Methodologies

FREE FLOAT ANALYSIS

The analysis, conducted by Vigeo S.A., covers the largest global asset owners (see below) as well as mutual funds.

Asset owners are: large financial organizations investing their own assets; national, occupational, companyspecific, and local government pension funds; foundations; public funds; insurance funds; endowments; or sovereign wealth funds. Assets do not include those managed by firms on behalf of their clients.

An asset owner is identified as a Socially Responsible Investor (SRI) if at least one of these conditions is met:

  • it adopts SRI principles in its investment policy (with regard to voting, engagement, activism, and screening)
  • has dedicated SRI mandates
  • uses SRI benchmarks.

The analysis also covers green, social, and ethical mutual funds operating worldwide (see below).

Mutual funds are defined as in the European Fund and Asset Management Association (EFAMA) Statistical Releases: i.e., publicly offered open-end funds investing in transferable securities and money market funds. However, data is not fully comparable as the report in question includes some life insurance and pension funds consistent with Vigeo definitions (Green, Social and Ethical Funds in Europe - 2014 Review).

To be eligible for analysis, a mutual fund must:

  • perform ethical, social or environmental screenings for stock and bond issuer selection (negative screens and/or best-in-class)
  • be marketed as an SRI
  • be available to the public (retail funds).

The free float indicates the percentage of shares remaining after block ownership and restricted shares adjustments, as calculated by STOXX Ltd. Block ownership is defined as the sum of all holdings larger than 5% - held by companies, governments, families, and private investors, but excluding those by investment companies and funds - that must be reported to domestic regulatory agencies.

DETAILS OF CALCULATIONS

  • To enable comparability over time, the data presented refers to the three-year period from 2012 to 2014. The 2012 data refers to Fiat Industrial
  • The added value, representing the value generated by Corporate business activities, was calculated via an internal method as the difference between production value and the associated intermediate costs, net of depreciation. The global net added value was then divided among beneficiaries as follows: employees (direct remuneration comprising salaries, wages, and severance pay; and indirect remuneration consisting of welfare benefits); government and public institutions (income taxes); financial backers (interest paid on borrowed capital); shareholders (dividends payable); Company (share of reinvested profits); and local communities
  • Economic data was collected directly rather than extrapolated from the Annual Report, and converted into US dollars using the average exchange rate as at December 31, 2014. To calculate variations, the 2013 data was converted into US dollars using the average exchange rate as at December 31, 2013
  • Human resources data refers to the entire Corporate scope, unless otherwise specified  
  • Employees are divided into four main categories: hourly, salaried, professional, and manager. Professional encompasses all individuals in specialized and managerial roles (including those identified as professionals and professional experts under the CNH Industrial classification system). Manager refers to individuals in top management roles (including those identified as professional masters, professional seniors, and executives under the CNH Industrial classification system) 
  • For 2012 and 2011, labor cost data was reformulated following the adoption of the revised International Accounting Standards (IAS) 19
  • Injury rates were calculated excluding commuting accidents, i.e., those involving employees during normal commutes between place of residence and work
  • Each manufacturing operative unit is required to report monthly safety data to the regional EHS department, which is accountable for data reporting and statistics on safety at Company level. Data collection and analysis is performed by means of specific information technology tools and software
  • Investment data for local communities is based on accounting data and calculation methods, and also includes estimates. Figures in currencies other than dollars were converted at the exchange rate as at December 31, 2014. The stated figures also take into account the cost of employee time to manage and organize humanitarian initiatives promoted by the Company, and do not include brand promotion initiatives
  • Regarding environmental and energy performance, normalized production unit indices were defined to evidence each segment’s medium and long-term trends in environmental and energy performance. The purpose was in fact to highlight enhanced performances resulting from process improvements, and not simply linked to variations in production volumes. Production units are specific to each segment’s nature and activity: hours of production for Agricultural Equipment, Construction Equipment, and Commercial Vehicles, and units produced for Powertrain. Improvement targets were set for each segment based on these normalized indices.  The hours of production refer to the number of working hours of hourly employees required to manufacture a product. In 2014, CNH Industrial set new indicators and targets. The new targets indicated in the Sustainability Plan refer to a performance indicator calculated on the total number of manufacturing hours, defined as hours of presence of hourly employees within the manufacturing scope required to manufacture a product
  • Values expressed in tons refer to metric tons (one thousand kilos)
  • With regard to environmental data, Standard Aggregation Data (SAD) or similar systems were individually compiled for each production unit based on respective qualitative and quantitative data. Individual Standard Aggregation Databases only include data relevant to the activities of the production unit in question. Depending on data, the detection criterion was either measured, calculated or estimated1
  • NOX, SOX and dust emissions were calculated based on historical average values  
  • The emissions of Ozone Depleting Substances (ODS), deriving from inevitable leaks from cooling and air conditioning equipment, were calculated based on the amount of R-22 refilling, and converted into kilos of CFC-11 equivalent considering an Ozone Depletion Potential of 0.055 (source: United Nations Environment Programme (UNEP), HCFCs controlled under the Montreal Protocol)
  • The water sources (or water bodies) considered as significantly affected by water withdrawals and/or discharges fall into three categories: protected, with high biodiversity value, or affected by water withdrawals and/or discharges in excess of 5% of their average annual volume. A protected water body is a geographically defined area designated, regulated, and managed according to specific conservation objectives. A water body with high biodiversity value is an area that is not legally protected, but recognized by government and nongovernmental organizations for the presence of significant biodiversity
  • Energy consumption was measured via specific measurement systems and converted into joules through specific equivalences based on energy carrier. For example, when monitored as a secondary carrier, compressed air is indicated in Nm3 and, through conversion formulas, translated into kWh and then GJ. Direct energy refers to the forms of energy that fall within the scope of the organization’s operations; it can either be consumed by the organization within its boundaries, or exported to other users. Indirect energy refers to the energy produced outside the scope of the organization’s operations, supplied to meet the organization’s needs (e.g., electricity, heating, and cooling) 
  • At CNH Industrial, the sources of greenhouse gas emissions, besides the CO2 emissions from energy consumption, are associated with the use of HFC compounds with Global Warming Potential (GWP) present in air-conditioning, cooling, fire suppression, aerosol (e.g., propellants), and manufacturing equipment. The potential emissions from these substances (CO2 eq) are negligible compared with emissions from energy production; in fact, with an incidence of less than 0.5%, they fall outside the reporting scope 
  • CO2emissions were calculated according to GHG Protocol standards, implemented through Company guidelines, whereas the indirect emissions associated with energy production emission factors were calculated as per the standards published in November 2014 by the International Energy Agency. Furthermore, calculations were made using the lower heat of combustion reference value and the emission factors specific to the energy industry’s power generation stations, available in the second volume of the IPCC 2006 Guidelines. In terms of emission factors, only CO2 was taken into account, as CH4 and N2O components were considered negligible and therefore de minimis.

OTHER INFORMATION

As regards the infographics included in the document and in Facts and Figures, the percentages indicate trends calculated against 2013, unless otherwise specified.

GRI-G4 indicators are referenced at the bottom of the pages in which they are disclosed. If a disclosure is explained over a number of consecutive pages, it is indicated only on the first page.

(1) A value is considered as measured if detected using a certified measurement tool. This criterion remains valid even if a formula is applied to convert the detected value’s unit of measurement. A value is considered as calculated if derived from two or more measured data items related by a formula or algorithm. A value is considered as estimated if based on at least one uncertain data item in addition to other measured quantities.

GRI: 
G4-LA6; G4-EN8; G4-EN9; G4-EN10; G4-EN21; G4-EN22; G4-EN3; G4-EN6 G4-EN15; G4-EN16