Sustainability Performance 2020

DELIVERY OF MATERIALS Emissions from transporting materials such as fiberglass or liquid resin polyester from suppliers to our factories. WASTE DISPOSAL Emissions from landfilling, incinerating and recycling the waste we produce. 31% STATIONARY EQUIPMENT Emissions from stationary equipment such as boilers or back-up electricity generators in our plants. EMPLOYEE COMMUTING Emissions from commuting to work, for instance by car or public transport. BUSINESS TRAVEL Emissions from business travel, for instance by airplane, public transport or car. 3% COMPANY VEHICLES Emissions from company-owned vehicles such as cars, trucks or forklifts. 4% * Based on the CarbonNeutral Protocol, including instruments like EACs. ** In 2020, according to the GHG protocol, we reported upstream indirect emissions related to fuels and energy separately from the consumptions. 23% 8% 10% ELECTRICITY Emissions from purchased electricity that powers the lights, computers, tools and other equipment at our plants and o‡ces. 0%* FUEL AND ENERGY – RELATED ACTIVITIES** Indirect upstream emissions related to the production of fuels and energy purchased and consumed and their transmission and distribution. 20% Where did our carbon emissions come from in 2020? Optimizing the resource consumption As a manufacturing business, our main emissions come from resources and energy used in our operations. Reducing con- sumption not only makes us a greener business, but also leaner and more profitable. The largest share of our emissions comes from electricity con- sumption. Already in 2018, we installed Energy Management Systems at all plants to drive transparency and identify oppor- tunities for improvement. In 2020, our energy efficiency team continued to assist the plants in finding efficiency gains. Our relative energy consumption per square meter factory space decreased by 5.9% in 2020. With Covid-19 affecting operations at different plants during the year, we were able to determine that approximately 2% of this reduction can be attributed to Covid-19 restrictions. At the same time and to ensure opera- tions continued safely, the sites also increased indoor ventila- tion. Hence, at least 3.9% relative reduction was achieved by efficiency optimization efforts across the plants, a huge leap forward compared to the 2% reduction in 2019. One of the focus areas to achieve energy reductions this year has been the switches for our Heating, Ventilation and Air Con- ditioning (HVAC) system, a major source of electricity consump- tion. Installing different control systems allows the sites to turn the HVAC system to a lower speed when the machine does not need to run at full capacity. As such, we implemented a smart system that adjusts ventilation needs in line with the needs during a typical production cycle. Going forward, the team will continue to roll out this proven initiative across more plants while continuing to identify and implement further actions to improve energy efficiency. As a manufacturer of turbine blades, production waste is anoth- er major source of emissions and therefore area to focus our reduction efforts on. To improve our environmental performance on waste, we approach the topic from two workstreams simulta- neously - namely Direct Material (DM) reduction and Waste sepa- ration. Direct material reduction focuses on preventing waste generation in the first place. Our Material Performance Optimi- zation team makes comparisons across plants and identifies the best in class Bill of Material (BOM) for various blade types – essentially the BOM with the least waste. They then work with plants to implement savings based on consumption studies, enabling the plants to implement changes to bridge the gap between their local BOM and best in class BOM. Apart from oper- ational changes, waste is prevented through Engineering proj- ects that optimize blade designs and the materials required. In 2020, we achieved a saving of USD 8.4 million in direct material reduction, well above the target of USD 6.4 million. After preventing as much waste as possible to be generated in the first place, it is important to segregate waste so the recy- clable materials are actually sent to a recycling facility. Our local EHS teams set up procedures to have the inevitable waste pre-separated into groups such as glass fiber, carton, and other industrial waste, in order for it to be disposed of in the most environmentally friendly and economical way. Color-coded waste bins are placed at each section of the production area, helping our operators segregate waste streams at generation. With such system, we managed to recycle 28% of our waste in 2020, compared to 25% in 2019. Renewable energy In 2020, approximately 96% of our electricity consumption was covered by EACs (Energy Attribute Certificates), which will con- tinue to play a role in our renewable electricity commitment. Our site in Canada is powered by green electricity and our fac- tory in Jiangyin, China receives more than a third of its electric- ity directly from a wind turbine. We aim to phase out the use of EACs as more direct and commercially attractive renewable electricity options become available in the geographies where 23 | LM WIND POWER SUSTAINABILITY PERFORMANCE 2020