dormakaba

Sustainability
ReportFinancial Year2018/19

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Sustainability Report 2018/19

dormakaba

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Sustainability Report 2018/19

Introduction
A vital element for dormakaba to achieve the ambition to become thetrusted industry leader is to offer innovative and sustainable products,
solutions and services.
2018/19 in brief• 13,240 tonnes CO2e saved through energy efficiency projects and green electricity
purchases• 37% of purchased electricity from renewable sources• 70 suppliers assessed for sustainability management•

1 new Environmental Product Declaration published• 2,200 new initiatives launched as a result of the internal employee engagement
program “dormakaba dialogue”• A new Statement of Commitment on Human Rights developed• A third-party, publicly available whistleblowing tool launched, which enables
employees and external stakeholders to anonymously report unlawful or unethicalbehavior

Introduction

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Introduction

Sustainability Report 2018/19

dormakaba

Letter from our Chairman and CEO
Dear stakeholders
Today, shareholders, customers, employees and regulatory bodies alike expect responsible
business behavior from all companies, and we are no exception. Our ambition is to become
the trusted leader in our industry. And trust inherently entails conducting our business
responsibly. That is why sustainability is one of the two foundations of our business strategy.
We are committed to fostering sustainable development along our value chain in line with
our economic, environmental, and social responsibilities.
One key global challenge is the mitigation of, and adaptation to, climate change. This iswhere dormakaba can have a very positive influence, not just within our own operations but
also in the upstream and downstream value chain. This is why we have signed acommitment letter to the Science Based Targets initiative (SBTi) to set a science-basedGroup-wide carbon emissions reduction target in the year 2020. In the financial year
2018/19, we focused on improving our reporting coverage of carbon emissions from ouroperations, as well as on developing carbon inventories for our products.
We also take note of the increasing political discussions and regulations related to humanrights. Since committing to developing a human rights due diligence process two years ago,
we have made significant progress in the financial year 2018/19 by formalizing ourcommitment through our Statement of Commitment on Human Rights and in defining
salient issues for our company.
At the same time, we see sustainability as an important business opportunity that adds
value to our company. Green building activities are growing worldwide and are expected to
double every three years. We can contribute to greener and safer buildings with our offering.
And, by providing more sustainable products, we can meet the expectations of ourcustomers. Our employees, too, greatly value our commitment to a sustainable future. This
is why we are continuously aligning our sustainability initiatives with the UN Sustainable
Development Goals (SDGs). Many SDGs cannot be solved without corporate leadership. At
dormakaba, we see an opportunity to contribute to eight SDGs through our sustainability
initiatives.
I want to extend my thanks to all our colleagues who have contributed to our sustainability
strategy and its execution in the last year, by making the responsible choice in their everyday
actions and decisions. Making responsible choices and being transparent about our journey isabout recognizing what matters most. And what matters most is living up to the
expectations and trust our stakeholders place in our company and in our solutions.
I know I speak for the entire team when I say that we are proud of the progress we havemade on sustainability. I invite you to read more about our efforts in this sustainability
report.
Sincerely yours,

Riet Cadonau
Chairman & CEO,dormakaba

Riet Cadonau, Chairman & CEO

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About dormakaba
Worldwide presence

Our businessdormakaba makes access in life smart and secure. We are one of the leading companies in
the global security and access solutions market. With our outstanding portfolio, thecompany provides our customers with products, solutions and services for anything related
to access to buildings and rooms from a single source. dormakaba has distribution channels
and production facilities in all of the industries’ key markets and will accelerate global
expansion through a strengthened presence in Europe, the Americas and Asia Pacific.
dormakaba is a growth-oriented company with a strong anchor shareholder group that will
ensure our long-term strategy. In order to grow profitably and to sustainably create value
for all our stakeholders, dormakaba focuses on a clearly defined strategy with the following
elements:• Superior offering for needs along life cycle;• Expanded presence in markets and verticals;• Drive enterprise excellence along the value chain;• Leadership in innovation for superior customer value;• Optimized management of the business portfolio and disciplined M&A activities;• Have the right people at the right place.
These strategic pillars are based on the two foundations of sustainability and enhancing the
global brand power of dormakaba.

Introduction

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Introduction

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Sustainability Report 2018/19

Operating Model
dormakaba has divided the areas of business in which the company is globally active into
five segments. Access Solutions (AS), which comprises four segments, is structured byregion: 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 segment Key& Wall Solutions is globally positioned and consists of the business units Key Systems andMovable Walls.

Our value chain

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Our employees1 )Employees by region

Employees by contract type1)

Employees by employment typeheadcount as at 30 June 2019, without apprentices, trainees, interns and contract workers

The key performance indicators for environmental and human resources data in this report
represents 79% of all dormakaba employees as at 30 June 2019, and which are located at
the 73 sites in the reporting coverage (see Outro for a map of included sites). The total
workforce in this scope consisted of 12,523 employees, based on headcount. While themajority of our employees work full-time and on the basis of permanent contracts, 6% havepart-time engagements. Over 64% of the employees in scope are covered by collective
bargaining agreements. In addition, dormakaba developed nearly 200 apprentices, trainees
and interns, and employed over 850 contract workers at the sites in scope during thefinancial year 2018/19.

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Sustainability Report 2018/19

Strategy
dormakaba defines sustainability as one of the key success factors tobeing recognized as the trusted industry leader. That is why
sustainability is one of the two foundations of the company’s businessstrategy.
dormakaba strives to promote sustainable development along the value chain as part of oureconomic, environmental and social responsibility toward current and future generations.
We commit to an open and transparent dialogue with stakeholders to define strategies andactions based on clear goals and continuous improvements. We adhere to the precautionary
principle as the foundation of sustainability. Negative impacts on the environment andhealth should be avoided in advance to the greatest extent possible by all employees in all
business activities. This approach is set out in our Code of Conduct that outlines our values,
principles, standards and norms of behavior.

Materiality
In the financial year 2017/18, dormakaba invested in a comprehensive materiality
reassessment, aligned with our leadership practices, to identify which sustainability topics
matter most and where they matter (see full details of the materiality process in the Outro).
The results of this sustainability materiality assessment strengthen our drive to develop
efficient, environmentally favorable and socially responsible products, as well as to extend
our sustainability efforts to upstream value creation processes. The material topics are valid
for the years 2017–2021 and have been aligned to the four focus areas of our sustainability
strategy: Transparency, Process & Production, People and Products.

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Our focus areas
Transparency – We are committed to being 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’ rights 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, aswell as integrating our customers’ health and safety concerns. We aim to reduce ourcustomers’ environmental burdens by designing materially- and energy-efficient products.

Strategy & Approach

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Sustainability Report 2018/19

Strategic targets
In line with this strategic approach, dormakaba has committed to achieving sevenoverarching sustainability goals in our corporate strategy as follows:
TargetDeadline

Financial year 2018/19

Meet target submission
requirements as part ofthe commitment to the
Science Based Targets
initiative

September 2020

Scope 3 screening
complete; Scope 3 carbon
inventories in development;
79% Scope 1 and Scope 2
emissions reported (95%required)

Reduce Scope 1 and 2
carbon emissions by 5%
tCO2e (baseline 2017/18)

End of financial year
2020/21–1%

Increase the share of ISO
14001 certified production
sites to >50% (baseline
2017/18)

End of financial year
2020/2132%

All manufacturing sites
maintain health & safety
management systems
based on ISO 45001 or
OHSAS 18001

End of financial year
2021/2265%

All manufacturing sites
maintain energy
management systems
based on ISO 50001

End of financial year
2021/22

17%

Increase the revenue shareof products withenvironmental and/or
health productdeclarations to >30%

End of financial year
2020/21

13%

Operationalize a supplieraudit system based onsustainability criteria

End of financial year
2020/21

Self-assessments by 70
suppliers conducted

StatusWe are on track with several of our sustainability targets, particularly on our commitment to
the Science Based Targets initiative and in responsible procurement. However, to achieve allof our targets we will need to plan, budget and implement further activities. This is why wewill refocus our efforts and revise our sustainability governance and accountability systems
in the financial year 2019/20.

Sustainability governance
The management of our sustainability program is overseen by the Executive Committee, by
a Group-level Sustainability Working Group and by segment-level networks as detailed in
the graphic below. With the exception of the AS DACH segment, all segments haveestablished sustainability networks, outlined concrete action plans, and host regular internal
meetings to further develop segment initiatives.

Sustainability organization

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Strategy & Approach

Stakeholder dialogue and partnerships
dormakaba attaches great importance to regular contact and ongoing dialogue with our
stakeholders at both the local and global level. We consider the close involvement of our
stakeholders to be an asset in our ongoing efforts and therefore pursue a goal of creating
better mutual understanding, based on trust, to enhance our partnerships and collaboration.
In order to identify and select stakeholder groups for dialogue, we held workshops withinternal experts during the merger process of Dorma and Kaba in the financial year 2015/16.
Specific target groups were selected depending on the aims of the stakeholder engagement.
As an example, a high-level segmentation of customer stakeholder groups was validated
based on input from country managers in the frame of our annual brand tracking survey. In
another example, stakeholders for the recent Human Rights dialogues were selected basedon relevance of the job function, such as Health and Safety Managers or authors of related
policies such as the Supplier Code of Conduct.

Stakeholder

Key topics and concerns

Platforms

Grievance Mechanisms

Employees

Employment practices
and benefits,
occupational health andsafety, sustainablebusiness practices,
environmentally safe
production processes

dormakaba dialogue
survey, bilateralmeetings with local
Human Resources
representative,
employee works councils
or trade unions, safetycommittees

Reporting channels
defined in the Code of
Conduct, open-door
policies, grievancemechanisms in place aspart of collective
bargaining agreements,
meetings with tradeunion representatives

Investors

Business performanceand strategy,
responsible businesspractices, ecoproducts,
transparent reporting,as well as quantifiableobjectives

Anchor Shareholders
Events, Capital Market
Day, roadshows, analyst
conferences, bilateralmeetings, ESG ratingsquestionnaires

Interviews with Investor
Relations and membersof the Executive
Committee uponrequestArchitects,
Specifiers

Product offering,product design andquality, trustworthinessand reliability, price level,
innovation

Annual brand tracking
survey, trade shows &associations, customer
service hotlines

Customer complaint
process

Partners,
Installers,
Distributors,
Customers andEnd-users

Technical training andproduct specifications,product design andquality, trustworthinessand reliability, price level,sustainability demands
for green building
certifications

Partner Days
(conferences), in-houseproduct training, annual
brand tracking survey,
trade associations,direct e-mail requests

Customer complaint
process

Suppliers

Qualification process

Bilateral meetings,
surveys, on-site audits

3rd party whistleblowing
hotlineLocal government

Employment, health,safety andenvironmental
compliance

Bilateral meetings

Direct contact

Increasingly, customers,
partners and end-users inthe building industry aredemanding environmentallyfriendly products, giving riseto new market
opportunities. At the sametime, responsible businesspractices are demanded bylegislators and investors aswell as employees.

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Strategy & Approach

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Partnerships

External acknowledgments
dormakaba has been awarded a Silver Medal for our sustainability
management by the assessment firm EcoVadis, placing thecompany in the top 30% of all assessed companies worldwide.
Based on the EcoVadis assessment, dormakaba is in the top 20% ofcompanies rated in the assigned manufacturing industry. Our company is especially strong in
the areas of sustainable procurement (top 21%) and ethics (top 6%) among othercompanies in our industry.

dormakaba received a B score for our 2018 Carbon Disclosure
Project (CDP) report. CDP requests thousands of companies reporton climate change on behalf of over 650 investors with assets of
USD 87 trillion. The B rating reflects the strong progress dormakabashows on climate change and carbon emissions management. Our 2018 CDP score is in the
top 20% of companies in Switzerland in the assigned sector of Industrials. It is higher thanthe CDP worldwide average and the European program average (B-).

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The bigger picture
Mapping material topics to the UN Sustainable Development Goals
In 2015, the 193 countries of the United Nations General Assembly adopted the Agenda
2030, with 17 Sustainable Development Goals (SDGs) and 169 targets at its heart. These areambitious targets for people, planet and prosperity which require partnerships between
government, non-governmental organizations (NGOs), businesses and institutions of higher
learning to be able to achieve. If we are to achieve them, everyone should know them.
Because less than half of the global population has even heard of them (OECD, 2017 ),dormakaba aims to increase stakeholder awareness of the SDGs, especially within our
workforce, which we have done through our Enterprise Social Network. As a first step tocontribute to the SDGs, we have mapped our defined material topics to the targets of the
SDGs. While it is essential to achieve all 17 Global Goals, we can make a substantial
contribution to eight of the SDGs by addressing 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 of deaths and illnesses from hazardous chemicals
and air, water and soil pollution and contamination (Target 3.9).
Material Topic: Customer Health & Safety
How we are contributing
People spend more up to 90% of their time inside buildings and many indoor environments
have pollution levels two to five times higher than outdoor levels. It is therefore our
responsibility that our products do not contain hazardous materials that may harm people’s
health. We provide our customers with transparent product declarations on the materials
used, including those under the Health Product Declaration and Declare standards, as wellas those in accordance with related regulations such as REACH and RoHs. Several products
have qualified as testing for low emissions of volatile organic compounds or as “Red List
Free”. This means they are free from 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. Today, 13% of our products are coveredby a Health Product Declaration or similar standard, such as the Declare label.
We continuously work to reduce the use of hazardous materials in our production processes,
and our filter systems ensure that potentially hazardous substances are not released
externally. Activities include the substitution of solvent-based paints for water-based paints,
using web-based systems that allows facilities to easily analyze the current hazardous
materials in order to prioritize for material substitution.

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 and men to affordable and quality technical,
vocational and tertiary education, including university (Target 4.3).
By 2030, ensure that all learners acquire the knowledge and skills needed to promotesustainable development (Target 4.7).
By 2030, substantially increase the number of youth and adults who have relevant skills,
including technical and vocational skills, for employment, decent jobs and entrepreneurship(Target 4.4).
Material Topic: Training & Education
How we are contributing
We provide our employees with regular vocational training on topics such as leanmanagement, health and safety, and product offerings. We have also introduced LinkedIn
Learning with a portfolio of more than 10,000 courses covering everything from generalbusiness skills to IT skills to personal development. Additionally, we partner with local schools
and universities by offering apprenticeships and internships as well as work-study programs.
To raise awareness about sustainable development, we regularly communicate oursustainability initiatives to employees through our intranet. We have made good progress indeveloping the skills of our workforce. For example, 76% of employees now have access to,and can participate in, our Learning Management System. Of these, 60% (7,341 employees)
have completed at least one online module in the areas of information security, anti-trust, or
our Code of Conduct, for example.

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Goal 6 – Clean Water and Sanitation

Goal 6. Ensure availability and sustainable management of water and sanitation
for all
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 of freshwater to address water scarcity andsubstantially reduce the number of people suffering from water scarcity (Target 6.4).
Material Topic: Water
How we are contributing
Our electroplating processes inherently require strong controls on wastewater treatment,
because we are working with metallic ions that need to be captured, consolidated anddisposed of properly before discharging the cleaned process water back into theenvironment. Our biggest challenge is how to most effectively separate the hazardous
material and concentrate it into a metals-rich sludge, so as to minimize total generated
mass. At our production facility in Indianapolis (USA), for example, we achieved this throughvarious process improvements that included changing our nickel scrubbing equipment from a
metals-based recovery system to a water-based recovery system; redesigning the plumbing
in our clarifying tank to reduce turbulent disturbance; and improvements in our filter press
and water extraction process so that less water was trapped in our sludge cake.
Further, we have mapped our production facilities for the degree of water stress andscarcity in their communities, with a plan to focus our water reduction activities in those inareas of high-water stress. Other facilities have implemented water-use reduction projects,
which include installing closed loop cooling systems on certain equipment, where previously
the cooling water was immediately discharged. Additionally, replacing older equipment withnew efficient systems has helped to realize water use reductions.

Goal 7 – Affordable and Clean Energy

Goal 7. Ensure access to affordable, reliable, sustainable and modern energy forall
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
How we are contributing
We currently source renewable energy for 37% of the locations in the scope of this report(see map in the Outro) and we are focused on increasing our use of renewable energy as acentral component of our strategy to reduce our carbon emissions. This approach aligns withour commitment to the Science Based Targets initiative and the Paris Agreement. In thefinancial year 2018/19, energy saving initiatives were being implemented at nearly 40% of
the sites in the reporting coverage. This work included retrofitting facilities to LED lighting
systems; upgrading equipment such as air compressors, as well as milling and key bitingmachines; the optimization of heating and cooling systems (installation of rapid doors, heatrecovery, renewal of circulation pumps, radiators and valves); and the procurement as wellas on-site production of renewable electricity.

Sustainable Development Goals

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Goal 8 – Decent work and economic growth

Goal 8. Promote sustained, inclusive and sustainable economic growth, full andproductive employment and decent work for all
Protect labor rights and promote safe and secure 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 to eradicate forced labor, end modern slavery andhuman trafficking and secure the prohibition and 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
How we are contributing
We are committed to providing our nearly 16,000 employees with fair working conditions.
This entails fulfilling our duty of care for our employees in terms of healthy working
environments, fair compensation and full respect for the ILO core labor standards.
We therefore address not only the safe operation of machines, ergonomic workplaces or thehandling of hazardous substances, but also mental health issues including stress, depression
and emotional wellbeing and refrain from offering excessively low wages (i.e. wage
dumping). We are, however, also committed to further expanding our sphere of influence toour suppliers. This is why these principles are also enshrined in our Supplier Code of
Conduct and are part of our supplier risk assessments.

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 all countries taking action in accordance with
their respective capabilities, and specifically, reduce the CO2 emission per unit of value added(Target 9.4).
Material Topics: Emissions; Materials
How we are contributing
Further to our contributions to resource-use efficiencies in the production phase, which are
outlined under Goal 7, we also aim to increase the resource-efficiency of our products. An
important first step was including a sustainable life-cycle approach to product developmentin our Product Design Manual. We also invest in the development of life-cycle assessmentsof our products and currently have 25 Environmental Product Declarations (EPDs). To
supplement the existing EPDs, we have begun to create a carbon inventory for over
400 products that consume energy in their use-phase. We currently offer several productsthat bring our customers energy efficiency gains, including the SafeRoute escape routesystem, the ST FLEX Green sliding door and the FFT FLEX Green folding door.

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Goal 12 – Responsible Consumption and Production

Goal 12. Ensure sustainable consumption and production patterns
By 2020, achieve the environmentally sound management of chemicals and all wastes
throughout their life cycle, in accordance with agreed international frameworks, andsignificantly reduce their release to air, water and 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
How we are contributing
The generation of different waste streams is an inevitable consequence of our operations.
We monitor our waste by treatment method and by waste type. Approximately 76% of thewaste stream was recycled, reused or recovered (including raw materials and energy
recovery) in the financial year 2018/19. To reduce packaging waste, our Madison Heights
facility in the USA implemented new packaging which is biodegradable, backyard
compostable and water soluble. Our contributions to the environmentally soundmanagement of chemicals and hazardous materials are detailed under Goals 3 and 6.

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 and human and institutional capacity on climatechange mitigation, adaptation, impact reduction and early warning (Target 13.3).
Material Topic: Emissions
How we are contributing
In addition to the initiatives mentioned under Goal 9 and our commitment to the Science
Based Targets initiative, we have conducted a climate change vulnerability mapping
exercise, based on climate change modelling up to the year 2060. The mapping revealed that
29 dormakaba locations are vulnerable to the physical impacts of climate extremes andfuture changes in climate over the next three decades, where climate extremes are defined
as extreme weather or climate events. Six of these sites were also considered to be of higher
relevance due to the number of employees, sales volume or infrastructure values. For thesesites, we aim to develop appropriate awareness-raising materials in the near term, together
with local management.

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dormakaba

Focus Area Transparency
We are committed to being a socially responsible corporate citizen
and to upholding the principles of international conventions, laws andinternal rules and regulations. We also expect our suppliers andbusiness partners to adhere to similar standards and rules.

Fair competition
andAnti-corruption

By standing up to and rejecting anticompetitive behavior and corruption in all
forms, we enhance our stakeholders’ trust
while securing the basis for future business.

Human Rights
Assessment

Supplier
Sustainability
Assessment

We acknowledge our responsibility torespect human rights as outlined in the UN
Guiding Principles on Business and Human
Rights.

We are committed to leveraging ourpurchasing power to benefit those partners
whose values and beliefs align most closelywith ours.

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Fair competition & Anti-corruption
By standing up to and rejecting anti-competitive behavior andcorruption in all forms, we enhance the trust our stakeholders place in
us while protecting our reputation and securing the basis for futurebusiness.
Why it matters
The dormakaba mission is to make access in life smart and secure. This can only be realized
if we work together and consistently apply a legal and ethical approach in all matters. Trustand credibility are built over many years but can be lost in a single moment. In particular,
corruption and anti-competitive behavior are unfair business practices that destroy society’s
trust in the economy and business community. By standing up to and rejecting anticompetitive behavior and corruption in all forms, we enhance the trust our stakeholders
place in us while protecting our reputation and securing the basis for future business.

Key activities
dormakaba aims to be a trusted global partner and believes our customers’ interests are
best served by focusing on our company value “Customer First” and strict adherence to allapplicable laws. Illegal business practices, such as corruption, subvert the rule of law anderode trust, while anti-competitive behavior distorts markets and produces inefficiencies.
Therefore, we emphasize integrity, governance and responsible business practices, andregard fair competition as the soundest basis for our growth and corporate success. As amember of the UN Global Compact, dormakaba has committed to not only avoid bribery,
extortion and other forms of corruption, but to develop related policies and specificprograms, both internally and within our supply chain.

dormakaba Code of Conduct & Directives
dormakaba sets a clear tone from the top regarding compliance by providing guiding
documents and training to all employees. Principles of antitrust regulations, anti-corruption
and ethical business dealings, for example, are part of our Code of Conduct (CoC). The
dormakaba CoC is binding for all our employees and management. It is each employee’s
responsibility to comply with laws and internal regulations as per the CoC. The respective
manager is responsible for ensuring that employees know regulations and understandexpectations. In the course of the recruitment and onboarding process, new employees
receive and acknowledge the dormakaba CoC.
Group Compliance publishes new Directives on compliance-relevant topics and manages
internal communication of any related publications and topics. This includes, for example,
personal e-mail distribution targeted to employees who may be affected by a new Directive.
Group Compliance revised and published the Group Directive Antitrust which came into
effect during the financial year 2018/19. It replaced the previous Fair Competition Directive.
The publication was accompanied by other internal communication initiatives and supports
the global antitrust training initiative (see below section on increasing awareness).
A detailed Anti-Corruption Directive is in development, and upon approval it will be rolled out
across the company through our various internal communication channels. It will be followedby customized training for impacted employees, which may include face-to-face trainings,
webinars and eLearning sessions, or further supporting documents. The start of thisinitiative is scheduled for the financial year 2019/20.

Reporting misconduct & grievances
The CoC outlines the standard procedure for reporting grievances and/or breaches of law.
As a first step, any employee should ideally contact his or her direct manager. Subsequently,
the matter may be escalated to the local HR function, Group Legal or Group Compliance.

Transparency

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Reporting channels

dormakaba strives to create a culture where employees speak up and are encouraged toaddress concerns as outlined in the above-mentioned process. On matters of transparency,
the respective manager is encouraged to contact Group Compliance directly. Group
Compliance carefully considers all notifications received and, depending on the matter,creates an action plan or sets up a project to solve any issues. The remediation progress istracked by Group Compliance and may include direct legal advice, the involvement of
external experts, internal investigations, or the development of workshops or customized
training. If necessary, Group Legal and Group Compliance will involve the CEO and/or otherrelevant members of the Executive Committee.
Although employees are encouraged to speak up, potential whistleblowers may want to stayanonymous for various reasons. Group Compliance implemented an integrity line
(whistleblowing tool) in the financial year 2018/19, allowing dormakaba employees and third
parties (e.g. customers or suppliers) to submit notifications about potential violations oflaws and threats to our reputation. The system has been successfully tested and went live inJuly 2019. The dormakaba whistleblowing tool is available globally 24/7 and is offered invarious languages.

Identifying & addressing risks
Antitrust and corruption risks are identified top-down and bottom-up. Risks can beaddressed in the company’s risk model as part of the global risk management process whichis conducted every six months. Within our risk-evaluation process, the segments can addressrisks, including any perceived gaps within the internal organization and processes. Segment
management can also address relevant issues to Group Internal Audit during regular audit
planning and on an ad hoc basis. The Audit Committee makes use of a top-down approachby mandating audits (either by Group Internal Audit or through third-party support) with afocus on bribery and corruption matters. Triggers include hints from whistleblowers(received through anonymous letters, e-mails or further whistleblowing reports), from theorganization itself, from impressions during on-site visits, external factors, or regional risk
factors.
Regarding anti-corruption, Group Internal Audit integrates the Corruption Perceptions Index(CPI), an index developed by Transparency International as one criterion for developing its
internal audit plan. Procurement and Sales functions, as well as processes, are regularly
subjected to internal audits. In each standard audit engagement, Group Internal Audit
verifies whether the principle of segregation of duties is maintained. Furthermore, risks are
identified and addressed in the course of advising the business or in training sessions.

Increasing awareness through training activities
dormakaba aims to ensure compliance with applicable laws by strengthening awarenessthrough employee training. Enabling employees to comply with legal requirements will help
avoid breaches of laws, negative financial impact to the company and safeguard our
reputation. Group Compliance develops training models and activities, e.g. on faircompetition and anti-corruption. Group Compliance liaises with segment management

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about the training initiatives within their segments. The latter can then give feedback on the
training strategy or indicate whether training content should be adjusted based on the local
setting or local legislation.
dormakaba aims to train every employee on our Code of Conduct (CoC). In the financial
year 2018/19, the CoC training initiative which began in the previous financial year wasconcluded, with each segment having at least 92% participation rates. As the basic rules offair competition and anti-corruption are part of the CoC, almost all employees have been
introduced to these general principles. Dedicated antitrust and anti-corruption training isprovided to management and employees of relevant departments.
In the financial year 2018/19, training focused on the antitrust initiative. Group Compliancedeveloped an antitrust training concept that included eLearning and live training workshops
to increase internal awareness and knowledge. The relevant target group for antitrust
training (e.g. Sales, Procurement, General Management) was identified and then assigned
the eLearning module, which was made available in different languages. Following thecompletion of the module, participants were asked for feedback and to nominate othercolleagues to participate in the eLearning. Around 70% of the participants provided
feedback, which was used to customize the subsequent face-to-face training to eachaudience’s specific training needs.
In-depth anti-corruption and fraud training is offered upon request, however the global anticorruption training initiative will be launched shortly, once the ongoing antitrust training
initiative is completed. The target group will include management and employees from Sales
and Procurement.

Our performance
Milestones of Group Compliance’s work in the last financial year include the completion of
the initial Code of Conduct training, the rollout of the global antitrust training initiative, andthe implementation of the whistleblowing tool allowing employees to reveal misconduct
globally and anonymously, which was launched in July 2019.
With operations in over 50 countries, it is vital that dormakaba complies with all applicablelaws and regulations at the local, national and international level. Compliance with laws andregulations is a key factor for the sustainability of our business. We confirm that there wereno legal actions pending or completed for anti-competitive behavior in the financial year
2018/19. There were also no confirmed incidents of corruption in the financial year 2018/19.

OutlookIn the financial year 2019/20, dormakaba Group Compliance aims to complete the ongoing
antitrust training initiative, including through live training sessions. Group Compliance willcontinue to coordinate legal advice on antitrust and monitor the topic globally. In addition,
Group Compliance intends to launch the global anti-corruption training initiative, thereby
comprehensively addressing our two most prominent compliance topics.

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Building Trust
An interview with Michael Vorhold, dormakaba Compliance
Officerdormakaba aims to be the trusted industry leader. What is yourpersonal experience with the company’s promise to build brandvalue and trust?
In my experience, dormakaba is a company in which colleagues listen
to each other and value the opinion of others. To talk openly to eachother is – in my opinion – a question of mutual trust. Trust in thissense means working in a collaborative environment, in which thevoices of all relevant stakeholders are taken into account. It also includes the opportunity toaddress potential compliance issues to my team directly or using our integrity line, i.e.
whistleblowing tool.
What are the biggest challenges in your area right now?
We earn trust by doing what we say. This, of course, also includes complying with legal
requirements, acting according to our values and following our internal rules and regulations.
Unfortunately, we sometimes fail to act in compliance with those rules. Often this is notdone with bad intentions but merely due to unawareness. It is a big challenge for us to
publish our internal rules and regulations to targeted addressees, and to offer customized
workshops and training, in order to raise the knowledge and awareness level of ourcolleagues.
How are you addressing these challenges?
My team is working closely with the owners of Directives and Group Communications toannounce all the new internal rules and regulations. We are considering the best roll-out
strategy and also planning additional initiatives for the next financial year. When offering
workshops and training, my team pays attention to identifying the right focus areas andpresenting the information in a “non-legal” manner, in other words: we aim to talk thelanguage of our clients. We foster open discussions and offer practical advice subsequent to
the workshops.

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Human Rights Assessment
dormakaba acknowledges the responsibility to respect human rights
as outlined in the UN Guiding Principles on Business and Human Rights(UNGP).
Why it matters
In today’s ever more interconnected and globalized world, there is increasing public focus on
how companies are respecting human rights in their operations as well as through theirbusiness relationships across value chains. That means demonstrating that they are notharming the fundamental dignity and welfare of people as they go about their legitimate
work and generate the jobs, wealth and growth that benefit all communities. Human rights
are rights inherent to all human beings, irrespective of nationality, place of residence, sex,
national or ethnic origin, color, religion, language or any other status. Above all, human rights
are interrelated, interdependent and indivisible.
As a global company with highly complex supply chains, dormakaba is exposed to increased
risks of being directly or indirectly linked with human rights violations. We therefore treat
the respect of human rights as a priority and require our business partners to do the same.

Key activities
In the financial year 2016/17, dormakaba committed to the development of a Human Rights
Due Diligence (HRDD) process aligned to the United Nations Guiding Principles on Businessand Human Rights (UNGP). Our aim is to conduct HRDD throughout our business toproactively assess, identify, prevent and mitigate actual and potential adverse human rights
impacts on potentially affected rightsholders across the value chain. We also use HRDD to
identify where we can better support and promote individuals’ ability to live and exercise
their fundamental human rights.
In the financial year 2017/18, we conducted a Human Rights Due Diligence gap analysis.
Based on the results, we worked with external human rights and business experts to outline
the practical application of the UNGP within our business.
In the financial year 2018/19, we implemented a stepwise HRDD project plan, focusing on
stakeholder consultations, policy development (dormakaba Statement of Commitment on
Human Rights), human rights risk assessment including the identification of salient issues
and roadmap development, with the overall goal of developing a human rights due diligenceframework in line with international standards.

We have defined the following HRDD process and outlined it in the new Statement ofCommitment on Human Rights to ensure dormakaba will be able to effectively implement
our commitment to respect human rights:

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dormakaba

Process of Human Rights Due Diligence (HRDD)

dormakaba focused on the following areas in the financial year 2018/19:
1. Developing our policy commitment
2. Assessing actual and potential impacts
3. Integrating findings and committing to appropriate action
4. Tracking and communicating performance
5. Supporting remediation of adverse impacts by providing access to grievance

Developing our policy commitment
Our human rights commitment was formalized in the financial year 2018/19, through thedevelopment of our new Statement of Commitment on Human Rights. It was elaborated
based on the gap assessment mentioned above, stakeholder consultations and the salientissues identified (see details in the following section) and approved by our Chairman andCEO, Riet Cadonau.
In line with the “Protect, Respect, Remedy” Framework provided by the UN Guiding
Principles on Business and Human Rights (UNGP) and as outlined in the company’s
Statement of Commitment on Human Rights, dormakaba recognizes the important role thecompany has in respecting human rights. We are guided by international human rights
frameworks, which include but are not limited to the UNGPs, the Universal Declaration of
Human Rights (UDHR), the International Covenant on Civil and Political Rights, theInternational Covenant on Economic, Social and Cultural Rights, the Core Labor Conventionsof the International Labor Organization (ILO) and the OECD Guidelines for Multinational
Enterprises.
We are committed to fully respect the personal dignity, privacy and individual rights of ourcolleagues, customers, suppliers and other stakeholders. Our commitment to respect humanrights extends to all individuals throughout the value chain, and we use the relationships withco-manufacturers, independent suppliers, and other business partners to encourage andpromote the principles of the Statement of Commitment on Human Rights throughout our
network. We believe that we can influence others through leading by example and therefore
communicate proactively about our commitment.

Assessing actual and potential impacts
dormakaba does not attribute more importance to one human right over another. However,for the implementation of our human rights commitment, dormakaba prioritizes humanrights issues that are most salient to the business – identified via a formal human rights
saliency assessment conducted in the financial year 2018/19 in accordance with the UNGPs.
This included consultations with 20 key internal and external stakeholders including humanrights experts, customers and suppliers, which generated a focused list of salient humanrights issues for dormakaba and formed the basis for the company’s Statement ofCommitment on Human Rights, which came into effect in August 2019.

The commitment to humanrights is further put into
effect by the human rightsrelated sections in both thedormakaba Code of
Conduct and the Supplier
Code of Conduct, which
establish the company’s
expectations on humanrights for employees andsuppliers.

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The stakeholder consultations were focused on the potential gross risk of human rights
impacts on rightsholders, as opposed to a standard risk assessment approach, which looks
at the risk to the company. The company’s current management of human rights related
topics were not evaluated. In other words, saliency was defined based on the inherent
human rights risk, without reference to how well our company manages the topic already.
Thirteen issues appeared as most relevant, and these were further analyzed in terms of thecompany’s leverage and the potential severity of impact. Severity here is defined by thescale, scope and remediability of the potential human rights impacts on people.
dormakaba Human Rights Saliency Matrix

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Among the broader human rights issues identified, dormakaba commits to focus on thesalient human rights issues (in alphabetical order) defined below:
Salient issue

Potential human rights impacts

Illustrative example in our value chain(not exhaustive)

Child labor

Rights on protection for the child;
Right to a family life;
Right to an education

Child labor used for cobalt andmica mining.

Contributing to conflict

Right to the security of theperson;Freedom from cruel, inhuman anddegrading treatment

Sourcing raw materials fromconflict zones and therefore
indirectly financing armed
conflicts.

Customer safety

Right to health

Door not stopping during
operation injuring someone or not
opening in case of fire leading toa fatality.

Environmental issues
impacting human rights

Right to safe and clean drinking
water and sanitation;
Bauxite mine polluting water used
Right to health;by local communities for drinking,Right to an adequate standard of washing and cooking.
livingMigrant workers (forcedlabor)

Right not to be subjected toslavery, servitude or forced labor;
Right to freedom of movement

Migrant workers in plants hired
through recruitment agencies atrisk of modern slavery / bonded
labor.

Outsourced services

Right to health;
Right to enjoy just and favorable
conditions of work

Outsourced /subcontracted
employees in plants facing health& safety risks (e.g. cleaning &security staff).

Occupational health &safetyRight to health;
Right to enjoy just and favorable
conditions of work;
Right to social security, including
social insurance

Staff installing products onbehalf of dormakaba facing injury
risks: lifting heavy equipment,
unsafe construction sites, roadaccidents, etc.

Given the challenges of limited transparency in the value chain, our salient issues will beanalyzed in more details through human rights impact assessments in high-risk areas inorder to develop appropriate measures.
In prioritizing these issues, dormakaba recognizes that some groups may be at greater riskof negative human rights impacts due to their vulnerability or marginalization. We also
recognize that the evaluation of the severity of potential impacts may change and that
other issues may grow in importance over time. We will therefore regularly re-assess salientissues and human rights risks based on internal and external stakeholder feedback andexpert judgments.

Integrate findings & take appropriate action
Based on the human rights-related risks and impacts identified, dormakaba will develop
prevention and mitigation measures integrated into company operations, training programs,
policies and management systems. This will be achieved through the implementation of ahuman rights roadmap which was established in the financial year 2018/19 and approved by
the Executive Committee in the context of the HRDD process development.
dormakaba is committed to a continued dialogue with internal and external stakeholders tocontinuously improve its HRDD. Where our ability to influence potential human rights issues
is limited, we strive to enhance leverage through (industry) collaboration and partnershipwith key stakeholders, including employees, suppliers, civil society organizations andbusinesses partners to prevent or mitigate negative human rights impacts.

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Transparency

Track & communicate performancedormakaba will track the effectiveness of our actions and influence to ensure human rights
are respected in the value chain through a system with concrete targets and key
performance indicators monitoring the implementation of the human rights roadmap.
Where possible, dormakaba will strive to measure the actual impacts of our actions on thehuman rights of potentially affected rightsholders.
Respect for human rights is an integral part of our global sustainability strategy andthrough the new Statement of Commitment on Human Rights, we commit to transparently
report on the progress of our efforts in our annual sustainability report as well as throughthe annual Modern Slavery Statement to publicly account for how human rights issues are
addressed.

Remediating adverse impacts
Access to grievancedormakaba attaches great importance to an open corporate culture, where every employee
is encouraged to speak up if they become aware of compliance risks, including as relates tohuman rights, through the reporting channels outlined in the Code of Conduct. In addition,
the company ensures employees and external third parties, such as business partners or
suppliers, access to an anonymous, confidential, and safe process for investigating
grievances by means of a whistleblowing tool, which was launched in July 2019 and isoperated by an independent third party. We encourage our suppliers and business partners
to use their own effective grievance mechanisms and inform their employees that thedormakaba whistleblowing tool is available for their use. dormakaba does not retaliate or
permit retaliation against anyone who raises questions or concerns in good faith about
corporate activities. We are committed to investigating these issues thoroughly and toproviding appropriate responses and remedies.
Access to remedy
When adverse human rights impacts are uncovered due to our business activities or fromlinkages to our operations, we are committed to taking timely and transparent action to
remediate in a fair and equitable manner in line with the UNGPs. Where we find impacts
linked to our business relationships, we will use our influence to encourage suppliers andbusiness partners to respect human rights.

Our performance
As regards our approach towards human rights, our biggest achievement in the last
financial year was the development of our new Statement of Commitment on Human
Rights and the identification of salient issues, which helps us to prioritize due diligence
activities. However, the biggest challenge of limited leverage and limited transparency in the
upstream and downstream value chain remains. This is especially true at the mineral
extraction stage or in terms of improper use of our products by end-users. This is why wehave planned to conduct a Human Rights Impact Assessment in line with international
standards to collect more in-depth information on salient human rights issues in thefinancial year 2019/20.

OutlookIn the financial year 2019/20, we will focus on internal communication and awareness raisingon our salient issues and the Statement of Commitment on Human Rights, as well as theroll-out of the above-mentioned Human Rights Impact Assessment. A key focus will be tofurther assess the topic of migrant workers and the business practices of recruitment
agencies for which we currently have limited transparency. In addition, the recently approved
human rights roadmap will be communicated, and the roll-out of first actions are alsoplanned for the financial year 2019/20.

In addition, dormakaba
issues an annual Modern
Slavery Statement
pursuant to Section 54,
Part 6 of the UK Modern
Slavery Act 2015. The
statement sets out thesteps dormakaba has taken
to ensure that slavery andhuman trafficking is nottaking place in the supply
chains or any part of thebusiness.

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Gaining insight from business and human rights experts
Interview with Sibylle Baumgartner, Director & Co-Founder,
focusright ltd.
As a business and human rights expert, you accompanied
dormakaba through its development of a Human Rights Due
Diligence (HRDD) process. What is your expectation towards
companies in terms of HRDD?
Even though social topics are part of companies’ sustainability
engagements, they often receive less attention than environmental
topics because they are more difficult to quantify, and evidence is less clear. HRDD helps tomake social issues more concrete and tangible for the business and to address them more
systematically. It also helps companies to better understand the ways that environmental
issues impact people and human rights. Appropriate HRDD in line with international
standards requires Board-level commitment, the preparedness to look at the way thecompany operates from a different angle and acknowledging that the company’s
operations might impact people across the entire value chain. Creativity is needed to findinnovative approaches to tackle issues, especially when the company’s ability to influence islimited.
What were the key messages you learned through the stakeholder consultations?
Respecting human rights seems to be common sense and therefore the process was wellsupported by the stakeholders consulted. It was clear that dormakaba cannot only ask
others to comply with social and environmental standards, e.g. through the Supplier Code of
Conduct, but that the company must also look at its own operations carefully. The following
questions arose during the consultations: How can the company ensure that its commitment
to respect human rights is implemented across the Group and throughout its value chain?
What does HRDD really mean for the company? How can human rights issues be prioritized?
Which measures are already in place and how must internal processes and management
systems be adapted to reflect this commitment?
What do you see as the main challenges for dormakaba regarding human rights due
diligence?
The following three main challenges appeared while working on the HRDD process withdormakaba and the identification of salient issues for the company:
1. Adopting a human rights lens to risk management requires the company to consider the
impacts it might potentially have on people, i.e. on “rightsholders” rather than on thecompany, through its operations and across value chains. When identifying salient issues
gross risks must be considered: a human rights issue might therefore be identified as salienteven if already managed well by the company, for example, as in occupational health andsafety;2. Limited value chain transparency: complex mineral supply chains and limited directcontact with end-users lead to a limited value chain transparency. It is therefore difficult for
dormakaba to gather information on impacts that might occur both downstream andupstream the value chain;
3. Limited ability to influence: potential human rights issues were identified across the entire
value chain leading to questions about the company’s ability to influence, especially where
potential issues seem to be of systemic nature.

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Supplier Social and Environmental
Assessment
The rise of supply chain transparency legislation points to theincreasing mandate that a company must be aware of the economic,
environmental and social dimensions of its supply chain.
Why it matters
We believe truly sustainable supply chains ensure the well-being of the people andenvironments they procure from, while seeking to grow the business through ethical andlegal business practices. dormakaba is therefore committed to leveraging our purchasing
power to benefit those partners whose beliefs align most closely with ours.

Key activities
The rise of supply chain transparency legislation points to the increasing mandate that acompany must be aware of the economic, environmental and social dimensions of its supply
chain, and that it must proactively monitor and manage those dimensions. Our global supply
chain is large and complex, which can pose a challenge in this regard. Global purchasing
volumes with external vendors correspond to approximately 53% of total sales, making thecompany’s procurement strategy highly relevant to achieving our financial and sustainability
targets. The number of active suppliers is approximately 22,500. Direct material spend with
our top 100 suppliers is focused in Europe (49%), North America (27%), and Asia (22%).
The dormakaba Supplier Code of Conduct outlines our requirements with regard to humanrights, fair working conditions, environmental responsibility and business ethics, among
others. It is integrated in our online bidding system and is further included as part of new or
extended standard supplier contracts. As a result of feedback from sustainability rating
agencies, our Supplier Code of Conduct was revised in the financial year 2018/19. The revised
version now includes:• Clear reference to the ILO Forced Labor Convention & ILO Minimum Age
Convention;• Clearer definition of working hours, occupational health and safety, and freedom of
association and collective bargaining stipulations; and• Inclusion of stipulations on conflict minerals regulations and data privacy andprotection.
To ensure our suppliers contribute to social and environmental wellbeing, dormakaba
focuses on three areas:
1. Identifying supply chain risks
2. Supplier self-assessments
3. Supplier audits

Identifying supply chain risks
In the financial year 2017/18, dormakaba developed a target group for sustainability
assessment based on identified sustainability risk factors – such as country-level and thematerial content of the goods purchased. The latter refers to material compliance topics
that were included in the European Union’s REACH regulations and RoHS Directive.
Suppliers over a certain procurement threshold were taken into consideration as part of thecategorization work.
To determine sustainability risk factors on a country-level, the impact assessment andhotspot analysis we conducted in the financial year 2017/18 was used as a baseline. The
hotspot analysis identified the following sustainability topics as being of highest relevance inthe supply chain: (1) Energy and Emissions; (2) Effluents and Waste; (3) Occupational Healthand Safety; (4) Materials; (5) Training and Education; (6) Freedom of Association; (7) Human
Rights. For these high-impact topics, any supplier from countries listed as high-risk was

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included in the sustainability target group for assessment. This list will be reviewed in theregular course of future impact and materiality assessments in our sustainability
management.
Supplier categorization for sustainability assessment

Supplier self-assessments
As a further step in assessing the sustainability performance of our existing suppliers,
dormakaba has developed a sustainability self-assessment questionnaire. The survey covers
nearly 40 questions related to such issues as human rights, labor conditions, environmental
management systems and packaging. It addresses the most relevant compliance topics suchas the UK Modern Slavery Act, anti-corruption and various reporting obligations under the
Carbon Disclosure Project and the UN Global Compact. This is the third time the company
has issued the self-assessment to our suppliers. For the financial year 2018/19, we invited 123
suppliers to participant in the self-assessment, of which 70 suppliers complied (60%participation rate, representing 5% of total procurement spend).
Furthermore, we have developed a comprehensive self-assessment for all potential new
suppliers as part of the supplier qualification process. This supports the comparison ofqualified candidates and the onboarding decisions we have made to date. This general selfassessment also includes sustainability elements, such as management practice related tooccupational health and safety, social engagement and environmental management. The
self-assessment questions related to sustainability will be regularly assessed and improved
based on changes in our sustainability strategy and regulatory trends.

Supplier audits
In order to examine our suppliers’ situation on-site, we developed a standard audit
questionnaire that contains topics related to quality system management, as well assustainability. As on-site audits require immense effort and cost, we have introduced a risk
assessment process that takes into account the potential risk from specific locations,products and performance. This risk assessment results in a score ranking, indicating thefrequency of auditing required for the relevant supplier.

Our performance
In the financial year 2018/19, we conducted on-site audits for potential new suppliers which
had already passed our first “gate” as part of the supplier pre-qualification process. Out of
the 30 conducted audits we identified some quality process weaknesses but no social orenvironmental issues. These results confirmed that the self-assessment process (see section
above) had led to a pre-selection of potential new suppliers already meeting a good level ofsustainability management based on the audit criteria.
The financial year 2018/19 was the third pilot year for our sustainability self-assessment forexisting suppliers. Of the 70 self-assessment participants, 56 were identified as having
significant actual and potential negative social or environmental impacts. These impacts inthe supply chain included: lack of management systems to ensure compliance withapplicable environmental laws (5 suppliers), lack of greenhouse gas emissions reporting anddormakaba

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management (56 suppliers), lack of safe and hygienic living conditions in dormitories (2suppliers), or lack of written employment contracts with their workers (3 suppliers), among
other impacts. Improvement plans were not agreed upon yet for any of these suppliers as aresult of the assessment, nor were any business relationships terminated. An accompanying
escalation process will be the key focus in the financial year 2019/20.
Our biggest achievement was the selection of an external partner to support us in scaling up
self-assessments and supplier ratings. Discussions with potential partners reconfirmed that
our management approach – including self-assessment questionnaires, risk classifications
and feedback to affected suppliers – was a good foundation for further initiatives. This was
confirmed, once again, by the Carbon Disclosure Project, which rated dormakaba at an Alevel for our Supplier Engagement Rating in 2018.
This was an important step in addressing the biggest challenges we face in our assessments,
which are the lack of internal resources and a large supplier base spread across the globe. As
a result, we have agreed to work with a leading service provider called EcoVadis to reducerisk for a sustainable procurement. The lack of internal resources, however, remains achallenge and we did not achieve our goal of setting up an escalation process for suppliers in
the financial year 2018/19 as originally planned.

Outlook
We plan to develop the escalation process in the financial year 2019/20, with a rollout
beginning in the subsequent financial year. Additionally, we will be able to increase thenumber of supplier assessments in the short-term due to our collaboration with EcoVadis.
We plan to perform several assessment waves during the upcoming financial year including
scoring and corrective action plans where necessary for around 500 suppliers, which can bedigitally monitored, tracked and exchanged via the EcoVadis platform.

Talking with our suppliers about sustainability
Interview with Dr. Hossam Mahmoud, Commercial Director,
Gulf Extrusions Co., LLC
Gulf Extrusions has been an important supplier of aluminum profiles
in the Middle East market for dormakaba these last five years. And
your company has been a participant in a recent dormakaba
stakeholder dialogue on sustainability. What can you tell us about
the expectations from dormakaba in terms of sustainability for its
business partners, and how have these been received internally by
your company?
We have been approached about sustainability by other customers before, mainly thosefrom Europe or Canada. But these mainly focus on Supplier Codes or audits. By asking us tojoin a dialogue, dormakaba took things one step further than most. This made a good
impression. We were happy to see the interest from dormakaba – we feel that there are still
not too many customers moving in this direction. This gives us the impression that
dormakaba is ahead of the market, with a strong focus on quality. And that it is about
working together toward the common goal of environmental and social sustainability for theindustry.
What kind of trends is your company seeing on the topic of sustainability?
We have noted increasing interest from our customers for transparency, either in the formof a corporate social responsibility report or product declarations, particularly Environmental
Product Declarations. These documents are often a prerequisite for entering into tenders forbuilding projects due to new regulations from the Dubai government. New buildings in Dubai
have to meet, at a minimum, the bronze rating by LEED, or the building will not be given
permits. And the LEED certification scheme allocates credits for Environmental ProductDeclarations. Not working on the topic is no longer an option.

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dormakaba

Focus Area Process and Production
We seek to reduce the environmental impact of production andadhere to environmental laws and regulations. We strive to ensure ahealthy and safe workplace and to safeguard our customers’ rights to
privacy and security.

Environmental
Management

Occupational
Health & Safety

CustomerPrivacy

We focus on improving our management ofenvironmentally related processes andreducing our carbon emissions, energy andwater consumption.

The protection of the physical and mental
integrity and wellbeing of employees is acore responsibility of dormakaba.

As a technology-oriented company, we place
great importance on safeguarding ourcustomers’ right to privacy and security.

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Environmental Management
dormakaba seeks to reduce the environmental impact of production
and to adhere to environmental laws and regulations.
Why it matters
Every business, government and individual has a role to play in meeting the goals of the Paris
Agreement. For our part, dormakaba aims to reduce our energy consumption and related
emissions. We use the latest scientific knowledge to guide a sound management approach.
Our energy-intensive processes include melting, and aluminum and zinc die casting. We use
these materials to manufacture numerous products including hotel and high-security locks,
door closers, fittings and door handles.

Key activities
dormakaba seeks to reduce the environmental impact of production and to adhere toenvironmental laws and regulations. We focus on improving our management ofenvironmentally related processes and on monitoring and reducing our energy consumption,
carbon emissions, water consumption and effluents, as well as monitoring our waste
disposal and recycling rates.
Environmental management is embedded at both the Group and local levels of our various
production locations. Several locations have environmental officers, while others haveincorporated environmental management into their quality assurance processes.
Our environmental management covers the following aspects:
1. Energy and emissions
2. Water and effluents
3. Waste

Energy and emissions
The emission of greenhouse gases, which are generated through the use of fossil fuels, is oneof today’s biggest challenges. dormakaba has signed a commitment letter to the Science
Based Targets initiative to set a science-based, Group-wide carbon emissions reduction
target by September 2020.
The first step to 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 sites representing over 95%
of employees. As a further commitment, we have set an interim carbon emissions reduction
target of ­5% tonnes of carbon dioxide equivalent (tCO2e) by the end of the financial year
2020/21 for the reporting scope and baseline of the financial year 2017/18.
dormakaba strives to continuously reduce carbon emissions and improve the energy
efficiency of processes by reducing energy consumption and sourcing renewable forms ofenergy.
Energy consumption
Total energy consumption was over 247,000 MWh in the financial year 2018/19. Electricity
and fuels for heating or manufacturing both play a crucial role in our production processes,
constituting nearly 80% of total energy consumption. The remainder is associated with thefuel consumption of our vehicle fleet.
Many components used to create our products are manufactured in-house, and purchased
parts require further processing, both of which impact total energy demand. As a result, we
focus many of our energy saving initiatives in this area.
In the financial year 2018/19, energy saving initiatives were being implemented at nearly
40% of the sites in the reporting coverage. This work included retrofitting facilities to LED
lighting systems; upgrading equipment such as air compressors, as well as milling and key
biting machines; the optimization of heating and cooling systems (installation of rapid doors,

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heat recovery, renewal of circulation pumps, radiators and valves); and the procurement aswell as on-site production of renewable electricity.
As a result, we realized total quantifiable annual energy savings of approximately
1,650 MWh for the sites covered in the scope of this report. In addition, over 47,000 MWh(37%) of the electricity that dormakaba consumed came from renewable sources. In ourAccess Solutions (AS) EMEA segment, this share already reached over 81%. All othersegments showed a percentage of electricity consumption from renewable resources
ranging from around 25­40%.
Examples of energy reduction activities in the financial year 2018/19 included:• AS AMER paid particular attention to changing out older facility lighting with LED
systems. Some sites focused on identifying and repairing leaks in the compressed air
systems that supply the manufacturing floors. The Indianapolis facility, for example,
replaced many of the common air nozzles for the compressed air system with highefficiency nozzles.
• AS DACH focused on retrofitting the lighting in the production hall to LED, reducing
energy consumption from 165,240 kWh/a to 106,920 kWh/a, a savings of 35%.
Optimization of the air ventilation system further reduced energy consumption from74,000 kWh/a to 47,500 kWh/a, another savings of around 35%.
• The Key Systems business unit’s facility in Rocky Mount (USA) developed an energy
audit system to identify equipment and facility infrastructure that was not energy
efficient. The facility will now work to improve this equipment and infrastructure,with a target to reduce energy consumption by at least 5% to meet the set target.

in MWh2018/19

Energy consumption

247,598

Electricity

127,130

District heating

1,904

Heating fuels total

68,652

Heating oil, kerosene and diesel for backup generators

8,492

Natural gas

58,956

LPG/propane

1,204

Vehicle fuels total

49,913

Diesel

40,226

Gasoline

6,130

LPG/propane

3,430

Other vehicle fuels

126

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Energy use (in MWh)

Energy use by segment (in MWh)

Purchased electricity by segment (in MWh) ** Including own generation

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Purchased electricity by source (in %)Process & Production

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Percentage of purchased electricity from renewable sources by segment (in %) ** Including own generation

Greenhouse gas emissions
In the financial year 2018/19, our total greenhouse gas emissions (GHG) amounted to over
81,000 tCO2e. More than two thirds were emitted as a consequence of electricity
consumption, followed by heating and vehicle fuel consumption, and volatile as well asprocess gas emissions. Climate-related initiatives implemented during the reporting year
resulted in total annual savings of approximately 13,240 tCO2e (16% of our total footprint).
Due to the implementation of energy saving initiatives outlined above, we expect to reduce
our annual GHG emissions by approximately 428 tCO2e. We also worked diligently to source
renewable electricity or generate own renewable energy wherever feasible, leading to anannual emissions avoidance of approximately 12,800 tCO2e.
Examples of GHG reduction activities in the financial year 2018/19 included:• Segment Access Solutions (AS) DACH facility in Bühl (Germany) switched to green
electricity in early 2019, saving approximately 359 tCO2e per year. In Ennepetal(Germany), ongoing renovations to the heating systems (including a fuel switchfrom heating oil to natural gas) reduced their total carbon emissions by 25%.
• Our Key Systems facility based in Greater Noida (India) has installed a solar power
plant on its roof ahead of schedule, with a projected annual generation capacity of
approximately 350 MWh solar power for production processes. Similarly, our AS
APAC facility in Chennai (India) installed solar panels, reducing their carbon
emissions by 16%.
Greenhouse gas emissions by source

Scope 1 and Scope 2 emissions(in tCO2e)(in tCO2e)1,5

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1)

Sustainability Report 2018/19

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 aconsequence of the company’s activities
4) The greenhouse gas emissions associated with electricity consumption are reported according to the“market-based approach”, as defined in the Greenhouse Gas Protocol Scope 2 Guidance. Whenreported according to the “location-based approach”, the emissions totaled 95,104 tCO2e.
5) Scope 3 emissions are additionally reported in dormakaba’s submission to the Carbon Disclosure
Project (CDP).

Greenhouse gas emissions by segment(in tCO2e)

Water and effluents
Early in the financial year 2017/18, dormakaba analyzed the water stress levels for our main
manufacturing sites. The analysis revealed that one in three sites has the potential for highto extreme water stress, defined as a “water demand to supply ratio of 40% or greater forthe respective municipality”. The data stems from a geographical analysis of water stress atcatchment level by the year 2020 for dormakaba main manufacturing sites. The water
stress analysis is based on the two databases Aqueduct Water Risk Atlas by the World
Resources Institute and AQUASTAT by the Food and Agriculture Organization. Appropriate
action plans for those sites having (1.) high or extreme water stress, and (2.) high water
consumption relative to other sites are under development, as part of our human rights
roadmap in view of the right to clean water and sanitation.
Water stress level by sites

The majority of our total water consumption is municipal water used for cooling,
manufacturing processes, and for sanitation purposes. Wastewater is mainly discharged via
the local municipal sewerage system, in compliance with local requirements and treated bythird-party companies where necessary.
Segment Access Solutions (AS) AMER developed a centrally managed approach toenvironment, health and safety in the financial year 2017/18. In order to achieve reductions inwater consumption, the facilities tracked water use on a monthly basis and worked toProcess & Production

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identify feasible measures. Based on this approach, the segment launched 4 projects andfacility improvements to reduce water and effluents.
Some of those projects included installing closed loop cooling systems on certain equipment,
where previously the cooling water was immediately discharged. Additionally, replacing older
equipment with new efficient systems has helped to realize water use reductions. One
replacement of a parts washer system in Indianapolis resulted in a 76% decrease in water
use for that process, as well as energy and chemical use reductions.
Water consumption

Wastewater discharge

Waste
Next to water consumption and effluents, waste management is of key importance during
the electroplating, surface finishing and painting processes. Our 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 returned, forexample, to the suppliers of the raw materials. Certified disposal companies arecommissioned to dispose of industrial waste and chemicals, and to recycle materials.
The generation of different waste streams is an inevitable consequence of our operations.
We monitor our waste by treatment method and by waste type. Approximately 76% of thewaste stream was recycled, reused or recovered (including raw materials and energy
recovery) in financial year 2018/19. At about 57% by weight, the largest proportion of waste
is scrap metal.
Examples of waste activities in financial year 2018/19 included:• Each manufacturing facility in the Access Solutions (AS) AMER segment has set
local reduction targets for waste generation and initiated projects to achieve thesetargets. The Detroit facility implemented new packaging which is biodegradable,
backyard compostable and water soluble. The Indianapolis facility made several
wastewater treatment improvements, resulting in a near 40% decrease in thegeneration of a hazardous waste sludge. This facility also changed the sanding belts
used in the finishing/polishing operations, resulting in the elimination of a hazardous
waste stream and an increase in sanding belt life. Our other facilities have foundways to divert waste streams from a typical landfill to an outlet for recycling. This
includes the Lake Bluff facility, which has found a recycler for its oversized pallets.

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Sustainability Report 2018/19• AS APAC’s manufacturing facility in Taishan (China) invested in a treatment system
to filter out water from electroplating sludge, which is estimated to have reduced
sludge waste disposal from electroplating by 40%.
• AS DACH’s manufacturing facility in Ennepetal (Germany) separates nearly 100%of all waste across 43 waste categories. A color-coding system shows employees the
allocation of waste types for faster orientation, ie. a color-coded poster indicates
the type of waste, including information on what may and may not be disposed of,using photographs. This initiative has resulted in a high recycling percentage of over95%.
Non-hazardous waste by type

Hazardous waste(in metric tons)

by type (in metric tons)

Waste by treatment path

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Our performance
To ensure our environmental management is state-of-the-art, we refer to international
standards for environmental management (ISO 14001) and energy management (ISO
50001). All manufacturing sites that have more than 100 employees, and non-negligible
hazardous materials in use, are expected to maintain an environmental management
system based on ISO 14001. Those with production process that could potentially seriously
harm the environment are required to certify their environmental management system.
These processes include plating, anodizing, polishing, galvanizing, painting and casting.
Today, 32% of the manufacturing sites covered in this report already benefit fromenvironmental standards set forth by ISO 14001 certification. We aim to increase this total
to over 50% by the end of the financial year 2020/21 (status and target based on reporting
scope 2017/18).
In the financial year 2018/19, our global foundry plant in Melaka (Malaysia) and ourmanufacturing facility in Taiwan, for example, became ISO 14001 certified and handle
environmental issues according to the international standard.
Further, all manufacturing sites are expected to maintain an energy management system inaccordance with ISO 50001 by the end of the financial year 2021/22. Our manufacturing
facility in Chennai (India) has just received ISO 50001 certification, becoming thefourth location Group-wide to achieve this standard.

Segment

MaintainISO 14001 Environmental
Certificate Management
SystemMaintain
ISO 50001
EnergyCertificate Management
SystemAS AMER

3

AS APAC

2

8
2

1

2

AS DACH

6

6

3

3

AS EMEA

7

10

KWS

1

3

Total

19

29

4

11

% locations covered inreporting scope*

26%

40%

5%

15%

% employees covered (versus
Group-wide FTEs)

36%

41%

9%

25%

4
2

* Including offices

There have been no incidents of non-compliance with environmental laws or regulations in
the 2018/19 financial year.

Outlook
We continue to advance our global environmental activities. Access Solutions (AS) AMER willcontinue to set annual reduction targets for energy use, water use and waste generation
with a focus on implementing sustainability projects, reviewing new processes and products,
and sharing best practice throughout the segment. AS DACH will focus on using energy
meters to set warning thresholds in energy use, so that any unusual deviation in energy
consumption is reported and corrective actions are promptly taken to avoid unnecessaryenergy consumption.

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How Lean processes help reduce environmental impact
An interview with Erik Saur, dormakaba Lean and
Productivity Manager, USA
dormakaba emphasizes Lean manufacturing, which is a systematic
method of reducing waste in manufacturing processes and forpracticing continuous improvement on a daily basis. You have beenworking on Lean initiatives for 11 years at our company. Can you
give us an example of how Lean manufacturing helps us take care ofnatural resources?
Two recent Lean initiatives have helped us reduce the environmental impact of our
production processes in Indianapolis, USA. In one initiative, we focused on replacing a robotic
finishing abrasive which had to be disposed of as hazardous waste. A team of five people,
including associates from our finishing/polishing department, worked for several months totest alternative sanding belts. The evaluation involved changing robot programming, feedand speed rates, pressures and angles, as well as testing longevity of the samples.
Ultimately, we found a suitable substitute which did not have to be treated as hazardous
waste and therefore posed no risk of contamination or pollution to natural resources after
disposal. We have been able to reduce hazardous waste by 2,800 pounds annually, and theinitiative has also saved the company USD 100,000 annually.
You also had a Lean initiative that focused on wastewater treatment processes, which
resulted in 57% less sludge being generated in the plating system. What were the mostsignificant challenges in the Lean manufacturing process related to wastewater treatment?
The electroplating process inherently requires strong controls on wastewater treatment,
because we are working with metallic ions that need to be captured, consolidated anddisposed of properly before discharging the cleaned process water back into theenvironment. We pride ourselves on discharging water that is chemically purer than theincoming water we receive. Our biggest challenge in this case was how to most-effectively
separate the hazardous material and concentrate it into a metals-rich sludge, so as tominimize total generated mass. We achieved this through process improvements that
included changing our nickel scrubbing equipment from a metals-based recovery system to awater-based recovery system; redesigning the plumbing in our clarifying tank to reduceturbulent disturbance; and improvements in our filter press and water extraction process sothat less water was trapped in our sludge cake. We followed this up with a camera systemthat allows us to monitor and record, in real time, the discharge of our system to our local
city authority. Our commitment to continuous improvement in our wastewater treatment
processes has earned us two prestigious awards in the last ten years for Operator andIndustrial Plant of the Year in the State of Indiana, and we’re proud of that.
Looking forward, how can dormakaba further benefit from Lean manufacturing to recognize
other waste streams that could be eliminated? What kind of tools can a company use toachieve this?
Lean, as a philosophy for how we operate our business, teaches us to continually identify andeliminate waste. The key is to identify what activities, material and information is providing
value to our customers and what is not. Then you can devise ways to eliminate or at least
reduce the everyday waste in your operating system, whether that be excess packaging
materials received from vendors, which must then be disposed of; poor quality parts thatmust be reworked or discarded; paperwork which is looked at only once and thrown away,
etc. One of the simplest tools that is helpful for pointing out where opportunities for
improvement exist is to go to gemba, ie. the actual place where the work is performed andvalue created, observe what you see and compare it to the Seven Forms of Waste. Where
there is Correction, Overproduction, Movement, Motion, Waiting, Inventory or Processing
Waste, there is opportunity to reduce the total waste stream. Lastly, do not forget theeighth Waste – not empowering people who know their processes and have ideas to improvethem. Ask them and help them create change for the better!

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Occupational Health & Safety
Throughout our business and most especially in our manufacturing
sites worldwide, the health and safety of our employees is a priority.
Why it matters
The protection of the physical and mental integrity and wellbeing of employees is a core
responsibility of dormakaba. Accidents and work-related illnesses can be of a long-term
nature and entail costs to society and the company. We can only be successful in the longterm if we help ensure our employees remain healthy. Occupational health and safety (OHS)
addresses not only the safe operation of machines, ergonomic workplaces or the handling of
hazardous substances, but also mental health issues including stress, depression andemotional wellbeing. We strive to simultaneously create optimal working conditions for our
employees and to ensure operational efficiencies.

Key activities
Throughout our business and particularly at our manufacturing sites worldwide, the healthand safety of our employees is a priority. We want to provide a safe workplace, thoughmany injuries are still occurring in and around our facilities: including cuts, stumbles,
commuting accidents, burns in smelting operations, heavy lifting or exposure to toxic fumes
in galvanization processes. Currently, dormakaba has only location-specific systems in place
to align with national regulations and standards.
It is our goal that, by the end of financial year 2021/22, all dormakaba manufacturing sites
will maintain an occupational health and safety management system based on the rigorous
standards set forth by ISO 45001 or OHSAS 18001. 65% of our manufacturing sites havealready achieved this. These sites have designated safety personnel, safety committees,
regular safety training, and they collaborate with external partners to ensure that healthand safety standards are integrated in prevailing production processes at dormakaba.
In addition, 21% of the manufacturing sites covered in this report benefit from the ISO
45001 or OHSAS 18001 certification. Our facility in Dubai, for example, achieved ISO 45001
certification in the 2018/19 financial year. The table below gives an overview of these
indicators for all reporting sites, including offices.

Segment

OHSAS 18001
Certificate orsimilarly
certified

AS AMER

Maintain OHSManagement
System15

AS APAC

1

AS DACH

4

5
7AS EMEA

8

13

KWS

1

3

Total

14

43

% locations covered in reporting scope*

19%

59%

% employees covered (versus Group-wide FTEs)

19%

50%

*

Including offices

To ensure our employees remain healthy, dormakaba focuses on three areas:
1. Employee engagement and training
2. Reducing hazardous materials
3. Designated safety personnel and safety committees

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Employee engagement and training
To identify and address our health and safety risks, employee engagement is crucial. Our
employees are encouraged to report challenges and near misses in order to address theserisks. Access Solutions (AS) AMER, for example, regularly trains employees to report near
miss incidents that have a potential for injury or property damage in an effort to beproactive. This program helps employees recognize hazards or unsafe acts and to correct
them immediately or to ask for support to correct the issue. Near miss reports are treatedthe same as injury reports, and the respective supervisor follows up with the near miss toensure it is corrected.
Examples of our employee engagement and training in the financial year 2018/19 included:• AS AMER has 13 sites that are implementing and maintaining health and safety
management systems. Each has set up facility-specific plans and policies anddocumented them for the internal audit team to evaluate conformance with roll-out
plans. AS AMER targeted five Environmental, Health & Safety (EHS) areas of focus
for the financial year 2018/19, which included the implementation of the EHS
Management System, development of an EHS training program and training matrix,
establishment of site EHS Committees, machine guarding improvements and theimplementation of an ergonomic program.
• AS DACH in Germany plans to develop and introduce a health management system
to improve employee health and reduce the rate of sick leave. The system will be
implemented over the next few years. The first initiative to date has been an
information campaign on colds and flu.
• AS APAC in Suzhou (China) has filmed two safety videos, one for employees and theother for visitors and contractors. All employees are required to watch the video on
their first day of work, while visitors and contractors will watch it upon arrival at thefacility.

Reducing hazardous materials
The potential impact on employees’ health of working with hazardous materials is of special
concern. Hazardous materials are used as cooling lubricants, oils in machining and for the
cutting of raw materials. As well, in the electroplating area some hazardous materials areused to protect materials from corrosion. Our Access Solutions (AS) DACH segment
therefore systematically carries out hazardous material substitutions and tracks reductionsin hazardous material usage.
In the last four financial years, hazardous materials have been reduced by 80%.
Change vs.
FY 2015/16

Hazard Symbol

FY 2015/16

FY 2016/17

FY 2017/18

FY 2018/19(T+) Very toxic

–

–

–

–

n/a

(T) Toxic

5

4

2

3

–40%

(C) Corrosive

24

12

7

6

–75%

(Xn) Harmful

64

40

26

9

–86%

(Xi) Irritant

137

99

59

31

–77%

(E) Explosive

–

–

–

–

n/a

(F+) Extremely flammable

46

21

12

6

–87%

(F) Highly flammable

32

24

15

9

–72%

(O) Oxidizing

4

1

1

1

–75%

(U) Dangerous for theenvironment

45

30

13

9

–80%

No hazard symbol

262

264

320

351

34%

Examples of our activities to reduce hazardous materials in the financial year 2018/19
included:• AS AMER has implemented a new segment-wide service to house and update all
chemical Safety Data Sheets for each site. This new web-based system allows
facilities to easily analyze the current hazardous materials in order to prioritize for

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material substitution. For instance, the Indianapolis facility recently eliminated theuse of a product containing n-Propyl Bromide for cleaning metal parts.
• Additionally, the Key Systems business unit’s manufacturing facility in Rocky Mount(USA) has secondary containment areas and sumps which flow to wastewater
treatment, tank secondary self-containment, safety barrier curtains and emergency
showers and eyewash stations.
• AS APAC in Singapore made a substantial investment in a new painting system inorder to switch over from solvent-based to water-based application last year. Thischange is estimated to have reduced solvent consumption by 38% per month.

Designated safety personnel and safety committees
dormakaba employs designated safety personnel and safety committees in order to ensurethat workers comply with company policies and government regulations. These forums also
facilitate communication and cooperation between management and personnel.
Examples of our safety personnel and safety committee activities in the financial year
2018/19 include:• The Key Systems business unit’s manufacturing facility in Rocky Mount (USA) has adesignated EHS manager who is responsible for monitoring workplace activities,
developing programs and providing safety training. The manager is also responsible
for assessing hazardous and unsafe situations and developing measures to assure
personnel safety. The plant maintains a safety committee. Its aim is to reduceincidences of injury and illnesses through: education and discussion; openly
communicating with employees on safety matters; building enthusiasm for healthand safety initiatives; and by making health and safety activities, such as hazard
identification, an integral part of its operating procedures, culture and programs.
• Similarly, AS DACH has dedicated safety personnel who also ensure that, among
other duties, accidents are analyzed with a so-called STOP (Substitution, Technical,
Organizational, Personnel) system: i.e. for each accident, a report is developed,
including photographic evidence, and a process is implemented to eliminate or
reduce the likelihood of further incidence. Also, a point system is in place: points areallocated to actions that lead to the successful elimination of the injury risk.
• Each AS AMER manufacturing site has established an EHS Committee comprised ofvarious employees from different departments and shifts. These committees haveeach developed a written procedure and vision statement, and they hold regularmeetings to establish goals and action plans. Committee activities arecommunicated to all employees and committee members receive advanced EHS
training on relevant topics.

Our performance
Of our reporting sites, 19% had a health and safety management system certified to OHSAS
18001, ISO 45001 or the equivalent local standard; and 59% maintain a health and safety
management system. For these sites, health and safety training goes beyond the
mandatory requirements to include emergency and risk prevention. For example,
assessments of repetitive movement and heavy load-lifting, to prevent work-related
illnesses, take place at various sites.
In the financial year 2018/19, 259 occupational injury cases were registered (2.1 per 100 fulltime employees), compared to 260 in the previous reporting year. Regionally, occupational
injury cases were reported as follows: 7 in Switzerland (1.4), 58 in Germany (2.1), 63 in therest of Europe, Middle East and Africa (2.3), 75 (2.5) in the Americas, and 56 (1.7) in AsiaPacific. There were no fatalities as a result of work-related injuries in the financial year
2018/19.
Access Solutions (AS) AMER recorded a 29% decrease in employee injuries in the financial
year 2018/19 compared to the previous year. The segment also experienced a 40% decreasein more severe injuries, i.e. injuries that result in time away from work or light-duty
restrictions. Each manufacturing site in the AS AMER segment has addressed the five EHS
Emphasis Topics, providing a framework for many safety improvements. These include
upgrades to machine guarding, facility shipping dock upgrades, completion of ergonomic

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assessments and personal protective equipment evaluations. Future plans include additional
EHS Emphasis Topics for the coming fiscal year, standardization of safety signage andfactory floor markings, and enhanced EHS training for managers and supervisors.

Outlook
We continue our efforts to ensure our employees remain safe and healthy. For instance, weare rolling out a Health and Safety Committee in Victoria (Australia), which will incorporate
representatives from technical, operations and office staff. The Middle East & Africa region
will also roll out a corporate wellness program with on-site classes and courses that target
better mental and physical health including stress management, weight management andhealthy eating, work life balance, and smoking cessation. Additionally, our manufacturing
facility in Suzhou (China) is working on a project to switch over its painting system fromsolvent-based painting to water-based painting in the financial year 2018/19 and expects tocomplete it by the financial year 2020/21.

The value of ISO 45001 certification
An interview with Nasab Khalife, dormakaba Quality, Health,
Safety and Environment Manager, United Arab Emirates
In October 2018, our site in Dubai was recommended for ISO 45001
for its health and safety management. Why did you choose to get
certified?
We already had some processes and initiatives in place related tohealth & safety, and we wanted to put all of these actions into a single, organizedframework. That is why we opted for ISO 45001. Also, having ISO certifications for quality,
environment, and health and safety are becoming, more and more, a fundamental
requirement for new projects and tenders in Dubai.
What were the biggest challenges in the certification process? And how did you addressthese?
Our main issue was managing the shop floor space, as we have a limited area. At the sametime, we were all convinced that organizing the area was fundamental not only forcertification, but for our own safety and the safety of our employees. The certification was
an extra push and it helped us to speed up this project. With the help of our operations andproduction team, we were able to overcome this challenge.
What value do you see in the ISO 45001 certification?
Certification is a confirmation that our system is working properly in regard to health andsafety. Also, it gives us an advantage among our competitors, because we have been early
adopters of the recently released ISO 45001 standard.

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Customer Privacy
As a technology-oriented company, we place great importance on
safeguarding our customers’ rights to privacy and security.
Why it matters
Customers and business partners place a great deal of trust in dormakaba as a premium
partner for access and security solutions. dormakaba takes the protection of data andinformation very seriously. Abuse and misuse of data and information can lead to major
tangible and intangible damage due to, for example, relevant information being unavailable,
rendered unusable or incorrect, or – in the worst-case scenario – made available oraccessible to a malicious third party.

Key activities
Safeguarding our customers’ rights to data protection and privacy includes obtaining databy lawful and fair means, protecting the personal data of customers by adequate
information security safeguards and using customer data in sales responsibly. dormakaba
also considers the proliferation of new technologies and security risks because weunderstand we have a responsibility to protect sensitive information against unauthorizedaccess, loss or falsification. We place a strong focus on:• 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 to see it.
• Availability: entitled persons can access information during defined periods andfrom defined locations.
• Integrity: warranty that information is correct and complete.
The dormakaba Group Data Protection Officer, in cooperation with the Group Information
Security Manager, oversees our approach to customer privacy.

Information Security Management System at the core
To meet our security aims, senior management introduced an Information Security
Management System (ISMS) in line with best practice in the industry. Our Chief Technology
Officer (CTO) also acts as the Chief Information Security Officer (CISO) within the ISMS.
This management system is based on the international ISO/IEC standard 27001:2013, themost recognized standard in the field. Certification to the standard is planned in thefinancial year 2019/20. As outlined in the Group Directive Information Security, the goal of
the ISMS is to achieve and maintain an adequate security level by leveraging risk
management methods, continuous improvement and best practices – all adjusted to ourneeds. 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 related to information security risks. They are also
responsible for implementing the necessary security levels for dormakaba, as defined by the
Security Board in accordance to its Charter. Additionally, Information Security Coordinators(ISC) are responsible for the implementation of the ISMS within an assigned segment orGroup function, and for providing support during security audits.

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EU General Data Protection Regulation (GDPR)
In the financial years 2017/18 and 2018/19, we focused on aligning internal compliance
processes to the new EU General Data Protection Regulation (GDPR). The GDPR aims
primarily to give control 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.
We have set ourselves three objectives:• Compliance with requirements: the legal and contractual requirements for theprotection of personal data are adequately implemented and complied with at alltimes• Embedding in the organization: the protection of personal data is a centralcomponent of all projects, activities and processes in which this data is processed• Continuous improvement: guidelines, procedures, measures and structures for theprotection of personal data follow uniform principles and are continuously further
developed and adapted to changing conditions

Raising employee awarenessWe are aware that technological advances in IT security cannot always guarantee thesecurity of the entire business environment, as human behavior can affect information
security and the associated risks. Phishing and other social engineering techniques use thehuman risk factor. In 2019, the trend has continued for such attacks. Attackers are evenusing technologies such as artificial intelligence to develop their attack scenarios and makefraudulent e-mails and messages appear more real to the victim.
However, people can learn to deal with risks in a professional and smart way. Raising
employee awareness of information security risks is a continuous process that, if done
correctly, turns the root of the problem into part of the solution. With our information
security training programs, in which all our employees must participate, we not only train our
employees to recognize suspicious messages, phone calls, and other social engineering
tactics; we are also building a culture of cyber security that enables us to manage our risks ina targeted and effective way.

Our performance
The financial year 2018/19 has been marked by the development of frameworks for Cyber
Risk Management, the implementation of a highly professional security operations centerwith a focus on threat detection and response, and the mitigation of information security
risks through Group-wide security training in order to strengthen employee awareness.
As part of the GDPR implementation project, many new processes and templates wererolled out across our European facilities. We maintain records of data processing activities inaccordance with the regulation, having implemented the required procedures, such as
amending the privacy policy and declaration, and ensuring proper data processing by 3rdparties (processors). Employees are comprehensively involved, and information regarding
the central data protection management system is made available to them. The challenge
now is to anchor the data protection organization firmly across the Group.
There have been no reported incidents nor substantiated complaints concerning breaches ofcustomer privacy or losses of customer data within the financial year 2018/19.

OutlookNow that we have established the foundation of our ISMS, we plan to further expand its
capacity to achieve our long-term goals and protect our customers data and information. As
regards data protection, employees will be provided with a basic data protection eLearning
training in autumn 2019.

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Ensuring connectivity while securing data
An interview with Andreas Robbert, dormakaba Information
Security Officer
For a long time, the trend has been toward internet-based solutions
and contactless access media, which are an ideal complement totraditional mechanical keys to access rooms. The use ofsmartphones is becoming increasingly important too in applications
such as accessing hotel rooms. Clearly this brings additionalcustomer benefits, but data security and data protection are thecrucial issues. How do you see the connection of data privacy to thetwo dormakaba values Customer First and Trust?
Trust is not only our brand promise but also a key value in the area of information security
and the protection of private data. What our customers expect from us is fully in line with
our plans to operate an ISMS that will make our environment, and thus our products, safer
and more reliable. With the increasing importance of data protection within the frameworkof the GDPR, we were already on the right track. For us, data protection is not an additionalburden, but an opportunity – an opportunity to strengthen our products and our brand andthus prepare our customers for the future.
Where do you see the biggest challenges related to customer privacy? How has the General
Data Protection Regulation impacted the company’s work?
We need to prepare for GDPR-like regulations. Other countries outside the EU already havetheir own regulations or laws, which sometimes orient themselves toward the GDPR oraway from it. Therefore, it is crucial that we consider our information security and dataprotection management systems under these aspects as well, and in areas that areimportant to our business. This work is vital to ensuring we meet our compliance obligations
and to improving the awareness of our employees.
Where do you see opportunities for dormakaba in the area of technology-driven growth, e.g.
Internet of Things and connected security products?
Our mission is to make access in life smart and secure. We are confident that building
management will evolve from on-premise systems to connected, on-demand, and cloudbased solutions. This should create more efficient possibilities for the operation of buildings
and also facilitate integration with partners who complement our offerings, e.g. integrationof video, alarm or building control systems. We have created the basis for offering datacentric services such as descriptive, predictive and prescriptive services that complement ourcurrent product offering. With all of these new developments, it is very important to us that
we remain focused on data protection and information security.

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Focus Area People
We offer fair working conditions in which our employees can leverage
their strengths and build their skills. We foster an engaged workforce
where we have the right people in the right roles.

Employment

Training &Education

Freedom of
Association &Collective Bargaining

We strive to create an engaging working
environment in order to be an employer ofchoice for current and prospective
employees.

Employee development is vital tomaintaining and improving the skills of ourworkforce and the quality of our products.

dormakaba respects the right of all workers
to form and join a trade union without fearof intimidation or reprisal, in accordancewith national laws.

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dormakaba

Good practice in 2018/19

Middle East and Africa

Central & Eastern Europe, Russia, Turkey

A range of employee engagement and enablement action

We improved and standardized the salary review process byplans (totaling 119 for the entire region) were created by line

introducing common templates for Regional Management

managers for their teams as a result of the dormakaba

to review and approve individual adjustments. We also plandialogue survey.

to improve our external and internal compensation
benchmarking analysis.

Southeast Asia

Australia

We launched the Employee Handbook in Sinapore and a

In our Australian head office in Hallam, we made a long-

Leave Portal for Thailand and the Philippines. The latter is anterm investment into improving local working conditions,

online system for applying for and receiving approval for

relocating staff to a new factory, warehouse and offices.

vacation days, which had previously been managed throughThe new facilities host ergonomic workstations, aa manual leave application process. The new online portal

gymnasium, and better meeting spaces. Key & Walls

thus helps ensure that staff can claim their vacation leave

Solutions provides all new staff with information on theirbenefits.

rights to freedom of association during the job onboarding
process.

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People

China

India

Our manufacturing facility in Taishan has invested in its

As part of the emergency preparedness training program,infrastructure, including building a new dormitory andwe conduct mock drills twice a year to train all employees on

reinforcing the roof. To further promote a satisfactory

how they should react and respond during emergency

workplace, we provide a shuttle bus on the weekends,

situations like fires or any accidents in workplace. We train

summer camps on-site for employees’ children, regularon how to use the fire extinguishers and how to provide firstsports meetings and other employee activities – encouraging

aid to any victims.

employees to play an active role in the organization.

Germany

SwedenAccess Solutions DACH implemented a uniform company

We established a local dormakaba union representative

car regulation in which electric vehicles were also newly

forum to hold regular information meetings between

included. Key & Wall Solutions implemented new standards

employees and the company.

for safety shoes, introduced height-adjustable desks, anddeveloped a policy for non-smoker protection. We have also
introduced a Graduate Trainee program, as well as annual
dialogues between employees and their supervisors to
discuss performance and cooperation.

Peru

CanadaIn a newly acquired business in Peru (Key & Wall Solutions),

In Canada, we redesigned and implemented a new cost

employee representatives were put in place and information

sharing benefits program (including medical, dental,

on freedom of association was provided.

accidental death and dismemberment, life, and short- andlong-term disability) for all employees, which provides better
coverage at a better price. We are partnering with a local
school in Montreal to offer free French classes to ouremployees who are new immigrants so they cancommunicate better with their peers at work.

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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.
Why it matters
Our success is based on the performance of our employees. It is their dedication that helps
us maintain and further develop our global competitive position, which is why we have astrong people-focus in our corporate strategy. As a company with employees in over 50
countries, we must ensure an engaging working environment in order to be an employer ofchoice for current and prospective employees. We must also ensure that we treat employees
fairly and with respect in accordance with our company values, and that we provide themwith equal opportunities and fair remuneration.

Key activities
A key element of our corporate strategy is that we continuously shape a productive andequitable working environment and foster an atmosphere of trust. As we strive to have theright people in the right roles, dormakaba offers fair working conditions in which our
employees can leverage their strengths and build their skills. This leads to an engaged
workforce and helps to avoid risks, such as loss of know-how and personnel shortages. Our
approach toward our employees is governed primarily by our Code of Conduct as well as bycountry-based labor regulations and the local employee handbook, where available.
Our Human Resources (HR) management team is spread globally – in addition to Group HR,
there are HR professionals at the segment level and HR representatives at the local market
level. Group HR bundles strategic issues based on our corporate strategy and the needs of
local HR representatives, and develops best practice programs accordingly. These programs
can then be customized and implemented in each segment and region to respond to local
market requirements and conditions. The local HR representatives also develop andimplement individual initiatives and programs suited to the needs of their employees, helping
to react to the different local customers and markets as effectively as possible. We continue
to invest in technology and business applications that allow us to more effectively deliver
services to our employees, including a Group-wide HR data management system launched in
the financial year 2017/18.
Due to the local nature of employment practices, our segments and regions develop
employment policies according to local requirements. Labor regulations and business needs
have to be taken into consideration to find the best and most sensible solutions on a local
level. For the sake of transparency, however, an overview of best-practice policies across theGroup is found below.

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Policies and benefitsin %Policies(additional to Code of Conduct)% employees
covered (Groupwide FTE)

Health and Safety Policy

91%

Employee Counselling and Discipline Policy

78%

Equal Opportunity Employment Policy

68%

Non-Harrassment/Non-Discrimination Policy

67%

Equal pay for equal work Policy

65%

Drug free/Alcohol free Workplace Policy

59%

Training and Professional Development Policy

50%

Whistleblower Policy

48%

Open Door Policy

27%

Anti-bullying Policy

23%

Flexible Working/Home Office Policy

20%

Benefits

Vacation and holidays*% employees
covered (Groupwide FTE)
64%

Incentive/bonus scheme

63%

Health Insurance benefits for employees

59%

Other special leave offerings*

55%

Health Insurance benefits for employees’ families/dependants

51%

Pension plan*

48%

Financial contribution to external training

44%

New employee referral bonus

41%

Disability benefits*

30%

On-site fitness classes or gym discounts

21%

Maternity, paternity or parental leave*

16%

Measures

Provision of protective equipment to all impacted employees% of countries
implementing**
77%

Regular assessment of individual performance

72%

Provision of skills development training

64%

Training of relevant employees on health & safety

60%

Recognition program

49%

Annual medical exams

47%

Employee representatives or employee representative body (e.g. works council)

40%

Flexible organization of working time

38%

Working time reduction measures

34%

Official measures to anticipate or reduce layoffs and associated negative impacts

34%

Communication on freedom of association and the right to collective bargaining

32%

Equal pay for equal work audit

28%

Employee Assistance Program (counselling)25%

Awareness training to prevent discrimination/harassment

19%

Training on freedom of association and the right to collective bargaining

19%

Dependent care support

13%

Measures to promote gender and/or minority inclusion

13%*

Beyond legal requirements** Even if not country-wide

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dormakaba

To provide employees with an employment and working environment in which they can
thrive, dormakaba focuses our activities on the following four areas:
1. Engaging our employees
2. Creating an inclusive and diverse workforce with equal opportunities
3. Fair remuneration and benefits
4. Employee attraction and retention

Engaging our employees
High employee engagement has been proven to lead to increased productivity, decreases inworkplace 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 financial year 2017/18, dormakaba launched the first Group-wide employee survey,
called dormakaba dialogue. In January 2018, 72% of our employees in 52 countries
anonymously participated in the survey, which was available in 18 languages. The aim of thesurvey was to gauge employee engagement and performance enablement. The latter
focuses on, for example, whether employees feel they have the required skills, tools andinformation they need to do their jobs effectively.
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 the dormakaba
values. The relationships between managers and employees are in general characterized byour value and brand promise: Trust.
Employee
Engagement
Index (%)

Performance
Enablement
Index (%)

dormakaba

67

68

IBM Global Norm*

71

74

*

The IBM global norm is a composite of employee responses from 400 companies across organizations
from all industries and all geographies. It provides comparative results that represent the averagescores across all organizations in the IBM norm database running employee surveys for multiple years.

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; and• Define ways to help people work within the operating model (e.g. through training).
In the financial year 2018/19, team leaders were asked to discuss the results in dedicatedteam sessions to develop actions on leadership behavior, team topics, processes andinfrastructure as needed. HR representatives trained team leaders throughout the company
on how best to communicate the results and develop their action plans. Communicationmaterials, such as posters, stickers and PowerPoint templates for cascading results anddefining team actions were made available. Stickers with the slogan “I am a result of
dormakaba dialogue” were designed for items specifically purchased or put in place as aresult of the employee engagement survey.
On top of the global actions highlighted above, over 800 teams worldwide worked with theirsurvey results and launched more than 2,200 team actions. Actions implemented at thesegment level were communicated in a series of intranet articles and newsletters. To
measure the efficacy of the ongoing actions, a follow-up global survey is planned for
February 2020. In addition to the global employee survey, segments and regions have local
solutions to gather employee feedback and to address employee concerns and grievances.

Read also about theimportance we place on
Training & Education here.

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Examples of such activities in the financial year 2018/19 included:• In China, as part of the post-acquisition integration of the Commercial Building
Physical Access Solutions (PAS) business from Beijing-based Cambaum Group, we
conducted four rounds of engagement surveys. After seeing dips in employee
engagement, follow up actions were planned considering the actual need to engage
team members. As a result, a new training program was implemented, focusing on
company culture and branding, product knowledge, order processing and sales skills.
• Access Solutions (AS) AMER in Canada conducted two alignment workshops with
its Montreal managers to explain the business objectives and develop common ones,
with the goal of fostering teamwork and breaking down silos.
• AS EMEA in France implemented a value recognition program “les victoires dedormakaba” to recognize and applaud colleagues who bring our dormakaba values
to life in their daily work life. Employees can nominate colleagues based on theirdemonstration of a behavior related to one of our five corporate values – Customer
First, Courage, Curiosity, Performance, and Trust. The nominations are thenscreened and validated at a local senior management meeting once every month.
The winners receive a diploma, an invitation to the French senior management
meeting, and a gift voucher.

Creating an inclusive and diverse workforce with equal opportunities
Our global presence and operations in various markets mirror our commitment to promote adiverse and inclusive workforce. As our Code of Conduct states, we respect the equality ofpeople and cultures. In the financial year 2018/19, female employees represented 31% of thetotal workforce. At 54%, the majority of employees represented in this report are between
30 and 50 years of age.
The topic of diversity and equal opportunity is driven by local activities. Examples of activities
in the financial year 2018/19 included:• Key Systems business unit in Colombia has historically employed a high number of
temporary workers from external employment agencies. In order to further equal
opportunities, some of this workforce has recently been progressively included into
the same working terms and conditions as the direct employees, e.g. participation ina bonus system and entitlement to the same number of holidays. Other
employment conditions for temporary workers are substantially aligned with thoseof regular employees.
• Grupo Klaus S.A. in Peru was acquired by dormakaba in May 2018 and is still in an
integration phase within the Key Systems business unit. Prior to acquisition, thecompany was a privately-owned family business, based in Villa el-Salvador andlocated on the margin of one of the poorest areas of Lima. In order to support theinclusion of a diverse workforce, transportation for night shift workers and a welfare
program were established. A dedicated room within the business was established
for breast-feeding and nursing.
• Skyfold, which is located in Canada and is part of the Movable Walls business unit,
offers a tailored external training program to develop female leadership, and topromote gender diversity and development. The program is called “L’effet A”, where
A stands for ambition. It covers topics such as reinforcing trust, negotiation, drive,
influence and inclusion.
• In our AS APAC manufacturing facility in Taishan (China), many employees live inthe dormitory during their working shift and are not able to look after their families,
especially their children, when they are working in the plant. To ensure a safe andhealthy summer vacation for these children, Taishan founded a summer
kindergarten in the year 2017. Children 6 to 10 years of age can join the summer
campus and are taught by university students. There are various events and courses
offered to the children such as traditional culture, Wushu, music and arts.

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Executive Committee

Fair remuneration and benefits
dormakaba aims to establish fair compensation that is determined 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 areevaluated in a consistent manner across the organization. In addition, we provide locallyspecific benefits and welfare programs. As stipulated in the Group Directive Compensation,
we refrain from offering excessively low wages (i.e., wage dumping). Examples of our fair
remuneration and benefits activities in the financial year 2018/19 included:• Access Solutions (AS) EMEA in the Middle East and Africa linked annual salary
increases to performance ratings in order to better reward strong performers. The
business also launched the High-5 program, a peer-nomination recognition schemethat rewards employees for demonstrating company values. The first round of theHigh-5 program was implemented at a regional level, with 5 regional winners every
six months. A local version of the program within each country will be launched tocreate an atmosphere of local team celebration.
• Key Systems business unit recently established the welfare program “Colsubsidio” in
Bogota, Colombia. Based on employer and employee contributions, it provides avariety of flexible benefits such as vouchers for infant food and medical care,
cultural and sporting initiatives for children and families, facilitated loans for house/
car purchases. Additionally, the business unit implemented a bonus system for all
employees, based on sales and profitability targets. A private transportation service
is provided for employees living further away to facilitate transportation in a heavy
traffic environment.
• AS DACH segment has an “equal pay for equal work” policy in place, according tonational legislation in Germany, Austria and Switzerland. Further, in Switzerland, anannual salary survey is carried out by an independent third party, as is standardpractice for all companies with membership to Swissmem – the Swiss association of
mechanical and electrical engineering industries. The analysis compares all thesalaries of the member companies who use Switzerland’s general collective
agreement as a basis for employment.

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Employee attraction and retention
We provide our employees with long-term professional development opportunities in order
to attract and retain an experienced workforce. This is vital to the company’s success. Whenfilling open positions, promoting from within our own workforce is preferred.
Examples of recruiting and career opportunity activities in the financial year 2018/19
included:• Access Solutions (AS) APAC in Suzhou (China) found it challenging to recruit shop
floor workers, so they launched the Manufacturing Technical Trainee program, whichfacilitates the transition of college students into an industrial employment setting.
In the financial year 2018/19, approximately 20 trainees from college schools were
given the opportunity to participate in a six-month internship program at thedormakaba manufacturing site in Suzhou.
• AS AMER implemented more specific approaches to supporting employees whosejobs were eliminated or relocated. These approaches include a Standard Severance
Policy, which goes well beyond the legal requirements in the USA; and a standard
approach to outplacement support, which is designed to enhance the employabilityof workers who were separated from employment with dormakaba through no faultof their own.
Fluctuation

Overall fluctuation (in percentage and headcount)1)

In financial year 2018/19, a total of 1,194 employees left the company and 1,411 joined in thereporting scope. This corresponds with rates of 10% and 12%, respectively.
Employee fluctuation in Asia and the Americas was higher than in other regions. This is
attributed to restructuring measures, and relocation of manufacturing activities in theAmericas. The higher fluctuation in Asia Pacific is to be expected based on regional
workforce trends. In addition, 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 fixedterm contracts, in accordance with Chinese Labor Contract Law).

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Fluctuation by region (in percentage and headcount)1)

Fluctuation by age and gender (in percentage and headcount)1)

The workforce aged under 30 years shows higher joining and leaving rates compared to theother age groups. This is consistent across all regions, and congruent with findings from astudy on general workforce turnover trends periodically conducted by human resources
consulting firm Mercer.
1)

Fluctuation is calculated with permanent staff.

Our performance
Our most significant achievement in the financial year 2018/19 was the continued
internalization of our corporate culture and values at the local level, as well as further
engaging with our employees on our values. We have significantly improved our global
employee master database, which has allowed us to gain additional insight on the workforce
structure and related trends. We also ran an in-depth analysis of where the company stands
as an employer and developed an Employer Branding strategy. Our biggest challenge,
however, remains in that we are a highly diversified company in terms of geographic
distribution, size of sites and local challenges. This is why we have planned to further
strengthen cross-country and cross-entity collaboration and communication which will bemeasured in the next round of our employee engagement survey in early 2020.

Outlook
On a Group-wide level, we will begin implementing a uniform orientation process across all
countries and segments, and we will roll-out initial actions based on our Employer Branding
strategy. We will continue to seek feedback through the second round of our global
employee engagement survey. In addition, we will continue to constantly review ourcompensation practices.
Access Solutions (AS) DACH is rolling out an eRecruiting system in Germany to automate
and optimize the recruiting process in order to be more transparent and efficient. A similar

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roll-out is planned for the Americas and is under consideration for the Middle East andAfrica (MEA) region.
Further, a home office policy is being developed to better balance family life and career inGermany, while in China, the focus is on completing succession planning. In Singapore, an
Employee Assistance Program will be launched to support employee emotional wellbeing byoffering talks and counselling sessions. MEA is establishing a grading structure to analyze“equal pay for equal work” and to design realignment measures. The region will also
introduce a “spot recognition program” that rewards employees for going the extra milewith outstanding contributions to the business.

Creating awareness about accessibility
Our colleague Tobias Röll, an employee in the marketing
department for Entrance Systems and a disabled representative at
dormakaba, is working to create more awareness about
accessibility. He is acting as an issue influencer under the Hashtag#moveforward.
Tobias says, “People see my wheelchair, and see only my wheelchair.
They think only that I am handicapped. But I’m not – it is my environment that makes me
disabled. Anyone can make a difference, whether they can walk or not. That’s why
dormakaba and I want to point out accessibility barriers in public and private spaces. We
want to draw attention to people with disabilities. And we no longer want to accept
discrimination.” Tobias is 33, married and a proud father. He is a paraplegic and comes into
daily contact with accessibility barriers. Under #moveforward he shares his personal
experiences – for example, when he is building a house or is on holiday – on various social
media channels and takes his followers with him on his many journeys.
#TobiOnTour: buildings are tested for accessibility; videos and photos from the road#TobiTrifft: interviews with decision makers or affected people#TobiCheckt: critical product tests, exchanges with product developers and managers#TobiInformiert: information and stories from everyday life
In his posts, Tobias is hoping to raise awareness of the challenges that people withdisabilities have to master every day. He also wants to highlight how it is possible to improve
our collective quality of life through publicly accessible buildings and workplaces (bothstructurally and technically) in such a way that everyone can lead a self-determined,
independent life. This is particularly true for children, senior citizens or people with physicaldisabilities who struggle to open doors – which often represents a basic barrier to everyday
life. Free movement in public or private buildings, as well as unhindered entry and exit,
especially in the event of an emergency, is a prerequisite and often regulated by law. Thisapplies to hospitals, nursing homes, government buildings, hotels, schools, shopping centers– anywhere where building accessibility issues could inhibit free movement. “Accessibility is
no longer a technical problem. Accessibility is a question of attitude”, emphasizes Tobias.
Website: moveforward.dormakaba.com – Facebook: Moveforward Tobias Röll – Instagram:@moveforwardtobiasroell – YouTube: #moveforwardtobiasroell

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Training & Education
Employee development is vital to maintaining and improving the skillsof our workforce and the quality of our offering.
Why it matters
Today’s dynamic and globalized world requires new competencies. At the same time, manyindustries face serious skills shortages, especially in the areas of information technology anddigitalization. Employee development is vital to maintaining and improving the skills of ourworkforce and the quality of our products. This is especially true for a technology driven
company like dormakaba. We want to offer careers instead of jobs and to prepare our
employees for the fast-changing world. This improves their motivation, performance on the
job and increases their long-term employability. We will continue to invest in thedevelopment of both our employees and business leaders.

Key activities
Training and education are key to our business success. We consider a skilled workforce
integral to creating customer satisfaction and critical to driving employee engagement.
Overall, by developing our employees we aim to provide the dormakaba workforce with theskills they require to safely and efficiently perform their tasks and support their careeradvancement, while reducing employee turnover. We offer various training and development
programs for our employees. While we apply some of these programs on a consistent global
basis – particularly leadership development – others are developed at the segment or
country level to serve local needs.
Local training includes a range of vocational training and dual study programs, language andproject management courses, as well as opportunities for job rotation. With our Learning
Management System, we provide employees with worldwide access to a variety ofeLearning modules, ranging from product, sales and safety to leadership topics. Starting in
the financial year 2018/19, we have made new content available with the implementation of
LinkedIn Learning, which currently offers more than 10,000 eLearning courses. Our Learning
Management System also allows us to roll out global learning initiatives such as information
security training, compliance training and antitrust training.
To provide staff with the competencies they require to safely and efficiently perform theirtasks and to support their career advancement, dormakaba focuses on three areas:
1. Leadership development
2. Individual development and career management
3. Vocational and technical training

Leadership development
We see leadership as the ability to move oneself and others toward a common goal.
Specifically, we want our leaders and managers to act according to our company values andto apply constructive leadership styles (e.g. working toward self-set goals, developing others,
resolving conflicts constructively, cooperating) while acting as strong role models for our
employees to follow. In line with our strategy and ambition, we want the best leaders in key
positions. We are aware that this requires clarity and support for potential leadership
candidates in their development.
We have therefore compiled a Leadership Toolbox, which is a unique set of methods andtools we want our leaders to understand and apply, e.g. constructive leadership behavior,
best practice facilitation skills, and further other core leadership skills and tools. This toolbox
also serves as the basis for a globally consistent roll-out of leadership training, e.g. ourstandard manager training Leading for Success and the senior manager training Leading
Leaders. We have also established two management development programs – theAdvanced Management Program (AMP) and Talent Development Program (TDP) – todevelop future leaders of dormakaba. The AMP focuses on further strengthening theleadership and business expertise of already successful managers, while the TDP focuses on

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high-potential employees. Both programs are co-facilitated by our Executive Committee
members and supported by faculty from external business schools.
Examples of our leadership programs in the financial year 2018/19 included:• The five-day leadership training Leading for Success provides essential tools andmethods for people management, including performance management andemployee development. The training was conducted in all segments and Groupfunctions, including in countries such as Canada, China, Germany, India, Italy,
Singapore, Switzerland and the USA, with around 130 participants worldwide.
• The second class of the AMP and TDP started in the financial year 2018/19. Overall,
30 participants from 13 countries and from all segments and some Group functions
joined the two programs.
• Access Solutions (AS) EMEA continued to focus on developing its leaders through amix of classroom training and tailored coaching. Two five-day leadership training
programs, Leading Leaders and Leading for Success, were implemented. A total of
65 participants attended the courses in the financial year 2018/19. The training was
positively received, and participants found the programs to be highly relevant.

Individual development and career management
After the merger in the year 2015, dormakaba introduced a combined performance andsuccession management process known as Perform & Grow. It provides a common
framework to measure and manage performance and potential. The process also includes
the documentation of individual development activities and related development measuresand training. Further, it provides criteria to identify high potentials and creates thefoundation for systematic succession management to ensure that each leadership position
has viable successors. In the financial year 2018/19, we extended the number of users for
Perform & Grow to 840 employees and will continue with further rollouts in the coming
years.
Examples of our career management initiatives in the financial year 2018/19 included:• In some countries, Perform & Grow needs to be aligned with the local works council.
In the financial year 2018/19, Access Solutions (AS) DACH reached an agreement toinclude new participants in Perform & Grow in Germany. In Austria, AS DACH
introduced an explicit agreement with the works council to include management in
the Perform & Grow process.
• AS EMEA in Central & Eastern Europe, Russia and Turkey continued its localizedversion of Perform & Grow to identify key talent. The program includes skills
assessments, development dialogues, and individual development activities. Out of
this group, 18 people have already changed their positions or received assignments
to lead beyond their past scope of work.
• Based on the results of Perform & Grow, we have identified potential successors forour top leadership positions globally. By using this process, we have achieved twothings: we have prepared our potential successors by giving them the opportunity toparticipate in our management development programs; and, we achieved aninternal placement rate for top management positions of 68%.

Vocational and technical training
In today’s rapidly changing world of work, the importance of lifelong learning is steadily
increasing. For our business success, it is essential that our employees have the relevant skills
for their work. The training we provide covers topics such as lean management, health andsafety, and product offerings. Additionally, the increasing digitalization of our products andservices also requires new competencies – for example, on big data analytics and artificial
intelligence. To ensure that our employees have the relevant long-term skills, we continue toinvest in their vocational development and in promoting their talents.

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Examples of our vocational and technical training in the financial year 2018/19 included:• AS EMEA delivered training for pre-sales and sales teams on soft skills and productknowledge. Approximately 110 sales staff from the Central & Eastern Europe, Russia
and Turkey, Middle East & Africa and South Europe regions participated in theseclassroom training sessions. We also offer training on consultative selling, whichenables salespeople to take a consultative process, through language and approach,while interacting with customers. The aim is to establish credibility, to better
understand customer needs and to persuasively articulate value, while also handling
any complaints or objections.
• In April 2019, ten Senior Technicians from France trained in a pilot program at theTechnical Training Center in the UK. During the training sessions, technicians fromboth countries shared technical tips that will help them when they return home. This
was the beginning of a future cross-regional collaboration throughout the segment
AS EMEA, which encourages the free sharing of knowledge and the implementationof best practices.
• The Scanbalt region in Norway has been focusing on the implementation of a new
Enterprise Resource Planning (ERP) system during the financial year 2018/19. As aresult, extensive system and change management training has been conducted toprepare the entire organization for the new ERP system.

Our performance
We have made good progress on developing the skills of our workforce. For example, 76% of
employees now have access to, and can participate in, our Learning Management System(LMS). Of these, 60% (7,341 employees) have completed at least one eLearning module. We
have also rolled out LinkedIn Learning to 750 employees to provide them with a broad
portfolio of learning content. We are planning to further increase the number of licenses in
the future to reach more employees.
Three major online training initiatives have been introduced on the learning platform on the
topics of the Code of Conduct, antitrust and information security. Combined, these had over
5,350 participants, with the greatest majority taking the information security training,
followed by anti-trust and the Code of Conduct in that order. Some segments have decided
to manage and document all related webinars or local on-site workshops through the LMS
as well to help promote the system as the future single point of access to learning.
We are currently expanding the scope of Group-wide reporting on training hours per
employee and expect full reporting in the financial year 2020/21. For the financial year
2018/19, the sites already reporting this figure covered 57% of our workforce (based on
15,811 full-time equivalent employees). For these, the average number of training hours per
employee was 12 hours per year, which corresponds to our expectations.
Our segments and Group HR regularly gather and evaluate participant feedback after
training sessions in order to maintain and continually adapt the quality of our training andeducation programs. In addition, our training programs are regularly evaluated as part ofthe external audits for ISO 9001 certification. If a negative trend is identified through thisaudit process, management meets to review the root cause and determine any potentiallyrequired remediation, which may include increased communication and/or modifying thetraining program.

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OutlookIn the financial year 2019/20, Group HR will further develop the Learning Management
System, with a focus on LinkedIn Learning, compliance and information security training. In
addition, we will rollout agile methods trainings, specifically SCRUM and Scaled Agile
Framework.
To better support new employees, an onboarding program containing various online learning
modules has been developed in the financial year 2018/19. One challenge for the next
financial year is to create translated versions, e.g. at the segment or region level, whichshould ideally include additional local content.
AS AMER in the USA is taking steps to upgrade their talent initiatives within their talentmanagement Center of Expertise and to centralize this support function in Indianapolis. The
goal is to better leverage investments in technology for training and education as they
implement a tuition reimbursement program.
Key Systems business unit in the USA will be partnering with a regional university to deliver
training on the International Standard for Automotive Quality Management Systems.

Launching a collaboration with LinkedIn Learning
An interview with Nicola Weiher, dormakaba Senior
Specialist Global Functional Development, Group HR
Why have you added LinkedIn Learning courses to our global
learning platform?
Our environment has become more agile and at the same time
more digital, and this is reflected in the way people prefer to learn –anywhere, anytime, and at their own pace. Our aim is to establish a user-driven learning
culture, giving employees easy access to learning material. Therefore, we have introduced
LinkedIn Learning with 10,000+ courses covering everything from general business skills to IT
skills to personal development topics.
How can employees use LinkedIn Learning, and who can take part?
After a successful pilot with 200 people in late 2018, we now provide 750 licenses for a twoyear period to users across Group functions and the majority of the segments. Target
audiences vary from senior management to employees in all functions.
The platform supports spontaneous “micro learning” activities to solve specific problems, butalso long-term learning paths to gain skills and competencies for both job-related andpersonal development. Besides self-directed learning, courses are also used to enhance
formal training programs by adding e.g. pre-course assignments or recommendations forfurther learning.

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Freedom of Association &Collective 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.
Why it matters
The right of employees to form or join trade unions and employee representative
organizations of their own choice fosters our constructive dialogue culture at all our
locations. For dormakaba, this also facilitates structured communication with our employees
on fair working conditions, reducing turnover and achieving high performance andengagement amongst members of our workforce. Our aim is to ensure employees feel
comfortable in communicating openly with their leaders and managers.

Key activities
As a member of the UN Global Compact, dormakaba respects the right of all workers toform and join a trade union without fear of intimidation or reprisal, in accordance withnational laws. Furthermore, our employees are free to collectively bargain, if they so desire.
We work proactively with employee representative bodies to achieve positive results for both
employees and the company. Collective bargaining agreements are in effect in various
locations including Australia, Austria, Brazil, China, Colombia, France, Germany, Italy,
Mexico, New Zealand, Switzerland and the USA. In Poland, alternative employee
representation is in place which is also based on a transparent election process. However,the committee serves in a more consultative capacity.
To guarantee the right of all workers to form and join a trade union and to bargain
collectively, dormakaba focuses on two areas:
1. Identifying risks, fostering openness and transparency
2. Negotiating for mutual benefit and performance gains

Identifying risks, fostering openness and transparency
In the financial year 2017/18, we conducted a comprehensive impact assessment along ourvalue chain (see Outro) to identify which sustainability topics were most relevant in which
geographical areas and steps along the value chain. The sustainability impact assessment
revealed that some countries like China, Malaysia, the United Arab Emirates and the USA
present a higher risk when it comes to respecting the rights of freedom of association andcollective bargaining. Hence, dormakaba explicitly fosters and ensures that employees canengage in unions and works councils in all our operating regions and business segments.
Specifically, our actions in the financial year 2018/19 included:• Access Solutions (AS) APAC facility in Suzhou (China) has a trade union that
supports many employee initiatives and activities. Employees may engage in
different committees such as the Employee Welfare Committee and the Employee
Food Committee.
• AS APAC subsidiary in Taiwan explicitly forbids: (1) threatening, disciplining,
punishing, or firing workers because they exercise this right; (2) refusing to hire a
candidate because of their association with trade unions; and (3) blacklisting ofunion organizers by providing their names and details of their activities to other
employers, or to employers’ associations.
• AS AMER has completed a renewal of the collective bargaining agreement with theemployee union at the Steeleville, Illinois manufacturing facility. In the months
leading up to the negotiations, we had made plans to close the facility in the coming
years. We informed the union voluntarily of this fact before the start ofnegotiations, in order to be as open and transparent as possible during thePeople65

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negotiations process. In the end, the parties landed on an agreement that suitedmutual interests.

Negotiating for mutual benefit and performance gains
dormakaba regularly engages in negotiations of provisions in collective bargaining
agreements. These collective bargaining agreements allow dormakaba to improve its
business practices but also to offer improved employment provisions for staff. For thisreason, some local entities put works councils in place to ensure the representation of all
employees.
Examples of our collective bargaining agreements in the financial year 2018/19 included:• In Australia, dormakaba engaged with employees and unions, prior to thecommencement of formal bargaining, in order to determine staff priorities. The newEnterprise Agreements include a four-day week trial for Victorian Service
Technicians, as well as the introduction of a compressed working week for the
Queensland-based Service Technicians. For the latter, employees work a nine-day
fortnight, meaning they work nine days every two weeks. They get an extra day off
every second week by working a little longer on the other days.
• In Germany, bargaining negotiations were conducted or are still in-process for thesites in Villingen-Schwenningen, Dreieich and Bühl. Various agreements on technicalimprovements and process standardizations were concluded or implemented. One
highlight is the provision for families, with either small children or with care cases,
and for employees working shifts to convert an unconditional one-off payment
granted to all employees into additional days off.
• In Italy, the Key Systems business unit seamlessly transitioned into a renewed works
council, which allowed it to reach agreement regarding overtime, the use of accrued
holidays on a rotational basis to contain labor costs, and on the company’s targets
in the collective bargaining agreement that cover topics such as profitability, quality
and efficiency. These targets are then used to determine the variable part of thecompensation.

Our performance
In the financial year 2018/19, 64% of our employees were covered by collective bargaining
agreements. This underscores the importance we place on fostering openness andtransparency with trade unions and works councils to negotiate for mutual benefit andimproved employment provisions. Our most significant achievement last year in securing andimproving core labor rights for employees is demonstrated in the examples above –specifically in Australia, Italy, Germany and the USA. However, our biggest challenge remains
in respecting the right to collectively bargain in countries where this is factually or legally
impeded.

OutlookIn the financial year 2019/20, the AS EMEA in Italy will introduce one collective agreement
which applies to all employees. Additionally, AS EMEA in Belgium is in the process oforganizing social elections in which employees can elect their representatives for the works
council and/or the Committee for Prevention and Protection at Work out of the lists
proposed by the unions. The entity is required by law to organize the social elections for theCommittee for Prevention and Protection at Work every four years.

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Focus Area Products
We are dedicated to producing high-quality, reliable products andsolutions, as well as integrating our customers’ health and safetyconcerns. We aim to reduce our customers’ environmental burdens bydesigning materially- and energy-efficient products.

Product-related
Energy, Emissions,Effluents & Waste

Materials

Customer Health &SafetyWe incorporate the latest product life-cycle
approaches in our product development.

We focus on choosing materials that areboth safe and environmentally friendly.

End-user health and safety is an inherent
part of our business plans.

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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.
Why it matters
In terms of primary energy consumption, the building sector is one of the largest energy
users in the world – as a result, their influence on climate change is enormous. As a leading
manufacturer, dormakaba is committed to incorporating the latest product life-cycle
approaches and environmental technologies to continuously advance our productdevelopment and improve our as well as our customers’ sustainability performance. This not
only provides new opportunities for our design and manufacturing processes; it addresses
our customers’ expectations regarding environmentally friendly products.

Key activities
We aim to reduce our customers’ environmental impacts by designing materially- andenergy-efficient products. We are dedicated to producing high-quality and reliable products
and solutions, while also integrating our customers’ desire for environmentally friendly
options. As a result, product design remains a core focus of our sustainability strategy, with
an emphasis on energy in-use, waste and emissions reductions.
The trend toward sustainable design and ecodesign is here to stay. With an average lifespanof 40 to 50 years, buildings should ideally be constructed in a way that allows requiredmaterials 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 für Nachhaltiges Bauen, DGNB) – rate thesustainability of an entire building. The green building market is forecast to experience a 13%
growth rate through the year 2020, according to Research and Markets. By developing
sustainable products and providing transparency on our sustainability performance,
dormakaba secures our market position and offers added value to customers seeking Green
Building certifications.
To reduce product-related energy consumption, emissions, effluents and waste, dormakaba
focuses on three areas:
1. Product design with a life-cycle approach
2. Greater transparency with Life Cycle Assessments and Environmental ProductDeclarations
3. Sustainability platforms for greater information sharing

Product design with a life-cycle approach
In the financial year 2017/18, we integrated our sustainability commitment and life-cycle
approach into the company’s Product Design Manual, which is binding for all new
dormakaba branded products in the Access Solution segments. By integrating life-cycle
thinking in the Product Design Manual, dormakaba is taking the first steps in integrating
environmental impacts into our decision-making, as well as in product and processdevelopment. This product development and design process requires Aesthetic Design
Approvals, so called ADECO, to ensure our design integrity. Each step in our design
development stage requires close collaboration between our engineers and producers. Finalapproval for pre-production is granted by Operations, Product Development, ProductManagement and Product Design. The manual’s product design requirements are binding
for all new dormakaba-branded products and product ranges. The life-cycle approach covers
the complete value chain from resources, production and distribution to use and waste/
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Greater transparency with Life Cycle Assessments and Environmental ProductDeclarations
Life Cycle Assessments (LCA) provide a reliable calculation of the environmental
performance of a product. This includes the systematic assessment of the environmental
impacts arising during the extraction of raw material through the production, distribution,and use phases which are quantified based on materials, energy consumption, transportroutes, emissions, and the lifespan of the products.
dormakaba uses two LCA approaches: cradle-to-gate and cradle-to-grave. The first
approach considers all production stage modules: raw material supply, transport, andmanufacturing. The latter one covers all life cycle modules, which means that in addition to
the cradle-to-gate stages, cradle-to-cradle analyzes the building construction process,product use stage and end of life, i.e our upstream value chain. We mainly use cradle-togate “with options” so that we can select the relevant upstream life cycle module(s).
We quantify and disclose a product’s environmental impact through its entire lifecycle in ourEnvironmental Product Declarations (EPDs), which are based on the international standards
ISO 14025, 14040, 14044 and the European Standard EN 15804. We have adopted them toensure that our environmental information is reliable and credible. Our goal is that by theend of the financial year 2020/21, products representing 30% of our total turnover have
EPDs and/or Health-related Product Declarations (HPDs). To provide this range of EPDs, we
are working with sustainability consultancies who help us in creating the LCAs.
In addition, dormakaba has become a partner in the “Live LCA” project hosted by KIC
InnoEnergy and the European Institute of Innovation and Technology. The project aims toquickly assess life cycle information by increasing the use of live data from production
monitoring systems. We support the project by providing manufacturer-specific data. In
addition to the LCA, product-specific live data on topics such as energy and material
consumption can be used to determine potentials in energy savings or waste reduction. At
the beginning of 2019, we conducted a Live LCA workshop. The workshop showed that eventhough we already collect relevant and valuable LCA data, further steps are necessary toachieve better data quality. This project helps to improve the understanding and relevanceof data hygiene at dormakaba.

Sustainability platforms for greater information sharing
Product information from EPDs and/or HPDs can contribute to the Building Information
Modelling (BIM) and specifications or help attain 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, mindful MATERIALS, andtoxnot. These databases provide transparent environmental and health information forusers and ensure easy access to specific product data. By providing product information on

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such databases, we seek to lower market entry barriers in the green building industry,making our inclusion in related bidding processes possible. These databases serve slightly
different purposes:• DGNB Navigator is an online database created for building products based on the
DGNB certification system. The online platform creates transparency and provides
manufacturers, architects, planners, craftsmen and auditors with fast, precise andfree valuable information on the product they are looking for and its characteristics– for example, information on environmental impacts, life cycle costs, energy
requirements or emission behavior. dormakaba received 14 DGNB-Navigator Labels
for the European EPD product portfolio in the last financial year.
• mindful MATERIALS is a free platform with aggregated information on
environmental impacts and human health for products from manufacturers.
dormakaba uses it to meet international market requirements, which are mainly
driven by the American construction industry, and to keep abreast of new
developments. Since this platform is constantly being revised, a Content Working
Group was set up, of which dormakaba is a member. The aim of the Content
Working Group is to coordinate a suitable approach for product manufacturers andto make suggestions for further platform developments.
• toxnot is a platform for chemical management and hazard assessment. dormakaba
uses this platform to create and manage Declare Labels in order to fulfill the
American and international market demands for greater transparency of hazard
profiles. The aim of toxnot is to promote safe and environmentally friendly products.

Our performance
The know-how we have acquired over the years enables dormakaba to set appropriate
priorities in a constantly changing international market environment with ever new demands
on sustainability issues. At the same time, this evolving marketplace remains our biggest
challenge. We constantly exchange knowledge with our colleagues worldwide in order toremain abreast of customer demands and to raise awareness on the importance ofachieving a comprehensive understanding of sustainability issues.
The former Dorma group has been using LCAs in the form of EPDs since 2011. The first EPD
we offered to customers was for our main door closer TS 93. Since then, our EPD portfolio
has steadily expanded for our top-selling and tender-relevant products.
Our aim for the financial year 2018/19 was to publish two new EPDs. We published one EPD
for our compact readers in the Electronic Access & Data global product cluster. We had also
aimed to publish an EPD for the TS 98 XEA door closer, which was achieved with a slightdelay in July 2019. Our further aim for the financial year 2018/19 to renew the EPDs for theTS 93 and BTS 80 door closers was not achieved but postponed to the subsequent financialyear.
In addition, we have begun baseline data collection and calculations to create the EPDs fordoor closers, automatic sliding doors and sensor barriers detailed in the Outlook section
below.
These efforts contribute to achieving the dormakaba sustainability target of having EPDs
and/or HPDs for products representing 30% of total turnover by the end of the 2020/21
financial year. Currently only 13% of our products based on sales volumes are covered by
EPDs and/or HPDs.

Outlook
We expect to publish four new EPDs for door closer accessories, sensor barriers andautomatic sliding door systems in the financial year 2019/20. In addition, four EPDs for door
closers will be renewed, including the two named above which had been postponed.

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Spotlight on SafeRoute emergency exit and escape route system
SafeRoute makes it possible to intelligently integrate safety
and energy efficiency
Using energy-efficient access solutions is just as important asproviding comfort, accessibility and security.
For example, in securing escape routes. Here, SafeRoute from dormakaba is a solution thatpromises considerable potential for energy savings: the modular, intelligent escape routesystem adapts itself consistently to its intended use and consumes up to 40%* less energy
than functionally comparable systems, thus reducing associated CO2 emissions by the sameamount.
All in all, over 30 years of experience in escape route safety have led to more sustainability
with SafeRoute. The lower power consumption results from a newly developed technology incombination with a system design that requires less material. And our new licensing model
offers facility managers the benefit of increased flexibility and less logistics, if subsequentfunctional adaptations are required.

* Example of SafeRoute’s energy consumption under comparison of escape route security
systems without a uniform system bus. The calculation basis considers a normally locked
single door which is not used very often, equipped with an emergency button, a control unit
and a magnetic clamp (operating voltage of 24 V DC, holding force of 2 kN).

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Materials
Knowing that healthier materials contribute to customer health andsafety, we focus on choosing materials that are both safe andenviromentally friendly.
Why it matters
It has been well documented that healthier building materials have a positive impact onbuilding occupants’ well-being. We therefore focus on choosing product materials that areboth environmentally friendly and consumer safe to ensure we are simultaneously
addressing any impacts to the environment and to our customers’ health and safety.

Key activities
dormakaba products are manufactured around the world using different processes. The
most utilized non-renewable raw materials include metals such as steel, brass, aluminum,
nickel silver and zinc, as well as gypsum board, glass and plastics. Other important materials
are wood, paper and cardboard which are made from renewable resources. Metal parts areoften converted, for example, into door closers, cylinders, key blanks, hotel locks and glass
fittings. Glass, wood and gypsum board are primarily utilized in sliding and revolving door
systems and movable walls.
The potentially greatest 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
manufacturing processes are used at 27 of the 73 locations covered in this report. To reduce
our environmental footprint, we focus on monitoring and mitigating the environmental
impact of these operational steps. When it comes to optimizing our choice of materials, we
focus on complying with international material requirements; developing environment- andhealth-related product declarations; and utilizing the life cycle approach whenever possible.
In addition, since the primary extraction of metals from ore and the subsequent refining
processes are resource intensive, dormakaba uses metals with recycled content wheneverpossible. Further, we generally send scrap metal to recycling.
Knowing that healthier materials contribute to customer health and safety, and thatarchitects and building inhabitants wish to have more transparency on the content of
products, we highlight the possible health impacts of our products. We have developed
various Health Product Declarations (HPDs) and regularly perform tests – for example onvolatile organic compounds (VOCs) in a movable wall product or on hazardous substances inelectronic products. To reduce our environmental and customer impacts related to the
choice of materials, dormakaba focuses on three areas:
1. Complying with international material requirements
2. Health-related product declarations
3. Closing cycles

Complying with international material requirements
We manage compliance issues on both an ad-hoc and strategic basis. Customer andinternal requests on training, for example, are addressed ad hoc; while liaising with external
legal support is a more strategic endeavor in order to review the requirements and draftingof a Group Directive Material Compliance document.
In the financial year 2018/2019, we were impacted by major changes to the EU Regulation
1907/2006 (REACH). Lead, which is used in a lot of metal alloys, has now been classified as a
Substance of Very High Concern (SVHC) by the European Chemicals Agency (ECHA). Afterassessing the impact of this change, we discussed the use of lead with our suppliers,
reviewed our product portfolio and informed our customers, as required by law.
With these regulatory changes, we have implemented material compliance requirements in
our enterprise resource planning (ERP) software, with a RoHS label in the Access Solutions(AS) DACH segment. We have discussed several other opportunities to improvetransparency on used materials and compliance (in relation to other international material

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composition restrictions) both internally and with potential service providers. The complexityof our upstream and downstream supply chain and of our products’ bill of materials
demonstrates the need for a Group-wide strategic approach, which we plan to further
develop over the next few years.
We also made an initial assessment of the possible impacts of the upcoming EU Regulation
2017/821 (Conflict Minerals) during the reporting year. Our assessment is still ongoing andnecessary actions will be determined before the regulation comes into effect in January
2021.
Through our Supplier Code of Conduct, we set clear expectations that our suppliers should
actively support ongoing efforts to manage and demonstrate product compliance with theabove-noted regulations.

Health-related product declarations
dormakaba offers various health-related product declarations which transparently accountfor the materials found in our products. These are in the form of HPDs, Building ProductDeclarations (BPDs) or Declare Labels, depending on local market requirements.
An HPD provides 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 withwhich the required transparency can be guaranteed.
In the financial year 2018/19, dormakaba updated 19 existing HPDs to the latest version of
the standard. Additionally, we updated existing BPDs to the updated standard from the
Byggvarubedömningen (BVB), a business association of Sweden’s major property owners
and building contractors, which originally developed the standard. The new requirements
have become more extensive, which means that the information must be provided in moredetail, e.g. information on chemical content and life cycle assessment. BVB now asks for
additional documents like Material Compliance Statements or Safety Data Sheets. Morethan 20 BPDs have been newly updated and published in the financial year 2018/19.

Closing cycles
Several production sites focus on close-loop systems in their material use. Key Systems
business unit’s manufacturing facility in Rocky Mount (USA), for example, purchases brass
scrap from recyclers to produce its keys. The plant recycles most internal scrap, either backinto its own processes or by selling it to a local approved recycler. Scrap material is also sent
back to the original producer, who then uses it to make our purchased materials, resulting ina closed-loop system. For the fifth year in a row, the production facility in Vittorio Venetoaccomplished this with over 70% of produced scrap going back into its closed-loop system.
The AS AMER manufacturing facility in Indianapolis conducts on-site oil reclamation
generated from the machining processes. The site utilizes a system whereby oil is spun off ofthe scrap metal and collected for re-processing. Once the water content in the oil is
evaporated, the oil is reconditioned and supplied back to the equipment for use. Similar to
Key Systems in Rocky Mount, the AS AMER facilities use recyclers for all the scrap metal
generated during their manufacturing process.

Our performancedormakaba has made good progress in enhancing our products and their material
composition and origin, beyond the legal requirements. This contributes to achieving thedormakaba sustainability target of having EPDs and/or HPDs for products representing
30% of total turnover by the end of financial year 2020/21.
We have continued to improve over the last two years on Material Compliance, but we havemore work to do to advance our agenda and performance. We understand that Material
Compliance constitutes good governance and we work hard to ensure legal compliance andto create more transparency about the materials we use in our manufacturing processes.
We believe that the number of regulations – along with the needs and expectations of ourcustomers regarding healthy materials and products – will rise further. There are many
challenges to tackle; for example, material compliance requires the extensive collection ofdata. Our supply chains are global and complex which makes it difficult to conduct any

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necessary follow up or investigation. And we have to ensure that changes in material
composition do not impact product quality.
For example, over the last year, the Key Systems business unit noticed a general growinginterest in our products’ materials, both from our customers and from regulatory authorities(including Customs) worldwide. In fact, we were often required to provide Material
Compliance documentation even in countries or regions traditionally less strict in this regard(e.g. Africa, South America, China, Russia). One of the major achievements in the financial
year 2018/19 was in meeting the requirements of California Proposition 65, while the biggest
challenge was related to the amended RoHS requirements under Directive 2015/863/EC.
Key Systems products recently brought to market are in fact RoHS 2015/863/EC compliant,while at the end of the financial year 2018/19 remaining products were on course to meetthe compliance deadline.
in metric tons 1)

2018/19

Non-renewable resources

68,599Steel (incl. stainless steel)

35,997

Brass

10,422

Aluminium

9,905

Nickel silver

2,051

Zinc

3,576

Copper8

Gypsum Board

2,954

Glass

2,389

Plastics (parts and packaging material)

1,297

Renewable resources

12,109Wood (incl. packaging material)

8,017

Paper and cardboard (incl. packaging material)

4,0921) Not included are materials and volumes which can only be accounted for in pieces or monetary terms.

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

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Outlook
An important change will come into effect in July 2019 when, in addition to monitoring andcontrol instruments, all other electrical and electronic equipment will be required to becompliant with EU Directive 2011/65/EU (RoHS) if sold in Europe. At the same time, anadditional amendment of four substances in the same Directive will also come into effect. In
preparation, we have reviewed all bill of materials for electronic products and performed
tests on chosen products to ensure compliance.
To further enhance our HPD offering, the Movable Walls business unit has committed to
publishing ten HPDs by March 2020. In addition, five new BPDs are planned for theupcoming financial year.

Spotlight on DORMA Hüppe Variflex 100
Variflex 100 room partitioning system is proven to have low
emissions, healthier for building inhabitants
The Variflex 100 has passed health-related emissions testing for
Volatile Organic Compounds (VOCs) with excellent results, showing
emissions values far below the allowed levels. Products with low levels of VOCs, such as the
Variflex 100, can support the health of building inhabitants.
VOCs are organic chemicals with high vapor pressure, which causes them to easily
evaporate into the surrounding air. High concentrations can cause health issues to building
users such as headaches, irritation of the mucous membranes and respiratory tract, fatigue,
reduced performance or sleep disorders. VOC levels are often looked at in connection withindoor air quality, also by building certification systems such as the DGNB (German
Sustainable Building Council) or LEED (Leadership in Energy and Environmental Design).

Total VOC
ResultVariflex 100
Maximum allowable level

57 µg/m3
1,000 µg/m3

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Customer Health & Safety
It is our aim to make access in our customers’ lives smart and secure.
End-user health and safety is therefore a top priority and an inherent
part of our business plans.
Why it matters
As one of the top three global access control and security solutions companies, customer
health and safety is fundamental to our sense of product responsibility. By identifying andminimizing all possible risks of our products – including those arising from harmful materials
or potentially endangering functional features – we ensure the safety of our customers andend-users.

Key activities
It is our aim to make access in our customers’ lives smart and secure. End-user health andsafety is therefore a top priority and an inherent part of our business plans. Public buildings
must meet high standards in terms of public health and safety, as well as for our built-in
products and solutions. dormakaba meets these product and customer requirements withproduct certifications for internationally recognized standards such as from the European
Standard (EN), American National Standards Institute (ANSI) or Deutsches Institut für
Normung (DIN). We pay particular attention to the DIN 18040 standards, which apply tobarrier-free construction in public buildings. Furthermore, the ISO 9001 ensures that quality
management requirements are continuously monitored and improved.
Our product management team is responsible for this work, in close consultation with
Product Development, as required by the Group Directive Adaptive Innovation Methodology(AIM) and defined by Group Innovation Management. Our product quality assurance
process, which includes both internal and external resources, ensures that our products have
all 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. the product verification phase based on AIM. At a Group-level, the productmanagement team is responsible for customer health and safety, in close consultation with
Product Development. In our business units and at our production sites, ISO 9001 processes
are implemented locally and managed by local quality assurance managers.
To ensure product and solution specific customer health and safety, each dormakaba
segment develops adequate action plans:
1. Access Solutions segments
2. Key & Wall Solutions segment

Access Solutions segments
Our Access Solutions (AS) segments provide products such as escape routes, entrance
systems and hotel access systems. dormakaba works to address fire safety, electromagnetic
interference and hazardous substances, as well as the need to ensure emergency exits open
following a power failure. To ensure customer health and safety, our business addresses
these topics through the following activities:• Hazardous substances: products are designed to comply with the EU Directive on
the restriction of the use of certain hazardous substances in electrical and electronicequipment (RoHS directive 2011/65/EC and its amendment 2015/863/EC). For
example, RoHS restricts the use of cadmium, as it is highly toxic and exposure to thissubstance is known to cause cancer. All components and materials in dormakaba
electronic products sold in the EU market are determined to be RoHS compliant
before any product manufacturing begins.
• Fire testing: an example of a fire test requires the door assembly with locks beplaced in a door leaf and subjected to a temperature determined in the door leaf
specification for a period of three hours. Requirements are met if no flaming occurs
on the unexposed surface of a door assembly during the first 30 minutes of thedormakaba

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testing period, among other prerequisites; the fire test fails if flames are going
through the door leaf during the whole test time.
• Electrostatic discharges: for various Electronic Access and Data products, we focus
on product certification. For example, the dormakaba Wireless Gateway 90 42 iscertified to EN 55024, which tests for immunity in cases of electrostatic 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.
• Emergency exits and escape routes: automatic doors are subject to the highest
safety demands, in accordance with EN 16005. To meet these demands, selfmonitoring sensors are mandatory. Obstacle self-detection and automatic reversing
are also included in many products. For example, Talos CSD circular sliding doors
and Talos RDR revolving doors feature a safety sensor system. Emergency exit andescape 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. Additionally,
revolving doors require a safety risk assessment before installation, in accordancewith DIN 18650. This is provided by dormakaba at the building site before a sale ismade.
• User Testing: in some cases, new product launches require the product development
team to initiate an alpha (internal) and a beta (external) user testing. This is inaddition to product certification and performance testing. Beta testing is theprocess by which the first initial products released from the production line are
installed in a limited customer setting, and monitored closely by the technicalsupport, product management and engineering teams. During the beta testing, any
issues can be escalated to the team, to which an investigation is carried out andissues resolved prior to the full launch of the product in the field. This provides anextra layer of verification and validation to most of our product launches andfurther deployments.
In case of emerging risks and customer complaints, 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 our 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 of the status.
5. Conclude with a proper follow-up to assess the customers satisfaction andintegrate lessons learned.
Regulatory compliance falls at the top of the list of priorities for any development leads andrequires immediate action plans. An incident response plan is put in place to enable directaccess to the required resources as well.

Key & Wall Solutions segment
Our Key & Wall Solutions segment provides product categories such as automotive solutions,keys and space-dividing solutions. Both business units, Key Systems and Movable Walls, haveindividual approaches to customer health and safety that are product specific:• The business unit Key Systems approaches customer health and safety as anelement of its ISO 9001 certifications and ensures compliance with both mandatory(such as the European CE Declaration of Conformity) and voluntary safety
standards. Over 16 product certifications apply. Each Key Systems product features:proper documentation, such as an owner’s manual; a Declaration of Compliance;
contact details for the manufacturer; quick guides and tutorials available on theweb; and training on demand or during product installation to provide the customer
with all the information relevant for proper product use and safety features.
Regional distributors are periodically trained on the same topics.

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Products

Sustainability Report 2018/19• The business unit Movable Walls has over ten active certifications, including thosefrom Underwriter’s Laboratory (UL) and the Canadian 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 monitored and updated.
In addition to the Group-wide dormakaba customer complaint process, which is 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 its ISO
9001 processes locally. Quality assurance managers have ownership of the grievancemechanism and track any complaints from receipt to closure, including feedback to thecustomer. The steps are registering the complaint in the ticketing system, evaluation,
problem analysis and corrective actions, verification, lessons learned, and closure. The
intended users of the grievance mechanism 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 basedon the number of open, accepted, refused and closed complaints per fiscal year. Additionally,at least once a year, a management review assessment evaluates related KPIs andperformance status.

Our performance
To ensure we are on the right track, we internally and externally verify customer health andsafety through various certification programs (including ISO 9001), testing, and stakeholder
feedback. For example, 52% of reporting sites have achieved ISO 9001 certification.
Individual segments have made further contributions to customer health and safety. For
example, AS DACH’s product launch of the TS98 XEA was another big achievement forcustomer health and safety: the slide channel door closer makes opening fire-protection
doors easier, especially for disabled people. We are also developing door operators that
tailor the way the door opens depending on walking pace, use of wheelchairs or strollers, etc.
This is a real technical challenge, considering all the sensors, behavioral pattern recognition
and reaction times of the hardware mechanisms that must synchronize. To meet thischallenge, we are deploying product developers to different segments and locations toimprove knowledge sharing on technical developments but also customer demands.
In the financial year 2018/19, there have been no incidents of non-compliance withregulations or voluntary codes concerning the health and safety impacts of products andservices, which have resulted either in a fine, penalty or written warning.

OutlookIn order to supply the markets with new innovations in a targeted manner, ProductDevelopment AS DACH will focus on developing a core competency model, emphasizing local
market requirements. As a first step, Singapore will concentrate on the development ofhydraulic door closers and on the system development of revolving doors. The necessaryknow-how transfer will be achieved by temporarily deploying engineers with the technicalknowledge to the various business segments.
In addition, knowledge and resource transfer between the segments will be achieved
through an overarching core competency model. Product Development AS DACH, forexample, will use the development know-how from Product Development AS EMEA in thefield of communication (software development); while Product Development AS EMEA will
use the know-how of Product Development AS DACH in the field of product approvals.

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Increasing requirements for product certifications
An interview with Andrea Costa, Head of Silca Supply Chain& Logistics, dormakaba Key Systems EMEA
Product certification helps ensure quality and safety of products
against a unified and independently verified set of standards. How
is the Key Systems business unit impacted by the increasing trend
on product certifications?
Mainly we are hindered in outbound logistics, because the risk in delayed certification canlead to late shipment of our products. Document preparation for the certifications can takea long time, both for the product certification itself and for specific additional documents
required by the countries we serve. Each country has specific import rules and requires
different documents. There is no standard import procedure, globally.
For example, one of our customers recently requested us to provide a Saudi ArabianStandards Organisation certificate, which was time intensive to obtain: it took us fivemonths to complete the task. Or consider that in some African countries we are requested
to provide an SGS certificate: in this case it can take a month to ship out our products.
What is the biggest challenge in managing product certifications?
There are some product types which are considered dangerous goods for which official
regulations on how to proceed, from an operative-logistics perspective, are not available. A
specific example is the transportation of products with a lithium battery. Every air freightcompany has their own rules and requirements on how to manage the transport.
To fulfill our purchase orders efficiently, we therefore streamline our internal workflow bycontinuously improving enterprise resource planning procedures and regularly training ourlogistics team to stay updated on new requirements and procedures.

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Sustainability Report 2018/19

Outro
About this report
This is the dormakaba Holding AG (“dormakaba”) Sustainability Report 2018/19, whichhighlights our sustainability commitment, strategic approach and progress and is geared toall stakeholders. This is the company's fourth sustainability report. This report has been
prepared in accordance with the GRI Standards: Core option. The report covers the financial
year 2018/19 from 1 July 2018 to 30 June 2019. dormakaba reports on an annual cycle andpublished the most recent report in September 2018. While external assurance of the
Sustainability Report 2018/19 was not performed, the compensation of the Board of
Directors and the Executive Committee, as well as the financial statements, were audited by
an external auditor. No restatements of any information given in previous reports isnecessary in the financial year 2018/19.

Significant changes to the organization and its supply chain
In the financial year 2018/19, dormakaba shareholders approved the proposed elections andre-elections to the Board of Directors (BoD), each for the proposed term of one year. Riet
Cadonau was elected as a new Member and BoD Chair, and Jens Birgersson was elected asa new Member of the Board. The existing Members Rolf Dörig, Stephanie Brecht-Bergen,
Daniel Daeniker, Karina Dubs-Kuenzle, Hans Gummert, John Heppner, Hans Hess andChristine Mankel were all re-elected to the BoD. Ulrich Graf, who was BoD Chair for 12 years,
and Elton SK Chiu, who sat on the Board from year 2010, did not stand for re-election. As
stated in the run-up to the election in October 2018, Riet Cadonau intends to continue in hisrole as CEO of dormakaba Group for two to a maximum of three years, in parallel with hisrole as BoD Chair. Together with the dual role of BoD Chair and CEO, the BoD establishedthe role of Lead Independent Director (LID). This role is specifically designed to ensure theindependence of the BoD from the BoD Chair and CEO and is equipped with competencies
that are defined in the Organizational Regulations. Hans Hess was appointed to the newly
created function of Lead Independent Director as well as the Vice Chairmanship.
Further, dormakaba reached an agreement in July 2018 on the sale of the 40% shareholdingin ISEO to the Facchinetti family, who already own the remaining 60% of the company.
Italy-based ISEO is a manufacturer of security products such as cylinders, master Key
Systems business unit, locks and panic hardware, mainly for the European market. In
December 2018, dormakaba also divested part of its US Door Hardware Service business in
Segment AS AMER, since this business failed to meet expectations in terms of profitability.
Further, on 27 June 2019, dormakaba announced that it had signed an agreement to acquire
Alvarado Manufacturing Co. Inc., based in Chino (CA/USA). Alvarado is a leading
manufacturer of physical access solutions in North America. The transaction was concluded
after the balance sheet date on 31 July 2019.
These businesses were not in scope in previous sustainability reports in terms ofenvironmental or human resources figures.

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Sites covered

Americas

Europe, Middle East & Africa

Asia Pacific

Bogota, Colombia
Cambridge, Canada*
Detroit, USA
Deerfield Beach, USA
Dyersville, USA
Greenfield, USA*
Huntsville, USA
Indianapolis, USA
Lake Bluff, USA
Lexington, USA
Mesquite, USA
Montreal, Canada
Nogales, Mexico*
Phoenix, USA
Reamstown, USA
Rio de Janeiro, Brazil
Rocky Mount, USA
Sao Paulo, Brazil
Steeleville, USA
Whitby, Canada
Winston-Salem, USA

Ayazaga-Sisli, Turkey*
Bad Salzuflen, Germany
Bonn, Germany*
Bühl, Germany
Brugge, Belgium*
Creteil Cedex, France*
Dodewaard, Netherlands*
Drammen, Norway*
Dreieich, Germany
Dubai, United Arab Emirates
Eggenburg, Austria
Ennepetal, Germany
Eskilstuna, Sweden*
Fougères, France
Herzogenburg, Austria
Hitchin, England
Johannesburg, South Africa
Konstancin-Jeziorna, Poland*
Le Mesnil-Saint-Denis, France*
Madrid, Spain*
Moscow, Russia
Nuneaton, England
Ocholt, Germany
Rümlang, Switzerland*
Seekirchen, Austria*
Sofia, Bulgaria
St. Gallen, Switzerland*
Tiverton, England
Velbert, Germany
Villingen-Schwenningen, Germany
Vittorio Veneto, Italy
Wetzikon, Switzerland
Wuppertal, Germany
Wuppertal-Ronsdorf, Germany*

Banyo, Australia*
Chennai, India*
Coorparoo, Australia*
Hallam, Australia
Mumbai, India*
Melaka, Malaysia
Moorebank, Australia*
New Delhi, India
Regents Park, Australia*
Senai, Malaysia
Shanghai, China*
Shenzhen, China
SingaporeSuzhou, China
Taishan, China
Yantai, China
Yokohama, Japan** Newly reporting in 2018/19 (Disclosure 102-49)

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Materiality process in detail
In the financial year 2017/18, dormakaba invested in a comprehensive materiality
reassessment to be aligned to the GRI Standards. The latter have clarified the inside-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.
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 financial years 2015/16 and 2016/17,• 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.

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 financial year 2015/16 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.

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Outro

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.
New material topics

Previously defined as material

Materials

Socioeconomic ComplianceFreedom of Association and Collective
Bargaining

Forced Labor

Customer Privacy

Diversity and Equal Opportunity

Customer Health and Safety

Economic Performance

Supplier Environmental Assessment

Product and Service Labelling

Supplier Social Assessment

Reporting Frameworks
This report has been
prepared in accordancewith the GRI Standards:
Core option.
dormakaba also reports to
the Carbon Disclosure
Project annually. Last year,
dormakaba achieved a B
score 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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dormakaba Materiality Matrix 2017 – 2021
The dormakaba Materiality Matrix below highlights the 17 material topics we plan tomonitor and report on through the year 2021, while tracking any emerging global issues orrisk for future consideration. An interactive version is available in the web-version of thisreport. For each topic, the topic boundaries are defined as per impacts along the dormakaba
value chain as seen in the subsequent charts. We prioritize these issues according to thedegree of potential impact.

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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

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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

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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

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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

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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

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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

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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

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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

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GRI Content Index

Sustainability Report 2018/19

dormakaba

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

Organizational profile
102 – 1 Name of the organization

About this report

102 – 2 Activities, brands, products, andservices

About dormakaba

102 – 3 Location of headquarters

About this report

102 – 4 Location of operations

Sites covered

102 – 5 Ownership and legal form

Corporate Governance

102 – 6 Markets served

About dormakaba

102 – 7 Scale of the organization

About dormakaba
Key Figures

102 – 8 Information on employees andother workers

About dormakaba

102 – 9 Supply chain

Supplier Social and Environmental Assessment

102 – 10 Significant changes to theorganization and its supply chain

About this report

102 – 11 Precautionary Principle orapproach

Strategy and Approach

102 – 12 External initiatives

Strategy and Approach

102 – 13 Membership of associations

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 well as
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, UnitedStates 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

Letter from our Chairman and CEO

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
Strategy and Approach

Stakeholder engagement
102 – 40 List of stakeholder groups

Strategy and Approach

102 – 41 Collective bargaining
agreements

Freedom of Association and Collective Bargaining

102 – 42 Identifying and selecting
stakeholders

Strategy and Approach

102 – 43 Approach to stakeholder
engagement

Strategy and Approach

102 – 44 Key topics and concerns raised

Strategy and Approach

Reporting practice
102 – 45 Entities included in the
consolidated financial statements
102 – 46 Defining report content andtopic Boundaries

About this report
Strategy and Approach
About this reportdormakaba

102 – 47 List of material topics

Sustainability Report 2018/19

GRI Content Index

Strategy and Approach
About this report

102 – 48 Restatements of information

No restatements

102 – 49 Changes in reporting

New reporting locations

102 – 50 Reporting period

About this report

102 – 51 Date of most recent report

About this report

102 – 52 Reporting cycle

About this report

102 – 53 Contact point for questions
regarding the report

About this report

102 – 54 Claims of reporting inaccordance with the GRI Standards

About this report

102 – 55 GRI content index

GRI Content Index

102 – 56 External assurance

About this report

GRI 200 Economic
GRI Standard

Disclosure

GRI 103: Management Approach 2016
103 – 1 Explanation of the material topic and its
BoundaryAnti-corruption

Materiality Matrix
Fair competition and anti-corruption

103 – 2 The management approach and its
components

Fair competition and anti-corruption

103 – 3 Evaluation of the management approach

Fair competition and anti-corruption

GRI 205: Anti-corruption 2016
205 – 3 Confirmed incidents of corruption andactions taken

Fair competition and anti-corruption

GRI 103: Management Approach 2016
103 – 1 Explanation of the material topic and its
BoundaryAnti-competitive Behavior

Materiality Matrix
Fair competition and anti-corruption

103 – 2 The management approach and its
components

Fair competition and anti-corruption

103 – 3 Evaluation of the management approach

Fair competition and anti-corruption

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

Fair competition and anti-corruption

GRI 300 Environment
GRI Standard

Disclosure

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

Materiality Matrix
Materials

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

Materials

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

103 – 2 The management approach and its
components

Environmental Management

103 – 3 Evaluation of the management approach

Environmental Management

GRI 302: Energy 2016

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302 – 1 Energy consumption within the organization

dormakaba

Environmental Management

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

Materiality Matrix
Environmental Management

103 – 2 The management approach and its
components

Environmental Management

103 – 3 Evaluation of the management approach

Environmental Management

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

Environmental Management

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

Emissions

Materiality Matrix
Environmental Management

103 – 2 The management approach and its
components

Environmental Management

103 – 3 Evaluation of the management approach

Environmental Management

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

Environmental Management

305 – 2 Energy indirect (Scope 2) GHG emissions

Environmental Management

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

Materiality Matrix
Environmental Management

103 – 2 The management approach and its
components

Environmental Management

103 – 3 Evaluation of the management approach

Environmental Management

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

Environmental Management

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

Environmental Compliance

Materiality Matrix
Environmental Management

103 – 2 The management approach and its
components

Environmental Management

103 – 3 Evaluation of the management approach

Environmental Management

GRI 307: Environmental Compliance 2016
307 – 1 Non-compliance with environmental laws
and regulations

Environmental Management

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

Supplier Environmental Assessment

Materiality Matrix
Supplier Social and Environmental Assessment

103 – 2 The management approach and its
components

Supplier Social and Environmental Assessment

103 – 3 Evaluation of the management approach

Supplier Social and Environmental Assessment

GRI 308: Supplier Environmental Assessment 2016
308 – 2 Negative environmental impacts in the
supply chain and actions taken

Supplier Social and Environmental Assessment

GRI 400 Social
GRI Standard

Disclosure

GRI 103: Management Approach 2016
Employment

103 – 1 Explanation of the material topic and its
Boundary

Materiality Matrix
Employment

dormakaba

Sustainability Report 2018/19

103 – 2 The management approach and its
components

Employment

103 – 3 Evaluation of the management approach

Employment

GRI Content Index

GRI 401: Employment 2016
401 – 1 New employee hires and employee turnover

Employment

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

Occupational Health and Safety

Materiality Matrix
Occupational Health and Safety

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, and absenteeism,and number of work-related fatalities

Occupational Health and Safety

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

Training and Education

Materiality Matrix
Training and Education

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
404 – 1 Average hours of training per year per
employee

Training and Education

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

Freedom of Association and Collective
Bargaining

Materiality Matrix
Freedom of Association and Collective Bargaining

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 2016
407 – 1 Operations and suppliers in which the rightto freedom of association and collective bargaining
may be at risk

Freedom of Association and Collective Bargaining

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

Human Rights Assessment

Materiality Matrix
Human Rights Assessment

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 to humanrights reviews or impact assessments

Human Rights Assessment

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

Supplier Social Assessment

Materiality Matrix
Supplier Social and Environmental Assessment

103 – 2 The management approach and its
components

Supplier Social and Environmental Assessment

103 – 3 Evaluation of the management approach

Supplier Social and Environmental Assessment

GRI 414: Supplier Social Assessment 2016
414 – 2 Negative social impacts in the supply chain
and actions taken
Customer Health and Safety

GRI 103: Management Approach 2016

Supplier Social and Environmental Assessment

97

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GRI Content Index

Sustainability Report 2018/19

103 – 1 Explanation of the material topic and its
Boundary

Materiality Matrix
Customer Health and Safety

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

Customer Health and Safety

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

Customer Privacy

Materiality Matrix
Customer Privacy

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

Contact
dormakaba Holding AG
Hofwiesenstrasse 24
8153 Rümlang Switzerland
sustainability@dormakaba.com

Imprint
Project management: Stephanie Ossenbach, Senior Manager Corporate Sustainability
Editor: dormakaba Holding AG
www.dormakaba.com
Picture credits:© Daniel Koebe, Human Rights / Supplier Assessments / Occupational Health & Safety /Customer Privacy / Products: Energy, Emissions, Effluents & Waste© Karsten Rabas, Environmental Management;© Alexa Rodenjohann, Fair Competition & Anti-corruption (Portrait);© Bine Bellmann, Freedom of Association & Collective Bargaining / Customer Health &Safety;© Adobe Stock (Quka), Materials

Copyrights: © dormakaba Holding AG, 2019

Customer Privacy

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