Sustainability Report
Transition to a new chapter of development

2019
In this report you’ll find:CEO’s statement

3

A new chapter of development

4

Our culture and purpose

8

Governance & strategy

11

Compliance15

Sustainable solutions

18

Sustainable operations

21

Sustainable partnerships

31

CEO’sstatement

A new chapter
of development

Our culture andpurposeGovernance& strategy

Compliance

Sustainable
solutionsSustainable
operations

Sustainable
partnerships

2

About this report
This is Nidec Global Appliance’s 2019 Simplified Sustainability Report. In July 2019, Embraco was
acquired by Nidec Global Appliance, a division of Nidec Corporation. Since then, several organizationalchanges took place, and the next pages are reflecting the new chapter of this enhanced organization.

For purposes of context and transparency, reporting was conducted as follows:

•
•
•
•

CEO’s Statement (p. 3)
A new chapter of development (p. 4)
Our Culture and Purpose (p. 8)
Governance & Strategy (p. 11)

Information updated until July/2020, after the consolidation of Nidec
Global Appliance division. In these chapters, information about thetransition process and its impacts on the organization will be madeavailable.

Material topics performance (from page 15 to 36)
Consolidated results from January 1st to December 31st, 2019 withdata referring only to compressors and cooling solutions production
units, which were formerly Embraco’s plants.

Communication on Progress 2019

CEO’sstatement

A new chapter
of development

Our culture andpurposeGovernance& strategy

Compliance

Sustainable
solutionsSustainable
operations

Sustainable
partnerships

3

Statement by the CEO
As society is increasingly relying on business fromdifferent segments to use its powers of change insolving major global challenges, Nidec Global
Appliance keeps its focus on where it believes tohave the greatest potential to transform lives for the
better which is by giving life to essential appliancesthat offer well-being.
In this sense, our sustainability strategy aims tobuild sustainable partnerships and operations thatenable the delivery of sustainable solutions for ourcustomers. At this aspect, when it comes to ourrefrigeration portfolio, energy efficiency andminiaturization are determinant concepts on thejourney of reducing the consumption of natural
resources. Combined to it, there is a deep
commitment to the use of natural refrigerants in aset of products adapted for climate-friendly
alternatives with lower global warming impact.

In the next pages, you will have the chance tobetter understand how we are acting in the fields
we can make a difference in. Notice that, at thisedition, we are still covering in detail only therefrigeration business since the Embraco’s
acquisition by Nidec Corporation was completed
in July 2019. For the next report, I hope to havethe chance to share with you how the otherbusiness units from Nidec Global Appliance arealso following the United Nations (UN) Global
Compact principles and contributing to the 17
Sustainable Development Goals.
Have a good reading!

Sincerely,
Valter Taranzano
CEO
Nidec Global Appliance

We believe that the collective efforts of ourworkforce - that start in the hands of our Researchand Development experts to then pass throughOperations and support functions - may result insignificant changes today and broader positive
impacts not only to the future of our business but
also to our customers and partners as well associety by the creation of shared value
opportunities.

Communication on Progress 2019

CEO’sstatement

A new chapter
of development

Our culture andpurposeGovernance& strategy

Compliance

Sustainable
solutionsSustainable
operations

Sustainable
partnerships

4

A new chapter
of development

Communication on Progress 2019

CEO’sstatement

A new chapter
of development

Our culture andpurposeGovernance& strategy

Compliance

Sustainable
solutionsSustainable
operations

Sustainable
partnerships

5

In 2019, Embraco was acquired by Nidec Global Appliance, a division of Nidec Corporation – global leader in manufacturing small
precision motors for a wide variety of applications, headquartered in Japan. This movement strengthened Nidec Global Appliance's
market position and broadened its presence worldwide, taking the company to a new chapter of growth.

Embraco has become a portfolio brand within Nidec Global Appliance's structure. This enhanced Nidec Global Appliance, whichbegan merging existing synergies among brands and products for home and commercial applications, including cooling solutions,motors for washing machines, dryers and dishwashers, as well as components for heating, ventilation, air-conditioning andrefrigeration systems (HVAC).
Considering that the acquisition took place in the middle of the year, for this edition, the Sustainability Report will highlight theresults and achievements of compressors and cooling solutions production plants focused on manufacturing Embraco’s products.

Nidec Global Appliance’s Timeline
2017

2014

• First compressor business is acquired• Reynosa plant integrated into the
Global Appliance division• Qingdao Wet is integrated into
the Global Appliance division

2010• Acquisition of ACC's household motors business(Appliances Components Companies)

2020• Incorporation of HVAC

• Acquisition of Delta’s (AU) compressors product line
• Launch of the 2025 strategy

2016

2019

• Acquisition of ANA IMEP,
manufacturing plant
located in Romania• Acquisition of Embraco• New logo, brand architecture
and brand portfolio

Communication on Progress 2019

CEO’sstatement

A new chapter
of development

Our culture andpurposeGovernance& strategy

Compliance

Sustainable
solutionsSustainable
operations

Sustainable
partnerships

6

Brand Architecture
and Product Portfolio
Nidec Global Appliance’s focus is to deliver a comprehensive portfolio with highstandards of quality, reliability, and energy efficiency, generating innovation that

anticipates trends in the home and commercial appliances industries.

Home Appliances

Commercial Appliances

Solutions for Refrigerators,

Compressors and condensing

Washing Machines,

Units for Refrigerators andDishwashers and Dryers

Cooling Systems

HVAC

Motors and Components for
HVAC and Refrigeration Systems,

To better serve its customers, Nidec Global Appliance manufactures andcommercializes the following brands:

Communication on Progress 2019

CEO’sstatement

A new chapter
of development

Our culture andpurposeGovernance& strategy

Compliance

Sustainable
solutionsSustainable
operations

Nidec Global Appliance’s footprint
Nidec Global Appliance has an annual
production capacity of approximately 65 million
units of motors and compressors, distributed
among a pool of 14 manufacturing plants.

Duluth (USA)
Sales OfficeSaint Louis (USA)R&D, Sales OfficeSustainable
partnerships

7

14 manufacturing plants

4 sales offices

9 R&D centers

1 business center

Fürstenfeld (Austria)
R&D, Manufacturing

Commercial presence in80+ countries

Spišská Nová Ves (Slovakia)
R&D, Manufacturing

Košice (Slovakia)
Global Business Support center

Monterrey (Mexico)
R&D, Manufacturing

Monterrey (Mexico)

Moscow (Russia)

Manufacturing

Sales Office

Reynosa (Mexico)
Manufacturing

Beijing (China)
R&D, Manufacturing

Qingdao (China)
Manufacturing, R&D

Qingdao (China)

Joinville (Brazil)
Global Headquarters, R&D, ManufacturingPitești (Romania)
Manufacturing

Pirabeiraba (Brazil)

Electronics Manufacturing, R&D

Changzhou (China)
Manufacturing

Foundry

Itaiópolis (Brazil)
Manufacturing

Pordenone (Italy)
Global Headquarters, R&D, Manufacturing

Chieri (Italy)
Sales OfficeCommunication on Progress 2019

CEO’sstatement

A new chapter
of development

Our culture andpurposeGovernance& strategy

Compliance

Sustainable
solutionsSustainable
operations

Sustainable
partnerships

8

Our culture and purpose

Communication on Progress 2019

CEO’sstatement

A new chapter
of development

Our culture andpurposeGovernance& strategy

Compliance

Sustainable
solutionsSustainable
operations

Sustainable
partnerships

9

During this transition, Nidec Global Appliance’s organizational governance structure went through a period of changes,
guided by the company's long-term vision, commitment to sustainable performance, and responsibility for its impact on society.

Launched in 2020, the company’s identity is organized as follows:

Our purpose: Why we exist
To give life to essential appliances, turning people’s day-to-day lives into
healthier and more comfortable experiences.

Our vision: What we aim for
To be the leading partner in Home & Commercial Appliances and Air
Conditioning industries by 2025.

Communication on Progress 2019

CEO’sstatement

A new chapter
of development

Our culture andpurposeGovernance& strategy

Compliance

Sustainable
solutionsSustainable
operations

Sustainable
partnerships

10

A global team of experts dedicated to solve
customer’s most challenging expectations.
Our Culture: How we do it everyday• Challenge cost & grow for the future• Collaborate without barriers• Act with agility & correctness• Innovate ourselves for differentiation• Be active learners & developers

Communication on Progress 2019

CEO’sstatement

A new chapter
of development

Our culture andpurposeGovernance& strategy

Compliance

Sustainable
solutionsSustainable
operations

Sustainable
partnerships

11

Governance & strategy

Communication on Progress 2019

CEO’sstatement

A new chapter
of development

Our culture andpurposeGovernance& strategy

Compliance

Sustainable
solutionsSustainable
operations

Sustainable
partnerships

12

Nidec Global Appliance’s governance structure is composedby the CEO and his staff. This sphere is responsible formaking global decisions and is organized as follows:

Valter Taranzano
CEO

Nidec Corporation

ACIM
Appliance, Commercial& Industrial Motors

GA

CFO

Innovation Advisor

HR & Comm

Business Planning

Legal

DigitalTransformation

President

President

President

HOME APPLIANCECOMMERCIAL APPLIANCE

AIR CONDITIONING

Global ApplianceCentral R&D

Procurement

Supply Chain

Operations

Communication on Progress 2019

CEO’sstatement

A new chapter
of development

Our culture andpurposeGovernance& strategy

Compliance

Sustainable
solutionsSustainable
operations

Sustainable
partnerships

13

The Nidec Group’s corporate vision is to stay competitive
as a socially desirable business even 100 years from now.

Inspired by this, Nidec Global Appliance aims to be the leading partner in the Home & Commercial Appliances and Air
Conditioning industries by 2025. Given this perspective, the evolution of corporate sustainability is one of the critical successfactors that adds value to the organization's tangible and intangible assets, as well as contributes to society’s new
development chapter.

At Nidec Global Appliance, sustainability management is carried out based on the definition of material
aspects, which are organized into four axes:

Compliance | Sustainable Solutions | Sustainable Operations | Sustainable Partnerships.
Execution of this strategy is integrated with the company's management programs and strategic projects,
monitoring performance indicators accordingly, to support their continuous improvement. In addition tocomplying with legislation and regulatory aspects, Nidec Global Appliance also adopts voluntary commitments
to guide its business: the 10 Principles of the Global Compact and the Sustainable Development Goals.

Global Compact sets out integrity principles forbusinesses and encourages alignment ofcorporate
policiesandpracticeswithinternationally agreed upon values and standards.
The Sustainable Development Goals point out thechallenges that need to be overcome to build asustainable society.

Communication on Progress 2019

CEO’sstatement

A new chapter
of development

Our culture andpurposeGovernance& strategy

Compliance

Sustainable
solutionsSustainable
operations

Sustainable
partnerships

14

The company understands that, based on its core business, it has the potential to contribute effectively to the following global challenges:

Nidec GA Indicator

2019 Results / Improvements

Leadership training

100% Leaders trained

Energy Efficiency

Launch of VESG, a compressor 3.5% more efficient

Active Patents

97 patents registered

Raw material

41% reduction in size and 66% in weight, in 10 years

Natural Refrigerants

5% increase in compressors sold with natural refrigerants

Employee’s training

Hours of training

85% increase in hours per employee

SafetyNumber of accidents

More than 30% reduction

Energy consumption

5% reduction per compressor

Waste generation
Water withdrawal

5% reduction per compressor
2% increase per compressor

Emissions

7% reduction per compressor

Sustainable Procurement

Supplier code of conduct

100% suppliers aligned

Quality for Customers

Customer Perception Index

92%

Private Social Investment

Social Activities

100% of sites develop local activities with community

Axes / Strategy Dimensions

Material aspects

Compliance

Ethics and Compliance

Sustainable
SolutionsInnovation

Sustainable
Operations
Environment

Sustainable
Partnerships

SDG

Communication on Progress 2019

CEO’sstatement

A new chapter
of development

Our culture andpurposeGovernance& strategy

Compliance

Sustainable
solutionsSustainable
operations

Sustainable
partnerships

15

Compliance

Global Compact Principles

1, 2, 3, 4, 5, 6, 7 and 10

Communication on Progress 2019

CEO’sstatement

A new chapter
of development

Our culture andpurposeGovernance& strategy

Compliance

Sustainable
solutionsSustainable
operations

Sustainable
partnerships

16

Committed to doing business in a fair, ethical, and transparent manner, Nidec Global Appliance
has integrated strict compliance standards during the transition period, after acquiring Embraco.
Guidelines and commitments to achieve theRoyal Road of Business• Compliance Code of Conduct.

• Employees Ethics Handbook.
•2019

11 Global Compliance Policies (GCP) including topics suchmain progress:

as Competition, Antitrust, Diversity, Equal Opportunities andRespect to Laws in the Workplace, Environment, Health and
Safety.

• Integration with Nidec’s Group directives.

• Signatory of the Global Compact since 2004.

• Review of Compliance Code of Conduct, Employees Ethics Handbook
and GCP, launched in 2020.
• Review of Compliance Reporting System (hotline channel) to Nidec GA.
• During 2019, 33 complaints and inquiries were received
already been investigated and closed.

94% have

Communication on Progress 2019

CEO’sstatement

A new chapter
of development

Our culture andpurposeGovernance& strategy

Compliance

Sustainable
solutionsSustainable
operations

Sustainable
partnerships

17

Nidec Global Appliance has an Ethics Committee, with representatives from different
areas and the Legal department, which is responsible for training employees, updating
policies, and managing Hotline Channel inquiries.

HotlineChannelNidec Global Appliance Hotline Channel is available for anyone –from outside or within the company – who has a complaint or
inquiry about the company or its employees' behavior.
Reports are handled in strict confidence and persons registering
an issue can remain anonymous, protected against retaliation.

The complete phone list and an online form can be found atwww.nidecgaethicshotline.ethicspoint.com.

2017

2018

2019

Number of employees

1004

368

167

% of leaders trained

75%

100%

100%

100%

100%

100%

ETHICS TRAINING

ONLINE COMPLIANCE TRAINING% of administrative employees

Communication on Progress 2019

A new chapter
of development

CEO’sstatement

Our culture andpurposeGovernance& strategy

Compliance

Sustainable
solutionsSustainable
operations

Sustainable
partnerships

18

Sustainable Solutions

Global Compact Principle
9

Communication on Progress 2019

CEO’sstatement

A new chapter
of development

Our culture andpurposeGovernance& strategy

Compliance

Sustainable
solutionsSustainable
operations

Sustainable
partnerships

19

For Nidec Global Appliance, focusing on innovation is the way to deliver solutions that improve people’s wellbeing around the world, providing the best technology for essential appliances that are present in everyday life.

Input

Analysis

Output• Customer needs• Strategic priorities• Sustainable• Consumer• Feasibility analysis

solutionsbehavior• Co-creation with

• Innovation trends

partners (customers,• Environmental

suppliers, universities)

aspects• Regulatory aspects

The innovation process at Nidec Global

Innovation awarded

Appliance is supported by solid foundations:

Most innovative company in Southern

500 researchers worldwide
120 partner universities

Brazil, according to the Champions of
Innovation award, carried out by Amanhã

Magazine. The company also won in theElectromechanical category.

9 R&D centers
In the Nuevo León Competitiveness• Over 1400 active patents• More than 4000 patents registered throughout its

Award, awarded by the Government of theState of Nuevo León, Mexico, it won in the
Companies category, large size.

history, of which 97 in 2019
• Investment of 3 to 4% of annual net revenue in R&D
processes

Communication on Progress 2019

A new chapter
of development

CEO’sstatement

Our culture andpurposeGovernance& strategy

Compliance

Sustainable
solutionsSustainable
operations

Sustainable
partnerships

20

Nidec Global Appliance understands its responsibility to lead the market in developing solutions
that reduce energy consumption, emissions, and the use of materials. For this reason, within its
compressors and cooling solutions production sites, the company works strongly on three drivers
for sustainable products:

Energy Efficiency
In a world of increasing energy demands, reducing
consumption is essential. Variable speed compressors,a technology pioneered by the Embraco brand, save up
to 40% energy, while reducing noise, vibration andimproving food preservation.

2019 main achievement:

Natural Refrigerants
Gradual reduction in hydrofluorocarbons (HFCs) in the
refrigeration sector represents an important contribution
towards international efforts to mitigate climate change. The
investment in compressors that use refrigerants with low
atmospheric impact started with Embraco, 25 years ago,and continues to be one of Nidec Global Appliance's
product development guidelines.

2019 achievements:

VESG launch• Up to 3.5% more efficient than VESF, the mostefficient model until now.
• 45% more efficient than a conventional
compressor.

• 49% of compressors sold uses naturalrefrigerants (increase of 5% comparing to2018)• 100% of our plants can produce naturalrefrigerant compressors.

Miniaturization
Delivering products with the same or better efficiency
while using fewer materials is essential to reduce
negative impacts on planetary boundaries. Smaller andlighter compressors reduce the consumption of raw
materials during production, support intelligent design
and benefit logistics and transportation.

Achievements in the last 10 years:• 41% reduction in size
• 66% reduction in weight

For compressors with the same application.

208mm
10.6kg

VEG

FMS

2010

2020
123mm
<3.6kgCommunication on Progress 2019

CEO’sstatement

A new chapter
of development

Our culture andpurposeGovernance& strategy

Compliance

Sustainable
solutionsSustainable
operations

Sustainable
partnerships

21

Sustainable Operations

Global Compact Principles

1, 3, 6, 7 and 8

Communication on Progress 2019

CEO’sstatement

A new chapter
of development

Our culture andpurposeGovernance& strategy

Compliance

Sustainable
solutionsSustainable
operations

Sustainable
partnerships

22

Operating safely, while respecting people and the environment is acommitment of Nidec Global Appliance which is grounded in World Class
Manufacturing (WCM) methodology.

THE GOAL

ZERO

Accidents
Breakdowns
Defects
Inventory
Waste
Scrap

For the past seven years, WCM has been the main system to achieve zero breakdowns,
waste, defects, and inventory inside compressors and cooling solutions production units.
Divided in 10 different pillars, the methodology offers tools and procedures that allow thecompany to achieve world class standards in its production sites.

International
Standards
certifications

2014

2017

•

•

Kick-off in Slovakia
and China (compressors

Bronze in Brazil

and electronics)

2013

2015

2019

•
•

•

•

Adoption of WCM
Kick-off in Brazil

Kick-off in Mexico

Plants are audited
semiannually to assess
their adherence andprogress to WCM
requirements.

Bronze in Slovakia,
Mexico and China(compressors andelectronics)

ISO 14001

ISO 9001OHSAS 18001

IECQ QC 080.000

IATF 16949

Environmental
Management System

Quality Management
SystemOccupational Safety
and HealthManagement System

Management ofharmful products tothe environment

Focused on theautomotive industry(electronics)

Communication on Progress 2019

CEO’sstatement

A new chapter
of development

Our culture andpurposeCompliance

Governance& strategy

Sustainable
solutionsSustainable
operations

Sustainable
partnerships

23

Our people
One of Nidec Global Appliance's main assets is its team’s high level of expertise. The diversityof backgrounds and competences, as well as the profound knowledge shared among its R&D
engineers, are key to maintain the company in the vanguard of the industry. With a robust set ofprocesses combined with highly skilled employees, Nidec Global Appliance creates a favorable
environment for innovation to happen every day.

Employees’ profile
As of December 31st, 2019, Nidec Global Appliance’s compressors and cooling solutions units
had 9731 employees. The percentage of women remained the same (29%) in comparison to2018.
EMPLOYEES BY
CATEGORY

2017

2018

2019

Executives (CEO, VicePresidents, Directors, Sr.
Managers)

112

105

100

83%

17%

Leaders

384

358

193

75%

25%

Administrative, operations,and others

10017

9510

9438

Employees by plant
31st December 2019
BrazilChina
Italy
MexicoSlovakia
United States
Russia

0,4%
24,0%

47,9%
12,2%
0,4%
15,0%

14%

71%

29%

0,1%

25%

Employees by age
Under 30 years
Between 30 and 50 years
Over 50 years
61%

TOTAL

10513

9973

9731

71%

29%

Note: This data is referring only to compressors and cooling solutions units. As Nidec
Global Appliance has global and integrated management, part of the company's
leadership is located in other plants and were not included in the calculation.

Communication on Progress 2019

CEO’sstatement

A new chapter
of development

Our culture andpurposeGovernance& strategy

Compliance

Sustainable
solutionsSustainable
operations

Sustainable
partnerships

Respect with labor legislation

24

2017

Currently, 93% of Nidec Global Appliance employees are under collective agreements.
PERCENTAGE OF EMPLOYEES COVERED BY COLLECTIVE AGREEMENTS

2018

2019

AVERAGE OF EMPLOYEE TRAINING
HOURS, BY GENDER AND CATEGORY

Executives (CEO, Vice- Presidents,
Directors, Sr. Managers)

8.7

14.7

6.1

19.1

9.9

13.5

Leaders

4.6

7.5

8.3

14.3

36.2

38.5

2017

2018

2019

Brazil – Compressors, Foundry
and Itaiópolis

100%

100%

100%

Administrative, operations, and others

19

10.7

9.6

9.8

19.3

13.2

China (compressors)

95.4%

99.4%

100%

Average by gender

18.3

10.7

9.5

10

19.5

13.7

Italy

100%

100%

100%

Mexico

72%

73%

73%

Slovakia – Compressors andGlobal Business Support

100%

100%

100%

UNIT

China (electronics), USA andRussiaAccording to local legislation, these units do not require a collective
agreement.

Average of Employee Training hours
17.84

16.03
+85%
9.65

Employee’s training
Through development programs such as Frontline Leaders, Preparing the Future andWCM Engineers Development, Nidec Global Appliance offers training for all levels of
the organization. In 2019, an average of 17.8 hours of training was provided to
employees, an increase of 85% compared to 2018.

2017

2018

2019

Communication on Progress 2019

CEO’sstatement

A new chapter
of development

Our culture andpurposeGovernance& strategy

Compliance

Sustainable
solutionsSustainable
operations

Sustainable
partnerships

25

Safety First
Nidec Global Appliance is committed to protecting life and providing
a safe and healthy environment for its employees. Health and Safety
management is structured based on WCM methodology, as well asinternational standards, such as ISOs and OHSAS.

The company has different spheres in its organizational
structure that are responsible for safeguarding the healthand safety of employees:

Leadership
They are the main guardians of
the employees’ health andsafety, closely watching andsupervising activities with theaim of finding opportunities toimprove performance while
guaranteeing a healthy andsafe workplace.

Global healthand safety teamLocal Health and
Safety teams(in each plant)Is
responsibleforthedevelopmentofpolicies,
procedures, training and tools.
They also seek to integrate
plants, harmonize concepts
and processes, and share bestpractices with local teams.

Ensurecustomization
andimplementation of policies andguidelines locally, in light oflocal laws and regulations.
They are also responsible formapping and mitigating local
risks
in
additiontoimplementing preventive healthand safety actions.

Communication on Progress 2019

CEO’sstatement

A new chapter
of development

Our culture andpurposeCompliance

Governance& strategy

Indicators are monitored daily, where
performance and possible deviations
are shown and based on thisinformation, corrective and preventive
actions are taken.

Sustainable
solutionsSustainable
operations

Sustainable
partnerships

As a result, in 2019 Nidec Global Appliance achieved thelowest number of accidents in the last five years:
more
than

30%

reduction compared tothe previous year.

2,5

2,32

7
1,81

2

-22%

1,5
1

6
5

6,12

4
4,81

3,71

-21%

3

2
0,5
0
2017

2018
Total Incident Rate

Regarding the rates, in 2019 there was a

22% reduction in the Total Incident Rate and
21% in the Lost Time Ratecompared to 2018.

Safety rates
2,28

26

+

Additional Health and
Safety Practices

Local committees to ensure management ofprocesses, practices, and crises

1

Global committee to exchange experiences and bestpractices among units

0

Safety Kaizens

2019
Lost Time Rate

Note 1: Total Incident Rate is measured by the total number of incidents (from First Aid to Fatality, and Ergonomic issues) in the period, multiplied by 200,000, divided
by the total worked hours in the period. Lost Time Rate is calculated by the total amount of days lost (due to Lost Time Accident), multiplied by 200,000 and divided by
the total worked hours in the period.
Note 2: In comparison to the last report, the “Occupational Disease Rate” indicator is no longer reported, as it is not used as a key metric in management. The topic
remains covered in other aspects of WCM and health and safety systems.

Daily safety dialogues at all manufacturing plants
Safety Management Audit Training (SMAT), a tool that
supports accident prevention by observing employees’
behavior
Autonomous Safety Group, to support strengthening
the safety culture

Communication on Progress 2019

CEO’sstatement

A new chapter
of development

Our culture andpurposeGovernance& strategy

Compliance

Sustainable
solutionsSustainable
operations

Sustainable
partnerships

27

Environment
Operational management, efficiency in using natural resources in addition to waste and effluent reduction are central issues in Nidec Global
Appliance's commitment to reducing its environmental impact in production processes. The company’s units encompassed in this report have an
Environmental Management System, aligned with ISO 14001 and WCM, which defines processes and guides employees’ actions with the aim of
reducing risks and negative impacts.

EnergyNidec Global Appliance continually seeks to improve the energy efficiency of its production processes, whether throughpreventive maintenance, machinery replacement, or by production facility and process improvements.
In 2019, energy consumption was 1,270,089 GJ, 1% lower than in the previous year, in absolute figures, even with the
production increase. The energy consumed to produce each compressor has been showing a downward trend, being
5% less in comparison to 2018.

Energy Intensity
FUEL COMBUSTION (GJ)

2017

2018

2019

Electric Power

900,353

814,490

831,118

Natural Gas

512,685456,710

438,971

Other*

16,370

7,909

N/A

TOTAL

1,429,406

1,279,872

1,270,089(GJ/compressors produced)
0,043
0,041

-5%

0,039

2017

2018

2019

Note: Other sources of energy, such as Liquefied Petroleum Gas (LPG), diesel and gasoline,
are no longer reported, as they represent less than 1% of total consumption.

Communication on Progress 2019

CEO’sstatement

A new chapter
of development

Our culture andpurposeGovernance& strategy

Compliance

Sustainable
solutionsSustainable
operations

Sustainable
partnerships

28

Emissions
The company's main strategy for reducing greenhouse gases (GHG) emission in
production processes is to consume less energy, related to scope 1 and 2.
Scope 1 includes direct GHG emissions from sources that belong to or are controlled
by the organization, while scope 2 measures indirect GHG emissions from energy
purchases, such as electricity.

Following WCM guidelines todecrease energy consumption

When it comes to emissions
per compressor

in 2019 it reduced
total emissions byin comparison to% 2018 (absolute figures).

electricity consumption
represents almost a
reduction in scope 2% comparing to
the previous year.

7

This result is mainly due to scope 1
emissions reduction, related to directenergy consumption.

7

Direct and indirect
greenhouse gas
emissions (t CO2eq)

Scope 1

Scope 2

Total

2017

38,84956,406

95,2552.90

2018

31,08749,31480,401

2.58

201926,043

48,77474,817

2.28

Index (kg CO2eq/Compressor)

Note: For standardization purposes, Brazilian GHG Program’s calculation tool was used, adjusting the power
generation emission factors for each country accordingly.

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Waste generation per compressor
3,75

Refuse, Reduce, Reuse, Recycle andRecover Energy – these are the 5Rs
that guide waste management at Nidec
Global Appliance. Using WCM as thefoundation, the teams focus on
production processes to achieve thezero-waste goal.

Landfilling

Recycling

2018

Total landfill rate (kg/compressor)

Non-hazardous waste

3,2
0,391

2017

5% decrease.
Type of waste

3,39

0,49

In 2019, waste generation remained
stable compared to 2018, while waste
generation per compressor showed a

Method ofdisposalCompliance

0,386

2019
Total waste rate (kg/compressor)

Hazardous waste

Incineration or
recoveryLandfilling

Recycling

Innovating in
waste recycling

Incineration or
recovery

Total

2017

15,888103,211

729

183

2,372

1,013

123,396

2018

11,95689,459

861

228

2,086

864

105,4542019

12,37788,457

989

304

2,085

1,024

105,236

Employees from Brazil were selected toparticipate in the SDG Young Innovators.
This global acceleration program, part of theUnited Nations (UN) Global Compact, isaimed at young professionals who want tosolve a business challenge and contribute toachieving the Sustainable Development
Goals (SDGs).
Along 9 months, they developed a businesscase, aligned with SDG 12 – responsible
consumption and production, to reuseproduction waste. The initiative brings
environmental benefits and cost reduction.

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Water
Water management is also guided by WCM. The methodology determines which
processes and machines are critical to be acted upon to reduce consumption.
In 2019, 17.87 liters of fresh water were withdrawn per compressor produced. This
figure represents an increase of 2% compared to 2018, due to tradeoffs inclimatization processes that used water instead of energy.
WATER WITHDRAWAL BY
SOURCE (M³)

2017

2018

2019

Groundwater

178,201

155,139

159,863

Municipal or utility water

428,446

387,867

427,244

TOTAL

606,647

543,006

587,107

221,815

191,831202,422

27

26

26

Water withdrawal per compressor
18,45

17,44

+2%

17,87

PERCENTAGE AND TOTALVOLUME OF WATERRECYCLED AND REUSED
Water recycled (m³)

Percentage reused (%)

2017

2018

2019

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Sustainable Partnerships

Global Compact Principles

1, 2, 4, 5, 8 and 10

ATMO 2019, Japan

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Nidec Global Appliance understands the interdependency between itself and customers, suppliers and communities surrounding
its factories. Therefore, the company promotes an active and positive partnership, establishing long-lasting relationships, rooted
in trust. Cooperation and co-creation are increasingly relevant to deliver positive impacts along the entire value chain.

Customers
Nidec Global Appliance aims to be
the leading partner in the homeand commercial appliance and air
conditioning industries by 2025.
To achieve this, robust, wellprepared sales and R&D teams
conduct technical visits andsurveysbasedona
codevelopment approach.
By listening to its customers, thecompany seeks to offer the mostappropriate and strategic solutions
for their needs and challenges.

Sharing knowledge
Supporting clients in their technical development andincreasing their awareness about critical issues forthe market are important measures in nurturing aclose relationship. Nidec Global Appliance offers
training sessions at trade and roadshows, for OEMs,
distributors, and retailers, as well as contractors andrefrigeration technicians.

2019 Resultssessions+190 training
and roadshows+ 4,000

trainedpeopleTopics covered:
Alternative refrigerants, system design guidance for better
performance, compressor selection guidance, training forcontrol routines of variable capacity compressors (VCC)

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Quality
The company has a Quality Management System that aims to ensure maximizing customer
satisfaction by delivering high quality products. Its policies and procedures, aligned with WCM
and ISO 9001, were designed to guarantee quality in all links of the chain, from purchasing raw
materials, to using the product, seeking to achieve the Zero Defect goal.
Since 2018, the company has adopted a global online system to manage customer
complaints, which brought more speed in solving problems and implementing
improvements related to quality.

In 2019, the Customer Perception Index had aslight decrease of 2%, achieving a score of 92%.

This means that 92% of customers are
satisfied with the products purchased
and the level of service delivered.

Customer Perception Index
91

94

92

All information regarding points to improve has
been taken into consideration and the company isworking to implement them.

Index
Target

2017

2018

2019

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Suppliers
Nidec Global Appliance’s presence around the globe requires a solid supply chain that isaligned to the standards required in the company’s Compliance Code of Conduct.

Suppliers locationby continent

2018
2019

2019

0%
2017

29%
34%
EuropaConsidering direct material suppliers,

Américas71% are in countries where Nidec Global Appliance has factories

Ásia
Oceania- Brazil, Mexico, Slovakia and China.

37%

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Respect for rules and regulations
Nidec Global Appliance believes that encouraging high standards of conduct in its
supply chain is an important part of creating a fairer market.

All of its suppliers – direct and indirect – need to be in line with the Compliance Code of
Conduct and accept the General Terms and Conditions, which include topics such as
anti-corruption; non-tolerance to discrimination; non-tolerance to slave, forced and childlabor; non-tolerance to deforestation or other environmental infractions; and compliancewith labor laws in the country of operation.

In addition, the company conducts audits at raw material and component suppliers to ensurecompliance with criteria related to quality, reliability, management of hazardous substancesand social and environmental responsibility. In 2019, 52 audits were carried out worldwide.

Hazardous Substances and Conflict Minerals
The Hazardous Substances Policy establishes strict criteria for the protection of Nidec
Global Appliance’s products and their users against substances that are notregistered, prohibited, or banned by RoHS standard and REACH, European Union
standard.
Nidec Global Appliance takes a firm stand against human rights violations stemmingfrom mineral exploitation in the Democratic Republic of Congo and adjacentcountries. To this end, it has mechanisms to prohibit its suppliers from buying fromany company mentioned in the Responsible Minerals Initiative prohibition list.

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Community

Inoveum
Educational program forhigh school students in
the region - innovativeideas for startups, withstrong cooperation
between R&D and
Innovation Center

Nidec Global Appliance's Social Responsibility actions
reflect its commitment to being an integral and active
member of the communities where it operates.

The company believes that these initiatives offer an
opportunity for dialogue, to strengthen ties ofinterdependence between the community and thebusiness in addition to contribute towards meeting theimmediate needs of people and the environment.

36

Event Bark for Life

River Alive
Volunteers participated incleaning Santa Catarina
River to remove polluting
waste and improve qualityof life

The American Cancer Society Bark for Life is anoncompetitive walk event for dogs and theirowners to raise funds and awareness for theAmerican Cancer Society's fight against cancer.

3 tons of waste and 1.7
tons of invasive plants
were collected

Bags were donated to distribute literatureand giveaways during the event

CCQ Campaigns
Donation Campaigns to help families in need in
Joinville and Itaiópolis.
5,960 items, including food, toys, andclothes

Community Cleaning
Employees go to different
areas in the community
for support and cleaning

Volunteer andDonation to Dorka
Crisis Center
Volunteers spent a lovely
day full of fun, games andlaughs with kids from
Dorka crisis center, andarranged a donation
campaign for Children’sDay

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Credits

Our culture andpurposeGovernance& strategy

Compliance

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solutionsSustainable
operations

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General coordination

Contact information

Nidec Global Appliance - Sustainability, Communication and Branding

1020 Rui Barbosa Street, PO Box 91, Zip code 89219-901
Joinville - Santa Catarina, Brazil

Reporting, indicators, and graphic design
Nexus Consultoria em Sustentabilidade

Questions and suggestions about this report can be sent to:corporate.communication@nidec-ga.com

PhotosNidec Global Appliance

Website: https://www.embraco.com/en/about-embraco/

Communication on Progress 2019