LM Wind Power
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Managingresponsibly

LM Wind Power’s sustainability focus resulted in further measured progress in 2012. We continued the strategy we outlined before publishing our first report and in each core area we developed on the progress we began to make in 2011.

Our efforts are guided by the strategies and ambitions defined within our four, overall focus areas: Safety; Environment; Technology and People. Within each area, we measure against a set of pre-defined Key Performance Indicators (KPI’s), which ensure we are tracking our progress and identify areas for improvement.

We show a selection of these metrics in the non-financial highlights section in this report. LM Wind Power has been a member of the UN Global Compact since we signed up in 2010 and has reported its sustainability performance in the annual Communication on Progress ever since. The detailed report is available on the UN Global Compact website.

Sustainability is part of the foundation of LM Wind Power’s corporate strategy and is evident in the company’s functional strategies as well as the Code of Conduct, Global HSE policy, and Global Quality Policy. The overall targets for the four focus areas mentioned above are:

Safety- Being in control and continuously improve
Safer workplaces and products
Safer processes and supply chain management

Technology – Making wind energy more competitive
Drive down product cost
Improve product performance

Environment – Minimizing harmful impact
Assess and reduce GHG emissions
Reduce resource consumption and waste

People – Creating opportunities in a safe environment
Increase safety, satisfaction and personal development
Contribute positively to the communities in which we operate

Within each area there are specific targets, the majority of which are managed by our Operations and HSE functions with others under the stewardship of Corporate Staff: Human Resources, Global Communications and Legal, Audit and Risk. We have specific targets for waste reduction, energy reduction, accident rates, absentee rates, people performance programs and certifications (ISO and OHSAS) of our environmental performance, quality and work environment. We did not meet the targets on all KPIs in 2012 e.g. for the carbon footprint and lost time accident rates. We do, however, have clear indications of where we need to improve and will work specifically on that in 2013.

In addition to the overall focus areas, LM Wind Power reports on anti-corruption and human rights issues which are addressed through our Code of Conduct. This core document was further updated and promoted in 2012. All white collar employees were trained in anti-corruption policies as well as the full content of the Code of Conduct. During 2nd half of the year, all white collar employees underwent training which took place using an e-learning module and included a comprehension test and a mechanism to track successful completion. The e-learning system will provide the basis for further training and refreshment of the current Code of Conduct whenever new additions or changes occur.

On the Technology side, most remarkable was the development of a new, leading-edge protection coating for our wind turbine blades which will increase annual energy production by up to 2% as well as the launch of the new GloBlade® 3 platform for the 2.5-3 MW wind turbine market segment. This innovative blade family will contribute to saving the world millions of tons of CO2 every year, finding further potential at low wind speed sites, and contributing to our overall target of making wind energy more competitive.

Improving the work environment
One of the most significant milestones within Health and Safety was the complete implementation of the newly-developed low styrene emission gel coat in all plants across the globe. The new gel coat, together with improved ventilation and new features on the molds, have resulted in a reduction of up to 90% in styrene emissions during gel coat spray application. (Gel coat is the outer layer of paint on the rotor blades and is sprayed on to the mold before application of glass and resin.)

This vital chemical substitution is an important achievement, enabling us to live up to our own high HSE standards and it’s the first project of this scope in our operations. Continuous smaller scale chemical substitutions as well as changes to processes to minimize chemical use have all contributed to further improving the environment in our plants and working conditions for our employees during 2012.

Over the years, LM Wind Power has taken great steps to reduce the Lost Time Accident Rate (LTA) per million working hours, identified as one of the key lagging performance indicators in relation to safety in the plants. By end of 2011, the LTA rate was 5.7, representing a 42% decrease compared to 2010. Encouraged by this achievement, the target for 2012 was set to 3.5. The actual LTA performance ended at 4.0, slightly above target; however, the company is still tracking in the right direction. Some of the initiatives that have made a difference were specific training in Root Cause Analysis (RCA) incident investigation, a number of projects targeted at handling chemicals and fire safety, and a strong focus on improving safety for working in confined spaces. 2012 was also the time when the organization, systems, and processes that have been put in place over the past years in collaboration with safety consultants DuPont stood their first real test. The safety organizations in the plants and on a global level have started to get good traction; new and more robust processes have been put in place to make sure key HSE aspects are being assessed and taken into consideration when developing new products, setting up new factories and when introducing new materials.

On the process side, the company ensured global ISO 14001 recertification and the Spanish blade plants have successfully been re-certified according to OHSAS 18001. The process to certify the remaining factories is ongoing and is expected to be completed during 2014.

Better at recycling
The company’s waste reduction program, now running in its third year, has continued to identify waste savings through the application of LEAN principles throughout the manufacturing process. The waste reduction initiatives have had a positive impact on operational efficiency as well as on the amount of waste going to landfill, with the latter showing a steady decreasing trend over the past years. The top saving initiatives of the year focused on re-using or recycling material and equipment or preparing the material to fit more specifically to its purpose to reduce waste generation. The ideas are driven to a large extent by employees and the global target is to implement five new ideas in each plant every year.

The program achieved almost EUR 2m EBITDA savings in 2012 in line with expectations and is now moving into a more advanced stage, focusing on the initiatives that require changes in the product development process.

Blade disposal
LM Wind Power has investigated various blade disposal solutions over the years, working with organizations, companies and research institutions individually and in groups of industry partners to solve the issue of scrapping wind turbine blades in a more environmentally friendly way. This challenge will continue to grow as the first generation of blades that were installed more than 20 years ago begin to be taken out of service. So far, it has not been possible to identify an environmentally and financially viable solution which can be offered on a large scale. However, in 2012, we entered into a four-year research project with other companies in the composites industry and the Technical University of Denmark which will address this challenge. The project, which is supported by the Danish Agency for Science, Technology and Innovation, will explore various paths for reusing and recycling composites material and regenerated resin, among other things developing technologies for how to apply them in new products. LM Wind Power contributes knowhow spanning more than 30 years of experience working with composites, and provides discarded blades to be taken apart for analysis. The project is expected to generate important new knowledge that will lead to innovative blade disposal solutions in the future, supporting our ambitions to minimize the environmental impact of our product.

Community outreach
Despite continued commercial challenges in 2012, the company remained committed to its local communities around the world. The community outreach activities included support for establishing a proper road, close to our Dabaspet plant in India, promoting girls’ education among employees’ children, donations to promote forest growth, and members of management volunteering to teach students at a nearby village. In the US, Canada and Spain the community outreach focused on blood drives, charity donations, career fairs and providing support for local schools. The Global Technology Center in Denmark received a variety of visits from schools, universities and local community stakeholders, to learn more about wind and renewable energy. Several visits by commercial, community and academic groups were also hosted by senior management at our global management office in Amsterdam and presentations on Sustainability were shared and reviewed in some detail with peer companies and experts including the Dutch national association of Auditors.