contribution is made here by the Haniel Academy – for example through the tailor-made development programmes of the Haniel Leadership Curriculum. This is where up-and-coming talents, executives and top managers develop their leadership potential – encompassing everything personal to strategic leadership skills. A get-together of graduates from the EXPLORE! programme was held for the first time in the summer of 2015. Under the heading 'Innovation through Culture & Leadership', the former participants in the programme came together in a variety of workshops to deal with questions of how companies can develop sustainable business model innovations and how managers can create a culture and working environment that encourages innovation. With the Haniel Management School, the Haniel Academy launched a new international programme in September 2015 that communicates to experienced executives current management methods and concepts, especially against the background of greater market dynamism and the need for organisational agility.

The Group-wide academy programme addresses current challenges and key topics such as the agility and flexibility of companies in a dynamic environment: formats that prepare specialists and managers individually and organisationally for the requirements of the digital transformation will be offered for the first time in 2016. Half-day seminars, which are called 'Smarties', continue to give staff of the holding company stimulus on topics such as working methods, health and even insights into individual specialist areas of the holding company – including in 2015 portfolio strategy and corporate responsibility. The 'Smart Training' sessions, special formats for employees in case processing and support functions, have been a firm and integral part of the offer for two years now.

Strengthening employees

Haniel promotes specialists and managers in an individual and targeted way, irrespective of sex, age or nationality. In the annual staff dialogue, employees of the Haniel holding company discuss their personal strengths together with their managers and set development targets – for example participation in seminars and training courses at the Haniel Academy in order to further develop their skills and abilities.

For Haniel, 'strengthening employees' also means maintaining an open dialogue based on trust. In order to receive feedback on the commitment and satisfaction of all employees, the holding company regularly conducts staff surveys – the most recent one was in 2014. A participation rate of 87 per cent means that many employees have taken the opportunity to provide feedback. In addition to communicating the overall results to all staff, the relevant outcomes have been discussed in the corporate departments with the managers and measures have been derived where necessary. The next staff survey is scheduled for 2016.

Responsible employer

In order to increase staff satisfaction, Haniel offers its employees attractive remuneration, but also a variety of social benefits – including subsidies for childcare and an employer-financed pension scheme. In 2015, the existing model was set on a sustainable path by a switch to a defined contribution plan. In addition, by launching an online pension portal, Haniel has created more transparency for employees on the current status of the pension scheme.

To provide for a better balance between private life, family and career, Haniel allows its staff to organise their working hours with greater flexibility. Depending on the activity and personal situation of the employee, the option exists of working flexitime or part-time or alternating between working at home and in the office. Holding company staff can make use of the counselling provided by a family service in order to cope with everyday life during particularly stressful changes in their private life or their career. If an employee of the Haniel Group has got into difficulties through no fault of their own, the possibility exists of applying for financial aid from a support fund. Based on this extensive commitment, Haniel was recognised by the Duisburg Family Alliance as a particularly family-friendly company in December 2015.

In order to maintain the long-term health of the staff, the Haniel holding company offers a number of medical check-ups and sports programmes, such as fitness, yoga and back training courses, some of which are free of charge. In addition, the Haniel Academy provides support for employees with training sessions on health and stress management. In order to raise the awareness of employees surrounding health promotion, the holding company held a health day in 2015 – which included presentations on healthy eating and stress prevention.

Responsibility in thought and action

Corporate responsibility is an instrument that is used to reinforce the corporate values that are put into practice with the aim of anchoring among the staff thought and action characterised by foresight and responsibility. To this end, Haniel creates a uniform understanding of CR and raises the awareness of employees on how to conduct themselves responsibly in their day-to-day work. Because the employees are a vital element in establishing sustainability firmly in the company. By continually improving their work processes, they play a part in conserving resources and reducing the impacts on the environment. That is why their awareness and training are especially important. In addition to information events, the holding company has developed an internal training format for CR: in what is known as the CR Smartie, participants are given an overview of global challenges such as climate change and the scarcity of resources and are encouraged to integrate sustainable behaviour into their day-to-day business life. Moreover, Haniel encourages all employees to get involved in things outside their job – for example in company projects in the area of the promotion of education or location responsibility.

As the portfolio manager, Haniel enjoys great leverage when it comes to reducing the ecological

impacts at the divisions, in the hands of which the operating business lies. Nevertheless, the holding

company also initiates a variety of measures in order to reduce the ecological and social impacts of

its own business activities. For example, heating and cooling generation equipment has been

installed with the goal of reducing energy consumption from 2016 onwards by 15 per cent in

comparison to 2014. In addition, an electric car was procured for the vehicle fleet in 2015 that every

employee can use for business trips. In this pilot project, the company wants to test the use of

alternative drives in company cars in order to thus establish the vehicle fleet in a more

environmentally friendly way in the long term.

Suppliers

In its role as a strategic holding company, Franz Haniel & Cie. GmbH procures goods exclusively for non-trading purposes, such as office supplies, IT equipment and company cars. A variety of criteria apply when selecting suppliers: in addition to the price, the quality of the products and the processing of the order play an important role. The holding company additionally prefers to use internal Group suppliers. The purchasing policy of the holding company ensures that minimum requirements are complied with in purchasing and tendering processes. When procuring goods and services, attention is additionally paid to the protection of the environment and the conservation of resources – for example when purchasing company cars. The holding company introduced a green car policy in 2013, which stipulates a continual reduction in the CO2 limits. Furthermore, employees can choose between a contribution to the annual pension plan or an annual season ticket for Deutsche Bahn (German Railways) as an alternative to a company car. The divisions have also issued

regulations in order to further drive an environmentally friendly set-up of their vehicle fleets. The choice of electricity provider is also made in consideration of sustainability criteria: since 2013, the holding company and also the divisions CWS-boco, ELG and TAKKT have procured 100 per cent of their electricity at their locations in Germany from renewable energy sources.

Responsibility for society

In accordance with the Haniel values, the holding company also makes a social commitment beyond the core business. As a corporate citizen, it provides financial, factual and ideal support for initiatives and projects at its location in Duisburg – with the goal of increasing the quality of life in the city and creating long-term benefits for the region. In order to achieve more through a combined effort and to bundle skills together, Haniel works together with strong partners here. In co-operation with the non-profit Social Impact gGmbH, of the Prof. Otto Beisheim Foundation and the KfW foundation, Haniel launched a start-up laboratory for social entrepreneurs in Duisburg in 2015. Start-up entrepreneurs who solve social challenges with their business ideas receive a scholarship for eight months that encompasses professional consultancy, coaching, workshops and the necessary work infrastructure. Haniel also understands corporate responsibility to include deploying the skills and abilities of employees to the benefit of society. The holding company is planning a mentor programme for 2016 in which experts and managers will get involved in the start-up lab on a voluntary basis and support the scholarship holders with their expertise in an advisory capacity.

Haniel is a co-founder of the initiative "We together – The integration initiative of the German economy" ("Wir zusammen – Integrationsinitiativen der deutschen Wirtschaft"), which was officially unveiled in the beginning of 2016. Participating companies pledge to make a tangible, lasting contribution to the integration of refugees in Germany. Haniel coordinates directly with the City of Duisburg to provide assistance when there are acute shortages in support for refugees and will promote cultural, technical and language training measures as well as child care and youth services. The Haniel Group is also making plans to assist with the professional integration of refugees granted rights of residence.

Hand in hand for Duisburg

In the area of the promotion of education, the company and the Haniel Foundation work hand in hand in Duisburg: in order to improve the prospects of socially disadvantaged children and youths, the co-operation project 'Education as an opportunity' was launched in 2010 together with Ashoka Germany and the three social entrepreneurs apeiros e.V., Chancenwerk e.V. and Teach First Deutschland. All three educational initiatives are targeted at the same group, but pursue a different approach: while Teach First Deutschland seconds outstanding university graduates to schools for two years to provide educational support, Chancenwerk offers qualified private tuition to students from financially less well-off families. The goal of apeiros is to get drop-outs back to school. By dovetailing these solutions

in Duisburg, more can be achieved through the combined strength of the entrepreneurs in order to reduce barriers to education and pave the way for a successful professional future for pupils.

In addition to the commitment described above, Haniel also champions a great many initiatives and projects at its business location. In co-operation with Deutsche Oper am Rhein, the city of Duisburg and the Duisburg Philharmonic Orchestra, the company organised the second Haniel Classic Open Air in 2015, providing around 7,000 visitors to Duisburg's city centre with access to some high culture. More detailed information on the social commitment of the company is published on the website under 'Responsibility'.

You can find more information on the commitment of the Haniel Foundation on the website.