KONE Sustainability Report 2017

KONE 2017 | SUSTAINABILITY REPORT Driving innovation and improving resource efficiency 20 Relative operational carbon footprint trend Data assured externally Target: 3% annual reduction relative to net sales* 2015 2016 2017 Overall operations (scope 1, 2, 3) -4.6% -4.0% -0.2% Scope 1, 2 -8.7% -4.2% -2.6% * Calculated at comparable exchange rates Showing commitment As a member of the UN Global Compact, KONE supports the Sustainable Develop- ment agenda, addressing the social, eco- nomic, and environmental dimensions of sustainability. KONE also reports on its sustainability performance annually in line with the Communication of Progress pro- cess of the UN Global Compact. KONE´s solutions help to address the challenges created by urbanization, climate change, demographic change, and increased safety demands – all covered in the new UN Sus- tainable Development Goals. KONE has also signed the Paris Pledge for Action climate initiative, showing cli- mate leadership and commitment to lim- iting global warming to under 2 degrees Celsius in accordance with the Paris Cli- mate Agreement. In 2017 KONE signed the #BeatPollution pledge of the UN Environment Assembly, aiming towards a pollution-free planet. In addition, a record number of KONE units from over 30 countries participated in WWF’s Earth Hour worldwide. During the year KONE also participated, together with other lead- ing companies, in a project where a new methodology for measuring the carbon handprint of a company’s solutions is being developed. Results from the project are expected during 2018. KONE a top climate change performer in CDP 2017 In 2017 KONE was recognized for its actions and strategies in response to cli- mate change. We received a leadership score of A- on climate action and were in the top category for advancing envi- ronmental stewardship. The score ranges from A to D and is based on independent assessment against the scoring criteria of CDP, an international not-for-profit organ- ization that drives sustainable economies. In addition to the recognition in CDP’s Cli- mate Change program, KONE received a place on CDP’s Supplier Climate A List for the second year running in 2017. KONE is proud to have reported in CDP since 2009 and to continuously be listed among the top performers. We have received a leader- ship score in the Climate Change program for four consecutive years. KONE is one of more than 1,800 companies selected by CDP to form a sample group that is now being used as a baseline for tracking pro- gress in greenhouse gas reductions in line with the Paris Agreement. LOW-CARBON OPERATIONS KONE’s operational environmental work focuses on resource efficiency and reduc- ing our carbon footprint. We work together with our suppliers and customers to minimize greenhouse gas emissions and other adverse environ- mental impacts. We consider the following our most significant environmental risks: • Controlling the usage of hazardous substances in the supply chain • Measuring the environmental impact of our solutions during their life-cycle. Environmental risks are managed by con- ducting internal and external audits and by regularly tracking compliance requirements and our environmental performance. Reducing our carbon footprint KONE’s overall carbon footprint relative to net sales decreased by 0.2% compared to 2016, with sales growth calculated at comparable exchange rates. The carbon footprint of Scope 1 and 2 greenhouse gas emissions relative to net sales decreased by 2.6%. Logistics amounts to 50% of KONE’s operational greenhouse gas emissions. In 2017, we were not able to meet the 3% annual carbon footprint decrease target mainly because of an increased logistics carbon footprint. Logistics Our logistics operations cover the trans- portation of products from KONE’s man- ufacturing units to our customers and the transportation of modules delivered straight from our suppliers to our distribu- tion centers and onward to customers. In 2017 we delivered over 3.4 million pack- ages to new installation sites, and around 1.4 million packages of spare parts to existing customer sites. 3.4 million pack- ages amount to a weight of 1,370 million kilograms, or 3.3 million cubic meters in volume. The biggest contributors to the increased logistics carbon footprint in 2017 are: • Ocean freight increase due to longer distances to sites and an increased weight per delivered elevator/escalator • Increased air and courier freight from the supply; one of KONE's suppliers had delivery issues in 2017 with the situation improving during the year • Increased road freight emissions in China due to longer distances to cus- tomer sites and changes in our mate- rial supplier base. DISCLOSURE INSIGHT ACTION