dormakaba

Sustainability
ReportFinancial Year2017/18

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Sustainability Report 2017/18

Table of Content
		
3
		
5
About the report

Materiality

		
17
		
20

Strategy and Approach

Linking to the
UN Sustainable Development Goals

		
25

Focus Area Transparency
25 Anti-corruption
29 Anti-competitive Behavior
31 Human Rights Assessment
34 Supplier Social & Environmental Assessment

		38

Focus Area Process & Production
38 Environmental Management
50 Occupational Health & Safety
52 Customer Privacy

		54

Focus Area People
54 Employment
65 Training & Education
69 Freedom of Association & Collective Bargaining		
70

Focus Area Products
70 Energy, Emissions, Effluents & Waste
73 Materials
75 Customer Health & Safety		78
GRI Content Index

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About dormakaba
To become the industry leader and strengthen trust in our businessactivities, we offer innovative and sustainable products, solutions andservices.
dormakaba Group (“dormakaba”) is one of the top three companies in the global market foraccess and security solutions. With strong brands in our portfolio, dormakaba is a single
source for products, solutions, and services for smart and secure access to buildings androoms. dormakaba is present globally in over 130 countries by own activities and numerous
partners.

About this reportdormakaba's Sustainability Report 2017/18 highlights our sustainability commitment,
strategic approach and progress and is geared to all our stakeholders, i.e. our employees,
investors, customers, suppliers and municipalities where we do business (Disclosure 102-40).
This sustainability report is the first to be published in accordance with the Global Reporting
Initiative Standards (core option).
This is the third sustainability report for dormakaba. Previous reports were publishedaccording to GRI G4 Guidelines (core option). The first report for dormakaba was publishedafter the merger of Dorma and Kaba for the 2015/16 financial year.
In the transition to the GRI Standards, dormakaba has invested resources in a newmateriality assessment, which will be valid until 2021. The report outlines detailed
Management Approaches in line with GRI 103. In coming financial years, this comprehensive
and detailed reporting will serve as a reference, with updates only as necessary.
Unless indicated otherwise, the reporting boundary comprises the entire dormakaba Groupas stated in the scope of consolidation for all indicators and is based on the 2017/18 financial
year from 1 July 2017 to 30 June 2018. For further information, refer to our Annual Report
2017/18. The underlying data, in particular for the key figures relating to employees and theenvironment, do not reflect all locations. Data stems from 48 sites and covers around 70%
of our employees.

About

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About

Sustainability Report 2017/18

Sites covered

Data source: dormakaba operates all over the world and employs around 16,000 people worldwide. The sustainability report is based on the data of 48
sites and covers around 70% of its employees.

Americas
Bogota, Colombia
Detroit, USA
Deerfield Beach, USA*
Dyersville, USA
Huntsville, USA
Indianapolis, USA*
Lake Bluff, USA
Leola, USA
Lexington, USA
Mesquite, USA*
Montreal, Canada
Phoenix, USA*
Reamstown, USA
Rio de Janeiro, Brazil
Rocky Mount, USA
Sao Paulo, Brazil*
Steeleville, USA
Waukegan, USA
Whitby, Canada
Winston-Salem, USA* newly reporting in 2017/18 (Disclosure102-49)Europe, Middle East
and Africa
Bad Salzuflen, Germany
Bühl, Germany
Dreieich, Germany
Dubai, United Arab Emirates
Eggenburg, Austria
Ennepetal, Germany
Fougères, France
Heiligenhaus, Germany
Herzogenburg, Austria
Hitchin, England
Johannesburg, South Africa
Moscow, Russia
Nuneaton, England
Ocholt, Germany
Sofia, Bulgaria
Tiverton, England
Velbert, Germany
Villingen-Schwenningen, Germany
Vittorio Veneto, Italy
Wetzikon, Switzerland
Wuppertal, Germany

Asia PacificHallam, Australia
Melaka, Malaysia
New Delhi, India
Senai, Malaysia
Shenzhen, China
SingaporeSuzhou, China
Taishan, China
Yantai, China

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Materiality

Materiality
At dormakaba, we make access in life smart and secure. We also want
to be smart about the choices we make as a company – including how
we manage and live sustainability.
That is why, in the 2017/18 financial year, dormakaba invested in a comprehensive
materiality reassessment to be aligned to the GRI Standards. The latter have clarified theinside-out nature of the term “impacts” in their latest materiality definition.

Impact assessment
As part of the materiality process, we focused our efforts on a study-based impact
assessment of sustainability topics along our value chain. The aim was to focus efforts
where dormakaba can have the most impact on sustainable development. The analysis
included dormakaba data from procurement, sales, production and human resources. Thiswas overlaid with over 50 risk indicators from social hotspot databases, the World Bank andthe Organisation for Economic Co-operation and Development (OECD).
The approach provided a structured qualitative analysis of environmental, social andeconomic indicators for the countries and industries dormakaba is involved in throughout thevalue chain (Disclosure 102-46).
dormakaba value chain

For ease of modelling, the company’s value chain was simplified into four steps in the sustainability impact assessment: 1.) Raw materials & sourced
goods; 2.) Transportation; 3.) Own activities; and 4.) Distribution, use and end-of-life.

The basis for the long-list of 26 topics taken up into the assessment were:• the material aspects as defined in the 2015/16 and 2016/17 financial years,• topics based on the sustainability context of the industries in our value chain, and• ongoing sustainability initiatives in the company.
Overall, the assessment process has not only helped to identify hotspots along the value
chain, it has generated internal momentum and sharpened understanding of such impacts.
This will serve as a basis for informed decision-making as the company manages its
sustainability efforts going forward.

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Materiality

Stakeholder dialogue
The second dimension in the materiality reassessment was focused on the relevance of thesustainability topics for our stakeholders, both internal and external. The stakeholder
dialogue which had taken place in the 2015/16 financial year was thorough and validated in arobust, multi-stage process. This included an online survey of around 100 employees
including the Executive Committee, the Senior Management and employees who regularly
deal with sustainability matters in their day-to-day work. Additionally, bilateral discussions
with external representatives such as investors, customers, suppliers, partners, and local
government were conducted. The results were therefore taken as a basis for this dimension
in the current materiality reassessment. For further details, refer to the 2016/17
Sustainability Report (page 8) (Disclosure 102-42, 102-43).

Threshold-setting and validation
The results of the impact assessment and stakeholder dialogue were quantified in thedormakaba materiality matrix. The threshold for material topics was defined in a workshop
with the international dormakaba Sustainability Working Group, including representatives
from a range of global and segmental functions within the Supply Chain, Procurement,
Human Resources, Compliance, Operations, Quality Control, Material Compliance andCommunications departments. After intensive discussion on a third and final dimension –i.e., importance of the individual topics to the company strategy and values, as well as
possible risks and opportunities – the materiality threshold was agreed.
All topics where dormakaba was shown to have a medium to high impact on sustainable
development were taken up as material. These were topics where dormakaba either makes
a positive contribution to sustainable development - for example through job creation ortraining – or topics whereby our own operations or those of business partners and suppliers
could have a negative impact, for example, energy consumption and greenhouse gas
emissions resulting from the manufacturing process. Areas of highest interest to
stakeholders were also considered. Most topics with a medium to high relevance to ourstakeholders were defined as material.
In a final step, the proposed material topics were discussed with the Executive Committee,
which then approved them. In addition, the Executive Committee defined the topics ofCustomer Health and Safety and Customer Privacy as material, highlighting our company
value “Customer First”.

Changes in material topics
Many topics which had been previously defined as material were reconfirmed through thereassessment process, which indicated that the company was on track in its sustainability
management. In addition, six topics have been newly added as material, as seen in the below
table. Some topics which had been previously defined as material were shown to be of lessrelevance to stakeholders or of less potential impact on sustainable development for thecompany. While these topics are less material in the sustainability strategy, ourcommitment to the principles related to forced labor and non-discrimination continues as amember of the UN Global Compact (Disclosure 102-49).

Reporting Frameworks
This report has been
prepared in accordancewith the GRI Standards:
Core option. It has
successfully completed the
GRI Materiality Disclosures
Service.
dormakaba also reports to
the Carbon Disclosure
Project annually. Last year,
dormakaba achieved a Cscore for its report.
dormakaba is a member of
the UN Global Compact
and publishes its annual“Communication on
Progress” on the UN Global
Compact website.

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New material topics

Previously defined as material• Materials• Socioeconomic Compliance• Freedom of Association and Collective• Forced Labor

Bargaining• Diversity and Equal Opportunity• Customer Privacy• Economic Performance• Customer Health and Safety• Product and Service Labelling• Supplier Environmental Assessment• Supplier Social Assessment

dormakaba interactive Materiality Matrix 2017 - 2021
The dormakaba Materiality Matrix below shows our 17 material topics until 2021. By clicking
on a topic of interest, an informational box will appear which shows the topic definition andthe degree of potential impact along our value chain. The topic boundaries are set based on
the value chain steps outside of own operations with high potential impact per topic. The
topic boundaries are extended to include own operations for all material topics, even if
potential impact is low to medium. Prioritization is set according to the degree of potential
impact (Disclosure 102-46, 102-47).

Materiality

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Anti-competitive Behavior
Definition: Prevention of any form of anti-competitive behavior, extortion, collusion, conflictsof interest, price fixing. Anti-trust and monopoly practices, whistleblowing procedures.
Potential Impact per Value Chain Step

Anti-corruption
Definition: Prevention of any form of corruption and bribery in the supply chain, logistics andoperations. Policy regarding payments to authorities and whistleblowing procedures.
Potential Impact per Value Chain Step

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Customer health and safety
Definition: Assurance of the health and safety of customers, consumers and other users.
Potential Impact per Value Chain Step

Customer privacy
Definition: Safeguarding of customer's rights of data protection and privacy; e.g. obtaining
data by lawful and fair means, protection of personal data of customers by adequate
information security safeguards, responsible use of customer data in sales, proliferation of
new technologies and security risks / liabilities, cyber security.
Potential Impact per Value Chain Step

Materiality

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Effluents and Waste
Definition: Pollution in the supply chain, logistics and operations; e.g. emissions of toxic orhazardous substances from manufacturing to soil or water, responsible use, storage anddisposal of potential pollutants, preventing chemical spills, wastewater treatment; waste
generation, recycling of generated waste.
Potential Impact per Value Chain Step

EmissionsDefinition: Greenhouse gas (GHG) emissions and air pollutants in the supply chain, logistics
and operations; e.g. CO2, NOx, SOx, volatile organic compounds (VOCs), fine dust emissions,ozone-depleting substances, reduction of the risks of related human health impacts.
Potential Impact per Value Chain Step

Materiality

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Employment
Definition: Employment and job creation by the organization and along the value chain; e.g.
employment practices, wages, working conditions, hiring and retention of employees, social
dialogue, employee-management relations.
Potential Impact per Value Chain Step

EnergyDefinition: Energy consumption and use of renewable energy in the supply chain, logistics,
operations and products, e.g. energy efficiency, use of local and renewable energy, energy
efficiency of products.
Potential Impact per Value Chain Step

Materiality

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Environmental Compliance
Definition: Compliance with environmental laws and regulations along the value chain (e.g.
reduction of financial risks through fines and negative impacts on reputation, avoidance ofclean-up obligations or other costly environmental liabilities).
Potential Impact per Value Chain Step

Freedom of Association and Collective Bargaining
Definition: Risk and non-compliance with the freedom of association and collective
bargaining in the supply chain, logistics and operations.
Potential Impact per Value Chain Step

Materiality

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Human rights assessment
Definition: Respecting human rights along the value chain; e.g. obligation and training of
employees and business partners to adhere to human rights, provision of grievancemechanisms, human rights due diligence. Human rights include e.g. freedom of religion, rightto life, protection from discrimination, freedom from slavery and forced labor.
Potential Impact per Value Chain Step

Materials
Definition: Efficient use of materials in production and in the supply chain, e.g. optimizationof the production process, responsible sourcing of conflict minerals and wood, ensuring
material traceability, responsible use, recycling and reuse of materials and product recovery,
responsible use of scarce materials.
Potential Impact per Value Chain Step

Materiality

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Occupational health and safety
Definition: Accidents, injuries and wellbeing of people involved in activities along the value
chain; e.g. workers' exposure to risks and hazardous substances, (personal) protective
equipment, health and safety training, health checks, case management, ergonomic work
areas.
Potential Impact per Value Chain Step

Supplier environmental assessment
Definition: Reduction of negative environmental impacts in the supply chain and of business
partners, i.e. supplier screening, due diligence processes, prevention, mitigation andremediation of negative impacts. Sustainable sourcing of raw materials, e.g. impacts ofextraction (including conflict minerals), procurement from politically unstable regions.
Potential Impact per Value Chain Step

Materiality

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Supplier social assessment
Definition: Requirement of social standards for suppliers and business partners, i.e. code of
conduct, certifications, audits in the supply chain. Sustainable sourcing of raw materials, e.g.
impacts of extraction (including conflict minerals), procurement from politically unstableregions.
Potential Impact per Value Chain Step

Training and education
Definition: Enhancement of employee and talent development along the value chain; e.g.
vocational training, development planning, performance evaluation, promotion of skills,
employee training and education, promotion of lifelong learning opportunities, facilitation ofcontinued employability.
Potential Impact per Value Chain Step

Materiality

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Water
Definition: Water consumption in the supply chain, logistics and operations and impact onwater availability and pollution; e.g. water withdrawal and affected sources; measures toensure availability and sustainable management of water and sanitation; adaptation towater scarcity, water saving measures.
Potential Impact per Value Chain Step

Materiality

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Strategy

Strategy and Approach
dormakaba defines sustainability as one of the key success factors to
becoming recognized as a trusted industry leader. That is why
sustainability has been anchored as one of the foundations of thecompany’s six strategic pillars.
dormakaba strives to promote sustainable development along the value chain in view of oureconomic, environmental and social responsibility toward current and future generations.
The company further commits to an open and transparent dialogue with stakeholders todefine strategies and actions based on clear goals and continuous improvements.
The results of the sustainability materiality assessment strengthen our drive to continue
developing efficient, environmentally favorable and socially responsible products, as well as
to extending our sustainability efforts to upstream value creation processes.
The material topics for the years 2017-2021 have been aligned to dormakaba’s four focus
areas of our strategic approach to sustainability, namely Transparency, Process &Production, People and Products.

Our focus areas
Transparency – We are committed to be a socially responsible corporate citizen and to
upholding the principles of international conventions, laws and internal rules and regulations.
We also expect our suppliers and business partners to adhere to similar standards and rules.
Process & Production – We seek to reduce the environmental impact of production andadhere to environmental laws and regulations. We strive to ensure a healthy and safe
workplace and to safeguard our customers’ right to privacy and security.
People – We offer fair working conditions in which our employees can leverage theirstrengths and build their skills. We foster an engaged workforce where we have the rightpeople in the right roles.
Products – We are dedicated to producing high-quality, reliable products and solutions, also
integrating our customers’ health and safety. We aim to reduce our customers’
environmental burdens by designing materially- and energy-efficient products.

Increasingly, customers,
partners and end-users inthe building industry aredemandingenvironmentally-friendly
products, giving rise to newmarket opportunities. At
the same time, responsible
business practices aredemanded by legislatorsand investors.

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Strategic targets
In line with this strategic approach, dormakaba has committed to achieving threeoverarching sustainability goals in our corporate strategy by end of the year 2021 as follows:• Increase the revenue share of products with environmental and/or health productdeclarations to > 30%• Increase the share of ISO 14001 certified production sites to > 50%• Operationalize a supplier audit system based on sustainability criteria (e.g., ISO
certification, material compliance)
In the 2017/18 financial year, we have approximately 12% of revenue share of products withenvironmental and/or health product declarations. We also have 29% of production sites
certified according to ISO 14001. Further, we have begun to operationalize a supplier socialand environment assessment system as detailed here.

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Sustainability governanceFurther achievements in embedding sustainability in the organization include thedevelopment and implementation of concrete action plans at a segment-level, particularly insegments AS EMEA and Key & Wall Solutions. For the latter, both business units (KeySystems, Movable Walls) have individual sustainability networks and action plans.
In addition, new segment-level sustainability networks have been established for segments
AS AMER and AS APAC. The company’s commitment to setting up segment-levelsustainability networks will continue in the 2018/19 financial year.

Sustainability organization

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Sustainability Report 2017/18

The Bigger Picture
Mapping material topics to the UN Sustainable Development Goals
In the year 2015, the 193 countries of the United Nations General Assembly adopted the socalled Agenda 2030, with 17 Sustainable Development Goals (SDGs) and 169 targets at its
heart. These are ambitious targets for people, planet and prosperity which requirepartnerships between government, NGOs, businesses and institutions of higher learning to
be able to achieve. If we are to achieve them, everyone should have knowledge of them.
Because less than half of the global population have even heard of them (OECD, 2017 ),dormakaba aims to increase stakeholders' awareness of the SDGs, especially within our
workforce. As a first step, dormakaba has mapped our newly defined material topics to thetargets of the SDGs. We see a link between eight SDGs and our material topics. We also see
the SDGs as a guide to new business opportunities.

Sustainable Development Goals

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Goal 3 - Good health and well-being

Goal 3. Ensure healthy lives and promote
well-being for all at all ages
By 2030, substantially reduce the number ofdeaths and illnesses from hazardous chemicals
and air, water and soil pollution andcontamination (Target 3.9)
Material Topic: Customer Health & Safety

Goal 4 – Quality Education

Goal 4. Ensure inclusive and equitable
quality education and promote lifelong
learning opportunities for all
By 2030, ensure equal access for all women andmen to affordable and quality technical,
vocational and tertiary education, including
university (Target 4.3)
By 2030, ensure that all learners acquire theknowledge and skills needed to promotesustainable development (Target 4.7)
By 2030, substantially increase the number ofyouth and adults who have relevant skills,
including technical and vocational skills, for employment, decent jobs and entrepreneurship(Target 4.4)
Material Topic: Training & Education

Sustainable Development Goals

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Goal 6 – Clean Water and Sanitation

Goal 6. Ensure availability and sustainable
management of water and sanitation forall
By 2030, improve water quality by reducing
pollution, eliminating dumping and minimizing
release of hazardous chemicals and materials,
halving the proportion of untreatedwastewater and substantially increasing
recycling and safe reuse globally (Target 6.3)
By 2030, substantially increase water-use
efficiency across all sectors and ensuresustainable withdrawals and supply offreshwater to address water scarcity andsubstantially reduce the number of people suffering from water scarcity (Target 6.4)
Material Topic: Water

Goal 7 – Affordable and Clean Energy

Goal 7. Ensure access to affordable,
reliable, sustainable and modern energy
for all
By 2030, increase substantially the share of
renewable energy in the global energy mix(Target 7.2)
By 2030, double the global rate of improvement
in energy efficiency (Target 7.3)

Material Topic: Energy

Sustainable Development Goals

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Goal 8 – Decent work and economic growth

Goal 8. Promote sustained, inclusive andsustainable economic growth, full andproductive employment and decent work
for allProtect labor rights and promote safe andsecure working environments for all workers,
including migrant workers, in particular women
migrants, and those in precarious employment(Target 8.8)
Take immediate and effective measures toeradicate forced labor, end modern slavery andhuman trafficking and secure the prohibitionand elimination of the worst forms of childlabor (Target 8.7)
By 2030, achieve full and productive employment and decent work for all women and men,
including for young people and persons with disabilities, and equal pay for work of equalvalue (Target 8.5)
Material Topics: Employment; Human Rights Assessment; Occupational Health & Safety;
Freedom of Association & Collective Bargaining

Goal 9 – Industry, Innovation and Infrastructure

Goal 9. Build resilient infrastructure,promote inclusive and sustainableindustrialization and foster innovation
By 2030, upgrade infrastructure and retrofit
industries to make them sustainable, withincreased resource-use efficiency and greater
adoption of clean and environmentally soundtechnologies and industrial processes, with allcountries taking action in accordance with theirrespective capabilities, and specifically, reduce
the CO2 emission per unit of value added(Target 9.4)

Material Topics: Emissions; Materials

Sustainable Development Goals

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Goal 12 – Responsible Consumption and Production

Goal 12. Ensure sustainable consumption
and production patterns
By 2020, achieve the environmentally soundmanagement of chemicals and all wastes
throughout their life cycle, in accordance withagreed international frameworks, andsignificantly reduce their release to air, waterand soil in order to minimize their adverse
impacts on human health and the environment(Target 12.4)
By 2030, substantially reduce waste generation
through prevention, reduction, recycling andreuse (Target 12.5)
By 2030, ensure that people everywhere have the relevant information and awareness forsustainable development and lifestyles in harmony with nature (Target 12.8)
Material Topic: Effluents & Waste

Goal 13 – Climate Action

Goal 13. Take urgent action to combat
climate change and its impacts
Strengthen resilience and adaptive capacity to
climate-related hazards and natural disasters
in all countries (Target 13.1)
Improve education, awareness-raising andhuman and institutional capacity on climatechange mitigation, adaptation, impact
reduction and early warning (Target 13.3)
Material Topic: Emissions

Sustainable Development Goals

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Transparency

Sustainability Report 2017/18

Anti-corruption
As a global business, dormakaba is committed to acting as a socially
responsible corporate citizen and to upholding the principles of andadherence to international conventions, laws and internal rules andregulations.
As a member of the UN Global Compact, dormakaba has committed itself to not only avoid
bribery, extortion and other forms of corruption but also to develop related policies andFocus Area: Transparency• Anti-corruption

concrete programs internally and within its supply chain.

• Anti-competitive Behavior

As for any company with global operations, the relevance of a sound management approach• Human Rights
Assessmenton the topic is clear. The so-called Corruption Perceptions Index (CPI), an index developed byTransparency International that ranks the perceived level of public sector corruption, is high• Supplier Social andEnvironmental Assessment

in some countries where dormakaba is active.
Through our management approach, dormakaba ensures compliance with the law and with
our Code of Conduct by raising awareness through employee trainings and offering legal
support and guidance. Enabling employees to comply with legal requirements will help avoid
negative financial impact on the company and safeguard our reputation.

Policydormakaba sets a clear tone from the top regarding anti-corruption and ethical business dealings through our Code of Conduct (CoC).
The CoC is binding for all dormakaba employees. Even if a national law would allow a practice forbidden by the dormakaba Code of
Conduct, employees must comply with the CoC.
Anti-corruption is included in chapters 1 (Compliance with Laws and Regulations), 5 (Conflict of Interests), 9 (Protection against
Corruption and Bribery) and 10 (Donating and Sponsoring) of the CoC. A more detailed Anti-Corruption Directive will be developed in the
2018/19 financial year.
No kind of corruption is tolerated. All illegal benefits to third parties directly or indirectly, whether public authorities or in the private
business sector, are forbidden. The same applies regarding receiving such benefits. Facilitation payments are forbidden.
dormakaba's Group Compliance releases new Directives and further respective internal communication. This includes personal emaildistribution targeted to the employees who might be affected by the Directive. In the case of the Group Directive Anti-corruption, acommunication to all employees is planned. Guidance on how to use the Group Directive including additional supporting documents, elearning, webinars of face-to-face training is offered.

A word on our Code of Conduct
The company’s values are included in the dormakaba Code of Conduct (CoC), which sets standards for ethical business behavior covering
human rights, forced, compulsory and child labor, and environmental responsibility. The CoC also governs other areas such as equal
opportunities and non-discrimination, and how to report misconduct.
The CoC is available to employees in various languages, both in electronic form and as printed document. All new employees receive the
CoC with their employment contract. In addition, a user-friendly interactive PDF version of the CoC with additional information is available
in various languages on the company’s intranet.

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Transparency

Management
To raise awareness of the topic, Group Compliance, part of the Group Legal organization, develops the related training concept andprovides the training material. Segments may amend as necessary after consultation. Group Compliance is supported by over 50 so-called
Compliance Ambassadors throughout the whole organization.
Incidences of suspected corruption are reported to Group Compliance. Then, Group Compliance, in collaboration with Group Internal
Audit, reviews the facts and circumstances. Based on the results of the review, Group Compliance derives countermeasures incollaboration with management and defines an action plan. Group Compliance then tracks the progress. The General Counsel regularly
reports to the Board of Directors regarding corruption proceedings.
Besides this bottom-up approach, the Audit Committee makes use of a top-down approach by mandating audits (either by GroupInternal Audit or through third-party support) with a focus on bribery or corruption matters. Triggers include hints from the organization
itself, their impressions during on-site visits, whistleblowers, (bad) news from competitors, or regional risk factors.
In addition, Group Internal Audit integrates the CPI as one criterion for developing their internal audit plan. Procurement and sales
functions and processes are regularly audited. In each audit engagement, Group Internal Audit verifies whether the principle ofsegregation of duties is maintained.
Corruption risks are also addressed in dormakaba’s risk model as part of the company’s global risk management process, conducted every
six months.

Beyond the four-eyes principle
At dormakaba there are clear and structured processes which ensure transparency and minimize the likelihood of corruption. The company
follows the four-eyes principle in decision making processes, meaning important decisions or critical activities are not made by one person
alone. For example, besides adhering to the company-wide four-eyes principle, the purchasing department must obtain at least threeoffers for larger bids.
Possible conflicts of interest must be reported to the supervisor, Human Resources or Group Compliance. The situation must be resolved in
the best interest of the organization based on a consultation between the employee, the supervisor, and Human Resources. The
consultation must be documented and related summary minutes provided to Group Compliance.
Further, employees are made aware of the approval process for granting or receiving benefits during the Code of Conduct training. From acertain threshold onwards, the employee must ask his or her direct manager for approval. If benefits exceed a higher threshold, Group
Compliance must give approval. Group Compliance processes, documents, and files such requests. These are reported to the Audit
Committee on an aggregated basis.
In addition, donations and sponsoring totaling more than CHF 1,000 per recipient per fiscal year must be reported to Group Compliance.
Group Compliance evaluates the data received and follows up on any conspicuous activities. These and other activities are reported to the
Audit Committee, CEO, and CFO in the annual Corporate Compliance Report.

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Transparency

Key activities
dormakaba ensures key activities on the topic through three working streams: (1) increasing awareness through training activities, (2)advisory services and (3) audits.
As mentioned, Group Compliance develops training concepts and activities. However, the responsibility for carrying out the training lies
within the Segments through Compliance Ambassadors and in collaboration with Human Resources. This cross-functional and crossdepartmental method further fosters the exchange of information on anti-corruption.
As part of the CoC training in the reported fiscal year, over 80% of all dormakaba employees were taught about the general anticorruption processes including how to deal with conflicts of interest, how to seek approval for benefits, etc. Training for the remaining
employees will take place in the financial year 2018/19.
An awareness-raising video on the topic was also released in the financial year 2017/18. To ensure that all employees understand thecontext and to minimize reservations on the topic, Group Compliance created a 5-minute animated film to explain anti-corruption. The
film was published on the intranet and is used by all CoC trainers.
In-depth anti-corruption/fraud training is offered upon request. The systematic roll-out of further anti-corruption training is planned after
concluding current training initiatives on the CoC and anti-competitive behavior, at the end of the financial year 2018/19. Refresher
courses and special topic courses are planned subsequently.
Group Compliance together with Group Legal offers direct anti-corruption consultancy whenever due diligence processes reveal related
issues. External legal expertise can be retained if necessary. Consultancy is offered on strategic projects but also occurs ad hoc. Durationof the actions depends on the related project or request. Actions are prioritized depending on the impact on dormakaba and urgency.
Group Internal Audit has performed two audits with a focus on anti-corruption and anti-bribery in the financial year 2017/18. The audits
did not reveal any misconduct.

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Transparency

Grievance mechanism
The CoC outlines the standard procedure for reporting grievances and/or breaches of the law. In a first step, the employee may contact
their respective manager. Subsequently the matter may be escalated to the local human resources or legal team, Group Legal or Group
Compliance.
Reporting channels

On topics related to our Transparency focus area, the most likely path would be for the respective manager to contact Group Compliancedirectly. dormakaba strives to create a culture where employees speak up and are encouraged to address concerns as outlined in theabove-mentioned process.
Group Compliance will carefully consider all notifications received and, depending on the matter, will create an action plan or set up a
project to solve any issue. This might include but is not limited to direct legal advice, involving external experts, investigations, or developing
workshops or tailored trainings. Depending on the assumed effect of the actions planned, Group Legal and Group Compliance will involve
the CEO and/or relevant members of the Executive Committee.

Evaluation of the management approach
Evaluation of the effectiveness of the management approach takes place, for example, when Segment management gives feedback orstates concerns in case they think the anti-corruption training strategy or content needs adjustments based on the local setting, orchallenge proposed budget allocations.
Further, within the company’s risk-evaluation process, the Segments can address risks, including any perceived gaps within internalorganization and processes. In addition, Segment management can address related issues to Group Internal Audit within the regular audit
planning and on an ad hoc basis.
Finally, the progress and the maturity grade of the Compliance Management System (CMS) are reported to the Audit Committee. The
Audit Committee (including the CEO) provide feedback to the dormakaba CMS as necessary, taking into consideration their knowledge ofrelated actions by other Swiss stock-listed companies.
There have been no major adjustments to the management approach in the financial year 2017/18.

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Transparency

Sustainability Report 2017/18

Anti-competitive Behavior
During the merger of Dorma and Kaba in the financial year 2015/16,
which was subject to scrutiny by governmental anti-trust agencies,
the need and importance of a management approach to(anti-)competitive behavior became tangible.
Through its management approach, dormakaba aims to ensure compliance with the law byraising awareness through employee training and offering legal support and guidance.
Enabling employees to comply with legal requirements will help avoid negative financial
impact to the company and safeguard our reputation.

PolicyThe company has a strong commitment regarding compliance with anti-trust regulations and ethical

Focus Area: Transparency• Anti-corruption• Anti-competitive Behavior• Human Rights
Assessment• Supplier Social andEnvironmental Assessment

business dealings as stated in our Code of Conduct (CoC). The CoC, which is binding for all dormakaba
employees, includes anti-competitive behavior in chapters 1 (Compliance with Laws and Regulations)and 10 (Fair competition and anti-trust law). The current policy is the C23 Competition ComplianceDirective, effective since 26 September 2011. The Group Directive Anti-trust, approved by the GeneralCounsel will come into effect in the financial year 2018/19 after final CEO approval and replace theaforementioned Directive. Group Compliance releases new Directives and further respective internal
communication.
”If we lose business because we strictly adhere to our Code of Conduct, this is done for a goodreason” Riet Cadonau, CEO dormakaba

Management
It is each employee’s responsibility to comply with laws and internal regulations as per the CoC. It is the responsibility of the respective
manager to ensure that employees know the respective regulations and understand expectations. Segment management offers theresources necessary to ensure appropriate compliance. Group Compliance develops the related training concept and provide the training
material, which Segments may amend as necessary together with Group Compliance.
Internal and/or external lawyers provide advisory services on anti-trust and fair competition matters. In case of dawn raids or anti-trust
proceedings, Segments give Group Legal immediate notice and then the issue is managed together. Group Legal regularly reports to theBoard of Directors regarding anti-trust proceedings in such cases.

Key activities
Group Compliance and Group Legal ensure key activities on the topic through two working streams: increasing awareness throughtraining activities and offering advisory services.
As mentioned, Group Compliance develops training concepts and activities. However, the responsibility for carrying out the trainings lies
within the Segments. This cross-functional and cross-departmental method further fosters the exchange of information on faircompetition topics.
As part of the CoC trainings in the reported fiscal year, the basic rules of fair competition law were taught to over 80% of all dormakaba
employees. Training for the remaining employees will take place in the financial year 2018/19.
Besides these general training activities, dormakaba developed tailored trainings for segments or critical job functions in which deeper
knowledge of anti-trust law is necessary. This includes functions such as purchasing, sales and general management. A new e-learning
module was launched in the financial year 2017/18. Group Compliance, Human Resources and direct managers can assign this training ona needs basis.
Group Legal offers direct anti-trust and fair competition consultancy whenever due diligence processes reveal related issues. Consultancy
is mainly offered on strategic projects, but also occurs ad hoc. Duration of the actions depends on the related project or request.
Particularly in Mergers & Acquisitions, reallocation of distribution or incentive programs, and pricing and market strategies, consultancy
might be long-term. Actions are prioritized depending on impact on dormakaba and urgency.

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Sustainability Report 2017/18

Transparency

Grievance mechanism
See “Grievance Mechanism” for Anti-corruption.

Evaluation of the management approach
Group Compliance informs Segment management about the training initiatives and about any projects planned within their Segments.
They can then give feedback or state concerns in case they think the strategy or training content would need adjustments based on thelocal setting, or challenge proposed budget allocations. Further, within the company’s risk-evaluation process, the Segments can addressrisks, including any perceived gaps within internal organization and processes. In addition, Segment management can address related
issues to Group Internal Audit within the regular audit planning and on an ad hoc basis. The evaluation method has not resulted in any
negative results or necessary adjustments.

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Transparency

Sustainability Report 2017/18

Human Rights Assessment
dormakaba acknowledges our responsibility to respect human rights
as outlined in the UN Guiding Principles on Business and Human Rights(UNGP), the UN Universal Declaration of Human Rights, the OECD
Guidelines for Multinational Enterprises, the EU Conflict Minerals
Regulation and the UK Modern Slavery Act 2015.
The aim of the management approach is to be compliant to these laws and frameworks
based on best-practice. The human rights-related sections in both the dormakaba Code of
Conduct and Supplier Code of Conduct established the company’s current policy positionand expectations on the topic. The materiality assessment undertaken in the 2017/18
financial year also underlined it importance. In addition, several sustainability topics can belinked to the issue of human rights, as shown in the below adaptation of the dormakaba
materiality matrix.

dormakaba materiality matrix and human rights related topics

A clear understanding of the links between sustainability topics and human rights is an
important step in developing an integrated human rights policy and strategy. Just as thegeneral sustainability impact assessment revealed those sustainability topics where we havethe most potential to have an impact on sustainable development, it likewise revealed thosehuman rights which could be seen as the most salient.

Focus Area: Transparency• Anti-corruption• Anti-competitive Behavior• Human Rights
Assessment• Supplier Social andEnvironmental Assessment31dormakaba

Sustainability Report 2017/18

Translating human rights to sustainability topics
The table below gives a good overview of the kinds of human rights that could be integrated
in any strategy involving the listed sustainability topics. It is a useful tool to understandsustainability topics through the lens of human rights, but is by no means exhaustive.
Sustainability Topics
EmissionsOccupational Health &SafetyCustomer Health &SafetyCustomer privacy
Training & Education
Anti-corruption

Human Rights

Right to an adequate standard of living
Right to health
Right to enjoy just and favourable conditions of work
Right to social security, including social insurance
Right to health
Right to health
Right to privacy
Right to work
Right to education
Right to a fair trial
Right to participate in public life
Rights of protection for the childChild labor

Right to a family life
Right to education
Rights of minorities

Non-discrimination

Right to enjoy just and favourable conditions of work
Right to equality before the law, equal protection of the law, andrights of non- discrimination

Forced labor
Freedom of Association/
Collective bargaining

Right not to be subjected to slavery, servitude or forced labour
Right to freedom of movement
Right to freedom of association

Water

Right to safe and clean drinking water and sanitation

Waste & effluents

Right to safe and clean drinking water and sanitation

Employment

Right to enjoy just and favourable conditions of work

Materials

Right not to be subjected to slavery, servitude or forced labour
Rights of protection for the childTransparency

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Sustainability Report 2017/18

Transparency

Key activities
In the financial year 2016/17, dormakaba committed to the development of a Human Rights Due Diligence (HRDD) process aligned to the
UNGP. In the financial year 2017/18, the company worked with external human rights and business experts to outline the practicalapplication of the UNGP within the business. The process framework follows five steps as required by the UNGP:

Key activities included:• Review of key company documents from a human rights perspective, consolidation of known risk and impact areas & identification ofpotential gaps
• Desk research to fill the gaps identified from a HRDD perspective• Mapping of relevant internal and external stakeholders• Development of the HRDD project plan and defined responsibilities
A step-wise HRDD project plan has been developed, focusing firstly on stakeholder consultations and further policy development.

In the coming financial year 2018/19, consultations with key internal and external stakeholders will take place, which will generate afocused list of salient human rights issues for dormakaba and will form the basis for further policy development. A roll-out of the resulting
roadmap and a Human Rights Impact Assessment is planned for the financial year 2019/20.

Evaluation of the management approach
The management approach was assessed in the financial year 2017/18 through external stakeholder feedback and through externalratings based on investor rating agencies. Further, the above-mentioned Human Rights Due Diligence gap analysis, conducted based oncompany documents and processes and referring to internationally recognized frameworks and tools, revealed that current initiatives aremainly reactive. As a result, the stakeholder consultation process in the financial year 2018/19 will have a clear focus on how to improve tomore effective and proactive management. As part of the consultation process in the coming financial year, key stakeholders will set goals
for achievement for the year 2021.

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Transparency

Sustainability Report 2017/18

Supplier Social and Environmental
Assessment
We believe sustainable supply chains are ones which ensure the wellbeing of the people and environments we procure from, while seeking
to grow the business through ethical and legal business practices. It istherefore our responsibility to leverage our purchasing power to thebenefit of those partners which align most closely to this definition.
Focus Area: Transparency

Our supply chain• Anti-corruption

The rise of supply chain transparency legislation points to the increasing mandate that a• Anti-competitive Behavior

company must be aware of the economic, environmental and social dimensions of its supply
chain, and that it proactively monitors and manages those.

• Human Rights
Assessment

With a global presence, the dormakaba supply chain is large and complex, which can pose a• Supplier Social andEnvironmental Assessment

challenge in this regard. Global purchasing volume with external vendors corresponds toapproximately 46% of total sales, making the company’s procurement policy therefore highly
relevant to achieving our financial and sustainability targets. The number of active suppliers
is approximately 22,000. dormakaba's direct material spend for our top 100 suppliers arefocused in Europe (54%), North America (25%), and Asia (21%).

Supplier Code of Conduct
dormakaba has already taken important steps in embedding sustainability in the supply
chain, namely by setting expectations to our suppliers. The dormakaba Supplier Code of
Conduct (SCoC) came into effect in the 2016/17 financial year and outlines minimal
requirements with regards to human rights, fair working conditions, environmental
responsibility and business ethics, among others. The dormakaba SCoC is integrated in thecompany’s online bidding system. It is further included as part of new standard suppliercontracts.

Supplier self-assessment
As a further important step in assessing the sustainability performance of its suppliers,
dormakaba has developed a sustainability self-assessment questionnaire. The survey covers
nearly 40 questions related to human rights, labor conditions, environmental management
systems and packaging, for example.
It addresses the most relevant compliance topics such as the UK Modern Slavery Act, anticorruption and various reporting obligations under the Carbon Disclosure Project and the UN
Global Compact. This is the second time the company issues the self-assessment to our
suppliers. In the 2016/17 financial year, 10% of suppliers based on procurement spend werein scope. In the 2017/18 financial year, the company focused on systematically defining abroader target group for self-assessment and on inviting suppliers with the highest risk
indices to participate (Disclosure 102-43).

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Sustainability Report 2017/18

Transparency

Defining the target group for self-assessment
In the 2017/18 financial year, dormakaba categorized the supply chain based on sustainability risk factors on a country-level, procurement
spend, and material content of the goods purchased. The latter was focused on material compliance topics including the REACH
regulations and RoHS Directive in the European Union.
The sustainability impact assessment and hotspot analysis revealed the following topics of highest potential impact in procurement:• Energy• Emissions• Effluents & Waste• Occupational Health & Safety• Materials• Training & Education• Freedom of Association• Human Rights• Supplier Social & Environmental Assessment
For these high-impact categories, any country listed as high-risk according to various indicators was included in the target group. The
underlying indictors for the categorization are as follows:• Energy intensity per country (GDP per energy use)
• Greenhouse gas emissions per capita per country• Risk a country is not enforcing freedom of association rights• Risk a country is not enforcing collective bargaining rights• Access to advanced education per country• Risk of child labor per country• Fatal injury rate per industry and country• Noise exposure risk by industry and country• Life loss risk due to airborne particles by industry and country• Waste collection coverage per country• Risk of pollution per country• Risk of forced labor by industry and country• Risk of human rights violation per country

Results of supplier sustainability self-assessment 2017/18
Of the suppliers who were asked to participate, 76% filled out the self-assessment survey. Over twice as many suppliers submitted
responses compared to the 2016/17 financial year in absolute terms. This represents 10% of procurement spend of the sustainability
target group defined above. Combined with the previous reporting year’s results, dormakaba has now assessed 28% of the target groupbased on procurement spend.
Overall, 26% of participating suppliers were evaluated as either "Excellent" (4%) or "Good" (22%), based on an initial rating method.
These suppliers are now being recognized with a Certificate of Appreciation based on their level, to acknowledge their efforts towards
sustainability.
The remaining suppliers have been rated as either “Average” (28%), "Below Average" (29%) and “Unsatisfactory” (16%). These suppliers
will be targeted in future in the Supplier Evaluation and Supplier Development processes and in the development of escalation and nonconformance processes.
The following graphic highlights some of the baseline results from the participating suppliers. The results showed, for example, that thevast majority acknowledge our Supplier Code of Conduct and ensure labor conditions where staff can openly voice grievances orcollectively bargain. In addition, there is good commitment to energy efficiency activities. On the other hand, few suppliers are engaging
with their own supply chain in terms of sustainability. Less than half have sustainability related policies and only one in three have arelated management system in place. These results improve when analyzing suppliers with over 250 employees, as larger organizations
tend to manage these topics more strategically. Supporting suppliers in developing and improving these aspects will be a focus in future.

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Sustainability Report 2017/18

Transparency

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Sustainability Report 2017/18

Auditing suppliers
The process to approve suppliers is in accordance to DIN and ISO requirements, as are thesupplier evaluation and assessment processes. Audits are performed on demand, forexample, for new suppliers or covering quality issues. The auditing method for Asia iscurrently being amended to include sustainability topics. In addition, an escalation process
for suppliers not accepting the SCoC or showing low ratings in the supplier self-assessment
will be developed in the 2018/19 financial year.

Evaluation of the management approach
The management approach has been evaluated based on investor feedback from various
rating agencies. These revealed, for example, an expectation to name and include moreinternational frameworks in the SCoC, such as a clear mention of the International Labor
Organization’s Minimum Age Convention. As a result, the SCoC is currently under revision,
with a new version expected in the 2018/19 financial year (Disclosure 102-44).

Transparency

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Process & Production

Sustainability Report 2017/18

Environmental Management
dormakaba seeks to reduce the environmental impact of production
and to adhere to environmental laws and regulations.
Focus Area: Process &Production

dormakaba specifically focuses on improving management of environmentally-related
processes and the implementation of measures in the following areas: environmental• Environmental
Compliancecompliance, energy consumption and the reduction thereof, monitoring and reduction ofcarbon emissions, water consumption, and effluents and waste disposal.

• Energy & Emissions

Systems & Compliance• Water

Environmental management is embedded both at Group level as well as in local processes at the• Effluents & Waste

various locations. Several locations work with environmental officers, in others, environmental• Occupational Health &Safetymanagement is part of quality assurance processes.

• Customer Privacy

National, regional and local laws and regulations must be adhered to at all sites as stipulated in thedormakaba Code of Conduct, and the Group Manufacturing Directive. Legal registers are maintained
as part of the ISO 14001 management systems where applicable.
The Group Manufacturing Directive also includes expectations on achieving international standards forenvironmental management (ISO 14001), and energy management (ISO 50001). All manufacturing
sites with more than 100 employees and having negligible hazardous materials in use are expected tomaintain a management system based on ISO 14001 by the year 2021. Further, all manufacturing sites
are expected to maintain a management system according to ISO 50001 by the year 2021.
Based on a further overview of dormakaba’s supply chain sites including plants, regional logistic centers,
local assembly and distribution centers and service hubs, the Directive also gives a framework for
expanding the coverage of sites certifying such management systems. Certifications are required forsome sites based on a priority listing depending on size, energy consumption and environmental risks.
dormakaba products are manufactured around the world using different processes. Raw materials
such as steel, brass, aluminum, zinc and glass are converted into door closers, cylinders, key blanks, hotel
locks, sliding and revolving door systems and glass fittings, among other products. The potentiallygreatest environmental risks lie in the processes used for (1) electroplating and surface finishing, (2)painting, (3) melting, and (4) zinc and aluminum die casting. These processes are used at 25 of the48 locations covered in this report. Therefore, dormakaba’s environmental management placesemphasis on these four processes.
Already 29% of the production sites covered in this report benefit from the rigorous environmental
standards set forth by ISO 14001 certification (financial year 2016/17: 33%). The slight decrease inpercentage is linked to an increased scope in the reporting, with more sites covered in the 2017/18
financial year. We aim to increase this total to over 50% by 2021. In addition, three sites are certified to
ISO 50001.

Segment

ISO 14001
Certificate

Maintain
Environmental
Management
System

ISO 50001
Certificate

AS AMER

4

8

AS APAC

1

1

AS DACH

6

AS EMEA
KWS
Group

14

% locations covered in reportingscope% employees covered (versus
Group-wide FTEs)

3

OHSAS 18001
Certificate orsimilarly
certified

Maintain H&SManagement
System

9
2

6

4

8

5

5

2

7

2

2

1

2

3

22

7

28

29%

6%

46%

15%

58%

38%

12%

45%

21%

49%

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Sustainability Report 2017/18

Process & Production

Segment-wide EHS Management in the Americas

Segment Access Solutions AMER (AS AMER) has developed a centrally managed approachto environment, health and safety (EHS) topics in the 2017/18 financial year. A segmentwide EHS policy and management system has been approved and covers 21 production
facilities. The key performance indicators for the coming financial year will include water,energy and waste figures. Each facility will be tasked to improve over the baseline by adetermined percentage and implement at least one water, energy and waste reduction
project. Performance and results will be monitored and communicated monthly through the
EHS Performance Review reporting. Nearly two million Swiss francs in capital expenditure
has been allocated for related projects until the 2020/21 financial year.
In addition, the facility in Indianapolis goes beyond regulatory requirements in many aspects.
A water-savings target of 5% year-on-year is in place. In the financial year 2017/18, a 14%
decrease was achieved by investment in replacing old faucets with touchless valves, a newcomputer system for the cooling tower, and chillers to close loop water cooling systems. The
facility has an industrial discharge permit that contains limits on metals that cannot be in
the water at the time of discharge. The treated process water is tested before discharge toensure compliance, and management is proactively informed if the testing shows are within
70% of the limit.
An energy reduction target of 5% (year-on-year) for heating and electricity is also in place.

Energy & Emissions
The World Economic Forum’s Global Risk Landscape Report (2018) showed two of the three top risks as being climate change related.
dormakaba's Materiality Assessment 2017-2021 showed that carbon emissions and energy were the sustainability topics where thecompany’s potential impact on sustainable development is the highest. As a tech-oriented company, dormakaba also believes in using thelatest in scientific knowledge to guide a sound management approach. It has therefore signed a commitment letter to the Science-based
Targets Initiative to set a science-based, Group-wide carbon emissions reduction target by the year 2020. In a first step this will involve
reporting our Scope 3 emissions more fully as well as expanding the coverage of our Scope 1 and Scope 2 emissions to locations
representing over 90% of employees. As a further commitment, dormakaba has set an interim carbon emissions reduction target of -5%
tCO2e by 2021 for the reporting scope and baseline year in this report.
To meet the commitment to the Paris Agreement, every business, government and individual has a role to play. A key element in reducing
carbon emissions is to reduce energy consumption and source renewable energy. At dormakaba, energy-intensive processes include
melting, and aluminum and zinc die casting. These are used in the production of hotel and high-security locks, door closers, fittings anddoor handles, among other products. dormakaba strives to continuously improve the energy efficiency for these processes.

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Sustainability Report 2017/18

Process & Production

Water, Effluents & Waste
Early in the 2017/18 financial year, dormakaba analyzed the water stress levels for its main production sites. This found that one in threesites have a potential for high to extreme water stress, defined as a water demand to supply ratio of 40% or greater for the respective
municipality. The data stems from a geographical analysis of water stress at catchment level by the year 2020 for dormakaba main
production sites based on the Aqueduct Water Risk Atlas (World Resources Institute) and AQUASTAT (Food and Agriculture
Organization). Appropriate action plans for the sites having high or extreme water stress is under development.
Water Stress Level by Sites

Water consumption as well as effluents and waste management are of key importance during the electroplating, surface finishing, as wellas painting processes. Filter systems ensure that potentially hazardous substances are not released externally.
Toxic waste arising from painting and electroplating are disposed of as special waste. In addition, scraps from turning and milling or
punching are recycled, and are, for example, returned to the suppliers of the raw materials.
For the disposal of industrial waste, chemicals and the recycling of materials, certified disposal companies are commissioned.

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Sustainability Report 2017/18

Process & Production

Facts and Figures
Greenhouse gas emissions
In the 2017/18 financial year, our total greenhouse gas emissions (GHG) amounted to over 75,000 tons of CO2 equivalent (tCO2e). Morethan two thirds were emitted as a consequence of electricity consumption, followed by heating and vehicle fuel consumption, and volatile
as well as process gas emissions.
Climate-related initiatives implemented during the reporting year resulted in total annual savings of approximately 12,500 tCO2e (nearly
17% of our total footprint).
Therein, we worked diligently to source renewable electricity wherever feasible, leading to an emissions avoidance of approximately 11,400tCO2e. Nearly 35% of the electricity that dormakaba consumed came from renewable sources. In our AS EMEA and AS DACH segments,
this share already reached over 71% and over 50%, respectively.
Due to the implementation of energy saving initiatives outlined in the following section, we expect an annual reduction of GHG emissionsof approximately 1,100 tCO2e.

Greenhouse gas emissions by source

Scope 1 and Scope 2 emissions(in tonnes CO2e)(in tonnes CO2e)1,5

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Sustainability Report 2017/18

Process & Production

Greenhouse gas emissions by segment (in tonnes CO2e)

1)

Greenhouse gas inventory calculated in accordance with the WRI/WBCSD Greenhouse Gas Protocol. Emission factor sources: UK Defra (2015), US EPA
eGRID (2017), Frischknecht (2017).

2) Scope 1: direct greenhouse gas emissions from sources owned or controlled by dormakaba
3) Scope 2: indirect greenhouse gas emissions from sources owned or controlled by another entity, as a consequence of dormakaba’s activities
4) The greenhouse gas emissions associated with electricity consumption are reported according to the “market-based approach,” as defined in theGreenhouse Gas Protocol Scope 2 Guidance. When reported according to the “location-based approach,” the emissions totaled 63,831 tCO2e.
5) Scope 3 emissions are additionally reported in dormakaba's submission to the Carbon Disclosure Project (CDP).

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Process & Production

43

Energy consumption
The total energy consumption was over 229,000 MWh in the 2017/18 financial year. Electricity and fuels for heating or manufacturing
both play a crucial role in dormakaba's production processes, constituting nearly 87% of total energy consumption. The remainder isassociated with the fuel consumption of our vehicle fleet.
Many components used to create dormakaba’s products are manufactured in-house, and purchased parts require further processing,both of which impacts on total energy demand. This is also where we focus our energy saving initiatives on.
In the reporting period, such initiatives were implemented or approved at more than a third of the production sites in scope and included
retrofitting facilities to LED lighting systems, upgrading equipment such as industrial burners, as well as milling and molding machines, theoptimization of heating and cooling systems, and the procurement of renewable electricity.
As a result of these activities, we realized a total quantifiable annual energy savings in the amount of approximately 4,300 MWh for thesites covered in the scope of this report. In addition, over 29,000 MWh of green electricity was purchased in the reporting year.
in MWh2017/18

Energy consumption

229,464

Electricity

122’132

District heating

3’370

Heating fuels total

73’763

Heating oil, kerosene and diesel for backup generators

8’420

Natural gas

63’395

LPG/propane

1’948

Vehicle fuels total

30’198

Diesel22’575Gasoline

5’101

LPG/propane

1’558

Other vehicle fuels

Energy use (in MWh)

964

Purchased electricity by source (in %)dormakaba

Sustainability Report 2017/18

Energy use by segment (in MWh)

Purchased electricity by segment (in MWh)

Percentage of purchased electricity from renewable sources by segment (in %)Process & Production

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Sustainability Report 2017/18

Process & Production

Water
For the sites covered in the scope of this report, the majority of dormakaba’s total water consumption is municipal water used for cooling,
manufacturing processes, and sanitation purposes. Wastewater is mainly discharged via the local municipal sewerage system incompliance with local requirements, and is treated by third-party companies where necessary.

Water consumption

Wastewater discharge

45dormakaba

Sustainability Report 2017/18

Process & Production

Waste
The generation of different waste streams is an inevitable consequence of dormakaba's operations. We monitor our waste by treatment
method and by waste type. Approximately 73% of the waste stream was recycled, reused or recovered (including raw materials andenergy recovery) in financial year 2017/18. At about 70% by weight, the largest proportion of waste is scrap metal.

Non-hazardous Waste by Type

Hazardous Waste by Type(in metric tons)(in metric tons)

Waste by treatment path46

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Process & Production

47

Materials Use
We use a variety of materials in our manufacturing processes and operations. The most utilized non-renewable raw material types include
steel, brass, aluminum, nickel silver, zinc, gypsum board, glass and plastics. Wood, paper and cardboard are made from renewable
resources, and also play an important role for our production and operations.
Steel, brass, aluminum, zinc and glass are converted into door closers, cylinders, key blanks, hotel locks, among other products. Glass,wood and gypsum board are primarily utilized in sliding and revolving door systems, movable walls and glass fittings, for example.
Since the primary extraction of metals from ore and the subsequent refining processes are resource intensive, dormakaba uses metals
with recycled content wherever possible. In addition, scrap metal is generally sent to recycling.
in metric tons 1)

2017/18

Non-renewable resources

75,210

Steel (incl. stainless steel)

39,289Brass

11,727

Aluminium

11,271

Nickel silver

3,443

Zinc

3,095

Copper9

Gypsum Board

3,190

Glass

2,219

Plastics (parts and packaging material)

967

Renewable resources

9,152

Wood (incl. packaging material)

5,412

Paper and cardboard (incl. packaging material)

3,7401) Not included are materials and volumes which can only be accounted for in pieces or monetary terms.

Materials use (in %)Raw material use (in %)dormakaba

Sustainability Report 2017/18

Access Solutions Segments
Integrated management system in Germany

Environment, energy, health and safety in the companies’ facilities in Germany is part of an
integrated management system which includes quality standards. With regards toenvironment, the plant in Ennepetal and the logistics center in Wuppertal are both certified
to ISO 14001 and ISO 50001 standards. Energy audits have been carried out for the plants
in Bad Salzuflen, Bühl, and Zusmarshausen.
For Wuppertal and Ennepetal, tracking performance and setting year-on-year targets iscarried out. The following shows the trend in carbon emissions reductions based on
operating output per year for Ennepetal and based on worked hours per year for thelogistics center in Wuppertal.
Location

Indicator

FY 2015/16

FY 2016/17

FY 2017/18

Wuppertal

tonnes CO2 per working
hours x 1000

7.09

6.61

5.17

Ennepetal

tonnes CO2 per million Euro

5.32

5.05

4.75

Green building certifications for our buildings

Green Building schemes and certifications play an ever-increasing role in the constructionindustry and to customers. dormakaba has certified several of our own buildings to suchstandards, in order to best understand our customers’ needs and requirements.
As reported in the 2016/17 financial year, three buildings have attained or are undergoingcertification in Germany, Switzerland and Singapore. In addition, a logistics center in
Chennai (India) has been awarded the India Green Building Council certification in March2018.

Investing to reduce carbon emissions in Switzerland

The production facility in Wetzikon (Switzerland) is launching a three-year initiative torefurbish its heating & ventilation systems, refrigeration plant, and process cooling systems(HVAC) to increase energy efficiency, reduce carbon emissions and minimize risk of businessinterruption. The initiative entails an investment of CHF 4.7 million until the year 2021.
The site had already committed to reduce its carbon emissions by 19% until 2024 (base-year
2016/17). The refurbishment of the HVAC system will reduce oil consumption by 86,000liters per year and carbon emissions by 288 tonnes per year upon project completion,equivalent to 60% of the site's current footprint.

Process & Production48

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Process & Production

Segment Key & Wall Solutions
Key Systems
The Key Systems plant in North Carolina (USA) focuses on closed-loop systems in its material use. For example, the facility purchases
brass scrap from recyclers to produce its keys. The plant also recycles all internal scrap, either back into own processes or selling it to a
local approved recycler. Scrap material is also sent back to the original producer, who then uses this material to make our products, thus
resulting in a closed loop system. Similarly, treated water is reused in the manufacturing processes where possible with minor amounts
returned to the municipality as non-potable effluent. The long-term goal is to ensure that treated water is acceptable for process reuse
and water reduction and recycling initiatives are continued. In terms of emissions, dust collection systems are employed throughout thefacility to collect all metal processed dust and recycle the dust back through the manufacturing process.
Finally, the plant is committed to ISO 50001 certification in the 2019/20 financial year. Related projects include air compressor system
upgrades, LED lighting systems, boiler control upgrades and upgrades to the key milling machine.
The plant in India is leading the way on energy self-sufficiency by having installed solar lighting in some areas. In the coming financial year
2018/19, the solar panel initiative will be expanded to the canteen.
In Colombia, the facility has released an environment, health and safety policy in the 2017/18 financial year. Major focus has been laid on
wastewater management. This involved identifying and controlling the processes that generate wastewater, establishing the conditions
for storage and transport of hazardous materials and defining a contingency plan for the containment, control of spills and leaks ofhazardous waste. In addition, the plant has switched from halogen to LED lighting in most areas. There is an initiative to collect rainwater
to be used in the production and cleaning processes of the plant to reduce the consumption of potable water.

Energy savings and renewable energy purchase in Italy

The Key Systems facility in Vittorio Veneto (Italy) introduced a mid-term project in the year
2014 to reduce overall energy consumption by refurbishing over 120 lighting systems with thelatest generation LED systems. This has led to an energy savings of 60%. The facility isalready certified to ISO 14001 but plans a ISO 50001 certification by the 2020/21 financialyear.
The plant has also switched to renewable energy in the current financial year 2017/18,
making it carbon neutral in terms of electricity consumption.

Movable Walls
The Movable Walls facility in Ocholt (Germany) has undergone an energy audit in compliance of the EU Energy Efficiency Directive
according to DIN EN 16247-1 standards. The largest source of energy consumption was found to be lighting (25%) and the venting (22%)
systems. Suggested improvements were therefore switching to an LED lighting system (amortization of 3 years) and upgrading the
motors for the venting system (amortization of 2 years). These recommendations are currently being implemented. The plant in Malaysia
has also invested in energy saving initiatives, namely in LED lighting systems, new air compressors and an air conditioner.

Evaluation of the management approach
Throughout the company, evaluation of the management approach is mainly based on internal and external auditing during ISO 14001
implementation. Results from audits regarding permits are communicated with management. Stakeholder feedback is also used toevaluate the approach. For example, the plant in Wetzikon (Switzerland) has engaged stakeholders and management in a sustainability
context analysis to define local materiality of sustainability topics.

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Occupational Health & Safety
Throughout dormakaba’s business and most especially in our
production sites worldwide, the health and safety of our employees isa priority.
Focus Area: Process &Production

Occupational health and safety is therefore aligned with national regulations and standards
serving as the minimum requirement. In addition, the Group Manufacturing Directive• Environmental
Compliancestipulates that all manufacturing sites maintain a health and safety management system inaccordance to international standards by the year 2021.

• Energy & Emissions

dormakaba has location-specific systems in place, for example, designated safety personnel,• Watersafety committees, regular training, and collaboration with external partners to ensure that• Effluents & Waste

health and safety standards are aligned with the prevailing production processes.
Of the sites in the scope of this reporting, 15% have a health and safety management• Occupational Health &Safetysystem certified to OSHAS 18001 or equivalent local standard. 58% maintain a health and• Customer Privacy

safety management system. For these sites, health and safety training goes beyond the
mandatory requirements to also include emergency and risk prevention. For example,
assessments of repetitive movement and heavy load-lifting to prevent work-related illnesses
take place in various sites.

Access Solutions Segments
Segment Access Solutions (AS) DACH steers health and safety by setting reduction targets on accident and illness rates for its largest
German sites (Ennepetal and Wuppertal). In the last five financial years, the number of accidents has been reduced by around 30%.
Accidents are analyzed with a so-called STOP (Substitution, Technical, Organizational, Personnel) system on a quarterly basis. Potential
impact of working with hazardous materials on employees’ health is of special focus. Therefore, hazardous material substitution issystematically carried out and reductions tracked.

Hazard Symbol

Reduction vs.

FY 2015/16

FY 2016/17

FY 2017/18(T+) Very Toxic

–

–

–

n/a

(T) Toxic

5

4

2

–60%

(C) Corrosive

24

12

7

–71%

(Xn) Harmful

64

40

26

–59%

(Xi) Irritant

137

99

59

–57%

(E) Explosive

–

–

–

n/a

(F+) Extremely flammable

46

21

12

–74%

(F) Highly flammable

32

24

15

–53%

(O) Oxidizing

4

1

1

–75%

(U) Dangerous for the environment

45

30

13

–71%

No hazard symbol

262

264

320

22%

FY 2015/16

Segment AS AMER, for example, sets goals for individual facilities in the areas of recordable injuries, total recordable injury rate (TRIR)
and days away/restricted time rate (DART). A segment-wide target will be set in the 2018/19 financial year. Employees are trained toreport near miss incidents that have a potential of injury or property damage in the effort to be proactive. This program helps theemployees to recognize hazards or unsafe acts and correct them immediately or ask for support to correct the issue. Near miss reports
are treated the same as injury reports, and the respective supervisor follows up with the near miss to ensure it is corrected.
The facilities in Pennsylvania (USA) are developing a return-to-work program, which offers light duty work for employees who sustain
minor injury that would otherwise deter their return to work. Other locations offer ergonomics training. In Brazil, annual medical
examinations are carried out that monitor the health of the employee, controlling eventual impacts of repetitive movement during
production. Safety signage and railings, personal protective equipment and spill containment procedures are among other initiatives.

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Process & Production

As best practice, segment AS EMEA began rolling out a health and safety web portal with e-learning material for all employees in the2017/18 financial year. The system also acts a centralized database for audit and incident reports.
In segment AS APAC, the Pacific region is working towards a health and safety management system that conforms to AS4801(Australian Standard) as a minimum.

Segment Key & Wall Solutions
Key Systems
Key Systems aims to empower all personnel to assist in risk identification and mitigation for a safe working environment. The facility inNorth Carolina (USA) achieves this through a safety committee of 24 employees from across the facility who meet monthly and conductsafety audits. Forty employees have been trained in first aid and CPR in the 2017/18 financial year. The facility tracks all injuries andillnesses against a quantitative goal and target including the type of injuries based on a monthly and annual basis. In the case of accidents,
an investigation and corrective action to prevent reoccurrence is implemented. Hazard analysis of personnel exposure to risks andhazardous substances also takes place.
Similarly, the facility in New Delhi (India) undertakes monthly safety audits and targets zero accidents in the production area. A yearly
health checkup is offered. The focus in the facility in Bogota (Colombia) is currently on soundproofing machinery. The plant in Vittorio
Veneto (Italy) is certified to OHSAS 18001 and launched a safety adequacy program for its machinery in the reporting period. According
to HSE Policy (rev. 2018) the major scope of OHSAS Management System is to reduce incidents and professional illness by pursuing
improvment goals. The EHS manual and policy have been revised in the 2017/18 financial year.

Movable Walls
The Malaysian facility has an advanced health and safety management, with daily safety briefings, key performance indicators, Kaizens
and established safety committee. Annual health checkups are offered, and personal protective equipment procedures are in place.
Similarly, the facilities in Ocholt (Germany) and in Dyersville (USA) track unsafe conditions, near misses, first aid incidents and accidents.
These are investigated and findings are used to mitigate risk and change behavior. Data are posted on the bulletin boards throughout theplants and incidents are discussed in daily or weekly meetings. In addition, a protective footwear policy has been released in the reporting
period in Dyersville.

Evaluation of the management approach
The management approach throughout dormakaba is evaluated by means of monitoring, measurement and incident investigation
procedures. Trends in frequency and severity of accidents are evaluated for root cause and effectiveness of the approach. Safety concerns
raised by employees or by internal and external auditors are also documented and investigated. Corrective actions based on feedback orgoals and targets are communicated with the appropriate stakeholders.

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Customer Privacy
As a technology-oriented company, we place great importance on
safeguarding our customers’ right to privacy and security.
Customers and business partners place a great deal of trust in dormakaba as a premium
partner for access and security solutions. The company is aware of the importance of theprotection of data and information, given that abuse and misuse can lead to major tangible
and intangible damage, for example, due to relevant information being unavailable,
rendered unusable or incorrect, or – in the worst-case scenario – made available oraccessible to a malicious third party.
dormakaba therefore has a responsibility to protect sensitive information – our own, andthat of our customers, stakeholders and partners – against unauthorized access, loss or
falsification. There is a strong focus on:

Focus Area: Process &Production• Environmental
Compliance• Energy & Emissions• Water• Effluents & Waste• Occupational Health &Safety• Customer Privacy• customer data
• operating and business data
• IT systems• financial data
• employee data
Considering all information and data available within dormakaba, we pursue the following
security aims:• Confidentiality: Confirmation that access to information is limited to persons entitled tosee it.
• Availability: Entitled persons can access information during defined periods and fromdefined locations.
• Integrity: Warranty that information is correct and complete.

Information Security Management System at the core
To meet this challenge, senior management introduced an Information Security
Management System (ISMS) in line with best practice in the industry. Andreas Häberli, Chief
Technology Officer (CTO) of dormakaba, is also the Chief Information Security Officer(CISO) within the ISMS. This management system is based on the international ISO/IEC
standard 27001:2013, the most recognized standard in the field. Certification to thestandard is planned in the 2018/19 financial year.
As outlined in the Group Directive Information Security, the goal of the ISMS is to achieve
and maintain an adequate security level leveraging risk management methods, continuous
improvement and best practices, adjusted to dormakaba needs. The risk management
included in the ISMS is used to identify, assess and treat risks adequately.
Reporting to the CISO, the Group Information Security Manager is responsible for
anticipating and assessing new threats regarding information security risks andimplementing the necessary security levels for dormakaba, as defined by the Security Boardin accordance to its Charter. In addition, Information Security Coordinators (ISC) areresponsible for the implementation of the ISMS within an assigned Segment or Groupfunction, and for supporting during security audits.
The confidentiality of information is classified based on its content and the protection
required to maintain integrity or availability, in line with the Group Directive Data andInformation Classification. Each piece of information must have a classification with its own
security requirements. Employees are made aware of the proper means for destroying anddisposing of information, as well as what to do in case of loss and misuse of information.

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In the 2017/18 financial year, focus was placed on aligning internal processes for complianceto the new EU General Data Protection Regulation (GDPR). The GDPR aims primarily to givecontrol to citizens and residents over their personal data, bringing with it a new set of"digital rights" for EU citizens at a time when the digital economy places increasing
economic value on personal data. dormakaba maintains records of data processing activities
in accordance with the GDPR and has implemented the required procedures, such as
amending the privacy policy and declaration, and ensuring proper data processing by 3rdparties (processors).

Grievance mechanism
dormakaba has a security incident management process in place as part of its ISMS toensure quick and effective handling of any incidents. Possible security issues are tracked andsolved with a ticket system. The process is reviewed once per year and the quality ismeasured by various performance indicators, such as the ratio of resolved security incidents
within the target timeframe.

Evaluation of the management approach
The management approach is evaluated according to ISO/IEC 27001. In addition, security
reports are provided to the Executive Committee, and management reviews take place
regularly to gauge the suitability, adequateness and effectiveness of the management
system.
The management reviews are documented and protocolled. Observations, conclusions, andrecommendations for further necessary action from the review are recorded. If any
corrective action is required, top management follows up to ensure that the action was
effectively implemented.

Process & Production

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Employment
dormakaba offers fair working conditions in which our employees canleverage on their strengths and build their skills. We foster an engaged
workforce where we strive to have the right people in the right roles.
Policy and organisation

Focus Area: People• Employment

dormakaba’s Human Resources (HR) management is spread globally – in addition to Group HR, there
are HR professionals at the segment level and local HR representatives in the markets. Group HR
bundles strategic issues based on our corporate strategy and the needs of local HR representatives anddevelops best-practice programs accordingly. These can then be customized and implemented in the• Training & Education• Freedom of Association &Collective Bargaining

segments and regions per the requirements and conditions in the local markets. The company has also
made technological investments in business applications to more effectively deliver services to ouremployees, including a Group-wide HR data management system launched in the reporting year
2017/18.
In addition to this, the local HR representatives also develop and implement individual initiatives andprograms suited to the needs of their local employees, to react to the different local customers andmarkets as effectively as possible. With the transition to the GRI Standards, dormakaba is paying
special focus to the management approaches on a Segment level in this section.

Our compensation principles
At the beginning of the 2017/18 financial year, a Group Directive Compensation came into effect.
Group HR authored the policy, which was approved by the Compensation Committee of the Board of
Directors.
The Directive outlines principles of compensation based on: (1) reward for short-term and long-term
performance; (2) alignment to shareholders' interest; (3) fairness and transparency; and (4)competitiveness.
As a rule, dormakaba refrains from offering excessively low wages (i.e., wage dumping). To establish
fair compensation, determination is based on the job function and relevant local market benchmarks.
It is not influenced by personal attributes such as age, nationality or gender. The global grading
system ensures that functions are evaluated in a consistent manner across the organization.

Creating dialogue through a Group-wide employee survey
High employee engagement has been proven to lead to increased productivity, decreases in workplace accidents and improved customer
satisfaction. A key method to support employee engagement is to ensure a culture of open dialogue across the organization.
In the 2017/18 financial year, dormakaba launched its first Group-wide employee survey after the merger. The aim of the survey was togauge (1) employee engagement and (2) performance enablement. The latter focuses on, for example, whether employees have therequired skills, tools and information to do their jobs adequately. The anonymous survey focused on topics such as change management,
the work environment, management (including the direct supervisor), strategy and values.
72% of dormakaba employees in 52 countries participated in the survey, which was available in 18 languages. The dormakaba Employee
Engagement index was 67% (IBM Global Norm: 71%). The Performance Enablement index was 68% (IBM Global Norm: 74%). The results
differ between Segments, between regions, countries and functions. However, the survey revealed strengths as well as room for
improvement on a global level.
One key strength is that managers and employees are perceived to act according to dormakaba values. The relationships between
managers and employees are in general characterized by our value and brand promise: trust. According to the results, we should jointly
work on improving collaboration between departments and on further developing recognition programs.
Based on the overall global results, the Executive Committee has identified the following fields of action and commitments:• encourage and demand closer collaboration between departments• continue to work on constructive leadership behavior• encourage ownership and accountability to improve work processes• define ways to help people work within the operating model (e.g. through training)54

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55

Besides the global actions, team leaders are asked to discuss the results in a dedicated team session to develop actions on leadershipbehavior, processes and infrastructure as needed (Disclosure 102-43, 102-44)

Facts and Figures
Type of Employment
The data in these facts and figures represents approximately 70% of all dormakaba employees as at 30 June 2018, and which are locatedat the 48 sites in the reporting coverage. The total workforce in this scope consisted of 11,520 employees. While the majority ofdormakaba's personnel work full-time and on the basis of permanent contracts, nearly 7% have part-time engagements. 62% of theemployees in scope were unionized or covered by collective bargaining agreements (Disclosure 102-41). In addition, dormakaba developed
nearly 400 apprentices, trainees and interns, and employed over 700 contract workers at the sites in scope during the 2017/18 financial
year.
Workforce composition (headcount)1 )Employees by region

Total

Male

Female11,520

7,832

3,688
170

Switzerland

407

237

Germany

3,053

2,336

717

Rest of EMEA

2,116

1,457

659

Americas

2,777

1,833

944

Asia Pacific

3,167

1,969

1,198

Employees by employment contract

11,520

7,832

3,688

Indefinite/permanent

10,485

7,265

3,220

Fixed term/temporary

1,035

567

468

Employees by employment type11,520

7,832

3,688

Full-time

10,734

7,533

3,201

Part-time

786

299

487

1) as at 30 June 2018, without apprentices, trainees, interns and contract workers
Data source: This report is based on data collected from 48 key sites, representing 70% (11,520) of Group employees.

Employees

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Sustainability Report 2017/18

People56

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PeopleDiversity
dormakaba's global presence and operations in varied markets mirror our commitment to promote a diverse and inclusive workforce. In
the 2017/18 financial year, the share of female employees was 32% of the workforce in scope.
At 56%, the majority of employees represented in this report are between 30 and 50 years of age. dormakaba provides our employeeswith long-term professional development opportunities in order to retain an experienced workforce. This is critical to the company's
success.
Fluctuation
In financial year 2017/18, a total of 1,371
employees left the company and 1,306
joined in the reporting scope. This
corresponds with rates of 13% and 12%,
respectively.
Employee fluctuation in Asia and theAmericas was higher than in other regions.
This is attributed to restructuring measures,and relocation of manufacturing activities.
Overall fluctuation (in percentage and headcount)

The workforce aged under 30 years shows higher joining and leaving rates compared to the other age groups. This is consistent across all
regions, and congruent with findings from a study on general workforce turnover trends periodically conducted by human resources
consulting firm Mercer (available here).
Fluctuation is calculated with permanent staff. In China, employees are usually appointed on the basis of fixed-term labor contracts
before being eligible for an indefinite contract. This results in a temporal shift of the fluctuation rates for Asia Pacific and to a certain
extent overall, since employees with permanent contracts joining and leaving dormakaba are counted only after their contracts have been
converted (usually after the completion of two consecutive fixed-term contracts, in accordance with Chinese Labor Contract Law).

Fluctuation by region (in percentage and headcount)57

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PeopleFluctuation by age and gender (in percentage and headcount)Segment AS AMER
The purpose of this management approach is to create a productive and equitable work environment with general guidance for theemployer/employee relationship that is specific enough to be equitable, but flexible enough to meet the business’ and individual
employee’s needs. AS AMER aims to foster a positive working environment and to be an employer of choice within the market for bothcurrent and prospective employees. The approach also ensures we are equitable in the treatment of candidates and employees
throughout their professional life cycle with us.
The topic of employment is managed by line managers in partnership with Human Resources through the USA, Canadian, Brazilian and
Mexican entities of AS AMER. Employment is governed first by the dormakaba Code of Conduct, then the country-based labor regulations
and the employee handbook, if available. Policies are compliant with local employment law and in some cases, go beyond it.
Each local entity in the USA and Canada has an employee handbook which details employer and employee commitments related to theemployee relationship. At the end of the 2017/18 financial year, an updated employee handbook applicable to all AS AMER employees in
the USA was released, ensuring country-wide processes and benefits.
The consolidated employee handbook for AS AMER employees in the USA contains the following employer commitments:• Equal Opportunity Employment• Non-Harassment / Non-Discrimination• Drug Free / Alcohol Free Workplace• Open Door Policy• Whistleblower Policy
Employee handbooks for employees in Canada contain the following employer commitments:• Equal Opportunity Employment• Non-Harassement / Non-Discrimination• Drug Free / Alcohol Free Workplace• Open Door Policy• Training and Professional Development Policy• Health and Safety Policy• Performance Management program• Maternity, paternity and parental leaves• Statutory Holidays and vacation leave• Group Insurance Plan
• Pension Plan

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Related projects and processes in the USA and Canada include, for example, annual salary reviews, town hall meetings, onboarding,
performance management, employees’ engagement activities, plant tours, etc. These actions are sometimes systemic (like salary reviews
and performance assessment), sometimes ad hoc and tailored to the local situation. In the 2018/19 financial year, AS AMER will be
releasing an employee handbook that covers all employees in Latin America.

Further policy & benefits

FTEs

BrazilCanadaMexico

USA

246

566

21

2,262

Flexible workplace measures (telecommuting, flextime,
etc.)

x

Working time reduction measures (part-time; job sharing
etc.)

x

Dependent care support (on-site childcare, financial
support, holiday care, referral services)x

Special leave offerings (beyond legal requirements)
Responsible workforce restructuring measures (internal
job placement, job search support, counselling, support
for moving costs, etc.)

x

x
x

x

X

X

X

X

Grievance mechanism
The mechanism for reporting grievances is included as a part of our employee handbook, and includes escalation points starting with theemployee’s line managers, then moving to their HR Business Partner, then to the segment HR Lead. This grievance mechanism is intended
to cover any alleged offensive behavior between employees of dormakaba or between partners, vendors, contractors, customers or otherpersons affiliated with dormakaba and its employees. This mechanism also covers any grievances from employees related to employment,compensation, or performance, and formal complaints.

Evaluation of the management approach
The segment maintains an open-door policy to receive feedback from employees on the topic and acst accordingly. There is no formal
evaluation of results or for adjusting the approach to this topic.

Segment AS APAC
The aim of the management approach is to treat employees fairly and with respect, and to provide employees with equal opportunity to
be considered for training and development based on their strengths and needs for them to reach their full potential. The Segment
manages most aspects of employment through HR functions in China North Asia, Southeast Asia (ASEAN), South Asia, Pacific, and Wah
Yuet (Taishan, China), reporting to the Segment HR Lead. The regional HR representatives provide oversight and are responsible for all
documentation relating to wages, working conditions and hiring. The management approach differs based on the regional setting.
Singapore, for example, follows the Tripartite Guidelines on Fair Employment Practices. Recruitment is merit-based and does not takeage, race, gender, religion, marital status and family responsibilities, or disability into account. Recruitment needs are evaluated monthly.
In the South Asia region (predominantly India), key targets related to employment include, for example, 100% achievement of employee
productivity targets and a maximal 10% fluctuation rate. In terms of recruitment, candidates go through multiple levels of assessment
which may include aptitude tests and psychometric assessment, in addition to personal interviews. Benefits and terms of employment arealigned to local regulations. Compliance with local labor law is tracked via a legal register in India.
Entities in China have formal recruitment and on-boarding policies, as well as an employee handbook (effective since 2014). HR
management places special emphasis on providing a safe working environment, offering annual medical exams to staff. A budget isallocated to employee engagement activities such as team building and communication campaigns. The production facility in Taishan has
opened a new employee recreation center in the 2017/18 financial year.
The pacific region has recently committed to upgrade their employee management systems to facilitate greater efficiency andreportability across the business. Once implemented, this system will bring into one place all the employee management data and allow
reporting beyond regulatory compliance. The new system will also make it possible to offer a wide variety of work schedules with
automatic time management and payroll calculations, creating more accurate and cost-effective staff management options.

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Further policy & benefits
ASEAN

China North Asia

Pacific

South Asia

Wah Yuet (Taishan)

FTEs

595

1,040

543

787

1,603

Flexible workplace measures (telecommuting,flextime, etc.)x*xWorking time reduction measures (part-time;
job sharing etc.)x*

Dependent care support (on-site childcare,financial support, holiday care, referral services)x*

Special leave offerings (beyond legal
requirements)x*x

Responsible workforce restructuring measures(internal job placement, job search support,
counselling, support for moving costs, etc.)

x*

x

*

x
x

x**

x
x

Singapore, 401 FTEs** covering 265 FTEs

Grievance mechanism
The pacific region has developed a draft Employee Counselling and Discipline Policy to provide a framework and process for managing
grievances within the organization. This policy will be used in conjunction with the dormakaba CoC to address any concerns that may
arise. China North Asia implements grievance mechanisms in conjunction with trade union representatives. In addition, the production
facility in Taishan has implemented a business ethics mailbox, hotline and webchat service. If any employee feels he/she is being
mistreated, he or she can turn to the ethics system for help. Confidentiality is maintained to the fullest practical extent.

Evaluation of the management approach
The segment maintains an open-door policy to receive feedback from employees on the topic and acts accordingly. In addition, feedback is
received through the dormakaba dialogue. In South Asia and China North Asia regions, local governmental agencies conduct compliance
audits. No cases of non-compliance have been reported. Employees in some locations in China North Asia have the option to provide
feedback directly and may also appeal to external bodies to have decisions reviewed. Outcomes are evaluated as a part of management
reviews with corrective actions taken as appropriate. There is no further formal evaluation of results or for adjusting the approach to this
topic.

Segment AS DACH
The aim of the Segment AS DACH management approach is to create an inspiring and performance oriented environment and foster an
atmosphere of trust and respect driven by constant feedback and opportunities to grow. This will help avoid risks such as loss of knowhow and minimize personnel shortages. There is a strong commitment to compliance on local labor laws in Europe (Austria, Bulgaria,
Switzerland and Germany) as well as for its plants in Asia (China, Malaysia and Singapore). Segment AS DACH human resourcesmanagement is strongly aligned to the collective bargaining agreements in place in those countries, especially in Austria, Germany and
Switzerland.
The segment has an “equal pay for equal work” policy in place, according to national legislation in Germany, Austria, Switzerland and also
the European Union. A home office policy to enable more flexible working hours and locations is planned in the midterm. Amendments togeneral conditions of employment and fringe benefits, such as staff discounts on public transport, are planned in the short and medium
term.
Germany and Switzerland offer an Employee Assistance Program to support employees and their relatives in case of psychological,
addiction or financial problems. The offering includes a hotline where employees or their relatives can get advice from professional
experts.

Further policy & benefits
Austria

Germany

Switzerland

FTEs

529

3,132

793

Flexible workplace measures (telecommuting, flextime, etc.)

x

x

x

Working time reduction measures (part-time; job sharing etc.)

x

x

x

Special leave offerings (beyond legal requirements)xx

Responsible workforce restructuring measures (internal job placement, job
search support, counselling, support for moving costs, etc.)xx

Dependent care support (on-site childcare, financial support, holiday care,referral services)60

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PeopleGrievance mechanism
In addition to the reporting channels offered in the dormakaba CoC, Segment DACH has further grievance mechanisms in place as part ofcollective bargaining agreements in the individual countries as well.

Evaluation of the management approach
ISO 9001 certification is in place in various sites in Austria, Germany and Switzerland, which is used to evaluate the management
approach. Related audits and corrective action plans are used to adjust the management approach as necessary. Monthly performance
reviews and feedback gathered during exit interviews is also taken into consideration.
Direct feedback from employees is also used in the evaluation of the management approach. One such feedback in Switzerland was theperceived lack of internal career opportunities. This is partly due to a need for improving communication on vacancies internally and also
because managers are wary to lose top talent to other departments. Therefore, a project has been launched together with ProductDevelopment to increase communication on internal opportunities for specialists and managers in the field of software and hardware
engineering. Switzerland and Austria aim to increase filling open positions through internal talent by 10% by 2020.
Further, in Switzerland an annual salary survey is carried out by an independent third party, as is standard practice for all companies withmembership to the Swiss association of mechanical and electrical engineering industries, Swissmem. The analysis compares all thesalaries of the member companies who use Switzerland’s general collective agreement as a basis for employment. Salary differences
between the regions, gender and job function (for example, accounting or IT) are analyzed. The results are then integrated into thesubsequent salary increase process once a year.

Segment AS EMEA
Segment AS EMEA aims to be fair, transparent and legally compliant in its employment practices, and to be acknowledged as an
employer of choice. The segment manages most aspects of employment through regional HR functions in CEERT (Central and Eastern
Europe, Russia and Turkey), MEA (Middle East and Africa), South Europe, UK, Ireland and Benelux, and ScanBalt, reporting to the
Segment HR Lead.
The focus in CEERT is on fostering long-term employment, recruiting temporary staff only as a last resort. HR processes are described in aconsolidated handbook for the region, outlining recruitment, performance reviews, salary reviews and an incentive scheme.
The MEA region, including UAE, Kuwait, Saudi Arabia, Qatar, and South Africa, exceeds minimum statutory entitlements such as annual
leave, compassionate and cultural leaves, and healthcare coverage of dependents. Salary review and incentive schemes are highly
structured and documented and take international best practice into account. This also includes a recently launched recognition programthat rewards outstanding behavior aligned with dormakaba values.
For South Europe (France, Italy, Iberia and Morocco), a consolidated employee handbook was released in the 2017/18 financial year.
France has further policies related to performance reviews, salary reviews, incentive schemes, professional fees, disciplinary rules andcompany cars. A key aim in the 2018/19 financial year is to implement performance review processes in Italy, Iberia and Morocco.
In region UK, Ireland and Benelux, Belgium has a balanced scorecard approach to human resources management. This approach builds
human resources strategy based on four pillars: the financial perspective, the customer perspective, the business process perspective, andthe learning and growth perspective. One outcome has been to mandate teambuilding activities for all employees. A “person of trust”
program has also been introduced, which pairs people with volunteers with whom they can have a personal chat in case of personal
problems. On the process side, new digital HR tools (for example, a tool to request leave) have been introduced.

Supporting the local community
Employees in the UK and Ireland have engaged with the local community to raise money for valuable charities. In the reporting year
2017/18, a Charity Committee has been formed as a result of discussions in the Employee Forum, where staff expressed wishes tocontribute to their local community and give back to worthy causes. The committee comprises of employees from all over the region.
Employees were able to vote on the kind of charity they wished to support, and the decision was made to support local hospices, in orderto make a greater impact in nearby communities so that we could make a difference to our surrounding areas. Seven hospices were thenselected, all of which are located near the main offices and branches.
Fundraising activities included bake sales, breakfast celebrations, coffee mornings, Christmas Jumpers Days, Guess the Number of Easter
Eggs, Raffles and more recently a Summer Fun Day, World Cup events and Quiz Nights. Thanks to the personal commitment and highengagement of the dormakaba employees, nearly CHF 4 000 have been raised.

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Further policy & benefits
CEERT

MEA

ScanBalt

South Region

UK, Ireland &Benelux

FTEs

457

211

340

524

702

Flexible workplace measures (telecommuting,flextime, etc.)

x

x*

x

x

x

Working time reduction measures (part-time;
job sharing etc.)xx

Dependent care support (on-site childcare,financial support, holiday care, referral services)
Special leave offerings (beyond legal
requirements)x**x

Responsible workforce restructuring measures(internal job placement, job search support,
counselling, support for moving costs, etc.)

*

x***

Dubai, approx. 193 FTEs** UK & Ireland, approx. 527 FTEs*** Netherlands, approx. 99 FTEs

Grievance mechanism
There is a grievance procedure in South Africa and another one for the Middle East documented in the respective employee handbooks. In
the UK, policies cover disciplinary and appeals processes as well as grievances. The grievance policy is in line with the ACAS code ofpractice.

Evaluation of the management approach
The results of the dormakaba dialogue are used to evaluate the management approach in general within the segment. Belgium haslaunched an additional “well at work” survey, and follow-up of action plans occur in every management team meeting. Exit interviews arealso conducted.
In CEERT and South Europe, the regional management team receives a 360° feedback on their leadership styles every 18 months, toimprove their management capabilities and instill a culture of empowerment and trust in their teams. Such programs are planned in the
future in the other EMEA regions (MEA, ScanBalt and UK, Ireland & Benelux).

Segment Key & Wall Solutions
Key & Wall Solutions (KWS), with the business units Key Systems and Movable Walls, has operations in Europe, Asia, and the Americas.

Key Systems
HR management for Key Systems (KS) networks with the local communities in which it works, offering working conditions beyond
compliance to local labor law. Standards in industry collective bargaining agreements are generally offered, even in cases where
employees are not unionized.
In the USA, for example, the Family and Medical Leave Act provides protected unpaid leave for an employee’s serious health condition. The
KS North America facility offers company-provided short-term and long-term disability benefits over and above this leave requirement.
Various units in France, Italy, Colombia and the USA offer a local bonus system, linked to improvements in profitability, efficiency andinternal quality. In Italy, employees are further offered an annual discretionary stipend which can be used for tuition fees, medical costs,
pension, gym memberships or dependent care costs.
Across all of its regions, KS works with local schools, universities and business schools to offer internships, trainees and apprenticeships.
Students are occasionally offered permanent employment in the company. Promoting from within the own workforce is preferred. Job
posting – directly or through recruitment agencies – provides equal opportunity and information to all potential candidates.
Key performance indicators include ratios of temporary to permanent employees, and rate of transfer of temporary to permanent
employees. KS North America offers a referral bonus for successful employee referrals to vacant positions.

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Employee engagement is also a priority in all KS regions. In the 2017/18 financial year, the following activities have taken place:
In North America,• Backpacks with school supplies donation to local children• Participation in the American Heart Association's Heart Walk (fundraising and promoting healthy nutrition and activity)• Hosted an employee holiday lunch, funded by the company• Team participation in the American Cancer Society's Relay for Life (fundraising)• Collected toys for less fortunate children during the Christmas season• Showcased career paths at Manufacturing Day, a Chamber of Commerce event for local middle school students• Annually, each employee, temporary worker and on-site contractor is provided with a turkey or ham for the holidays• Annual celebration banquet for employees achieving five years of service at the company
In South America,• Recognition program for employees celebrating their 25th or 40th year with the company• Managers and foremen training on the adherence to company values and constructive behaviours to ensure a positive working
environment• Free transportation to the workplace• Guarantee of same employment conditions for external contractors as granted to dormakaba own employees
In EMEA,• Reward and recognition program for employees celebrating their 25th or 40th year with the company• Bi-annual townhall meeting with all employees to update on company results and strategy• Immigrant employees are offered health and safety classes in a known language and English language classes are also offered• Food gift baskets and celebration event dinners for Christmas• Coaching and mentorship programs to assist on career development
In India & SEA,
• Monthly recognition program for best results in Lean Management activities• Rewards program for ideas contributing to occupational health and safety• Sport program open to all employees, with internal tournament and prizes to promote team building and healthy lifestyle• Company celebration of major festivals (Diwali, Holi, Republic's Day) and International Women's Day• Medical check-ups for employees and their families

Further policy & benefits

FTEs

Italy

Rest of Europe

North America

South America

India & SEA

429

147

440

53

440

x

x

x

x

x

Flexible workplace measures (telecommuting,flextime, etc.)
Working time reduction measures (part-time;
job sharing etc.)x

Dependent care support (on-site childcare,financial support, holiday care, referral services)xx*

Special leave offerings (beyond legal
requirements)
Responsible workforce restructuring measures(internal job placement, job search support,
counselling, support for moving costs, etc.)

*

x

x

x

x

x

x

referrals

Grievance mechanism
Italy maintains an active employee workers council that oversees norms and contract compliance and assists employees. The employee
handbook in KS North America outlines an open-door policy and invites employees to convey any suggestions or concerns to theirsupervisor, the next level manager, and/or HR.

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Evaluation of management approach
In addition to the feedback received through the dormakaba dialogue, exit interviews are conducted to develop action plans andcontinuously improve as an employer. Senior leaders also meet with a random, cross-functional group of employees monthly in a Lunchand-Learn setting to get to know each other, provide business updates and respond to employee concerns.

Movable Walls
Movable Walls has most of its employee base in Australia, Canada, Germany, Malaysia and in the USA.
Policies and management approach in the USA and Canada is aligned to that of Segment AS AMER. In addition, active wellness andengagement committees in the USA help to ensure employees are engaged and healthy through activities such as on-site fitness classes,
health challenges, picnics, and holiday parties. In Canada, employees benefit from a local bonus system and an employee assistanceprogram, which provides confidential advice on legal, financial, psychological or other personal issues.
In Germany, Movable Walls human resources management is strictly aligned to collective bargaining agreements in the country. Policies
are defined as part of the collective bargaining agreement and offer more than the regulatory minimal benefits in general.
In Malaysia, employment is managed according to the Malaysian Employment Act, but offer some conditions beyond legal requirements,
especially regarding parental leave or special leave due to family issues.

Further policy & benefits

FTEs

APAC

CanadaEurope

USA

91

257

165

242

Flexible workplace measures (telecommuting, flextime,
etc.)

x

x

Working time reduction measures (part-time; job sharing
etc.)

x

x

Dependent care support (on-site childcare, financial
support, holiday care, referral services)x

Special leave offerings (beyond legal requirements)
Responsible workforce restructuring measures (internal
job placement, job search support, counselling, support
for moving costs, etc.)

x

x
x

x

x

x

x

Grievance mechanism
In Germany, this is included in the collective bargaining agreement. In the USA and Canada, the AS AMER Open Door policy applies.

Evaluation of the management approach
Movable Walls in Germany evaluates the management approach based on achieving budgetary targets. In the USA, an annual benchmark
of benefits based on the local market is taken into account and related adjustments made thereafter. The management approach has not
required any adjustment.

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Training & Education
Various training and development program offerings are developed at
the Group level which can then be specifically tailored to local needs.
These include, for example, a range of vocational training and dual studies, language andproject management courses and opportunities for job rotation.

Focus Area: People• Employment• Training & Education

In addition to providing employees worldwide with access to a Learning Management
System, which hosts a variety of e-learning modules, dormakaba offers our employees• Freedom of Association &Collective Bargaining

various continuous training and development programs, ranging from product, sales, safety
and leadership topics.
The company supports the professional qualification of employees, and at many locations,also contributes to the financing of external training on an individual basis.

Segment AS AMER
AS AMER has formulated clear expectations on leadership behavior and has outlined the different tools and learning resources that canbe used to meet or exceed the expectations. There are 1.5 dedicated resources to learning and development, demonstrating thecommitment the segment has in this area. The segment is also developing a segment-wide strategy that considers individual development
needs and mandatory requirements by country (USA, Canada, Mexico and Brazil). In Canada, the company tracks all learning to becompliant with local regulations. Tuition and professional development reimbursement is offered. A focus of the training program is on
project & change management, sales product training and leadership training including Leading for Success, Leading at the Speed of
Trust, Leading Others Through Change, and Strength Finders.

Evaluation of the management approach
In AS AMER, evaluation of the management approach takes place through employee feedback. One challenge of the management
approach has been carrying out annual performance review processes within the company’s HR web-based management system forsome target groups, and through manual forms for others. However, progress has been made in aligning the various business entities andbuilding awareness of the process. One key adjustment has been to develop a talent management focus group with management to gain
further insight on their needs.

Segment AS APAC
The Training & Education management approach in AS APAC enables staff to have the required competencies to safely and efficiently
perform their tasks and, where appropriate, to support for career advancement. Further objectives include reduction of employee
turnover, ensuring health and safety, and minimizing risk by cross-training through job rotations. Learning new languages is supported tohelp employees fit-in in a multinational environment.
South Asia has a competence-based framework across four silos in technical training, with two training managers dedicated tosupporting implementation. As a part of this competency framework, we offer employees in product specification with sponsoredcertification programs through the Guild of Architectural Ironmongers (GAI) and by the Door & Hardware Institute, USA. Special emphasis
is placed on employees with less than five years in the company, which constitutes about 65% of product specifiers. The average training
time per employee per year in the general sales workforce is 5 working days.
In Singapore, direct supervisors are responsible for conducting a Training Needs Analysis with the support of HR. The operations team has
several compulsory trainings covering, for example, safety and lean management. New hires undergo two weeks of training. All employees
are eligible for a government-funded “SkillFuture” program to learn new skills as part of lifelong learning. 15 training sessions have beenoffered to staff in the reported financial year.
In China North Asia, new hires are offered a four-week onboarding program. GAI certification is also offered. Generally, most training ison-the-job. An annual training plan is developed for classroom training programs, with a set target of completion of 85%. As the facility in
Suzhou (China) is certified to ISO 9001, the training management process, plan, records and evaluation are systemized. Averageclassroom trainings for shop floor employees are 14 hours per year per employee. Office employees average 16 hours per year.
Similarly, the subsidiary TLHM Co. Ltd. is also certified to ISO 9001. The subsidiary follows the Plan-Do-Check-Act cycle as part of thecertification. SWOT analyses, satisfaction questionnaires, quizzes for participants and tracking on subsequent promotion andperformance are regularly done. Average training time is 13 hours per employee per year.

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People

The facility in Taishan (China), which hosts the largest dormakaba employee base worldwide, has a talent development training programin place for all employees. In the 2017/18 financial year, focus was placed on training of management basics for workshop managers andsupervisors, which included courses on daily management, daily communications, continuous improvements and lean production. 22
frontline managers benefited from this training. Training on the new ERP system was another focus. 55 staff members were trained aspart of the roll-out of the system. In total, Taishan employees participated in 73 courses (in class or e-learning), with an average training
time per employee of 1.5 hours over the course of the year.
Pacific has a full-time National Training Manager who is responsible for writing and delivering training packages to meet operational
requirements. In the service organization, each service location has a nominated training champion. Managers set goals and targets fortheir teams. Team goals are preferred to foster greater collaboration within the respective team. Goals and targets generally vary inlength from 3 to 12 months. Staff can access funding and support for external study programs, and traineeships are offered for service
technicians.
Service technicians undergo between 8 and 12 hours of training per year, whereas sales representatives undergo between 4 and 16 hours
training per year.

Evaluation of the management approach
The management approach is evaluated based on feedback after trainings. Another evaluation method is the pass/fail ratio ofassessments of participants or employee turnover rates. Improved productivity rates, measured quarterly, are also used as a metric toevaluate successful training programs. For the facilities in Suzhou (China) and TLHM Co. Ltd., evaluation occurs as a matter of course
through external audits for ISO 9001 certification. In the latter, further evaluation occurs in the education review meeting and is fed into
the company-wide mid-term planning.

Segment AS DACHThe Learning and Development department in Germany is responsible for training and development of AS DACH employees in Germany,
Austria and Switzerland. The processes are centrally organized and mapped in the Integrated Management System based on ISO 9001
requirements. The online learning platform is the central hub for all employees. It contains the current training programs. In future, thelearning platform will also provide documentation and workflows for external and target group-specific trainings. Personality diagnostics
and coaching are made available, as well as leadership, team and individual training modules.
In Germany, participants benefited from training on energy management, environment, business management, purchasing, IT,
communication, quality management, law, conduct, sales, marketing, production and service. Further, 16 participants benefited from the
management development program Leading for Success in the 2017/18 financial year.
Besides also offering the above, Swiss and Austrian sites offer occupational health and safety training in accordance with local labor law.
Approximately 2 hours of training per employee per year and 24 hours of training per manager per year are offered. Additionally, Swiss
entities offer financial support for external courses. The degree of support varies based on the relevance of the studies to the business.
For information on training and education activities in the AS DACH manufacturing facilities located in Asia, refer to the AS APAC section.

Evaluation of the management approach
Employees are encouraged to fill out a feedback form after participating in a training. An evaluation of the feedback is the basis for theplanning and implementation of improvement measures. Based on audits related to ISO 9001 certification, Switzerland will takecorrective action by maintaining better records of training hours in future.

Segment AS EMEAAS EMEA has a segment-wide approach to training and education, with a focus on sales and leadership development under the
responsibility of a segment-level Learning and Development manager. The same management-level training courses and initiatives aredelivered throughout EMEA, ensuring that a consistent methodology, content and standard of training is delivered throughout thesegment. At least one management course is delivered in each region on an annual basis. On average, managers receive 12 hours of
training per year. In the 2017/18 financial year, 84 managers participated in classroom trainings on leadership development. Another 32
managers were trained on how to lead virtual teams. In addition, 16 sales employees were trained on consultative selling skills. 22 newjoiners in regions CEERT participated in a training on the dormakaba mission, ambition, strategy and brand. Over 125 product training
sessions were held across EMEA including numerous online training courses. Further trainings were offered on HR processes, constructionindustry regulations, health and safety, pricing and ISO certification, for example.

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PeopleIndividual Development Plans (IDPs) are defined annually in the MEA region and in France. CEERT has developed a Key Talent
Identification system where 44 people have been identified as Key Talents in different countries. The program includes assessment,
development dialogues, and IDPs.
Belgium has committed to provide a minimal of 16 hours of training per employee per year. In 2017/18, the average training time was 17
hours. A large focus has been on onboarding 34 new joiners, as well as in launching a so-called “back-up” program. As part of this,management appointed a back-up colleague for every job function and then organized classroom and on-the-job training to ensurebusiness continuity.

Evaluation of the management approach
Effectiveness of the training programs is assessed by testing participants knowledge after the training. In region CEERT, a sales survey
across the sales population was conducted which included questions about sufficiency of existing product trainings and identifications ofknowledge gaps. The results are taken in consideration during planning further products training.

Segment Key & Wall Solutions
Senior management in Key & Wall Solutions updates analysis and development plans twice a year for talented potentials, based on
performance review results and additional individual assessments. This may include project assignment, exchanges abroad, and dedicatedin-class or individual training plans.

Key Systems
In Italy, a training plan is developed on an annual basis as required by ISO 9001 and OSHAS 18001 standards. This includes ‘on-the job’ andin-class activities, and their completion is tracked. Beginning in 2018, governmental regulations mandate 24 hours of training per employee
within three years. The facility goes beyond this and offers at least 24 hours of training for every employee on a two-year average.
Effectiveness of training initiatives is evaluated based on the ISO 9001, ISO 14001 or OSHAS 18001 requirements. It involves an initial skills
assessment and a final one, to identify the improvement. Similarly, the effectiveness of training may be measured by tests (in class orfollowing training) and by the enhancement in skills evaluation.
As an ISO 9001 certified entity, Key Systems (KS) North America in Rocky Mount, North Carolina (USA) also develops an annual training
plan accordingly. New-hires receive a performance evaluation after 90 days of employment to ensure they are qualified to perform the job
for which they are hired. All employees receive an annual performance evaluation from their direct manager. Employees who do not meet
performance expectations are provided with a development plan, or may be placed on a performance improvement plan.
KS North America also has an Educational Assistance program for continuing postsecondary education in programs aligned to an
employee’s current or future career path. This benefit is not required by any legislation, and supports our preference for promotion fromwithin. At least three employees participated in this during the fiscal year.
Besides on-the-job training, KS South America offers trainings on how to create a constructive work culture, including conflict
management and adherence to dormakaba values. Training on work safety and ergonomics are also offered. The training concept iscurrently being integrated in the ongoing development of an ISO 9001 certification.
KS India and South East Asia offers opportunities for vocational training, from basic technical skills to behavioral skills and organization
development programs, with an internal training center available for all employees. The annual training plan is elaborated based on needs
analysis according to the ISO 9001 management system. The average annual training is 12 - 16 hours per employee (including apprentices
and contractors). In addition, vocational classes are offered to the local community as part of its community engagement.

Evaluation of the management approach
Training effectiveness is measured against audits, stakeholder feedback and KPIs. If a negative trend is identified in ISO audits,management meets to review the root cause and determine possible remediation needed, which may include increased communication
and/or modifying the training program. Voluntary feedback surveys (directly after the training and 100 days later) also provide input forplanning continuous improvement.

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PeopleMovable Walls
Modernfold, the USA-based entity in Movable Walls, considers an educated workforce an integral part in creating customer satisfaction.
Training and education is also seen as critical to driving employee engagement. Managers and employees discuss development informallyat least quarterly and on a formal basis at performance reviews. Management maintains a quarterly review of talent management,
including succession planning, development, needs and risk assessment. Production supervisors receive approximately 16 hours of training
per year. Office and management employees have at least 8 hours of training in class, on-the-job or e-learning.
Besides on-the-job training and onboarding programs, EMEA offers technical training (e.g., on new machines or regulations, etc.). In the2017/18 financial year, a leadership skills training program has been launched.
APAC (Malaysia) dedicates a yearly budget for training, which is distributed based on a training needs analysis. Besides the mandatory
health and safety training, vocational sessions for shop-floor employees are offered.

Evaluation of the management approach
Through employee feedback, one major challenge in the management approach was found. Being a lean organization, at times it can bedifficult for employees to find time to take training courses. Therefore, Modernfold is reviewing on-line resources to provide employees
access to training and education around the clock, which will improve employee performance.

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Freedom of Association andCollective Bargaining
As a member of the UN Global Compact, dormakaba respects theright of all workers to form and join a trade union without fear of
intimidation or reprisal, in accordance with national laws.
Further, dormakaba employees are free to collectively bargain, if they so desire.

Focus Area: People• Employment

Related policies include, for example, a harassment and bullying policy in the Pacific region(AS APAC). Subsidiary TLHM Co. Ltd. in China North Asia explicitly forbids, among others:• threatening, disciplining, punishing, or firing workers because they exercise this right• refusing to hire a candidate because of their association with trade unions• blacklisting of union organizers by providing their names and details of their activities toother employers, or to employers' associations.
We work proactively with employee representative bodies to achieve positive outcomes for
employees and the organization. Collective bargaining agreements are in effect in various
locations including: Australia, Austria, China, Colombia, Italy, New Zealand, Brazil, Mexico,
France, Germany, Switzerland, and the US. In Poland an alternative employee
representation is in place.

Grievance mechanism
The grievance mechanism for employees covered by a collective bargaining agreement(CBA) are defined by the CBA itself. On the other hand, the grievance process for nonrepresented employees is defined in our employee handbooks or through the dormakaba
Code of Conduct. In addition, the Pacific region (AS APAC) and Movable Walls entities in
Canada have an Employee Assistance Program that provide confidential support andcounselling for all staff around the clock. Canada, Switzerland and Germany provide thesame service for their staff through an external provider.

Evaluation of the management approach
There is no current formal evaluation of the above management approach.

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Product-related Energy, Emissions,Effluents & Waste
We aim to reduce our customers’ environmental burdens by designing
materially- and energy-efficient products.
dormakaba is dedicated to producing high-quality reliable products and solutions, also
integrating our customers’ health and safety and desire for environmentally friendly options.
That is why our products are a core focus area in the sustainability strategy, with emphasison energy in-use, materials use and compliance, customer health and safety, waste andFocus Area: Products• Energy (use-phase)• Emissions (use-phase)• Effluents & Waste

emissions reduction.
• Materials

The trend towards sustainable design and ecodesign are here to stay. With an average• Customer Health & Safety

lifespan of forty to fifty years, buildings should clearly be constructed in a way that allows
required materials and natural resources to be used efficiently.
Green Building certification schemes such as Leadership in Energy and Environmental
Design (LEED) or the German Sustainable Building Council (Deutsche Gesellschaft fürNachhaltiges Bauen, DGNB) rate the sustainability of an entire building. The Green Building
market is to experience a 13% growth rate through the year 2020. By developing sustainableproducts and ensuring transparency on sustainability information, dormakaba secures ourmarket position and offers added value to customers seeking Green Building Certifications.

Environmental Product Declarations
At dormakaba, quantified disclosures of a product’s environmental impact through its entire
lifecycle are described in Environmental Product Declarations (EPDs) based on theinternational standards ISO 14025, 14040, 14044 and the European standard EN 15804.
The Life Cycle Assessment (LCA) is the core element of the EPD and provides a reliablecalculation of the environmental performance of a product. This means, in concrete terms,
that a systematic assessment of the environmental aspects and effects arising during theextraction of raw material through the production, distribution, and use phases takes place.
To calculate an eco-balance, statements must be made on materials, energy consumption,transport routes, emissions, and the lifespan of the products.
The EPDs for the Variflex 88/100 and Varitrans movable walls (Segment Key & Wall
Solutions) have been published in the 2017/18 financial year. In addition, baseline datacollection and calculations to create EPDs for compact readers, door closers and automaticdoor systems have begun. We expect to publish 2 new EPDs in the 2018/19 financial year. In
addition, 2 further EPDs for the products TS 93 and BTS 80 will be renewed. To further
round off our EPD offer, dormakaba has individualized 9 association EPDs published by theEuropean Federation of Associations of Locks & Builders Hardware Manufacturers(Arbeitsgemeinschaft der Verbände der Europäischen Schloss und Beschlagindustrie, ARGE).
This contributes to achieving the dormakaba sustainability target of having EPDs and/or
HPDs for products representing 30% of total turnover by 2021. Currently 12% of our
products based on sales volumes are covered by EPDs and/or HPDs.

Partnerships forsustainability
In the 2017/18 financial
year, dormakaba joined an
initiative by KIC InnoEnergy
and the European Instituteof Innovation andTechnology, which brings
together leading higher
education institutions,research labs andcompanies to boost
innovation andentrepreneurship.
dormakaba has become apartner in the project "LiveLCA", which aims to quickly
assess life cycle information
by increasing the use of live
data from production
monitoring systems.
dormakaba supports the
project with manufacturerspecific data. In addition to
the LCA, product-specific
live data on topics such asenergy and material
consumption can also be
used to determine
potentials in energy savings
or waste reduction. This
enables full transparency of
input and output flows andthe corresponding costs.

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Product design with a life-cycle approach
In the 2017/18 financial year, the company’s sustainability commitment and life-cycle
approach was integrated in the Product Design Manual, binding for all new dormakababranded products in the Access Solution segments:

Beyond Environmental Product Declarations
In addition to our commitment to expanding our portfolio of Environmental ProductDeclarations, dormakaba also develops products that are environmentally friendly. The
folding door FFT FLEX Green is a sustainable, reliable and energy-efficient door system,
which forms the connection of thermal insulation with silent and dynamic driving
performance. The FFT FLEX Green has low thermal transmittance values (UD Values) from
1.7 to max. 2.4 (also known as heat transfer coefficient) and, in combination with highquality insulating glass, is particularly well suited for energy-efficient buildings.
In addition, the ST FLEX Green door system meets the requirements of Germany's energyefficiency regulation (EnEV 2016), which stipulates a certain UD value for complete door
systems. The ST FLEX Green boasts low UD-values from 1.4 to max. 1.8
Finally, dormakaba aims to reduce waste by integrating rechargeable battery packs
wherever feasible, as in the ES 200-2D Sliding door operator for emergency exits.

Products

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Sustainability platforms for greater transparency
Product information from EPDs and/or HPDs can contribute, for example, within theframework of Building Information Modelling (BIM) models and specifications or help toattain the highest levels of green building certification systems such as Leadership in Energy
and Environmental Design (LEED).
dormakaba publishes the product information from EPDs and HPDs on internationallyrecognized sustainability platforms such as the DGNB Navigator, ÖKOBAUDAT, mindful
MATERIALS and PORTICO. These databases provide transparent environmental and healthinformation for users and ensure easy access to specific product data. By providing productinformation on such databases, dormakaba lowers market entry barriers in the green
building industry, making the company’s inclusion in related bidding processes possible. In the2017/18 financial year, processes were developed to ensure regular updates and to maintaina high-quality standard of information.

Evaluation of the management approach
There is no current formal evaluation of the above management approach.

Products

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Materials
Material compliance is simply good governance.
The management approach to the topic Materials is two-fold. On the one hand, thecompany focuses on material compliance, which means compliance with international(environmental) laws and regulations regarding the material composition and origin ofmaterials. On the other hand, dormakaba places emphasis on the possible health impacts ofFocus Area: Products• Energy (use-phase)• Emissions (use-phase)• Effluents & Waste

our products, which is closely related to the topic Customer Health & Safety. As part of ourcommitment to this, dormakaba develops various Health Product Declarations.

• Materials• Customer Health & Safety

Material Compliance
At a Group level, dormakaba is currently focusing on Material Compliance on hazardous
materials and conflict minerals. There is emphasis on EU Regulation 1907/2006 (REACH),
EU Directive 2011/65/EU (RoHS) and the US Dodd-Frank Act (Conflict Minerals). We believe
REACH and RoHS are high standards and thus meet further local requirements.
Management is both ad-hoc and strategic. For example, customer and internal requests andtraining are addressed ad hoc, whereas liaising with external legal support to review therequirements, and the drafting of a Group Directive Material Compliance are rather
strategic.
In the 2018/19 financial year, the impacts of the upcoming EU Regulation 2017/821 (Conflict
Minerals) and California Proposition 65 on the business and related processes will be
evaluated. A further integration of material compliance requirements in the company’s
enterprise resource planning (ERP) software is also underway.
Through our Supplier Code of Conduct, dormakaba sets clear expectations that our
suppliers should actively support ongoing efforts to manage and demonstrate productcompliance with the above regulations.

Health-related Product Declarations
dormakaba offers various health-related product declarations which transparently giveaccount of the materials found in our products. These take the form of Health ProductDeclarations (HPDs), Building Product Declarations (BPDs) or Declare Labels, depending on
the local market requirements.
An HPD gives a detailed list of the materials and contents of a building product and theassociated effects on human health. The declaration is a common reporting format in the
USA with which the required transparency can be guaranteed.
dormakaba published more than 20 HPDs in the 2017/18 financial year in the latest versionof the standard (HPD 2.1). Work is also in progress on HPDs for Modernfold and DORMA
Hüppe products (Segment Key & Wall Solutions). Modernfold aims to have an HPD for eachof its seven products completed by the end of year 2018.
The Declare label, which is relevant to the USA market, is like a nutrition label for the building
industry. It lists the ingredients in products to help customers ensure healthier indoor living
environments. It discloses where a product comes from, the materials it is made from, andits end-of-life pathway. Products with a Declare label are featured in a transparency
platform and product database from the International Living Future Institute. The platform
helps stakeholders in the building industry find products free from hazardous substances.

Product Transparency
Trends in Sweden
In Sweden, providing
environmental and healthproduct information ontransparency platforms forthe building industry is
becoming a prerequisite fordoing business. This isbecause these platforms
are often searched andaccessed by building
planners and architects
during product selection.
dormakaba offers Building
Product Declarations(BPDs) for the Swedishbuilding industry throughByggvarubedömningen(Building Material
Assessment, BVB) andSunda Hus. These
assessments focus ontransparency related tohazardous materials, butalso on several life-cycle
environmental criteria.
In the 2017/18 fiscal year,
dormakaba worked onoffering additional BPDs forour product portfolio.
Currently dormakaba lists
70 articles on the BVB
platform and an additional
88 on Sunda Hus, making
the search for healthy
products easier for ourcustomers.

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Its “Red List” contains the worst-in-class materials prevalent in the building industry, which
pollute the environment, bioaccumulate to toxic levels in the food chain, and/or are harmful
to construction and factory workers.
In the 2017/18 financial year, dormakaba published Declare labels for a total of sevenproducts (Product Clusters Door Hardware and Mechanical Key Systems), and eachachieved “Red List Free” status, the highest level offered by Declare.

Evaluation of the management approach
Beyond considering the results of benchmarking through investor ratings, there is no current
formal evaluation of the above management approach.

Products

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Customer Health & Safety
To fulfill the building requirements in the public and private domains,
dormakaba products must meet very high standards of security,transparency and quality.
To meet these prerequisites, dormakaba labels our products according to the applicablestandards and customer requirements. Product management is responsible for this in close
consultation with product development as stipulated in the Group Directive Adaptive
Innovation Methodology (AIM) defined by Group Innovation Management. Internal and, if

Focus Area: Products• Energy (use-phase)• Emissions (use-phase)• Effluents & Waste

required, also external product quality assurance ensure that products have all the necessary
labels. No product can be installed in field or released for production without the appropriate
certification in hand. This is a necessary step in the product development life cycle, i.e.

• Materials• Customer Health & Safety

product verification phase, based on AIM.
Public buildings must meet high standards in terms of the health and safety of the peopleusing these buildings. dormakaba meets these prerequisites with product certifications
according to internationally recognized standards such as EN, ANSI or DIN. Particularattention is placed on the DIN 18040 standards, which applies to barrier-free construction in
public buildings.
dormakaba brings added-value to our customers by implementing features which makedoors easier to open, benefiting the elderly or mobility impaired, as in the case of the TS 93
and TS 98 door closers.

Access Solutions Segments
Wherever applicable, products developed in the AS AMER segment are scrutinized for compliance to two major regulatory requirements
which includes a third-party certification for safety performed at the Underwriter’s Laboratory (UL), Intertek, or self-certified laboratory
and third-party certification for compliance to electromagnetic interference and compatibility as per the Federal Communications
Commission (FCC) standards in the USA.
dormakaba ensures compliance to 12 various UL standards, which includes fire testing and standards on marking and labeling systems. An
example of the UL test (UL 10C: Fire tests of door assemblies) requires the door assembly with the locks to be placed in a frame andsubjected to a temperature of 1052⁰C for a period of 3 hours. Requirements are met if no flaming occurs on the unexposed surface of adoor assembly during the first 30 minutes of the testing period, among other prerequisites. Fire testing according to DIN standards is also
conducted.
Furthermore, products are designed to comply with the RoHS (Restriction of Hazardous Substances Directive 2002/95/EC). Allcomponents and materials are determined to be RoHS compliant before implementation in products during product development.
dormakaba also designs to ensure compliance to applicable Builders Hardware Manufacturers Association (BHMA) codes depending on
the product line. The BHMA is the trade association for North American manufacturers of commercial builders hardware. BHMA isinvolved in standards, code and life safety regulations and other activities that specifically impact builders hardware. Depending on the
product line, whenever applicable, products are designed to meet the Florida Building Code (FL13061).
dormakaba also participates and at times, leads the creation, updates or revisions of existing BHMA standards. BHMA standards arevoluntary and thus enables dormakaba to demonstrate leadership towards product quality and safety.
Customer health and safety is addressed similarly within segment AS APAC. Further, the topic is integrated in the ISO 9001 management
systems at various locations. The focus for AS EMEA, which develops various Electronic Access and Data (EAD) products, is also on
product certification. For example, the Kaba Wireless Gateway 90 42 is certified to EN 55024, which tests for immunity in cases ofelectrostatic discharges, power surges and interruptions, or radio frequency interference. The product is also certified to IEC 60950, which
specifies requirements intended to reduce risks of fire, electric shock or injury for the service person, operator or end user who may come incontact with the product.

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Products

In Segment AS DACH, automatic doors are subject to the highest safety demands in accordance with EN 16005. To meet these, selfmonitoring sensors are mandatory. Obstacle self-detection and automatic reversing are also included in many products. For example,
Talos CSD circular sliding doors and the Talos RDR revolving doors feature a safety sensor system. Emergency exit and escape route doors
are equipped with a redundant operator, an additional control unit for safety purposes and a self-monitoring motion detector. The ES
200-2D door operator features emergency opening following a power failure. The FFT FLEX Green is certified to user safety andperformance standards based on EN 16361. And revolving doors such as the KTV3 and KTV 4 require a safety risk assessment before
installation in accordance with DIN 18650. This is provided by dormakaba at the building site before a sale is made.

Supporting ease of access
The TS 98 XEA door closer features our EASY OPEN technology, which provides barrier-free access based on German Industrial Standards
DIN SPEC 1104 and DIN 18040. The heart-shaped cam technology reduces the required effort to a minimum, with 40% less effort. It not
only opens easily, but also features delayed closing. This allows sufficient time to pass through the door with luggage, prams, hospital beds
and similar.

TS 98 XEA with EASY OPEN: heart-shaped cam

Grievance mechanism
dormakaba has a Group-wide customer complaint process in place based on the principles of ease of access, solution-driven expertise,short response times, positivity and focus on the company value Customer First.
The process follows five steps:
1. Acknowledge that the customer has an issue, ideally within 24 hours
2. Assess the problem, prioritize and find a solution driver
3. Resolve the issue
4. Respond in a timely manner, keeping the customer informed on the status
5. Conclude with a proper follow-up to assess the customers satisfaction and integrate lessons learned
Regulatory compliance falls at the top of the list of priorities for any development leads and require immediate action plans. An incident
response plan is put in place to enable direct access to the required resources as well.

Evaluation of the management approach
The management approach is evaluated based in benchmarking of competitor’s product positioning, through internal or externalverification in terms of certifications (including ISO 9001) and testing, and through stakeholder feedback.
For the latter, dormakaba analyzes inputs from customers and end-users prior to product launches. In segment AS AMER, all new productlaunches require the product development team to initiate an alpha (internal) and, in most cases, a beta (external) testing. Beta testing is
the process by which the first initial products released from the production lines are installed in a limited customer setting, monitored
closely by the sales, product management and engineering team. During the beta testing, any issues can be escalated to the team, towhich an investigation is carried out and issues resolved prior to the full launch of the product in the field. This provides an extra layer ofverification and validation to most of the product launches and further deployments.

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Products

The management team regularly communicates any product shortcomings to ensure that we have an enhanced level of attention to theseand ensure that we learned from any potential gaps. Segment AS AMER has dedicated manpower to ensuring that any corrective actions
requiring an update in processes are implemented accordingly. This ensures that there is neutral individual who can implement newprocesses segment-wide that will be common and applicable to everyone.
Further, segment AS APAC conducts customer satisfaction surveys on an annual basis and the segment management conference includes
Voice of the Customer sessions to gather additional insights to product performance, health and safety topics. In the spirit of continuous
improvement, resources are allocated to ensure that there is no compromise with regards to product safety and regulatory standards.
The segment goes beyond by allocating resources to joining committees to help improve and shape future standards and industry
requirements. The segment is thus actively helping raise the bar regarding various criteria.

Segment Key & Wall Solutions
Business Unit Key Systems approaches the topic of Customer Health & Safety as an element of its ISO 9001 certifications and ensurescompliance with both mandatory (such as the European CE declaration of conformity) and voluntary safety standards. Over 16 productcertifications apply. Business Unit Movable Walls has over 10 active certifications, including from Underwriter’s Laboratory (UL) and theCanadian Standards Association (CSA). Product certification includes fire testing, smoke testing, ball-throwing tests, and weight bearing
tests on suspension track systems, for example. The related legal registers are regularly surveilled and updated.
Each Key Systems product features proper documentation such as owner’s manual, declaration of compliance, contact details to the
manufacturer, quick guides, tutorials available on the web and even trainings on demand or during product installation to provide thecustomer with all the information relevant to correct product use and safety features. Regional distributors are periodically trained on thesame topics.

Grievance mechanism
Besides the Group-wide dormakaba customer complaint process as described in the Access Solutions Segments section above, the ISO
9001 quality system within Key Systems includes a further grievance mechanism. Each production site implements their ISO 9001
processes locally. Quality assurance managers have the ownership of the grievance mechanism and track any complaint from receipt toits closure, including feedback to the customer. This includes registration of the complaint in the ticketing system, evaluation, problem
analysis and corrective actions, verification, lessons learned, and closure. The intended users are all the relevant stakeholders such as
customers, technical assistance, procurement, quality control, logistics, manufacturing, product development, and sales teams.
Effectiveness of the grievance mechanism is based on number of open, accepted, refused and closed complaints per fiscal year.

Evaluation of the management approach
The management approach is evaluated firstly through external audits by ISO 9001 certification bodies. Product surveillance (e.g., UL,
CSA) and customer audits also take place. Further, the customer claims monitoring and database mentioned as part of the grievancemechanism is also considered in defining corrective actions. At least once a year, a management review assessment evaluates related KPIs
and performance status. Movable Walls subsidiary Skyfold (Canada) also engages with customers through surveys.

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GRI Content Index

GRI Content Index
GRI 100 Foundation 2016
GRI 102: General Disclosures 2016

Organizational profile
102 – 1 Name of the organization

dormakaba Holding AG

102 – 2 Activities, brands, products, andservices

dormakaba is one of the top three companies in the global market for access and security solutions.
dormakaba has divided the areas of business in which the company is globally active into fivesegments. Access Solutions (AS), which comprises four segments, is structured by region: AS AMER
(North and South America), AS APAC (Asia-Pacific), AS DACH (Germany, Austria, and Switzerland)and AS EMEA (Europe, Middle East, and Africa). The offering includes the global product clusters Door
Hardware, Entrance Systems, Electronic Access & Data, Interior Glass Systems, Lodging Systems,
Mechanical Key Systems, Safe Locks and Services, as well as local products. The multifaceted portfolio
ranges from door technology solutions, automatic door systems, a wide variety of fittings, door closers
and stoppers, and locking systems – from cylinders, keys, and locks all the way up to fully networked
electronic access solutions for companies, public facilities, hotels, and many other applications. The
range also includes physical access systems, high-security locks, glass fittings, solutions for workforce
management, as well as services for all these applications. The other globally focused segment is Key &Wall Solutions, with its two business units of Key Systems – which features a high-performance range
of key blanks and mechanical, electronic and (semi-)industrial key-cutting and origination machines and Movable Walls, specializing in partitioning systems. Alongside the dormakaba brand, the Group’s
portfolio contains a number of other valuable brands for Access Solutions: e.g. Farpointe Data,
Madinoz, Best; for Key Systems: Silca, Ilco, Advanced Diagnostics; for Movable Walls: Modernfold,
Skyfold, Dorma Hüppe

102 – 3 Location of headquarters

Hofwisenstrasse 24
8153 Rümlang
Switzerland

102 – 4 Location of operations

Sites Covered

102 – 5 Ownership and legal form

Corporate Governance

102 – 6 Markets served

Sites Covered
Sites Covered
Key Figures Financial Report
Facts and Figures - People

102 – 7 Scale of the organization

dormakaba offers a comprehensive portfolio of services in the area of secure access to buildings androoms. The portfolio is structured into eight global product clusters: Door Hardware, Entrance
Systems, Electronic Access & Data, Services, Mechanical Key Systems, Lodging Systems, Safe Locks
and Interior Glass Systems. Moreover, there are local products for Access Solutions offered in thevarious regions. In addition to Access Solutions, dormakaba offers a comprehensive portfolio of
products in the area of Key Systems (Keys, Key Cutting Machines, Automotive Solutions) and Movable
Walls (Acoustical Movable Partitions, Vertical Sliding Walls, Horizontal Sliding Walls).

102 – 8 Information on employees andother workers

Facts and Figures - People

102 – 9 Supply chain

Our Supply Chain

102 – 10 Significant changes to theorganization and its supply chain

In the 2017/18 financial year, dormakaba has combined its two smallest segments, Key Systems andMovable Walls, to form the Key & Walls Solutions segment with a joint leadership team. The individual
businesses have not been merged operationally and continue to be run under separate brands. Further,
we came to an agreement to divide existing shareholding in Dorset Kaba among the joint venture
partners as per agreed terms, thus dissolving the joint venture that was initiated by former Kaba
Group in 2007. Two divestments took place, one being the sale of our low-performing business Dorma
Beschlagtechnik. This was followed in September 2017 by the sale of Chinese company GMT, due tothe existing business portfolio and the prospects for profitability.
Further adjustments to the business portfolio include two larger acquisitions. We acquired Australiancompany Kilargo in July 2017 to strengthen our market position in the Pacific region. In the samemonth, we acquired Skyfold, a Canadian producer of automated vertical partition wall systems thathas a strong position in North America.
As part of the post-merger integration activities, the relocation of standard door closer production
from Ennepetal to Singapore has been accomplished in June 2018.

102 – 11 Precautionary Principle orapproachdormakaba adheres to the precautionary principle as the foundation of sustainability. Negative effects
on the environment and health should be averted in advance to the greatest extent possible by all
employees in all business activities. dormakaba sets this out in its Group-wide Code of Conduct.

102 – 12 External initiatives

United Nations Global Compact, United Nations Guiding Principles on Business and Human Rights, ILO
Minimum Age Convention, UN Universal Declaration of Human Rights, OECD Guidelines forMultinational Enterprises, UK Modern Slavery Act 201578

dormakaba

102 – 13 Membership of associations

Sustainability Report 2017/18

GRI Content Index

dormakaba is a member of various industry associations and organizations. The focus thereby lies onorganizations concerned with door hardware, the security industry, building, locks and fittings, as wellas metal and glass hardware, with memberships varying across countries and markets. These
memberships include but are not limited to: Builders Hardware Manufacturers Association (USA),
Swissmem (Switzerland), Association of Swiss Locks and Builders Hardware Manufacturers, European
Locksmith Association, Security Industry Association (USA), The American Institute of Architects,
United States Green Building Council, Door and Hardware Federation (UK), Singapore Manufacturing
Federation, German Sustainable Building Council, Construction Specifiers Institute (USA), Glassassociation of North America, Canadian Security Association, American Association of Automatic Door
Manufacturers, China Construction Metal Structure Association, Hong Kong Fire Protection
Association, Japan Lock Manufacturer’s Association, Japan Security Systems Association, National
Fire & Civil Emergency Preparedness Council (Singapore), Architectural Door Hardware Association(Australia).

Strategy
102 – 14 Statement from senior decisionmaker

CEO Video Statement

Ethics and integrity
102 – 16 Values, principles, standards, andnorms of behavior

Our Code of Conduct outlines our values, principles, standards and norms of behavior.

Governance
102 – 18 Governance structure

Board of Directors

Stakeholder engagement
102 – 40 List of stakeholder groups

About this report

102 – 41 Collective bargaining
agreements

Facts and Figures - People (Type of Employment)

102 – 42 Identifying and selecting
stakeholders

Stakeholder Dialogue
Stakeholder Dialogue

102 – 43 Approach to stakeholder
engagement

Creating dialogue through a Group-wide employee survey
Supplier Assessment

102 – 44 Key topics and concerns raised

Supplier Assessment - Evaluation of the management approach
Creating dialogue through a Group-wide employee survey

Reporting practice
102 – 45 Entities included in the
consolidated financial statements

Legal Structure

102 – 46 Defining report content andtopic Boundaries

Materiality - Impact Assessment; dormakaba interactive Materiality Matrix 2017 – 2021

102 – 47 List of material topics

dormakaba interactive Materiality Matrix 2017 – 2021

102 – 48 Restatements of information

No such restatements

102 – 49 Changes in reportingAn additional 4 sites are reporting in the 2017/18 financial year.
The materiality reassessment has resulted in changes in material topics.

102 – 50 Reporting period

About this report

102 – 51 Date of most recent report

01.09.2017

102 – 52 Reporting cycle

Annual

102 – 53 Contact point for questions
regarding the reportsustainability@dormakaba.com

102 – 54 Claims of reporting inaccordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards: Core option

102 – 55 GRI content index

GRI Content Index

102 – 56 External assurance

An external assurance for the Sustainability Report 2017/18 was not performed.
The compensation to the Board of Directors and the Executive Committee as well as
the financial statements were audited by an external auditor.

GRI 200 Economic
GRI Standard

Disclosure

GRI 103: Management Approach 2016

Anti-corruption

103 – 1 Explanation of the material topic and its
Boundary

Materiality Matrix

103 – 2 The management approach and its
components

Anti-corruption

103 – 3 Evaluation of the management approach

Anti-corruption

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GRI Content Index

GRI 205: Anti-corruption 2016

205 – 3 Confirmed incidents of corruption andactions taken

There were no confirmed incidents of corruption
in the 2017/18 financial year, including any related
to employees or business partners. There havebeen no public legal cases regarding corruption
brought against the organization or its employees
during the reporting period.

GRI 103: Management Approach 2016

Anti-competitive Behavior

103 – 1 Explanation of the material topic and its
Boundary

Materiality Matrix

103 – 2 The management approach and its
components

Anti-competitive Behavior

103 – 3 Evaluation of the management approach

Anti-competitive Behavior

GRI 206: Anti-competitive Behavior 2016
206 – 1 Legal actions for anti-competitive behavior,anti-trust, and monopoly practices

There were no legal actions pending or completed
for anti-competitive behavior, anti-trust andmonopoly practices in the 2017/18 financial year.

GRI 300 Environment
GRI Standard

Disclosure

GRI 103: Management Approach 2016

Materials

103 – 1 Explanation of the material topic and its
Boundary

Materiality Matrix

103 – 2 The management approach and its
components

Materials

103 – 3 Evaluation of the management approach

Materials

GRI 301: Materials 2016
301 – 1 Materials used by weight or volume

Facts and figures - Environment

GRI 103: Management Approach 2016
103 – 1 Explanation of the material topic and its
Boundary

Materiality Matrix

103 – 2 The management approach and its
components

Energy & Emissions

103 – 3 Evaluation of the management approach

Environmental Management - Evaluation ofApproach

EnergyGRI 302: Energy 2016
302 – 1 Energy consumption within theorganization

Facts and figures - Environment

GRI 103: Management Approach 2016

Water

103 – 1 Explanation of the material topic and its
Boundary

Materiality Matrix

103 – 2 The management approach and its
components

Water, Effluents and Waste

103 – 3 Evaluation of the management approach

Environmental Management - Evaluation ofApproach

GRI 303: Water 2016
303 – 1 Water withdrawal by source

Facts and figures - Environment

GRI 103: Management Approach 2016

Emissions

103 – 1 Explanation of the material topic and its
Boundary

Materiality Matrix

103 – 2 The management approach and its
components

Energy & Emissions

103 – 3 Evaluation of the management approach

Environmental Management - Evaluation ofApproach

GRI 305: Emissions 2016
305 – 1 Direct (Scope 1) GHG emissions

Facts and figures - Environment

305 – 2 Energy indirect (Scope 2) GHG emissions

Facts and figures - Environment

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GRI Content Index

GRI 103: Management Approach 2016

Effluents and Waste

103 – 1 Explanation of the material topic and its
Boundary

Materiality Matrix

103 – 2 The management approach and its
components

Water, Effluents and Waste

103 – 3 Evaluation of the management approach

Environmental Management - Evaluation ofApproach

GRI 306: Effluents and Waste 2016
306 – 2 Waste by type and disposal method

Facts and figures - Environment

GRI 103: Management Approach 2016
103 – 1 Explanation of the material topic and its
Boundary

Materiality Matrix

103 – 2 The management approach and its
components

Environmental Compliance

103 – 3 Evaluation of the management approach

Environmental Management - Evaluation ofApproach

GRI 307: Environmental Compliance 2016

Environmental Compliance

307 – 1 Non-compliance with environmental laws
and regulations

In the 2017/18 financial year, dormakaba was
subject to CHF 6,215 in fines due to noncompliance with environmental laws andregulations pertaining to two locations. In one
case this was due to administrative errors on theside of the company. In the other location, fines
were imposed due to a wastewater spill after thesite was hit by a typhoon. A new waste ironresidue capture place was constructed, with aditch diversion and a catchment for collecting any
leaking oil in future. There is anti-seepage
treatment on the ground. A further fine was given
for operating a painting line without the required
environmental impact assessment andenvironmental protection equipment. Since theincident, the issue has been corrected and thecompany has received qualified environmental
impact assessment reports.

GRI 103: Management Approach 2016
103 – 1 Explanation of the material topic and its
Boundary

Materiality Matrix

103 – 2 The management approach and its
components

Supplier Environmental Assessement

103 – 3 Evaluation of the management approach

Supplier Environmental Assessement

GRI 308: Supplier Environmental Assessment 2016

Supplier Environmental Assessment

308 – 2 Negative environmental impacts in the
supply chain and actions taken

10% of dormakaba’s procurement spend related
to the sustainability target group was assessed
for environmental impacts in the 2017/18 financial
year. 16% were found to be unsatisfactory in theirsustainability performance. These suppliers, forexample, did not manage energy or water
consumption nor maintained Environmental
Management Systems. For none of these suppliers
identified have there been improvements agreed
upon as a result of assessment nor any
contractual termination. A supplier development
program is currently being developed.

GRI 400 Social
GRI Standard

Disclosure

GRI 103: Management Approach 2016

Employment

103 – 1 Explanation of the material topic and its
Boundary

Materiality Matrix

103 – 2 The management approach and its
components

Employment

103 – 3 Evaluation of the management approach

Employment

GRI 401: Employment 201681

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401 – 1 New employee hires and employee turnover

GRI Content Index

Facts and Figures - People

GRI 103: Management Approach 2016

Occupational Health and Safety

103 – 1 Explanation of the material topic and its
Boundary

Materiality Matrix

103 – 2 The management approach and its
components

Occupational Health and Safety

103 – 3 Evaluation of the management approach

Occupational Health and Safety

GRI 403: Occupational Health and Safety 2016

403 – 2 Types of injury and rates of injury,
occupational diseases, lost days, andabsenteeism, and number of work-related
fatalities

In financial year 2017/18, 260 occupational injury
cases were registered (2.3 per 100 full-time
employees), compared to 309 in the previous
reporting year. Regionally, occupational injury
cases were reported as followed: 13 in Switzerland(3.6), 59 in Germany (2.2), 44 in the rest of EMEA
(2.2), 97 (3.6) in the Americas, and 47 (1.4) in AsiaPacific. No fatalities as a result of work-related
injuries in the financial year 2017/18.

GRI 103: Management Approach 2016
103 – 1 Explanation of the material topic and its
Boundary

Materiality Matrix

103 – 2 The management approach and its
components

Training and Education

103 – 3 Evaluation of the management approach

Training and Education

GRI 404: Training and Education 2016

Training and Education

404 – 1 Average hours of training per year per
employee

Currently the approximately 11,000 dormakaba
employees with computer access are able toparticipate in the dormakaba elearning platform.
This represents 63% of the dormakaba employeebase. Of these, 26% (2,807 employees) havecompleted at least one online module. The average
training time of these employees is 1.7 hours. In the
future, dormakaba will further promote the use ofelearning and also consider access options for blue
collar employees, e.g. dedicated rooms or
multimedia terminals for online learning. Tracking
of classroom training hours has taken place on a
local level. For instance, the average training time
per employee per year in the general sales
workforce is 5 working days in India (AS APAC). In
Suzhou, average classroom trainings for shop floor
employees are 14 hours per year per employee.
Office employees average 16 hours per year. The
subsidiary TLHM Co. Ltd. in China North Asia
shows training time as 13 hours per employee per
year. Taishan employees have an average training
time of 1.5 hours per employee per year. In the
Pacific region, service technicians undergo between
8 and 12 hours of training per year, whereas sales
representatives undergo between 4 and 16 hours
training per year. Approximately 2 hours of training
per employee per year and 24 hours of training per
manager per year are offered in Swiss andAustrian sites. Belgium provided an average
training time of 17 hours per employee in the2017/18 financial year. In Italy, the Key Systems
facility offers an average of 12 hours of training forevery employee. In India, business unit Key Systems
has an average annual training of 12 – 16 hours per
employee (including apprentices and contractors).
In the Modernfold facility, production supervisors
receive approximately 16 hours of training per year.
Office and management employees have at least
8 hours of training in class, on-the-job or elearning. In the coming years, the coverage of thisdata will be improved.

GRI 103: Management Approach 2016

Freedom of Association andCollective Bargaining

103 – 1 Explanation of the material topic and its
Boundary

Materiality Matrix

103 – 2 The management approach and its
components

Freedom of Association and Collective Bargaining

103 – 3 Evaluation of the management approach

Freedom of Association and Collective Bargaining

GRI 407: Freedom of Association and Collective Bargaining 201682

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407 – 1 Operations and suppliers in which the rightto freedom of association and collective
bargaining may be at risk

GRI Content Index

The sustainability impact assessment revealed
China, Malaysia, the UAE and the USA as highest
risk in the value chain and within operations.

GRI 103: Management Approach 2016

Human Rights Assessment

103 – 1 Explanation of the material topic and its
Boundary

Materiality Matrix

103 – 2 The management approach and its
components

Human Rights Assessment

103 – 3 Evaluation of the management approach

Human Rights Assessment

GRI 412: Human Rights Assessment 2016
412 – 1 Operations that have been subject tohuman rights reviews or impact assessments

An analysis of human rights risk countries, sectors
and industries across the whole Group and thevalue chain was an integral part of the latest
materiality assessment.

GRI 103: Management Approach 2016
103 – 1 Explanation of the material topic and its
Boundary

Materiality Matrix

103 – 2 The management approach and its
components

Supplier Social Assessment

103 – 3 Evaluation of the management approach

Supplier Social Assessment

GRI 414: Supplier Social Assessment 2016

Supplier Social Assessment

414 – 2 Negative social impacts in the supply chain
and actions taken

10% of dormakaba’s procurement spend related tothe sustainability target group was assessed forenvironmental impacts in the 2017/18 financial
year. 16% were found to be unsatisfactory in theirsustainability performance. These suppliers, forexample, did not offer anonymous grievancemechanisms to their employees nor respect theright to freedom of association. For none of these
suppliers identified have there been improvements
agreed upon as a result of assessment nor any
contractual termination, as supplier development
programs are currently being developed.

GRI 103: Management Approach 2016
103 – 1 Explanation of the material topic and its
Boundary

Materiality Matrix

103 – 2 The management approach and its
components

Customer Health and Safety

103 – 3 Evaluation of the management approach

Customer Health and Safety

GRI 416: Customer Health and Safety 2016

Customer Health and Safety

416 – 2 Incidents of non-compliance concerning thehealth and safety impacts of products andservices

There was one incident of non-complianceresulting in a warning letter from the Federal
Communications Commission (FCC) in the USA.
The product in question was a legacy product froma recent acquisition to dormakaba, which had beencertified for Europe but not the USA. Corrective
actions were implemented immediately. In
addition, all products related to the acquisition
were revisited, tested and certified to showcompliance to the FCC. There were no further
incidents reported.

GRI 103: Management Approach 2016

Customer Privacy

103 – 1 Explanation of the material topic and its
Boundary

Materiality Matrix

103 – 2 The management approach and its
components

Customer Privacy

103 – 3 Evaluation of the management approach

Customer Privacy

GRI 418: Customer Privacy 2016
418 – 1 Substantiated complaints concerning
breaches of customer privacy and losses ofcustomer data

There have been no reported incidents nor
substantiated complaints concerning breached ofcustomer privacy or losses of customer data within
the 2017/18 financial year.

83