Sustainability Governance and Commitment to Stakeholders

Sustainability Governance

All areas of the Group have an active role in addressing the goals and challenges of sustainability.

The sustainability management process is based on a model of shared responsibility that begins with the top level of management and involves every area and function within the organization. All employees worldwide are expected to conduct their activities responsibly.

Several entities within the organization are responsible for directing and coordinating the sustainable management of the Group’s businesses. Those entities include:

The Sustainability Team, through its offices in Italy, the U.S. and Brazil, has a key role in promoting a culture of sustainability within the Group and facilitating the process of continuous improvement, while contributing to risk management, cost optimization, stakeholder engagement and enhancement of the Group’s image. The team collaborates with individuals within the operating segments, regions and central functions that have operational responsibility for issues such as the environment, energy, innovation and human resources, and supports them in identifying key areas for action. It also manages relationships with international sustainability organizations, as well as sustainability rating agencies and investment analysts, with the support and coordination of the Investor Relations team.

The Cross-functional Sustainability Committee (CSC) consists of the heads of the principal central functions, operating segments and regions, who are often also consulted individually. The CSC evaluates and facilitates operational decisions, as well as serving in an advisory capacity for proposals submitted by the Sustainability Team to the Group Executive Council (GEC), the decision-making body headed by the Group CEO and composed of the COOs of the regions and operating segments, together with the heads of various central functions. The GEC is responsible for defining the strategic approach, approving operating guidelines and evaluating the alignment of the Sustainability Plan with business objectives. The Committee periodically updates the GEC on individual initiatives and the Group’s overall sustainability performance.

The Nominating, Corporate Governance and Sustainability Committee (a committee of the Board of Directors) evaluates proposals relating to strategic guidelines for sustainability-related issues and, as appropriate, formulates proposals to the Board of Directors. The Committee also reviews the annual Sustainability Report.

Commitment to Stakeholders

The Group’s ability to generate value through business decisions also depends on listening to and understanding the expectations and needs of all stakeholders who, directly or indirectly, have an influence on or are influenced by the Group’s activities.

The decisions of many internal and external stakeholders – including customers, suppliers, dealers, employees, public institutions, trade and industry groups, investors and local communities – are affected by the Group’s activities just as the Group’s activities and results are, to varying degrees, also affected by the actions and expectations of stakeholders.

Operating responsibly therefore requires constant engagement with all stakeholders, at the local and global level, in order to understand and appropriately address the most relevant needs and expectations, as set out in the Stakeholder Engagement Guidelines.

As the engagement with stakeholders evolves over time, initiatives have become increasingly effective. The Group uses a variety of channels to engage with each category of stakeholders and gain a more in-depth understanding of their expectations.

In 2013, the Group developed additional channels for interaction with external stakeholders, including three sustainability-focused Stakeholder Engagement events held in Italy, Brazil and the U.S. These events provided a platform for individual customers, fleet operators, dealers, suppliers, media, local communities, universities and technical schools, environmental organizations, foundations and NGOs to express their views, priorities and needs. For each stakeholder category, specific local issues also emerged.

(1) All information in the Sustainability section has been audited by the independent certification organization SGS Italia S.p.A. The scope, methodology, limitations and conclusions of the audit are provided in the Assurance Statement issued by SGS and published in the Fiat Group 2013 Sustainability Report.